Studsvik — Annual Report 2015

Apr 18, 2016

Annual Report 2015

Information to shareholders

ANNUAL GENERAL MEETING OF SHAREHOLDERS, APRIL 25, 2016

The Annual General Meeting will be held in Stockholm, World Trade Center, Klarabergsviadukten 70 / Kungsbron 1, on Monday April 25, 2016 at 4 p.m.

Notification

Shareholders wishing to participate must be registered in the share register kept by Euroclear Sweden AB by Tuesday, April 19, 2016, and must give notification of their intention to attend by Tuesday, April 19 at the latest.

• By telephone +46 155 22 10 25,
• by mail to Studsvik AB, SE-611 82 Nyköping, Sweden
• by email to studsvik@studsvik.se,
• by fax on +46 155 26 30 70, or
• via Studsvik's website, www.studsvik.se.

The shareholder's notification 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 Tuesday, April 19, 2016.

Nomination committee

Studsvik's Nomination Committee consists of:

• Sven Ericsson, representative of the Karinen family (chairman)
• Stina Barchan, Briban Invest AB
• Malte Edenius
• 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 2016

• Report on the first quarter as at March 31	April 25, 2016
• Report on first half year as at June 30	July 22, 2016
• Report on the three first quarters as at September 30	October 21, 2016
• Year-end report 2016	Feb 2017
• Annual Report 2016	April 2017

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

Contents

Facts about Studsvik	2
President's comments	3
Administration report	4
Fuel and Materials Technology	7
Consultancy Services	8
Waste Treatment	9
Risk management	11
Proposed distribution of profits	13
The Studsvik share	14
Financial statements	16
Group	16
Parent company	20
Notes to the consolidated accounts	24
Notes to the parent company accounts	48
Auditor's report	53
Corporate Governance	54
Board of Directors and Auditors	58
Executive Group Management	60
Five-year review	62
Definitions of key figures and ratios	64

Facts about Studsvik

THIS IS STUDSVIK

Studsvik delivers high-tech services to customers mainly in the nuclear power industry, through testing material and reactor fuel in our own qualified laboratories and software and consultancy services that improve efficiency and extend the operating life of nuclear power plants.

Our consultancy services also cover the nuclear power plant lifecycle from planning to decommissioning. We also offer consultancy services on radiological issues to oil, gas and mineral extraction companies.

We treat, stabilize and reduce the volume of low and intermediate level waste at our own facilities in Sweden and England.

2015 IN BRIEF

• Sound profitability in the Fuel and Materials Technology and Consultancy Services business areas
• Fuel and Materials Technology successfully established in the Chinese market
• Weak demand for services in the Waste Treatment business area
• Continued rationalization in Waste Treatment and administration
• After the reporting period Studsvik issued a three-year corporate bond of SEK 300 million

MISSION

To provide world-leading, innovative, customized, valuable and environmentally safe solutions in the global nuclear and radiological markets.

VISION

By creating superior value for our customers we will be the preferred and leading provider in our chosen marktes.

STRATEGIES

Growth with profitability

We strengthen our position and profitability through organic growth in combination with alliances.

Products and services

We focus on products and services that increase customers' profitability, 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 developing our own technology and methods based on customers' requirements.

Market

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

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 management structure with sharp focus on profitability and customer satisfaction.

Key figures and ratios	2015	2014
Sales, SEK million	895.4	909.6
Operating profit, SEK million	24.4	30.5
Profit/loss after net financial items, SEK million	6.7	11.6
Earnings per share, SEK	0.29	–1.46
Operating margin, %	2.7	3.3
Debt/equity ratio, %	45.0	36.1
Equity per share, SEK	36.30	35.64
Average number of employees	829	895

Focus on customer value

In 2015 customers in our most important markets, North America and Europe, continued to have profitability problems. This has meant major challenges to readjust and adapt the range of services and products to customers' gradually changed needs in a situation where we have also noted increased caution in procuring external contracts. At the same time, the changes offer new business opportunities in both operations and decommissioning.

We continued the work of evaluating, adapting and developing the organization to the new and changed market conditions. Effectiveness improvements continued to be implemented in both administration and business areas and we further developed our customer value based culture, introduced in 2014. Our insight and knowledge of customers' changed needs and what they value have contributed to our ongoing adaptation of both organization and offers.

Fuel and Materials Technology reported positive growth and has established a business model that supports growth and improved profitability. Demand for Waste Treatment services continued to be weak, which was also reflected in earnings.

Sales in local currencies decreased by about 6 per cent compared with 2014 and amounted to SEK 895 million. The operating margin deteriorated to 2.7 (4.7) per cent after adjustment for non-recurring items.

Fuel and Materials Technology reported a sales increase of about 6 per cent. The operating margin was 15.2 (13.7) per cent. The work of the business area on a value-based sales culture and its continued work to enhance effectiveness creates increased sales and profitability.

Consultancy Services increased sales by 3 per cent, but earnings deteriorated. The operating margin for the business area was 5.2 (7.8) per cent.

Consultancy operations in Germany, offering consulting and engineering services, as well as inspection and maintenance of nuclear facilities in Germany and neighboring countries, improved its earnings through increased sales, better capacity utilization and lower costs.

The consultancy operations in the USA had good capacity utilization from the work on the THOR facility, which was contracted in 2014. The operations developed positively, both in terms of sales and earnings.

The Swedish and British consulting operations developed well with the exception of the British work on design of ventilation systems, where demand was very weak, which meant sales and earnings decreased considerably. From the beginning of the year the organization has been adapted to prevailing demand.

Waste Treatment was negatively impacted by continuing weak demand for both processing of metals and combustible material. Sales decreased by 31 per cent and the operating margin was –6.7 (3.3) per cent. The work on productivity improvements in the UK recycling facility was completed, leading to elimination of the previous year's loss. The establishment of a lower cost base is continuing at the same time as we are looking into various strategic alternatives and business models.

In 2016 we expect positive development in the business areas Consultancy Services and Fuel and Materials Technology, with rising demand for such services in Europe, Asia and the Middle East. Demand for services in Waste Treatment is expected to stay weak, as our customers have major profitability challenges, mainly in Europe and North America. Decommissioning of nuclear facilities continues to be an interesting market for us, but it is difficult to assess when the market will pick up speed, due to uncertainties about financing and storage of waste.

We note that existing operators in Europe and North America continue to focus on improving safety, increasing power extraction and extending the life of existing nuclear power plants. We also see increased interest in preparing spent fuel for final disposal. India and Russia are expected to continue investment in new reactors and in China we note great demand for our services, mainly in Fuel and Materials Technology. An increased number of countries have started to draw attention to the problems of low and intermediate level waste arising in connection with extraction of minerals, oil and gas, which gives us the opportunity to offer services in that area.

All in all, we assess that the market for 2016 will continue to be challenging in Europe and North America. The market in Asia, mainly China, is expected to develop positively. Despite difficult external circumstances I believe we have good prospects of increasing both sales and earnings in the Consultancy Services and Fuel and Materials Technology business areas, mainly through increased understanding of customers' needs and what they value. In the short perspective, Waste Treatment is expected to continue to face a challenging situation, but with increasing business prospects that will not, however, materialize until after 2016.

The work on continued effectiveness improvement is moving ahead, while work on the customer value based culture remains our most important initiative.

Stockholm in March 2016 Michael Mononen

Administration report

The Board of Directors and the President of Studsvik AB (publ), company registration number 556501-0997, hereby submit the annual accounts for 2015.

BUSINESS ACTIVITIES OF THE GROUP

Studsvik delivers services to the international nuclear power industry. Its customers are mainly nuclear power plants and suppliers to the nuclear industry. Operations are conducted at Studsvik's own facilities in Europe as well as at customer sites. The services cover the entire lifecycle of nuclear power plants as regards waste treatment, consultancy services, fuel and materials technology, as well as management and treatment of radioactive waste from hospitals, universities, gas, oil and mineral extraction.

The annual report follows the group structure introduced in 2014 with operations organized in three business areas: Waste Treatment, Consultancy Services and Fuel and Materials Technology, where the respective business area works globally with an integrated service/product portfolio.

The company's share is listed on Nasdaq Stockholm.

MARKET

INCREASED FOCUS ON COST EFFECTIVENESS AND LOWER CARBON DIOXIDE EMISSIONS

The nuclear power industry is currently facing receding profitability, mainly in Western Europe and the USA, where falling energy prices are reducing the profitability of many facilities. However, global demand for electrical energy is expected to continue to grow by more than 30 per cent over the next 25 years. Rising demand will mainly come from non-OECD countries, where demand from Asia and above all China dominates. The percentage of renewable and nuclear electrical energy is expected to increase, while the percentage of electrical energy generated by fossil fuels will decrease. At the UN summit on climate change in Paris in December 2015 many governments gave notice of measures to reduce emissions of carbon dioxide.

The overall conditions for nuclear power are governed to a great extent by national political decisions. The decisions are made on the basis of each country's financial situation, energy supply, environmental guidelines and public acceptance of nuclear power and other energy sources. Many governments see nuclear power as a reliable energy source with low carbon dioxide emissions. Nuclear power is also seen as a way to balance dependence on energy imports from other countries, which leads to reduced economic and political risks. In addition, economic conditions for nuclear power are governed by market conditions and external costs for such things as safety and waste management.

In the longer term the outlook at global level for nuclear power is positive, with 70 new nuclear power plants under construction and another 179 at the planning stage. Of the 70 new plants, 22 are in China, 9 in Russia, 5 in India and 4 in South Korea. Of the existing 437 reactors, 80 per cent are in OECD countries and 75 per cent of these are more than 25 years old. For economic and political reasons, the work of replacing old reactors is slow, which leads to increased focus on extending the life and increasing the power output of existing reactors. The long-term challenge for Europe and the USA is how the electricity generated today by nuclear power plants is to be replaced when old plants reach their maximum life, as well as when and how these plants will then be decommissioned.

With falling electricity prices, the trend in the market is to reduce costs. Conditions may change rapidly, which leads to increased demand for services that contribute to cost reductions in fuel optimization and management of spent nuclear fuel, for example.

STUDSVIK'S MARKET POSITION

Studsvik offers services in all phases of a nuclear power plant's lifecycle, which means that the company benefits from continued operation, initiatives to extend the life of the plant, upgrading as well as increased output, new construction and decommissioning. When upgrading and increasing the output of reactors Studsvik can deliver consulting and engineering services. Studsvik can deliver the same type of services for new construction. When a nuclear reactor 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 identified.

In the area of Fuel and Materials Technology, Studsvik is the only independent supplier of fuel optimization software and the only commercial supplier of services in materials technology. Studsvik also has extensive competence for handling used and damaged fuel.

In the area of Waste Treatment Studsvik offers services for treatment of low and intermediate level waste at its facilities in Sweden and the United Kingdom. The primary aim of the treatment is to reduce the volume and stabilize the waste ahead of final disposal.

Studsvik's market position is based on high-level competence in all business areas.

STUDSVIK'S AREAS OF OPERATION

The Hot Cell Laboratory in Studsvik.

FUEL AND MATERIALS TECHNOLOGY

Studsvik's expertise in Fuel and Materials Technology contributes to better operating economy and improved safety in the nuclear industry. A long life and sound fuel economy are central for achieving good profitability in operating a nuclear power plant. Studsvik's world-leading software for fuel optimization and core monitoring increases the burn-up of reactor fuel and thus the power extraction without jeopardizing operating safety. More energy is extracted from each fuel element, leading to better operating economy.

In our laboratories we test and evaluate irradiated and nonirradiated material. The results make it possible to establish strength and expected life of construction material and fuel for both operation and reinvestment.

Radiological consultancy.

CONSULTANCY SERVICES

Studsvik's Consultancy Services contribute to improved profitability and safety in nuclear power and other industries that handle radioactive material. We assist our customers with strategies, policies and plans for management of waste arising in nuclear facilities and handling naturally occurring radioactive material (NORM), mainly in the oil, gas and mining industries. Consultancy Services also include radiation protection through measurement and analysis of radiation levels and measures to minimize the dose when working in classified environments. Studsvik's services in decommissioning and dismantling nuclear power facilities cover everything from feasibility studies, planning and project management to practical dismantling and subsequent waste treatment. Apart from this, we offer engineering services and advisory services in design, safety, technology, maintenance, fuel, core and material issues. The Group has developed its own pyrolysis process, THORSM, which can be used to treat both dry and wet low-level and intermediate-level waste.

Management of radiation source referring to non-nuclear waste.

WASTE TREATMENT

Studsvik's methods for waste treatment reduce the customers' costs for subsequent handling and storage as well as contributing to conservation of natural resources. All waste generated by the nuclear power industry, both during the operating and decommissioning phases, must be sent for final disposal to special facilities. There is major environmental and economic value in reducing and chemically stabilizing these volumes.

Studsvik has developed methods for treating different types of nuclear waste. Studsvik offers treatment of low and intermediate level waste at its own facilities in Studsvik in Sweden, and in Workington in the United Kingdom. The purpose of waste treatment is mainly to achieve volume reduction and stabilization of waste before final disposal.

Services are also carried out at customers' own facilities; for example, characterization, sorting and packaging of waste, compacting of dry waste and measurement of radioactivity in waste before treatment and recycling.

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 final disposal, but is also melted and sorted to reduce the volume. Apart from traditional incineration, Studsvik also uses pyrolysis, in which material is treated by dry distillation without addition of oxygen.

SALES AND EARNINGS

Sales in the first quarter were SEK 895.4 (909.6) million, a decrease in local currencies of 6 per cent. The operating profit was SEK 24.4 (30.5) million, including non-recurring items of SEK – (–12.1) million. Adjusted for non-recurring items the operating profit was SEK 24.4 (42.6) million.

In Fuel and Materials Technology earnings and margin improved, despite postponement of some major deliveries for the software part of the business until the first half of 2016.

Consultancy Services increased sales but earnings decreased. At the end of the year the organization had adapted to the unexpectedly low demand for ventilation services in England. The previous year was also positively impacted by consultancy and license revenue for construction of a THOR facility.

In the Waste Treatment business area sales and earnings continued to decrease due to weak demand for treatment of metallic waste and incineration. The facilities in Sweden and England have implemented efficiency improvements and adapted the organization and processes to the reduced demand. The work of establishing a lower cost base is continuing.

PROFITABILITY

The operating margin for the Group was 2.7 (3.3) per cent.

Adjusted for non-recurring items, the operating margin was 2.7 (4.7) per cent. The profit margin was 0.7 (1.3) per cent and return on capital employed was 6.6 (5.5) per cent.

CASH FLOW

Cash flow after changes in working capital was –6.6 (–20.8) and the free cash flow (before financing activities) was –29.8 (49.9).

FINANCING

After the reporting period, on February 16, 2016, Studsvik issued a senior, unsecured corporate bond of SEK 300 million with a maturity of three years in the Swedish market, with final maturity in February 2019. The bond has a framework amount of SEK 350 million. The bond loan bears a variable interest rate of STIBOR 3m + 6.50 %, with final maturity in February 2019.

The issue proceeds will be used to refinance Studsvik's outstanding bond of SEK 200 million (with final maturity on 7 March 2016).

FINANCIAL TARGETS

Studsvik's overall financial targets are an average annual growth of 10 per cent, achieving an operating margin of 8 per cent and an equity/assets ratio of at least 40 per cent. In 2015 sales in local currencies decreased and the operating margin decreased to 2.7 (3.3) per cent. Adjusted for non-recurring items the operating margin in 2015 was 2.7 (4.7) per cent. The equity/assets ratio increased to 30.0 (28.1) per cent and the net debt/equity ratio in-creased to 45.0 (36.1) per cent.

INVESTMENTS

The Group's capital expenditure investments amounted to SEK 33.5 (32.7) million. Most of the investments referred to the facilities in Sweden.

RESEARCH AND DEVELOPMENT

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

In 2015 total costs of company-funded research and development amounted to SEK 25.4 (25.8) million.

The greatest resources were allocated to Studsvik's in-core fuel management codes and reactor operation. In software development the expenditure is a combination of maintenance of existing software and new development.

Fuel and Materials Technology

Studsvik is the only independent supplier of fuel optimization and core monitoring software and analyses of nuclear fuel and material. The business area offers services to nuclear power plants, reactor and fuel manufacturers, government authorities and organizations. Testing and analysis operations are conducted in Studsvik's laboratories in Sweden and sometimes in collaboration with universities and other higher education institutions and other international laboratories. Apart from fuel optimization and core monitoring the software is used as a support to fuel management after operation. The software operations are conducted at several offices in Europe, the USA and Japan. The software development is based in the USA.

The Fuel and Materials Technology business area contributes to improved operating economy and increased safety in the nuclear power industry with methods and knowledge that extend the life of new and existing investments and it offers software for optimizing the use of nuclear fuel.

Sales amounted to SEK 262.3 (239.5) million and the operating profit increased to SEK 39.8 (31.4) million. Items affecting comparability impacted earnings for the previous year by SEK –1.4 million. Adjusted for items affecting comparability the operating margin increased to 15.2 (13.7) per cent. Sales in local currencies increased by 6 %, despite a number of major software sales being postponed from the last quarter of 2015 to 2016.

As a result of the testing and analysis operations' customer activities in new markets, mainly China, and additional sales to existing customers this part of the business area increased its sales by 15.6 % during the year. The customer value based

Key figures and ratios

Amounts in SEK million	2015	2014
Sales	262.3	239.5
Operating profit	39.8	31.4
Operating margin, %	15.2	13.1
Items affecting compa rability	0.0	–1.4
Adjusted operating profit	39.8	32.8
Adjusted operating margin, %	15.2	13.7
Investments	5.9	5.3
Average number of employees	117	120

Percentage of sales

2014 2015 -10 0 10 20 30 Q4Q3Q2Q1 Q4Q3Q2Q1 3.3 6.0 14.1 -0.8 1.4 5.0 27.2

sales and continued effectiveness improvements in operations have resulted in improved earnings.

Sales of software did not achieve the expected results in 2015, mainly due to delays in customers' decision-making processes.

The customers in our new markets are showing clear interest in the business area's integrated range of services.

Operating profit excluding items affecting comparability

16.4

Consultancy Services

Studsvik offers a broad range of consultancy and engineering services to customers in both the nuclear sector and other industries, including the oil, gas and mining industries, where there is naturally occurring radioactive material (NORM). Customers are in Europe, North America, the Middle East and Asia. The range of services covers the entire lifecycle from planning and design to waste management. The inspection and maintenance operations for nuclear facilities in Germany, Belgium and Switzerland are included in this business area. The business area also includes consultancy services and licensing of the pyrolysis technology (THORSM) that Studsvik has developed for radioactive waste that is particularly difficult to treat.

The Consultancy Services business area helps its customers to improve profitability and safety by developing and implementing the right strategy, policy and processes together with the customer.

Key figures and ratios

Amounts in SEK million	2015	2014
Sales	431.8	399.6
Operating profit	22.3	36.8
Operating margin, %	5.2	9.2
Items affecting compa rability	0.0	5.6
Adjusted operating profit	22.3	31.2
Adjusted operating margin, %	5.2	7.8
Investments	1.2	0.3
Average number of employees	508	527

Percentage of sales

Sales in local currencies increased by 3 % to SEK 431.8 (399.6) million, while the operating profit decreased to SEK 22.3 (36.8) million. Items affecting comparability impacted earnings for the previous year by SEK 5.6 million. Adjusted for items affecting comparability in 2015 the operating margin was SEK 5.2 (7.8) per cent.

Demand for advanced consulting services continues to be good and the billed time ratio is high. The declining earnings are partly explained by license revenue that was recognized in 2014 when a major THOR contract was signed with the US based operations. The THOR-contract includes consultancy support and associated license revenue for construction of a THOR-facility and during the year has led to increased demand for engineering services.

Operating profit excluding items affecting comparability

The German maintenance operations report positive earnings with good capacity utilization with customers in Germany and Switzerland. In England the demand for consulting services specializing in ventilation was very weak, with low capacity utilization and resulting losses. The operations have undergone a restructuring program and since the beginning of the year are adapted to prevailing demand.

Demand for services in waste management and interest from the oil, mining and gas industries in services relating to NORM continue to increase. During the year consultancy operations have increased staff in waste management and NORM, while the staff numbers in ventilation and maintenance have been reduced. The work on customer value based sales is continuing, which over time will be reflected in a higher operating margin.

Waste Treatment

Studsvik treats and reduces the volume of low level waste on behalf of customers mainly in the nuclear power industry. Studsvik holds a strong position in the European market for 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 treatment of radioactive waste from nonnuclear operations, such as hospitals, universities and the process industry. Waste from the nuclear industry and non-nuclear operations is handled and treated at customers' facilities and at Studsvik's facilities in Sweden and the United Kingdom.

The Waste Treatment business area offers solutions for managing waste flows that reduce both environmental impact and customers' costs for treatment and final disposal.

Key figures and ratios

Amounts in SEK million	2015	2014
Sales	175.4	241.2
Operating profit	–11.7	2.9
Operating margin, %	–6.7	1.2
Items affecting compa rability	0.0	–5.1
Adjusted operating profit	–11.7	7.9
Adjusted operating margin, %	–6.7	3.3
Investments	18.9	21.7
Average number of employees	109	158

Percentage of sales

Sales in local currencies decreased by 31 % to SEK 175.4 (241.2) million and the operating profit to SEK –11.7 (2.9) million. Items affecting comparability impacted earnings for the previous year by SEK -5.1 million. Adjusted for items affecting comparability in 2015 the operating margin was SEK –6.7 (3.3) per cent.

Demand for volume reduction of large components was weak in 2015, which is reflected in flagging sales and a loss for the full year. In incineration and volume reduction of mixed metals demand was satisfactory but weaker than in 2014.

Efficiency in the facilities has improved and the average number of employees has decreased by 26 %. The work of adapting the cost level in the business area is continuing and

Operating profit excluding items affecting comparability

at the same time we are reviewing various strategic alternatives and business models for the operations.

The market situation for the business area is dependent on both political decisions concerning operation of nuclear power plants and our customers' financial capacity to treat and reduce the volume of waste arising from operations and maintenance on an ongoing basis. Low energy prices put pressure on our customers' profitability and customers defer their deliveries to us.

PARENT COMPANY

Operations in the parent company consist of coordination of the Group. Parent company sales were SEK 10.6 (11.9) million. Operating profit was SEK –28.9 (–43.9) million. Items affecting comparability impacted the previous year by SEK –5.6 million. Profit/loss after financial items was SEK 8.0 (–8.5) million; this includes group contributions of SEK 45.1 (42.8) million.

Cash and cash equivalents amounted to SEK 14.5 (35.6) million and interest-bearing liabilities to SEK 200.0 (221.0) million.

BENEFITS TO SENIOR MANAGEMENT

The principles for benefits to senior management were adopted by the Annual General Meeting held on April 29, 2015.

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

Apart from the provisions of collective agreements or other agreements, senior management executives can choose pension solutions on an individual basis. Thus they can convert salary and variable remuneration to extra pension payments, 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 payment equivalent to a maximum of 12 months' salary may be made in addition to salary during the period of notice. There is more information concerning benefits to senior management in note 38.

The Board of Directors does not intend to propose any change in these principles at the 2016 Annual General Meeting.

EMPLOYEES

The average number of employees in the Group in 2015 was 829 (895). The reduction refers to the Waste Treatment business area and administrative functions at the head office and shared service organization. Demand is increasing for Consultancy Services and Fuel and Materials Technology, which, together with the generational shift that the nuclear power industry is facing, further underlines the importance of creating attractive conditions for the Group's existing and potential employees.

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 to completely avoid work-related injuries. Studsvik has a program to reduce the number of work-related injuries and the number of injuries resulting in sickness absence has gradually decreased in recent years. In 2015 the number of injuries resulting in sickness absence was 12 (18). Measures are being taken to eliminate physical work environment risks both at the Group's and customers' facilities. Improved knowledge of risks and influencing and changing attitudes and behavior are equally important. Part of this work is to encourage all employees to identify improvements and to report potential risks and risk behaviors.

EQUAL OPPORTUNITIES AND DIVERSITY

Studsvik values and encourages diversity in the organization in a way that reflects the diversity in our markets. An organization made up of employees with different experience and backgrounds makes the business more innovative. The percentage of women was 18 (19) 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 (CORPORATE RESPONSIBILITY)

Safety, sustainable development and environmental responsibility, i.e. Studsvik's corporate responsibility activities, are integrated parts of the Group's business strategy. For Studsvik this entails a commitment to follow the principles of sustainable development, which also cover economy, environment, health and safety as well as ethical and social aspects. The goal is to minimize the environmental impact of operations and Studsvik's own facilities, both as regards emissions and use of resources. Studsvik is to supply the global nuclear and radiological market with sustainable solutions for safe and environmentally friendly operations.

SOCIAL COMMITMENT

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.

DECOMMISSIONING OF STUDSVIK'S NUCLEAR FACILITIES

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

In accordance with the Act on Financing the Handling of Certain Radioactive Waste etc. (1988:1597) (the Studsvik Act) the Swedish nuclear power producers pay a fee per generated kWh of electricity to the Nuclear Waste Fund to cover the costs of decommissioning the main part of Studsvik's nuclear facilities. Regular cost estimates are made to establish the extent of the commitment. 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 decided by that company.

The Group's Swedish facilities that are not covered by the Studsvik Act are governed by an Act that came into force in 2007 (2006:647). Under that Act Studsvik is financially liable to ensure future decommissioning of these facilities. This is done partly by paying a fee to the Nuclear Waste Fund, partly by pledging collateral to assure compliance. Cost estimates are made to determine the extent of Studsvik's commitment. These then form the basis for determining the fee to be paid by Studsvik to the Nuclear Waste Fund. In 2015 the fee to the Nuclear Waste Fund was SEK 1.4 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 recognized in income. The annual cost will be more or less equivalent to the fee paid to the Nuclear Waste Fund. The balance in the Nuclear Waste Fund is recorded as an asset in the accounts.

For its nuclear facility in the United Kingdom the Group makes provision in its own balance sheet for future decommissioning.

RISK MANAGEMENT

Studsvik operates in an international, competitive market. The responsibility for assessing operational and financial risks lies with each respective business area. The business areas' risk assessments are examined, compared and followed up by the parent company as well as being dealt with in connection with the regular follow-up in each business area.

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 security culture, which rests on a long tradition of clear routines for quality assurance and follow up in the context of various quality certification processes.

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

EXTERNAL RISKS

Licensing obligation and regulatory framework

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

Studsvik fulfills 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 is affected by a number of factors, and in the long term is dependent on developments in the nuclear power industry and the factors that influence them. By addressing its services to the nuclear power industry's needs throughout plant lifecycles, Studsvik's business is only dependent in the very long term on the survival of the nuclear power industry.

Public opinion

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

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

OPERATIONAL RISKS Technology

Software, laboratory activities, waste management 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.

The risk is 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. Studsvik also manages this risk by patenting its proprietary technology whenever it is considered possible and financially justifiable.

Transport

A large part of Studsvik's operations, especially in the field of materials testing and waste treatment, 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 official approval, special equipment and/or vehicles, resulting in the possibility of prolonged licensing processes, which can lead to deferment or losses in earnings. Transportation complies with high safety standards, is subject to frequent inspections by supervisory authorities and has a low risk of harmful con-sequences in the event of an accident. By maintaining a high level of competence in our own transport organization, and through 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 system, monitoring and maintenance systems, as well as 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 conflicts that may affect business and cause loss of income cannot be ruled out. Studsvik works actively to create stable and sound relations with employees and trade union organizations. An active human resources policy with the means and systems required for employee development creates a high level of job satisfaction.

In accordance with Swedish legislation Studsvik has employee 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 limited by systematizing processes, recruitment and competence development.

Fixed price contracts

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

Supplier liability

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

Owner liability for waste

Studsvik has owner liability for waste arising from its own processes and operations. In addition, Studsvik has owner liability for a limited period for some waste from its customers. The Group aims to have agreements with sub-contractors on the conditions for final disposal of this waste. Changes in regulatory or commercial conditions that necessitate amendments or supplements to these arrangements cannot be ruled out. The risk is managed through Studsvik periodically calculating the economic effects of these commitments, making provision in the balance sheet for future costs of final disposal, paying in fees in accordance with local regulations and receiving remuneration from customers for Studsvik's commitments.

Dependence on suppliers

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

Financing and political decisions

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

In many markets these activities are funded through complex systems involving a combination of accumulated funds, income from the operations of nuclear power plants, and taxes. Consequently, political decisions affect demand for Studsvik's services, mainly 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 surveyed regularly and preventive measures are integrated into the Group's quality and safety systems. In order to reduce the negative impact on profits that an accident and subsequent stoppage could have, all facilities are covered by property insurance and consequential loss insurance has been taken out for all strategic facilities.

Damage caused to a contracting party or third party

Error or negligence in performance of a service or delivery of a product can lead to a contracting party or third party suffering physical and/or financial damage. The concept of damage includes personal injury, material damage and financial damage. Third party liability insurance has been taken out to cover Studsvik against the financial risks and consequences its business entails. 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 4.2 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).

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 of this material. 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 continually 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 responsibility to decommission the facilities. Under local regulations Studsvik is technically and financially responsible for decommissioning the Group's UK facility.

Environmental debt

Studsvik generates a limited volume of own waste that impacts the environment. When Studsvik processes radioactive waste on behalf of a customer it is the customer that is responsible for the radioactive residual products.

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 about 61 per cent of total costs. The Group's currency exposure is greatest against EUR, GBP and USD.

Sensitivity analysis		Change	Effect on operating profit
Price to customer	1 %	+/–	SEK 8.9 million
Personnel costs	1 %	+/–	SEK 5.3 million
Exchange rate EUR/GBP/USD 10 %			+/– SEK 10.5 million

CORPORATE GOVERNANCE

The company has drawn up a corporate governance report separate from the administration report, which can be found in the Corporate Governance section.

PROPOSED DISTRIBUTION OF PROFITS

The Board of Directors proposes that no dividend be distributed in 2015. No dividend was distributed in the previous year. The total profits at the disposal of the Annual General Meeting comprise the parent company's non-restricted equity, SEK 57,366,741, consisting of retained earnings of SEK 50,599,485 and profit for the year, of SEK 6,767,256. The Board of Directors proposes that the profits be distributed as follows:

To be carried forward	SEK 57,366,741
Total non-restricted equity in the	SEK 57,366,741
parent company

THE STUDSVIK SHARE

SHARE PRICE AND TRADING

The Studsvik share is listed on Nasdaq Stockholm. In 2015 the share price fell by 0.3 per cent from SEK 32.80 to SEK 32.70. At the close of the year the market value was SEK 268.7 million. During the year the price varied between a high of SEK 39.0 on April 29 and a low of SEK 28.1 on September 16.

In 2015, 2.8 million Studsvik shares were traded for a value of SEK 90.5 million. This corresponds to 55 per cent of the free float (the value of shares that are available for trading), to be compared with 50 per cent in the previous year. The free float refers to shares held by shareholders with less than 10 per cent of the capital.

NUMBER OF SHARES AND SHARE CAPITAL

On December 31, 2015 Studsvik AB (publ) had 8,218,611 shares in issue. Each share carries one vote and entitles the owner to share equally in the company's assets and earnings. The quotient value is SEK 1.0 and the share capital amounted to SEK 8.2 million.

SHAREHOLDERS

On December 31, 2015 Studsvik had 3,307 shareholders. The percentage of shares registered abroad was 17 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 shareholders 62.8 per cent. The shareholdings of the Board and the Executive Group Management are presented in the sections Board of Directors and auditors and Executive Group Management.

SHAREHOLDERS

DECEMBER 31, 2015
	Number of shares	Holding %
Karinen Family	1,769,552	21.5
Briban Invest AB	1,285,492	15.6
Credit Agricole Suisse SA	363,879	4.4
Avanza Pensionsförsäkring AB	347,163	4.2
Nordnet Pensionsförsäkring AB	327,551	4.0
Invus Investment AB	276,594	3.4
Malte Edenius	250,000	3.0
Eikos AB	201,950	2.5
Leif Lundin	186,000	2.3
Unionen	152,709	1.9
Total of the 10 largest share holders – holdings	5,158,890	62.8
Other shareholders	3,059,721	37.2
Total	8,218,611	100.0

DIVIDEND POLICY AND DIVIDEND

The Board's goal is that on average the dividend should correspond to at least 30 per cent of the consolidated profit after tax. Decisions on dividend proposals will, however, take into consideration Studsvik's expansion potential, the strength of its balance sheet, liquid funds and financial position in general. For 2015 the Board proposes that no dividend be paid.

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 Remium.

INFORMATION ON THE ARTICLES OF ASSOCIATION ETC.

There is no provision in Studsvik's Articles of Association that restricts the right to transfer shares. The company has not transferred any of its own shares or issued new shares during the financial year. The company is not aware of any agreements between shareholders that may result in restrictions on the right to transfer shares in the company. The company is not a party to any material agreement that is affected by any public take-over bid. The compa-ny'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 ap-pointed by the Annual General Meeting. There is no provision in the Articles of Association concerning appointment and dismissal of Board members. The Board of Directors is not authorized to decide on the issue of new shares or acquisition of own shares.

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. 2015

Shareholding	Number of shareholders	Number of shares	% of total shares
1 – 500	2,740	276,210	3.4
501 – 2 000	365	396,428	4.8
2 001 – 10 000	137	614,655	7.5
10 001 – 50 000	36	784,845	9.5
50 001 – 100 000	15	975,366	11.9
100 001 –	14	5,171,107	62.9
Total	3,307	8,218,611	100.0

DATA PER SHARE
Amount, SEK	2011	2012	2013	2014	2015
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	31.80	29.50	37.80	32.80	32.70
Earnings per share from continuing ope rations before and after dilution	1.04	–1.65	–2.78	0.63	0.29
Earnings per share from operations to be sold before and after dilution	1.72	–4.17	–21.15	–2.09	–
Equity per share	66.77	58.19	34.83	35.64	36.30
P/E ratio	11	neg	neg	neg	neg

Consolidated statement of profit or loss and other comprehensive income

Continuing operations	Note	2015	2014
Sales revenues	4	895,370	909,570
Costs of services sold	7	–657,214	–660,459
Gross profit		238,156	249,111
Selling and marketing costs	7	–56,352	–47,562
Administrative expenses	7, 8	–133,366	–146,942
Research and development costs	7	–25,422	–25,759
Share in earnings from associated companies	17, 18	11,608	11,539
Other operating income	5	10,947	5,433
Other operating expenses	6	–21,220	–15,369
Operating profit	4, 5, 6, 7, 8, 9	24,352	30,451
Financial income	10, 12	224	182
Financial expenses	10, 12	–13,607	–17,007
Fair value gain/loss (realized and unrealized)	10, 12	–4,287	–2,030
Profit/loss before tax		6,681	11,596
Income tax	11	–4,258	–6,443
Profit/loss for the year from continuing operations		2,423	5,153
Operations held for sale
Profit/loss for the year from operations held for sale	39	–	–17,153
NET PROFIT/LOSS FOR THE YEAR		2,423	–12,000
Other comprehensive income
Items that may later be reversed in the income statement
Translation differences on foreign subsidiaries	28	2,584	19,178
Cash flow hedging		482	–645
Income tax on items recognized in other comprehensive income		–106	90
Other comprehensive income for the year, net after tax		2,960	18,623
Total profit or loss and other comprehensive income for the year		5,383	6,623
Income for the year attributable to
Parent company's shareholders		2,423	–12,000
Non-controlling interests		–	–
Total comprehensive income attributable to
Parent company's shareholders		5,310	6,623
Non-controlling interests		73	–
Earnings per share calculated on income attributable to the parent company's shareholders during the year (SEK)
Earnings per share before and after dilution
Profit/loss from continuing operations	13	0.29	0.63
Profit/loss from operations to be sold		–	–2.09
NET PROFIT/LOSS FOR THE YEAR		0.29	–1.46

Group statement of financial position

	Note	2015	2014
ASSETS
Non-current assets
Property, plant and equipment	15	344,797	350,019
Intangible assets	16	181,407	177,178
Investments in associated companies	17, 18	4,849	6,098
Deferred tax assets	31	86,139	84,450
Financial assets at fair value through profit or loss	19, 23	33,794	34,852
Derivative financial instruments	19, 21, 23	144	233
Trade and other receivables	19, 22	2,777	2,723
Total non-current assets		653,907	655,553
Current assets
Inventories	24	2,381	1,907
Trade and other receivables	19, 22	259,935	261,487
Financial assets at fair value through profit or loss	19, 23	0	454
Derivative financial instruments	19, 21, 23	2,344	1,840
Cash and cash equivalents	19, 25	74,914	120,074
Total non-current assets		339,574	385,762
Assets in operations held for sale	39	–	–
TOTAL ASSETS		993,481	1,041,316
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	15,512	12,625
Retained earnings	27	48,929	46,506
Equity attributable to the parent company's shareholders		297,932	292,622
Non-controlling interests		344	271
Total equity		298,276	292,893
LIABILITIES
Non-current liabilities
Borrowings	19, 30	1,012	203,013
Derivative financial instruments	19, 21, 23	2,062	2,792
Deferred tax liabilities	31	29,963	38,057
Pension obligations	32	5,478	7,517
Other provisions	33	161,292	152,905
Trade and other payables	29	39,115	39,699
Total long-term liabilities		238,922	443,983
Current liabilities
Trade and other payables	29	236,414	263,698
Current tax liabilities		6,073	2,873
Borrowings	19, 30	208,243	22,817
Derivative financial instruments	19, 21, 23	4,695	13,752
Other provisions	33	858	1,300
Total current liabilities		456,283	304,440
Liabilities in operations held for sale	39	–	–
Total liabilities		695,205	748,423
TOTAL EQUITY AND LIABILITIES		993,481	1,041,316

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

	Share capital	Other paid in capita	Other reserves	Retained earnings	Equity attributable to parent company	Non-controlling interests	Total equity
Opening balance at January 1, 2014	8,219	225,272	–5,998	58,506	285,999	271	286,270
Other comprehensive income			18,623	–	18,623		18,623
Net profit/loss for the year			–	–12,000	–12,000	–	–12,000
Closing balance at December 31, 2014	8,219	225,272	12,625	46,506	292,622	271	292,893
Opening balance at January 1, 2015	8,219	225,272	12,625	46,506	292,622	271	292,893
Other comprehensive income			2,887	–	2,887	73	2,960
Net profit/loss for the year			–	2,423	2,423	–	2,423
Closing balance at December 31, 2015	8,219	225,272	15,512	48,929	297,932	344	298,276

Group statement of cash flow

Total operations	Note	2015	2014*
Cash flow from operating activities
Operating profit		24,352	17,914
Adjustment for non-cash items	34	28,699	17,328
		53,051	35,242
Interest received		224	182
Interest paid		–11,725	– 17,807
Income tax paid		–6,881	1,080
Cash flow from operating activities before changes in working capital		34,669	18,697
Change in working capital
– Current assets		– 5,469	29,633
– Other current liabilities		–35,781	– 69,089
Cash flow from operating activities	39	–6,581	–20,759
Cash flow from investing activities
Sale of subsidiaries		–	93,947
Acquisition of financial assets	23	–	–1,250
Disposals of financial assets	23	–	–
Acquisition of property, plant and equipment	15	–28,557	–32,750
Proceeds from sale of property, plant and equipment	15	–	364
Purchases of intangible assets	16	–7,374	–9
Dividend from associated companies	17,18	12,704	10,406
Cash flow from investing activities	39	– 23,227	70,708
Free cash flow		–29,808	49,949
Cash flow from financing activities
Loans raised	30	6,158	12,703
Repayments of loans	30	–22,828	– 105,291
Dividend	27	–	–
Cash flow from financing activities	39	–16,670	-92,588
Change in liquid assets		–46,478	–42,639
Cash and cash equivalents at beginning of the year		120,074	151,367
Translation difference		1,319	11,346
Cash and cash equivalents at end of the year	25	74,914	120,074

Parent company income statement

	Not	2015	2014
Sales revenues	41	10,580	11,919
Costs of services sold	43	–2,925	–2,248
Gross profit		7,655	9,671
Administrative expenses	43	–36,686	–47,588
Other operating income	45	189	1,652
Other operating expenses	45	–98	–7,671
Operating profit	41, 42, 43, 44, 45, 46	–28,940	–43,936
Profit/loss from participations in group companies	47	45,100	42,807
Interest income and similar items	48	17,702	17,309
Interest expense and similar items	49	–25,901	–24,687
Profit/loss before tax		7,961	–8,507
Appropriations	50	–	–
Income tax	51	–1,194	2,368
NET PROFIT/LOSS FOR THE YEAR		6,767	–6,139
Parent company statement of comprehensive income
Net profit/loss for the year		6,767	–6,139
Other comprehensive income		–	–
Total comprehensive income for the year		6,767	–6,139

Parent company balance sheet

	Not	2015	2014
ASSETS
Non-current assets
Intangible assets	52	3,261	–
Property, plant and equipment
– Equipment and tools		–	–
Financial assets	53
– Deferred tax assets		3,859	5,053
– Shares in subsidiaries	55	371,813	371,813
– Receivables from subsidiaries	53	205,683	209,744
Financial assets at fair value through profit or loss	53	25,880	25,514
Derivative instruments	60	78
Total non-current assets		610,574	612,124
Current assets
Inventories and goods for resale		579	535
Trade and other receivables		3,935	3,600
Derivative financial instruments	60	–	–
Receivables from group companies		45,780	45,894
Prepaid expenses and accrued income	54	1 ,496	3,274
Cash and cash equivalents		14,498	35,552
Total non-current assets		66,288	88,855
TOTAL ASSETS		676,862	700,979
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		50,599	56,739
Net profit/loss for the year		6,767	–6,139
Total non-restricted equity Total equity		57,366 290,857	50,600 284,091
Untaxed reserves		–	–
LIABILITIES
Non-current liabilities
Liabilities to credit institutions	56	–	200,000
Deferred tax liabilities		–	–
Liabilities to group companies		91,712	68,358
Other liabilities		14,975	14,267
Total long-term liabilities		106,687	282,625
Current liabilities
Liabilities to group companies		66,541	84,740
Trade creditors		1,398	1,745
Liabilities to credit institutions	56	200,111	21,002
Derivative financial instruments	60	69	7,750
Other liabilities		3,089	1,360
Accrued expenses and deferred income	57	8,110	17,666
Total current liabilities		279,318	134,263
Total liabilities		386,005	416,888
TOTAL EQUITY AND LIABILITIES		676,862	700,979

Parent company statement of changes in equity

	Share capital	Other contributed capital	Retained earnings	Equity attributable to parent company's shareholders	Total equityl
Opening balance at January 1, 2014	8,219	225,272	56,739	290,230	290,230
Comprehensive income
– Net profit/loss for the year			–6,139	–6,139	–6,139
Closing balance at December 31, 2014	8,219	225,272	50,600	284,091	284,091
Opening balance at January 1, 2015	8,219	225,272	50,600	284,091	284,091
Comprehensive income
– Net profit/loss for the year			6,767	6,767	6,767
Closing balance at December 31, 2015	8,219	225,272	57,367	290,858	290,858

Parent company cash flow statement

	Not	2015	2014
Cash flow from operating activities
Operating profit		–28,940	–43,936
Adjustment for non-cash items	62	167	–1,613
		–28,773	–45,549
Interest received		5,125	7,017
Interest paid		–33,660	–14,947
Income tax paid		–	69
Cash flow from operating activities before changes in working capital		–57,308	–53,410
Change in working capital
– Current assets		1,512	6,154
– Other current liabilities		–47,195	–10,088
Cash flow from operating activities		–102,991	–57,344
Cash flow from investing activities
Group contribution received		42,807	46,000
Acquisition of property, plant and equipment	52	–3,505	–
Loans to group companies	53	41,996	38,809
Cash flow from investing activities		81,298	84,809
Cash flow from financing activities
Repayments of loans		–	–69,367
Loans raised		639	21,002
Dividend paid		–	–
Cash flow from financing activities		639	–48,365
Change in liquid assets		–21,054	–20,900
Cash and cash equivalents at beginning of the year		35,552	56,452
Cash and cash equivalents at end of the year		14,498	35,552

Notes

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, International Financial Reporting Standards (IFRS) and interpretations by the IFRS Interpretations Committee (IFRIC) as adopted by the EU. The consolidated accounts have been prepared in accordance with the historical cost method except as regards financial assets and liabilities carried at fair value through profit or loss.

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

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

None of the IFRS and IFRIC interpretations that are compulsory for the first time in the financial year starting on January 1, 2015 apply to the Group. Other standards, amendments and interpretations that come into force for the financial year starting on January 1, 2015, have no material impact on the Group's financial statements.

New standards, amendments and interpretations that have not as yet come into force and that are not applied in advance by the Group

A number of new standards and interpretations come into force for the financial year starting on January 1, 2015. None of them have been applied when preparing this financial report and none of them are expected to have any material impact on the Group's financial statements, with the exception of those set out below:

• IFRIC 21, "Levies"; this is an interpretation of IAS 37 Provisions, contingent liabilities and contingent assets. IAS 37 clarifies the criteria for recognizing a liability; one criterion is that the company has an existing obligation as a result of a past event (also called an obligating event). IFRIC 21 deals with recognition of different forms of levies that may be imposed on a company by a government or equivalent body, through legislation and/or regulation. The interpretation deals with the time at which an obligating event arises, triggering recognition as a liability. The obligating event that gives rise to a liability is the event that triggers payment of a levy. Came into force on January 1, 2014 according to the IASB but for financial years starting after June 17.

Upcoming standards not yet in force

IFRS 9, "Financial instruments" replaces the parts of IAS 39 that deal with classification and valuation of financial instruments. IFRS 9 retains a mixed measurement approach, but simplifies this approach in some respects. There will be three measurement categories for financial assets; amortized cost, fair value through other comprehensive income and fair value through net income. The classification of an instrument depends on the company's business model and the characteristics of the instrument. Investments in debt instruments are measured at amortized cost if: a) the asset is held to collect its contractual cash flows and b) the assets contractual cash flows represent solely payments of principal and interest. All other debt and equity instruments, including complex instruments, are to be measured at fair value. All fair value changes of financial assets are recognized through profit or loss, with the exception of investments in equity instruments held for trading, for which there is an option to recognize fair value changes in other comprehensive income. No reclassification to profit or loss will then be made when the instrument is sold. For financial liabilities measured at fair value, companies are to recognize the part of the fair value change that is attributable to changes in credit risk of the liability in other comprehensive income. The new hedge accounting rules in IFRS 9 give companies a better opportunity to reflect their applied risk management strategies. In general, it will be easier to qualify for hedge accounting. The new standard increases the disclosure requirements and introduces some changes in presentation. IFRS 9 also introduces a new model for calculating credit loss reserves based on expected credit losses. The model for impairment loss contains a three-step approach based on changes in credit quality of the financial assets. The different steps govern how companies measure and recognize impairment loss and how they should apply the effective interest method. For financial assets without a significant financing component, such as ordinary trade receivables and lease receivables, there are simplification rules allowing the company to recognize a reserve for the entire life of the receivable directly, thus not needing to identify when significant deterioration in credit quality has occurred. For financial years starting before February 1, 2015 companies have the option of early application of IFRS 9, in accordance with specific transition rules. If early application is opted for after February 1, 2015 IFRS 9 must be applied in its entirety. Applies on and after January 1, 2018 (not adopted by the EU).

• IFRS 15, "Revenue from contracts with customers", is the new standard for revenue recognition. IFRS 15 replaces IAS 18 "Revenue" and IAS 11 "Construction contracts" and all associated interpretation statements (IFRIC and SIC). Revenue is recognized when the customer obtains control over a good or service, a principle that replaces the earlier principle that revenue is recognized when risks and rewards have been transferred to the buyer. The fundamental principle in IFRS 15 is that a company recognizes revenue in the way that best reflects the transfer of the promised good or service to the customer. This recognition is by means of a five-step model:
• Step 1: Identify the contract with the customer
• Step 2: Identify the performance obligations in the contract
• Step 3: Determine the transaction price
• Step 4: Allocate the transaction price to the performance obligations
• Step 5: Recognize revenue when a performance obligation is satisfied

The greatest changes compared with today's rules are: Distinct goods or services in integrated contracts must be recognized as separate obligations and any discounts must as a principle rule be allocated to the separate entities. If the transaction price contains variable consideration (for example performance bonuses, discounts, royalties, etc.) revenue can be recognized earlier than under current rules. It is to be estimated and included in the transaction price to the extent it is highly probable that it will not need to be reversed. The time when the revenue is to be recognized can vary; some revenue that is currently recognized when a contract is completed may need to be recognized over the contract period or vice-versa. There are new specific rules for licenses, guarantees, advance payments that are not repaid and consignment contracts. The standard also entails increased disclosure requirements. A company can choose between a "full retroactive" application or prospective application with further disclosures. Applies on and after January 1, 2018 (not adopted by the EU).

• IFRS 16,"Leases": On January 1, 2016 the IASB published a new standard on leases that will replace IAS 17 Leases and the associated interpretations IFRIC 4, SIC 15 and SIC 27. The standard requires that assets and liabilities referring to all leases, with some exceptions, be recognized in the balance sheet. This accounting is based on the view that the lessee has the right to use an asset for a specific period of time and at the same time an obligation to pay for this right. The lessor's accounting will essentially be unchanged. The standard is applicable to financial years starting on or after January 1 2019. Early application is permitted (not adopted by the EU).

The Group has not yet evaluated the effects of introducing the standards. No other IFRS or IFRIC interpretations that as yet have not come into force are expected to have any material impact on the Group.

Amendments to standards

Disclosure Initiative – Amendments to IAS 1, Presentation of financial statements, is within the framework of the IASB's Disclosure Initiative, a project to improve disclo-sures in financial statements. The amendments clarify a number of issues, including:

• Materiality a company may not combine or disclose separately items in a way that hides useful information. In cases where items are material, sufficient information must be disclosed to explain the impact of the item on the company's financial position or results.
• Separate disclosure and subtotals items specified in IAS 1 may need to be separately disclosed in cases where this is necessary to understand the company's financial position or results. There is also new guidance on the use of subtotals.
• Notes the amendment confirms that the notes do not need to be presented in any particular order.

• Other comprehensive income attributable to investments recorded in accordance with the equity method must be grouped in accordance with whether or not the items will subsequently be reclassified to profit or loss. Each group must be presented on a separate line in the statement of other comprehensive income.

Under the transition rules disclosures under IAS 8 referring to the application of new standards and new accounting policies are not compulsory for these amendments. Applies on and after January 1, 2016 (adopted by the EU).

1.2 CONSOLIDATED ACCOUNTS

Subsidiaries

Subsidiaries are all companies over which the Group has a controlling interest. The Group controls a company when it is exposed, or has rights, to variable returns from its involvement with the company and has the ability to affect those returns through its power over the company. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are de-consolidated from the date that control ceases.

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

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

Transactions with non-controlling interests

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

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

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

Associated companies

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

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

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

Joint ventures

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

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

1.3 SEGMENT REPORTING

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

1.4 FOREIGN CURRENCY TRANSLATION Functional and presentation currency

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

Transactions and balances

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

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

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

Group companies

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

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

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

1.5 PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment is recorded at historical cost less depreciation. The Group applies depreciation of components, where each part of an item of property, plant and equipment with a cost of acquisition that is significant in relation to the total cost of the item is to be depreciated separately. 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 costs are included in the asset's carrying amount or recognized as a separate asset, as appropriate, only when it is probable that the future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. The carrying amount for the replaced part is removed from the balance sheet. All other repairs and maintenance are charged to the income statement during the financial period in which they are incurred.

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

• Land and buildings	20–50 years
• Plant and machinery	3–20 years
• Equipment and tools	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 benefit from the business combination giving rise to the goodwill item.

Computer software

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

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

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

Contractual customer relations and similar rights

Contractual customer relations and similar rights consist mainly of customer relations and contracts as well as some tenancy rights. Documents to verify their capitalization could be business plans, budgets or the company's assessments of future outcomes. An individual assessment is made for each item. Amortization starts when the asset is ready for use and subsequently continues over the estimated useful life. 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 indefinite 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 identifiable cash flows (cash-generating units). Assets other than financial 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 classifies its financial assets in the following categories: financial assets at fair value through profit or loss, loans and receivables and financial assets available for sale. The classification depends on the purpose for which the financial asset was acquired. The management determines the classification of financial assets when they are first reported.

Financial assets at fair value through profit or loss

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

Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are included in current assets, except for maturities greater than 12 months after the balance sheet date. These are classified as non-current assets. The Group's loans and receivables comprise 'Trade and other receivables' and 'Cash and cash equivalents' in the balance sheet (notes 22 and 25).

Derivatives for hedging

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

Recognition and measurement

Purchases and sales of financial assets are recognized on the trade date – the date on which the Group commits to purchase or sell the asset Financial instruments are initially recognized at fair value plus transaction costs for all financial assets not carried at fair value through profit or loss. Financial assets recognized at fair value through profit or loss are initially recognized at fair value, while related transaction costs are recognized in the income statement. Financial assets are derecognized when the rights to receive cash flows from the instruments have expired or have been transferred and the Group has transferred substantially all risks and benefits of ownership.

Financial assets at fair value through profit or loss are subsequently carried at fair value after the date of acquisition. Loans and trade receivables are carried at amortized cost after the acquisition date, applying the effective interest method. Trade receivables with short maturities are recognized at nominal value.

Gains and losses arising from changes in the fair value of the "financial assets at fair value through profit or loss" category, are presented in the income statement in the period in which they arise under the items 'Other operating income' and 'Other operating expenses'.

1.9 OFFSET OF FINANCIAL INSTRUMENTS

Financial assets and liabilities are offset and recognized net in the balance sheet only if there is a legally enforceable right to set off the recognized amounts and an intention to settle on a net basis, or to realize the asset and settle the liability simultaneously. The legal right may not be contingent on a future event and it must be legally enforceable on the company and the counterparty, both in the normal course of business or in the event of default, insolvency or bankruptcy.

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

The Group first assesses whether there is objective evidence of impairment.

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

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

1.11 DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

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

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

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 classified as a non-current asset or liability when the remaining maturity of the hedged item is more than 12 months and as a current asset or liability when the remaining maturity of the hedged item is less than 12 months.

Fair value hedging

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

Cash flow hedging

The effective portion of the change in fair value of a derivative instrument identified as a cash flow hedge and satisfying the criteria for hedge accounting, is reported in other comprehensive income. The gain or loss referring to the ineffective portion is recognized immediately in the income statement in the items 'Other operating income' or 'Other operating expenses' - net. When a hedging instrument matures or is sold or when the hedge no longer fulfills 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 first-in, first-out (FIFO) method. The cost of finished goods and work in progress comprises raw materials, direct labor, other direct costs and related production overheads. Borrowing costs are not included. Net realizable value is the estimated selling price in the ordinary course of business, less applicable variable selling expenses.

1.13 TRADE RECEIVABLES

Trade receivables are reported in the amount expected to be paid in after deduction for individually assessed doubtful receivables. The expected maturity of trade receivables is less than twelve months 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 shortterm liquid investments with original maturities of three months or less of the date of acquisition.

1.15 SHARE CAPITAL

Ordinary shares are classified as equity.

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

1.16 TRADE PAYABLES

Trade payables are 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 classified as current liabilities.

1.17 BORROWINGS

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

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

1.18 CURRENT AND DEFERRED INCOME TAX

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

The current tax expense is calculated on the basis of the tax laws that have been enacted or substantively enacted on the balance sheet date in the countries in which the parent company's subsidiaries and associated companies operate and generate taxable revenues.

The management regularly assesses claims made in tax returns for situations where applicable tax rules are subject to interpretation and, where deemed appropriate, makes provision for amounts that will probably have to be paid to the tax authorities.

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

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

Deferred tax 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 defined benefit and defined contribution plans. A defined contribution plan is a pension plan under which the Group pays fixed contributions into a separate legal entity. The Group has no legal or constructive obligation to pay further contributions if this legal entity does not have sufficient assets to pay all employee benefits associated with the employees' service in the current or prior periods. A defined benefit plan is a pension plan that is not a defined contribution plan. It is characteristic of defined benefit plans that they define an amount of pension benefit that an employee will receive on retirement, usually dependent on one or more factors such as age, years of service and compensation.

The liability recognized in the balance sheet in respect of defined benefit pension plans is the present value of the defined benefit obligation at the balance sheet date less the fair value of plan assets. The defined benefit obligation is calculated annually by independent actuaries using the projected unit credit method. The present value of the defined benefit obligation is determined by discounting the estimated future cash outflows using interest rates of high-quality corporate bonds that are denominated in the currency in which the benefits will be paid and that have terms to maturity approximating to the terms of the related pension liability.

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

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

Termination benefits

Termination benefits are payable when employment is terminated by the Group before the normal retirement date, or whenever an employee accepts voluntary redundancy or in exchange for these benefits. The Group recognizes termination benefits at the earlier of the following dates, a) when the Group can no longer withdraw the offer of those benefits, and b) when the company recognizes the costs for a restructuring within the scope of IAS 37 that includes the payment of termination benefits. In cases where the company has made an offer to encourage voluntary redundancy, the termination benefits are calculated on the basis of the number of employees expected to accept the offer.

Profit sharing and variable salary components

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

1.20 PROVISIONS

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

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

The provisions are recognized at the present value of the amount expected to be needed to settle the obligation. A discount rate before tax is used here which reflects a current market assessment of the time-dependent value of money and the risks associated with the provision. The increase in provision due to the passing of time is recorded as interest expense. 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 benefits will flow to the company and special criteria are fulfilled for each of the Group's operations as described below.

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

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 profits exceed progress billings. Progress billings not yet paid by customers and retention are included in 'Trade and other receivables'.

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

Sales of contract services are recognized 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 flow, discounted at the original effective interest rate for the instrument, and continues to reverse the discount effect as interest income. Interest income on impaired loans is recorded at the original effective interest rate.

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

1.22 LEASES

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

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

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

1.23 DIVIDENDS

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

1.24 PARENT COMPANY

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

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 financial 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 'Profit/loss from participations in Group companies '. Dividend received is reported as financial 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 finance or operating leases, are recorded as rental agreements (operating leases).

Pensions

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

Taxes

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

Group contributions and shareholders' contributions for legal entities

The company reports group contributions and shareholders' contributions in accordance with the Swedish Financial Reporting Board's recommendation RFR 2. Shareholders' contributions are recognized directly in the equity of the recipient and capitalized in shares and participations by the giver, to the extent there is no impairment loss. Group contributions from subsidiaries are reported as financial 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 financial risks: market risk (covering currency risk, fair value interest rate risk, cash-flow interest rate risk and price risk), credit risk and liquidity risk. The financial risks also include the company's ability to uphold financial key ratios (covenants) that regulate borrowing. The Group's overall risk management policy focuses on the unpredictability of financial markets and aims to minimize potential adverse effects on the Group's financial performance. The Group uses derivative instruments to hedge certain risk exposure. Risk management is handled by a central treasury function in accordance with policies determined by the Board of Directors. The central function identifies, evaluates and hedges financial risk in close cooperation with the Group's operating units. The Board of Directors draws up written policies, both for overall risk management and for specific areas, such as currency risk, interest rate risk, credit risk, use of derivative and non-derivative financial instruments and investment of surplus liquidity.

Market risk

Price risk

The Group's largest single cost item is personnel costs, which accounts for 61 (59) per cent of the total costs of operations. Other expenses are of less significance.

Currency risk

The Group operates internationally and is exposed to currency risk arising from various currency exposures, above all in US dollars (USD), euros (EUR) and pounds sterling (GBP). 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.

If the Swedish krona had weakened by 10 per cent against the euro, all other variables being constant, the year's profit as at December 31, 2015 would have been SEK 13.3 (9.0) million higher, as the Group's total revenue in EUR is greater than the corresponding expenses in EUR. Equity would have been SEK 13.0 (9.4) million higher, mainly due to translation of the Group's net investments in Germany.

If the Swedish krona had weakened by 10 per cent against the pound sterling, all other variables being constant, the year's profit as at December 31, 2015 would have been SEK 5.2 million lower (4.4 million higher), as the Group's total revenues in GBP are greater than the corresponding expenses in GBP. Equity would have been SEK 5.0 million lower (4.7 million 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 US dollar, all other variables being constant, the year's profit as at December 31, 2015 would have been SEK 2.5 million higher (3.4 million lower), mainly as a result of Scandpower Inc's operations. Equity would have been SEK 2.5 million higher (3.8 million lower), mainly due to translation of the Group's net investments in the USA.

Interest rate risk referring to cash flows and fair values

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

The Group's interest rate risk arises through long-term borrowings. Borrowing at variable interest rates exposes the Group to cash flow interest rate risk. Borrowing at fixed interest rates exposes the Group to fair value interest rate risk. 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 refinancing, renewals of existing positions, alternative funding and hedging. With these scenarios as a base, the Group calculates the impact on earnings of a given interest rate change. For each simulation the same interest rate change is used for all currencies. The scenarios are only simulated for debt constituting the largest interest-bearing positions.

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

If the interest rate on borrowing in US dollars on December 31, 2015 had been 0.5 percentage points higher/lower, all other variables being constant, the pre-tax earnings for the financial year would have been SEK 0.01 (0.02) million lower/higher, as an effect of higher/lower interest expense in connection with changed reference rates

If the interest rate on borrowing in SEK on December 31, 2015 had been 0.5 percentage points higher/lower, all other variables being constant, the pre-tax earnings for the financial year would have been SEK 1.1 (1.1) million lower/higher, mainly as an effect of higher/lower interest expense in connection with changes in reference rates.

Credit risk

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

The credit quality of financial assets is reported in note 20.

Liquidity risk

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

The management also carefully follows rolling forecasts of the Group's liquidity reserve, consisting of unutilized loan assurances (note 30) and cash and cash equivalents (note 25), on the basis of expected cash flows.

The table below analyses the Group's financial liabilities and derivative instruments settled net that constitute financial liabilities, broken down by the contractual time to maturity remaining on the balance sheet date. The amounts stated in the table are the contracted, undiscounted cash flows.

As at December 31, 2015	Less than 1 years	Between 1 and 2 years	Between 2 and 5 years	More than 5 years
Bank loans	8,243	1,012	–	–
Bond loans	200,000	–	–	–
Derivative financial instruments	4,695	1,602	460	–
Trade and other payables	236,414	3,408	7,805	27,902
As at December 31, 2014	Less than 1 years	Between 1 and 2 years	Between 2 and 5 years	More than 5 years
Bank loans	22,818	1,816	1,196	–
Bond loans	–	200,000	–	–
Derivative financial instruments	13,752	2,792	–	–
Trade and other payables	263,698	2,422	4,902	32,375

The table below analyses the Group's financial derivative instruments that will be settled gross, broken down by the contractual time to maturity remaining on the balance sheet date. The amounts stated in the table are the contracted, undiscounted cash flows. The amounts that mature within 12 months have not been discounted, since the discount effect is immaterial.

As at December 31, 2015	Less than 1 years	Between 1 and 2 years	Between 2 and 5 years	More than 5 years
Forward exchange contracts – Cash flow hedges
– Outflow	–	–	–	–
– Inflow	73,007	7,332	4,058	–
As at December 31, 2014	Less than 1 years	Between 1 and 2 years	Between 2 and 5 years	More than 5 years
Forward exchange contracts – Cash flow hedges
– Outflow	358	–	–	–

2.2 CAPITAL RISK MANAGEMENT

The Group's goal for its capital structure is to safeguard the Group's ability to continue as a going concern, so that it can generate a return for its shareholders and benefit for other stakeholders and maintain an optimal capital structure as a means of controlling the cost of capital. The Group assesses the capital on the basis of debt/ equity ratio and equity/assets ratio. Studsvik has an overall goal of an equity/assets ratio of 40 per cent. The equity/assets ratio at the close of the year was 30.0 (28.1) per cent.

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

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

	2015	2014
Total borrowing (note 30)	209,255	225,830
Less cash and cash equivalents (note 25)	-74,914	–120,074
Net debt	134,341	105,756
Total equity	298,276	292,893
Debt/equity ratio	45.0%	36.1%

The change in debt/equity ratio in 2015 was mainly a consequence of lower cash and cash equivalents. Borrowing decreased during the year and the cash flow after investments was positive. Positive translation differences are the main reason for higher equity.

2.3 FAIR VALUE ESTIMATION

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

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

The following table shows the Group's assets and liabilities measured at fair value as at December 31, 2015.

	Level 1	Level 2	Level 3
Assets
Financial assets at fair value through profit or loss
- Unlisted shareholdings	–	–	11,324
- Capital insurance	–	14,556	–
- Long-term bank deposits	–	7,914	–
Derivatives used for hedging	–	2,488	–
Total assets	–	24,958	11,324
Liabilities
Derivatives used for hedging	–	6,757	–
Total liabilities	–	6,757	–

The following table shows the Group's assets and liabilities measured at fair value as at December 31, 2014.

	Level 1	Level 2	Level 3
Assets
Financial assets at fair value through profit or loss
- Unlisted shareholdings	–	–	11,247
- Capital insurance	–	13,813	–
- Long-term bank deposits	–	10,246	–
Derivatives used for hedging	–	2,073	–
Total assets	–	26,132	11,247
Liabilities
Derivatives used for hedging	–	16,544	–
Total liabilities	–	16,544	–

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

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

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

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

The following instruments at level 3 refer to our holdings in nuclear insurance companies. They are valued at acquisition cost plus our share of their surplus. The following table shows changes for instruments at level 3 in 2015.

	Level 3
Opening balance	11,247
Acquisitions of shares	–
Gains recognized in the income statement	77
Closing balance	11,324
Total gains or losses for the period included in profit or loss for assets held at the end of the reporting period	77

The following table shows changes for instruments at level 3 in 2014.

	Level 3
Opening balance	9,635
Acquisitions of shares	–
Gains recognized in the income statement	1,612
Closing balance	11,247
Total gains or losses for the period included in profit or loss for
assets held at the end of the reporting period	1,612

30 NOTES TO THE CONSOLIDATED ACCOUNTS

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 ACCOUNTING ESTIMATES AND ASSUMPTIONS

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

Impairment tests for goodwill

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

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

Income taxes

The Group is liable to pay tax in different countries. Extensive assessments are required to establish the global provision for income tax. There are many transactions and calculations in which the final tax is uncertain at the time the transactions and calculations are made. The Group reports a liability for expected tax field audits based on assessments of whether further tax liability will arise. In cases where the final tax for these cases differs from the amounts first reported, the differences will affect current and deferred tax assets/liabilities in the period when these determinations are made. Deferred tax assets relating to temporary tax-deductible differences and loss carry-forwards are only recognized when it is probable that they can be used in the future. The value of deferred tax assets is reduced when it is no longer deemed likely that they can be used.

Fair value of derivative instruments or other financial instruments

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

Revenue recognition

The Group uses the percentage of completion method for reporting fixed price contracts. The percentage of completion method means that the Group must estimate comple-tion 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 in continuing operations would increase by SEK 3.8 (2.6) million if the percentage of completion had increased, or decrease by SEK 3.8 (2.6) million if the percentage of completion had decreased.

Provisions

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

If the actual estimate of the discount rate were to deviate by 10 per cent from the management's estimate, the net result before tax would have been SEK 0.3 (0.2) million lower for a higher rate. If the actual estimate of the future decommissioning cost were to deviate by 10 per cent from the management's assessment, the result would have been SEK 1.2 (1.5) million 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 Swedish facility, which affect future cash flows. Other changes in estimated future costs are capitalized as property, plant and equipment and thus only affect future depreciation.

Changes in the Group's provisions are presented in note 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 Board of Directors and the President assess operations mainly from a business area perspective, and therefore the segments consist of the Group's three business areas, which are described on pages 7-9.

The Board of Directors and the President assess the operating segments' performance on the basis of operating profit.

Operating segment assets refer to all non-current assets and current assets allocated by segment. Operating segment liabilities refers to all long-term and current liabilities allocated by segment.

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 2015	Waste Treatment	Consultancy Services	Fuel and Materials Technology	Other	Eliminations	Group
Sales revenues	175,344	431,792	262,262	39,942	–13,970	895,370
External sales revenue	174,189	429,962	262,262	28,957	–	895,370
EBITDA before non-recurring items	3,031	12,546	48,815	–18,107	–	46,285
Non-recurring items	–	–	–	–	–	–
Depreciation/amortization and impairment	–14,692	–1,820	–9,017	–8,012	–	–33,541
Earnings from associated companies and joint ventures	–	11,608	–	–	–	11,608
Operating profit	–11,661	22,334	39,798	–26,119	–	24,352
Net financial items						–17,670
Taxes						–4,258
Profit/loss for the year from continuing operations						2,423
Share of equity in associated companies and joint ventures	–	4,801	48	–	–	4,849
Other operating segments	320,891	390,014	234,061	344,205	–300,539	988,632
Total assets	320,891	394,814	234,109	344,205	–300,539	993,481
Operating segment liabilities	226,843	319,346	98,318	351,237	–300,539	695,205
Equity						298,276
Total equity and liabilities						993,481
Investments from continuing operations	18,942	1,173	5,924	7,502	–	33,541
Average number of employees from continuing operations	109	508	117	95	–	829
Financial year 2014	Waste Treatment	Consultancy Services	Fuel and Materials Technology	Other	Eliminations	Group
Sales revenues	241,165	399,641	239,506	46,753	–17,495	909,570
External sales revenue	240,321	397,650	239,506	32,094	–	909,570
EBITDA before non-recurring items	23,548	21,949	41,318	–22,272	–	64,543
Non-recurring items	–5,055	5,581	–1,444	–11,167	–	–12,085
Depreciation/amortization and impairment	–15,599	–2,239	–8,484	–7,224	–	–33,546
Earnings from associated companies and joint ventures	–	11,539	–	–	–	11,539
Operating profit	2,894	36,830	31,390	–40,663	–	30,451

Net financial items –18,855 Taxes –6,443 Profit/loss for the year from continuing operations 5,153 Share of equity in associated companies and joint ventures – 6,050 48 – – 6,098 Other operating segments 320,843 353,400 227,406 414,595 –281,026 1,035,218 Total assets 1,041,316 Operating segment liabilities 255,261 305,251 108,480 360,457 –281,026 748,423 Equity 292,893 Total equity and liabilities 1,041,316 Investments from continuing operations 21,740 311 5,310 5,398 – 32,759 Average number of employees from continuing operations 158 543 120 74 – 895

Note 4 (cont.)

External sales revenue per product area	2015	2014
Treatment of radioactive waste	174,189	238,852
On-site waste services	–	1,469
Consulting and engineering services	147,301	160,587
Health physics services	109,603	64,367
Transport and logistics	21,449	21,422
Decommissioning services	23,154	44,605
Operational and outage support	167,974	154,923
Fuel and materials performance	101,012	83,831
Corrosion and water chemistry studies	39,822	34,148
Fuel optimization software	79,572	73,164
Other operations	31,294	32,202
Total	895,370	909,570

Other operations include the parent company and the part of the Swedish compa-ny Studsvik Nuclear AB that is not part of the Waste Treatment, Consultancy Services or Fuel and Materials Technology segments.

External sales revenue 2015				2014
based on the customer's country of location	SEK thousand	Per cent	SEK thousand	Per cent
Sweden	178,027	19.9	182,843	20.2
Europe excluding Sweden	579,494	64.7	615,970	67.7
North America	105,048	11.7	84,884	9.3
Asia	26,799	3.0	20,247	2.2
All other countries	6,002	0.7	5,626	0.6
Total	895,370	100.0	909,570	100.0

In 2015 the Group had no customers that accounted for 10 per cent of total sales. In 2014 the Group had one customer that accounted for 11.7 per cent of total sales. This was reported in the Waste Treatment segment.

		2015	2014
Non-current assets per country	SEK thousand	Per cent	SEK thousand	Per cent
Sweden	259,308	39.7	424,221	64.7
Europe excluding Sweden	293,497	44.9	155,519	23.7
North America	101,011	15.4	75,775	11.6
Asia	91	0.0	38	0.0
Total	653,907	100.0	655,553	100.0

Note 5 Other operating income

Other income	2015	2014
Sale of property, plant and equipment	214	272
Insurance compensation	4,055	91
Revaluation of holding in mutual insurance company	77	1,611
Other	889	141
Total	5,235	2,115
Other gains	2015	2014
Other financial assets measured at fair value through profit or loss
– Fair value gains	3,569	2,009
Forward exchange contracts
– Foreign exchange differences	2,143	1,309
Total	5,712	3,318

Note 6 Other operating expenses

Other costs	2015	2014
Sale of property, plant and equipment	2,649	92
Non-recurrent structural costs	–	12,084
Other	7,595	511
Total	10,244	12,687
Other losses	2015	2014
Other financial assets measured at fair value through profit or loss
– Fair value losses	6,443	2,812
Forward exchange contracts
– Foreign exchange differences	4,533	–130
Total	10,976	2,682

Note 7 Costs by nature of expense

	2015	2014
Purchases of material and services	267,188	296,193
Personnel costs	533,458	518,595
Energy	19,476	24,013
Depreciation/amortization and impairment	33,569	33,546
Other costs	18,663	8,375
Total	872,354	880,722

Note 8 Remuneration to auditors

	2015	2014
PricewaterhouseCoopers
- Audit assignments	3,305	2,946
-Audit business in addition to audit	272	35
-Tax consultancy	935	814
- Other services	130	–
Total	4,642	3,795
Other auditors
- Audit assignments	312	–
-Audit business in addition to audit	120	55
-Tax consultancy	295	236
- Other services	320	–
Total	1,047	291
Group, total	5,689	4,086

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 9 Employee benefits

Employee benefits	2015	2014
Salaries	454,874	441,593
Social security contributions	93,953	92,133
Pension costs - defined contribution based	31,252	32,132
Pension costs – defined benefit based	1,609	1,589
Total	581,688	567,447

			2015			2014
Salaries and other remuneration distributed be-tween 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	6,008	–	7,356	5,902	–	8,296
Subsidiaries in Sweden	1,273	–	135,283	2,663	–	134,469
Subsidiaries abroad	12,948	355	287,903	7,952	366	282,311
Total, subsidiaries	14,221	355	423,186	10,615	366	416,780
Total for Group	20,229	355	430,542	16,517	366	425,076

		2015				2014
Average number of employees	Men	Women	Total	Men	Women	Total
Parent company	6	4	10	6	4	10
Subsidiaries in Sweden	175	77	252	211	75	286
Subsidiaries abroad
– Germany	390	40	430	411	61	472
– United Kingdom	53	15	68	74	13	87
– USA	33	3	36	32	5	37
– Japan	1	0	1	1	–	1
– Switzerland	30	1	31	1	–	1
– France	0	1	1	–	1	1
Total, subsidiaries	682	137	819	730	155	885
Total for Group	688	141	829	736	159	895

		2015
Gender breakdown in the Group (including subsidiaries) for members of the Board and other senior management	Number on balance sheet date	Of which men	Number on balance sheet date	Of which men
Board members	11	9	11	9
President and other senior management	7	5	6	5
Total for Group	18	14	17	14

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

Note 10 Financial income and expense

	2015	2014
Financial income
Current bank balances	11	129
Fair value gains (realized and unrealized)	9,138	8,260
Other financial income	213	53
Total	9,362	8,442
Financial expenses
Bank loans	–10,409	–14,613
Fair value losses (realized and unrealized)	–13,425	–10,290
Other financial expenses	–3,198	–2,394
Total	–27,032	–27,297
Net financial items	–17,670	–18,855

Note 11 Income tax

	2015	2014
Current tax
Current tax on profit for the year	–8,092	–5,639
Adjustment for previous years	–251	1,480
Total	–8,343	–4,159
Deferred tax (note 31)
Origination and reversal of temporary differences	4,085	–2,284
Total	4,085	–2,284
Total income tax	–4,258	–6,443

The Swedish income tax rate is 22 (22) per cent. The income tax on the Group's profit before tax differs from the theoretical amount that would arise using the weighted average tax rate for profits of the consolidated companies as follows.

	2015	2014
Profit/loss before tax	6,681	11,596
Tax in accordance with the current tax rate	–2,947	–5,186
Non-taxable revenue	2,346	–
Expenses not deductible for tax purposes	–764	–18
Unrecognized tax asset in respect of loss carry forwards	–2,642	–2,719
Adjustment for previous years' tax assessment	–251	1,480
Other effects	–	–
Tax expense	–4,258	–6,443

The weighted average tax rate was 64 (56) per cent.

Other comprehensive income only includes tax effects on cash flow hedges and on December 31 these were SEK –106 (90) thousand. Other comprehensive income also includes foreign exchange differences, but they have no tax effect.

Note 12 Foreign exchange differences – net

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

	2015	2014
Other gains and losses – net (notes 5 and 6)	–5,264	506
Financial items (note 10)	–4,287	–2,030
Total	–9,551	–1,524

Note 13 Earnings per share

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

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

Before and after dilution, continuing operations	2015	2014
Net profit/loss for the year	2,423	5,153
Weighted average number of ordinary shares in issue	8,218,611	8,218,611
Diluted and undiluted earnings per share
(SEK per share)	0.29	0.63
Before and after dilution, operations held for sale	2015	2014
Net profit/loss for the year	–	–17,153
Weighted average number of ordinary shares in issue	–	–
Earnings per share before and after dilution
(SEK per share)	–	–2.09
Before and after dilution, total operations	2015	2014
Net profit/loss for the year	2,423	–12.000
Weighted average number of ordinary shares in issue	8,218,611	8,218,611
Diluted and undiluted earnings per share
(SEK per share)	0.29	–1.46

Note 14 Earnings per share

Dividend paid in 2015 and 2014 was SEK 0 (0) per share. At the Annual General Meeting on April 25 2016 it will be proposed that no dividend be distributed for the 2015 financial year.

Note 15 Property, plant and equipment

	Buildings and land	Plant and machinery plant	Equipment and tools	Construction in pro gress and advance payments for pro perty, plant and equipment	Total
As at January 1, 2013
Cost of acquisition	299,979	219,266	128,900	15,534	663,679
Accumulated depreciation and impairment	–105,676	–129,017	–97,598	–	–332,291
Book value	194,303	90,249	31,302	15,534	331,388
January 1 – December 31, 2014
Opening book value non-divested companies	194,303	90,249	31,302	15,534	331,388
Foreign exchange differences	13,944	1,900	922	–	16,766
Investments	95	580	1,501	30,574	32,750
Capitalization of future restoration cost	–	–	–	–	–
Redistributions	5,017	4,003	4,872	–12,263	1,629
Disposals and retirements	–7	–242	–45	–	–294
Depreciation/amortization	–8,278	–16,432	–7,510	–	–32,220
Impairment losses for the year	–	–	–	–	–
Closing book value	205,074	80,058	31,042	33,845	350,019
As at December 31, 2014
Cost of acquisition	319,882	227,490	138,837	33,845	720,054
Accumulated depreciation and impairment	–114,808	–147,432	–107,795	–	–370,035
Book value	205,074	80,058	31,042	33,845	350,019
January 1 – December 31, 2015
Opening book value non-divested companies	205,074	80,058	31,042	33,845	350,019
Foreign exchange differences	2,368	264	317	–	2,949
Investments	1,751	1,850	2,080	20,305	25,986
Capitalization of future restoration cost	–	–	–	–	–
Redistributions	274	3,908	910	–5,604	–512
Disposals and retirements	–	–1,225	-17	–	–1,242
Depreciation/amortization	–8,844	–15,901	–7,658	–	–32,403
Impairment losses for the year	–	–	–	–	–
Closing book value	200,623	68,954	26,674	48,546	344,797
As at December 31, 2015
Cost of acquisition	324,223	229,916	140,004	48,546	742,689
Accumulated depreciation and impairment	–123,600	–160,962	–113,330	–	–397,892
Book value	200,623	68,954	26,674	48,546	344,797

Depreciation costs include SEK 30,614 (30,305) thousand in 'Cost of services sold', SEK 136 (172) thousand in 'Selling and marketing costs' SEK 1,093 (1,139) thousand in 'Administrative expenses' and SEK 560 (604) thousand in 'Research and development costs'. Interest of SEK 5,701 (5,590) thousand is included in the cost of acquisi-tion of buildings, plant and machinery. The value of finance leases capitalized as property, plant and equipment is presented in note 36.

Note 16 Intangible assets

	Goodwill	Software rights	and similar rights	Total
As at January 1, 2013
Cost of acquisition	191,797	25,153	23,739	240,689
Accumulated depreciation and impairment	–32,986	–24,130	–20,687	–77,803
Book value	158,811	1,023	3,052	162,886
January 1 – December 31, 2014
Opening book value	158,811	1,023	3,052	162,886
Foreign exchange differences	15,097	442	70	15,609
Investments	–	–	9	9
Depreciation/amortization	–24	–278	–1,024	–1,326
Impairment losses for the year	–	–	–	–
Closing book value	173,884	1,187	2,107	177,178
As at December 31, 2014
Cost of acquisition	208,746	25,153	23,739	257,638
Accumulated depreciation and impairment	–34,862	–23,966	–21,632	–80,460
Book value	173,884	1,187	2,107	177,178
January 1 – December 31, 2015
Opening book value	173,884	1,187	2,107	177,178
Foreign exchange differences	–1,885	–92	–30	–2,007
Investments	–	3,835	3,539	7,374
Depreciation/amortization	23	–167	–994	–1,138
Impairment losses for the year	–	–	–	–
Closing book value	172,022	4,763	4,622	181,407
As at December 31, 2015
Cost of acquisition	205,626	29,360	28,323	263,309
Accumulated depreciation and impairment	–33,604	–24,597	–23,701	–81,902
Book value	172,022	4,763	4,622	181,407

Contractual customer relations and similar rights consist mainly of customer relations/contracts as well as some tenancy rights. Amortization of SEK 1,138 (1,326) thousand is included in 'Cost of services sold' in the income statement.

Impairment tests for goodwill

Goodwill is allocated to the Group's cash generating units (CGUs) identified by segment. A segment level summary of the goodwill allocation is presented below. As of January 1, 2014 income and balance are reported per business segment instead of geographical segment.

	2015	2014
Consultancy Services	168,086	170,024
Other	3,936	3,860
Total	172,022	173,884

Goodwill is tested annually to identify any impairment loss. Acquired operations are integrated with other operations after acquisition. Impairment testing is therefore carried out at segment level. The segments are identified as cash generating units.

The cash-generating units' recoverable amount is based on value in use. These values are based on estimated future cash flows based on business plans approved by the Board of Directors for the next five years. The management has established the budgeted gross margin on the basis of previous earnings and its expectations concerning market developments. The rate of growth is estimated for each cash-generating unit on the basis of market position and development. Cash flows beyond the five-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 2015:

	Gross margin %	Rate of growth after year 5, %	Discount rate, %
Consultancy Services 2014	18.0	2.5	9.4
Consultancy Services 2015	13.0	2.5	9.0

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 11 (10) per cent before tax. Based on the assumptions and estimates made, there is no impairment loss on goodwill. Studsvik has also assessed the sensitivity of value in use to unfavorable changes in the most important assumptions concerning cash flows and discount rate. There are no other specific circumstances that have affected impairment testing.

Sensitivity analysis	Margin at carrying amount, %	Margin at 25 % hig her discount rate, %	Margin at 25 % lower operating profit, %
Consultancy Services 2014	653	455	466
Consultancy Services 2015	372	249	317

Note 17 Investments in associated companies

	2015	2014
As at January 1	2,940	155
Share in earnings	12,368	12,306
Dividend received from associated companies	–11,044	–10,406
Translation differences	–378	885
As at December 31	3,886	2,940

The Group's holding in the two unlisted associated companies KraftAkademin AB and UK Nuclear Waste Management Ltd. Both companies have ordinary shares that are owned directly by the Group.

2015	Operating site	Participating interest %	Valuation method
KraftAkademin AB	Sweden	25	Equity method
UK Nuclear Waste Management Ltd	United Kingdom	15	Equity method
2014	Operating site	Participating interest %	Valuation method
KraftAkademin AB	Sweden	20	Equity method
UK Nuclear Waste Management Ltd	United Kingdom	15	Equity method

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.

UK Nuclear Waste Management Ltd (NWM) has been appointed to be responsible, together with the Nuclear Decommissioning Authority (NDA), for management and operation of a final repository and to implement a well-functioning strategy for management of low level radioactive waste in the United Kingdom.

Obligations and contingent liabilities

Obligation to contribute capital to both associated companies if necessary.

Financial information for the Group's associated companies

A financial summary of the Group's associated companies in which the equity method is applied is given below.

Balance sheet	KraftAkademin AB		UK Nuclear Waste Management Ltd*		Total
	2015	2014	2015	2014	2015	2014
Current
Cash and cash equivalents	212	444	1,493	1,125	1,705	1,569
Other current assets	117	27	1,559	1,175	1,676	1,202
Total current assets	329	471	3,052	2,300	3,381	2,771
Financial liabilities (excluding trade payables)	–	–	–	–	–	–
Other current liabilities (including trade payables)	133	296	17,113	12,895	17,246	13,191
Total current liabilities	133	296	17,113	12,895	17,246	13,191
Non-current
Non-current assets	–	–	39,646	29,875	39,646	29,875
Total non-current assets	–	–	39,646	29,875	39,646	29,875
Financial liabilities	–	–	–	–	–	–
Other long-term liabilities	–	–	–	–	–	–
Total long-term liabilities	–	–	–	–	–	–
Net assets	196	175	25,586	19,280	25,782	19,455
Statement of comprehensive income	2015	2014	2015	2014	2015	2014
Income	1,730	539	86,972	82,040	88,702	82,577
Depreciation/amortization	–	–	–	–	–	–
Interest income	2	3	–	–	2	3
Interest expense	–	–	–	–	–	–
Profit/loss before tax	–36	–57	82,453	82,040	82,417	81,981
Income tax	–	–	–	–	–	–17,228
Net profit/loss for the year	–36	–57	82,453	82,040	82,417	64,753
Other comprehensive income	–	–	–	–	–	–
Total comprehensive income	–36	–57	82,453	82,040	82,417	64,753

The information above reflects the figures presented in the associated companies' financial statements adjusted for differences in accounting rules between the Group and the respective associated company.

* UKNWM's financial year runs from April 1 to March 31. The figures are estimated on the basis of information available at the year-end closing in 2014 and 2015.

Reconciliation of the financial information

Reconciliation of the financial information to the carrying amount of the Group's participations in associated companies.

	KraftAkademin AB		UK Nuclear Waste Management Ltd
	2015	2014	2015	2014	2015	2014
Net assets as at January 1	175	232	19,280	713	19,455	945
Net profit/loss for the year	–36	–57	82,453	82,040	82,417	81,983
Dividend	–	–	–73,627	–69,373	–73,627	–69,373
Capital contributions from owners	–	–	–	–	–	–
Translation differences	–	–	–2,520	5,900	–2,520	5,900
Other comprehensive income	–	–	–	–	–	–
Net assets as at December 31	139	175	25,586	19,280	25,725	19,455
Participating interest associated companies	35	35	3,838	2,892	3,873	2,927
Carrying amount	48	48	3,838	2,892	3,886	2,940

Note 18 Interests in joint ventures

	2015	2014
As at January 1	3,158	5,484
Share in earnings	–760	–767
Less participations sold	–	–2,132
Dividend received from joint ventures	–1,660	–
Less operations held for sale	–	–
Foreign exchange differences	225	573
As at December 31	963	3,158

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 liabili-ties) is as follows.

2015		Non-current assets	Current assets	Current liabilities	Net assets	Income	Profit/loss	Participating interest
THOR Treatment Technologies, LLC	USA	–	1,470	504	966	693	–760	50
Total		–	1,470	504	966	693	–760
2014		Non-current assets	Current assets	Current liabilities	Net assets	Income	Profit/loss	Participating interest
THOR Treatment Technologies, LLC	USA	–	3,702	675	3,026	3,528	–908	50
Total		–	3,702	675	3,026	3,528	–908

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.

Obligations and contingent liabilities

The Group has an obligation to contribute capital to TTT if necessary.

Financial information for the Group's joint ventures

A summary is given below of the Group's joint venture companies in which the equity method is applied.

Balance sheet	THOR Treatment Technologies, LLC
	2015 2014
Current
Cash and cash equivalents	2,170 5,915
Other current assets	163 1,490
Total current assets	2,334 7,405
Financial liabilities (excluding trade payables)	– –
Other current liabilities (including trade payables)	1,014 1,354
Total current liabilities	1,014 1,354
Non-current
Non-current assets	607 –
Total non-current assets	607 –
Financial liabilities	– –
Other long-term liabilities	– –
Total long-term liabilities	– –
Net assets	1,927 6,053

Statement of comprehensive income	THOR Treatment Technologies, LLC
	2015	2014
Income	1,386	7,056
Depreciation/amortization	–	–
Interest income	–	–
Interest expense	–	–
Profit/loss before tax	–1,520	–1,815
Income tax	–	–
Net profit/loss for the year	–1,520	–1,815
Other comprehensive income	–	–
Total comprehensive income	–1,520	–1,815

The information above reflects the figures presented in THOR Treatment Technologies, LLC financial statements adjusted for differences in accounting rules between the Group and the joint venture company.

Reconciliation of the financial information

Reconciliation of the financial information to the carrying amount of the Group's participations in joint venture companies.

	2015	2014
Net assets as at January 1	6,317	10,967
Net profit/loss for the year	–1,520	–1,815
Dividend	–3,320	–
Capital contributions from owners	–	–
Less participations sold	–	–4,263
Translation differences	450	1,428
Other comprehensive income	–	–
Net assets as at December 31	1,927	6,317
Participating interest in joint venture companies	963	3,158
Carrying amount	963	3,158

Note 19 Financial instruments by category

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

	Loans and	Derivatives for
	trade receivables	fair value through profit or loss	hedging	Total
As at December 31, 2015
Assets on the balance sheet
Derivative financial instruments	–	–	2,488	2,488
Trade and other receivables	262,712	–	–	262,712
Other financial assets measured at fair value through profit or loss	–	33,794	–	33,794
Cash and cash equivalents	74,914	–	–	74,914
Total	337,626	33,794	2,488	373,908

	Liabilities at fair value through profit or loss	Other financial liabilities	Derivatives for hedging	Total
Liabilities on the balance sheet
Borrowings	–	209,255	–	209,255
Derivative financial instruments	69	–	6,688	6,757
Total	69	209,255	6,688	216,012

	Loans and	Derivatives for
	trade receivables	fair value through profit or loss	hedging	Total
As at December 31, 2014
Assets on the balance sheet
Derivative financial instruments	–	–	2,073	2,073
Trade and other receivables	264,210	–	–	264,210
Other financial assets measured at fair value through profit or loss	–	35,306	–	35,306
Cash and cash equivalents	120,074	–	–	120,074
Total	384,284	35,306	2,073	421,663

	Liabilities at fair value through profit or loss	Other financial liabilities	Derivatives for hedging	Total
Liabilities on the balance sheet
Borrowings	–	225,830	–	225,830
Derivative financial instruments	7,750	–	8,794	16,544
Total	7,750	225,830	8,794	242,374

Note 20 Credit quality of the financial assets

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

	2015	2014
Trade receivables
Counterparties without external credit rating
- New customers (less than 6 months)	1,944	64
- Existing customers with no defaults in the past	193,846	177,822
- Existing customers with some delayed payments in the past	681	5,379
Total	196,471	183,265
Loans to related parties
Existing related party with no previous defaults	2,777	2,723
Total	2,777	2,723
No repayment of loans to related parties was made during the year.
Bank balances and short-term borrowing
AA- and A+	74,914	120,074
Total	74,914	120,074
Derivative financial instruments
AA- and A+	2,488	2,073
Total	2,488	2,073

Note 21 Derivative instruments

		2015		2014
	Assets	Liabilities	Assets	Liabilities
Forward exchange contracts – Cash flow hedges	2,488	6,727	2,073	16,544

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

The ineffective portion, recognized in the income statement, referring to cash flow hedges, amounts to SEK 2,390 thousand (notes 5 and 6).

The hedged, highly probable forecast transactions in foreign currency are expected to occur at varying dates during the coming 48 months. Gains and losses on forward exchange contracts as at December 31, 2015, 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, 2015

			INFLOW CURRENCIES			OUTFLOW CURRENCIES
		EUR	GBP	USD	EUR	JPY
	Maturity year	000	000	000	000	000
2016	Amount	1,361	54	7,484	–	–
	Rate 1	9.227	12.658	7.986	–	–
2017	Amount	–	–	1,020	–	–
	Rate 1	–	–	7.191	–	–
2018	Amount	–	–	444	–	–
	Rate1	–	–	7.068	–	–
2019	Amount	–	–	116	–	–
	Rate1	–	–	7.955	–	–
	Remeasured at fair value, SEK thousands	12,595	702	66,805	–	–

¹ Average contractual rate

The nominal amount for outstanding forward exchange contracts is SEK 84,369 (273,880) thousand.

Note 22 Trade and other receivables

	2015	2014
Trade receivables	197,730	184,363
Less – Provision for impairment of receivables	–1,259	–1,098
Trade receivables – net	196,471	183,265
Loans to related parties (note 37)	2,777	2,723
Other receivables	–	9,312
Service contracts in progress	26,303	29,448
Tax assets	7,996	8,255
Other receivables	7,396	4,997
Prepaid expenses and accrued income
- Accrued income	13,191	15,057
- Prepaid rent	1,208	900
- Prepaid lease charges	–	26
- Prepaid insurance premiums	910	1,286
– Other prepaid expenses	6,460	8,941
Total	262,712	264,210
Long term portion	2,777	2,723
Current portion	259,935	261,487
Total	262,712	264,210

Of the long-term liabilities SEK 2,777 (2,723) thousand constitutes receivables from related parties, which is on level 2 of the fair value hierarchy.

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

The effective interest rate on long-term receivables is as follows.

	2015	2014
Loans to related parties (note 37)	2.0 %	2.0 %

As at December 31, 2015 trade receivables amounting to SEK 42,255 (34,802) thousand were overdue without any impairment loss being identified. These refer to a number of independent customers who have not had payment difficulties in the past. An age analysis of these trade receivables is given below.

	2015	2014
Less than 3 months	41,244	32,767
3 to 6 months	993	1,874
More than 6 months	18	161
Total	42,255	34,802

The reserve for doubtful receivables amounted to SEK 1,258 (1,098) thousand as at December 31, 2015.

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

	2015	2014
SEK	71,387	121,935
EUR	84,598	61,494
GBP	66,176	22,140
USD	26,038	51,651
Other currencies	14,513	6,990
Total	262,712	264,210

Changes in the reserve for doubtful receivables:

	2015	2014
As at January 1	–1,098	–1,227
Translation difference	33	–40
Provision for doubtful receivables	–667	–87
Receivables written off as unrecoverable	237	38
Unused amounts reversed	237	218
As at December 31	–1,258	–1,098

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 identified for any assets in other categories of trade and other receivables. There is no concentration of credit risk with respect to trade receivables, as the Group has a large number of customers, internationally dispersed.

Note 23 Financial assets at fair value through profit or loss

	2015	2014
Unlisted shareholdings	11,324	11,247
Capital insurance	14,556	13,813
Long-term bank deposits	7,914	10,246
Total	33,794	35,306

The statement of cash flows includes financial assets measured at fair value through profit or loss in the category 'Cash flow from operating activities' as part of the change in working capital. This does not, however, apply to bank deposits recorded as 'Cash flow from financing activities'. The Group makes regular payments to blocked bank accounts for future waste management costs. Blocked bank funds in the Nuclear Waste Fund amount to SEK 6,356 (9,390) thousand and are recorded as long-term bank deposits.

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

Note 24 Inventories

	2015	2014
Raw material	–	–
Finished goods	2,381	1,907
Total	2,381	1,907

The expensed expenditure for inventories is included under 'Cost of services sold' and amounts to SEK 4,789 (3,447) thousand.

Note 25 Cash and cash equivalents

	2015	2014
Cash and bank balances	74,914	120,074
Total	74,914	120,074

Note 26 Share capital and other contributed capital

	Number of shares	Share capital	Other contributed capital
As at January 1, 2014	8,218,611	8,219	225,272
As at December 31, 2014	8,218,611	8,219	225,272
As at January 1, 2015	8,218,611	8,219	225,272
As at December 31, 2015	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 December 31, 2015	48,929
Transfers within equity	–
Dividend paid for 2014	–
Net profit/loss for the year	2,423
As at January 1, 2015	46,506
As at December 31, 2014	46,506
Transfers within equity	–
Dividend paid for 2013	–
Net profit/loss for the year	–12,000
As at January 1, 2014	58,506

Note 28 Reserves

All the items below may be reclassified in the income statement.

	Currency translation reserve	Hedging reserve	Total reserves
As at January 1, 2015	17,539	–4,914	12,625
Foreign exchange differences
–Group	2,511	–	2,511
Cash flow hedging
–Currency translation reserve	–	376	376
As at December 31, 2015	20,050	–4,538	15,512
As at January 1, 2014	–7,878	1,880	–5,998
Foreign exchange differences
– Group *	25,417	–	25,417
Cash flow hedging
–Currency translation reserve		–6,794	–6,794
As at December 31, 2014	17,539	–4,914	12,625

* Transfers within equity have been made for the comparison year.

Note 29 Trade and other payables

	2015	2014
Trade payables	34,287	42,699
Liabilities for work in progress	67,543	82,674
Social security and other taxes	37,846	41,361
Other liabilities	45,775	39,645
Accrued expenses and deferred income
–Deferred income	9,720	13,023
–Accrued interest expense	467	573
–Accrued wages and salaries	18,260	29,428
–Accrued pension costs	14,556	13,500
–Accrued consulting and service costs	25,489	24,292
–Accrued audit fees	1,503	1,285
–Other items	20,083	14,917
Total	275,529	303,397
Long term portion	39,115	39,699
Current portion	236,414	263,698
Total	275,529	303,397

Note 30 Borrowings

	2015	2014
Long term portion
Bank loans	1,012	3,013
Bond loans	–	200,000
Total	1,012	203,013
Short term portion
Bank loans	8,243	22,817
Bond loans	200,000	–
Total	208,243	22,817
Total borrowings	209,255	225,830

The bond loan bears an interest margin of 3.75 per cent plus stibor 30 days and matures in its entirety on March 6, 2016.

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

the balance sheet date are as follows	2015	2014
0–6 months	208,243	222,817
6–12 months	–	–
1-5 years	1,012	3,013
More than 5 years	–	–
Total borrowings	209,255	225,830

Note 30 (cont.)

The bank loans mature in 2017. The total borrowing includes bank loans and other borrowing against collateral of SEK 52,098 (60,729) thousand. Shares in Studsvik GmbH and Studsvik Verwaltungs GmbH as well as the shares in Studsvik Nuclear AB have been put up as collateral for the Group's bank borrowing.

Carrying amounts and fair value for non-current borrowing are presented below. The loans are at level 2 of the fair value hierarchy.

		FAIR VALUE	CARRYING AMOUNT
Maturities of borrowings	2015	2014	2015	2014
Less than 1 year	209,557	22,787	208,243	22,817
Between 1 and 2 years		1,012 199,571		1,012 201,817
Between 2 and 5 years	–	1,150	–	1,196
More than 5 years	–	–	–	–
Total		210,569 223,508		209,255 225,830

The carrying amounts of the Group's borrowings are

denominated in the following currencies	2015	2014
SEK	206,269 221,002
USD	–	–
GBP	2,986	4,828
Total	209,255 225,830
The Group has the following unutilized credit facilities	2015	2014
Variable interest rate
– Matures within one year	–	8,998
Total	–	8,998

The lines of credit that mature within one year are one-year credit facilities that will be reviewed on varying dates in 2016.

Average effective interest rate

on balance sheet date, bank borrowings	2015	2014
SEK	3.32 %	3.87 %
USD	–	–
GBP	3.00 %	2.46 %

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			2015	2014
Deferred tax assets
Deferred tax assets to be utilized after more than 12 months			80,843	82,861
Deferred tax assets to be utilized within 12 months			5,296	1,589
Total			86,139	84,450
Deferred tax liabilities
Deferred tax liabilities to be paid after more than 12 months			28,599	35,518
Deferred tax liabilities to be paid within 12 months			1,364	2,539
Total			29,963	38,057
Deferred tax assets	Tax losses	Fair value gains	Other	Total
As at January 1, 2014	68,816	3,488	597	72,901
Recognized in the income statement	–5,094	2,812	–	–2,282
Tax referring to components in other comprehensive income	–	–	90	90
Translation differences	13,741	–	–	13,741
As at December 31, 2014	77,463	6,300	687	84,450
Recognized in the income statement	–753	– 1,017	50	–1,720
Tax referring to components in other comprehensive income	–	–	–	–
Reposting to current tax	–	–	–	–
Translation differences	4,160	–14	–737	3,409
As at December 31, 2015	80,870	5,269	0	86,139
Deferred tax liabilities	Accelerated tax depreciation	Fair value gains	Other*	Total
As at January 1, 2014	8,282	2,861	24,917	36,060
Recognized in the income statement	–1,186	–	1,188	2
Tax referring to components in other comprehensive income	–	–	–	–
Reposting to current tax	–	–	–	–
Translation differences	–	–	1,995	1,995
As at December 31, 2014	7,096	2,861	28,100	38,057
Recognized in the income statement	–6,689	–	884	–5,805
Tax referring to components in other comprehensive income	–	–106	–	-106
Reposting to current tax	–	–	–	–
Translation differences	–	–2,624	441	–2,183
As at December 31, 2015	407	131	29,425	29,963

* Other deferred tax liabilities include deferred tax of SEK 27.0 (29.3) million referring to temporary differences from goodwill in the German operations.

Deferred tax assets are recognized for tax loss carry forwards to the extent that the realization of the related tax benefit through the future taxable profits is probable. Most of the Group's tax loss carry forwards are related to the US and UK operations. They amount to a total of USD 110.7 (59.3) million, which restated at the balance sheet rate is SEK 918.5 (460.2) million, to be utilized within a 20-year period in the USA, and GBP 9.6 (9.2) million in the United Kingdom, which restated at the balance sheet rate is SEK 118.4 (111.3) million, where there is no time limit on the right to apply tax loss carry forwards. The Group's recognized deferred tax assets include tax loss carry forwards in the USA of SEK 62.2 (58.2) million and in the UK of SEK 14.7 (14.4) million.

Note 32 Pension obligations

Defined benefit pension plans

There are a few defined benefit pension plans within the Group, which are primarily based on final salary. The plans that have been considered to be material are in Germany. Other pension obligations, which also exist in Germany 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 defined benefit plan covering several employers. For the 2015 financial year the Group has not had access to information that makes it possible to report this plan as a defined benefit plan. The pension plan under ITP, which is vested through insurance with Alecta, is therefore reported as a defined contribution plan. The year's contributions for pension insurance taken out with Alecta amount to SEK 7,782 (7,133) thousand. Alecta's surplus can be distributed to the policy holders and/or the insured. At the end of 2015 Alecta's surplus in the form of a collective solvency level was 153 (146) 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.

	2015	2014
Obligations in the balance sheet for
Pension benefits	5,478	7,517
Recognition in the income statement for (note 9)
Pension costs	32,861	35,456
Amounts recognized in the balance sheet	2015	2014
Present value of unfunded obligations	5,478	7,517
Total	5,478	7,517
Amounts recognized in the income statement	2015	2014
Defined benefit plans
Current service cost	43	33
Interest expense	75	109
Total	118	142

Of the total cost, SEK 118 (142) thousand was included in the items 'Cost of goods sold' and 'Administrative expenses'. The actual return on plan assets was SEK – (–) thousand.

Changes in the liability recognized

in the consolidated balance sheet	2015	2014
At the start of the year	7,517	5,969
Translation differences	–2,012	1,576
Total expense recognized in the income statement	118	142
Contributions paid	–145	–170
At the end of the year	5,478	7,517

Total pension costs recognized in the consolidated income statement 2015 2014 Total costs for defined benefit plans 118 142 Total costs for defined contribution plans 27,812 29,042 Costs of special employer's contribution and tax on returns from pension funds 4,931 6,272 Total 32,861 35,456 Actuarial assumptions 2015 2014 Discount rate 2.0 % 2.0 % Expected return on plan assets 0.0 % 0.0 % Future salary increases 0.0 % 0.0 %

Future pension increases 1.0 % 1.0 %

Note 33 Other provisions

	Future waste management costs	Other provisions	Total
As at January 1, 2015	55,799	98,406	154,205
Recognized as an expense in the consolidated income statement
– Additional provisions	11,377	327	11,704
– Reversed provisions	–4,379	–	–4,379
Capitalized as property, plant and equipment
Repostings	297	–297	0
Discount effect	1,515	1,634	3,149
Amount utilized during the period	–2,790	–459	–3,249
Translation difference	–	720	720
As at December 31, 2015	61,819	100,331	162,150
Long term portion	60,961	100,331	161,292
Current portion	858	–	858
Total	61,819	100,331	162,150

Future waste management costs

The Group's operations generate nuclear waste and radioactive waste which must be sent for final disposal within the framework of the systems and rules in force in the countries in which Studsvik carries on operations in its own production facilities. Provisions are made for operational waste and also to some extent for decommissioning of facilities and the resulting decommissioning waste. The main part of the costs of decommissioning and decommissioning waste from the Group's Swedish nuclear facilities is financed, under the provisions of the Studsvik Act 1988:1597, through a charge on nuclear generated electricity. Fees paid in are administered by the Nuclear Waste Fund. The Group's total payments to the Nuclear Waste Fund amount to SEK 6,356 (8,759) thousand and are recorded as long-term bank deposits.

Funds for decommissioning and waste management may be withdrawn from the Fund by Studsvik, which holds the nuclear permit for the facilities in question. Studsvik is not liable to pay under the current Act. Studsvik's responsibility for decommissioning and waste management for its own nuclear facilities is limited to buildings, systems and components coming into existence after June 30, 1991. Studsvik estimates these commitments on a current basis and provision is made for them. Recognized provisions include management of waste in connection with decommissioning, SEK 61.8 million. Of the total provisions, SEK 0.9 million is expected to be utilized in 2016 and the rest is expected to be utilized successively and at the earliest starting in 2017.

Other provisions

Other provisions refer to future costs for decommissioning the Swedish and British 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 2016. The remaining part of the provisions is expected to be utilized only in connection with decommissioning operations.

Note 34 Cash flow from operating activities

Non-cash items	2015	2014
Depreciation/amortization	33,541	33,546
Impairment losses on property, plant and equipment	1,196	–
Proceeds from sale of property, plant and equipment	2,436	–182
Share in earnings from associated companies	–11,608	–12,306
Revaluation of financial holdings	–289	–2 576
Other changes in provisions	3,423	–1,154
Total	28,699	17,328

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 52,098 (60,729) thousand to third parties. No further payments are expected as at the date of these financial statements.

Note 36 Commitments

CAPITAL COMMITMENTS

Capital expenditure contracted for at the balance sheet date but not yet recog-nized in the financial statements is as follows.

	2015	2014
Property, plant and equipment	–	–
Total	–	–

OPERATING LEASE COMMITMENTS

Lease expenses for operating leases for the year amounted to SEK 10,576 (12,301) thousand.

Future aggregate minimum lease payments	2015	2014
Within 1 year	11,755	10,604
Between 1 and 5 years	20,909	19,454
More than 5 years	2,900	2,232
Total	35,564	32,290

FINANCE LEASE COMMITMENTS

Assets recognized as finance leases		Equipment and tools
Opening book value January 1, 2014		1,683
Investments		0
Depreciation/amortization for the year		–626
Disposals and retirements		–1,057
Translation differences		0
Closing book value December 31, 2014		0
Opening book value January 1, 2015		0
Investments		–
Depreciation/amortization for the year		–
Disposals and retirements		–
Translation differences		–
Closing book value December 31, 2015		0
Future aggregate minimum lease payments	2015	2014
Within 1 year	–	–
Between 1 and 5 years	–	–
More than 5 years	–	–

Lease expenses for finance leases for the year amounted to SEK – (626) thousand. Remaining finance leases consist of equipment for treating large components in the Swedish operations.

Total 0 0

Note 37 Transactions with related parties

Studsvik, Inc. owns 50 percent 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	2015	2014
Sale of services
– THOR Treatment Technologies, LLC	693	2,800
– UK Nuclear Waste Management Ltd	4,643	4,667
Reported receivables from related parties
– THOR Treatment Technologies, LLC	199	543
– UK Nuclear Waste Management Ltd	481	811
Provision for doubtful trade receivables	–	–
Impairment loss on trade receivables	–	–
Total costs referring to provisions and impairment
losses recognized in the income statement	6,016	8,821

Loans receivable from related parties
– UK Nuclear Waste Management Ltd	2,777	2,723

Under an agreement with the owners the services are supplied on a commercial basis.

There have been no transactions with other related parties, besides remuneration to the Board of Directors, President and senior management. Remuneration to the Board of Directors, President and senior management is described in Note 9.

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 owns 91 per cent of Studsvik Scandpower AB and its subsidiary Studsvik Scandpower GmbH. 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 benefits, 2015	Basic salary/ Board fee	Committee fee	Variable remuneration	Other benefits	Pension cost	Other remuneration	Total
Chairman of the Board
– Anders Ullberg	650	62	–	–	–	–	712
Members of the board (6)
– Jan Barchan	225	–	–	–	–	–	225
– Lars Engström	225	125	–	–	–	–	350
– Anna Karinen	225	–	–	–	–	–	225
– Alf Lindfors	225	–	–	–	–	–	225
– Peter Gossas	225	63	–	–	–	–	288
– Agneta Nestenborg	225	–	–	–	–	–	225
Employee representatives (4)	–	–	–	–	–	–	–
President	3,608	–	–	140	1,609	–	5,357
Other senior management (6)	9,204	–	50	501	1,863	–	11,617
Total	14,812	250	50	641	3,472	–	19,223

Salaries and other benefits, 2014	Basic salary/ Board fee	Committee fee	Variable remuneration	Other benefits	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	100	–	–	–	–	325
– Anna Karinen	225	–	–	–	–	–	225
– Alf Lindfors	225	–	–	–	–	–	225
– Peter Gossas	225	50	–	–	–	–	275
– Agneta Nestenborg	225	–	–	–	–	–	225
Employee representatives (4)	–	–	–	–	–	–	–
President	3,488	–	–	129	1,226	–	4,843
Other senior management (5)	7,310	–	477	353	1,300	–	9,440
Total	12,798	200	477	482	2,526	–	16,483

Remuneration to the board of directors and other

senior management	2015	2014
Parent company
Salaries and other remuneration	8,045	7,726
– Of which variable remuneration	–	–
Pensions	2,190	1,645
Number of persons	14	13
Subsidiaries
Salaries and other remuneration	7,707	6,231
– Of which variable remuneration	50	477
Pensions	1,282	881
Number of persons	4	4
Group
Salaries and other remuneration	15,752	13,957
– Of which variable remuneration	50	477
Pensions	3,472	2,526
Number of persons	18	17

Principles

In 2015 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 2015 the variable salary component is based on the Group's sales and operating margin and may not exceed 50 per cent of annual salary. The variable salary component for other senior management for 2015 is based on outcomes related to individually specified targets at both Group and unit level. For 100 per cent target fulfillment in all parameters a maximum variable salary component is payable of 30–50 percent of the basic salary.

Other benefits and remuneration

Other benefits reported are company car, meal subsidies and other benefits such as health care. 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 defined contribution pension plan to which the company pays in a monthly pension premium equivalent to 35 per cent of fixed 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. Defined contribution plans apply to members of the Executive Group Management outside Sweden, with the exception of Germany, where a defined benefit 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 12 months for termination by the company. In the case of termination of employment by the company, salary is payable during the period of notice as well as an additional monthly severance payment for 6 months after termination of employment, though no longer than until retirement age. The monthly severance payment will be equivalent to the fixed 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 6 months' salary.

Note 39 Operations held for sale

At the close of 2015 there were no operations held for sale

Cash flow from operations held for sale	2015	2014
Cash flow from operating activities	–	–16,796
Cash flow from investing activities	–	93,947
Cash flow from financing activities	–	–
Total	–	77,151

Cash flow from operations held for sale is included in the Group's reported cash flows in the amounts above.

Assets in the disposal group classified as operations

held for sale	2015	2014
Property, plant and equipment	–	–
Goodwill	–	–
Other current assets	–	–
Total	–	–

Liabilities in the disposal group classified as

opera-tions held for sale	2015	2014
Trade and other payables	–	–
Provisions	–	–
Total	–	–

Accumulated income reported in other comprehen-

sive income referring to disposal group classified as
opera-tions held for sale	2015	2014

Translation differences on foreign subsidiaries	–	–
Total	–	–

Analysis of profit from operations held for sale and

accounting profit on revaluation of operations held

for sale	2015	2014
Sales revenues	–	–
Other operating income	–	–
Costs	–	–
Other operating expenses	–	–12,537
Operating profit	–	–12,537
Financial expenses	–	–801
Profit/loss from operations held for sale - before tax	–	–13,338
Income tax	–	–3,815
Profit/loss from operations held for sale - after tax	–	–17,153
Profit/loss on revaluation of assets in operations held for
sale - before tax	–	–
Income tax	–	–
Profit/loss on revaluation of assets in operations held
for sale - after tax	–	–
Profit/loss from operations held for sale - after tax	–	–17,153

Note 40 Events after the close of the reporting period

After the reporting period, on February 16, 2016, Studsvik issued a senior, unsecured corporate bond of SEK 300 million with a maturity of three years in the Swedish market, with final maturity in February 2019. The bond has a framework amount of SEK 350 million. The bond loan bears a variable interest rate of STIBOR 3m + 6.50 %, with final maturity in February 2019.

The issue proceeds will be used to refinance Studsvik's outstanding bond of SEK 200 million (with final maturity on 7 March 2016) and for general business purposes. Studsvik will apply for listing of the bond loan on Nasdaq Stockholm.

NOTES TO THE PARENT COMPANY ACCOUNTS

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

Note 41 Sales revenue

Sales revenue by geographical market	2015	2014
Sweden	5,432	6,630
Europe, not including Sweden	4,437	4,782
North America	711	507
Total	10,580	11,919

Note 42 Employee benefits

2015			2014
	Salaries and other remuneration (of which variable remunera tion)	Social security expenses (of which pension costs)	Salaries and other remuneration (of which variable remunera tion)	Social security expenses (of which pension costs)
Board of Directors	6,008	2,837	5,902	3,237
and President	(–)	(1,609)	(–)	(1,589)
Other employees	7,356	4,697	8,296	6,788
	(–)	(2,389)	(–)	(3,465)
Total	13,364	7,534	14,199	10,025
	(–)	(3,998)	(–)	(5,053)

See also note 38.

Note 43 Costs by nature of expense

2015	2014
22,497	33,131
16,870	16,705
244	–
39,611	49,836
Services include fees and remuneration to accounting firms as follows:
2015	2014
1,325	1,137
0	35
7	37
165	394
1,497	1,603

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 44 Depreciation/amortization

	2015			2014
	According to plan		Book According to plan	Book
Equipment and tools	244	244	–	–
Total	244	244	–	–

Note 45 Other operating income and operating expenses

Other operating income	2015	2014
Financial assets at fair value through profit or loss
– Fair value gains	77	1 611
Foreign exchange gains	112	41
Total	189	1,652
Other operating expenses	2015	2014
Provision for severance payment	–	–6,560
Foreign exchange losses	–98	–1,111
Total	–98	–7,671

Note 46 Operating leases

	2015	2014
Maturity within one year	272	234
Maturity after one year but within five years	135	90
Maturity after five years	–	–
Total	407	324

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

Note 47 Result from participation in group companies

	2015	2014
Group contributions from subsidiaries	45,100	42,807
Result of recognition of impairment loss on shares in subsidiary	–	–
Total	45,100	42,807

Note 48 Interest expense and similar profit/loss items

	2015	2014
Interest	9,943	9,150
Exchange rate differences	7,759	8,159
Total	17,702	17,309
Of which, in respect of Studsvik Group companies
Interest	9,932	9,020
Total	9,932	9,020

Note 49 Interest expense and similar profit/loss items

	2015	2014
Interest	12,625	14,948
Exchange rate differences	13,276	9,739
Total	25,901	24,687
Of which, in respect of Studsvik Group companies
Interest	2,386	1,386
Total	2,286	1,386

Note 50 Appropriations

	2015	2014
Dissolution of tax allocation reserve	–	–
Total	–	–

Note 51 Income tax

	2015	2014
Current tax
Current tax on profit for the year	–	0
Adjustment for previous years	–	–99
Total	0	–99

Total income tax	–1,194	2,368
Total	–1,194	2,467
Origination and reversal of temporary differences	–1,194	2,467
Deferred tax

The Swedish income tax rate is 22.0 (22.0) per cent. The income tax on the parent company's profit before tax differs from the theoretical amount that would arise using the weighted average tax rate for profits as follows:

	2015	2014
Profit/loss before tax	7,961	–8,507
Tax in accordance with the current tax rate	–1,751	1,872
Non-taxable revenue	2,001	466
Expenses not deductible for tax purposes	–250	–2,338
Tax referring to temporary differences	–1,194	2,467
Adjustment for previous years' tax assessment	–	–99
Total	–1,194	2,368

The weighted average tax rate was –15 (–27,8) per cent.

Note 52 Intangible assets

	2015	2014
Equipment and tools
Opening cost of acquisition	–	–
Investments for the year	3,505	–
Closing accumulated cost of acquisition	3,505	–
Opening depreciation	–	–
Depreciation for the year	–244	–
Closing accumulated depreciation	–244	–
Closing residual value according to plan	3,261	–

Note 53 Financial assets

	2015	2014
Shares in subsidiaries
Opening cost of acquisition	1,024,067	1,024,067
Shareholders' contributions	–	–
Investment in subsidiaries	–	–
Closing cost of acquisition	1,024,067	1,024,067
Opening impairment losses	–652,254	–652,254
Impairment losses for the year	–	–
Closing impairment losses	–652,254	–652,254
Closing value	371,813	371,813

The impairment loss on shares in a subsidiary refers Studsvik Holding, Inc.

	2015	2014
Receivables from subsidiaries
Loans to Studsvik Holding, Inc. Group
– Opening cost of acquisition	95,043	127,701
– Repayment received	–	–51,718
– New loans	7,650	1,400
– Change in accrued interest	49	2 224
– Conversion to shareholders' contribution	–	–
– Foreign exchange differences	6,604	15,436
Closing value	109,346	95,043

	2015	2014
Loan to Studsvik UK Ltd
– Opening cost of acquisition	23,133	15,093
– Repayment received	–15,425	–
– New loans	262	5,889
– Change in accrued interest	–	–
– Foreign exchange differences	460	2 151
Closing value	8,430	23,133
Loan to Studsvik France SAS
– Opening cost of acquisition	948	11
– Repayment received	–	–
– New loans	–	908
– Change in accrued interest	–1	–11
– Foreign exchange differences	–37	40
Closing value	910	948
Loan to Studsvik GmbH
– Opening cost of acquisition	90,630	67,439
– New loans	–	17,817
– Change in accrued interest	23	–79
– Foreign exchange differences	–3,657	5,453
Closing value	86,996	90,630
Financial assets measured at fair value
through profit or loss
Unlisted shareholdings
– Opening cost of acquisition	11,248	9,636
– Acquisition of new shares	–	–
– Revaluation to fair value	77	1,612
Closing value	11,325	11,248
Capital insurance
– Opening cost of acquisition	14,266	13,266
– Items added	–	269
– Reposting to current asset	–	–455
– Revaluation to fair value	289	1,186
Closing value	14,555	14,266

Note 54 Prepaid expenses and accrued income

	2015	2014
Prepaid rent	–	67
Prepaid credit charges and fees	170	2,051
Prepaid pension premiums	47	88
Prepaid software licenses	830	607
Prepaid service charges	2	2
Other	447	459
Total	1,496	3,274

Note 55 Shares and participations in subsidiaries

	Share of equity, %	Share of voting rights, %	Number of participa tions/ shares		Nominal value	Book value
Parent company's holdings
Studsvik Holding, Inc.	100	100	2,000 kUSD		25,372	24,042
Studsvik Nuclear AB	100	100	5,000	kSEK		50,000 133,400
Studsvik Scandpower, Inc.	79	79	1,503 kUSD		149	984
Studsvik Scandpower AB	91	91	910	kSEK	91	603
Studsvik Japan Ltd	100	100	10,000	kJPY	10,000	373
Studsvik Germany GmbH	100	100		kEUR	26	241
Studsvik Verwaltungs
GmbH	100	100		kEUR	26	261
Studsvik UK Ltd	100	100	1,022,500	kGBP		1,023 193,760
Studsvik Instrument
Systems AB	100	100	17,000	kSEK	17,000	18,106
Studsvik France SAS	99	99	4,950	kEUR	5	43
Studsvik Limited	100	100		kGBP	–	–
Total						371,813

Information on subsidiaries' corporate identity numbers and registered offices Corporate identity Registered office

	number
Studsvik Nuclear AB	556051-6212	Nyköping, Sweden
Studsvik Scandpower, Inc.	36-3088916	Boston, USA
Studsvik Scandpower AB	556137-8190	Nyköping, Sweden
Studsvik Scandpower GmbH	HRB 4839	Norderstedt, Germany
Studsvik Suisse AG	CH400.4.021.112.4	Fischbach-Göslikon, Switzerland
Studsvik Japan Ltd		Tokyo, Japan
Studsvik Holding, Inc.	35-3481732	Atlanta, USA
Studsvik, Inc.	36-2999957	Atlanta, USA
RACE Holding, LLC	20-2472653	Atlanta, USA
Studsvik Germany GmbH	HRB 504467	Mannheim, Germany
Studsvik Verwaltungs GmbH	HRB 504468	Mannheim, Germany
Studsvik GmbH & Co. KG	HRA 503411	Mannheim, Germany
Studsvik UK Ltd	4 772 229	Workington, England
Studsvik Alpha Engineering Ltd	3 658 198	Newcastle, England
Studsvik Instrument Systems AB	556197-1481	Nyköping, Sweden
Studsvik France SAS	791 048 200 000 12	Paris, France
Studsvik Nuclear Environmental Holding AB	559037-4749	Nyköping, Sweden
Studsvik Nuclear Environmental AB	559019-2455	Nyköping, Sweden
Studsvik Consulting AB	559019-2448	Nyköping, Sweden
Studsvik Limited	09660060	Gateshead, England

Note 56 Liabilities to credit institutions

	2015	2014
Bank loans
Long term portion	0	200,000
Current portion	200,111	21,002
Total	200,111	221,002

Note 57 Accrued expenses and deferred income

	2015	2014
Holiday pay liability	858	1 800
Accrued wages and salaries	–	–
Accrued social security contributions	4,927	5,692
Accrued interest expense	473	560
Provision for severance payment	1,029	7,671
Other	823	1,943
Total	8,110	17,666

Note 58 Pledged assets

	2015	2014
Shares in subsidiaries	133,902	133,902
Total	133,902	133,902

Shares in Studsvik GmbH and Studsvik Verwaltungs GmbH as well as in Studsvik Nuclear AB have been put up as collateral for bank loans.

Note 59 Contingent liabilities

	2015	2014
Guarantees	–	–
Contingent liabilities referring to insurance	5,328	5,446
Total	5,328	5,446

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

Note 60 Derivative instruments

	2015			2014
	Assets	Liabilities	Assets	Liabilities
Forward exchange contracts	78	69	–	7,750

Revaluation of forward exchange contracts is through profit or loss.

Outstanding forward exchange contracts, December 31, 2015

		INFLOW CURRENCIES
	GBP 000	USD 000	EUR 000
Maturity year
2016 Amount	–	2,400	600
Average rate	–	8.349	9.329
Remeasured at fair value	–	19,912	5,690

Note 61 Investments in non-current assets

	2015	2014
Patents	3,505	–
Equipment and tools	–	–
Total	3,505	–

Note 62 Cash flow from operating activities

Non-cash items	2015	2014
Depreciation/amortization	244	–
Fair value gains	–77	–1,613
Other items	–	–
Total	167	–1,613

Note 63 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.

	2015	2014
Purchases	26 %	18 %
Sales	100 %	100 %

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

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

The President's period of notice is 6 months for his own termination of employment and 12 months for termination by the company. In the case of termination of employment by the company, salary is payable during the period of notice as well as an additional severance payment equivalent to 6 months' salary. See also note 38.

Note 64 Number of employees

	2015	2014
Women	4	4
Men	6	6
Total	10	10

		2015	2014
Board members and senior management executives	Number on balance sheet date	Of which men	Number on balance sheet date	Of which men
Board members	11	8	11	8
President and other senior
management executives	3	3	3	3

Note 65 Investment in subsidiaries

	2015	2014
Shareholders' contributions	–	–
Total	–	–

The consolidated income statement and balance sheet will be presented to the Annual General Meeting on April 25, 2016 for approval.

The Board of Directors and the President certify that the consolidated accounts have been prepared in accordance with international financial reporting standards, IFRS, as adopted by the EU, and the Annual Accounts Act and give a true and fair view of the Group's financial position and results of operations. The annual accounts have been prepared in accordance with generally accepted accounting principles and give a true and fair view of the parent company's financial position and results of operations.

The administration report for the Group and parent company provides a fair review of the development of the Group's and the parent company's business, financial position and performance and describes significant risks and uncertainties faced by the parent company and the companies that are part of the Group.

Nyköping, February 29, 2016

Anders Ullberg Anna Karinen Jan Barchan Chairman Vice Chairman Board Member

Lars Engström Peter Gossas Lena Sivars Becker Board Member Board Member Employee representative

Board Member Employee representative Board Member

Alf Lindfors Roger Lundström Agneta Nestenborg

Michael Mononen President

Our auditor's report was submitted on March 7, 2016 PricewaterhouseCoopers AB

Lennart Danielsson Authorized public accountant

Auditor's report

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

REPORT ON THE ANNUAL ACCOUNTS AND THE CONSOLIDATED ACCOUNTS

We have audited the annual accounts and consolidated accounts of Studsvik AB (publ) for 2015. 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 in accordance with the Annual Accounts Act and of the consolidated accounts in accordance with International Financial Reporting Standards, as adopted by the EU, and the Annual Accounts Act, and for such internal control as the Board of Directors and the Managing Director determine is necessary to enable the preparation of annual accounts and consolidated accounts that are free from material misstatement, whether due to fraud or error.

Auditor's responsibility

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

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

Opinions

In our opinion, the annual accounts have been prepared in accordance with the Annual Accounts Act and present fairly,

in all material respects, the financial position of the parent company as at December 31, 2015 and of its financial performance and its cash flows for the year then ended in accordance with the Annual Accounts Act. The consolidated accounts have been prepared in accordance with the Annual Accounts Act and present fairly, in all material respects, the financial position of the Group as at December 31, 2015 and of its financial performance and its cash flows for the year then ended 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 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 profit or loss and the administration of the Board of Directors and the President of Studsvik AB (publ) for 2015.

Responsibilities of the Board of Directors and President

The Board of Directors is responsible for the proposal for appropriations of the company's profit or loss, and the Board of Directors and the 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 profit or loss and on the administration based on our audit. We conducted the audit in accordance with generally accepted auditing standards in Sweden.

As a basis for our opinion on the Board of Directors' proposed appropriations of the company's profit or loss, we examined 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 significant 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 board member or the President has, in any other way, acted in contravention of the Companies Act, the Annual Accounts Act or the Articles of Association.

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

Opinions

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

Stockholm, March 7, 2016 PricewaterhouseCoopers AB

Lennart Danielsson Authorized public accountant

Corporate Governance

Corporate Governance

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

General Meeting of Shareholders

The General Meeting is the company's highest decision-making body, where the shareholders exercise their influence through discussions and decisions. An Annual General Meeting shall be held once a year to adopt the income statement and balance sheet, decide on dividend, elect a Board of Directors and auditors and decide on their remuneration.

The number of shareholders on December 31, 2015 was 3,307. The total number of shares was 8,218,611. All shares have an equal right to participate in the company's assets and profits. Information on shareholders, voting rights and the Articles of Association is presented in the annual report on pages 54–61.

At the Annual General Meeting in April 2015, 30 shareholders participated, representing a total of 35,8 per cent of all votes in the company. The Annual General Meeting adopted the consolidated income statement and balance sheet, adopted the Board of Directors proposal concerning dividend, 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 benefits to senior management and appointed the Nomination Committee. The minutes of the Annual General Meeting can be found on the company's website.

Nomination Committee

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

As resolved by the Annual General Meeting, the Nomination Committee is to consist of the Chairman of the Board and representatives of each of the three largest shareholders. The Annual General Meeting appointed Stina Barchan (Briban Invest AB), Sven Ericsson (representative of the Karinen family), Malte Edenius and Anders Ullberg (Chairman of the Board) as members of the Nomination Committee. The Nomination Committee's term of office is until a new Nomination Committee is appointed. The composition of the Nomination Committee was announced on April 29, 2015 in a press release and on Studsvik's website.

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.

Composition of the Board of Directors

The 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.

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

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 and Anna Karinen, are independent of major shareholders.

Chairman

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

Work of the Board of Directors

The task of the Board of Directors is to administer the company's business in the best way possible and safeguard the interests of the shareholders in its work. The Board's work follows rules of procedure adopted annually at the inaugural board meeting. The rules of procedure specify the division of duties between the Board and the President, the responsibilities of the Chairman and President respectively, and the forms of financial reporting. The President takes part in the work of the Board of Directors and other employees take part when this is called for. The Group's Chief Financial Officer is the secretary to the Board.

In 2015 the Board of Directors held eight meetings, including the inaugural meeting immediately following the Annual General Meeting. The attendance of the members is shown in the table below.

The Board of Directors receives information on the company's economic and financial situation through monthly reports and at board meetings. 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 business area 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 2015 a twoday meeting was held which dealt with the Group's strategy, development of the market and review of the consultancy and waste treatment operations as well as the Group's financing.

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 2015 the Board devoted particular attention to the Group's financing, strategic alternatives for the Waste Treatment business area, customer value based sales and cost savings in administration.

At one meeting during the year the company's auditors reported on their findings 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 reviews and adopts Group policies and guidelines and the Group's Code of Conduct. The Code of Conduct aims to provide guidance to employees and business partners, minimize risks, strengthen the corporate culture and convey Studsvik's core values.

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

Board members	Elected	Attendance	Remu neration		Audit Independent	Independent	Fee
Anders Ullberg, Chairman	2007	8/8	1/1	5/5	Yes	Yes	725
Anna Karinen, deputy Chairman	2003	8/8	1/1		Yes	No	225
Jan Barchan	2004	7/8	1/1		Yes	No	225
Lars Engström	2008	7/8		5/5	Yes	Yes	375
Peter Gossas	2013	8/8		5/5	Yes	Yes	300
Alf Lindfors	2006	8/8			Yes	Yes	225
Agneta Nestenborg	2010	7/8			Yes	Yes	225
Thomas Kinell (A)1	2011	1/8
Roger Lundström (A)	2005	7/8
Per Ekberg (A) suppleant	2006	8/8
Tommi Huutoniemi (A) suppleant2	2014	3/8
Lena Sivars Becker (A)3	2015	7/8
Eva Gimholt (A) suppleant4	2015	2/8

Member of the Board until March 16, 2015,2 Alternate member of the Board until July 9, 2015, 3 Member of the Board from March 16, 2015, 4 Alternate member of the Board from September 1, 2015

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 financial reporting. The Audit Committee consists of Lars Engström (chairman), Peter Gossas and Anders Ullberg. The presenter in the Committee is the Chief Financial Officer. Apart from the Group's quarterly reports, during the year the Committee has taken note of and dealt with reports from the follow-up of internal controls. In addition, the Committee has been updated on the development of major current fixed 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 findings from the six-monthly accounts, 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 five 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 benefits to senior management is given in note 38 on page 46.

Board fees

The total board fee paid by Studsvik AB for 2015 amounted to SEK 2,300,000 (2,200,000). 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 150,000 per year and the members SEK 75,000 per year. No fee is paid to the Remuneration Committee. Board fees paid are presented in note 38 on page 46.

Auditors

At the 2015 Annual General Meeting the registered public accounting firm PricewaterhouseCoopers AB was elected as auditor for the period up to and including the 2016 Annual General Meeting. The auditor in charge is authorized public accountant Lennart Danielsson. PricewaterhouseCoopers conducts the audit of all the Group's material companies. The audit is based on an audit plan and during the year the auditor regularly reports findings 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 auditor's report and describe the audit work and findings.

In addition to the audit assignment Studsvik has consulted PricewaterhouseCoopers in the area of taxation and on various accounting and financial issues. PricewaterhouseCoopers is obliged to test its independence prior to every decision to provide advice to Studsvik unrelated to the audit assignment. Advisory services in excess of SEK 50,000 are to be approved in advance by the chairman of the Audit Committee. Remuneration to the company's auditors is paid in accordance with an approved invoice on agreed terms. For information concerning remuneration in 2015 please refer to notes 8 and 43.

President/CEO 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. In 2015 the Executive Group Management consisted of the President/Chief Executive Officer, the Chief Financial Officer, the Head of Business Development and the heads of the three business areas. In November an HR director was recruited to the Executive Group Management. The Executive Group Management is presented on pages 60–61 of the annual report and on the website under Executive Group Management.

The Executive Group Management meets every month to follow up the operative and financial developments in the segments. On two to three occasions during the financial year the Executive Group Management meets to deal in more detail with matters of an operative, strategic or long-term nature. The President/CEO and Group functions are located in Stockholm. In accordance with the policies and guidelines established by the Board, the Group functions are responsible for business development, allocation of financial resources among the Group's operations, capital structure, risk management and human resources. The tasks also include questions of Group wide acquisitions and disposals, certain major projects, the Group's financial reporting, communication with the stock market and other internal and external communication.

Operative management

The Group's operative business was conducted in 2015 in subsidiaries of Studsvik AB, which are included in the three business areas. Operations in the business areas were followed up partly through business area reviews, partly through active board work in the subsidiaries. The business area reviews, which take place quarterly, not only analyze and discuss financial developments, but also market developments, risks and CR issues, among other things. The management groups for the business areas follow the business areas' day to day activities on a monthly basis. Business plans and budgets are prepared by each business area in consultation with the Executive Group Management. The business is carried on in accordance with the rules, guidelines and policies established by the parent company, and local rules established by the respective local board. The heads of business areas have budget responsibility and are to ensure growth in their operations as well as being 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 financial reporting reflects the actual situation with reasonable certainty,
• that financial 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 that guarantee internal control and the quality of financial reporting are in place. Studsvik has no special internal audit function. Review of internal controls is carried out by the Group accounting and finance function, 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 selfassessment that is subsequently verified from the point of view of materiality through direct audit. The audit is conducted via interviews and spot checks and is summarized in a report to the Audit Committee, where it is dealt with. A detailed description of the Group's risks and how they are managed is presented in the Administration Report on pages 4-15. An account of the Group's financial risks can be found in note 2 on pages 28–30.

The outcome of the examination is reported to the Audit Committee and the Board. The company's financial situation is discussed at every board meeting and the management makes a monthly analysis of the financial reporting at a detailed level. At its meetings the Audit Committee follows up the financial reporting and receives a report from the auditors.

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 2015 on pages 54–57 and for its preparation in accordance with the Annual Accounts Act.

We have read the corporate governance report and based on that reading and our knowledge of the company and the Group we believe that we have a sufficient basis for our opinions. This means that our statutory examination of the corporate governance report is different and substantially less in scope than an audit conducted in accordance with International Standards on Auditing and generally accepted auditing standards in Sweden.

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 7, 2016 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 Boliden, Eneqvist Consulting and Natur & Kultur, and member of the board of Atlas Copco, Beijer Alma, Valedo Partners and Åkers. Chairman of the Swedish Financial Reporting Board Education: M.Sc. (Business and Economics) Holding: 60,000 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 President of Briban Invest AB, Chairman of the board of Audiodev AB and member of the board of Assistera AB, Net Insight AB, Trianon AB and Trialbee AB Education: M.Sc. (Business and Economics) Holding: 1,285,492 shares

Lars Engström

Örebro, born in 1963 Member since 2008 Head of the business area Sandvik Mining. Former President and CEO of Munters AB Education: M.Sc. (Engineering) Holding: 10,000 shares

Peter Gossas

Mora, born in 1949 Member since 2013 Previously President of the Sandvik Materials Technology business area Chairman of the board of Maintpartner Group OY and Motor Group AB. Member of the board of Höganäs AB. Industrial Advisor at Peter Gossas AB and KIGO Business Development. Education: M.Sc. Engineering physics Holding: 2,000 shares

Alf Lindfors

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

Agneta Nestenborg

Södra Sandby, born in 1961 Member since 2010 Director, Project Support & Administration, European Spallation Source ERIC Education: Ph.D. and MBA Holding: 2,000 shares

EMPLOYEE REPRESENTATIVES

Lena Sivars Becker

Nyköping, born in 1974 Member since 2015 Representative of the Swedish Association of Graduate Engineers. Works in the consultancy operations at Studsvik Consulting AB Education: Ph.D. Holding: 0 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

Eva Gimholt

Trosa, born in 1967 Alternate since 2015 Representative of the Swedish Association of Graduate Engineers. Works in the Quality, Safety and Environment department at Studsvik Nuclear AB Education: Mining engineer, materials technology and metallurgy Holding: 0 shares

AUDITOR

PricewaterhouseCoopers AB Auditor in charge: Lennart Danielsson Year of birth 1959 Auditor of Studsvik since 2011 Other assignments: Mekonomen AB

Anders Ullberg

Peter Gossas

Lena Sivars Becker

Lars Engström

Alf Lindfors Anna Karinen Roger Lundström

Agneta Nestenborg

Per Ekberg

Eva Gimholt

Executive Group Management

Michael Mononen

President and Chief Executive Officer Education: M.Sc. (Civil engineering) Born in: 1958 Year of employment: 2013 Background: Several different roles in the Sapa Group, Group Vice President Sapa AB, President of Sapa Heat Transfer AB Directorships: Member of the board of Mobile Climate Control Holding: 45,000 shares

Pål Jarness

Mats Fridolfsson

Chief Financial Officer Education: M.Sc. (Business and Economics) Born in: 1964 Year of employment: 2013 Background: Chief Financial Officer at Actic, Goodyear Dunlop Nordic and Kraft Foods Nordic as well as various positions in treasury and human resources at Philip Morris. Holding: 37,500 shares

Paul McDonald

Acting head of the Consulting Services business area Education: BA (hons) Business and Finance; CGMA Born in: 1961 Year of employment: 2008 Background: Several senior management positions in engineering and retail organisations, including Boots, Colorgraphic, Durham Pine and as an accountant at PWC. Holding: 0 shares

Elisabeth Fahle Gårdebäck

Head of Human Resources Education: M.Sc. in Business and Economics Born in: 1968 Year of employment: 2015 Background: Positions as HR Manager at Wallenius Wilhelmson, Medtronic, Allergan and Becton Dickinson. Holding: 0 shares

Head of Waste Treatment business area Education: System scientist, postsecondary education in Norrköping and Linköping University Born in: 1962 Year of employment: 2010 Background: Alstom Power Sweden AB, including as site manager of Oskarshamn nuclear power plant, Flextronics and other leading positions in the Group Holding: 0 shares

Camilla Hoflund

Head of Fuel and Materials Technology business area Education: Mining engineer, Materials technology Born in: 1969 Year of employment: 1994–2000, 2003 Background: Consultant and business developer at Det Norske Veritas and other senior positions in the group Holding: 0 shares

Sam Usher

Head of Business Development Education: MEng Chemical Engineering, MSc Engineering Management, CEng Chartered Engineer Born in: 1969 Year of employment: 2008 Background: Plant Manager BNFL Sellafield, Business, Project and Strategic Development Manager, AMEC and other leading positions in the Group Holding: 2,042 shares

Paul McDonald Mats Fridolfsson Sam Usher

Elisabeth Fahle Gårdebäck

Five-year review

CONDENSED INCOME STATEMENT

Amounts in SEK million	2011	2012	2013	2014	2015
Sales revenues	969.3	1,012.9	1,001.3	909.6	895.4
Cost of services sold	–745.3	–771.2	–742.1	–660.5	–657.2
Gross profit	224.0	241.7	259.1	249.1	238.2
Selling and marketing costs	–39.2	–45.2	–46.5	–47.6	–56.4
Administrative expenses	–141.9	–149.9	–142.0	–146.9	–133.3
Research and development costs	–28.4	–25.4	–26.6	–25.8	–25.4
Participation in associated company's profit before tax	7.6	5.4	7.3	11.5	11.6
Other. net	17.4	–11.4	–31.9	–9.8	–10.3
Operating profit	39.5	15.2	16.0	30.5	24.4
Net financial items	–12.6	–13.8	–18.8	–18.9	–17.7
Profit/loss after financial items	26.9	1.4	–2.8	11.6	6.7
Income tax	–18.3	–15.0	–20.1	–6.4	–4.3
Profit/loss for the year from continuing operations	8.6	–13.6	–22.9	5.2	2.4
Operations held for sale
Profit/loss for the year from operations held for sale	14.1	–34.2	–173.9	–17.2	–
Net profit/loss for the year	22.7	–47.8	–196.8	–12.0	2.4

CONDENSED BALANCE SHEETS

Amounts in SEK million	2011	2012	2013	2014	2015
Assets
Goodwill	315.9	300.9	158.8	173.9	172.0
Other non-current assets	685.1	608.0	448.2	481.7	481.9
Trade receivables	223.0	169.1	151.7	183.3	196.6
Other non-interest bearing current assets	109.9	122.6	92.6	73.0	68.1
Cash and cash equivalents and short-term investments	122.1	115.8	151.4	129.4	74.9
Assets in operations held for sale	–	–	260.7	–	–
Total assets	1,456.0	1,316.4	1,263.4	1,041.3	993.5
Equity and liabilities
Equity	548.5	477.9	286.0	292.6	297.9
Non-controlling interests	0.3	0.3	0.3	0.3	0.3
Long-term interest-bearing liabilities	92.1	131.0	264.8	203.0	1.0
Long-term non-interest-bearing liabilities	322.2	263.9	222.7	242.3	238.0
Short-term interest-bearing liabilities	125.5	99.3	42.3	22.8	208.2
Short-term non-interest-bearing liabilities	367.4	344.0	275.4	280.3	248.1
Liabilities in operations held for sale	–	–	171.9	–	–
Total equity and liabilities	1,456.0	1,316.4	1,263.4	1,041.3	993.5

CONDENSED CASH FLOW STATEMENTS

Refers to total operations
Amounts in SEK million	2011	2012	2013	2014	2015
Operating profit	53.6	–19.4	–165.3	17.9	24.4
Reversal of depreciation/amortization	62.3	64.0	63.5	33.5	33.5
Other non-cash items	21.9	–72.8	89.7	–16.2	–4.8
Cash flow from operating activities	137.8	–28.2	–12.1	35.2	53.1
Net financial items	–13.0	–13.4	–18.5	–17.6	–11.5
Taxes	–12.0	–27.5	–13.3	1.1	–6.9
Cash flow before changes in working capital	112.8	–69.1	–43.9	18.7	34.7
Changes in working capital	38.3	61.8	19.3	–39.5	–41.3
Cash flow before investments	151.1	–7.3	–24.6	–20.8	–6.6
Investments	–63.3	–9.1	–15.3	70.7	–23.2
Cash flow after investments	87.8	–16.4	–39.9	49.9	–29.8
DATA PER SHARE	2011	2012	2013	2014	2015
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 from continuing operations before and af
ter dilution, SEK	1.04	–1.65	–2.78	0.63	0.29
Earnings per share from operations held for sale before and after dilution, SEK	1.72	–4.17	–21.15	–2.09	–
Earnings per share before and after dilution, SEK	2.77	–5.82	–23.93	–1.46	0.29
Equity per share, SEK	66.77	58.19	34.83	35.64	36.30
KEY FINANCIAL FIGURES AND RATIOS	2011	2012**	2013**	2014	2015
Margins
Operating margin, %	4.5	1.5	1.6	3.3	2.7
Profit margin, %	3.4	0.1	–0.3	1.3	0.7
Return on investment*
Return on operating capital, %	8.2	5.3	4.5	7.7	5.9
Return on capital employed, %	9.1	5.0	3.5	5.5	6.6
Return on equity, %	4.3	–2.6	–6.0	1.8	0.8
Capital structure
Operating capital, SEK million	645.4	287.5	353.2	398.6	432.6
Capital employed, SEK million	767.5	403.3	504.6	518.7	507.5
Equity, SEK million	548.8	478.2	286.3	292.9	298.3
Net interest-bearing debt, SEK million	95.6	114.5	155.7	105.7	134.3
Net debt-equity ratio, %	17.4	23.9	54.4	36.1	45.0
Interest coverage ratio, multiple	2.5	1.1	–0.9	1.8	1.8
Equity-assets ratio, %	37.7	36.3	26.2	28.1	30.0
Cash flow
Self-financing ratio, multiple	2.6	0.9	0.5	–	–
Investments, SEK million	55.4	48.9	20.1	32.8	33.5
EBITDA	115.9	44.6	49.8	50.7	57.9
EBITDA/Net financial items	9.0	3.4	2.7	3.2	3.3
Employees
Average number of employees	1,153	1,031	988	895	829
Net sales per employee, SEK million	1.0	1.0	1.0	1.0	1.1
* Calculation based on closing balance 2012 and 2013.

** Calculated on remaining operations.

Definitions of key figures and ratios

EBITDA

Operating result before amortization and impairment.

EBITDA/Net financial items

Operating result before amortization and impairment divided by net financial items.

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.

Sales revenue per employee

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

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 debt

Total long-term and short-term borrowing less cash and cash equivalents.

Net debt-equity ratio

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

Operating capital

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

P/E ratio

The share price divided by earnings per share.

Earnings per share

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

Return on equity

Profit for the year as a percentage of average equity.

Return on operating capital

Operating result as a percentage of average operating capital.

Return on capital employed

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

Net interest-bearing debt

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

Interest coverage ratio

Profit after financial income divided by financial expense.

Operating margin

Operating result after amortization as a percentage of net sales.

Self-financing ratio

Cash flow before investments divided by investments.

Equity/assets ratio

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

Capital employed

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

Profit margin

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

Worldwide

SWEDEN

Studsvik AB SE-611 82 Nyköping Visitors' address: Studsvik Tel: +46 155 22 10 00 Fax: +46 155 26 30 70

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

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

Studsvik Nuclear AB / ALARA Engineering Stensborgsgatan 4 SE-721 32 Västerås Tel: +46 155 22 10 00

Studsvik Scandpower AB Stensborgsgatan 4 SE-721 32 Västerås Tel: +46 21 41 57 83

FRANCE

Studsvik France SAS 166, Boulevard du Montparnasse F-75014 Paris Frankrike Tel: +33 1 4279 5130 Fax: +33 1 4279 5131

JAPAN Studsvik Japan, Ltd Rinku Gate Tower Building 1409, 1 Rinku Oraikita, Izumisano-city, Osaka, 598-0048 Japan Tel / Fax: +81 (0)72 493 7418

SWITZERLAND Studsvik Suisse AG

Klausenstrasse 21 CH-5525 Fischbach-Göslikon Schweiz Tfn: +41 79 319 1501

UNITED KINGDOM Studsvik Ltd Unit 14, Princes Park Fourth Avenue Team Valley Trading Estate Gateshead Tyne & Wear NE11 0NF United Kingdom

Tfn: +44 191 482 1744 Fax: +44 191 482 1747

Studsvik UK Ltd 1 Joseph Noble Road Lillyhall Industrial Estate Workington CA14 4JX Cumbria England

Tfn: +44 190 0649 03

GERMANY

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

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

USA

Studsvik Scandpower, Inc. 309 Waverley Oaks Road Waltham, MA 02452 USA Tfn: +1 617 965 7450 Fax: +1 617 965 7549

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

Studsvik AB (publ) Annual report 2015 Corporate identity number 556501-0997

© Studsvik AB (publ)

Studsvik AB (publ) SE-611 82 Nyköping Telephone +46 155 2210 00 www.studsvik.com