Welcome to EuroMaint

EuroMaint strengthens its customers’ competitiveness through tailored­ maintenance and­ technical solutions. EuroMaint’s companies are specialist businesses that offer ad­vanced­ maintenance services. We supply our customers with expertise, d­evelopment resources, proactive planning and­ innovative maintenance solutions. 06EuroMaint unites innovative thinking with a long past. Through creative technical system

services, customised total solutions and partnerships, we contribute to our customers’

competitiveness and success. The EuroMaint Group consists of EuroMaint Rail, which

helps strengthen profitability in the rail transport sector, and EuroMaint Industry,

which helps increase customers’ productivity.

www.euromaint.se

EuroMaint annuaL rEPort

EuroMaint unitEs innovativE thinking With a

Long Past. through crEativE tEchnicaL systEM

sErvicEs, custoMisEd totaL soLutions and

PartnErshiPs, WE contributE to our custoMErs’

coMPEtitivEnEss and succEss. thE EuroMaint

grouP consists of EuroMaint raiL, Which hELPs

strEngthEn ProfitabiLity in thE raiL transPort

sEctor, and EuroMaint industry, Which hELPs

incrEasE custoMErs’ Productivity.

Eu

ro

Ma

int

an

nu

aL

rE

Po

rt

06

Welcome to EuroMaint

EuroMaint strengthens its customers’ competitiveness through tailored­ maintenance and­ technical solutions. EuroMaint’s companies are specialist businesses that offer ad­vanced­ maintenance services. We supply our customers with expertise, d­evelopment resources, proactive planning and­ innovative maintenance solutions. 06EuroMaint unites innovative thinking with a long past. Through creative technical system

services, customised total solutions and partnerships, we contribute to our customers’

competitiveness and success. The EuroMaint Group consists of EuroMaint Rail, which

helps strengthen profitability in the rail transport sector, and EuroMaint Industry,

which helps increase customers’ productivity.

www.euromaint.se

EuroMaint annuaL rEPort

EuroMaint unitEs innovativE thinking With a

Long Past. through crEativE tEchnicaL systEM

sErvicEs, custoMisEd totaL soLutions and

PartnErshiPs, WE contributE to our custoMErs’

coMPEtitivEnEss and succEss. thE EuroMaint

grouP consists of EuroMaint raiL, Which hELPs

strEngthEn ProfitabiLity in thE raiL transPort

sEctor, and EuroMaint industry, Which hELPs

incrEasE custoMErs’ Productivity.

Eu

ro

Ma

int

an

nu

aL

rE

Po

rt

06

contents

EuroMaint in brief 3The year in brief 4The past year 5The CEO’s comments 6

EuROMaInT RaIl 8EuroMaint Rail in brief 9EuroMaint Rail, President 10Maintenance of Stockholm’s commuter trains – a prestigious contract 12new interior for arlanda Express – designed by Björn Borg 14light maintenance of Green Cargo’s freight carriages 14Contract with arriva – new operator on the Swedish market 15Baltic establishment the first step in international development 16Refurbishment contract in norway – ground-breaking for both parties 18Creative development – a natural part of every process 20Market strategies for growth 21

EuROMaInT InduSTRy 22EuroMaint Industry in brief 23EuroMaint Industry, President 24Production streamlining at the forefront 26Establishment in Gävle expands our market 28Closeness to the customer 29From Euromation to EuroMaint Industry 29Specially adapted production equipment 30new customer segments and markets 31

EuROMaInT 32EuroMaint in brief 33The role of the Group management 34Business development 35Operational development 36discretion – a natural part of the change process 37Personnel development 38The role of employees on the Board 39Five-year summary 40

ThE BuSInESS In FIGuRES 41Report of the directors 42Income Statements 44Balance Sheets 45Changes in Equity 47Cash Flow analyses 48notes 49audit Report 64

CORPORaTE GOvERnanCE 65Corporate Governance Report 66The Chairman’s comments 70The EuroMaint Board of directors 72EuroMaint Rail management 74EuroMaint Industry management 75EuroMaint Group management 76

MISCEllanEOuSaddresses 77

EuroMaint in brief

since 1 January 2006, EuroMaint has been a group with the main task of being a strong, lead­ing maintenance partner that increases its customers’ efficiency. the group has two subsid­iaries, EuroMaint rail and­ EuroMaint ind­ustry, which operate in the rail transport and­ engineering sectors respectively.

The whole Group is characterised by a strong focus on developing new services and concepts which enable the companies to offer the foremost maintenance and technical solutions in their industries. The main product is a comprehensive package, a Total Service Concept encompassing preventive, corrective, restorative and improvement maintenance.

The subsidiaries concentrate on customer benefit and delivery quality, while strategic development issues and co-operation with strategic partners are dealt with at Group level.

Maintenance solutions for the rail transport ind­ustryEuroMaint offers cost-effective maintenance solutions for rolling stock in the rail transport industry, which entails the development, production and delivery of technical system services, as well as maintenance and refurbishment of all types of rolling stock and its components. a process of internationalising the operation began during the year.

streamlining in the engineering sectorEuroMaint Industry are specialists in production streamlining. Taking the existing production process as its point of departure, the company offers maintenance, component servicing, production engineering and production equipment with the aim of strengthening industry competitiveness.

EuroMaint’s operating locationsEuroMaint has operations all over Sweden, from luleå in the north to Malmö in the south.

3

the year in brief

about EuroMaintEuroMaint strengthens its customers’ competitiveness through tailored mainte-nance and technical solutions. EuroMaint’s companies are specialists which offer advanced maintenance services to the rail transport and engineering industries. Turnover in 2006 totalled SEK 2,047 million, with a profit of SEK 100 million. The Group had an average of 1,746 employees in 2006. EuroMaint is owned by aB Swedcarrier, a Swedish state-owned holding company.

kEy ratios 2006 2005*

turnover, SEK mn 2,037 1,872

operating profit, SEK mn 100 114

cash flow after investment activities, SEK mn 45 -38

operating margin, % 5 6

Equity/assets ratio, % 24 18

average number of employees 1,746 1,669

* includes EuroMaint Industry as of 1 July 2005.

EuroMaint AB

EuroMaint Rail AB

EuroMaint Industry AB

The Group consists of EuroMaint Rail, which helps strengthen profitability in the rail transport sector, and EuroMaint Industry, which helps increase its customers’ productivity. EuroMaint Rail accounts for 89% of the Group’s turnover and EuroMaint Industry for 11%.

100

50

-50

-100

cash fLoW aftEr invEstMEnts* SEK mn

-77

2002 2006

-30

14

45

2003 2004 2005

-38

2,200

2,000

1,800

1,600

turnovEr* SEK mn

1,879

2002 2006

1,653

1,493

1,872

2,037

2003 2004 2005

*includes EuroMaint Industry as of 1 July 2005.

4

ad­d­resses

stockhoLMEuroMaint ab PO Box 1555SE-171 29 Solna

www.euromaint.se

soLnaheadquarters

EuroMaint rail abPO Box 1555SE-171 29 Solnavisiting address: Svetsarvägen 10

borLängEEuroMaint rail abBangårdsgatan 8SE-781 71 Borlängevisiting address: Bangårdsgatan 8

gävLEEuroMaint rail ablötängsgatanSE-801 31 Gävlevisiting address: lötängsgatan

gothEnburgEuroMaint rail abPO Box 36 136SE-400 13 Göteborgvisiting address: Minuthandelsgatan 15

haLLsbErgEuroMaint rail ablokvägen 2SE-694 35 hallsbergvisiting address: lokvägen 2

LinköPingEuroMaint rail abSödra Oscarsgatan 2SE-582 73 linköpingvisiting address: Södra Oscarsgatan 2

LuLEåEuroMaint rail abKontorsgatan 37SE-993 42 luleåvisiting address: Kontorsgatan 37

EuroMaint rail ablokstallsvägen 2972 45 luleåvisiting address: lokstallsvägen 2

MaLMöEuroMaint rail abPO Box 124SE-201 21 Malmövisiting address: Carlsgatan, infart 6

EuroMaint rail abPO Box 3503SE-200 22 Malmövisiting address: Södra Bulltoftavägen 51

nässJöEuroMaint rail abPO Box 37SE-571 21 nässjövisiting address: Gölgatan

stockhoLMEuroMaint rail abväxlarevägen 29SE-170 63 Solnavisiting address: växlarevägen 29

EuroMaint rail abBlackvretenSE-195 95 Rosersbergvisiting address: verkstaden Blackvreten

EuroMaint rail abRysstorpsvägen 12SE-197 91 Brovisiting address: Stinsvägen 15

EuroMaint rail abvaruvägen 34SE-125 30 Älvsjövisiting address: varuvägen 34

sundsvaLLEuroMaint rail abParkgatan 5SE-852 29 Sundsvallvisiting address: Parkgatan 5

vännäsEuroMaint rail abvästra Järnvägsgatan 8SE-911 34 vännäsvisiting address: västra Järnvägsgatan 8

åMåLEuroMaint rail abPO Box 302SE-662 27 Åmålvisiting address: västra Bangatan 2

örEbroEuroMaint rail abPO Box 1502SE-701 15 Örebrovisiting address: Södra Grev Rosengatan 1

EuroMaint rail abPO Box 1403SE-701 14 Örebrovisiting address: Södra Grev Rosengatan 1

skövdEheadquarters

EuroMaint ind­ustry abSE-541 87 Skövdevisiting address: Kavelbrovägen 2

gävLEEuroMaint ind­ustry ablötängsgatanSE-801 31 Gävlevisiting address: lötängsgatan

haLLsbErgEuroMaint ind­ustry abKraftvärmegatan 1SE-694 32 hallsbergvisiting address: Kraftvärmegatan 1

åMåLEuroMaint ind­ustry abPO Box 302SE-662 27 Åmålvisiting address: västra Bangatan 2

EuroMaint raiL abEuroMaint ab EuroMaint industry ab

dEsign and Production: Collaboration between EuroMaint aB and Care of haus, västerås.PhotograPhy: lasse Fredriksson, Thomas harrysson, hans Blomberg, Kasper dudzik, Peter lydén, Fortum, Jernbaneverket, Matton, nSB and archive photos from EuroMaint.rEPro: Turbin, västerås. Printing: Edita, västerås. othEr inforMation: This is not an official annual Report. It is a translation of the Swedish annual Report and may not contain all the information provided in the Swedish original.

200

100

-100

-200

oPErating Profit* SEK mn

-188

2002 2006

-103

47

114100

2003 2004 2005

swed­en

contents

EuroMaint in brief 3The year in brief 4The past year 5The CEO’s comments 6

EuROMaInT RaIl 8EuroMaint Rail in brief 9EuroMaint Rail, President 10Maintenance of Stockholm’s commuter trains – a prestigious contract 12new interior for arlanda Express – designed by Björn Borg 14light maintenance of Green Cargo’s freight carriages 14Contract with arriva – new operator on the Swedish market 15Baltic establishment the first step in international development 16Refurbishment contract in norway – ground-breaking for both parties 18Creative development – a natural part of every process 20Market strategies for growth 21

EuROMaInT InduSTRy 22EuroMaint Industry in brief 23EuroMaint Industry, President 24Production streamlining at the forefront 26Establishment in Gävle expands our market 28Closeness to the customer 29From Euromation to EuroMaint Industry 29Specially adapted production equipment 30new customer segments and markets 31

EuROMaInT 32EuroMaint in brief 33The role of the Group management 34Business development 35Operational development 36discretion – a natural part of the change process 37Personnel development 38The role of employees on the Board 39Five-year summary 40

ThE BuSInESS In FIGuRES 41Report of the directors 42Income Statements 44Balance Sheets 45Changes in Equity 47Cash Flow analyses 48notes 49audit Report 64

CORPORaTE GOvERnanCE 65Corporate Governance Report 66The Chairman’s comments 70The EuroMaint Board of directors 72EuroMaint Rail management 74EuroMaint Industry management 75EuroMaint Group management 76

MISCEllanEOuSaddresses 77

EuroMaint in brief

since 1 January 2006, EuroMaint has been a group with the main task of being a strong, lead­ing maintenance partner that increases its customers’ efficiency. the group has two subsid­iaries, EuroMaint rail and­ EuroMaint ind­ustry, which operate in the rail transport and­ engineering sectors respectively.

The whole Group is characterised by a strong focus on developing new services and concepts which enable the companies to offer the foremost maintenance and technical solutions in their industries. The main product is a comprehensive package, a Total Service Concept encompassing preventive, corrective, restorative and improvement maintenance.

The subsidiaries concentrate on customer benefit and delivery quality, while strategic development issues and co-operation with strategic partners are dealt with at Group level.

Maintenance solutions for the rail transport ind­ustryEuroMaint offers cost-effective maintenance solutions for rolling stock in the rail transport industry, which entails the development, production and delivery of technical system services, as well as maintenance and refurbishment of all types of rolling stock and its components. a process of internationalising the operation began during the year.

streamlining in the engineering sectorEuroMaint Industry are specialists in production streamlining. Taking the existing production process as its point of departure, the company offers maintenance, component servicing, production engineering and production equipment with the aim of strengthening industry competitiveness.

EuroMaint’s operating locationsEuroMaint has operations all over Sweden, from luleå in the north to Malmö in the south.

3

the year in brief

about EuroMaintEuroMaint strengthens its customers’ competitiveness through tailored mainte-nance and technical solutions. EuroMaint’s companies are specialists which offer advanced maintenance services to the rail transport and engineering industries. Turnover in 2006 totalled SEK 2,047 million, with a profit of SEK 100 million. The Group had an average of 1,746 employees in 2006. EuroMaint is owned by aB Swedcarrier, a Swedish state-owned holding company.

kEy ratios 2006 2005*

turnover, SEK mn 2,037 1,872

operating profit, SEK mn 100 114

cash flow after investment activities, SEK mn 45 -38

operating margin, % 5 6

Equity/assets ratio, % 24 18

average number of employees 1,746 1,669

* includes EuroMaint Industry as of 1 July 2005.

EuroMaint AB

EuroMaint Rail AB

EuroMaint Industry AB

The Group consists of EuroMaint Rail, which helps strengthen profitability in the rail transport sector, and EuroMaint Industry, which helps increase its customers’ productivity. EuroMaint Rail accounts for 89% of the Group’s turnover and EuroMaint Industry for 11%.

100

50

-50

-100

cash fLoW aftEr invEstMEnts* SEK mn

-77

2002 2006

-30

14

45

2003 2004 2005

-38

2,200

2,000

1,800

1,600

turnovEr* SEK mn

1,879

2002 2006

1,653

1,493

1,872

2,037

2003 2004 2005

*includes EuroMaint Industry as of 1 July 2005.

4

ad­d­resses

stockhoLMEuroMaint ab PO Box 1555SE-171 29 Solna

www.euromaint.se

soLnaheadquarters

EuroMaint rail abPO Box 1555SE-171 29 Solnavisiting address: Svetsarvägen 10

borLängEEuroMaint rail abBangårdsgatan 8SE-781 71 Borlängevisiting address: Bangårdsgatan 8

gävLEEuroMaint rail ablötängsgatanSE-801 31 Gävlevisiting address: lötängsgatan

gothEnburgEuroMaint rail abPO Box 36 136SE-400 13 Göteborgvisiting address: Minuthandelsgatan 15

haLLsbErgEuroMaint rail ablokvägen 2SE-694 35 hallsbergvisiting address: lokvägen 2

LinköPingEuroMaint rail abSödra Oscarsgatan 2SE-582 73 linköpingvisiting address: Södra Oscarsgatan 2

LuLEåEuroMaint rail abKontorsgatan 37SE-993 42 luleåvisiting address: Kontorsgatan 37

EuroMaint rail ablokstallsvägen 2972 45 luleåvisiting address: lokstallsvägen 2

MaLMöEuroMaint rail abPO Box 124SE-201 21 Malmövisiting address: Carlsgatan, infart 6

EuroMaint rail abPO Box 3503SE-200 22 Malmövisiting address: Södra Bulltoftavägen 51

nässJöEuroMaint rail abPO Box 37SE-571 21 nässjövisiting address: Gölgatan

stockhoLMEuroMaint rail abväxlarevägen 29SE-170 63 Solnavisiting address: växlarevägen 29

EuroMaint rail abBlackvretenSE-195 95 Rosersbergvisiting address: verkstaden Blackvreten

EuroMaint rail abRysstorpsvägen 12SE-197 91 Brovisiting address: Stinsvägen 15

EuroMaint rail abvaruvägen 34SE-125 30 Älvsjövisiting address: varuvägen 34

sundsvaLLEuroMaint rail abParkgatan 5SE-852 29 Sundsvallvisiting address: Parkgatan 5

vännäsEuroMaint rail abvästra Järnvägsgatan 8SE-911 34 vännäsvisiting address: västra Järnvägsgatan 8

åMåLEuroMaint rail abPO Box 302SE-662 27 Åmålvisiting address: västra Bangatan 2

örEbroEuroMaint rail abPO Box 1502SE-701 15 Örebrovisiting address: Södra Grev Rosengatan 1

EuroMaint rail abPO Box 1403SE-701 14 Örebrovisiting address: Södra Grev Rosengatan 1

skövdEheadquarters

EuroMaint ind­ustry abSE-541 87 Skövdevisiting address: Kavelbrovägen 2

gävLEEuroMaint ind­ustry ablötängsgatanSE-801 31 Gävlevisiting address: lötängsgatan

haLLsbErgEuroMaint ind­ustry abKraftvärmegatan 1SE-694 32 hallsbergvisiting address: Kraftvärmegatan 1

åMåLEuroMaint ind­ustry abPO Box 302SE-662 27 Åmålvisiting address: västra Bangatan 2

EuroMaint raiL abEuroMaint ab EuroMaint industry ab

dEsign and Production: Collaboration between EuroMaint aB and Care of haus, västerås.PhotograPhy: lasse Fredriksson, Thomas harrysson, hans Blomberg, Kasper dudzik, Peter lydén, Fortum, Jernbaneverket, Matton, nSB and archive photos from EuroMaint.rEPro: Turbin, västerås. Printing: Edita, västerås. othEr inforMation: This is not an official annual Report. It is a translation of the Swedish annual Report and may not contain all the information provided in the Swedish original.

200

100

-100

-200

oPErating Profit* SEK mn

-188

2002 2006

-103

47

114100

2003 2004 2005

swed­en

• MaintenanceofStockholm’scommutertrains–aprestigiouscontract EuroMaintRailinawinningteamformorepunctualcommutertraffic Readmoreonpage12

• Balticestablishmentthefirststepininternationaldevelopment Internationalisation:OwnreprocessingofproductsinLatvia Readmoreonpage16

• RefurbishmentcontractinNorway–ground-breakingforbothparties Internationalisation:FirstmajororderoutsideofSweden Readmoreonpage18

• Productionstreamliningattheforefront Peaceofmind,addedvalueandstreamliningwithTotalServiceConcept Readmoreonpage26

• EstablishmentinGävleexpandsourmarket EuroMaintIndustryinitiatesregionalstructureandgetsclosertonewcustomers Readmoreonpage28

ThepastyearThepastyear

5

contents

EuroMaint in brief 3The year in brief 4The past year 5The CEO’s comments 6

EuROMaInT RaIl 8EuroMaint Rail in brief 9EuroMaint Rail, President 10Maintenance of Stockholm’s commuter trains – a prestigious contract 12new interior for arlanda Express – designed by Björn Borg 14light maintenance of Green Cargo’s freight carriages 14Contract with arriva – new operator on the Swedish market 15Baltic establishment the first step in international development 16Refurbishment contract in norway – ground-breaking for both parties 18Creative development – a natural part of every process 20Market strategies for growth 21

EuROMaInT InduSTRy 22EuroMaint Industry in brief 23EuroMaint Industry, President 24Production streamlining at the forefront 26Establishment in Gävle expands our market 28Closeness to the customer 29From Euromation to EuroMaint Industry 29Specially adapted production equipment 30new customer segments and markets 31

EuROMaInT 32EuroMaint in brief 33The role of the Group management 34Business development 35Operational development 36discretion – a natural part of the change process 37Personnel development 38The role of employees on the Board 39Five-year summary 40

ThE BuSInESS In FIGuRES 41Report of the directors 42Income Statements 44Balance Sheets 45Changes in Equity 47Cash Flow analyses 48notes 49audit Report 64

CORPORaTE GOvERnanCE 65Corporate Governance Report 66The Chairman’s comments 70The EuroMaint Board of directors 72EuroMaint Rail management 74EuroMaint Industry management 75EuroMaint Group management 76

MISCEllanEOuSaddresses 77

EuroMaint in brief

since 1 January 2006, EuroMaint has been a group with the main task of being a strong, lead­ing maintenance partner that increases its customers’ efficiency. the group has two subsid­iaries, EuroMaint rail and­ EuroMaint ind­ustry, which operate in the rail transport and­ engineering sectors respectively.

The whole Group is characterised by a strong focus on developing new services and concepts which enable the companies to offer the foremost maintenance and technical solutions in their industries. The main product is a comprehensive package, a Total Service Concept encompassing preventive, corrective, restorative and improvement maintenance.

The subsidiaries concentrate on customer benefit and delivery quality, while strategic development issues and co-operation with strategic partners are dealt with at Group level.

Maintenance solutions for the rail transport ind­ustryEuroMaint offers cost-effective maintenance solutions for rolling stock in the rail transport industry, which entails the development, production and delivery of technical system services, as well as maintenance and refurbishment of all types of rolling stock and its components. a process of internationalising the operation began during the year.

streamlining in the engineering sectorEuroMaint Industry are specialists in production streamlining. Taking the existing production process as its point of departure, the company offers maintenance, component servicing, production engineering and production equipment with the aim of strengthening industry competitiveness.

EuroMaint’s operating locationsEuroMaint has operations all over Sweden, from luleå in the north to Malmö in the south.

3

the year in brief

about EuroMaintEuroMaint strengthens its customers’ competitiveness through tailored mainte-nance and technical solutions. EuroMaint’s companies are specialists which offer advanced maintenance services to the rail transport and engineering industries. Turnover in 2006 totalled SEK 2,047 million, with a profit of SEK 100 million. The Group had an average of 1,746 employees in 2006. EuroMaint is owned by aB Swedcarrier, a Swedish state-owned holding company.

kEy ratios 2006 2005*

turnover, SEK mn 2,037 1,872

operating profit, SEK mn 100 114

cash flow after investment activities, SEK mn 45 -38

operating margin, % 5 6

Equity/assets ratio, % 24 18

average number of employees 1,746 1,669

* includes EuroMaint Industry as of 1 July 2005.

EuroMaint AB

EuroMaint Rail AB

EuroMaint Industry AB

The Group consists of EuroMaint Rail, which helps strengthen profitability in the rail transport sector, and EuroMaint Industry, which helps increase its customers’ productivity. EuroMaint Rail accounts for 89% of the Group’s turnover and EuroMaint Industry for 11%.

100

50

-50

-100

cash fLoW aftEr invEstMEnts* SEK mn

-77

2002 2006

-30

14

45

2003 2004 2005

-38

2,200

2,000

1,800

1,600

turnovEr* SEK mn

1,879

2002 2006

1,653

1,493

1,872

2,037

2003 2004 2005

*includes EuroMaint Industry as of 1 July 2005.

4

ad­d­resses

stockhoLMEuroMaint ab PO Box 1555SE-171 29 Solna

www.euromaint.se

soLnaheadquarters

EuroMaint rail abPO Box 1555SE-171 29 Solnavisiting address: Svetsarvägen 10

borLängEEuroMaint rail abBangårdsgatan 8SE-781 71 Borlängevisiting address: Bangårdsgatan 8

gävLEEuroMaint rail ablötängsgatanSE-801 31 Gävlevisiting address: lötängsgatan

gothEnburgEuroMaint rail abPO Box 36 136SE-400 13 Göteborgvisiting address: Minuthandelsgatan 15

haLLsbErgEuroMaint rail ablokvägen 2SE-694 35 hallsbergvisiting address: lokvägen 2

LinköPingEuroMaint rail abSödra Oscarsgatan 2SE-582 73 linköpingvisiting address: Södra Oscarsgatan 2

LuLEåEuroMaint rail abKontorsgatan 37SE-993 42 luleåvisiting address: Kontorsgatan 37

EuroMaint rail ablokstallsvägen 2972 45 luleåvisiting address: lokstallsvägen 2

MaLMöEuroMaint rail abPO Box 124SE-201 21 Malmövisiting address: Carlsgatan, infart 6

EuroMaint rail abPO Box 3503SE-200 22 Malmövisiting address: Södra Bulltoftavägen 51

nässJöEuroMaint rail abPO Box 37SE-571 21 nässjövisiting address: Gölgatan

stockhoLMEuroMaint rail abväxlarevägen 29SE-170 63 Solnavisiting address: växlarevägen 29

EuroMaint rail abBlackvretenSE-195 95 Rosersbergvisiting address: verkstaden Blackvreten

EuroMaint rail abRysstorpsvägen 12SE-197 91 Brovisiting address: Stinsvägen 15

EuroMaint rail abvaruvägen 34SE-125 30 Älvsjövisiting address: varuvägen 34

sundsvaLLEuroMaint rail abParkgatan 5SE-852 29 Sundsvallvisiting address: Parkgatan 5

vännäsEuroMaint rail abvästra Järnvägsgatan 8SE-911 34 vännäsvisiting address: västra Järnvägsgatan 8

åMåLEuroMaint rail abPO Box 302SE-662 27 Åmålvisiting address: västra Bangatan 2

örEbroEuroMaint rail abPO Box 1502SE-701 15 Örebrovisiting address: Södra Grev Rosengatan 1

EuroMaint rail abPO Box 1403SE-701 14 Örebrovisiting address: Södra Grev Rosengatan 1

skövdEheadquarters

EuroMaint ind­ustry abSE-541 87 Skövdevisiting address: Kavelbrovägen 2

gävLEEuroMaint ind­ustry ablötängsgatanSE-801 31 Gävlevisiting address: lötängsgatan

haLLsbErgEuroMaint ind­ustry abKraftvärmegatan 1SE-694 32 hallsbergvisiting address: Kraftvärmegatan 1

åMåLEuroMaint ind­ustry abPO Box 302SE-662 27 Åmålvisiting address: västra Bangatan 2

EuroMaint raiL abEuroMaint ab EuroMaint industry ab

dEsign and Production: Collaboration between EuroMaint aB and Care of haus, västerås.PhotograPhy: lasse Fredriksson, Thomas harrysson, hans Blomberg, Kasper dudzik, Peter lydén, Fortum, Jernbaneverket, Matton, nSB and archive photos from EuroMaint.rEPro: Turbin, västerås. Printing: Edita, västerås. othEr inforMation: This is not an official annual Report. It is a translation of the Swedish annual Report and may not contain all the information provided in the Swedish original.

200

100

-100

-200

oPErating Profit* SEK mn

-188

2002 2006

-103

47

114100

2003 2004 2005

swed­en

6

TheCEO’scomments

Ourcustomersshouldbeabletoconcentrateontheircorebusiness.TheideaisforEuroMainttodelivertheservicewhichenablestheoperationtofunction.Weareincreasinglymovingtowardsanoverallapproach,whereourlongexperienceintherailtransportsectorisdevelopedandalsoappliedontheengineeringside.Weworkconsis-tentlywithhighlevelsofqualityandexpertise,whileatthesametimeweareinvolvedinnetworksandpartnerships,enablingustodeliverfullserviceinlinewithcustomers’needsandpreferences.

EuroMaintRaillooksoverthebordersThereisstiffcompetitionintherailtransportindustryregardingmaintenance,whilethescopeofthemarketisbarelychanging.Tobecompetitive,itisessentialtooffertruecustomervalue.OurimmediategoalsaretoretainourmarketshareinSwedenbywinningmanyoftherenegotiationsandnewtenderswhichwillbecomingupinthenearfuture,andtoestablishourselvesinternationallyinordertocontinueourgrowthandstrengthenourcompetitiveness.

EuroMaintIndustry–faithinthefuture2006hasbeenachallengingyearfortheengineeringsideofthebusiness.Wehavehadtoreducethenumberofemployeesinsomeareaswhilewecanseepersonnelneedsinothers,andattheendoftheyearwedecidedtoreplacethecompany’sPresident.IamconvincedtheoperationhasexcellentpotentialandIhavegreatfaithinouremployees’expertiseandcapacity.Wewillstrengthentheexistingbusinesswhilesimultaneouslyfocusingondevelopingnewbusiness.Oneimportanttrendinthisindustryisashiftfromsellinghourstofull-servicepackages.

EnvironmentaleffortsTheGrouphasaclearfocusontheenvironment.Aspartofthisweareconductinganextensiveenergy-savingprojectwiththedualaimsofreducingcostsandprotectingtheenvironment.TheprojectwascarriedoutatEuroMaintRailin2006andwillbeimplementedatEuroMaintIndustryin2007.

DevelopmentwithmanybenefitsEuroMaintiscurrentlyinapositivetrendwithabroadeningoftheoperationandinternationalisation.Thisisachallengewewillcontinuetotackle.Thistrendisnotonlybeneficialtoourcustomersandowners;italsocreatesexcitingdevelopmentopportunitiesforouremployees,enablingthemtoexpandtheirworktasks,changeindustryorworkabroad–allwithinthesameGroup.

IndustrydevelopmentforthefutureAsaleadingmaintenancegroup,industrydevelopment,trainingandresearchareimportantareas.Incollaborationwithindustryorganisations,uppersecondaryschools,collegesanduniversities,wewanttocontributetoandharnessnewindustryexpertise.Bearinginmindfuturerecruitment,wealsowanttosupportfreshtalentwhenitcomestomaintenanceexpertise.OneexampleofthisisplanningamaintenanceengineeringcentreinMalmöforcompetenceandprocessdevelopmentlinkedtorollingstockmaintenance.InthisinstancewearecollaboratingwiththelocalauthorityandtheSwedishemployerorganisationAlmega.

Long-termambitionsManyindustriesrequirethetypeofsecurity-gradedmaintenanceservicesofwhichweatEuroMainthaveextensiveexperience.Advancesintechnologyalsomeanthattheservicesarebecomingincreasinglyspecialised.Ourlong-termambitionistoestablishourselvesinmoreindustries,whereourexperienceofdevelopmentandinnovationinmaintenancecancontributetocustomers’success.IntheevenlongertermweexpecttocarryoutinternationalventuresoncewehaveachievedasoundknowledgebaseinSwedenforeachindustry.

Consequently,EuroMaintneedsamainownerwiththefinancialstrength,sustainabilityanddesiretomakemaintenanceaSwedishexportusingEuroMaintasafoundationfordevelopment.

PetherWallinPresident&CEO

Duringthepastyear,wehavestrengthenedourpositionasamaintenancepartnerinSweden.Thetwoindustriesweoperateintoday,railtransportandengineering,areatdifferentstagesofdevelopmentwhenitcomestomaintenanceservices.Weareinvestingstronglytocontributetoourcustomers’positivedevelopment,adaptedtotherequirementsoftheindustryinquestion.

7

“Positive trend with broadening of the operation and internationalisation”

PEThERWaLLIN

Family:Wife,andtwinsonsaged16

Livesin:Gothenburg

Workplace:Stockholm

Railtravel:Weeklycommute,atleastsixhoursonthetrainaweek.Switchoffthemobile,findtimetoreadandthinkalot.

Leisureinterests:Travellingwithfamily(alotinthepastyearwithtwo50thbirthdaysinthefamily).Foodandwine(happytohelpwiththecooking,butnotinchargeofthekitchen).Interiors(sharedinterest).Renovation.Gardening.

Societies:StJörgen’sGolfclub.Thewholefamilyhasbeenplayinggolfforthreeyears.It’snicetospendtimetogetherasafamily.

Somethingyoudidn’tknow:Iironallmyshirtsmyself!

Bestquality:Usuallyhappy,andthinklife’sfun.

EuroMaintRail•MaintenanceofStockholm’scommutertrains–aprestigiouscontract EuroMaintRailinawinningteamformorepunctualcommutertraffic Readmoreonpage12

•Contractwitharriva–newoperatorontheSwedishmarket MaintenanceofcommutertrainsPågatågen,agreedwithinternationaloperatorArriva Readmoreonpage15

•Balticestablishmentthefirststepininternationaldevelopment Internationalisation:OwnreprocessingofproductsinLatvia Readmoreonpage16

•RefurbishmentcontractinNorway–ground-breakingforbothparties Internationalisation:FirstmajororderoutsideofSweden Readmoreonpage18

•Creativedevelopment–anaturalpartofeveryprocess EuroMaintRailactivelydevelopstechnologyandplanning Readmoreonpage20

EuroMaintRail

8

�

EuroMaintRailinbrief

EuroMaintRailofferscost-effectivemaintenancesolutionsforrollingstockintherailtransportindustry.Thecompanydevelops,producesandsuppliestechnicalsystemservicesandmaintenanceforalltypesofrollingstockanditscomponents.WithheadquartersinSolnaandoperationsin13locations,EuroMaintRailhasanextensivenetworkofworkshopsinSweden.

KEyRaTIOS 2006 2005

Turnover,SEKmn 1,818 1,710

Operatingprofit,SEKmn 108 100

Cashflowafterinvestmentactivities,SEKmn 73 1�

Operatingmargin,% 6 6

Equity/assetsratio,% 25 17

averagenumberofemployees 1,456 1,3�6

EuroMaintRail’smainoperationencompassestrainmaintenanceandrefurbishmentofrollingstock.Trainmaintenancekeepstherollingstockmovingwithoptimisedoperationundersafetrafficconditions.Refurbishmentincreasestheperformanceandcomfortofrollingstock,whilealsoupdatingthedesignandincreasingservicelife.EuroMaintRailalsohastheSwedishindustry’smostcompletematerialsourcingsystem.

200

100

-100

-200

100

50

-50

-100

CaShFLOWaFTERINvESTMENTSSEKmn

-77

2002 2006

-30

14

73

2003 2004 2005

-19

OPERaTINGPROFITSEKmn

-188

2002 2006

-103

47100 108

2003 2004 2005

TuRNOvERSEKmn

2,200

2,000

1,800

1,600

1,879

2002 2006

1,653

1,493

1,710

1,818

2003 2004 2005

10

EuroMaintRail

During2006,EuroMaintRailhaswonseveralmajor,strategicallyimportanttendersinincreasinglytoughinternationalcompetition.Tothesesuccesseswecanalsoaddthebeginningofaninternationalestablishment.Thepastyearhasbeentremendousinmanyways.

Withasuccessfulyearbehindusweareoptimisticaboutthefuture.EuroMaintRailiswellpreparedtocompeteformajornewcontractsandtoexpandinternationally.Onaday-to-daybasiswearecontinuingourgoal-orientedeffortstobecomeevenmoreefficientandproductive.

ContinuedconfidencefromSJaBOverthenextfewyearsanumberofcontractswillexpire.Thebestwayofwinningthemagainistokeepourpromises,buildtrustandadaptourcustomerpropositions.Exampleswherewehavesucceededinaccomplishingthisincludetheextended,directlynegotiatedthree-yearmaintenancecontractswithSwedishtrainoperatorSJABforpassengercarriagesandRCengines.

WinningteamforStockholmcommutertrainsItwasexcellentforEuroMaintRailtobeannouncedoneofthewinnersinStockholmTransport´stenderfortheStockholmcommuterrailservice.TheteamspiritandpartnershipintheStockholmTrainAlliance,inwhichEuroMaintRailisapart,wasajoy–togetherweofferedawinningqualityconcept.Thismaintenancecontracthasalsobroughtusaroundahundrednewco-workers,withwhomweshareourfaithinthefuture.

MaintenancecontractwitharrivaforPågatågencommutertrainsBritishcompanyArriva–oneofEurope’slargestcompaniesinpassengercommuterservice–wastheoperatorchosenbySwedishtrainoperatorSkånetrafikentorunPågatågencommutertrains.Inturn,ArrivachosetocollaboratewithEuroMaintRail.Themaintenancecontract,anine-yearavailabilitycontract,wasdrawnupincloseco-operationwiththecustomer.

JONaSSaMuELSON,PRESIDENTOFEuROMaINTRaIL

TuRNOvERByPRODuCTaREa

1. Trainmaintenance84%

2. Refurbishment11%

3. Sparepartssupply4%

4. Other1%

1

2

3

4

MaJORCONTRaCTSIN2006

• arriva–MaintenanceofcommutertrainsPågatågen(X11electricenginecoaches)

• aSJ–Refurbishmentofsleepercarriages,maintenanceofpassengercarriages

• a-Train–MaintenanceandrefurbishmentofArlandaExpresstrains(X3)

• veolia–Maintenanceofenginecoaches(X52),passengercarriagesandengines

• GreenCargo–Maintenanceofelectricanddieselengines,maintenanceandrefurbishmentoffreightwagons

• NSB–Refurbishmentofpassengercarriages

• SJaB–MaintenanceandrefurbishmentofX2000 trains(X2),maintenanceofRCengines,passengercarriages,electricenginecoaches(X11–X14, X32 andX50)anddieselenginecoaches(Y1andY2)

• StockholmTransport–Maintenanceofcommutertrains(electricenginecoachesX1, X10 and X60)

• TKaB–Maintenanceofelectricenginecoaches(X50,X51andX52)

RefurbishmentforNSB–aninternationalbreakthroughEuroMaintRailwasentrustedbyNSB,NorwegianStateRailways,torefurbish5�passengercarriages–animportantinternationalbreakthrough.Thecontractentailsacompleterefurbishmentfromtechnicaldesigntodelivery.

BalticestablishmentanassertivemoveThenewEUMemberswillbemakingsubstantialinvestmentsinrailways.EuroMaintRail’snewworkshopforreprocessingreplace-mentitemsintheBalticregionisanassertivemovetoensuregreaterefficiencyandapresenceonanexpansivenewmarket.

11

DialogueforparticipationIn2006wecarriedoutthefirststageof‘DialogueforParticipation’.Thegoalistoincreaseemployees’overallview,participationandteamspirit.Everyonemustunderstandthebusinessplan–wherewe’reheadingandwhy.

Thesecondstageentailsmakingiteasierforeveryonetohaveaninfluenceandsuggestimprovements.Wehaveabroadbaseofindustryexperience.Swifterdecisionpathsenableustocapitaliseonouremployees’skillsandsenseofresponsibility.Weachievemoreactiveplanningwithmoredelegatedresponsibilityforefficiencyandqualitydevelopment.

Themainstrengthofourprocessofchangeliesinacorporateculturecharacterisedbycustomerfocus,expertise,professionalprideandsustainability.Weboastextensiveexperienceofchangeand–mostimportantly–ofembracingchange.

InnovativeemployeesInnovativeemployeesareofteninspiredbyeverydayproblems:Wouldn’titbebettertoturnwheelsonsiteusingaportablewheellatheratherthandismantlingthemfromthetrainsandsendingthemtotheworkshop?Kurt-GöranThyni,whoworksatEuroMaintRail’sworkshopinLuleå,startedthinkingaboutthisacoupleofyearsago.Nowaprototypehasbeentestedandadevelopmentprojectinitiated.

Wouldn’titalsobebettertocarryoutbraketestsonsiteusingportabletestingequipmentratherthanhavingtobringentiretrainsintotheworkshop?ThordRutqvist,anotheremployeeinLuleå,developedhisfirstbraketestingsystemsixyearsago.Afterfurtherdevelopmentitnowworksevenbetterthantheequipmentintheworkshops.

Wehavealsosuccessfullydevelopedandevaluatedaspeedsimulatorusedtocheckthatthetraindoorslockwhenthetrainstartsmoving.ThesimulatorwasdevelopedbyBengtBergelin,anemployeeinHagalund.

MarketandmarketdevelopmentEuroMaintRailenjoysastrongpositiononitsdomesticmarketandawell-establisheddialoguewithcustomers.Swedenhascleargrowthregionsforrailtraffic,butthetotalvolumeofmaintenanceisnotgrowing.Ontheotherhand,requirementsonflexibilitywithregard

towhenandhowmaintenanceiscarriedoutareincreasing.Similarlythereisgreaterdemandonustobringaddedvalueandmoveourofferingsupthevaluechain.

Examplesofthelatterincludethecontinueddevelopmentofsplit-basedmaintenanceandtheestablishmentoftheIntegratedLogisticsSupportunit,ILS.Atthesametimetheentirecompany’splanninganddevelopmentofnewmaintenancemethodsarebeingco-ordinated.

Innovativedevelopmentoftechnologyandplanningcharacteriseseachprocessandsub-process.

Therefurbishmentmarketfluctuatesfromyeartoyear,bothinSwedenandinternationally.Althoughlargeinvestmentsarebeingmadeinnewrollingstock,therearestillalotofolder,well-functioningvehicletypeswhichneedalongerservicelifeandhighercomfortthroughrefurbishment.

Theevermorederegulatednatureoftheinternationalmarketandtheriseinthenumberofplayersmeanthatweincreasinglyencounterinternationalcompetitors,bothonourdomesticmarketandinneighbouringterritories.Atthesametimewearealsoobservingmoreinternationalcustomers.Theirgoodexperienceofworkingwithusisasuccessfactorinourinternationalexpansion.

ThefutureEuroMaintRail’sstrategyistobestrongonthedomesticmarketandtoprogressivelyexpandintothesurroundingarea,primarilyintoDenmark,Norway,GermanyandtheBalticregion.Ourgoalfor2007istowinanothermajorinternationaltender.

OnestrategicallyimportantcontractwhichwehavebeendeeplyinvolvedinforthepastfouryearsistheprocurementbytrainoperatorSkånetrafikenandDenmark’sNationalRailAuthorityforrailservicesacrosstheSound.Herewehaveoptednottoformpartnershipswithanyofthecompetingoperatorsinadvance,butrathertoapproacheachpartywithabespokeoffering.

ThemajorcontracttorefurbishtheX2trainsforSwedishtrainoperatorSJABwillbecompletedduringthesummer.Itispartlyinlightofthisthatitisessentialforustowinnewrefurbishmentcontracts.WearecurrentlyworkingonabidforGreenCargo,aSwedishlogisticscomapany.NorwegianStateRailways,NSB,willalsobeprocuringfurtherrefurbishmentshortly,acontractwearealsoworkinghardtowin.

6%

4%

2%

SICKLEavE*

*Actualleaveasapercentageofnormalworkinghours.

5.2

2005 2006

5.2

0.30

0.20

0.10

REhaBILITaTIONCaSES*

*Calculatedas(periodsofsickleavebeginningday2�/hoursworked)x10,000.

0.26

2005 2006

0.30

TuRNOvERByCuSTOMER

1. SJAB48%

2. GreenCargo17%

3. Stockholmståg�%

4. Veolia4%

5. TKAB3%

6. Citypendeln2%

7. SwedishRailAdministration2%

1

2

3

4

5678

11

9

8. A-Train2%

9. NSB2%

10. ASJ1%

11. Others10%

10

12

EuroMaintRail

“Wedidn’tpaythatmuchattentiontothecompetition,insteadweconcentratedonSL’sneedsand,togetherwithourpartnersintheStockholmTrainAlliance,onfindingthebestsolutions,”saysNiclasFlodin.HeistheContractManagerforthemaintenanceagreementandheadofthemaintenanceunitwhichEuroMaintRailtookoverfromCitypendeln.

GentleflyingstartforournewemployeesThecontractbroughtEuroMaintRailaroundahundrednewemployeesandoperationoftwoworkshops,oneinÄlvsjöandabrandnewoneinBro.Whenwetakeoversuchalargeorganisationwehavetoberespectfulandnotchangetoomuchtooquickly.WethereforedecidedtomaketheexistingorganisationaseparateunitwithinEuroMaintRail.Themostimportantelementaheadofstart-upwastoquicklyfamiliariseournewcolleagueswithourwayofworking,oursystemsandroutines.

NewthoughtsonavailabilityTheintroductionalsoincludedinformingasmanypeopleaspossibleaboutourapproachtotrainmaintenance.Thereweremanyconven-tionsinplace;forexamplemajoroverhaulsrequiredtrainstospendseveraldaysintheworkshopmeaningtheywereunavailableforser-vice.Weontheotherhandprefertosplitmajoroverhaulsintosmallerpartswhichcanbecarriedoutatdifferenttimes.Thisenablesustomakeuseofoperationalbreaksduringlowtrafficformaintenancework,thusincreasingthetrains’availabilityduringpeakperiods.

Lowercostsorincreasedincome–orboth?Astrainmaintenanceisourcorebusiness,weworkwithboththecostandtheincomesideofthebusiness.Usingawell-consideredstrategyforprocess,technologyandvaluedevelopment,wearemorecost-effectiveandhelpensurethetrainsareavailablemoreofthetime.Forexample,atthenewworkshopinBrowehaveinvestedinaViewsystemwhichautomaticallycheckstheconditionofbrakeliningsandwheels–asafetytaskthatwouldotherwiseentailalotofmanualwork.

Increasedpunctualityandreliability–thebiggestdemandsSLhasthreegenerationsofcommutertrain.TheoldestareX1trainsfromthe1�60swhicharebeingreplacedbynewX60 trainsuptoNovember2007.TheX10 trainsfromthe1�80sarestillattheirpeakagefromatechnicalperspective.

Themoregenerationsofrollingstock,thehigherthedemandsonthemaintenanceorganisation.Itisalwaysdifficulttogetholdofsparepartsforoldtrains.Atthesametime,newtrainsoftenexperienceteethingproblems.Thankstoourvehicleengineeringknow-howandwell-developedmaintenance,wedoeverythingtominimisetheriskofdelaysandalackofcarriages.Increasedpunctualityandreliabilityarethebiggestdemands,fromSLandrailcommutersalike.

MaintenanceofStockholm’scommutertrains–aprestigiouscontractDuringthenightbetween17and18June2006,thecompanyCitypendelntransferredoperationofStockholmTransport’s(SL)commutertraffictoStockholmståg,withEuroMaintRailasthemaintenancesupplier.ThecompetitionfromSwedishandforeignplayersalikewasparticularlystrongforthisprestigiouscontract.

“The contract brought around a hundred new employees and two workshops”

13

STOCKhOLMCOMMuTERTRaINS

TheStockholmTrainAlliancecomprisesthreepartnerswhoworkcloselytogether:Stockholmstågastheoperator,ISSTraffiCareasthesupplierofcleaningandstationservice,andEuroMaintRailasthesupplieroftrainmaintenance.

TheStockholmTrainAllianceandSwedishRailAdministrationrunajointoperationscentreandofferSLatotalsolutionwithclearcommonobjectives:punctualtraffic,cleanandcompletetrains,andgoodserviceforpassengers.

Typeofcontract:Availabilitycontractwithfixedandvariableelements.

Term:Fiveyearswithanoptionforafurtherfive.

Therefurbishmentincludedstrengtheningthefloors,newwallpanels,newcarpetsandnewseatupholstery.Thechallengewastocarryouttheassignmentswiftlyinordertominimisedisruptiontorailservicesandtherepercussionsforpassengers.Thepreparationstookaroundsixmonths.

TightscheduleforworkoneachtrainThefirstoftheseventrainunitswasbroughtinforrefurbishmentinMay.Followingminoradjustmentstotheproductionplan,theothertrainswerebroughtinonebyoneduringtheoff-peaksummerperiod.The25peopleinvolvedintherefurbishmenthadoneweektocompleteworkoneachtrain.Therefurbishmentwascarriedoutintandemwithongoingmaintenancetominimisetheimpactonservices.

“EuroMaintRailandtheotherprojectparticipantsplannedandcarriedouttheprojectinaprofessionalmanner,understrictrequire-mentsintermsofqualityandschedule,”saysMartinByström,VehicleManageratA-Train.

NewinteriorforarlandaExpressdesignedbyBjörnBorga-TrainincollaborationwithBjörnBorg’sdesignteamhasproducedabrandnewinteriorforitstrains–arlandaExpress.Insummer2006,EuroMaintRailwasentrustedtocarryouttherefurbishmentonthecompany’sseventrainunits.

EuroMaintRail

Thecontract,whichrunsuntil1March2008,encompassespreventiveandcorrectivemaintenanceoffreightandmailwagons.ThemaintenanceiscarriedoutatourworkshopsinLuleå,VännäsandSundsvall.Thecontractalsoincludesahighproportionoffieldserviceoriginatingfromtheselocations.AfewofthemailwagonsaremaintainedinMalmöandHagalund.Thecontractprovidesapproximately25workyears.

KnowledgeableclientGreenCargooperatesonahighlycompetitivemarketthatplacesrigorousdemandsoncarefulcostcontrol.Thankstothecompany’sextensiveknowledgeofmaintenance,theyhavebeenabletochooseanaction-basedcontractwithstrictdeliveryterms.

CompetitivesupplierSomeofourclearestcompetitivebenefitsareourestablishedstruc-tureandorganisationformaintenanceoffreightwagons,coupledwithatriedandtestedabilityandcapacitytocarryouttherequisitehighvolumeoffieldmaintenance.Theresultforourclientishighavailabilityofthewagonfleetcombinedwithcost-effectivemaintenance.

LightmaintenanceofGreenCargo’sfreightcarriagesSince1January2006,EuroMaintRailandGreenCargohavehadabrandnewcontractstructureforthemaintenanceoffreightandmailwagonsinnorthernSweden.Itisaminutelyspecifiedandregulatedaction-basedcontract.

14

SkånetrafikenhasputthePågatågencommuterserviceouttotender.EuroMaintRailchosetosubmitmaintenancebidstotheoperatorstakingpartinthetender,bothSwedishandinternational.Thebidswesubmittedwerebasedonthesamefoundation,butvariedquiteextensi-velyasthecontentoftherequestsfortenderwereverydifferent.ThisinturnwasbecauseSkånetrafikenhadmadeanopenrequestleavingituptotheoperatortodecidehowthearrangementshouldbestructured.

InternationaloperatorInearly2006SkånetrafikenchoseArrivaastheoperatorforPågatågencommutertrains.BritishcompanyArrivaisoneofEurope’slargestprivatecompaniesinpassengerservicesandhasapproximately30,000employees,2,500oftheminrailtraffic.ThecompanyhasoperationsineightEuropeancountriesandhaspreviouslyonlyrunbusservicesinSweden.ThecompanyArrivaTågABwascreatedinconnectionwithwinningthetender.

GoodcollaborationArrivachoseEuroMaintRailasthesupplierforallmaintenance,whichisofcourseanhonourforus.Wehavenegotiatedamaintenancecontractinexcellentcollaboration.Arrivahasdecidednottoprocurecomponentoverhaulsseparately,insteadallmaintenanceworkwillbecoveredbyasingleavailabilitycontract.

Theoriginalrequestwasforathree-yearcontractfortheexistingX11trains,afterwhichtheywereduetobephasedout.Duringcontractnegotiationthepartiesagreedtoextendthetermtonineyears,i.e.untilmid-2016,soastoencompassthephasing-outofoldertrainsandthephasing-inofnewones.

IncreasingscopeThecontractisatotalundertakingforbothcomponentmaintenanceandlightmaintenance.Itinitiallycoversthe26modelX11trainsanditmayalsoincludenewrollingstockduringthetermofthecontract.Thetrainscurrentlytravelbetweenfourandfivemillionkilometresayearandallforecastsindicatethatvolumewillincreaseoverthenextdecade.

InDecember2006Skånetrafikenordered4�newmodelX60PågatågencommutertrainsfromAlstom.Theywillbeginbeingdeliveredinautumn200�.MaintenanceforthisnewrollingstockwillbethesubjectofaseparateprocurementonSkånetrafiken’spart.

Ifwealsowinmaintenancebidsforthenewtrains,theexistingtrainswillbephasedoutandthenewonesphasedinwithintheframe-workofthemaintenancecontractafar-reachingprocessofwhichwehavesoundexperience.Newrollingstockdoescallfornewworkmethods,buttheswitchisfacilitatedbyourexperienceofthechosenmodel.Foralongperiodofthecontract,expertiseandmaintenanceprocesseswillberequiredforbothtypesofvehicle.Ensuringasmoothtransitionperiodplaceshighdemandsbothonouremployeesandongoodcollaborationwiththeoperator.

Contractwitharriva–newoperatorontheSwedishmarketThetrainoperatorSkånetrafikenhasputthePågatågencommutertrainserviceouttotender.EuroMaintRailhasbeencommissionedtocarryoutbothcomponentmaintenanceandlightmaintenanceonPågatågencommutertrains,whichwillbeoperatedbyarrivaTågaBfromJune2007.anine-yearcontracthasbeensignedwhichcurrentlyencompasses26trains.

15

16

WORKShOPINThEBaLTICREGION

PreparationsforsettinguptheworkshopbeganinOctober2006andareexpectedtotakearoundoneyear.Productionisbeingrelocatedinthefirstprojectphaseattheendof2007andinthesecondphaseplannedformid-2008.

Location:TheworkshopwillbeinthecityofJelgava,40kmoutsideRiga,Latvia.

area:Approximately5,000m2ofworkshopand500m2ofoffices.

Production:Thefirstphaseoftheprojectcomprisesreprocessingshockabsorbersandbrakecylinders.Thesecondphasecoversreprocessingoffurthermechanicalproductsandsomeelectricalproducts.

Scope:Bytheendof2007around20employeesareexpectedtobeemployedinLatvia.During2008thatfigurewillrisetoabout35.

Estonia

Latvia

Lithuania

Jelgava

Sweden

Balticsea

17

EuroMaintRail

ThisisEuroMaint’sfirststepininternationaldevelopment,andthefirsttimeanoperationstemmingfromtheSwedishStateRailwayspublicenterprisehasestablisheditselfoutsideofSweden.

Sowhyrelocate,andwhytotheBalticregion?OurownoperationintheBalticregionisverymuchinlinewithouraimtoexpandinternationally,becausetheSwedishmarketfortrainmaintenanceislimited.Moreover,competitiononourdomesticmarketistough.Toremaincompetitivewemustcontinuouslyshowthatwearestreamliningandrationalisingourproductionindifferentways.Thislatestmoveisapartofthatprocess.

TheBalticregionisfacingmajorinvestmentsininfrastructure,andaphysicalpresenceengenderscompletelydifferentopportunitiestohaveaninfluenceandtakepartinthatchange.Thealternativeofworkingwithpartnerswouldnotbringthisbenefit,anditwouldalsobehardertoassureexpertise,qualityanddeliveryreliability.

assuringhighqualityAwell-composedprojectgroupisworkingontheestablishmentinLatvia.Oncethefirststepsofhiringpremises,finalisingtheworkshoplayoutandprocuringcertainmachineryiscomplete,therearegreatchallengesahead.Thepersonnelnotonlyneedtohavetheneces-saryprofessionalskillsandlearnboththeirtasksandhowtooperateoursystems;theymustalsobecomeanintegralpartofEuroMaint’scorporateculture.

“We’renotonlyrelocatingproduction,butalsodevelopingadminis-trationandworkingmethods,andtherebyalsoquality,”explainsprojectownerStevenDavidsson.“Wehaveanexcellentstartingpointinourexistingproductionandwe’renowinvestingtobeevenbetter.”

Healsoexplainsthattheadvancedworkprocessaimstoreduceleadtimesinproductionandthatthelogisticsneedtobeadaptedaccordingly.

“Obviouslyit’sdifferenthavingtoplanforoverseastransportbyseacomparedtodomestictransportoverland.Butwestillneedtofindwaysoffurtherimprovingourdeliveryquality.”

Themainchallengeliesinassuringqualityanddeliveries.Theoperationwillinitiallyencompassreprocessingofafewmechanicalproductgroups.EuroMaintRailhasalreadybegunassessingnewsubcontractorsontheBalticmarket,withtheaimofassigningtheworkshopinLatviatotaldeliveryresponsibilityforreprocessedpro-ductsatthelowestpossiblecost.

FutureinvestmenttoincreasecustomervaluesTheBalticinitiativeenablesthecompanyinSwedentofocusonincreasingthetechnicallevelofmaintenanceforthenew,moreadvancedandmorecomplexrollingstock.EuroMaintRail’saimistomoveupthevaluechainandincreasethecustomervalueinitsofferings.

TheworkshopinLatviawillinitiallysupplyourdomesticmarket.Inthelongterm,theoperationmaydeveloptoalsoincludereprocessingofmorecomplexproducts,aswellasserviceofferingsforthelocalmarket.WealsoseepotentialtoofferrefurbishmentandtrainmaintenanceintheBalticregioninthefuture.

WithinayearEuroMaintRailwillbebeginningitsownreprocessingofmechanicalandelectricproductsinJelgavaoutsideRigainLatvia.Thenewestablishmentservesseveralpurposes.Inthelongterm,thecompanywantstobepresentandactiveinabrandnewrailwaymarketforEuroMaint.Intheshortterm,thecompanyisaimingtoreduceitsproductioncoststostrengthencompetitiveness.

“We’ll also be devel­oping administration and work methods, and thereby quality”

Balticestablishmentthefirststepininternationaldevelopment

18

EuroMaintRail

TherefurbishmentcontractisofstrategicimportancetoEuroMaintRail.IttestifiesthatweperformwellincompetitionwithotherEuro-peanplayersandisaclearstepinourinternationalestablishment.

TheNorwegianmarkethasrecentlybeenderegulatedandplacingsuchalargeorderoutsideofNorwaywasabigdecisionforNSB.Italsosentaclearsignaltotheoutsideworldthatnationalbordersarebecominglessimportant.

AtthesametimeithasbroughtusextendedrelationswithNSBasthecompanyacquiredpartsofSwedishtrainoperatorTågkompaniet,whichwasalreadyourcustomer,atthebeginningof2007.

ModernisingpassengercarriagesTheassignmentincludesthemodernisationandrefurbishmentof5�carriagesonlongroutesinsouthernNorway.

“Forusthisisanimportantrenewalofourcustomeroffering.Toretainourcompetitivenessthetrainsmustbeofgoodquality.Wearethereforecarryingoutextensiverefurbishmentoverthenextfewyears.Wearelookingforwardtoputtingthemodernisedcarriagesintoservice,”saysRolfRoverud,DeputyCEOofNSB.

InternationalcompetitionSeveralEuropeansupplierscompetedfortheorder.Bidswereassessedbasedontechnology,price,commercialtermsandexperience.Aspartoftheevaluationprocess,NSBcarriedoutanauditattheworkshopinMalmö.Afterthecontracthadbeensigned,NSBconfirmedthattheresultsfromthevisithadbeenamajorconsiderationinthedecision.

“Ithinkthat,apartfromacompetitivepriceandourquality,theauditinMalmöwasoneofthedecidingfactorsinwinningustheorder,”saysLarsÅkerlind,HeadofMarketingatEuroMaintRail.

“Thetenderingprocessentailedquestions,answersandnegotiations,andatthesametimeadjustmentsweremadetothespecificationbybothparties.Thisprocessenabledustoclearlydemonstrateourabilitytobereceptiveandmeetthecustomer’sneedsandpreferences.”

PlanninginprogressTheorderisforacompleterefurbishmentfromconstructiontodeliverywhichentailsupgradingthecomfortandenvironmentofthecarriages.Itmainlyinvolvesaninternalupdate,withanewinteriorandnewseats,butalsosometechnicallyadvancedsystemssuchasclimatecontrol.

Thereisagreatdealtoplaninaninteractiveprocesswiththecustomer,suchasthechoiceofcoloursandmaterials.Whenthefirstcarriagearrivesattheworkshop,alltheworkflowshavetofunctionproperlyallstagesneedtobeplannedandthematerialflowmustrunsmoothly.

RefurbishmentcontractinNorway–ground-breakingforbothpartiesEuroMaintRailhasbeencommissionedbyNorwegianStateRailways,NSB,torefurbish59passengercarriagesoverthenexttwoyears.ThisisourfirstmajororderoutsideSweden,andthefirsttimeNorway’sstaterailwaycompanyhaslookedbeyondnationalbordersforsuchacomprehensiveassignment.

“Placing such a large order outside Norway was a big decision for NSB”

1�

REFuRBIShMENTFORNSB

Scope:5�passengercarriages

Deliveries:StartApril2007andfinishfirsthalfof200�.

Location:EuroMaintRail’sworkshopinMalmöwillcarryouttherefurbishment.TheorderfitsinwellwiththeplanningasthecurrentrefurbishmentoftheX2vehiclesisdueforcompletioninApril2007.

EuroMaintRail

Customersbenefitfromcreativedevelopmentthroughhigheravailability,increasedtrafficsafety,lowermaintenancecostsandcontinuouslyimprovedprofitability.Thedifferencebetweengoodandevenbetterisnotsimplyaresultofwhatwedo–butalsohowwedoit.

atechnicalsystematicapproachTechnicalfaultsemergeatcomponentlevelalthoughthecausemayoftenariseatsystemlevel.Consequentlythisiswhereactionneedstobetakensothatfaultsarelesscommonorinthebestcasescenario–absentaltogether.TomaintaintheX2trainswehavecreatedaworkmodelwherebyspecialmaintenanceengineersmonitorimportantvehiclesystems,analysethefaultsandsuggestimprovements.Thisisamodelweareintroducingintomoreandmorekeycontractstoreduceoperationaldisruptionandmaintenancecosts.

Split-basedmaintenanceMajoroverhaulsareconventionallycarriedoutbybringingthevehicleintotheworkshopforseveraldays.If,instead,theoverhaulsaredividedupintosmallermeasures,aprocessknownassplit-basedmaintenance,whichcanbecarriedoutatdifferenttimesandatdifferentworkshops,betterusecanbemadeofthevehicles’operationalbreaks.Thankstorefinedmaterialandpersonnelplanning,easyaccesstomaintenancedocumentationandfasterreporting,wetherebyincreaseavailability.

LicenceinNordicregionforviewsystemEuroMaintRail’spartnershipwithleadingBritishcompanyDeltaRail(formerlyAEATechnologyRail)hasintensifiedduringtheyear.WehaveobtainedthelicencerightsintheNordicregionforDeltaRail’sViewsystemwhichautomaticallydetectsbrakeliningandwheelcondition,therebypavingthewayforcondition-basedmaintenance.

TheViewsystemhasachievedexcellentresultsintheacceptancetestsandevaluationsatourworkshopinHagalund,inconnectionwithmaintenanceforSJAB’sX2trains.ThesystemisalsoinstalledatourworkshopinBrowherewemaintainSL’scommutertrains.

FromviewsystemtoworkorderTheViewsystemrapidlyindicatestechnicalfaults.Thismeanswecantakeactionatanearlystage,beforethefaultleadstoseriousoperationaldisruptionsandcostlyrepairs.Thelong-termaimistoconverttheViewsystem’sdataintoinformationthatautomaticallygeneratesaworkorder.Ourcosteffectivenessisthecustomer’sprofitability.

ILSattheforefrontofresearchInformationandmeasurementtechnologyachieveagreatdeal.However,allthedatastillneedstobetranslatedintosupportinthemanagementsystemifcustomersaretobenefitfromthenewoppor-tunities.ThisiswhywearebuildingupaspecialIntegratedLogisticsSupportunit,ILS,fortechnologydevelopment,processoptimisation,supportsystemsanddocumentation.Toforcethepaceofdevelop-mentsinthemaintenanceindustrywealsoneedtobemorevisibleintheresearchcommunity.

Split-basedrefurbishmentfromaTCtoETCSTheEUdecisiontoreplacetheAutomaticTrainControl/ATCsignallingsystemwiththeEU-wideEuropeanTrainControlSystem,ETCS,meansthatinthelongtermallenginesandenginecoacheswillneedtoberefittedtoadapttothenewsystem.Ourgoalistobeabletooffersplit-basedrefurbishment.Thisisamethodwhich,combinedwithournationwidenetworkofworkshops,willentailconsiderableavailabilitygainsforourcustomersinSweden.

Creativedevelopment–anaturalpartofeveryprocessThedifferencebetweenmerelysolvingaproblemandtransformingitintoanewopportunityforthecustomerliesinourabilitytodevelopourselvesandouroffering.Creativedevelopmentoftechnologyandplanningshallcharacteriseeachprocessandsub-processwithinEuroMaintRail,fromthefirstcustomercontacttofinaldelivery.

20

MarketstrategiesforgrowthEuroMaintRailhasaclearvisionofretainingitsstrongpositiononthemaintenancemarketinSweden,whileprogressivelyexpandinginternationallythroughourcoreproducts.achievingthisvisionrequiresawell-definedstrategy.

21

EuroMaintRailcurrentlyhasjustover50%oftheSwedishmarket.Toretainorincreasethisshareweneedtowinmanyoftheupcomingtendersinthenextfewyearsthosewehavehadbeforeaswellasbrandnewones.

Three-partmarketingstrategyHigh-qualitydeliveries,includingdeliveryreliability,isoneofthethreemostimportantpillarsofthestrategy.Customersneedtobecon-vincedthatwehaveattractiveofferingsandsolutionsthatguaranteehighquality.Information,dialogueandclarityarekeyissues.

Flexibilityintheofferingisthesecondimportantpillar.Theoperatorhastrainstoprovideservicesforitscustomers,sotherollingstockneedstobeavailablewhenthepassengerswanttotravelorthefreighthastobetransported.Maintenancemustbecarriedoutatothertimes.

Therightpriceandcost-effectivesolutionsare,ofcourse,importantingredientsinasuccessfulbidand,therefore,makeupthethirdpillarofthemarketingstrategy.

InternationalinitiativebegunEuroMaint´sBoardhasdecidedthatthequalityofourdeliveriesandprocessesissohighthatitistimeforinternationalestablishment.Thiswillbeginonthenearbymarket,whichisthemostderegulated.

Weseethreepossiblepaths:collaborationwithacustomerinanothercountry,expansionfromSwedeninareaswherewearealreadystrong,orstartingourownproductioninanothercountry.Inallcasestheexpansionwillbegradual.Thefocusmustalwaysbeonourpromisesofcost-effective,high-qualitysolutions.

Raisingourprofilein2006Thehighestprofileactivityfromthegeneralpublic’sperspectivein2006wasthe150thjubileeoftherailwayinSweden.EuroMaintRailcontributedbyholdingopendaysatmanyofitsworkshops.Thisisnotexactlyamarketingactivity,butitisimportantforourbrand,ouremployeesandourgoodwillamongthepublic.

FortheveryfirsttimeEuroMaintRailhaditsownstandatthemajorInnoTranstransportfairinBerlin.ThiswaspartofaninitiativetomaketheEuroMaintnameknownoutsideofScandinaviaandtoascertainwhereinterestingpotentialbusinessmightbefound.Fiveofourmarketingstaffattendedandforgednewcontactsforthefuturepartofthecompany’slong-termmarketing.

AsusualwealsoparticipatedinPublicTransport2006atStockholmInternationalFairs.ThefairisarrangedbytheSwedishPublicTransportAssociation,SLTF,anindustryorganisationforcountytransportcompaniesandothers,whichareanimportanttargetgroup.Theaimofourparticipationwastostrengthenourbrandamongtheseplayers.Theyarenotusuallydirectcustomers,butwehavecontractswiththeirtrainoperators.

Fairsin2007In2007wewillasusualbetakingpartinNordicRailinJönköping,southernSweden,thebiennialNordicRailwayindustryfairwhichisbecomingincreasinglyinternational.

WewillalsobeattheHighTechinHeavyHaulfairinKiruna,northernSweden,focusingonheavyrailtransport.Theaimofourparticipationistoshowthatweareattheforefrontofdevelopmentsinmaintenanceengineeringandmaintenanceoptimisation.

EuroMaintIndustry•Productionstreamliningattheforefront Peaceofmind,addedvalueandstreamliningwithTotalServiceConcept Readmoreonpage26

•EstablishmentinGävleexpandsourmarket EuroMaintIndustryinitiatesregionalstructureandgetsclosertonewcustomers Readmoreonpage28

•Closenesstothecustomer Clearcustomerresponsibilitystrengthensrelations Readmoreonpage2�

•FromEuromationtoEuroMaintIndustry ThenewbrandpresentedatmaintenancefairinGothenburg Readmoreonpage2�

•Speciallyadaptedproductionequipment Growingdemandforcustomisedautomationsolutions Readmoreonpage30

EuroMaintIndustry

22

23

EuroMaintIndustryinbrief

EuroMaintIndustrystrengthensindustry’scompetitivenessbyofferingknowledge,servicingandequipmentthatstreamlineproduction.Thecompanydesignsandrefinesproductionprocesses,developsandmanufacturescustomer-specificproductionequipment,andisacompletesupplierinthefieldofmaintenancefortheengineeringindustry.TheheadquartersareinSkövdeandthecompanyalsohasoperationsinHallsberg,GävleandÅmål.

KEyRaTIOS 2006 2005*

Turnover,SEKmn 231 161

Operatingprofit,SEKmn -8 13

Cashflowafterinvestmentactivities,SEKmn -27 24

Operatingmargin,% negative 8

Equity/assetsratio,% 52 4�

averagenumberofemployees 281 281

*Figuresfrom1July2005whenEuroMaintIndustrywasacquiredbyEuroMaintAB.

EuroMaintIndustryrationalisesproductionthroughthefollowingserviceandproductareas:Maintenance,Componentservicing,ProductionengineeringandProductionequipment.

TuRNOvER*SEKmn

300

225

150

75

259

2002 2006

288303 307

231

2003 2004 2005

20

10

-10

-20

OPERaTINGPROFIT*SEKmn

8

2002 2006

-4

11

25

-8

2003 2004 2005

40

20

-20

-40

CaShFLOWaFTERINvESTMENTS*SEKmn

-3

2002 2006

29

-30-27

2003 2004 2005

42

*Figuresfor2005refertowholeyear.

24

EuroMaintIndustry

Thepastyearhasbeenturbulent.alothashappened–bothgoodandbad.TheProductionEquipmentproductareahasreportedlowersalesvolumeswhileotherareashaveenjoyedsuccesses,inparticularMaintenancewherewehavedevelopedthenewTotalServiceConcept,TSC.

ThefirstmajordevelopmentoftheyearwasthelaunchofEuroMaintIndustryasanewbrand,apresentationthattookplaceatthemain-tenancefairUnderhållinGothenburg.Intheearlysummerwewereforcedtogivenoticeofredundancies.Laterintheyearwemanagedtoturnthetrendaroundandwearenowstandingstrongforthefuture.

ForproductivityandcompetitivenessThesharpdeclineinsalesofproductionequipmentwasadecreasefromahighlevelcomparedwiththerecordyearsof2004and2005,whenoneofourmajorcustomerscarriedoutanextensiveinvest-mentprogramme.Atthesametimeaswewereforcedtoannounceredundancies,weexperiencedachangeindemandintheotherproductareas.

Ouruniquecombinationofspecialistknow-howinmaintenanceandproductionenablesustoworkonseveralfrontstoraisecustomers’productivityandcompetitiveness.Acomprehensivefocusonfurtherdevelopingandre-orientingpersonnelexpertisehasstrengthenedourposition,ashastherecruitmentofanumberofpersonneltostrengthenourspecialistexpertiseinthegrowthareaswehavegreatfaithinforthefuture.

OurnewTotalServiceConceptTheTotalServiceConcept,TSC,isbasedonourcoreexpertiseinproductionstreamliningandenablesustoofferoutsourcingcontractsformaintainingallorpartsofacustomer’sproductionfacilities.Thisisinlinewithmodernthinkingasdemonstratedbythedevelopmentsweseearoundus.Industryisworkingathighcapacity,whileatthesametimecost-cuttingandproductivity-raisingprogrammesarebeingimplementedtofurtherstrengthencompetitiveness.Moreandmorecompaniesarechoosingtobuyexternalservices,toincreasebothprofitabilityandflexibility.

ThistrendconfirmsthatourmajorinitiativeduringtheyeartodevelopTSCisontargetandattractivetoindustry.

NICKLaSFaLK,PRESIDENTOFEuROMaINTINDuSTRy

MaJORORDERSIN2006

• Thevolvocompanies(automotive)–Allproductareas

• Junoverken(manufacturing)–Preventivemaintenanceonmachinery

• aBSandvikMaterialsTechnology(engineering)–Technicalmaintenanceservices

• E.ON(energy)–Renovationofgenerator

• husqvarnaaB(manufacturing)–Spindleservicing

• Drivesol(automotivesubcontractor)–Projectmanagement

• DIaBaB(manufacturing)–Preparation

• Getrag(automotivesubcontractor)–Fixturesforgearboxes

TuRNOvERByPRODuCTaREa

1. Maintenance32%

2. Componentservicing31%

1

2

3

4

3. Productionengineering12%

4. Productionequipment25%

Breadth,depthandtotalapproachtocomponentservicingIn2006,EuroMaintIndustrytookoversalesandbusinessresponsi-bilityforthepartofEuroMaintRail’soperationinÅmålwhichfocusesontheenergysectorandtheprocessingindustry.Wewerethereforeabletowelcomenewcustomers.Theexpertiseandresourcesforservicingeverythingfromcircuitboardstoenormouselectricengineshavebroadenedourofferingandalsolaidthefoundationforatotalofferingintheformofavailabilitycontractsforreserveunits.

25

EstablishmentinGävle–thestartofanewregionalstructureOurnewbranchinGävleestablishedduringtheyearisthefirststepinaplannedregionalstructure.TheestablishmentstrengthensourrelationswithcustomersinnorthernSwedenandbringsusclosertothemgeographically.Thereisaclearneedherewhichourproductofferingcancover.WehaverecruitedanumberofexperiencedmaintenancespecialistsattheGävleunitwhohavegoodcontactsintheregion.

FromEuromationtoEuroMaintIndustryTheprocessofchangingbrandnamefromEuromationtoEuroMaintIndustrybeganinMarchatthemaintenancefairUnderhållinGothen-burg.Thiswasfollowedbyanumberofmarketingandcommunicationinitiatives.Ourcustomersviewthechangeofbrandasapositivedevelopmentforthecompany.

MarketandmarketdevelopmentTheengineeringindustryisEuroMaintIndustry’sestablishedmarketforallproductareas.Ourexperienceofproductionequipmentandproductionengineeringinthisfieldisasuccessfactorformaintenanceandcomponentservicing.Andviceversa–ourexperienceofmainte-nanceenablesustoincorporatehighfunctionalsafetyandeaseofmaintenanceintheproductionequipmentandsolutionsweoffercustomers.

Ourproductareasformauniqueandcompletewhole.Weareconfidentbothaheadofageographicalexpansionandwhenitcomestoofferingtotalconceptsforproductivity-enhancingmaintenance.ThereismajorgrowthpotentialforTSCandthemarketforout-sourcingcontractsisquicklymaturing.

TheprocessingandenergyindustriesarenewmarketsforEuroMaintIndustryasacompany–althoughnotforournewco-workersinÅmålandGävle.Therearealsomanysimilaritieswiththeautomotiveindu-stry,ofwhichwehaveextensiveexperience:highavailabilityrequire-mentsandaclearunderstandingthatwell-consideredmaintenanceisnotonlyacost,butalsogeneratesincomethroughhigherOverallEquipmentEfficiency(basedonavailability,performanceandquality).

ThefutureTobettermeetthecomplexneedsofmajorcustomerswehavedevelopedthesalesorganisationwithadedicatedkeycustomerresponsibility.

TheplansforthenextfewyearsincludeofferingTSCtotheSwedishindustrywiththeaimofwinningatleastoneoutsourcingcontractayear.Ourprocessesarewell-preparedfortotalresponsibility.OnegreatadvantageisthatTSCisscaleable,i.e.theconceptcanbeappliedtoallorpartsofacustomer’sproductionfacilities.Thecustomercanbeginwithalimitedagreementandallowittogrowinlinewiththeirconfidenceinus.

WewillalsoincreasinglyofferTSCintheformofcompleteavailabilitycontractsforcomponentsandreserveunits.Thisentailsreprocessing,logistics,procurement,stockingsparepartsandround-the-clockservice:Therightcomponentwiththerightfunction,reachingthecustomerattherightplaceandtime.

OurestablishmentinGävlewillbefollowedin2007bytheestablishmentofatleastonenewregionalcentrewithadvancedengineersandoperationalreliabilityteams.RegionswherewewanttobeclosertocustomersincludeMälardalen,GothenburgandtheTrollhättan–Uddevalla–Vänersborgtriangle,whereindustriesaremakinggreatinvestmentsandneedhelpwithproductivity-enhancingmaintenance.

TuRNOvERByCuSTOMER

1. AB Volvo45%

2. VolvoCars27%

3. Othercustomers28%

1

3

2

6%

4%

2%

SICKLEavE*

*Actualleaveasapercentageofnormalworkinghours.

2.8

2005 2006

2.5

0.30

0.20

0.10

REhaBILITaTIONCaSES*

*Calculatedas(periodsofsickleavebeginningday2�/hoursworked)x10,000.

0.28

2005 2006

0.20

26

EuroMaintIndustry

Thegoalistoincreaseavailability,performanceandquality,knownasOverallEquipmentEfficiency,intheoperationswherecustomersaskustostreamlineproduction.

Customer-ledPackagedmaintenancesolutionsgivecustomersgreaterfreedomofchoice.Eachservicecanbedeliveredindividuallyorallatonce.Weareledbythecustomer’sneeds.Somecustomersbeginwithoneserviceandthenaddmore,whileothersmayonlybuythe‘effectivenewpro-curement’service,forexample,whenpurchasingmachineryrequiresspecialistexpertiseintheorganisation.EuroMaintIndustryhasthespecialistexpertisethatsmallandmedium-sizedengineeringcompa-niesfindithardtomaintainastheneedforthemvariesdramatically.

Thisyearwehavedeliveredallservicestooneofourmajorcus-tomers.Thischallenge–todevelopandruntheentiremaintenanceoperationforalargecustomer–hasbeenanimportantexperienceaswehavedevelopedTSCduringtheyear.

TSCforpeaceofmind,addedvalueandstreamliningTheTotalServiceConceptisafull-servicepackageforallofindustry.EuroMaintIndustrytakescareofallorpartsofthecustomer’sproduction-relatedmaintenance,componentservicingand/orsparepartsmanagement.Theaimistobringaboutgreaterpeaceofmind,betteropportunitiesforstreamliningandhigherfinancialvalueforthecustomer,comparedwithaconventionalserviceoffering.

Integratingproductionandmaintenancehaslongbeenatrendintheautomotiveindustry.Theoperatorsdealwiththesimplerday-to-daymaintenance,whilemaintenancepersonnelincreasinglyspecialiseinmoreadvancedtasksinpreventivemaintenance,troubleshootingandrepairs.Requirementsregardingexpertisehavethereforebecomeclearer,ashasthepositiveimpactofmaintenanceonincome.ThisisthetrendonwhichtheTSCisbased.

ClarityandflexibilityATSC-contractmeansthatEuroMaintIndustrybecomesthenewemployerofthemaintenancepersonnel.Jointplanningbetweenproductionandmaintenanceisrefined.Theoperatorscontinuetotakecareofday-to-daymaintenanceandreceiveongoingtrainingfromEuroMaintIndustry,whilethespecialistexpertiseofthemain-tenancepersonnelishoned.EuroMaintIndustry,whichhasmaintenanceasitscorebusiness,providesthepersonnelwithmoreeffectivesupportwithclearroutines,clearresponsibilities,well-developedmethodsandcarefullyplannedcompetencedevelopment.

Forthecustomer,aTSC-contractmeansgreaterpeaceofmindintheformofpredictablecosts,higheravailabilityandimprovedsafety.Ourabilitytoprovideadditionalresourcesformajormaintenanceprojectsoruniquecutting-edgeexpertisealsoincreasesflexibility.

ProductionstreamliningattheforefrontDuringtheyearEuroMaintIndustryhasintensifiedthedevelopmentofitsmaintenanceoperationinordertooffercustomersmaximumproductionefficiency.Twoheavydevelopmentprojects,packagedmaintenanceservicesandTSC,havebeenpredominant.Bothprojectsareabouthowwerespondtothemarketandaddedvalueforthecustomer.

“TSC means peace of mind, streamlining and higher financial value for the customer”

27

MaINTENaNCECONCEPTS

Packagedmaintenanceservices:

Maintenancemodulesimplementedindividuallyorincombinationforthecustomer.

TotalServiceConcept,TSCAvailableintwoversions• Outsourcingcontractforproductivity-enhancingmaintenance

ofallorpartsofthecustomer’sproductionfacilities.

• Availabilitycontractforcomponents/reserveunits.

EuroMaintIndustry

TheestablishmentinGävleisafirststepinbeingabletoofferourentirepropositioninmaintenance,componentservicing,productionengin-eeringandproductionequipmenttocustomersonanexpandedmarket.

GreatercompetitivenessintheGävleregionTheaimoftheestablishmentinGävleistohelpincreasethecom-petitivenessofcompaniesintheregion.Theregionisaninterestingmarketwithmanycompaniesinvariouspartsoftheprocessingindustrysuchaspower,steel,paperandpulp.Wearereadilyabletomeetthemarket’sneedsasallpersonnelinGävlehaveasolidbackgroundintheprocessingindustry,andwecanalsoaddthecollectiveknowledgethecompanyhasamassedfrommanyyearsintheengineeringindustry.

BreadthanddepthofexpertiseOurnewlystartedoperation,whichisalreadyonthevergeofexpanding,hasabreadthanddepthofexpertiseinmaintenanceengineering,productionengineering,newprocurementandlogistics.Wealsohaveextensiveexperienceofelectrics,mechanics,servosystems,hydraulicsandpneumatics.OurcustomerscanturntothepersonnelinGävleforhelpintheproductionprocessfromanalysistoimplementationandadministration.

understandingproducesresultsTypicalassignmentsrangefromworkingwiththecustomertocarryoutefficiencymeasurementsandanalyses,securingunderstandingintheorganisationregardingvariousmaintenanceprocessesandimplementingprocessesofchange,tostructuringthecustomer’sdocumentation.

Itishardforcompaniestooptimisetheirownmaintenanceorganisation,bothintermsofmanpowerandexpertise.Rapiddevelopmentsaretakingplaceinmaintenance,workingmethodsandtechnicalsolutions.Moreandmorecompaniesarerequiringaccesstomaintenanceexpertisefromorganisationswiththisastheircorebusiness.EuroMaintIndustryisexactlythistypeofpartner.Wecarryoutmaintenanceandproductionengineeringprojectsofallsizes.Whennecessary,weproducecustomer-specificproductionequipment.Whenitcomestocomponentservicingourofferingincludesrepairs,sparepartsmanagementandreserveunitstohelpcustomersminimisetheiroperationaldowntime.Alldependingonthecustomer’sspecificneeds.

EstablishmentinGävleexpandsourmarketClosenesstothecustomerisparamounttoEuroMaintIndustry.Oneofthewayswecanachievethisistoexpandgeographicallyandbewhereourcustomersare.ThebranchinGävleisonestepinourendeavourtoestablishregionalcentresatstrategiclocationsacrossSweden.

28

Majorcustomershaveneedsthatvarygreatlyfromoneinstancetothenext.understandingthecustomerproperlyrequiresmorethansimplyunderstandingthecustomer’sbusiness.Wealsoneedtounderstandthecustomer’smarketifwearetooffertheattentionandsupportweconsidertobeintegralpartsofbeingclosetothecustomer.

Closenesstothecustomer

FromEuromationtoEuroMaintIndustry

2�

atthe2006maintenancefairunderhållinGothenburg,theformerEuromationwaspresentedunderitsnewbrandname,EuroMaintIndustry.Themovesignifiedaconsciouschoiceofpathandemphasisedareinforcedidentityasamaintenancecompany.

Toincreasethefocusonourkeycustomers,wehaveintroducedastructurewherebydedicatedKeyAccountManagers,KAMs,areexpresslyresponsibleformonitoringoneortwocustomers’develop-ment,establishingcontactsandactingasdooropeners.

TheKAMrepresentstheentiretyofourofferingandshouldbeveryfamiliarwithallourrelationswiththecustomer.Inrealitythisisnothingnew;wehaveoftenworkedthiswayinformallywiththecustomersweknowwell.

ThereasonwehavenowformalisedtheKAMstructureistoclarifyourcommitmenttocustomersatisfaction.TheKAM’sresponsibilityincludesleadingagroupwhichrepresentsdifferentfunctionswithinEuroMaintIndustry.Inordertostrengthenrelationsanddevelopbusi-nessopportunitiesthegroupproduceskeyratiosandactionplans.

ThejobofaKAMisgenerallylongterminnature,althoughinpracticeitmayalsorequireswiftaction.Ifthecustomerhasaproblem,itisessentialtofindasolutionfast.Ifsomeoneatthecustomercom-panyisunabletofindtherightdepartmentatEuroMaintIndustry,orviceversa,everyoneshouldknowwhotheycanturntoforassistance.TheKAMisourvoicewiththecustomerandtoanevengreaterextentthecustomer’svoicewithus.

ThenewEuroMaintIndustrybrandstrengthensthecorporateprofileandcommunicatesaddedvalueinanewcontextforemployeesandcustomers.ItsymbolisesbeingpartofaGroup,entailinggreaterstrength,stabilityandimproveddevelopmentopportunitiesforthecompany.

Ourcustomersviewthechangeofbrandasapositivedevelopmentforthecompany.

Thechangeofbrandhasbeensuccessfullyusedtocommunicatethecompany’svalues–partlythroughthenewcustomermagazineAktuellt,whichhasbecomeavaluabledirectchanneltoexistingandprospectivecustomers.

TheGroup-widewebsitebecameanimportantnewchannelforpresentingournewidentityinabroadercontext.

Thesharingofexperiencesandactivitiesacrosscompanyborderswillfurtherhelpstrengthenpersonnel’ssenseofaffiliationwiththeEuroMaintbrand.

EuroMaintIndustry

30

Speciallyadaptedproductionequipment

Wemanagedtoreversethestrongdecreaseinsalesofproductionequipmentduringthefirsthalfoftheyearbywinningalargenumberofimportantorders.Wenowseegrowingdemandforcustomisedproductionequip-mentandautomationsolutions.

Wehaveestablishedaflexible,skilled,customer-focusedorganisationforthefutureintheProductionEquipmentproductarea.Wenowhaveamoreefficient,sharperandmorenimblegroupofourownsalespersonnelwithaclearresponsibilitytodrivetechnologyforward.

ExperiencebuildssuccessWeareusedtofulfillingrigorousdemandsonquality,customeradap-tationandfunctionfromourestablishedcustomersintheautomotiveindustry.

Oneimportantlessonforthefutureisthatweneedtobefarclearertonewcustomersinhighlightingtheaddedvalueswehaveinourofferings.Atthesametime,wemustalsobemoresensitivetothefactthattheydonotalwaysneedeverythingwehavetooffer,insteadtheymaywishtochoosebasedonafundamentalconcept.

InnovativecustomeradaptationIncreasedautomationinindustryisentailinghigherdemandinmanyareas.AutomatedGuidedVehicle,AGV,whichbeganasaspecialsolution,nowformsthecoreofcustomisedassemblysystemsformanydifferentapplications.Anotherfactoraffectingdemandistheneedforcustomerstobeabletoquicklyadapttheirproductiontonewproducts.

Whenstandardsolutionsarenotsufficient,customersmayrequireanythingfromuniquetotalsolutionstoinnovativespecialadaptationtoandbetweencustomers’existingproductionequipment.

CleareraddedvaluePriceisbecomingincreasinglyimportant,anditisnotenoughtohighlightqualityasanaddedvalue.Betterexamplesofaddedvalueareinsteadourabilitytounderstandcustomers,toresolvetheirproblemsswiftlyandassumeoverallresponsibility.Anotherimportantaddedvalueisthatourcreativethinkinghelpscustomersmakebetteruseoftheirexistinginvestments.Itisnotalwaysnecessarytobuynew.Byinsteadextendingtheservicelifeofthecustomer’sproductionsystems,wemakeadirectcontributiontoincreasedprofitability.

CollaborationwithpartnersInordertoofferthecompletespectrumourcustomersneed,wecollaboratewithpartnerswhosupplementourspecialistknow-howinproductionstreamlining.Differentexperiencesbringfreshideas,somethingeveryonegainsfrom–andcustomersinparticular.

Newcustomersegmentsandmarkets

TheestablishmentinGävle,combinedwiththefactthatwetookoversalesandbusinessresponsibilityforEuroMaintRail’sindustryserviceinÅmålduringtheyear,meansthatEuroMaintIndustrynowhasnewcustomersegmentsandabroadermarket.

31

TheoperationsinGävleandÅmåladdnewexperienceandcustomerrelationsintheenergyandprocessingindustry–andexpandourmarketgeographically.

uniquewholeforcomponentmaintenanceWeareasupplier-independentpartnerofferingauniquebreadthincomponentservicing.Weworkwitheverythingfromheavyelectricalcomponentssuchastransformers,generatorsandelectricengines,tomechanicalprocessing,spindlerenovationandcircuitboards.Demandforelectronicservicing,forexample,isgrowing.

Throughtechnicalcounsellingandlogisticsanalysiswecanactasahubinthenetwork,assumingtotalresponsibilityforensuringthecustomerhastherightcomponent/reserveunitwiththerightfunctionintherightplaceattherighttime.Thekeyratiosareeasytomeasure:reducedcapitalinthesparepartsinventoryaswellasshorterwaitingandactiontimes,whichhaveadirectimpactonavailability.

EachoperatinghourisworthgoldtoFortumAnexample:thankstoaclosecollaborationwithEuroMaintIndustry,FortumGenerationinSunnereceivesemergencysupportwithinextremelytighttimeframes,regardlessofwhenastoppagetakesplace.

“Aseachoperatinghourisworthitsweightingold,wevaluethecollaborationhighly,”saysTordSkymberg,Fortum’sOperations&MaintenanceManagerfortheVänernarea.

NewbusinessopportunitiesWhereasinthepastwehavesolelyofferedelectricalandenginemaintenancetocustomersintheenergyandprocessingindustry,wecannowexpandourofferingtoincludeallourproductareasandabroaderwhole.Workingwithcustomersfromdifferentindustriescreatessynergies.Moreandmorecompaniesaretakingaprocess-basedapproachtomaintenanceandareseeingtheproductivity-enhancingeffects.

Well-structuredmaintenanceisacorebusinessthathasgoodpotentialforcreatingincome.Bringingaboutthe‘hiddenfactory’isthebestwecanoffertocompanieswishingtoincreasetheircapacityandcompetitiveness.Wehavedonethisinthepast,andtodaywecandoitevenmoreclearlywithintheframeworkofoutsourcing.Todateonlyafewmaintenanceorganisationsintheindustryhavebeenout-sourced.Placingsuchgreattrustinanexternalmaintenancesupplierisamajorstep.

ConfidenceamongnewcustomersForacustomertosignacompleteoutsourcingcontract,thatcustomermustknowuswellandknowthatwekeepourpromises.Webuildupconfidenceamongnewcustomerswithmorelimitedofferings.Ourentireofferingcanbeappliedtopartsofthecustomer’sfacilitiesandcanalsobestructuredasanavailabilitycontractforcomponents/reserveunitsorproductionequipment.Eachcustomercanchoosethelevelthatsuitsthembest.

•TheroleoftheGroupmanagement EuroMaint’sGroupmanagementdriveoveralldevelopment Readmoreonpage34

•Discretion–anaturalpartofthechangeprocess Theconsequencesofchangesintheoperationarecarefullyanalysed Readmoreonpage37

•TheroleofemployeesontheBoard HowdoescollaborationworkbetweentheunionorganisationsandtheGroup? Readmoreonpage3�

•Five-yearsummary EuroMaint’sdevelopmentoverthepastfiveyearsinfigures Readmoreonpage40

EuroMaintEuroMaint

32

33

EuroMaintinbrief

BusinessconceptEuroMaintstrengthensitscustomers’competitivenessthroughtailoredmaintenanceandtechnicalsolutions,primarilyinrailtrafficandtheengineeringandprocessingindustries.

visionEuroMaint’svisionistobetheleadinginnovativemaintenancepartnerforincreasedefficiency.

Corevalues•Businessoriented•Responsible•Innovative

aGroupindevelopmentEuroMaintisamaintenancegroupthatunitescreativethinkingwithlongexperience,enablingittoofferinnovative,customisedtotalsolutions.Industry-wideissuesthathelptosafeguardanddevelopEuroMaint’spositionasaleadingmaintenancesupplieraredealtwithatGrouplevel–irrespectiveofthebusinessareatheyrelateto–asisthedevelopmentofcollaborationwithstrategicpartners.Thesubsidiariesfocusonthecustomersandtheirneeds.

historicaldevelopmentBothsubsidiaries,EuroMaintRailandEuroMaintIndustry,haveahistorythatdatesbacktothe1�thcentury.Bothcompanieshavedevelopedfrombeinganinternalresourcewithintheirformerownerorganisations–theSwedishStateRailwaysandVolvorespectively–tobecomingcommercialcompaniesonacompetitivemarket.

EuroMaintRailwasformedatthebeginningof2001whentheSwedishStateRailwayspublicenterprisewasconvertedintocompaniesandSJEngineeringbecameEuroMaintAB.

EuroMaintIndustrywasestablishedin2000whentheAutomationbusinessunitwithintheVolvoGroupwasconvertedintoacompanyandnamedEuromation.

TheGroupwasformedatthebeginningof2006followingEuroMaint’sacquisitionofEuromationin2005.

STRaTEGICGOaLS

EuroMaint’sstrategicgoalsareto

• satisfyownerdemandsonprofitability.• developlong-termrelationsthroughpartnerships

withcustomersandsuppliers.• bethemostattractiveemployerinourareaofoperation.

STRaTEGICThEMES

InordertoachievethestrategicgoalsEuroMaintshall

• expandwithincurrentbusinessunitsandnewsectors.• developthebrandandrelationshipwithstakeholders

andtheoutsideworldthroughstrategiccommunication.• developnewmaintenanceengineeringsolutionsaswell

asjointprocessesfortheGroup(structuralcapital).• ensuresuccessthroughdedicated,motivated

personnelwiththerightknowledgeandattitudesandacommonvaluefoundation(humancapital).

KEyRaTIOS,GOaLSaNDRESuLTS2006Strategic goal Key ratio Target 2006 Outcome CommentsImproveprofitability Operatingmargin,% 6.5 6 Measuresinprogress

Moreflexibleandcost-effectiveproduction Productivityimprovement,% 3 Below3 Measuresinprogress

Furtherdevelopdomesticmarket Growth,% +3 Above3 Targetachievedfor2006growthandexpandinternationally

Rightdeliveryquality CustomerSatisfactionIndex,CSI 24.5 25.4(2004) NextCSImeasurementin2007

Proud,dedicatedemployees EmployeeMotivationIndex,EMI 2.� 2.4(2004) EMIresultsdue2007

Strengthenmarketposition Turnover,SEKmn 260 231 Measuresinprogress

Becomecustomers’natural,preferredpartnerin Customersatisfaction,% Above80 76 Upbutfurtherimprovementproductionstreamliningprogress needed,measuresinprogress

Fulfilourowners’demandsonprofitability Operatingprofit,% 5.4 -3.5 Measuresinprogress

Beanattractiveemployer Leadershipstyle Above4.0 4.0 Targetachievedfor2006

Secureflexibleproductioncapacityandan Qualityindex Above500 470 MeasuresinprogressoperationfocusedoncontinuousimprovementandprocessorientationEu

roM

aintIn

dustry

Euro

MaintRail

SincetheGroupwasformedatthebeginningof2006,theparentcompanyEuroMaintABhashadamanagementgroupwitharemittoenabletheplannedexpansion.Developmentissuesofageneral,industry-neutralnaturewhichareofimportancetotheentireGroup’sdevelopmentarehandledbytheGroupmanagement.Theseincludestandardisedmodelsforbusinessdevelopment,operationaldevelop-ment,humanresourcesandcommunication.

Tosupplementtheexistingfunctionsforbusinessandoperationaldevelopmentandfinance,themanagementgrouphasbeenexpandedduringtheyeartoincludeVicePresidentsforHumanResourcesandCommunication.

BoardthatfocusesongoalsTheGroupmanagement’stasksarepartlytoco-ordinateoperationswherecommonprocessesarejustified,andtoleadthesubsidiariestowardsthestrategicgoals.Theresourcesfordevelopmentprojectsmainlycomefromthecompaniesthemselves.Ifthedevelopmentrelatestobrandnewareas,externalresourcesareused.

ThePresidentsofthetwosubsidiariesarepartoftheGroupmanagement,whichinturnmakesupthesubsidiaries’Boards.ThenumberofemployeesatGroupleveliskeptlowwhileinthecentraldevelopmentfunctionitmustbehigh–theoutputmustbeinproportiontothecosts.

Qualityimprovementsin2006TheentireGrouphasworkedagreatdealonmeasurestoimprovequalityduringtheyear.Usingvalue-creatinganalyses,wehaveincreasedourknowledgeofthelinksbetweendeliveryreliability,qualityandprofitability.Conventionally,developmentinoneoftheseareashasbeenatthecostofanotherarea.Byidentifyinganumberofimprovementareasandtacklingthem,wehavebeenabletoimprovestandardsinallareas.

DuringtheyearaGroup-widepersonnelmagazine,emma,waslaunched.Auniformgraphicprofilehasbeenproducedandbothsub-sidiariesarenowpresentedontheGroupwebsite,www.euromaint.se.

TheroleoftheGroupmanagement

TheentireEuroMaintGroupworksinengineeringandmaintenance.Thesubsidiariesfocusonthecustomersandtheirneeds,andhaveplanning,engineeringandmanagementresponsibilityfortheirownoperations.StrategicdevelopmentissuesarehandledatGrouplevelinnetworkswiththesubsidiaries,andcertainaspectsareco-ordinated.

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34

“Group management handle development issues to enable expansion”

TodayEuroMaintoperatesintherailtransportandengineeringindustries,bothofwhichareindifferentphasesofdevelopmentwhenitcomestomaintenancetechnology.WhicheverindustryorindustriestheGroupexpandsitsoperationsinto,thesuccessfactorremainsthesame–ateamofhighlyskilledengineerswhocanalsounderstandandmeetourcustomers’needs.

MeasurablecostsandincomeInthetechnicallyorientedindustrieswhereEuroMaintoperatesitisimportanttobeabletoclearlyshowmeasurableresults.Accessibilitytoproductionresourcesisnottheonlyimprovementarea;incomecanalsobeaffected,forexamplebyschedulingplannedoperationalstoppagesintelligently.Wemustalsobeabletoshowthatsafetylevelsaremaintainedeventhoughthecostislower.Onceagain–focusingonthecustomer’sneeds.

Partnership,collaborationandinfluenceCollaborationinvariousformsisanimportantcomponentinEuroMaint’sdevelopment.Itentailslong-term,stablerelationswithourcustomersinordertounderstandtheirneedsinthebestwaypossible.Itinvolvespartnershipsandnetworkswithsupplierstosatisfycustomers’varyingneeds,andalsotoincreasethepaceandcapacityofourdevelopmentandensureflexibilityandadaptabilitytochangesinthemarket.

Developingcondition-basedmaintenancerequirestheinstallationofmeasurementequipmentonrollingstock,forinstance.IntherailtransportindustryEuroMaint’sadvisoryrolehasgraduallyincreased.Weoftenhaveanopportunitytoinfluencehowourcustomersfitoutnewrollingstockinordertoincreaseavailabilityanddecreasethe

numberofstoppages.Inthesamewayweneedtokeepabreastofotherindustriesinordertodevelopouradvisoryroleinthelongterm.

WeworkwiththeSwedishRailAgencyandhavebeenabletoshowgoodexamples,whichnowservetoinfluenceinternationalregulations.Weareproudofthisrole,whichsendsoutpositivesignalstothemarket.WealreadyknowthatcompanieswillhavetoobtaincertificationfromtheEuropeanRailwayAgency,ERA,inordertodelivermaintenancefortheEuropeanrailways,andthatthesystemisnotsignificantlydifferentfromtheoneweuseatpresent.WewelcomethisdevelopmentandwillbeforemostamongEurope’sERA-certifiedmaintenancecompanies.

IndustriesatdifferentstagesEuroMaintIndustryiscurrentlytakingthestepfromclassicmain-tenancesoldbythehour,toofferingafullservicewithafocusalsoonincome.Weareinvestingagreatdeal,withtheaimofsigningnewmaintenancecontractswithmanufacturingindustriesin2007inlinewithourTotalServiceConcept.

EuroMaintRailisreadytoestablishitselfinternationally.Thecompanymayachievethisbyaccompanyingpartnerstoothercountries,wherebywetakeourestablishedmaintenanceconceptandgraduallyinvest.WemayalsoexpandfromSweden,suchaswiththerefurbishmentcontractforNSB’spassengercarriages.EuroMaintisalsoexpandingintotheBalticregion,whereourestablishmentisbeingfinancedthroughthemorecost-effectiveproductionofcom-ponentmaintenance.Inthelongtermwealsoexpecttobuildrelationswithlocaltrainoperatorsinordertobringamodernmaintenanceap-proachtotheexpansionoftherailwaysonthatsideoftheBalticSeatoo.

Businessdevelopment

EuroMainthasachieveditsleadingpositioninmaintenanceengineeringbysystematicallyfocusingoncustomers’needs.Themainpriorityisnotwhatwecandeliver,butwhatthecustomerneeds.however,fromthecustomer’sperspectiveadegreeofcourageisrequiredtomoveawayfromconventionalmaintenanceprogrammestothenewapproachofcondition-basedmaintenance.

35

Wecreatecustomervaluebyoptimisingprocessesandtechnology.Thequestionwecontinuouslyaskinouroperationaldevelopmentishow:Howcanwemakeourprocessesmoreefficient?Howcanweintroducenewtechnologyandnewmethodsforstreamlinedmaintenance?Howcanwedevelopourcollaborationwithstrategicpartners?Howcanweharnessanddevelopcreativeideas?

SynergyandcustomerbenefitAsamaintenancegroupwithoperationsindifferentindustries,EuroMaintbenefitsfromsynergies.Thelowestcommondenominatoristhateveryoperationaldisruptioncomesasasurprise–moreorless.Ideallyless.Byrefiningmaintenanceplanning,preventingsurprises,fine-tuninglogisticsandbeingpreparedtoactaheadoftheunexpected,weminimisethenumberofoperationaldisruptions.

StatisticsorrealityConventionalpreventivemaintenanceisbasedonoperatingstatisticswhichdeterminehowoftenthemeasuresarecarriedout.Incontrast,newpreventivemaintenanceisconditionbased.Thankstonewtech-nologyformonitoringtheconditionofequipment,wecanmeasurethemaintenanceneedandcarryouttheworkwhenitisactuallyneeded.

PartnershipandthewidescopeMaintenancerequiresbothgeneralandspecialistexpertise.AtEuroMaintwerecognisethatwecannotbespecialistsateverything.Wethereforecollaboratewithselectedpartners.Someofthemarecloselyinvolvedinouroperationaldevelopmentregardingconditionmonitoring,documentationandIntegratedLogisticsSupport,ILS.Othershelptocompletethetotalrangeofservicesweoffercustomers.

FromactivitytoprocessDuringtheyearEuroMainthaslaunchedtheTotalServiceConcept,TSC,asacomprehensivepropositionfortheentireindustry.Thetotalserviceaspectliesinviewingmaintenancenotonlyasaseriesofactivities,butassomethingcloselyintegratedwithoperation.Thisapproachenablesustotakegreateradvantageofbreaksinoperationtocarryoutpreventivemaintenance.Similarly,betterusecanbemadeofoperators’knowledgeinday-to-daymaintenance.Maintenancehasonthewholebecomemorespecialisedandexpertise-demanding.Doesthecustomerwantusjusttotakecareofthespecialisedmaintenance?Ortoberesponsibleforthetotalservice?Thechoiceisthecustomer’s.

TotalconceptindependentofsectorTheTSCwasoriginallydevelopedwithinEuroMaintRailtooffercustomersintherailtransportindustryamorecomprehensivepackage,toprovidereliefandassumetotalresponsibilityforavailability.Sincethen,withthesupportoftheGroupmanagement,EuroMaintIndustryhasfurtherdevelopedandadaptedtheconcepttotheengineeringindustry.Oneofthemainbenefitsoursubsidiariesenjoyinbeingpartofamaintenancegroupisthatthedevelopmentofmethodsrelatingtooperationalreliabilityandmaintenanceislargelythesameregardlessofindustry.

activeideasprocessEuroMainthasthebreadthinmaintenanceengineeringthatenablesustoharnessandexchangegoodideasbetweentherailtransport,engineering,energyandprocessingindustriesandothersectors.Onewayofaddingnewknowledgeistoarrangepersonnelseminarswithexternalspeakers.InaGroupthatrecognisescreativeinnovativethinking,activelyseeksnewideasandensurestheyareswiftlyimplemented,goodideasrarelycomeinones.

Operationaldevelopment

Maintenanceisacommissionoftrustbasedonin-depth,industry-specificskillandabroad,sector-wideinnovativeapproach.WhicheverindustryEuroMaintoperatesinthegoalisthesame:tofindthebestbalancebetweenavailability,profitabilityandsafetyforthecustomer.

EuroMaint

36

37

AllmajorplannedoperationalchangesinEuroMaintareprecededbyariskanalysistoestablishwhattheconsequencesmightbeforthecompany,itscustomersorthewideroutsideworld.Alltominimiserisksandmaintainhighpreparedness.

analysisaheadofchangesAnalysisisusedcontinuouslyduringthecompanies’tenderingprocessanddeliveriestoexaminetheconsequencesonfinances,safety,theenvironmentandworkingenvironment,forexample.EventswhicharenottheinitiativeofEuroMaintarealsoexaminedintheformofvariousconceivablescenarios.

Forexample,ariskanalysiswascarriedoutbeforethebidforStockholmTraincommutertrafficwasevensubmitted.Theanalysiswasthensuccessfullyusedtoeliminaterisksoncethecontracthadbeenwonandtheoperationtakenover.Activitiesthataimtoreduceriskshavebeenincorporatedintotheoperation’songoingactionplans.

RiskanalysisTheanalysisiscomprisedoffourphases:• Phase1–Identification• Phase2–Analysisandclassification• Phase3–Preventivemeasures• Phase4–Follow-upThephasesaredescribedinmoredetailintheillustrationbelow.

PrudentfinancialmanagementEuroMaintisalsoexposedtocurrencyrisks,interestraterisks,creditrisks,liquidityrisksandrefinancingrisks.TheGroupfocusesonminimisingeffectswhichhaveanadverseimpactonresults.

Currencyrisks–EuroMaintisexposedtosomeextenttocurrencyrisksduetoitsrelativelylargepurchasevolumesinforeigncurrenciesandlowcustomerinvoicingincorrespondingcurrencies.Purchasesinforeigncurrenciesforlargeprojectsarehedgedoragreedwithvariableforeignexchangeclausesduringthetenderingorcontractformulationstage.

Interestraterisks–EuroMaint’sloanportfolioisaffectedbygeneralchangesininterestrates.Tocounterthistheportfoliohasbeendividedandtiedtodifferentfixed-interestterms.

Creditrisk–EuroMainthasproceduresforminimisingongoingcustomercreditrisks.Theseproceduresincludecreditchecks,advancepaymentandguaranteemanagement,aswellasongoingcreditmonitoring.

Liquidityandrefinancingrisk–EuroMaint’spolicyisalwaystohavecashandcashequivalentsandsecuredrefinancingavailabletotheextentrequiredfortheoperation.

Discretion–anaturalpartofthechangeprocess

ContinuousimprovementoftheoperationisabsolutelycrucialforaGrouplikeEuroMaintthatoperatesonamarketexposedtocompetition.EverychangeaffectsahostofdifferentfactorsbothwithinandoutsideoftheGroup.Itisparamountthatweanalysethepotentialconsequencesofchangesinadvanceandminimisetheriskofadverseeffects.

PhaSESOFRISKaNaLySIS

Identifyingrisksrequirestheinvolvementofthosewhoworkintherelevantoperation.Themethodcanvary:situationalquestions,workshopsorinterviews.

Theriskclassificationiscarriedoutwiththeaidofamatrix,inwhichconceivabledamagesandtheirprobabilitiesaregraded.Thisisprecededbyaqualitativeanalysistodetectanytrendsorpatternsthatmayaffecttheassessment.

Theprobabilityoftheidentifiedrisksoccurringisreducedthroughpreventivemeasures,whicharedocumentedinanactionplan.

Thepreventivemeasuresarecontinuallyfolloweduptoensuretheyarehavingtheintendedeffect.Insomecases,anewidentificationandanalysisphasemayberequiredthatresultsinanewactionplan.

EuroMaint

38

Itisessentialtohavededicated,motivatedpersonnelifweasaGrouparetoachieveourambitiousgoals.Therightknowledgeandattitudealongwithcommonvaluesarefactorsthatcontributetooursuccess.

ThewayEuroMaintisperceivedasanemployeriscrucialtoattractnewpersonnel,retainskilledemployeesinthecompanyandensurethatwehaveamotivatedworkforce.WearethereforeincreasingourfocusondevelopingEuroMaint’simageasanemployerbothinter-nallyandexternally.

ManagerswithtotalresponsibilityThemanagersinthecompanieshavetotalresponsibilityforpersonnel.Theirroleentailsfocusingonperformanceandtheinherentpotentialofeachemployee.Weworktoensureouremployeesapproachthefuturewithdedication,self-confidenceandresponsibility.Tomakethispossible,theHumanResources,HR,functionsupportsthema-nagerswhointurnsupportpersonnel.

Skilledpersonnelarethekeytocompetitiveperformance,whichiswhyitisimportanttodevelopHRprocessesintopartoftheday-to-dayleadership.Itshouldbeequallynaturalforourmanagerstobeleadersofpeopleasitisforthemtodobusinessorbeexpertsintheirfield.TocreategreaterscopeforthemorestrategicHRwork,wherethemanagersaregivensupportindifficultissues,theadministrationneedstobestreamlinedasfaraspossible.Aprocesswhichiscurrentlyunderway.

Therightpeople,intherightplace,attherighttimeTheagestructureatEuroMaintmeansthatinfiveyearstime,anaverageofoneemployeeaweekwillberetiring.Handlingthegenerationshiftwhilesafeguardingouraimofexpandingrequiresaproactiveapproachandaclearplan.

Ourprovisionofskillspartlyreliesoneducationalinitiativesatseverallevelsandwearestrivingforlong,well-definedcollaborationswithafewselectedschools.InMalmöweareworkingwithemployerorganisationAlmegaandtheCityofMalmötoexpandthenewwork-shopsolutionintheregiontoformaninnovativetechnologycentre.Theideaistoincludecoursesaswellasresearchanddevelopmentcollaborationswithuniversitiesandcolleges.Thecoursesmaybeindustrialprogrammesinexistinguppersecondarysyllabuses,AVE(AdvancedVocationalEducation)andrecruitmentcourses.

Wearealsotakingmeasurestoincludeevenmorepersonnelinourleadershipdevelopmentprogramme.Inadditiontocoursesforgroupmanagers,wearenowstartingprogrammesforforemen.

Increasedcommitmentgoodforthecompany’sgoalsWestrivetohavemotivatedpersonnel.Motivatedpeopleengendersuccess.Wewanttopromoteandstrengthenthefactorsthatproducededicated,motivatedandsatisfiedemployees.

Toensurethatallpersonnelworktowardsacommongoalandarefamiliarwithandunderstandthecompany’sstrategies,visionsandbusinessobjectives,weusethe‘DialogueforParticipation’toolandsharedcorevalues.

Corevaluesareaboutcreatingasharedplatformandclimatewhichmeansthatallpersonneldotheirbestandabitmore.Allemployeesmustunderstandcustomers’needseventhosewhodonothavedirectcontactwithcustomers.Withadesiretobebusinessoriented,responsibleandinnovativewebuildupasenseofprideinwhatweachievetogether.Inautumn2007andspring2008wewillbeorganisingemployeeactivitiestocontinueourworkongoalsandstrategies.

Personneldevelopment

EuroMaintaimstobethemostattractiveemployerinitsareaofoperation.Ourimageisalsoofsignificanceinourfinancialstatements.Ifthecompanyisattractivebothinternallyandexternallywecanattractthebestresourcesandsecureacompetentworkforceinthelongterm.Weshouldthereforebeourpresentandfutureemployees’firstchoiceasaworkplace.

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NuMBEROFNEWPERMaNENTEMPLOyEES

2005 2006EuroMaintIndustry

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36

18 17

EMPLOyEEFaCTS 2006 2005

Personnelturnover,% 6.0 6.0

Turnover/employee,SEKthousands 1,167 1,122

Sickleave,% 4.7 4.8

Percentageofwomen,% 6.5 7.0

averageage 47 50

2005 2006EuroMaintRail

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LEaDERShIPDEvELOPMENTMaNaGERSINTRaINING

18

43

3 3

2005 2006EuroMaintIndustry

2005 2006EuroMaintRail

RelationsbetweenGroupmanagementandtheunionaregood.ThisisabriefsummaryofBertilHallén’sviewofrelationsbetweentheparties.

“Themostimportantthingisthatwenowalwaysreceiveinfor-mationveryearlyon,assoonaspossible.Alsothere’sanongoingdialogue,whereI’venoticedthatthemanagersofbothcompaniesandtheGroupgenuinelylistenandtakeourargumentsonboard.”

agreementbutnotabouteverythingWhentheGroup’slong-termstrategiesarebeingdiscussed,aconsensusisusuallyreachable.Forexample,allpartiesconsiderinvestmentindevelopmentimportant.Forpersonnelitisimportanttobeadvancedintheirtechnicalandskillsdevelopmentasitcreatesopportunitiesforagoodpaysituation.

EuroMainthasaco-operationagreement“Thisdoesn’tmeanweagreeoneverything,butthatwecometoanagreementinnegotiation.Thedifferenceisthatwe’reinvolvedfromanearlystageandhavemoreofanopportunitytoaffectdecisions,althoughthiscanalsomeanwehavetobeinvolvedintheprocessaheadofunpleasantdecisions.

“Thentherearesomeissueswherewewillneveragreecompletely,suchasovercapacityandpay,”saysBertil.

Heexplainsthatitcansometimesbedifficulttobeintheknowabouttoughdecisionsatanearlystage.Heisnotalwaysabletoinformunionmembersaboutwhatheknowsstraightaway.

“Mypriorityisalwaysthebestinterestsofthemembers.Thetrickistoknowwhat’sbestinthelongterm.AfterwardsIalwayshavetobeabletoexplainwhathashappened,andwhy.Informationisanimportantpartofmyrole,andsomethingthatcanalwaysbeimproved.”

PersonnelhavealotofknowledgeBertilHallénhasworkedintherailtransportindustryforalmost30yearsandhehasbeenanemployeerepresentativeontheBoardsince2001.HecurrentlysitsontheBoardsofABSwedcarrierandEuroMaintAB.

“Itwasn’teasybeingaunionrepresentativeontheBoardinthebeginning.Ittookawhileforeveryonetogrowintotheirroles,andIfoundthatmanyoftheexternalrepresentativesdidn’tunderstandverymuchaboutouroperation,althoughthishasimprovedalot.

“Ithinkemployeerepresentativeshavecontributedalotofknow-ledgetotheBoard.Welookathowthecompanyisperformingfromacompletelydifferentperspectiveandwecanexplainwhatneedstobedone.”

Bertilsaysthatitisnotalwayseasyforanindividualemployeetobringhisorhermanager’sattentiontoareasthatshouldbeimpro-ved.Insuchcasesitmaybesimplertotaketheissuetotheunionwhichcanensurethematterisdealtwithatahigherlevel.

PositivedevelopmentThemainchangeBertilhaswitnessedoverthepastfiveyearshasbeenthefactthateveryoneseemsmoreinvolvednow,whichiscloselylinkedtotheclearercontrol.

“It’stakenawhiletogetthisfar,butnowitfeelsverypositive.Thisislargelythankstothemanagement,they’vereallymadeanefforttoensureeveryonecanseethebiggerpicture.They’realsoveryclearaboutwhereweareandwherewe’reheading.

“AnotherpositivethingisthatEuroMaintIndustryhasnowbecomepartoftheGroup,it’sgoodtohaveanotherlegtostandon.Thereispotentialforexcellentresults.Ithinkthatfromtheunion’spositionwecanofferplentyofgoodadviceforitsdevelopment.”

TheroleofemployeesontheBoard

BertilhallénisoneofthethreeemployeerepresentativesonEuroMaint’sBoardofDirectors.asaunionspokespersonitishistasktoprotectmembers’interests.asamemberoftheBoardheisinvolvedinmanagingtheGroup’sdevelop-ment.Soisthereanyconflictbetweenthesetworoles?howdoesthecollaborationbetweentheunionorganisationsandtheGroupwork?

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40

Five-yearsummary

PROFORMa PROFORMa

INCOMESTaTEMENT,SEKmn 2006 2005 2004 2003 2002

Turnover 2,037 1,872 1,4�3 1,653 1,87�

Operatingprofit/loss 100 114 47 -103 -188

Netfinancialrevenues/expense -� -11 -10 -11 -26

Profit/lossaftertax 70 �2 52 -106 -164

CaShFLOW,SEKmn

Cashflowfrom:

Operatingactivities 77 62 48 -40 -56

Investmentactivities -32 -100 -34 10 -21

Financingactivities -66 �0 0 30 76

Changeincashandcashequivalents -21 52 14 0 0

BaLaNCEShEET,SEKmn

Fixedassets 207 221 160 113 140

Receivablesandstock 776 6�3 563 6�0 722

Cashandcashequivalents 45 66 14 0 0

TOTaLaSSETS 1,028 980 737 803 862

Equity 24� 178 81 18 110

Deferredtax 8 12 0 0 13

Otherprovisions 63 66 46 54 75

Long-termliabilities 274 340 250 250 240

Operatingliabilities 434 384 35� 481 424

TOTaLEQuITyaNDLIaBILITIES 1,028 980 737 803 862

Therelevantfiguresfor2002–2004relatetoEuroMaintRail.EuroMaintIndustryisincludedfrom1July2005.

•ReportoftheDirectors Readmoreonpage42

•IncomeStatements Readmoreonpage44

•BalanceSheets Readmoreonpage45

•ChangesinEquity Readmoreonpage47

•CashFlowanalyses Readmoreonpage48

•Notes Readmoreonpage4�

•auditReport Readmoreonpage64

ThebusinessinfiguresThebusinessinfigures

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E u r o M a i n t A n n u a l R e p o r t 2 0 0 6

ReportoftheDirectors

Continuedconsolidation,streamliningandinternationalisationTheGroup’saimistobeactivelyinvolvedintheconsolidationofthemaintenanceindustry.

TheacquisitionofEuromationABandmaintenancecontractsforcommutertrainsinStockholmandtheArlandaExpressaresomeexamplesofoperationaldecisionsaimedatrealisingtheGroup’saimofbecominganimportantplayerinthemaintenanceindustry,notonlyinSwedenbutalsointernationally.

Newmaintenanceconceptswithtotalundertakingsinpartner-shipstyleagreements,ofthetypeusedinEuroMaintRail,arebeingdevelopedforEuroMaintIndustry.Theaimofthisstrategyistomakeitpossibleforthecompaniestoadvanceupthevaluechain.EuroMaintwantstodeveloppartnershipswithitscustomersandtherebyestablishlong-termincentive-ledservicingcontracts.StrategiccollaborationswithcompaniesthatdevelopdifferenttechnicalsolutionsandsystemsenableEuroMainttoswiftlybringnewtechnologytoitscustomers.

Wehavetakencrucialstepsduringtheyeartorealiseourambitionofbecomingaplayerontheinternationalmarket.

Since2003EuroMainthascarriedoutanumberofstructuralmeasurestoachieveincreasedcost-effectivenessandhasimplemen-tedanefficientfinancialcontrolmodel.Thesedevelopmentinitiativeswillcontinuein2007andcreatefurthercompetitiveadvantagesfortheGroup.

OperationsAdecisionhasbeentakentostartupanoperationintheBalticregionandthisestablishmenthasbegun.

Instiffcompetition,EuroMaintRailhaswonitsfirstmajorinternationalorder,arefurbishmentcontractfortheNorwegianStateRailways,NSB.

Inadditiontoseveralnewcontractsandcontractextensionsamongexistingcustomers,thecompanyhasalsowonanumberofbrandnewordersduringtheyear.InJuneEuroMaintRailtookoverresponsibilityfortechnicalmaintenanceofthecommutertrainsinStockholm.AnewoperatorontheSwedishrailmarket,Arriva,awardedEuroMaintRailthemaintenancecontractforthePågatågencommutertrains.

AdditionalordersforEuroMaintIndustry’suniqueAutomatedGuidedVehicles(AGVs)havebeenreceivedbothwithinandoutsideofSweden.Alongsidetheestablishedservicesthecompanyisalsoinvestinginnewconcepts.TheTotalServiceConcept(TSC)isanimportantelementintheaimofstrengtheningmarketpositionandbringingaboutvolumegrowth.TheconceptentailsEuroMaintIndustryofferingafullserviceundertakinginmaintenance,sparepartsmanagementandcomponentservicing.

PersonnelIntakingovermaintenanceofthecommutertrainsinStockholm,EuroMaintincreaseditsworkforcebyaround100.

EuroMaintIndustryhasadapteditsorganisationpartlyinlinewiththealteredproductmix,andpartlytocreateconditionsforgrowth.Thecompanyhasalsobegunamajorrecruitmentprocessforspecialistexpertise.

‘DialogueforParticipation’isthenameofthelong-termprojectinitiatedbyEuroMaintRailinthespringwiththeaimofincreasingemployees’knowledgeandunderstandingofthebusinessplan.Thedialoguewillhelpincreasepersonnel’sopportunitiesforrealisingthebusinessplan.

MarketDemandforbothconsultancyandservicingintheengineeringindu-stryhasincreasedduringtheyear.Inresponsetotheincreasedandalterednatureofthisdemand,EuroMaintIndustryisnowstrengthe-ningcertainareasofspecialistexpertisesuchasmaintenanceengine-ering,productionengineeringandserviceengineering.TheSwedishmarketfortrainmaintenanceisoneofthemostopentocompetitioninEurope.ThistrendhasbeenpositivelyaffectedbyderegulationandEUharmonisation,whicharegraduallyopeningthemarketuptoserviceexports.

Severalofthecontractssignedsofarduringtheyearareclearproofofmajorcustomers’continuedtrustinEuroMaint’squalityandabilitytodeliver.EuroMaintRailhassubmittedseveralmajortenderstoitscustomersforrollingstockrefurbishmentandisprocessingrequestsfortenderregardingmaintenancefortheÖresundRailServices.EuroMaintIndustryisindialoguewithbothexistingandnewcustomerswithregardtoextended,partnership-stylecollaborationsinproductionstreamliningandmaintenancedevelopment.

ImpactontheenvironmentAtallEuroMaintRailworkshops,themaineffectontheenvironmentistotheairandwater.Theoperationisclassifiedasharmfultotheenvironmentandanapplicationmustbemadetotheenvironmentalauthorities.Theenvironmentalauthoritiesdecidewhetherapermitornotificationisrequireddependingonthedegreeofrisktotheenvironment.IfEuroMaintRailwerenottoreceivetheenvironmentalpermitsrequiredforproduction,thiscouldharmitsopportunitiestofulfilcustomercommitments.Ifpermitswerenotgrantedthereis,however,theabilitytorestructureactivitiesattheworkshopsforalimitedperiodtorestricttheadversefinancialimpact.

ElevenoftheEuroMaintRailworkshopsrequireofficialnotificationinaccordancewiththeOrdinance(1��8:8��)concerningEnviron-mentallyHazardousActivitiesandTheProtectionofPublicHealth.TherelevantinspectionauthoritiesfortheworkshopsinLuleå/SvartönandSundsvallhavejudgedthatnonotificationisrequired.Theacti-vitiescarriedoutbyEuroMaintRailwhichrequirenotificationincludevehiclewashing,painting,deicingandhandlingdieselfuel.

InJune2006,EuroMaintRailtookoverthemaintenanceworkatSL’sworkshopsinÄlvsjöandBro.BothworkshopsrequireofficialnotificationinaccordancewiththeOrdinanceconcerningEnviron-mentallyHazardousActivitiesandTheProtectionofPublicHealth.

TheBoardofDirectorsandPresidentofEuroMaintaBherebysubmittheannualReportforthe2006financialyear.EuroMaintaBisawholly-ownedsubsidiaryofaBSwedcarrier,withregisterednumber553036-3409domiciledinStockholm,Sweden,andiswholly-ownedbytheSwedishstate.

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E u r o M a i n t A n n u a l R e p o r t 2 0 0 6

Theamendmentapplicationforeachinspectionauthorityregardingregistrationofanewcompanycarryingouttheactivitieshasbeendealtwith.AnapplicationforapermitforinflammablegoodsfortheÄlvsjödepothasalsobeennotifiedtothelocalauthority.

Inspring2007theworkshopsinÄlvsjöandBrowillbeauditedforcertificationtoISO14001:2004standards.

TheoperationsinÅmålandÖrebrorequirepermits.Theworkshopsrequirepermitsduetothelargeworkshopareaandthelargeamountofchemicalsusedinconnectionwithvehiclewashingandpainting,forexample.

EuroMaintIndustrydoesnotconductanyactivitiesthatrequireapermit.Ithasoneoperationwhichrequiresnotification.Itrelatestothemotorrewindingoperationandtheuseofpaints.Theenviron-mentalimpactofallEuroMaintIndustry’soperationsislowandthefinancialriskis,therefore,low.

SignificantrisksTheGroup’scompanieshaveacustomerstructurewherebyasmallnumberofcustomersaccountforthepredominantproportionofGroupturnover.Thelossofamajorcustomerorasignificantcustomercontractwouldplaceextensivedemandsonthecompaniestoadapttheiradministrativesupportfunctionstothereducedturnover.Foratransitionalperiodthecompanies’profitabilitywouldbereduced.Ascustomerrelationsoftenencompassseveraldifferentcontractareaswithdifferinglengthsofterm,thisriskis,however,spreadoutovertime.

FuturedevelopmentBydevelopingnewtypesofcontractwithtotalsolutions,EuroMaintcantakeonoverallresponsibilitywhichincludespreventive,corrective,restorativeandimprovementmaintenance,intheformofperiodicreviewsandadvancedrefurbishment,forexample.EuroMaint’sundertakingthereforeencompassesalargepartofthevaluechain.ThemaintenancemethodsandcontractstructuresdevelopedbyEuroMainthavebeenjudgedtobetransferabletootheroperations.ThiscreatesscopeforexpansionintootherareasandimprovesconditionsforEuroMainttobeinvolvedintheconsolidationofthemaintenanceindustry.

InlinewithEuroMaint’sbusinessplantostreamlineandbecomemorecosteffective,projectsareinprogressinSwedenwhileatthesametimeinternationalestablishmentsareunderwayandbeingplanned.ThenewoperationintheBalticregionandtherefurbishmentprojectfortheNorwegianStateRailwaysarethefirstofseveralstepsintotheinternationalmarket.Theseestablishmentsassureasignificantnewlocalpresenceonexpansivemarkets.

Interestinproductionstreamlininghasincreased.Industryneedsflexible,cost-effectivesolutions.ThetrendtowardsoutsourcingenablesEuroMainttoofferaconceptofinteresttothemarket.Newbusinesssolutionsforcost-effectivesparepartsmanagementforindustry,alongwithnewcustomisedautomationsolutions,combinedwithincreasedlocalpresencethroughestablishmentsinnewlocations,areallimportantelementsofthebusinessstrategy.

Eventsaftertheyear-endAspartofitsremitfromtheSwedishgovernmentinconnectionwiththeconversionoftheSwedishStateRailwaysintoindependentcompaniesin2001,EuroMaint’sowner,ABSwedcarrier,hasdecidedtoinitiateasalesprocessforitswholly-ownedsubsidiariesEuroMaintandSweMaint.

Turnoverandprofit

TurnoverTotalrevenuesfortheyearamountedtoSEK2,037(1,872)million.

TheincreaseisexplainedbytheacquisitionofEuromationAB(nowEuroMaintIndustryAB)on1July2005,aswellasageneralincreaseinturnoverforEuroMaintRailAB.

ThelatterisduetoneworextendedcontractssuchasArlandaExpress,refurbishmentofX2trainsforSJAB,refurbishmentofcarriagesfortheSwedishStateRailwayspublicenterpriseandnewenginemodificationsforGreenCargoAB.

OperatingprofitOperatingprofitamountedtoSEK100(114)million,whichgivesanoperatingmarginof5%(6%).

Thedecreaseinthemarginismainlyduetostructuringcostsandcostsforqualityimprovementmeasuresin2006,aswellasapositiveone-offitemin2005.

FinancialitemsNetfinancialrevenues/expenseamountedtoSEK-�(-11)million.Thisfigurehasbeenaffectedpositivelybyalowernetprovisionachievedthroughastrongercashflow.

CashflowCashflowfortheyearafterinvestmentsamountedtoSEK45(-38)million.

Theincreaseismainlyexplainedbythefactthatthe2005figurewasaffectedbytheacquisitionofEuromationAB.

ProposedtreatmentofunappropriatedearningsProfitfortheyearintheparentcompanyamountedtoSEK2,186,532(117,570).

TheBoardofDirectorsproposesthatthefundsattheAGM’sdisposal,inaccordancewiththeparentcompany’sbalancesheet,becarriedforward:

Earningscarriedforward(SEK) 156,878,232

Netprofitfortheyear 2,186,532

TOTaL 159,064,764

TheincomestatementandbalancesheetwillbepresentedtotheAGMon2�March2007foradoption.

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Group Parentcompany

SEKthousands Note 2006 2005 2006 2005

Operating revenues

Netturnover 27 2,033,842 1,865,011 28,140 0

Otheroperatingrevenues 4 3,17� 7,202 3 0

TOTaLOPERaTINGREvENuES 2,037,020 1,872,213 28,143 0

Operating expenses

Netoperatingexpenses -610,487 -631,100 0 0

Otherexternalexpenses 5,23 -462,�58 -381,036 -13,081 0

Costsofpersonnel 6 -831,565 -721,183 -14,001 0

Depreciationoftangibleassets 7 -25,432 -24,163 -18 0

Amortisationofintangibleassets 8 -1,875 -�38 0 0

Otheroperatingexpenses -4,576 -6� 0 0

TOTaLOPERaTINGEXPENSES -1,936,893 -1,758,489 -27,100 0

OPERaTINGPROFIT 100,128 113,724 1,044 0

Financial items

Financialrevenues � 3,101 �16 13,588 163

Financialexpenses � -11,648 -11,800 -11,5�5 0

NETFINaNCIaLREvENuES/EXPENSE -8,546 -10,884 1,993 163

PRE-TaXPROFIT 91,581 102,840 3,037 163

Tax 10 -21,342 -10,376 -850 -46

NETPROFITFORThEPERIOD 70,239 92,464 2,187 118

Parentcompanyshareholders’shareofprofitfortheperiod 70,23� �2,464 2,187 118

EaRNINGSPERShaRE,SEKThOuSaNDS 70.2 92.5 2.2 0.12

IncomeStatements1January–31December2006

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Group Parentcompany

SEKthousands Note 2006 2005 2006 2005

assets

Fixed assets

Tangibleassets 7 131,434 131,823 258 66

Intangibleassets 8 42,383 44,258 0 0

ParticipationsinGroupcompanies 11 0 0 253,386 156,761

Deferredincometaxesrecoverable 14 11,71� 21,548 0 0

Otherlong-termreceivables 12,13 21,215 23,313 12� 12�

Long-termreceivables 0 0 200,000 0

TOTaLFIXEDaSSETS 206,750 220,941 453,772 156,956

current assets

Inventories 15 268,770 25�,343 0 0

Accountsreceivable 331,�63 283,644 0 0

ReceivablesfromGroupcompanies 4,125 511 2,366 163

Otherreceivables 2� 47,555 54,2�6 1,210 0

Completed,notinvoiced 2� 6�,255 75,224 0 0

Prepaidexpensesandaccruedrevenues 16,2� 54,2�8 20,335 312 0

Cashandbankbalances 45,323 65,850 37,560 0

TOTaLCuRRENTaSSETS 821,290 759,202 41,448 163

TOTaLaSSETS 1,028,040 980,143 495,220 157,119

BalanceSheets1January–31December2006

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Group Parentcompany

SEKthousands Note 2006 2005 2006 2005

equity and liabilities

equity

Sharecapital 100 100 100 100

Othercontributedcapital/statutoryreserve 3�4,863 3�4,863 2� 2�

Accumulateddeficit/non-restrictedequity -145,606 -216,867 15�,065 156,878

ShaRECaPITaLPERTaININGTO

PaRENTCOMPaNyShaREhOLDERS 249,357 178,096 159,194 157,007

TOTaLEQuITy 249,357 178,096 159,194 157,007

lOng-term liabilities

Long-terminterest-bearingliabilities 17 270,000 340,000 270,000 0

Provisionforpensionsandsimilarcommitments 13 42,054 38,448 0 0

Otherprovisions 18,2� 20,671 26,�68 0 0

Deferredtaxliability 1� 8,266 12,418 0 0

Otherlong-termliabilities 4,22� 0 0 0

TOTaLLONG-TERMLIaBILITIES 345,219 417,834 270,000 0

current liabilities

Advancepaymentfromcustomers 20 35,�08 �,�38 0 0

Accountspayable 20 123,205 116,�54 2,2�3 0

Incometaxliability 20,2� 21,452 37,3�4 0 46

LiabilitiestoGroupcompanies 20 6,013 7,482 58,�73 0

Othercurrentliabilities 20 12,008 1�,120 0 66

Accruedexpensesanddeferredrevenues 21,2� 234,408 1�3,326 4,75� 0

OtherliabilitiestoSCGroup 20 46� 0 0 0

TOTaLCuRRENTLIaBILITIES 433,463 384,213 66,026 112

TOTaLLIaBILITIES 778,682 802,047 336,026 112

TOTaLEQuITyaNDLIaBILITIES 1,028,040 980,143 495,220 157,119

pledged assets and cOntingent liabilities

Pledgedassets,floatingcharges 22 20,000 20,000 none none

Contingentliabilities 22 10,577 11,80� none none

BalanceSheetsContd.

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grOup1January–31December2005 Sharecapital Othercontributed Profitearned TotalSEKmn capital equity

Openingequity1Jan2005 100 3�4,863 -313,532 81,431

Adjustmentduetochangeofaccountingprinciple,investmentproperty – – 6,257 6,257

Taxeffectduetochangeinaccountingprinciple – – -1,752 -1,752

– – 4,505 4,505

Reclassification – – -304 -304

Netprofitfortheyear – – �2,464 �2,464

TOTaLChaNGEINWEaLThEXC.TRaNSaCTIONSWIThThECOMPaNy’SOWNERS 0 0 96,665 96,665

CLOSINGEQuITy31DEC2005 100 394,863 -216,867 178,096

TheGrouphasdecidedtoapplyfairvalueforinvestmentproperty(IAS40)toensureauniformtreatmentprinciplethroughouttheSwedcarrierGroup.

1January–31December2006

Adjustedopeningbalance1Jan2006 100 3�4,863 -216867 178,0�6

Reclassification – – 1,022 1,022

Netprofitfortheyear – – 70,23� 70,23�

TOTaLChaNGEINWEaLThEXC.TRaNSaCTIONSWIThThECOMPaNy’SOWNERS 0 0 71,261 71,261

CLOSINGEQuITy31DEC2006 100 394,863 -145,606 249,357

ChangesinEquity

parent cOmpany

1January–31December2005

Sharecapitalpertainingtoparentcompanyshareholders Sharecapital Statutory Earningsbrought Netprofitfor TotalequitySEKmn reserve forward theyear

Netprofitfortheyear – – – 118 118

TOTaLChaNGEINWEaLThEXC.TRaNSaCTIONSWIThThECOMPaNy’SOWNERS 0 0 0 118 118

Shareholders’contribution – – 156,760 – 156,760

CLOSINGEQuITy31DEC2005 100 29 156,760 118 157,007

Thenumberofsharesintheparentcompanyamountsto1,000Thequotavalueintheparentcompanyamountsto100

1January–31December2006

Openingequity1Jan2006 100 2� 156,878 0 157,007

Netprofitfortheyear – – – 2,187 2,187

TOTaLChaNGEINWEaLThEXC.TRaNSaCTIONSWIThThECOMPaNy’SOWNERS 0 0 0 2,187 2,187

CLOSINGEQuITy31DEC2006 100 29 156,878 2,187 159,194

Thenumberofsharesintheparentcompanyamountsto1,000Thequotavalueintheparentcompanyamountsto100

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Group Parentcompany

Note 2006-01-01 2005-01-01 2006-01-01 2005-01-01SEKthousands 2006-12-31 2005-12-31 2006-12-31 2005-12-31

Operating activities

Profitafterfinancialitems �1,581 102,840 3,037 163

Depreciation/amortisation 27,307 25,102 18 0

Otheritemsnotaffectingcashflow 24 1,572 -33,�2� 0 -46

Incometaxpaid -15,666 – -850 –

CaShFLOWFROMOPERaTINGaCTIvITIESBEFOREChaNGESINWORKINGCaPITaL 104,794 94,013 2,204 118

changes in wOrking capital

Increase(-)/decrease(+)ininventories -�,427 -18,501 0 0

Increase(-)/decrease(+)inaccountsreceivable -48,31� -47,675 0 0

Increase(-)/decrease(+)inothercurrentreceivables -1�,368 12,248 -3,725 -163

Increase(+)/decrease(-)inaccountspayable 6,251 -15,467 2,2�3 0

Increase(+)/decrease(-)inothercurrentliabilities 42,��� 37,356 63,621 112

CaShFLOWFROMOPERaTINGaCTIvITIES 76,930 61,974 64,394 66

investment activities

Acquisitionoftangibleandintangiblefixedassets 7 -31,043 -21,04� -223 -66

Divestmentoftangibleandintangiblefixedassets 7 3,167 1,115 13 0

Acquisitionofsubsidiary/businesssegment,netliquidityeffect 0 -80,534 -�6,625 0

Acquisitionofotherfinancialassets -3,810 524 -200,000 0

CaShFLOWFROMINvESTMENTaCTIvITIES -31,686 -99,944 -296,834 -66

CaShFLOWFROMOPERaTINGaCTIvITIES 45,244 -37,970 -232,440 0

Financing activities

Borrowings 0 100,000 340,000 0

Repaymentofdebt -70,000 -10,000 -70,000 0

Changeinotherfinancialliabilities 4,22� 0 0 0

CaShFLOWFROMFINaNCINGaCTIvITIES -65,771 90,000 270,000 0

Changeincashandcashequivalentsfortheyear -20,527 52,030 37,560 0

Cashandcashequivalentsatbeginningofyear 65,850 13,820 0 0

CaShaNDCaShEQuIvaLENTSaTENDOFyEaR 45,323 65,850 37,560 0

CashFlowanalyses1January–31December2006

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Notes

Note1 aCCOuNTINGPRINCIPLES

GeneralinformationEuroMaint’spropositiontocustomersencompassesmostformsoftechnicalmaintenance.EuroMaintRaildevelopsandproducestechnicalsystemservicesandmaintenanceintherailtransportandengineeringindustries.EuroMaintIndustryofferscustomersmain-tenance,componentservicinganddevelopmentofvarioustypesofproductionequipment.

TheconsolidatedfinancialstatementsandtheAnnualReportforEuroMaintAB(theparentcompany)forthe2006financialyearhavebeenapprovedbytheBoardofDirectorsandthePresidentforpresen-tationtotheAGMon2�March2007foradoption.

TheparentcompanyisaregisteredlimitedcompanydomiciledinStockholm,Sweden.TheaddressoftheheadofficeisSvetsarvägen10,SE-1712�SOLNA.TheSwedishstateistheultimateowner.TheparentcompanyofthelargestGroupinwhichEuroMaintAB,556084-8458,isasubsidiaryandinwhichconsolidatedfinancialstate-mentsareprepared,isABSwedcarrier,556036-340�,inStockholm.

SummaryofimportantaccountingprinciplesThemostimportantaccountingprinciplesappliedinthepreparationoftheseconsolidatedfinancialstatementshavebeensetout.

StatementoncompliancewiththeappliedrulesTheconsolidatedfinancialstatementsfortheEuroMaintGrouphavebeenpreparedinaccordancewithInternationalFinancialReportingStandards(IFRS).AstheparentcompanyisacompanyintheEU,onlytheIFRSasendorsedbytheEUareapplied.Moreover,theconsolidatedfinancialstatementsarepreparedinaccordancewithSwedishlegislationthroughtheapplicationofSwedishFinancialAccountingStandardsCouncilrecommendationRR30:05(Supple-mentaryfinancialreportingrulesforGroups).TheparentcompanyAnnualReportispreparedinaccordancewithSwedishlawthroughtheapplicationofSwedishFinancialAccountingStandardsCouncilrecommendationRR32:05(Financialreportingforlegalentities).ThismeansthatIFRSvaluationanddisclosureprinciplesareappliedwiththedeviationsspecifiedinthesectiononparentcompanyaccountingprinciples.

EuroMaintalsofollowstheStockholmStockExchange’slistingagreementwithappendicesandregulationsfromtheSwedishIndustryandCommerceStockExchangeCommittee(NBK).

FoundationforpreparingreportsTheconsolidatedfinancialstatementsfortheEuroMaintGrouphavebeenpreparedinaccordancewithInternationalFinancialReportingStandards(IFRS).Theaccountsareprimarilybasedonhistoricalcostswiththeexceptionofcertainfinancialinstrumentsandinvest-mentpropertywhicharerecognisedatfairvalue.

alteredaccountingprincipleforinvestmentpropertyAsofmid-2006theGroupmeasuresitsinvestmentpropertyatfairvalue.Theeffectofalteringtheaccountingprincipleforinvestmentpropertytofairvalue(IAS40)entailsanincreaseinequityintheopeningbalanceofSEK4.5millionupontransitiontoIFRS.

ImportantestimatesandassumptionsforaccountingpurposesTheGroupmakesestimatesandassumptionsaboutthefuture.

Theestimatesforaccountingpurposeswhichresultfromthese,bydefinition,willrarelyequatetotheactualresult.Theestimatesandassumptionswhichentailasignificantriskforconsiderableadjust-mentsincarryingamountsforassetsandliabilitiesoverthecomingfinancialyeararediscussedbelow.

CriticalaccountingissuesDuringthepreparationofEuroMaint’sconsolidatedfinancialstate-ments,theBoardandPresidenthave,inadditiontoestimates,madeanumberofassessmentsofcriticalaccountingissueswhicharehighlysignificanttocarryingamounts.Thisappliesforthefollowingareas:

Fair value of acquired subsidiaryEuroMaintIndustry’spredominantcustomersoperateintheauto-motiveindustry.Thisindustryisundergoingheavyrestructuringbothnationallyandinternationally,whichishenceforthlikelytoforceplayerspossiblytorelocatetheirproductionfacilitiestoregionswithcomparativeadvantages.Needlesstosay,thisscenariomeansthatvaluationsofcustomerrelationsandgoodwillcontainadegreeofuncertainty.

uncertaintyinestimatesCertainassumptionsaboutthefutureandcertainestimatesandassessmentsonthebalancesheetdateareofparticularimportancetothevaluationofassetsandliabilitiesinthebalancesheet.Theareaswheretheriskofchangesinvalueduringthesubsequentyearisgreatestbecausetheassumptionsorestimatesmayneedtobealteredarediscussedbelow.

Impairment test for goodwillThevalueofrecognisedgoodwillistestedatleastonceayeartode-termineanywrite-downrequirement.Thetestrequiresanassessmentofthevalueinuseofthecashgeneratingunit,orgroupsofcashgeneratingunits,towhichthegoodwillvalueisattributable.Inturn,thisrequiresanestimationoftheexpectedfuturecashflowfromthecashgeneratingunitandarelevantdiscountratemustbeestablishedtocalculatethepresentvalueofthecashflow.

Obsolescence of inventoriesIntermsofvalue,inventoriesmainlycompriseitemswhichhavebeenacquiredinaccordancewithanassessedmaintenanceplanforvarioustrainmodels.Asthesecyclesarelong-terminnature(5to12years),thereisanelementofuncertaintyinthisassessment.Thecompanyhasafar-reachingobligationtostockitems(spareparts)foralongtimeforvarioustrainmodelswhichhaveaverylongfinancialandtechnicallife.

ConsolidatedaccountsSubsidiariesareallcompaniesinwhichtheGroupisentitledtoformulatefinancialandoperationalstrategiesinawaythatusuallyaccompaniesashareholdingamountingtooverhalfthevotingrights.SubsidiariesareincludedintheconsolidatedfinancialstatementsfromthedayonwhichcontrollinginfluencepassestotheGroup.Theyareexcludedfromtheconsolidatedfinancialstatementsfromthedayonwhichthiscontrollinginfluenceceases.

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Intra-Grouptransactionsandbalancesheetitems,aswellasprofitsontransactionsbetweenGroupcompanies,areeliminated.Lossesarealsoeliminated,unlessthetransactionisproofofawrite-downrequirementforthetransferredasset.TheaccountingprinciplesforsubsidiarieshavebeenchangedwhereappropriatetoguaranteeconsistentapplicationoftheGroup’sprinciples.

BusinesscombinationsIFRS3entailsestablishingthefairvalueofidentifiableassetsandliabilitiesintheacquiredoperationatthetimeofacquisition.Identifi-ableassetsandliabilitiesalsoincludeassets,liabilitiesandprovisionsincludingobligationsanddemandsfromexternalpartiesnotreportedintheacquiredoperation’sbalancesheet.Noprovisionsaremadeforcostsrelatingtoplannedrestructuringmeasuresresultingfromtheacquisition.Thedifferencebetweenthecostoftheacquisitionandtheacquiredproportionofnetassetsintheacquiredoperationisclassifiedasgoodwillandisrecognisedasanintangibleassetinthebalancesheet.

Theusefullifeofeachindividualintangibleassetisestablishedandtheasset’sfairvalueisamortisedoveritsusefullife.Iftheusefullifeisdeemedindefinite,noamortisationtakesplace.Iftheusefullifeofanintangibleassetisdeemedindefinite,allrelevantconditionsaretakenintoaccountandbasedontherebeingnoforeseeableuppertimelimitforthenetcashflowgeneratedbytheasset.Theusefullifeforgoodwillisgenerallyassumedtobeindefinite.

SegmentreportingAsthesubsidiariesconductseparateoperationswithseparateproductsandservices,theiroperationshavebeenchosenastheprimarysegment.Salesbetweensubsidiariesarebasedonmarketconditions.Allassetsandliabilitieshavebeenincludedforeachsubsidiary.SegmentinformationpersubsidiaryisgiveninNote3.

TranslationofforeigncurrenciesTransactionsinforeigncurrenciesaretranslatedattherateusedonthetransactiondate.Receivablesandliabilitiesinforeigncurrenciesaretranslatedattheexchangeratesinforceonthebalancesheetdate.Exchangeratedifferencesonloansandinvestmentsinforeigncurrenciesarereportedasfinancialrevenuesorfinancialexpense.Otherexchangedifferencesareincludedinoperatingrevenues.

TangiblefixedassetsTangiblefixedassetsarerecognisedatcostlessaccumulateddepre-ciationaccordingtoplanandaccumulatedwrite-downs.Depreciationtakesplaceinaccordancewithasystematicplanovertheusefullifeoftheassettoanestimatedresidualvalue.

Additionalcostsareaddedtotheasset’scarryingamountorrecognisedasaseparateasset,asappropriate,onlywhenitislikelythatfutureeconomicbenefitsassociatedwiththeassetwillaccruetotheGroupandtheasset’scostcanbemeasuredinareliableway.Allotherformsofrepairandmaintenancearerecognisedasexpensesintheincomestatementfortheperiodinwhichtheyarise.

Inordertodistributethecostoftangiblefixedassetsdowntotheestimatedresidualvalue,depreciationtakesplacelinearlyovertheestimatedusefullife,inaccordancewiththefollowingpercentages.

Machineryandequipment 10–20Computersandterminals 33Improvementstothird-partyproperty 10–20

Theresidualvaluesandusefullivesofassetsaretestedoneachbalancesheetdateandadjustedasnecessary.Anasset’scarryingamountisdepreciatedimmediatelytoitsrecoverableamount(thehigherofthenetsellingpriceandvalueinuse)iftheasset’scarryingamountexceedsitsestimatedrecoverableamount.

Profitsandlossesfromsalesareestablishedbymeansofacomparisonbetweenthesalesproceedsandcarryingamountandtheresultisrecognisedintheincomestatement.

IntangibleassetsGoodwillGoodwillistheamountbywhichthecostexceedsthefairvalueoftheGroup’sproportionofthesubsidiary’sidentifiablenetassetsuponacquisition.Goodwillisrecognisedasanintangibleasset.Profitorlossfromthesaleofaunitincludestheremainingcarryingamountofthegoodwillpertainingtothesoldunit.

Goodwillisdistributedbetweencashgeneratingunitsupontestingtodetermineanywrite-downrequirement.Thewrite-downrequirementforgoodwillistestedasfollows:thegoodwillvalueestablishedatthetimeofacquisitionisdistributedamongcashgeneratingunitsorgroupsofcashgeneratingunits,whichareexpectedtobringbenefitsthroughtheacquisitionintheformofsynergyeffects.AssetsandliabilitiesalreadywithintheGroupatthetimeofacquisitionmayalsobeattributedtothesecashgeneratingunits.Eachcashflowofthiskindtowhichgoodwillisdistributed,correspondstothelowestlevelintheGroupatwhichgoodwillismonitoredinthecompany’sBoardandisnotalargerpartoftheGroupthanasegment.Awrite-downrequirementexistswhentherecoverableamountforacashgeneratingunit,orgroupofcashgeneratingunits,islowerthanthecarryingamount.Insuchcasesawrite-downisenteredintheincomestatement.

Other intangible assets/Customer relationsInconnectionwithcorporateacquisitions,theGrouphasidentifiedintangibleassetswhichfulfilthecriteriasetoutinIAS38.Linearamortisationisappliedovertheusefullifeoftheasset,whichistakenas8years.

Thecarryingamountsofintangibleassetsaretestedtodetermineanywrite-downrequirementwheneventsorchangesincircumstan-cesindicatethatthevaluemaynotberecoverable.

Investment propertyInvestmentpropertyisrecognisedatfairvalue,whichequatestothemarketvalueandisestablishedannuallybyexternalandinternalvaluers.ChangesinfairvaluearerecognisedintheincomestatementaspartoftheOtheroperatingrevenuesitem.

The“Landandbuildings”headerinNote7mainlyrecognisesrebuildingofhiredpremisesandinvestmentproperty.

Notes

Note1 aCCOuNTINGPRINCIPLESCONTD.

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Write-downsAssetswithanindefiniteusefullifearenotdepreciated/amortisedbuttestedannuallytodetermineanywrite-downrequirement.Theassetswhicharedepreciated/amortisedareassessedintermsofdecreaseinvaluewheneveraneventorachangeincircumstancesindicatesthatthecarryingamountmaynotberecoverable.Awrite-downiscarriedoutfortheamountbywhichtheasset’scarryingamountexceedsitsrecoverableamount.Therecoverableamountisthehigherofanasset’sfairvaluelesssellingexpenses,oritsvalueinuse.Ondeterminingthewrite-downrequirement,theassetsaregroupedatthelowestlevelsatwhichthereareseparate,identifiablecashflows(cashgeneratingunits).Goodwillistestedannuallytoidentifyanywrite-downrequirementandisrecognisedatcostlessaccumulatedwrite-downs.

FinancialinstrumentsFinancialinstrumentsrecognisedasassetsinthebalancesheetincludecashequivalents,accountsreceivable,derivativesandotherreceivables.Thoserecognisedasliabilitiesincludeaccountspayable,borrowings,derivativesandotherliabilities.

Afinancialassetorfinancialliabilityisrecognisedinthebalancesheetwhenthecompanybecomespartytotheinstrument’scontrac-tualterms.Accountsreceivablearerecognisedinthebalancesheetonceaninvoicehasbeensent.Liabilitiesarerecognisedoncethecounterpartyhascompleteditstaskandthereisacontractualobliga-tiontopay,eventhoughaninvoicemaynotyethavebeenreceived.Accountspayablearerecognisedoncetheinvoicehasbeenreceived.

Afinancialassetisexcludedfromthebalancesheetoncethecontractualrightshavebeenrealised,haveexpiredorthecompanyhaslostcontroloverit.Thesameappliesforpartofafinancialasset.Afinancialliabilityisremovedfromthebalancesheetoncetheobliga-tioninthecontracthasbeenfulfilledorhasinsomeotherwaybeenextinguished.Thesameappliesforpartofafinancialliability.

Financial assetsAcquisitionsandsalesoffinancialassetsarereportedonthebusinessday,i.e.thedayonwhichthecompanycommitstoacquiringorsellingtheasset.

BorrowingLoansareinitiallyrecognisedattheloanamountandaresubsequentlyenteredattheloanamountlessreductions.Borrowingisclassifiedasacurrentliabilityifthepaymentoftheliabilitywillbemadewithin12monthsofthebalancesheetdate.

Derivative instrumentsTheGroupusesderivativeinstrumentstosecurepartsofitsexposuretocurrencyrisksinongoingpaymentflows.ManagementisinaccordancewiththefinancialrulesestablishedbytheBoard.Hedgeaccountingisnotapplied,insteadallderivativesarecategorisedasfinancialassetsandliabilitiesvaluedatfairvaluethroughtheincomestatement.Thismeansthatthechangeinvalueofthederivativesisrecognisedintheincomestatementunderfinancialitems.Deriva-tiveswithpositivevaluesareenteredasassetsandderivativeswithnegativevaluesareenteredasliabilities.Fairvalueisestablishedbyobtainingthecostsorrevenuewhichwouldhavearisenifthecontracthadexpiredonthebalancesheetdate.

InventoriesMaterialstoresandfinishedgoodsinventoriesarevaluedatthelowerofcostornetsellingprice.TheGroupappliesthefirst-in,first-outmethod(FIFO).Thenetsellingpriceistheestimatedsellingpriceinoperatingactivitieslessapplicablevariablesellingexpenses.

accountsreceivableAccountsreceivablearereportedattheinvoicedamountlessanyreservefordecreaseinvalue.AreservefordecreaseinvalueofaccountsreceivableissetupwhenthereisobjectiveproofthattheGroupwillnotbeabletoreceiveallamountsdueinaccordancewiththeoriginaltermsofthereceivables.Thesizeofthereserveisthedifferencebet-weentheasset’scarryingamountandthevalueofassessedfuturecashflows.Thedecreaseinvalueisreportedintheincomestatement.

CashandcashequivalentsCashandcashequivalentsincludecashandbankbalances.Inthebalancesheet,thebankoverdraftfacilityutilisedisenteredasborrowingundercurrentliabilities.

IncometaxThetaxburdenisaffectedbyappropriationsandothertaxadjustmentsmadeineachcompany.Thetaxrateusedis28%.Deferredtaxisrecognisedinitsentiretyonalltemporarydifferencescomprisingthedifferencebetweenthetaxbaseforassetsandliabilitiesandtheircarryingamounts.Deferredtaxiscalculatedthroughtheapplicationoftaxratesandlawswhichhavebeendecidedornotifiedonthebalancesheetdateandwhichareexpectedtoapplywhenthedeferredtaxassetsinquestionarerealisedorthedeferredtaxliabilityiscleared.

Deferredtaxassetsarerecognisedfortax-deductibletemporarydifferencesandunusedlosscarry-forwardstotheextentitislikelythatfuturetaxableprofitwillbeavailableagainstwhichthetemporarydifferencesorunusedlosscarry-forwardsmaybeused.

RemunerationtoemployeesPension obligationsTheGroupcompanieshavedifferentpensionplans.Thepensionplansarefinancedthroughpaymentofinsurancepremiumsorthroughaprovisioninthebalancesheet.TheGrouphasbothdefinedbenefitanddefinedcontributionpensionplans.ForemployeesintheGrouppreviouslyemployedbythepublicenterprise,theSwedishStateRailways,theSwedishstateisresponsibleforearnedandnotpaidpensioncommitmentsforthetimepriortoconversionintocompaniesattheendof2000/beginningof2001.

AdefinedcontributionpensionplanisaplanforwhichtheGroupholdsnofurtherpaymentobligationoncethecontributionsarepaid.DefinedcontributionpensionplansintheGrouparePA-03,AlternativITP(supplementarypensionsforhigherearners),andITPsupplementarypensionsforsalariedemployees,Alecta.ITPpensionsinAlectaarerecognisedasdefinedcontributionplansduetoadeficiencyintheinformationrequiredtoclassifytheplanasadefinedbenefitpension.AccordingtoastatementfromtheSwedishFinancialAccountingStandardsCouncil’sEmergingIssuesTaskForce,URA42,thesearedefinedbenefitplansencompassingseveralemployers.EuroMainthasnothadaccesstosuchinformationforthe2006financialyearthatwouldmakeitpossibletoenterthisplanasadefinedbenefitplan.

Note1 aCCOuNTINGPRINCIPLESCONTD.

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TheITPpension,whichissecuredthroughaninsurancepolicywithAlecta,isthereforeenteredasadefinedcontributionplan.FeesfortheyearforpensionplansissuedbyAlectaamounttoSEK15(1�)million.SomeemployeesareentitledtoexchangepartoftheirITPplanforapremium-basedpensionsolutionwherethecompany’ssoleobligationistopaythesetpremiums.Thefeesarereportedascostsofpersonnelwhentheyfalldueforpayment.Prepaidfeesarerecognisedasanassettotheextentthatcashrepaymentorareductioninfuturepaymentsmayaccruetothecompany.

Adefinedbenefitpensionplanguaranteestheemployeeapensionequivalenttoacertainpercentageofhisorherfinalsalary.Theliabilityrecognisedinthebalancesheetregardingdefinedbenefitpensionplansisthepresentvalueofthedefinedbenefitobligationontheba-lancesheetdatenetthefairvalueoftheplanassets,withadjustmentsforunrecognisedactuarialgains/lossesforpastservice.Thedefinedbenefitpensionobligationiscalculatedannuallybyindependentactuaries.

Thepresentvalueofthedefinedbenefitobligationisestablishedbydiscountingtheestimatedfuturecashflowataninterestrateforgovernmentbondsissuedinthesamecurrencyinwhichtheremunerationwillbepaidout,andwithdurationscomparabletothepensionprovisioninquestion.Actuarialgainsandlossesarisingfromexperience-basedadjustmentsandchangesinactuarialassumptionsexceedingthehigherof10%ofthevalueoftheplanassetsand10%ofthedefinedbenefitobligation,aretakenupasexpenseorrevenuesovertheestimatedaverageremainingperiodofserviceoftheemploy-ees.Pastservicecostisrecogniseddirectlyintheincomestatement,unlessthechangesinthepensionplanareconditionalontheemploy-eeremaininginserviceforasetperiod(entitlementperiod).Insuchcases,thepastservicecostisrecognisedonastraight-linebasisovertheentitlementperiod.

RemunerationonterminationofemploymentRemunerationonterminationofemploymentispaidwhenanemployee’spositionisterminatedpriortostandardretirementorwhenanemployeeacceptsvoluntaryredundancyfromthepositioninexchangeforsuchremuneration.TheGrouprecognisesseverancepaywhenitisdemonstrablyobligedeithertomaketheemployeeredun-dantinaccordancewithadetailedformalplanwithnoopportunityforrecall,ortoprovideremunerationuponredundancyduetoanoffermadetoencouragevoluntaryredundancyamongpersonnel.Benefitsdueafter12monthsofthebalancesheetdateorlongerarediscountedatthepresentvalue.

ProvisionsProvisionsarerecognisedwhentheGrouphasanexistinglegalorconstructiveobligationasaresultofapastevent,anditismoreprobablethannotthatanoutflowofresourceswillberequiredtosettletheobligation,andtheamounthasbeenreliablyestimated.Noprovisionsaremadeforfutureoperatinglosses.Ifthereareanumberofsimilarobligations,theprobabilitythatanoutflowofresourceswillberequiredtosettleisassessedgenerallyforthisentiregroupofobligations.Aprovisionisalsoreportediftheprobabilityofanoutflowregardingaspecificiteminthisgroupofcommitmentsisonlyslight.

RevenuerecognitionNetturnoverencompassessalesofservicesandgoodswithinmain-tenance,newconstructionandrefurbishmentofrollingstock,aswellasmaintenanceandimplementationofproductionfacilitiesfortheengineeringindustry.

Formaintenancecontractsguaranteeingavailability,knownas‘TSCcontracts’(TotalServiceConcept),andnewconstructionandrefurbishmentcontracts,revenuesandcostspertainingtotheassignmentarerecognisedrelativetothedegreeofcompletionoftheassignment.Thisaccountingprincipleisbasedontheviewthatthetaskisfulfilledinlinewiththeworkbeingcarriedout,andmeansthatprofitisrecognisedprogressivelybasedonthedegreeofcompletionofeachassignmentwhentheassignment’sfinaloutcomecanbemeasuredinareliableway.Foravailabilitycontracts,thedegreeofcompletionisdeterminedonthebasisofworkcarriedoutinrelationtothemaintenanceplan.Fornewconstructionandrefurbishmentcontracts,thedegreeofcompletionisdeterminedinrelationtoaccruedassignmentcosts.Ifanassignment’sfinaloutcomecannotbemeasuredinareliablewaybutnolossisfeared,revenuecorrespondingtoaccruedcostsisrecognised.

Afearedlossforanassignmentisimmediatelychargedinitsentiretytotheperiod’sresults.

LeasesLeaseswheretherisksandrewardsofownershipareretainedbythelessorareclassifiedasoperatingleases.Paymentsmadeduringtheleasetermaretakenupasexpensesintheincomestatementonastraight-linebasisovertheleaseterm.

CashflowanalysisTheindirectmethodisappliedinrecognisingcashflowfromoperatingactivities.

RelatedpartiesRelatedcompaniestotheEuroMaintGrouparedefinedasstatecompanieswithmarketrequirementswherethestatehasacontrollinginfluence.

PersonscloselyassociatedwiththeGrouparedefinedasBoardmembers,seniorpersonnelandclosefamilymembersofthesepeople.

Disclosuresareprovidedabouttransactionswithrelatedpartieswhichentailthetransferofresources,servicesorobligationsbetweenrelatedparties,whetherornotremunerationispaid.Theinformationcontainsdetailsofthenatureoftherelationshipandinformationabouttheeffectoftherelationshiponthefinancialreports.

Parent companyTheparentcompanyappliesthesameaccountingprinciplesastheGroup,alongwithRR32:05.

Notes

Note1 aCCOuNTINGPRINCIPLESCONTD.

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Note2 TRaNSaCTIONSWIThRELaTEDPaRTIES

Group,SEKthousands 2006-01-01 2005-01-01 2006-12-31 2005-12-31

Saleofgoodsandservices

State companies/departments

SwedishRailAdministration 44,44� 50,313

GreenCargoAB 2�4,02� 2��,802

SJAB 868,635 835,565

SwedishStateRailwayspublicenterprise 23,415 12,82�

SweMaintAB 47,337 55,453

VattenfallAB 454 543

JernhusenAB 851 1�

StockholmstågKB 158,678 0

Purchaseofgoodsandservices

State companies/departments

SwedishRailAdministration �,48� 7,688

GreenCargoAB 2,202 2,014

SJAB 13,��1 �,821

SwedishStateRailwayspublicenterprise 103 37

SweMaintAB 28,417 30,�37

Lantmäteriverket 0 6

VattenfallAB 0 233

JernhusenAB 114,25� 128,482

StockholmstågKB 34,231 0

Receivablesfromrelatedparties

State companies/departments

SwedishRailAdministration 13,173 8,01�

GreenCargoAB 34,186 31,505

SJAB 103,017 102,278

SwedishStateRailwayspublicenterprise 5,573 14,087

SweMaintAB 277 20�

VattenfallAB 268 3

JernhusenAB 271 0

StockholmstågKB 33,72� –

Liabilitiestorelatedparties

State companies/departments

SwedishRailAdministration 2,313 2,04�

GreenCargoAB 575 283

SJAB 38� 1,187

SwedishStateRailwayspublicenterprise 20 0

SweMaintAB 2,26� 3,821

VattenfallAB 0 27

JernhusenAB 3,754 3,645

Thetablebelowpresentsinformationabouttheprimenatureofthetransactionswithrelatedparties.

Operatingrevenues Expenses

SwedishRail Materialsales, Premisesrental,administration Rollingstock Telephonecosts maintenance, Recoveryservices

GreenCargoaB Materialsales, Premisesrental, Rollingstock Transportcosts maintenance, Recoveryservices

Lantmäteriverket – Purchaseofmaps

SJaB Materialsales, Trainjourneys Rollingstock maintenance, Recoveryservices

SweMaintaB Materialsales, Materialcosts, Rollingstock Component maintenance maintenancecosts

SwedishState Refurbishmentof DamagescostsRailwayspublic rollingstockenterprise

JernhusenaB – Workshoprental

vattenfallaB Industrialmaintenance Energycosts

StockholmstågKB Rollingstock Workshoprental maintenance andequipment

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Note3 SEGMENTREPORTING

TheEuroMaintGroupoperatesinthemaintenanceindustry.TheGrouphastwosegments:railtransportmaintenanceandtheengineeringindustry.EuroMaintRailABoperatesintherailtransportmaintenancesegmentwhileEuroMaintIndustryABoperatesintheengineeringindustry.

1January–31December2005,SEKthousands EuroMaintRail EuroMaintIndustry Groupadjustments Group

Netturnover

Externalnetturnover 1,804,762 225,�32 6,327 2,037,020

Internalnetturnover 12,856 4,801 -17,656 0

Totalnetturnover 1,817,617 230,733 -11,329 2,037,020

Profit/loss

Operatingprofit 108,383 -8,136 -118 100,128

Financialrevenues 2,811 345 -55 3,101

Financialexpenses -13,6�6 0 2,04� -11,648

Pre-taxprofit �7,4�8 -6,�1� 1,003 �1,581

Incometax -22,�14 1,853 -281 -21,342

Netprofitfortheyear 74,584 -5,066 722 70,239

Otherdisclosures

Assets �01,741 115,6�7 10,601 1,028,040

Liabilities 680,435 67,271 30,�77 778,682

Investments 27,366 3,455 223 31,043

Depreciation/amortisation 23,603 2,108 1,5�7 27,307

TheGroupgenerallyenterssalesandtransfersbetweenthesegmentsasthoughthesalesandtransfershadbeentoathirdpartyatprevailingmarketprices.

1January–31December2005,SEKthousands EuroMaintRail EuroMaintIndustry Groupadjustments Group

Netturnover

Externalnetturnover 1,70�,617 161,42� 1,167 1,872,213

Internalnetturnover 0 27 -27 1,176

Totalnetturnover 1,709,617 161,456 1,140 1,872,213

Profit/loss

Operatingprofit 100,247 13,121 356 113,724

Financialrevenues 642 111 163 �16

Financialexpenses -11,7�3 -7 – -11,800

Pre-taxprofit 8�,0�6 6,851 6,8�3 102,840

Incometax -6,1�2 -1,�70 -2,214 -10,376

Netprofitfortheyear 82,904 4,880 4,679 92,464

Otherdisclosures

Assets 887,811 123,700 -31,367 �80,143

Liabilities 736,5�� 74,�68 -�,520 802,04�

Investments 20,�83 �70 -�03 21,04�

Depreciation/amortisation 23,230 �35 �38 25,102

Notes

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Note4 OThEROPERaTINGREvENuES

SEKthousands Group Parentcompany

2006 2005 2006 2005

Profitfromsaleoffixedasset 38� 86� – –

Exchangegainfromreceivables/liabilitiesrelatingtooperations 467 1,480 3 –

Rentalrevenues �18 1,226 – –

Changeinvalueofinvestmentproperty 823 – – –

Other 581 3,627 – –

Total 3,179 7,202 3 0

Note5 REMuNERaTIONTOauDITORS

SEKthousands Group Parentcompany

2006 2005 2006 2005Deloitte

Auditengagement – 22 – –

Otherengagements – 630 – –

Ernst & Young

Auditengagement 1,123 �10 – –

Otherengagements 543 150 – –

TOTaL 1,666 1,712 0 0

Note6 avERaGENuMBEROFEMPLOyEESaNDCOSTSOFPERSONNEL

SEKthousands Group Parentcompany

2006-01-01 2005-01-01 2006-01-01 2005-01-01 2006-12-31 2005-12-31 2006-12-31 2005-12-31averagenumberofemployeesbygender

Sweden

Women 122 108 2 –

Men 1,624 1,561 6 –

Total 1,746 1,669 7 –

Boardmembersandseniorpersonnel

Board members

Women � 4 2 2

Men 21 24 7 7

President and other senior personnel

Women 4 2 2 0

Men 18 17 4 4

Total 52 47 15 13

AuditengagementreferstotheexaminationoftheannualreportandaccountsaswellastheBoard’sadministration,othertasksincum-bentonthecompany’sauditorsaswellasadviceorotherassistanceresultingfromobservationsduringtheexaminationorimplemen-

tationofothersuchworktasks.Allotherworkisclassifiedasotherengagements.TheauditingfeefortheparentcompanyhasbeenchargedtoEuroMaintRailAB.

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Note6 avERaGENuMBEROFEMPLOyEESaNDCOSTSOFPERSONNELCONTD.

EuroMaint EuroMaint RailaB IndustryaB

Sickleave,% 2006 2005 2006 2005

Totalsickleave 5.2 5.2 2.5 2.8

Long-termsickleave 5.2 5.2 0.8 0.7

Sickleaveformen 5.3 5.2 2.2 2.6

Sickleaveforwomen 3.2 4.2 6.8 4.7

Employees–2�years 6.3 5.1 1.6 1.�

Employees30–4�years 4.6 4.2 2.4 3.2

Employees50+years 5.6 6.3 2.� 2.5

Sickleaveiscalculatedbasedontheactualabsenceinrelationtothenormalworkinghoursforeachgroup.

Costsofpersonnel 2006-01-01 2005-01-01Group,SEKthousands 2006-12-31 2005-12-31SalariesandotherremunerationinSweden

BoardandPresidents 12,2�3 6,230

ofwhichbonusandtherebyequalisedremuneration 0 2,558

Otheremployees 536,65� 463,564

Totalsalariesandotherremuneration 548,952 472,352

Socialsecurityexpenses 25�,773 232,5�2

ofwhichpensioncosts 61,�47 61,877

Notes

RemunerationtoboardandpresidentofEuroMaintaBThechairmanofEuroMaintABreceivesafeeofSEK124,500andotherBoardmembersSEK83,000providedtheyarenotmembersoftheSwedcarrierBoard.Iftheyare,afeeofSEK0(zero)ispaidtomembersoftheEuroMaintBoard.MembersoftheRemunerationCommittee(comprisingthreeBoardmembers,includingachairman)receiveremunerationtothesumofSEK15,000forthechairmanandSEK10,000foreachmember.MembersoftheAuditCommittee(comprisingthreeBoardmembers,includingachairman)receiveremunerationtothesumofSEK30,000forthechairmanandSEK20,000foreachmember.ApreparationfeeofSEK63,000hasbeenpaidtounionrepresentativesontheBoard.TheEuroMaintBoardhasreceivedafeeofSEK708,000(520,000).

ThePresidentofEuroMaintreceivedsalaryandbenefitstotallingSEK2,344,000(2,0�0,000)duringthefinancialyearexcludingsocialsecuritycosts.ThePresidentreceivesanold-agepensionat65years.ThePresidenthasanon-revokablepremium-basedpensionpromiseamountingto30%offixedmonthlyrevenues.Thetermofnoticeis12monthsfromboththecompany’sandthePresident’sside,andduringthistimesalaryispayablewithfulladjustment.Ifnoticeisgivenbythecompany,12months’non-pensionableseverancepayisalsoawardedwithfulladjustmentagainstotherrevenues.

Agreementshavebeenreachedwithoneseniorpersonnelregardingseverancepayshouldthecompanygivenotice.Theseverancepayisequivalenttothefixedsalaryfor12monthsinadditiontotheperiodofnotice,whichis12months.Severancepayisnotpensionable,isfullyadjustableandisnotpaidonretirement.Otherseniorpersonnelreceivesalaryduringtheperiodofnotice,whichis12months,andnoseverancepay.

RemunerationtoboardandpresidentofEuroMaintRailaBTheBoardofEuroMaintRaildidnotreceiveaBoardfeefor2006.ThePresidentofEuroMaintRailreceivedsalaryandbenefitstotallingSEK1,455,000.ThePresident’spensionsolutionencompassesthealternativeITPwithasupplementarypremium-basedpensionplanwithapremiumequivalentto20–40%offixedsalary.Agreementshavebeenreachedwithtwoseniorpersonnelregardingseverancepayshouldthecompanygivenotice.

Theseverancepayisequivalenttothefixedsalaryfor12monthsinadditiontosalaryduringtheperiodofnotice,whichis12months.Severancepayisnotpensionable,isfullyadjustableandisnotpaidonretirement.Otherseniorpersonnelreceivesalaryduringtheperiodofnotice,whichis12months.

RemunerationtoboardandpresidentofEuroMaintIndustryaBTheBoardofEuroMaintIndustrydidnotreceiveaBoardfeefor2006.ThePresidentsofEuroMaintIndustryreceivedsalaryandbenefitstotallingSEK3,054,000.RemunerationforthePresidentsincludesalaryofSEK1,5�1,000,otherbenefitsofSEK55,000forthedepartingPresidentduringtheperiodofnotice.UponterminationofemploymentforthePresidentthereisaperiodofnoticeof12monthsfromtheemployer’sside,or6monthsfromthePresident’sside.TheVicePresidentshaveatermofnoticeof3monthswhichappliesfornoticegivenbyeitherside.Noseverancepayispayableuponterminationofemployment.

GeneralRemunerationispaidtotheBoardChairmanandothermembersoftheGroup’sBoardsinaccordancewithdecisionsbythegeneralmeet-ingofshareholders.SalaryandremunerationtoPresidentsisdecidedbyeachcompany’sBoard.Salaryandremunerationtootherseniorpersonnelisdecidedbyeachcompany’sBoardorPresident.

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Note7 TaNGIBLEFIXEDaSSETS

Group,SEKthousands Land Improvementsto Plantandmachinery Equipment,tools, Construction andbuildings* third-partyproperty fixturesandfittings inprogress** Total

2006 2005 2006 2005 2006 2005 2006 2005 2006 2005 2006 2005

Openingcost 12,421 12,421 24,581 23,2�0 14�,262 128,035 164,237 151,773 �,420 15,737 35�,�21 331,255

Changeinvalueofinvestmentproperty 823 0 0 0 0 0 0 0 0 0 823 0

Acquisitionofsubsidiaries 0 0 0 0 0 18,768 0 2,677 0 0 0 21,445

Purchases 0 0 0 1,77� 1,�75 7,220 21,67� 18,367 7,38� -6,317 31,043 21,04�

Sales/scrappings 0 0 0 -488 -25,345 -4,760 -26,075 -8,580 -13 0 -51,433 -13,828

Closingaccumulatedcost 13,244 12,421 24,581 24,581 125,8�1 14�,262 15�,841 164,237 16,7�6 �,420 340,354 35�,�21

Openingdepreciation -4,774 -4,478 -5,088 -1,623 -101,534 -8�,403 -116,701 -110,7�0 0 0 -228,0�7 -206,2�4

Acquisitionofsubsidiaries 0 0 0 0 0 -8,2�� 0 -2,57� 0 0 0 -10,878

Depreciationfortheyear 0 -2�6 -2,821 -3,823 -8,633 -8,5�3 -13,�77 -11,452 0 0 -25,432 -24,164

Sales/scrappings 0 0 0 358 20,457 4,760 24,152 8,120 0 0 44,60� 13,23�

Closingaccumulateddepreciation -4,774 -4,774 -7,�0� -5,088 -8�,710 -101,535 -106,527 -116,701 0 0 -208,�20 -228,0�7

CLOSINGRESIDuaLvaLuE

aCCORDINGTOPLaN 8,470 7,648 16,672 19,493 36,181 47,727 53,315 47,536 16,796 9,420 131,434 131,823

*LandandBuildingsincludesinvestmentpropertywiththefollowingvalues:Openingbalance2006SEK6,257,000,ChangeinvalueSEK823,000,closingbalance2006SEK7,080,000.**ConstructioninprogressmayreportanegativefigureinthePurchasesrowifthefigurefortheyear’sfacilitiessetupasanassetexceedspurchasesinthefinancialyear.

Parentcompany,SEKthousands Land Plant Equipment,tools, Construction andbuildings andmachinery fixturesandfittings inprogress Total

2006 2005 2006 2005 2006 2005 2006 2005 2006 2005

Openingcost 0 0 0 0 0 0 66 0 66 0

Acquisitionofsubsidiaries 0 0 0 0 0 0 0 0 0 0

Purchases 0 0 0 0 53 0 170 66 223 66

Sales/scrappings 0 0 0 0 0 0 -13 0 -13 0

Closingaccumulatedcost 0 0 0 0 53 0 223 66 275 66

Openingdepreciation 0 0 0 0 0 0 0 0 0 0

Acquisitionofsubsidiaries 0 0 0 0 0 0 0 0 0 0

Depreciationfortheyear 0 0 0 0 -18 0 0 0 -18 0

Sales/scrappings 0 0 0 0 0 0 0 0 0 0

Closingaccumulateddepreciation 0 0 0 0 -18 0 0 0 -18 0

CLOSINGRESIDuaLvaLuE

aCCORDINGTOPLaN 0 0 0 0 35 0 223 66 258 66

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Note8 INTaNGIBLEaSSETS

accumulatedcost,SEKthousands 2006 2005

Goodwill Customer Total Goodwill Customer Total relations relations

Openingbalance 30,1�5 14,063 44,258 0 0 0

Businesscombinations 0 0 0 30,1�5 15,000 45,1�5

Amortisation 0 -1,875 -1,875 0 -�38 -�38

Closingbalance 30,195 12,188 42,383 30,195 14,062 44,258

GoodwillisattributabletotheacquisitionofEuroMaintIndustryAB.Thisgoodwillwastestedtodetermineanywrite-downrequirementon31December2006.

Note9 NETFINaNCIaLREvENuES/EXPENSE

SEKthousands Group Parentcompany 2006 2005 2006 2005

Interestrevenues 2,168 785 13,588 163

Netexchangeratefluctuations �33 131 – –

Financialrevenues 3,101 916 13,588 163

Interestexpenses -11,078 -11,645 -11,5�5 –

Netexchangeratefluctuations -56� -155 – –

Financialexpenses -11,648 -11,800 -11,595 0

Netfinancialrevenues/expense -8,546 -10,884 1,993 163

Note10 TaX

SEKthousands Group Parentcompany

2006-01-01 2005-01-01 2006-01-01 2005-01-01 2006-12-31 2005-12-31 2006-12-31 2005-12-31

Currenttax -15,45� -1,�71 -850 –

Deferredtax -5,883 -8,405 – -46

Total -21,342 -10,376 -850 -46

Differencesbetweentherecordedtaxandcalculatedtaxbasedontheprevailingtaxratecomprisethefollowingcomponents:

Group,SEKthousands

Differencewithcalculatedtax 2006-01-01 2005-01-01atprevailingtaxrate 2006-12-31 2005-12-31

Recordedpre-taxprofit/loss �1,581 102,840

Taxinaccordancewithprevailingtaxrate,28% -25,643 -28,7�5

Effects of non-taxable revenues and non-deductible expenses

Non-deductibleexpenses -6,752 -�,187

Cancellationofexcessdepreciation/amortisation -3,�45 -3,�45

Non-taxablerevenues 10,225 �,478

Valuationoflosscarry-forwardandpreviouslynon-recognisedtemporarydifferences 4,772 22,074

Total -21,342 -10,375

TheGroup’saveragetaxfor2006amountsto23%ofthetaxableprofit.

Notes

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Note11 PaRTICIPaTIONSINGROuPCOMPaNIES

No.of Percentageof Bookvalue BookvalueCompanyname,SEKthousands Reg.no. Domicile participations equityandvotes 2006-12-31 2005-12-31

EuroMaintAB 556084-8458 Stockholm

–EuroMaintRailAB 556032-2�18 Stockholm 1�0,000 100 156,761 156,761

–EuroMaintBemanningAB 556670-30�5 Stockholm 1,000 100 – –

–UnderhållsbolagetPendelnAB 556673-4363 Stockholm 1,000 100 – –

–EuroMaintIndustryAB* 556232-0134 Stockholm 100,000 100 �6,1�7 –

–EuroMaintGmbH HRB1034�8B Berlin 1 100 233 –

–EuroMaintSIA – Riga 15,000 100 1�5 –

TOTaL 253,386 156,761

*EuroMaintIndustryABwasownedbyEuroMaintRailABon31December2005andsoldtoEuroMaintABinJanuary2006.

Note12 LONG-TERMRECEIvaBLES

SEKthousands Group Parentcompany

2006-12-31 2005-12-31 2006-12-31 2005-12-31

PensionsinaccordancewithIAS1� 21,086 23,183 0 0

Miscellaneous 12� 12� 12� 12�

Total 21,215 23,313 129 129

Note13 PENSIONOBLIGaTIONS

InaccordancewithIAS1�,EmployeeBenefits,anactuaryworkingonbehalfofEuroMainthascalculatedtheGroup’spensionprovisionandtheamountstobeallocatedforpensionsforGroupemployeesonanongoingbasis.PensionplansinEuroMaintcomprisebothdefinedbenefitandpremium-basedplans.Premium-basedpensionpromisescomprisewhatareknownasAlternativeITPplans,individualpensionpromisesforseniorpersonnel,aswellasPA-03.

Definedbenefitpensionobligations

ITP and ITP-S pensionsITPandITP-Saredefinedbenefitpensionplanscontainingretire-ment,familyanddisability/sicknesspension.Onfullentitlementtheemployeereceivesafinalretirementpensionincludingageneralpensionofapproximately65%oftheleavingsalary.Salariedemploy-eeswithITPareinsuredwithAlecta,whileemployeeswithITP-SareinsuredwithSkandia.

AccordingtoastatementfromtheSwedishFinancialAccountingStandardsCouncil’sEmergingIssuesTaskForce,theITPpensionsecuredthroughaninsurancepolicywithAlectaisadefinedbenefitplanencompassingseveralemployers.TheEuroMaintGrouphasnothadaccesstosuchinformationforthe2006financialyearthatwouldmakeitpossibletoenterthisplanasadefinedbenefitplan,whichiswhyithasbeenenteredasadefinedcontributionplan.

Pension in accordance with transition rules and occupational injury annuitiesEmployeespreviouslycoveredbythestatepensionplanPA-�1,formeremployeesoftheSJGroup,havetheopportunitytochooseearlyretire-mentinaccordancewiththetransitionalrules.Pensionispaidfrom60yearsattheearliestandthepensionleveldependsonthesalaryandlengthofservice.

Occupationalinjuryannuitiesarepaidonacontinuousbasisuntilthedeathoftheemployee.EuroMainthasbeenresponsibleforcostsforthislifeannuitysincethebeginningof2001,beforewhichtheobligationwastheresponsibilityoftheSwedishStateRailwayspublicenterprise.

KPA pensionDefinedbenefitpensionsandlifeannuitiesinaccordancewithstatepensionrulesforformeremployeeswhichwereearnedpriorto1��2havebeenredeemedinlifeassurancecompanyKPA.ApremiumofSEK125millionwaspaidforthisin1���.TheNationalGovernmentEmployeePensionsBoardisresponsibleforcalculatingbenefitsandalsoadministeringthepaying-outofpensionswherebyfundsarecontinuouslywithdrawnfromtheinsurance.Theinsurancetermsspe-cifyhowthecostissettledifpensionspaiddeviatefromthebenefitamountthatformedthebasisfortheredeemedpremiumin1���.ThistypeofcostadjustmentisusuallyhandledbywithdrawingfundsfromthesurplustheGrouphaswithKPA.

Thefollowingdefinedbenefitplansarerecognisedinthebalancesheet:

Pensionprovision/receivable(-/+)inbalancesheet

Plan 06-12-31 05-12-31

ITP-SpensionplaninsuredwithSkandia 10,0�4 12,800

Earlyretirementinaccordancewithtransitionrules,non-funded -24,306 -23,1�1

ITPinFPG/PRI,non-funded -5,522 -1,730

Occupationalinjuryannuities,non-funded -12,226 -13,527

RedeemedpensionobligationsinKPA 10,��2 10,383

-20,968 -15,265

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Note13 PENSIONOBLIGaTIONSCONTD.

SpecificationofpostednetprovisioninbalancesheetGroup,SEKthousands 2006-12-31 2005-12-31

Presentvalueoffundedobligations -257,474 -245,313

Fairvalueofplanassets 263,38� 248,024

Receivable 5,�15 2,711

Presentvalueofnon-fundedobligations -42,321 -3�,5�0

Non-reportedactuarialgain/loss(-/+) 15,438 21,614

Pensionprovisiontoreportinbalancesheet -20,�68 -15,265

Reconciliationofchangeinplanassets Group,SEKthousands 2006 2005

Fairvalueofplanassetsatbeginningofyear 248,024 242,038

Expectedreturnduringtheyear �,�37 �,626

Premiumspaid 10,464 �,466

Remunerationpaid -10,507 -12,531

Actuarialgainsduringtheyear 5,471 -575

Fair,valueofplanassetsatyear-end 263,38� 248,024

PlanassetsareinvestedinpensioninsurancepolicieswithSkandiaorKPA.Theinsurancescontainamixtureofsharesandbonds.On31December2006,65%wasinvestedinbondsand35%inshares.Thereturnin2006amountedto6.0%onaverage(SEK15,400,000).

SpecificationofpostednetprovisioninbalancesheetGroup,SEKthousands 2006 2005

Netprovisionatbeginningofyear -15,265 -15,�63

Netcostfordefinedbenefitpensionsin2006 -16,138 -10,183

Costforpensionsearnedinanearlierperiod -4,818 –

Remunerationpaid 15,2�7 13,735

Premiums 10,463 11,572

Reimbursement -10,507 -14,426

Netprovisionatyear-end -20,�68 -15,265

actuarialgainsandlosses Group,SEKthousands 2006 2005

Actuariallossatbeginningofyearnotamortised -20,471 0

Actuariallosssubjecttoamortisationduringtheaverageremainingperiodofservice. -3,363 0

Averageremainingperiodofservice 14 14

Amortisationofactuariallossduringtheyear 16� 0

Actuariallossonpresentvalueofobligationswhicharoseduringtheyear -606 -1�,8�6

Actuarialgainonplanassetswhicharoseduringtheyear 5,471 -575

Actuariallossatyear-endnotamortised -15,437 -20,471

Note14 DEFERREDTaXaSSETS

Group,SEKthousands 31Dec2006 31Dec2005

Deferredtaxfortaxdeficit 0 �,823

Deferredtaxontemporarydifferences 11,71� 11,724

Total 11,719 21,548

Deferredtaxassetsarebasedonnon-revokablepensionsandnontax-deductiblereserves.

Note15 INvENTORIES

Group,SEKthousands 2006-01-01 2005-01-01 2006-12-31 2005-12-31

Grossstock 366,157 347,73�

Obsolescencereserve -�7,387 -88,3�6

Netstock 268,770 25�,343

Distributed as follows

Replacementitems 67,�70 51,2�3

Spareparts 141,864 138,4�1

Miscellaneous 58,�36 6�,55�

Total 268,770 259,343

Allcompaniesuseanobsolescencescaleinlinewiththeirparticularcircumstances.

Costfordefinedbenefitpensions Group,SEKthousands 2006 2005

Costforearnedbenefits -15,147 -10,862

Interestexpense -10,75� -8,�47

Expectedreturnonplanassets �,�37 �,626

Amortisationofactuariallosses -16� 0

Costforpensionsearnedinanearlierperiod -4,818 0

Costfordefinedbenefitpensions -20,�56 -10,183

Calculationassumptions Group,SEKthousands 31Dec200631Dec2005

Discountrate,% 3.80 3.80

Returnonplanassets,% 4.00 4.00

Expectedpayincrease,% 2.50 2.50

Calculationofmaturingpensions,% 1.80 1.80

Personnelturnover,% 3.00 3.00

Calculationofincomebaseamounts,% 2.80 2.80

Expectedaverageremainingperiodofserviceforemployees,years 14 14

ThediscountrateisbasedonmarketexpectationsonthebalancesheetdateofbondswiththesametermastheGroup’spensioncommitments.ThishasbeenbasedonaninterestratecurveestimatedaccordingtoSwedishstaterealinterestratebonds.Theexpectedreturnonplanassetsisbasedontheportfolioallocationreportedbytheinsurancecompanies.Long-terminflationmeasurementsarebasedonmarketexpectationswhichcanbediscernedbetweenrealandnominalbonds.

Notes

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E u r o M a i n t A n n u a l R e p o r t 2 0 0 6

Note16 PREPaIDEXPENSESaNDaCCRuEDREvENuES

SEKthousands Group Parentcompany

2006-12-31 2005-12-31 2006-12-31 2005-12-31

Accruedrevenuesrelatingtomaintenanceworkcarriedout 43,060 8,133 0 0

Otheritems 11,238 12,202 312 0

Total 54,298 20,335 312 0

Note17 LONG-TERMINTEREST-BEaRINGLIaBILITIES

Therecordedamountsandfairvalueforlong-termborrowingareasfollows:

Group,SEKthousands Bookvalue Fairvalue

2006-01-01 2005-01-01 2006-01-01 2005-01-01 2006-12-31 2005-12-31 2006-12-31 2005-12-31

Long-term

Bankloans 270,000 340,000 270,000 340,000

Total 270,000 340,000 270,000 340,000

Current

Bankoverdraft 0 0 0 0

Total 0 0 0 0

Bankoverdraftfacilitygranted 125,000 125,000 – –

TotalcreditfacilitiesrefertocreditfacilitiesofSEK725(425)millionwithSwedbankandSEK0(300)millionwithotherinstitutions,ofwhichSEK455(85)millionremainsinthecreditfacilitieswithSwedbankandSEK0(300)millionremainswithotherinstitutions.Inaddition,thebankoverdraftfacilitygrantedamountstoSEK125million.

TheGrouphaschosentoclassifyunusedcreditwithinexistingcreditfacilitiesaslong-term,astheseagreementsrununtilfurthernotice.TheGroup’sexposure,regardingborrowing,tochangesininterestandcontractualtimeforinterestrenegotiationareasfollows:

Group,SEKthousands 06-01-01 05-01-01 06-12-31 05-12-31

6monthsorless 1�5,000 215,000

6–12months 75,000 125,000

Total 270,000 340,000

Averagefixedinterestterminmonths: 4.37 4.26

Weightedaverageinterestonbalancesheetdate 3.71 2.71

Note18 OThERPROvISIONS

Provisionguarantees

Group,SEKthousands 2006-12-31 2005-12-31

Provisionatbeginningofyear 26,�68 4,�75

Provisionsfortheyear 0 1,�00

Usedduringtheyear -6,2�7 -513

Reclassificationofguaranteeprovisions 0 20,605

Provisionatyear-end 20,671 26,968

Provisions

Long-termportion 20,671 26,�68

Note19 DEFERREDTaXLIaBILITy

Group,SEKthousands 2006-12-31 2005-12-31

Provisionatbeginningofyear 12,418 0

Deferredtaxforcancelleddepreciation/amortisation -3,�45 7,854

Deferredtaxforuntaxedreserves -207 4,564

Provisionatyear-end 8,266 12,418

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E u r o M a i n t A n n u a l R e p o r t 2 0 0 6

Note20 NONINTEREST-BEaRINGCuRRENTLIaBILITIES

SEKthousands Group Parentcompany

2006-12-31 2005-12-31 2006-12-31 2005-12-31

Advancepaymentfromcustomers 35,�08 �,�38 0 0

Accountspayable 123,205 116,�54 2,2�3 0

Taxliability 21,452 37,3�4 0 46

LiabilitiestoGroupcompanies 6,482 7,482 58,�73 0

Otherliabilities 12,008 1�,120 0 66

Total 199,055 190,888 61,266 112

Note21 aCCRuEDEXPENSESaNDDEFERREDREvENuES

SEKthousands Group Parentcompany

2006-12-31 2005-12-31 2006-12-31 2005-12-31

Costsofpersonnel 105,�67 10�,046 2,334 –

Tradeaccountspayable 17,176 16,775 0 –

Accruedexpensesformaintenancemeasures 40,320 11,472 0 –

Miscellaneous 70,�45 56,033 2,426 –

Total 234,408 193,326 4,759 0

Note22 PLEDGEDaSSETS/CONTINGENTLIaBILITIES

Group,SEKthousands 2006-12-31 2005-12-31

Bankguaranteesissued 10,467 11,772

Pensionobligations,FPG/PRI 110 37

Total 10,577 11,809

FloatingchargesamounttoSEK20millionandissuedtoSwedbankinSkövde.Furthermore,EuroMaintRailABhasfloatingchargesofSEK5.1�millioninitsowncustody.

Note23 OPERaTINGLEaSES

Group,SEKthousands 2006-12-31

Futureleasingfees2007 8,411

Futureleasingfees2008 5,�11

Futureleasingfees200� 3,101

Futureleasingfees2010 1,333

Futureleasingfees2011 540

Futureleasingfees2012andlater 23

Total 19,319

Leasingfeestakenupascosts2006 11,435

Total 11,435

TheGroup’soperatingleasesincludefeesforvehicles,computersandcertainofficeequipment.

Note24 CaShFLOWaNaLySIS,OThERITEMSNOTaFFECTINGCaShFLOW

Group,SEKthousands 2006-12-31 2005-12-31

Capitalgain/loss 3,658 -525

Utilisationofrestructuringreserve 0 -25,300

Changeinpensionprovision 3,606 -2,771

Changeinotherprovisionsandreserves -6,2�7 3,852

Otheritems 605 -�,185

Total 1,572 -33,929

OperatingactivitiesincludeinterestpaidofSEK-10,851,000andinterestreceivedofSEK+2,163,000.

Notes

63

E u r o M a i n t A n n u a l R e p o r t 2 0 0 6

Throughitsbusiness,EuroMaintisexposedtofinancialrisks,includingtheeffectsofchangesinpricesonthecreditandcapitalmarkets,andfluctuationsinexchangeratesandinterestrates.TheGroup’soverallriskmanagementfocusesontheunpredictabilityofthefinancialmarkets,andstrivestominimisepotentialunfavourableeffectsontheGroup’sfinancialresults.FinancialoperationsintheGrouparecentralisedintheparentcompany’sfinancefunction.Thefinancefunctionactsasaninter-nalbankandisresponsibleforthesourcingofcapital,cashmanagementandfinancialriskmanagement.TheoperationisregulatedthroughtheGroup’sfinancialrules.Theimportantareasoffinancialriskthataredealtwithcomprise:

ExchangeraterisksEuroMaintisexposedtosomeextenttoexchangeraterisksduetoitsrelativelylargepurchasevolumesinforeigncurrenciesandlowcustomerinvoicingincorrespondingcurrencies.Purchasesinforeigncurrenciesforlargeprojectsarehedgedoragreedwithvariableforeignexchangeclausesduringthetendering/contractformulationstage.Thefinancialrulesandregulationsalsostatethatoperatingnetflowsshallbehedgedatleasttosetlevelsduringarolling12-monthforecastperiod.Thisisusuallyachievedthroughforwardagreements.

InterestraterisksEuroMaintisaffectedbygeneralchangesininterestratesonitsloanportfolio.Tocounterthistheportfoliohasbeendividedandtiedtodif-ferentfixed-interestterms.Allborrowingagreementsre-signedduringtheyearhaveafixed-interestperiodof12months.On31December,26%ofthetotalloanamountwassubjecttovariableinterestrates.SeealsoNote17.Theonlyinterest-bearingassetsarecashandbankbalanceswhichhavebeencreditedwithvariableinterestlinkedtothebank’sVECIinterestrate,aweeklyinterestrateondeposits,less0.15percentagepoints,whichequatedto2.85%on31December2006.

CreditriskEuroMainthasproceduresforminimisingongoingcustomercreditrisksinthebusiness.Theseproceduresincludecreditchecks,advancepay-mentandguaranteemanagement,andongoingcreditmonitoring.Baddebtlossesestablishedin2006amountedtoSEK1,110,000(2,000).Onthebalancesheetdate,EuroMaintownedsecuritiesofapproximatelySEK36millionintheformofadvancesfromcustomers.TheGroupdoesnotconsidertheretobeanysignificantconcentrationofcreditrisksregardingfinancialassets.

LiquidityandrefinancingriskEuroMaint’spolicyisalwaystohavecashandcashequivalentsandse-curedrefinancingavailabletotheextentrequiredfortheoperation.On31December2006,thecompanyhadcreditfacilitiesofSEK725millionwithSwedbankandabankoverdraftfacilityofSEK125million.Thecompany’stotalcreditfacilityamountstoSEK850million.

FairvaluesofderivativeinstrumentsonthebalancesheetdateSEKthousands 31Dec2006 31Dec2005Contracts with positive fair values:Hedging 24� 61

Contracts with negative fair values: Hedging 0 154

Thenominalamountofoutstandingderivativeson31DecemberwasNOK182,450,000(Sell).

Thefairvalueofthederivativecontractshasbeencalculatedasthecostsorrevenuewhichwouldhavearisenifthecontracthadexpiredonthebalancesheetdate.Thebanks’officialexchangerateshavebeenused.

Note25 FINaNCIaLINSTRuMENTSaNDFINaNCIaLRISKMaNaGEMENT

Note26 DISCLOSuREONFaIRvaLuESRELaTINGTOFINaNCIaLINSTRuMENTS

Thefairvaluesoffinancialinstrumentscorrespondtothebookvalues,withtheexceptionoffinancialloanswhicharesubjecttofixedinterestrates.Thenominalandbookvalueoffixed-interestloansonthebalancesheetdateamountedtoSEK200million.UponvaluationatfairvaluetheliabilityincreasesbySEK564,000,takingintoaccountanyinterestpenaltycalculatedbythebankthatwouldbepayableiftheloansweretobesettledinadvanceonthebalancesheetdate.

Note27 NETTuRNOvER

SEKthousands Group Parentcompany

2006-12-31 2005-12-31 2006-12-31 2005-12-31

Saleofservices 1,85�,500 1,638,228 28,140 0

Saleofgoods 174,342 226,783 0 0

Total 2,033,842 1,865,011 28,140 0

Note28 DEFINITIONOFKEyRaTIOS

Operatingmargin:Operatingprofitasapercentageofoperatingrevenues Equity/assetsratio:Equityasapercentageoftotalassets

Note29 RECLaSSIFICaTIONS

2005figuresin Inlast Reclassifications, thisyear’sreport year’sreport completed, Otherassets notinvoiced Tax provisionsOtherreceivables 54,2�6 41,275 -15,�31 28,�52

Completed,notinvoiced 75,224 7�,��7 -4,773

Prepaidexpenses/accruedrevenues 20,335 28,450 -8,115

149,855 149,722Liabilities

Otherprovisions 26,�68 6,363 -20,605

Incometaxliability 37,3�4 6,6�0 -30,704

Accruedexpenses/deferredrevenues 1�3,326 242,750 28,81� 20,605

257,688 255,803

Reclassificationsofthecomparisonyear2005havetakenplaceinthefollowingareas:Reserveforguaranteesclassifiedasotherprovi-sions.Reclassificationofaccruedexpenses/deferredrevenuesandprepaidexpenses/accruedrevenuesrelatingtocompletednotinvoiced.Reclassificationofincometaxliabilities/assets,previouslyoffset.

64

E u r o M a i n t A n n u a l R e p o r t 2 0 0 6

TotheAnnualGeneralMeetingofEuroMaintABReg.no.556084-8458

Ihaveauditedtheannualaccounts,theconsolidatedaccounts,theaccountingrecordsandtheadministrationoftheBoardofDirectorsandthePresidentofEuroMaintABfortheyear2006.Thecompany’sannualreportandconsolidatedaccountscanbefoundonpages41-64oftheprintedversionofthisdocument.TheBoardofDirectorsandPresidentareresponsiblefortheseaccountsandtheadminis-trationofthecompany,andforensuringtheannualaccountsarepreparedinaccordancewiththeAnnualAccountsActandthattheconsolidatedaccountsarepreparedinaccordancewiththeInternatio-nalFinancialReportingStandards(IFRS)asendorsedbytheEUandtheAnnualAccountsAct.Myresponsibilityistoexpressanopinionontheannualaccounts,theconsolidatedaccountsandtheadminis-trationbasedonmyaudit.

IconductedmyauditinaccordancewithgenerallyacceptedauditingstandardsinSweden.ThosestandardsrequirethatIplanandperformtheaudittoobtainhighbutnotcompleteassurancethattheannualaccountsandtheconsolidatedaccountsarefreefrommaterialmisstatement.Anauditincludesexamining,onatestbasis,evidencesupportingtheamountsanddisclosuresintheac-counts.AnauditalsoincludesassessingtheaccountingprinciplesusedandtheirapplicationbytheBoardofDirectorsandPresidentandsignificantestimatesmadebytheBoardofDirectorsandthePresidentwhenpreparingtheannualaccountsandconsolidatedaccountsaswellasevaluatingtheoverallpresentationofinformationintheannualaccountsandtheconsolidatedaccounts.Asabasisformyopinionconcerningdischargefromliability,Iexaminedsignificantdecisions,actionstakenandcircumstancesofthecompanyinordertobeabletodeterminetheliability,ifany,tothecompanyofanyBoardmemberorthePresident.IalsoexaminedwhetheranyBoard

auditReport

memberorthePresidenthas,inanyotherway,actedincontraventionoftheCompaniesAct,theAnnualAccountsActortheArticlesofAssociation.Ibelievethatmyauditprovidesareasonablebasisformyopinionsetoutbelow.

TheannualaccountshavebeenpreparedinaccordancewiththeAnnualAccountsActand,thereby,giveatrueandfairviewofthecompany’sfinancialpositionandresultsofoperationsinac-cordancewithgenerallyacceptedaccountingprinciplesinSweden.TheconsolidatedaccountshavebeenpreparedinaccordancewithInternationalFinancialReportingStandards(IFRS)asendorsedbytheEUandtheAnnualAccountsActandgiveatrueandfairviewoftheGroup’sfinancialpositionandresultsofoperations.TheReportoftheDirectorsisconsistentwiththeotherpartsoftheannualaccountsandconsolidatedaccounts.

IrecommendtothegeneralmeetingofshareholdersthattheincomestatementandbalancesheetfortheparentcompanyandGroupbeadopted,thattheprofitbedealtwithinaccordancewiththeproposalintheReportoftheDirectorsandthatthemembersoftheBoardofDirectorsandthePresidentbedischargedfromliabilityforthefinancialyear.

Stockholm,1�February2007Ernst&Young

MagnusFredmerAuthorisedPublicAccountant

Stockholm,1�February2007

StigHolm LennartKäll ElisabethNilsson ChairmanoftheBoard

AnnikaNordin RichardReinius AndersÅgren

BertilHallén JohnnyStröm AndersGustafsson

PetherWallin PresidentandCEO

CorporateGovernance• CorporateGovernanceReport Readmoreonpage66

• TheChairman’scomments Readmoreonpage70

• TheEuroMaintBoardofDirectors Readmoreonpage72

• EuroMaintRailmanagement Readmoreonpage74

• EuroMaintIndustrymanagement Readmoreonpage75

• EuroMaintGroupmanagement Readmoreonpage76

CorporateGovernance

65

EuroMaintABcomplieswiththeSwedishCodeofCorporateGover-nancewiththeexceptionofthepartsrelatingtonominations,wheretheguidelinesofthestateownershippolicyarefollowed,andtheabilitytoparticipateremotelyinandhaveissuesdealtwithattheAGM.

ThisCorporateGovernanceReportisnotpartoftheformalannualreportdocumentandhasnotbeenexaminedbythecompany’sauditors.

articlesofassociationThecompanyshallown,manageandadministratesharesandsecuritiesinsubsidiariesandassociatedcompaniesinthetransportsectorandengineeringandprocessingindustry,andmanagerealandmovableestate,andpursuebusinesscompatibletherewith.

TheBoardofDirectorsshallcompriseatleastthreeandatmosteightmemberswithamaximumofthreedeputies.TheBoardmembersanddeputiesareselectedeachyearattheAGM.

NoticetoattendtheAGMshallbeissuedinwritingbypostnoearlierthansixweeksandnolaterthantwoweeksbeforethemeeting.Othermessagestoshareholdersshallalsobeissuedinwritingbypost.

GeneralmeetingofshareholdersTheAGMisEuroMaint’shighestdecision-makingbody.TheAGMshallbeheldwithinsixmonthsoftheendofthefinancialyearandshallbetheforumforapprovingtheincomestatementandbalancesheet,determiningthedividend,electingtheBoardofDirectorsand,whereappropriate,theauditorsanddecidingtheirfees,andfordealingwithotherstatutorymatters.

NoticetoattendtheAGMon30March2006wasissuedinwritingbypostinaccordancewiththerequirementssetoutinthearticlesofassociation.ThenoticeprovidesadetailedagendaincludingelectionoftheBoardofDirectorsandauditors,aswellasfeesfortheauditors.StigHolmchairedtheAGMon30March2006.TheAnnualReport

andauditreportwerepresentedattheAGM.Inconjunctionwiththis,theChairmanoftheBoardsubmittedinformationabouttheworkoftheBoard.

TheauditorsreportedtotheAGMontheirinspectioninaseparateauditreport.

The2006aGMdecided:•ToelectStigHolm,RichardReinius,ElisabethNilsson,Annika

Nordin,LennartKällandAndersÅgrenontotheBoardofDirectors.•ToappointStigHolmChairmanoftheBoard.•RemunerationtotheBoard:ChairmanSEK124,500;

BoardmembersSEK83,000.•RemunerationtotheRemunerationCommittee:

ChairmanSEK15,000;MembersSEK10,000.•RemunerationtotheAuditCommittee:ChairmanSEK30,000;

MembersSEK20,000.

BoardofDirectorsTheEuroMaintBoardofDirectors,whichisappointedbythegeneralmeetingofshareholders,currentlycomprisessixmembers.

Whennecessary,employeesofthecompanypresentreportstotheBoardmeetings.TheBoardisultimatelyresponsibleforthecompany’sorganisationandadministration,andshallalsomakedecisionsinstrategicissues.

IngeneraltermstheBoardofDirectorsdealswithissuesofconsiderableimportance,suchas:•Establishingrulesofprocedure.•Strategyplanning,andbusinessandprofitabilitygoals.

InadditiontotheinauguralBoardmeeting,whichisheldincon-nectionwiththegeneralmeetingofshareholders,theBoardusuallyconvenesfivetimesayear(ordinarymeetings).Extrameetingsarecalledifnecessary.Theinauguralmeetingestablishestherulesof

EuroMaint’sexecutivebodiescomprisetheannualGeneralMeeting,aGM,theBoardofDirectors,thePresidentandtheauditors.TheaGMelectstheBoardofDirectorsandauditors.TheBoardofDirectorsappointsthePresidentandvicePresidents.ParentcompanyaBSwedcarrierproposesBoardmembersinaccordancewiththeSwedishstate’sownershipdirective.OnbehalfoftheaGM,theauditorsexaminetheaccountsandtheadministrationoftheBoardofDirectorsandPresidentduringtheyear.

CorporateGovernanceReport2006

EuROMaINT’SEXECuTIvEBODIES

TheAGMisEuroMaint’shighestdecision-makingbody.

TheAnnualGeneralMeetingelectstheBoardofDirectorsandauditors.

TheBoardisultimatelyresponsibleforthecompany’sorganisationandadministration,andshallalsomakedecisionsinstrategicissues.

TheBoardofDirectorsappointsthePresidentandVicePresidents.

PresidentPetherWallinisresponsibleforEuroMaint’songoingadministration.TherearealsorulesforthePresident’sdecision-makingauthorityregardinginvestmentsandfinancingissues.TheseruleshavebeenestablishedbytheBoard.

ExecutiveVicePresidentÅkeFinnisresponsibleforeconomy,financeandIT.

ExecutiveVicePresidentBjörnSundénisresponsibleforbusinessdevelopment.

TheprincipalauditorisAuthorisedPublicAccountantMagnusFredmerofErnst&Young.

66

procedurefortheBoardanddecisionsonauthorisedsignatoriesforthecompanyandverificationoftheminutes.InconnectionwiththeBoardmeetingthatdealswiththeannualaccounts,thereportofthedirectorsandproposedtreatmentofunallocatedearnings,theprin-cipalauditorreportsontheauditors’observationsandassessmentsfromtheiraudit.

Attheordinarymeetingsheldduringtheyear,interimreportsareeitherfinalisedandpublished,orthistaskisassignedtothePresi-dent.TheBoardofDirectorsfinalisestheinterimreports.

Theordinarymeetingsencompassvariousstandardreportingpoints,suchasthelatestfinancialresultsoftheoperation.

EachyeartheBoardevaluatesthefinancialreportingitreceivesfromthecompanyandsetsoutrequirementsforitscontentandpresentation.

TwocommitteeshavebeensetupwithintheBoardtheRemunerationCommitteeandtheAuditCommittee.

TheAuditCommittee,comprisingmembersRichardReinius,LennartKäll,AnnikaNordinandco-optedmemberCFOÅkeFinn,aswellasprincipalauditorMagnusFredmerofErnst&Young,carriesoutanannualreviewoftheinternalcontrol,thecodeofcorporategovernanceandimportantauditingissues.

ThefollowingimportantissueshavebeendealtwithbytheAuditCommitteein2006•Discussionofmajorauditingissues.•Follow-upofinterimreporting.•Follow-upofexternalauditworkandrelatedcosts.•Proceduresforfollowingupinternalcontrol.•Thecodeofcorporategovernance.TheAuditCommittee’sassessmentisdealtwithbytheBoardasawhole.

TheRemunerationCommittee,comprisingmembersStigHolm,ElisabethNilsson,AndersÅgrenandco-optedmemberVicePre-sidentHRCeciliaBeer,dealswithremunerationissuesregardingEuroMaint’scompanymanagement.

TheRemunerationCommitteemettwicein2006anddealtwiththefollowingmatters:•GuidelinesfortheRemunerationCommittee’sfuturework.•EstablishmentofpayandremunerationfornewmembersoftheGroupmanagement.TheRemunerationCommittee’sassessmentisdealtwithbytheBoardasawhole.

Directors’attendanceatBoardmeetingsSevenordinaryandthreeextraordinaryBoardmeetingstookplaceduringtheyearwiththefollowingattendance:StigHolm�LennartKäll�ElisabethNilsson8AnnikaNordin7RichardReinius10AndersÅgren10BertilHallén10JohnnyStröm10LennartAndrén8PerGranström8

Importantissuesduringthe2006financialyearDuring2006theBoardmetatotalof10times.TheBoarddealtwiththefollowingpoints,amongstothers:•Ongoingfinancialmonitoringandreviewofkeycontracts.•Follow-upofGroupformation.•Scrutinyofmajortenders/contracts.•Updateofbusinessplan.•Strategiesforexpansion/growth.•SwedishCodeofCorporateGovernance.•Riskanalyses.•Structure-relateddiscussions.

TheroleoftheChairmanInadditiontoleadingtheworkoftheBoardofDirectors,theChairmanmonitorstheGroup’songoingdevelopmentthroughcontinuouscontactswiththePresidentinstrategicissues,andrepresentsthecompanyinissuesofinteresttotheowners.

PresidentandvicePresidentsPresidentPetherWallinhasbeenemployedbyEuroMaintsince2002.ThePresidentisresponsibleforEuroMaint’songoingadministration.TherearealsorulesforthePresident’sdecision-makingauthorityregardinginvestmentsandfinancingissues.TheseruleshavebeenestablishedbytheBoard.ExecutiveVicePresidentÅkeFinnisre-sponsibleforeconomy,financeandIT.ExecutiveVicePresidentBjörnSundénisresponsibleforbusinessdevelopment.

auditorsTheprincipalauditorisAuthorisedPublicAccountantMagnusFredmerofErnst&Young.

67

undertheannualaccountsactandSwedishCodeofCorporateGovernance,theBoardofDirectorsisresponsibleforinternalcontrol.Thisreporthasbeenpreparedinaccordancewithsections3.7.2and3.7.3oftheSwedishCodeofCorporateGovernanceandistherebyrestrictedtointernalcontrolwithregardtofinancialreporting.

Boardreportintointernalcontrolregardingfinancialreportingforthe2006financialyear

68

ControlenvironmentTheBoardmainlyexercisesitscontrolbydrawinguppolicydocumentsandinstructionsforthePresident,alongwiththebusinessplanandbudget.

Thecontrolisgovernedbytheorganisation,decisionpathsandadecision-makingprocesswhichisdocumentedandcommunicatedinsteeringdocumentssuchaspolicies,guidelinesandmanuals,includingtheallocationofworkbetweentheBoardandPresident,instructionsforauthorisationrights,aswellasauditingandreportinginstructions.

RiskassessmentEuroMainthasastructuredprocessforriskassessmentandriskmanagementinordertoidentifyandensurethattherisksEuroMaintisexposedtoarehandledwithinsetframeworks.

ControlactivityTheAuditCommitteeassessestheinternalcontrolandreportstotheBoard.TheauditorsreporttheirobservationsregardingtheauditattheBoardmeetingwhichdealswiththeannualaccounts.

EachBoardmeetingmonitorsfinancialdevelopmentagainstbudget,andchecksthatthedevelopmentofdecidedinvestmentsandsalesisfollowingsetplans.ThePresidentreportsanymajordeviationstotheBoard.TheGroupusestheMovexbusinesssystemandJeeves.

EuroMainthaschosentooutsourceallmanagementofoperatingissuestoSiemensandtohandlesystemdevelopmentitself.EuroMaintIndustryistobephasedintotheestablishedconcept.

TwoExecutivevicePresidentsThecompanyhastwoExecutiveVicePresidents.Oneisresponsibleforsatisfactoryinternalcontrolprocedures,ensuringthatthecompany’s

controlprocesseshavebeenimplementedandthatanyriskexposureisreported.Thecompanyhasproceduresformonitoringinternalcontrol.

TheotherExecutiveVicePresidentisresponsiblefordevelopingbusinessplansandbusinessstrategies.Thecompanyhasintroducedinformationandcommunicationpathswiththeaimofpromotingcompletenessandaccuracyinfinancialreporting.

EuroMaintproducesannualreports,interimreportsandotherongoinginformationinaccordancewithlegalrequirementsandacceptedpracticeinSweden.Thereportsarepublishedonthecompany’sownwebsiteandaredistributedtoownersandotherstakeholderswhohaveregisteredaninterestinreceivingthisinfor-mation.

Reportsandpressreleasesareavailableonthecompany’swebsitewww.euromaint.se

Informationonpolicies,instructionsandmanualsregardingfinan-cialreportingisprovidedtotherelevantpersonnel.

Follow-upEachBoardmeetingmonitorsfinancialdevelopmentagainstbudget,andchecksthatthedevelopmentofdecidedinvestmentsisfollowingsetplans.

Iftherearemajordeviationsfromthebudgetandthedecidedinvestmentsaredeemedmorecostly,thePresidentreportstotheBoard.

Thecompanypreparesmonthlyaccounts,includingabudgetcomparison,whereallsignificantdifferencesareanalysed.Forecastsaredrawnupthreetimesayearandanannualbudgetisprepared.

EuroMainthasnointernalaudit,insteadtheinternalcontrolisscrutinisedbythecompany’sexternalauditorsonanongoingbasis.

6�

StatementInaccordancewithTheSwedishCorporateGovernanceBoard,theBoardissuesnostatementonhowwelltheinternalcontrolisworking.

Stockholm,1�February2007

StigHolm LennartKäll ElisabethNilsson Chairman

AnnikaNordin RichardReinius AndersÅgren

BertilHallén JohnnyStröm AndersGustafsson Employeerepresentative Employeerepresentative Employeerepresentative

70

TheChairman’scomments

In2006EuroMainthasbeenshapingthemaintenanceGroupformedattheendof2005followingtheacquisitionofEuromation.TheBoardisverypositiveabouttheresults.TheGroupischaracterisedbyanambitiousstrategicapproachandagoodabilitytoconvertitsstrategiesintoaction.

TheGroupmanagementissmallandfocused.Ithasextensiveindu-stryexperienceandgenuineawarenessthatamaintenanceGroupoperatinginvariousindustriescancreateaddedvaluefortheGroup’scompanies,customersandthemarketalike.

astructured,business-orientedGroupLong-termeffortshaveresultedinaGroupthatsystematicallyevolvesmanagementsystems,proceduresandprofessionalinformationmanagement.Thecompanieshaveorderandstructure.

In2006acoupleofimportantstepsweretakentoincreaseemployees’participation;partlythroughthecreationofaGroup-widepersonnelmagazinewithvariedinformationaboutcustomersandorders,andpartlythroughour‘DialogueforParticipation’toolwhichprovidestheorganisationwithmoreinsightintothebusinessplan.

Thenextstepwillbetoinvolveemployeesevenmoreinthecompanies’developmentandtoexpandtheiropportunitiestotakeresponsibility.Thewillandabilityofeveryonetopullinthesamedirectionarecrucialforthefuture.

CommentsondevelopmentDevelopmentforEuroMaintRailhaslargelybeenverygood.Thecompanyhaswonseverallarge,importantcontractsinstiffinterna-tionalcompetitionandithasalsobeguninternationalexpansion.TheestablishmentinitiatedintheBalticregionisanimportantstepbothwhenitcomestoincreasedcosteffectivenessandpresenceonanexpansivenewmarket.

Thecompany’sturnoverduringtheyearhascomfortablyexceededthetarget.Profitability,however,hasnotdevelopedaspositively,mainlyduetoalackofprofitabilityincertainrefurbishmentprojects.

FinancialdevelopmentforEuroMaintIndustryhasbeennegative.Thegoalforthenexttwoyearsistorestorethecompany’sprofitabilitytothelevelinthepreviousannualaccounts.Nonetheless,theBoardcanstillviewthepastyearpositively.Ithasbeencharacterisedbychangesandrenewalwiththeaimofachievingthestrategicgoalsandmeetingthefuture.

Thecompany’sprofithasbeenburdenedrestructuringcostsorperhapsbetterexpressed,profithasbeenaffectedbyinvestmentsforthefuture.Employeeshavebeenencouragedtousetheircreativity,showcourageandtaketheinitiative.

TheBoard’scommitmentandworkTheBoardhasfollowedtheprocessofincorporatingEuroMaintIndustryintotheGroupwithgreatinterest.OnebenefitofbeingpartofamaintenancegroupistheTotalServiceConcept,whichmeansthatcustomerofferingsarenotrestrictedtoadvancedmaintenanceservicessoldbythehour,butthecompanycanalsoofferafullycom-prehensivemaintenancepackage,thuscreatingaddedvaluehigherupthevaluechain.TheconcepthasbeendevelopedwithinEuroMaintRail,andduringtheyearithasbeenadaptedtoEuroMaintIndustry’scustomersintheengineeringindustry.

TheproblemsandopportunitiesthathaveotherwiseengagedtheBoardduringtheyearareprimarilyasfollows.EuroMaintIndustry’s

dramaticdecreaseinvolumeintheProductionEquipmentproductareaatthebeginningoftheyear,whichwasunfortunatelyfollowedbyjoblosses.Thiswasatoughbutnecessarydecision.Asharper,morefocusedorganisationisnowbetterequippedtotacklenewbusiness.

EuroMaintRail’slackofprofitabilityincertainrefurbishmentprojectshasalsobeenaconcern.Thereisconsiderablescopeforimprovementinmaterialmanagement.Thecompanymanagementareawareofthisandhavestartedprojectsduringtheyearforfurtherstreamlining.

OneofthemajorpositiveeventsistheinitiatedestablishmentofEuroMaintRailintheBalticregion.Thenewworkshopwillalsofunda-mentallystrengthenproductioninEuroMaintRail’sSwedishworkshops.ThisinitiativegivesnotonlythecompanybutalsotheGroupasawholeaspringboardintoanimportantnewmarket.Theestablishmentisaskilfulcombinationofanoperationalefficiency-basedapproachandstrategicbusinessdevelopmentofourserviceexport.

activeenvironmentalresponsibilityThepastyearhasbeencharacterisedbygrowinginsightintothegreenhouseeffectandglobalwarming.Mypersonalprofessionalcommitmenttotheenvironmentandrenewableenergysources–includingbiogas–isextensive.

IamdelightedthatEuroMaintishelpingtoreduceenvironmentalimpactonseveralfronts.Railtrafficisanenergy-efficientmodeoftransport,agoodenvironmentalchoice.Andwell-maintainedtrainslikefinelytunedproductionsystemsinindustryimprovethatenergyefficiencyfurther.

Atthesametimewemustnotforgetthattherearemanyotherenvironmentalaspectstodealwith.Oneseeminglyminorexampleisparticlesfrombrakelinings.Worntrainbrakesendupatthework-shop–buttheparticlesthathavewornawayareleftontherailwayembankmentandaremadeupofheavymetalsandotherpollutants.IthereforewelcometheEuroMaintGroupmanagement’sinitiativetostudythistypeofproblemmoreclosely.

LookingtothefutureIseeactiveenvironmentalresponsibilitybeingoneoftheprincipalenvironmentalfactorswithinfiveyears.

FaithinthemaintenanceindustryandEuroMaint’sfutureTheBoardhasgreatfaithinthefutureofthemaintenanceindustry.WeregardEuroMaintasthehubofsomethingthatwillgrow.TheGroupmanagementenjoysanopendialoguewithitscompanies.Shortdecisionpathsmakeiteasytotakedecisions.Thereisadistinctsustainabilityinlong-termgoals,delegationandworkingmethods.Continuousimprovementtoprocessesandprocesscomplianceisanongoingtask.Everythingisthoroughlyconsideredandwellestablished.

InconclusionIwouldliketoexpressmyandtheBoard’sfullconfidenceinthefineworkandresultsachievedbyEuroMaintin2006.

StigHolm,ChairmanoftheBoard

71

“The companies have order and structure – everything is thoroughly considered and well established”

STIGhOLM

Family:Partner,fourchildrenaged31,28,1�and12

Livesin:Linköping

Workplace:CEOofTVABLinköping

Railtravel:Travelextensivelyandhaveaseasonticket

Leisureinterests:Creatingartandcompanies,aswellasbuildingloghouses

Societies:Notmany

Somethingyoudidn’tknow:Iplaytheguitar

Bestquality:Ikeepmypromises,andenjoydiscoveringlifeandmeetingnewpeople

TheEuroMaintBoardofDirectors

STIGhOLM LENNaRTKäLL ELISaBEThNILSSON

aNNIKaNORDIN RIChaRDREINIuS aNDERSÅGREN

72

BERTILhaLLéN JOhNNySTRöM aNDERSGuSTaFSSON

STIGhOLM1�51.MScengineering.ChairmanoftheBoard.Boardmembersince2004.

Currentemployment:GroupDirectorTekniskaVerkeniLinköpingAB

Otherassignments:MDofParkeringsaktiebolagetDukaten,LinköpingChairmanofStadspartnerAB,LinköpingKraftnätAB,ÖstkraftAB,SvenskBiogasiLinköpingAB,UtsiktLinköpingAB,KatrineholmEnergiABandSweMaintABBoardmemberofMjölby–SvartådalenEnergiAB,CityLinkAB,ÖstkraftEnergihandelABandABSwedcarrierBoardmeetingsattended:�(10)

LENNaRTKäLL1�58.MSceconomics.Boardmembersince2005.

Currentemployment:President&CEOofTicketTravelGroupAB

Otherassignments:BoardmemberofInsplanetAB,XnNetworkandSverigesResebyråFörening(SRF)AdvisorSegulahBoardmeetingsattended:�(10)

ELISaBEThNILSSON1�53.MasterofScience,MiningandMineralsProcessing.Boardmembersince2004.

Currentemployment:PresidentofJernkontoretSwedishSteelProducers’Association

Otherassignments:BoardmemberandViceChairmanoftheCentreforHighPerformanceSteel(LuleåUniversityofTechnology)BoardmemberofSwereaChairmanoftheBoardoftheMefosFoundationforMetallurgicalResearchBoardmeetingsattended:8(10)

aNNIKaNORDIN1�54.MSceconomics.Boardmembersince2004.

Currentemployment:VPCategoryProductDevelopmentAFH,SCATissueEurope

Otherassignments:–Boardmeetingsattended:7(10)

RIChaRDREINIuS1�67.MSceconomics.Boardmembersince2004.

Currentemployment:MinistryofEnterprise,EnergyandCommunications

Otherassignments:BoardmemberofSweMaintAB,JernhusenBoardmeetingsattended:10(10)

aNDERSÅGREN1�47.Engineer.Boardmembersince2005.

Currentemployment:NergaAB

Otherassignments:BoardmemberofSwedesurveyAB,JärntorgetABBoardmeetingsattended:10(10)

BERTILhaLLéN1�54.Employeerepresentative.Boardmembersince2001.

Currentemployment:EuroMaintRailAB

Otherassignments:BoardmemberofABSwedcarrierChairmanofSEKOEuroMaintABandDepartmentChairmanofSEKOGothenburgBoardmeetingsattended:10(10)

JOhNNySTRöM1�45.Employeerepresentative.Boardmembersince2004.

Currentemployment:EuroMaintRailAB

Otherassignments:ClubchairmanoftheSEKOCVclubEuroMaintÖrebro,CommissionsoftrustinFONUSBoardmeetingsattended:10(10)

aNDERSGuSTaFSSON1�46.Mechanicalengineer.Employeerepresentative.Boardmembersince2007.

Currentemployment:EuroMaintRailAB

Otherassignments:ChairmanoftheSACOfederationTransportandRailway(TJ)inEuroMaintABDeputyBoardmemberofEuroMaintRailABBoardmeetingsattended:NewlyelectedasofDecember2006

LennartAndrén,employeerepresentative,lefttheBoardduringtheyearandwasreplacedbyAndersGustafsson.

73

ThOMaSaNDERSSON1�53.MScengineering.

VicePresident,Quality&Environment.Employedsince1��1.

Previouspositions:SwedishStateRailwaysandPlockmaticInternational

hÅKaNBJöRK1�66.Electricalengineer.

VicePresident,Engineering&Planning.Employedsince2002.

Previouspositions:TheScaniaGroup

JONaSSaMuELSON1�60.MScengineering.

PresidentofEuroMaintRailAB.Employedsince2002.

Previouspositions:ABBProcessIndustries

STEvENDavIDSSON1�56.Mechanicalengineer.

VicePresident,Sourcing&Supply.Employedsince2003.

Previouspositions:EricssonAB

LaRSÅKERLIND1�62.MScengineering.

VicePresident,Sales&Marketing.Employedsince2006.

Previouspositions:ABBandAdtranz

EuroMaintRailmanagement

74

Backrow:THOMASANDERSSON,HÅKANBJÖRK,JONASSAMUELSON,STEVENDAVIDSSONANDLARSÅKERLINDFrontrow:HANS-ÅKEELFWING,ANN-CHARLOTTEÅGREN,TORSTENNEDERMAN,KRISTINANYHOLMANDNICLASFLODIN

haNS-ÅKEELFWING1�62.Mechanicalengineer.

VicePresident,TrainMaintenance.Employedsince1�84.

Previouspositions:SwedishStateRailways

aNN-ChaRLOTTEÅGREN1�60.Economist.

ExecutiveVicePresident&CFO.Employedsince2001.

Previouspositions:InternationalComputerLtd.(ICL)

TORSTENNEDERMaN1�64.MScengineering.

VicePresident,Refurbishment&ComponentOverhaul.Employedsince1��1.

Previouspositions:TGOJandRPL

KRISTINaNyhOLM1�43.BSc.

VicePresident,HumanResources.Employedsince1�62.

Previouspositions:SwedishStateRailways

NICLaSFLODIN1�66.MScengineering.

VicePresident,MaintenanceCommuterTrainsStockholm.Employedsince2005.

Previouspositions:ABBService

EuroMaintIndustrymanagement

75

ULFSANDÉN,PATRIKSAHLBERG,NICKLASFALK,URBANEKMARK,THOMASGRÖNLUND,BOLENNARTSSONANDKIMBERGHÄLL

uLFSaNDéN1�5�.Economist.

ExecutiveVicePresident&CFO.Employedsince1�8�.

Previouspositions:Volvo,KällbergsIndustriABandSparbanken

PaTRIKSahLBERG1�62.Mechanicalengineer.

ExecutiveVicePresident&ManagerAutomation.Employedsince1�82.

Previouspositions:Volvo

NICKLaSFaLK1�73.MScEngineering.

PresidentofEuroMaintIndustryAB.Employedsince2003.

Previouspositions:TrainTechEngineeringAB

uRBaNEKMaRK1�64.MScengineering,Eng.Lic.

Quality&EnvironmentManager.Employedsince2000.

Previouspositions:UniversityofSkövde

ThOMaSGRöNLuND1�63.MScengineering.

MarketingManager.Employedsince2002.

Previouspositions:Long&PartnerAB,PridoAB,LVIProdukterABandRapidGranulatorAB

BOLENNaRTSSON1�52.Electrical&TelecommunicationsEngineer.

MaintenanceDevelopmentManager.Employedsince1�73.

Previouspositions:Volvo

KIMBERGhäLL1�66.Mechanicalengineer.

Procurement&ProjectManager.EmployedsinceNovember2004.

Previouspositions:GM-FiatWWPSwedenABandSAABAutomobileAB

EuroMaintGroupmanagement

76

INGELACARLSSON,ÅKEFINN,NICKLASFALK,PETHERWALLIN,CECILIABEER,BJÖRNSUNDÉNANDJONASSAMUELSON

INGELaCaRLSSON1�62.MScAdministrativeSocialStudies.

VicePresidentCommunication.Employedsince2006.

Previouspositions:TheFederationofSwedishFarmers(LRF),Riksbyggen,SwedishPrimeMinister‘sOffice,(soc.dem.)secretariatEuropeanParliament,SwedishSocialDemocraticParty,TheSwedishAssociationofLocalAuthoritiesandRegions

Otherassignments:BoardmemberofEuroMaintRailAB,EuroMaintIndustryAB,FoundationofMediastudies,PoliticalcommissionsoftrustinTyresöMunicipality

ÅKEFINN1�5�.

ExecutiveVicePresident&CFO.Employedsince2002.

Previouspositions:AlphaHelixABandABBSwitchgearEgypt

Otherassignments:BoardmemberofEuroMaintRailABandEuroMaintIndustryAB

NICKLaSFaLK1�73.BScEngineering.PresidentofEuroMaintIndustryAB.Employedsince2003.

Previouspositions:TrainTechEngineeringAB

PEThERWaLLIN1�56.MScengineering.

PresidentofEuroMaintAB.Employedsince2002.

Previouspositions:PresidentofOmniNovaVehicleABandOmniNovaCompositeAB,VicePresidentHydroAutomotiveStructuresandVolvoCars

Otherassignments:ChairmanoftheBoardofEuroMaintRailABandEuroMaintIndustryABCo-optedBoardmemberofStockholmstågAB

CECILIaBEER1�66.BSc.

VicePresidentHumanResources.Employedsince2006.

Previouspositions:FortumPower&HeatAB,CraneABandManpowerAB

Otherassignments:BoardmemberofEuroMaintRailABandEuroMaintIndustryAB

BJöRNSuNDéN1�44.BSc.

ExecutiveVicePresident,Strategy&BusinessDevelopment.Employedsince2001.

Previouspositions:SaabNygeAero,Företags-finans,LinjeflygandNitroNobel

Otherassignments:BoardmemberofEuroMaintRailABandEuroMaintIndustryAB

JONaSSaMuELSON1�60.MScengineering.PresidentofEuroMaintRailAB.Employedsince2002.

Previouspositions:ABBProcessIndustries

contents

EuroMaint in brief 3The year in brief 4The past year 5The CEO’s comments 6

EuROMaInT RaIl 8EuroMaint Rail in brief 9EuroMaint Rail, President 10Maintenance of Stockholm’s commuter trains – a prestigious contract 12new interior for arlanda Express – designed by Björn Borg 14light maintenance of Green Cargo’s freight carriages 14Contract with arriva – new operator on the Swedish market 15Baltic establishment the first step in international development 16Refurbishment contract in norway – ground-breaking for both parties 18Creative development – a natural part of every process 20Market strategies for growth 21

EuROMaInT InduSTRy 22EuroMaint Industry in brief 23EuroMaint Industry, President 24Production streamlining at the forefront 26Establishment in Gävle expands our market 28Closeness to the customer 29From Euromation to EuroMaint Industry 29Specially adapted production equipment 30new customer segments and markets 31

EuROMaInT 32EuroMaint in brief 33The role of the Group management 34Business development 35Operational development 36discretion – a natural part of the change process 37Personnel development 38The role of employees on the Board 39Five-year summary 40

ThE BuSInESS In FIGuRES 41Report of the directors 42Income Statements 44Balance Sheets 45Changes in Equity 47Cash Flow analyses 48notes 49audit Report 64

CORPORaTE GOvERnanCE 65Corporate Governance Report 66The Chairman’s comments 70The EuroMaint Board of directors 72EuroMaint Rail management 74EuroMaint Industry management 75EuroMaint Group management 76

MISCEllanEOuSaddresses 77

EuroMaint in brief

since 1 January 2006, EuroMaint has been a group with the main task of being a strong, lead­ing maintenance partner that increases its customers’ efficiency. the group has two subsid­iaries, EuroMaint rail and­ EuroMaint ind­ustry, which operate in the rail transport and­ engineering sectors respectively.

The whole Group is characterised by a strong focus on developing new services and concepts which enable the companies to offer the foremost maintenance and technical solutions in their industries. The main product is a comprehensive package, a Total Service Concept encompassing preventive, corrective, restorative and improvement maintenance.

The subsidiaries concentrate on customer benefit and delivery quality, while strategic development issues and co-operation with strategic partners are dealt with at Group level.

Maintenance solutions for the rail transport ind­ustryEuroMaint offers cost-effective maintenance solutions for rolling stock in the rail transport industry, which entails the development, production and delivery of technical system services, as well as maintenance and refurbishment of all types of rolling stock and its components. a process of internationalising the operation began during the year.

streamlining in the engineering sectorEuroMaint Industry are specialists in production streamlining. Taking the existing production process as its point of departure, the company offers maintenance, component servicing, production engineering and production equipment with the aim of strengthening industry competitiveness.

EuroMaint’s operating locationsEuroMaint has operations all over Sweden, from luleå in the north to Malmö in the south.

3

the year in brief

about EuroMaintEuroMaint strengthens its customers’ competitiveness through tailored mainte-nance and technical solutions. EuroMaint’s companies are specialists which offer advanced maintenance services to the rail transport and engineering industries. Turnover in 2006 totalled SEK 2,047 million, with a profit of SEK 100 million. The Group had an average of 1,746 employees in 2006. EuroMaint is owned by aB Swedcarrier, a Swedish state-owned holding company.

kEy ratios 2006 2005*

turnover, SEK mn 2,037 1,872

operating profit, SEK mn 100 114

cash flow after investment activities, SEK mn 45 -38

operating margin, % 5 6

Equity/assets ratio, % 24 18

average number of employees 1,746 1,669

* includes EuroMaint Industry as of 1 July 2005.

EuroMaint AB

EuroMaint Rail AB

EuroMaint Industry AB

The Group consists of EuroMaint Rail, which helps strengthen profitability in the rail transport sector, and EuroMaint Industry, which helps increase its customers’ productivity. EuroMaint Rail accounts for 89% of the Group’s turnover and EuroMaint Industry for 11%.

100

50

-50

-100

cash fLoW aftEr invEstMEnts* SEK mn

-77

2002 2006

-30

14

45

2003 2004 2005

-38

2,200

2,000

1,800

1,600

turnovEr* SEK mn

1,879

2002 2006

1,653

1,493

1,872

2,037

2003 2004 2005

*includes EuroMaint Industry as of 1 July 2005.

4

ad­d­resses

stockhoLMEuroMaint ab PO Box 1555SE-171 29 Solna

www.euromaint.se

soLnaheadquarters

EuroMaint rail abPO Box 1555SE-171 29 Solnavisiting address: Svetsarvägen 10

borLängEEuroMaint rail abBangårdsgatan 8SE-781 71 Borlängevisiting address: Bangårdsgatan 8

gävLEEuroMaint rail ablötängsgatanSE-801 31 Gävlevisiting address: lötängsgatan

gothEnburgEuroMaint rail abPO Box 36 136SE-400 13 Göteborgvisiting address: Minuthandelsgatan 15

haLLsbErgEuroMaint rail ablokvägen 2SE-694 35 hallsbergvisiting address: lokvägen 2

LinköPingEuroMaint rail abSödra Oscarsgatan 2SE-582 73 linköpingvisiting address: Södra Oscarsgatan 2

LuLEåEuroMaint rail abKontorsgatan 37SE-993 42 luleåvisiting address: Kontorsgatan 37

EuroMaint rail ablokstallsvägen 2972 45 luleåvisiting address: lokstallsvägen 2

MaLMöEuroMaint rail abPO Box 124SE-201 21 Malmövisiting address: Carlsgatan, infart 6

EuroMaint rail abPO Box 3503SE-200 22 Malmövisiting address: Södra Bulltoftavägen 51

nässJöEuroMaint rail abPO Box 37SE-571 21 nässjövisiting address: Gölgatan

stockhoLMEuroMaint rail abväxlarevägen 29SE-170 63 Solnavisiting address: växlarevägen 29

EuroMaint rail abBlackvretenSE-195 95 Rosersbergvisiting address: verkstaden Blackvreten

EuroMaint rail abRysstorpsvägen 12SE-197 91 Brovisiting address: Stinsvägen 15

EuroMaint rail abvaruvägen 34SE-125 30 Älvsjövisiting address: varuvägen 34

sundsvaLLEuroMaint rail abParkgatan 5SE-852 29 Sundsvallvisiting address: Parkgatan 5

vännäsEuroMaint rail abvästra Järnvägsgatan 8SE-911 34 vännäsvisiting address: västra Järnvägsgatan 8

åMåLEuroMaint rail abPO Box 302SE-662 27 Åmålvisiting address: västra Bangatan 2

örEbroEuroMaint rail abPO Box 1502SE-701 15 Örebrovisiting address: Södra Grev Rosengatan 1

EuroMaint rail abPO Box 1403SE-701 14 Örebrovisiting address: Södra Grev Rosengatan 1

skövdEheadquarters

EuroMaint ind­ustry abSE-541 87 Skövdevisiting address: Kavelbrovägen 2

gävLEEuroMaint ind­ustry ablötängsgatanSE-801 31 Gävlevisiting address: lötängsgatan

haLLsbErgEuroMaint ind­ustry abKraftvärmegatan 1SE-694 32 hallsbergvisiting address: Kraftvärmegatan 1

åMåLEuroMaint ind­ustry abPO Box 302SE-662 27 Åmålvisiting address: västra Bangatan 2

EuroMaint raiL abEuroMaint ab EuroMaint industry ab

dEsign and Production: Collaboration between EuroMaint aB and Care of haus, västerås.PhotograPhy: lasse Fredriksson, Thomas harrysson, hans Blomberg, Kasper dudzik, Peter lydén, Fortum, Jernbaneverket, Matton, nSB and archive photos from EuroMaint.rEPro: Turbin, västerås. Printing: Edita, västerås. othEr inforMation: This is not an official annual Report. It is a translation of the Swedish annual Report and may not contain all the information provided in the Swedish original.

200

100

-100

-200

oPErating Profit* SEK mn

-188

2002 2006

-103

47

114100

2003 2004 2005

swed­en

Welcome to EuroMaint

EuroMaint strengthens its customers’ competitiveness through tailored­ maintenance and­ technical solutions. EuroMaint’s companies are specialist businesses that offer ad­vanced­ maintenance services. We supply our customers with expertise, d­evelopment resources, proactive planning and­ innovative maintenance solutions. 06EuroMaint unites innovative thinking with a long past. Through creative technical system

services, customised total solutions and partnerships, we contribute to our customers’

competitiveness and success. The EuroMaint Group consists of EuroMaint Rail, which

helps strengthen profitability in the rail transport sector, and EuroMaint Industry,

which helps increase customers’ productivity.

www.euromaint.se

EuroMaint annuaL rEPort

EuroMaint unitEs innovativE thinking With a

Long Past. through crEativE tEchnicaL systEM

sErvicEs, custoMisEd totaL soLutions and

PartnErshiPs, WE contributE to our custoMErs’

coMPEtitivEnEss and succEss. thE EuroMaint

grouP consists of EuroMaint raiL, Which hELPs

strEngthEn ProfitabiLity in thE raiL transPort

sEctor, and EuroMaint industry, Which hELPs

incrEasE custoMErs’ Productivity.

Eu

ro

Ma

int

an

nu

aL

rE

Po

rt

06