Volvo 2006 Annual Report Download - page 109

Note 5 Joint ventures
Joint ventures are companies over which Volvo has joint control
together with one or more external parties. Joint ventures are
reported by applying the proportionate consolidation method, in
accordance with IAS 31 Joint ventures. Group holdings of shares in
joint ventures are listed below.
Dec 31, 2006
Holding Holding
Shares in Joint ventures percentage no of shares
Shanghai Sunwin Bus Corp., China 50 –
Xian Silver Bus Corp., China 50 –
Volvo’s share of joint ventures’
income statements 2004 2005 2006
Net sales 492 345 630
Operating income (27) (62) (9)
Income after fi n ancial items (32) (71) (17)
Income of the period (34) (71) (17)
Volvo’s share of joint ventures’
balance sheets 2004 2005 2006
Non-current assets 100 117 99
Current assets 394 386 359
Total assets 494 503 458
Shareholders’ equity 228 207 168
Provisions 6 1 2
Long-term liabilities 0 0 3
Current liabilities 260 295 285
Total shareholders’ equity
and liabilities 494 503 458
At the end of 2006 no guarantees were issued for the benefi t of
joint ventures, neither by Volvo alone or jointly with other venturers.
At the same date Volvo’s share of contingent liabilities issued by its
joint ventures amounted to 0 (0; 6).
2004 2005 2006
Number of of which Number of of which Number of of which
Average number of employees employees women, % employees women, % employees women, %
Shanghai Sunwin Bus Corp. 604 21 567 17 488 18
Xian Silver Bus Corp. 252 12 243 14 258 15
Total number of employees 856 18 810 16 746 17
The effects during 2006, 2005 and 2004 on the Volvo Group’s bal-
ance sheet and cash fl ow statement in connection with the divest-
ment of subsidiaries and other business units are specifi ed in
the following table:
2004 2005 2006
Intangible assets – – (2)
Property, plant and equipment (440) (519) (181)
Assets under operating lease – – (369)
Inventories (4) (41) (254)
Other receivables 181 (334) (416)
Cash and cash equivalents – (114) (128)
Provisions 94 (12) 84
Other liabilities 50 888 723
Divested net assets (119) (132) (543)
Cash and cash equivalents received 187 782 797
Cash and cash equivalents,
divested companies – (114) (128)
Effect on Group cash and
cash equivalents 187 668 669
Non-Current Assets Held for Sale
Volvo Aero Engine Services (VAES)
During the fourth quarter 2006 a strategic decision on closure of
Volvo Aero’s operations in Bromma was decided. In November, it was
announced that Volvo Aero had initiated codetermination negoti-
ations with the trade unions relating to the closure of Volvo Aero
Engine Services (VAES) in Bromma, which conducts overhaul of
large aircraft engines. In recent years, the volumes of the engines
overhauled in Bromma have declined sharply. In accordance with the
strategic decision, the operations will be gradually phased out during
2007. Costs for a closure are estimated to 258. The assets and lia-
bilities in the table adjoined are listed to a net realizable value.
Non-Current Assets Held
for Sale1 2004 2005 2006
Tangible assets – – 56
Financial assets – – 22
Inventories – – 480
Short-term recievables – – 247
Total assets – – 805
Provision for post-employment benefi ts – – 7
Other provisions – – 20
Current liabilities – – 253
Total shareholders equity
and liabilities – – 280
1 Assets and liabilities do not balance since the table only display the assets
and liabilities in Volvo Aero Engine Services held for sale.
Financial information 2006 105