Volvo 2006 Annual Report Download - page 131

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Financial information 2006 127
Note 33 Government grants
During 2006, government grants amounting to 216 (173; 165) have been received, of which 141 (143; 137) has been accounted for in the
income statement. The grants were mainly received from the European Commission and the Swedish government..
Note 34 Personnel
In accordance with a resolution adopted at the Annual General
Meeting 2006, the fee paid to the Board of Directors was set at SEK
4,775,000, to be distributed among the members as follows: SEK
1,350,000 to the Chairman and a total of SEK 2,700,000 to the
other members; in addition, SEK 250,000 to the chairman of the
Audit Committee and SEK 125,000 to other members of the Audit
Committee and SEK 75,000 to each of the members of the Remu-
neration Committee.
Fixed Variable Other
Remuneration to senior executives, SEK salary salary benefi ts1 Pension4
Board Chairman 1,425,000 – – –
CEO 11,354,968 5,527,560 2,067,434 14,625,220
Other members of GEC 2 49,834,705 19,890,289 64,558,513 43,768,764
Total remuneration and benefi ts 62,614,673 25,417,849 66,625,947 58,393,984
Total costs3 80,243,527 32,494,979 85,581,958 70,140,948
1 Other benefi ts for the President and CEO includes SEK 1,460,000 related
to allotted shares during 2006 and for other members of the GEC SEK
6,935,000 related to allotted shares and SEK 2,882,809 pertaining cash
payments, for the GEC members not residing in Sweden, linked to the
share-based incentive program. For GEC additional 49,432,538 is included
for exercised employee stock options.
2 In addition to the CEO, the Group Executive Committee (GEC) comprised of
16 members at the end of the year.
3 Total costs for GEC include social fees on salaries and benefi ts, special
pension tax and additional costs for other benefi ts. The cost for other bene-
fi t s includes cost earlier accounted for in previous years relating to the
option and sharebased payment programs amounting to approximately SEK
60 M.
4 In the beginning of 2005 a previously announced one-time payment of SEK
34 M was made when Leif Johansson shifted over to a defi ned contribution
based pension. SEK 20.8 M of this amount was reported as a cost in 2005,
the remaining SEK 13.2 M is included above. For the time in 2006 after Leif
Johansson’s became 55 years old have payments amounting to 1,425,220
for pension premiums been made.
Note 32 Transactions with related parties
The Volvo Group has transactions with some of its associated com-
panies. The transactions consist mainly of sales of vehicles to deal-
ers. Commercial terms and market prices apply for the supply of
goods and services to/from associated companies.
2004 2005 2006
Sales to associated companies 279 381 156
Purchase from associated
companies 73 296 288
Receivables from associated
companies, Dec 31 174 206 40
Liabilities to associated
companies, Dec 31 70 65 39
Group holdings of shares in associated companies are presented in
Note 15, Shares and participations.
The Volvo Group also has transactions with Renault SA and its sub-
sidiaries. Sales to and purchases from Renault SA amounted to 336
(182; 277) and 4,031 (3,493; 3,242). Amounts due from and due to
Renault SA amounted to 97 (57; 81) and 1,176 (762; 554) respect-
ively, at December 31, 2006. The sales were mainly from Renault
Trucks to Renault SA and consisted of components and spare parts.
The purchases were mainly made by Renault Trucks from Renault SA
and consisted mainly of light trucks. Renault Trucks has a license
from Renault SA for the use of the trademark ”Renault”. During
2005, Renault Trucks received EUR 500,000 from Renault SA as
compensation for a common development project.
During 2005, AB Volvo sold properties to market price to mem-
bers in group management for an amount of 17. No similar trans-
actions took place during 2006.
Accumulated depreciation:
2004 2005 2006
Buildings (56) (79) (49)
Land and land improvements – – –
Machinery and equipment (46) (39) (35)
Assets under operating lease (518) (470) (609)
Total (620) (588) (693)
Book value:
2004 2005 2006
Buildings 470 380 102
Land and land improvements 66 75 72
Machinery and equipment 190 159 79
Assets under operating lease 547 405 279
Total 1,273 1,019 532