Volvo 2006 Annual Report Download - page 142

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Parent Company AB Volvo
Corporate registration number 556012-5790.
Board of Directors’ report
During the year, AB Volvo acquired 58.2 million shares, correspond-
ing to 19% of the shares, in the Japanese truck manufacturer Nis-
san Diesel. The investment amounted to approximately SEK 2.0 bil-
lion. In addition, AB Volvo has acquired all 57.5 million preference
shares in Nissan Diesel for a total amount of approximately SEK 3.5
billion.
Income from investments in Group companies includes dividends
amounting to 399 (9,161; 101), Group contributions and transfer
price adjustments, net of 8,721 (5,360; 5,673) and write-downs of
shareholdings of 192 (8,420; 1,364). The redemption of all prefer-
ence shares in VNA Holding resulted in a capital loss of 363 for the
parent company.
The carrying value of shares and participations in Group compa-
nies amounted to 40,419 (40,812; 40,393), of which 39,870
(40,298; 39,878) pertained to shares in wholly owned subsidiaries.
The corresponding shareholders’ equity in the subsidiaries (including
equity in untaxed reserves but excluding minority interests)
amounted to 76,232 (67,804; 55,831).
Shares and participations in Non-Group companies included
5,642 (0; 0) in associated companies that are reported in accord-
ance with the equity method in the consolidated accounts. The por-
tion of shareholders’ equity in associated companies accruing to AB
Volvo totaled 180 (85; 90). Shares and participations in associated
companies include 19% of the shares in Nissan Diesel with a carry-
ing value of 2,001. The market price of these shares amounted to
1,341 at year-end. Preference shares in Nissan Diesel with a carry-
ing value of 3,493 are also included. Shares and participations in
non-Group companies include listed shares in Deutz AG with a car-
rying value of 740, corresponding to the quoted market price at year-
end. The holding in Deutz AG is reported at market value as of
January 1, 2005 in accordance with the application of the new
accounting principle, IAS 39 Financial Instruments, from the same
date. See also Note 1 Accounting principles.
Financial net debt amounted to 3,589 (assets 6,052; assets
5,541).
AB Volvo’s risk capital (shareholders’ equity plus untaxed
reserves) amounted to 51,240 corresponding to 89% of total assets.
The comparable fi gure at year-end 2005 was 92%.
SEK M 2004 2005 2006
Net sales 531 663 764
Cost of sales (531) (663) (764)
Gross income 0 0 0
Selling expenses – (56) (16)
Administrative expenses Note 2 (471) (955) (621)
Other operating income and expenses Note 3 5 7 5
Income from investments in Group companies Note 4 4,409 6,620 8,565
Income from investments in associated companies Note 5 (1) 0 7
Income from other investments Note 6 851 (1) 0
Operating income 4,793 5,615 7,940
Interest income and similar credits Note 7 294 114 56
Interest expenses and similar charges Note 7 (238) (31) (67)
Other fi nancial income and expenses Note 8 111 (108) 126
Income after fi nancial items 4,960 5,590 8,055
Allocations Note 9 1,524 0 (2,000)
Income taxes Note 10 (1,338) (1,230) (1,706)
Income for the period 5,146 4,360 4,349
Parent Company AB Volvo
Income statements
138 Financial information 2006