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            Annual Report 2008
Mekonomen Annual Report 2008




            Table of content
              1   Year in brief, key ratios
              2   CEO’s comments
              4   Five-year summary
              7   Corporate governance
             12   Administration Report
             16   Income statement, Group
             17   Cash flow statement, Group
             18   Balance sheet, Group
             20   Income statement, Parent Company
             21   Cash flow statement, Parent Company
             22   Balance sheet, Parent Company
             24   Changes in shareholders’ equity
             25   Notes
             52   Auditors’ report
             53   Information to shareholders
             53   Definitions
             54   Board of directors
             55   Management Group
             56   Addresses


            Mekonomen’s formal Annual Report comprises
            pages 12 to 52. Only the formal Annual Report has
            been reviewed by the company’s auditors. A more
            detailed description of Mekonomen’s operations
            and additional, regularly updated, financial
            information are presented on Mekonomen’s
            website: www.mekonomen.se
                                                                                                            Year in brief | Mekonomen Annual Report 2008




                                                                revenue and eBit
                                                                   SEK M                                                             SEK M
                                                                    3,000                                                              300


Year in brief                                                      2,750

                                                                   2,500
                                                                                                                                      275

                                                                                                                                      250

                                                                   2,250                                                              225

                                                                   2,000                                                              200
•	 New store concepts launched – Mekonomen Medium
                                                                   1,750                                                              175
   and Mekonomen Mega
                                                                   1,500                                                              150

                                                                   1,250                                                              125
•	 Eight Micro stores acquired from Micro AB                       1,000                                                              100

                                                                     750                                                              75
•	 Mekonomen Direkt +46 (0)771-72 00 00 launched                     500                                                              50
   in January 2009                                                   250                                                              25
                                                                            2003     2004      2005      2006   2007          2008
                                                                                   Revenue                             EBIT

•	 Revenues increased to SEK 2,691 M (2,550).
                                                                earnings per share and dividend
•	 EBIT increased to SEK 251 M (250).
                                                                     SEK
                                                                      12                                                              12
•	 EBIT margin amounted to 9 per cent (10).                           11                                                              11

                                                                      10                                                              10
•	 Profit before tax amounted to SEK 261 M (418).                      9                                                              9
   Excluding capital gains from property divestments in 2007,          8                                                              8
   profit amounted to SEK 267 M in the preceding year.                 7                                                              7

                                                                       6                                                              6

•	 Earnings per share amounted to SEK 5.84 (11.03).                    5                                                              5

   Excluding property divestments, earnings per                        4                                                              4

   share amounted to SEK 5.98 in the preceding year.                   3                                                              3

                                                                       2                                                              2

•	 The Board of Directors proposes an ordinary dividend                1
                                                                            2003     2004      2005      2006   2007     2008
                                                                                                                                      1

   of SEK 6 (6) and an extraordinary dividend of SEK 0 (5).                         Earnings per share              Dividend




                                                                KeY ratios
                                                                                                                        2008               2007    2006
                                                                 Revenues, SEK M                                       2,691              2,550    2,450
                                                                 EBIT, SEK M                                              251                250    220
                                                                 EBIT margin, %                                                9              10      9
                                                                 Profit for the year*, SEK M                              189                348    140
                                                                 Earnings per share*, SEK                                5.84             11.03     4.28
                                                                 Cash flow ** per share, SEK                             6.77             10.32     8.61
                                                                 Dividend***, SEK                                        6.00             11.00    10.00
                                                                 Return on shareholders' equity, %                            20             36      14
                                                                 Equity/assets ratio, %                                       60             67      58

                                                                *) The figures for 2007 include capital gain from the sale of property. Profit for 2007,
                                                                   excluding sales of property, totalled SEK 192 M and earnings per share were SEK 5.98.
                                                                **) From continuing operations.
                                                                ***) Board of Directors’ proposal for 2008. Of which, extra dividend of SEK 5 in 2007 and
                                                                     SEK 7 in 2006.
                                                                                                                                                            1
    Mekonomen Annual Report 2008 | CEO’s comments




          Ceo’s comments

          The 2008 financial year was a strong year                were well-received and contributed to strengthening        define our objective to our customers. The results of
          for Mekonomen. Despite a weak economic                   sales and increasing revenues, however, with some          the work were summarised in the motto ”We want to
          climate and business trend in the total market,          negative impact on EBIT.                                   make CarLife easier” for our customers.
          EBIT and revenue increased by 6 per cent – an               Norway continues to develop according to plan. A           The year 2008 was a repositioning year. A year
          excellent confirmation that Mekonomen’s of-              number of newly established stores, combined with          in which, despite a weaker economic trend, we in-
          fering was well received by customers and that           higher market activities, had a negative impact on         creased our speed and implemented a number of
          our efforts were fruitful.                               profit for 2008. These stores are strategically impor-     new initiatives, while sharpening our market activities.
             The primary reason for the positive trend             tant and will eventually contribute positively to profit   When we summarise the year, we can confidently say
          was commitment from our employees. The                   in the long term. The new concepts were also well-         that ”We make CarLife easier.”
          rate of change was high and everyone in the              received by our customers. The underlying revenues
          Group had to satisfy stringent demands. Dur-             increased by 6 per cent.                                   new workshop concept
          ing 2008, we went from the previous promise                 The change effort that commenced in 2007 in             – Mekopartner and Workshop Centres
          of ”We want to make CarLife easier” to now               Denmark continued during 2008. We have also re-            During the year, the number of workshops affiliated
          saying ”We make CarLife easier”.                         viewed our distribution and logistics, which resulted      to Mekonomen increased from 778 to 1,051, up 35 per
                                                                   in a reduction in the number of warehouses during          cent. In order to supplement the current chain, Meko-
          stronger MarKet shares in sWeden,                        the year. We went from 38 to five regional warehouses,     nomen Service Centres, the MekoPartner chain was
          norWaY and denMarK                                       while implementing measures aimed at increasing            introduced at the beginning of 2008. MekoPartner rep-
          During the year, the total market for spare parts and    purchasing loyalty. We have accepted 119 workshops         resents the same high quality but the number of asso-
          accessories in Scandinavia declined by 5 per cent.       into our chains and initiated adaptation of the store      ciated services, such as substitute cars, is more limited.
          Despite this, Mekonomen strengthened its market          structure. A solid platform was built to achieve long-     The number of MekoPartner workshops was 199 at the
          shares and increased sales in all markets. The portion   term profitability. During the year, sales and profit      end of 2008 and the number of Mekonomen Service
          of consumer sales rose during 2008 in line with the      trend were positive, with an underlying revenue            Centres was 852. The largest increase in the number
          strategy to improve Mekonomen’s position with end        increase of 2 per cent.                                    of affiliated workshops occurred in Denmark. During
          consumers. The average for the Group is currently 25                                                                the year, workshops that were previously limited to
          per cent to consumers and 75 per cent to workshop        We MaKe CarLiFe easier                                     only one or a few car makes joined Mekonomen and
          customers.                                               During 2007, a new strategy was formed for Meko-           the inflow to these ”brand-affiliated” workshops has
            Sweden is our largest market and where we launch       nomen, with the objective of creating the prerequisites    increased. The support to workshops in the form of
          our new concepts first. New launches during 2008         to increase sales and improve profit. The basis was to     competency development and technical support




2
                                                                                                                      CEO’s comments | Mekonomen Annual Report 2008




continued to improve. In addition, we have also estab-       signed agreements with a total of 22 companies, which   to develop Mekonomen, additionally strengthen our
lished workshop centres at strategic locations, which        have a combined fleet of 38,000 cars.                   position and be productive for customers, owners,
only serve the workshops.                                                                                            employees and other cooperation partners.
                                                             new service concept
new store concepts launched                                  – Mekonomen direkt                                      Kungens Kurva, March 2009
– Mekonomen Mega and Mekonomen Medium                        In January 2009, Mekonomen Direkt was launched
During the year, new store concepts were developed,          – one call to +46 (0)771-72 00 00 is all a customer
aimed at making life easy for customers and making           needs to get in touch with Mekonomen, day or night,     Håkan Lundstedt
operations and space utilisation more efficient. The         to schedule a workshop visit, for example. This is      President and CEO
new concepts, Mekonomen Mega and Medium, com-                another example of how we are making CarLife easier
bine store and workshop in the same premises and             for consumers and companies and how we simultane-
differ primarily in terms of size and location.              ously strengthen our workshop chains.
   The new facilities were designed to satisfy custom-
ers’ requirements and demands. In order to further           Future
increase accessibility, we have established new stores       I am confident of the future and that we will achieve
in a number of retail centres and also increased open-       our long-term growth target of 10 per cent annually.
ing hours.                                                   At the end of 2008 and in early 2009, we saw an im-
                                                             provement in sales of our workshop services and we
new corporate concept                                        expect the aftermarket to stabilise already in 2009.
– Mekonomen Fleet                                              When we asked our customers what they wanted
Aimed at making CarLife easier for companies, a new          the most in terms of CarLife, the most important
business area was established – Mekonomen Fleet.             response was greater accessibility and an easier Car-
Mekonomen Fleet offers to handle all service and re-         Life – Mekonomen Direkt is the response to that. We
pairs on behalf of companies as well as administration       will continue in the same spirit and produce unique
of their cars. Our major competitive advantage is that       concepts and offerings aimed at satisfying each cus-
Mekonomen handles all car makes and that compa-              tomer’s specific needs – since each person and thus
nies with large fleets will be able to limit themselves to   each customer is unique – we not only service cars,
only one contact, namely with Mekonomen. We have             we serve people! With that attitude, we will continue




                                                                                                                                                                         3
    Mekonomen Annual Report 2008 | Five-year summary




          Five-Year suMMarY
          inCoMe stateMent
           SEK M                                                  2008     2007     2006     2005     2004
           Net sales                                              2,646    2,530    2,432    2,312    2,133
           Goods for resale                                      –1,317   –1,294   –1,275   –1,246   –1,135
           Other expenses                                        –1,123   –1,007    –955     –918     –846
           Operating revenue                                       251      250      220      170      168
           Profit after financial items                            261      418      198      162      162
           Tax on profit for the year                              –72      –70      –58      –44      –56
           PROFIT FOR THE YEAR                                     189      348      140      118      106



          BaLanCe sheet
           SEK M                                                  2008     2007     2006     2005     2004
           ASSETS
           Intangible assets                                       254      206      169      173      160
           Other fixed assets                                      148      109      471      490      561
           Inventories                                             602      554      521      534      473
           Accounts receivable                                     217      201      200      196      175
           Other current assets                                    116      120      188      169       67
           Cash and cash equivalents                                85      290       95       38       91
           TOTAL ASSETS                                           1,423    1,481    1,644    1,600    1,527


           SHAREHOLDERS’ EQUITY AND LIABILITIES
           Shareholders' equity, Parent Company's shareholders     833      978      933      911      831
           Minority share of shareholders' equity                   18       18       20       23       23
           Long-term liabilities                                    42       44       70      148      221
           Current liabilities                                     530      441      621      518      452
           TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY             1,423    1,481    1,644    1,600    1,527




          Condensed Cash-FLoW stateMent
           SEK M                                                  2008     2007     2006     2005     2004

           Cash flow from operating activities                     209      320      200      125      214
           Cash flow from investing activities                     –93      448      –19      –65     –163
           Cash flow from financing activities                    –321     –574     –122     –113      –42
           CASH FLOW FOR THE YEAR                                 –205      194       59      –53        9




4
                                                                                                                                               Five-year summary | Mekonomen Annual Report 2008




data per share
 Amounts in SEK per share, if not otherwise stated                                                                                           2008         2007         2006         2005         2004

 Profit                                                                                                                                       5.84        11.03         4.28         3.61         3.18
 Cash flow                                                                                                                                    6.77        10.32         8.61         4.06         6.95
 Shareholders’ equity                                                                                                                          27          31.7         30.2         29.5         26.9
 Dividends                                                                                                                                       6           11          10          3.25         1.15
 Share of profit paid, %                                                                                                                       103          100         234            90           36
 Share price at the end of the year                                                                                                             70          146      106.75         101.5         98.5
 Share price, highest for the year                                                                                                             151        154.5       114.5         104.5          107
 Share price, lowest for the year                                                                                                            58.25         100        73.75            76        77.75
 Direct yield, %                                                                                                                               8.6          7.5         9.4           3.2          1.2
 P/E ratio at the end of the year, multiple                                                                                                   12.0         13.2         24.9         28.1         31.0
 Average number of shares after dilution effects                                                                                        30,868,822   30,868,822   30,868,822   30,868,822   30,868,822
 Number of shareholders at the end of the year                                                                                              6,559        6,199        5,976        5,978        5,617
* Board of Directors’ proposal for 2008. Of which, extraordinary dividend SEK 5.00 for 2007, SEK 7.00 for 2006 and SEK 2.10 for 2005.




KeY ratios                                                                                                                                   2008         2007         2006         2005          2004

 Sales growth, %                                                                                                                                6            4            5            9            14
 Gross margin,%                                                                                                                                50           49           48           46            47
 EBIT MARGIN, %                                                                                                                                 9           10            9            7             8
 Profit margin, %                                                                                                                              10           16            8            7             8
 Capital employed, SEK M                                                                                                                      905         1,002        1,212        1,078        1,148
 Operating capital, SEK M                                                                                                                     820          712         1,117        1,040        1,057
 Return on capital employed, %                                                                                                                 28           39           19           16            15
 Return on operating capital, %                                                                                                                33           27           20           16            15
 Return on equity, %                                                                                                                           20           36           14           13            13
 Return on total capital, %                                                                                                                    19           27           13           11            12
 Equity/assets ratio, %                                                                                                                        60           67           58           58            56
 Net debt/equity ratio, multiple                                                                                                              neg          neg           0.2          0.1          0.2
 Interest-coverage ratio, multiple                                                                                                             33           47           14           13            12
 Net indebtedness, SEK M                                                                                                                      neg          neg          164          236           196

 AVERAGE NUMBER OF EMPLOYEES
 Sweden                                                                                                                                       732          687          684          670           627
 Norway                                                                                                                                       233          202          184          169           160
 Denmark                                                                                                                                      397          382          388          405           432
 GROUP                                                                                                                                      1,363        1,271        1,256        1,244         1,219

 Number of stores/of which wholly owned
 Sweden                                                                                                                                   123/103        114/93       115/88       115/88       112/84
 Norway                                                                                                                                     44/29        42/25        39/21        39/21         37/20
 Denmark                                                                                                                                    39/39        38/38        38/38        39/39         43/43
 GROUP                                                                                                                                    206/171      194/156      192/147      193/148       192/147




                                                                                                                                                                                                         5
    Mekonomen Annual Report 2008 | Quarterly data




           Contd. KeY ratios
                                                                                                   2008       2007      2006      2005      2004
           NUMBER OF MEKONOMEN SERVICE CENTRES
           Sweden                                                                                   363        337       329       365       549
           Norway                                                                                   320        305       321       310       274
           Denmark                                                                                  169        136       114        93        63
           GROUP                                                                                    852        778       764       768       886
           NUMBER OF MEKOPARTNER
           Sweden                                                                                    75          –         –         –         –
           Norway                                                                                    38          –         –         –         –
           Denmark                                                                                   86          –         –         –         –
           GROUP                                                                                    199          –         –         –         –




           QuarterLY revieW
                                          Full-year                                            Full-year
                                              2008     Q4 2008   Q3 2008   Q2 2008   Q1 2008       2007    Q4 2007   Q3 2007   Q2 2007   Q1 2007
           NET SALES, SEK M
           Sweden                            1,297        340       316       347       294       1,270       328       314       330       299
           Norway                              630        155       156       178       142         584       150       146       154       134
           Denmark                             704        181       162       184       178         661       166       162       170       163
           Group-wide and eliminations           14         4         3         3         3          15         4         4         3         4
           GROUP                             2,646        680       637       712       617       2,530       649       626       657       599


           EBIT, SEK M
           Sweden                                211       54        60        60        38         216        51        57        55        53
           Norway                                76        12        22        26        16          81        17        25        20        20
           Denmark                               –2        –7         3         2         0         –22       –21         0         1        –1
           Group-wide and eliminations         –34        –14        –6        –9        –6         –24        –4        –3         1       –18
           GROUP                               251         45        79        79        48         250        43        78        76        53


           EBIT MARGIN, %
           Sweden                                16        15        18        17        13          17        15        18        16        18
           Norway                                12         8        14        14         11         14         11       17        13        15
           Denmark                                0        –4         2         1         0          –3       –13         0         1        –1
           GROUP                                  9         7        12         11        8          10         7        13         11        9


           QUARTERLY DATA, GROUP
           Net financial items, SEK M            10         3         2        –1         5         168        25       137        –3         8
           Profit before tax, SEK M            261         49        81        78        53         418        68       216        73        61
           Tax, SEK M                          –72        –13       –23       –22       –14         –70        –2       –29       –21       –18
           Profit after tax, SEK M             189         36        58        56        39         348        66       187        52        43
           Gross margin,%                        50        51        52        50        49          49        49        51        48        47
           Earnings per share, SEK            5.84        1.13      1.79      1.72       1.2      11.03       2.13      5.94      1.62      1.34




6
                                                                                                                  Corporate governance | Mekonomen Annual Report 2008




Corporate governance
Corporate governanCe report                               The ten largest shareholders on 31 December 2008,            have registered participation in adequate time are en-
                                                          according to SIS Ownership Data Corp.
For MeKonoMen aB (puBL)                                                                                                titled to participate in the Annual General Meeting and
                                                                                        Number of      % of votes
Mekonomen applies the Swedish Code of Corporate           Shareholders                    shares       and capital
                                                                                                                       vote according to their shareholdings. All information
Governance. Information pertaining to the Swedish                                                                      concerning the company’s general meetings, such as
                                                          Axel Johnson AB with
Code of Corporate Governance is found on the Coun-        subsidiaries                   8,951,958              29.0   registration, entitlement for items to be entered in the
cil for Swedish Corporate Governance website, www.        AFA Försäkring                 3,665,330              11.9   agenda in the notification, minutes, etc., are available
                                                          lng-Marie Fraim Sefastsson     2,040,176               6.6
bolagsstyrningskollegiet.se. If companies included in     Eva Fraim Påhlman              2,040,176               6.6
                                                                                                                       on the company’s website.
the Code in no way apply the Code, this must be clear-    Swedbank Robur fonder          1,341,285               4.3      With regard to participation in the Annual General
ly stated and the reasons explained. Mekonomen’s          Fjärde AP-fonden               1,214,185               3.9   Meeting, the Board has deemed it not financially justi-
                                                          Lannebo fonder                 1,142,000               3.7
possible deviations from the Code and explanations                                                                     fiable at present to allow shareholders to participate in
                                                          SHB/SPP fonder                   892,573               2.6
are reported in the running text. This Corporate Gov-     SEB fonder                       791,820               2.6   the Annual General Meeting through any means other
ernance report does not represent part of the formal      Leif Möller                      319,700               1.0   than physical presence. It is the company’s ambition
Annual Report and has not been reviewed by the            TOTAL                         22,399,203              72.6   that the Annual General Meeting shall be a consum-
company’s auditors.                                                                                                    mate body for shareholders, in accordance with the
                                                          annual general Meeting                                       intentions of the Swedish Companies Act, which is
sharehoLders                                              The Annual General Meeting is Mekonomen’s                    why the objective is that the Board in its entirety, the
shares and shareholders                                   supreme governing body, at which every shareholder           representative of the Nomination Committee, the Presi-
The share capital amounted to SEK 77,172,055 on 31        is entitled to participate. The Annual General Meeting       dent, auditors and other management executives must
December 2008, represented by 30,868,822 shares.          shall be held within six months of the close of the          always be present at the Annual General Meeting.
Each share carries one voting right at the Annual Gen-    financial year. The Annual General Meeting adopts the
eral Meeting. The total market value for the company      income statement and balance sheet and the appro-            noMination CoMMittee
on 31 December 2008 was SEK 2.2 billion, based on the     priation of the company’s profit, resolves on discharge      In accordance with the resolution of the Annual
closing price.                                            from liability, elects the Board of Directors and where      General Meeting on 4 April 2008, Mekonomen has
   The number of shareholders on 31 December 2008         applicable, auditors, and approves fees, addresses           established a Nomination Committee. The Nomina-
was 6,559. At the same date, the ten largest sharehold-   other statutory matters and passes resolutions               tion Committee shall prepare and submit proposals to
ers controlled 72.6 per cent of the capital and voting    pertaining to motions from the Board and sharehold-          the Annual General Meeting pertaining to:
rights and the participation of foreign owners accoun-    ers. The company announces the date and location             •	 Election of the Chairman of the Annual General
ted for 9.4 per cent of the capital and voting rights.    of the Annual General Meeting as soon as the Board              Meeting,
                                                          has made its decision, but not later than in connection      •	 Election of the Chairman of the Board and other
                                                          with the third-quarter report. Information pertaining           Board members,
                                                          to the time and location is available on the company’s       •	 The Board fees and any remuneration for commit-
                                                          website. Shareholders that are registered in Euroclear          tee work,
                                                          Sweden’s shareholders’ register on the record date and       •	 where appropriate, election of and fees to auditors.




                                                                                                                                                                                   7
    Mekonomen Annual Report 2008 | Corporate governance




          Prior to the 2009 Annual General Meeting, the Nomi-      Wolff Huber, Helena Skåntorp, Fredrik Persson, Kenny         members prior to each meeting, which were then held
          nation Committee comprises Göran Ennerfelt, repre-       Bräck and Anders G Carlberg were re-elected. Fredrik         in accordance with the agenda that was approved for
          senting the Axel Johnson AB Group, Maj Charlotte         Persson was elected Chairman of the Board.                   the meeting. On occasions, other senior executives
          Wallin, representing AFA Försäkring, Ing-Marie Fraim        All ordinary Board members are independent in             have participated in the Board meetings in a reporting
          representing own shares and Eva Fraim Påhlman,           relation to the company and its management. Three of         capacity, whenever necessary. No deviating views to
          representing own shares. The Nomination Committee        the Board members are independent also in relation           be recorded in the minutes were expressed at any of
          elected Göran Ennerfelt as its Chairman.                 to major shareholders. The President is not a member         the meetings during the year. Matters of high signifi-
             Mekonomen’s Chairman, Fredrik Persson, has been       of the Board and neither is any other member of the          cance that were discussed during the year primarily
          co-opted to the Nomination Committee. The Nomina-        Management Group.                                            concerned the company’s financial performance, the
          tion Committee’s proposals are to be announced in                                                                     launch of new concepts and the company’s future
          connection with the notification to convene the An-      Board members                                                strategy.
          nual General Meeting.                                    It is the opinion of the Board that the Board’s structure
             The Nomination Committee has the right to charge      in terms of competency, experience and background
          the company with the costs of, for example, recruiting   is compatible with the company’s operations, develop-        assignment
          head hunters and other consultants required for the      ment phase and circumstances. A presentation of edu-         In accordance with the requirements of the Code, the
          Nomination Committee to fulfil its duties. Moreover,     cation, current assignments, and the number of shares        Board’s ambition was to devote particular attention to
          in connection with its assignments, the Nomination       held by Board members is found on page 54.                   establishing overall goals for the operation and decide
          Committee shall fulfil the duties that rest upon the                                                                  on strategies by which to achieve the said goals, and in
          Nomination Committee in accordance with the Swed-        Chairman of the Board                                        part to continuously evaluate the operating manage-
          ish Code of Corporate Governance.                        The Chairman of the Board, Fredrik Persson, is not           ment, with the aim of securing the company’s govern-
             Mekonomen has not established any specific age        employed by the company and does not have any                ance, management and control. The Board believes
          limit for Board meetings or time limits pertaining to    assignments for the company beyond his chairman-             that there are functioning systems for the monitoring
          the length of time Board members may sit on the          ship of the Board. It is the opinion of the Board that       and control of the company’s financial position in rela-
          Board. Auditors are elected every fourth year when       Fredrik Persson ensures that the Board conducts its          tion to the established goals; that control of compli-
          the matter is submitted to the Annual General Meet-      assignments efficiently and also fulfils its duties in ac-   ance with laws and other regulations is implemented,
          ing. The election of auditors took place at the 2007     cordance with applicable laws and regulations.               and that the provision of external information is open,
          Annual General Meeting.                                                                                               objective and relevant.
                                                                   the Board’s working procedures                                  There are written instructions that regulate the
          speCiFiC inForMation aBout the                           The Board is responsible for the company’s organisa-         distribution of information between the Board and
          Board’s WorK                                             tion and management and shall also make decisions            the President, and for the reporting process. They are
          size and composition                                     pertaining to strategic issues. During 2008, the Board       primarily:
          At the Annual General Meeting on 4 April 2008, it was    held eight meetings, of which one was the statutory
          decided that the Board shall comprise seven ordinary     meeting. The minutes of the meetings were recorded           •	 The rules of procedure for the Board’s work
          members with no deputy members. All existing Board       by the Board’s secretary, who is the company’s CFO.          •	 Instructions for the President
          members, Marcus Storch, Antonia Ax:son Johnson,          Relevant meeting documentation was sent to all               •	 Attestation regulations




8
                                                                                                                   Corporate governance | Mekonomen Annual Report 2008




The Board evaluates its work every second year and it       correct financial reporting. Twice per year, in con-      CoMpanY ManageMent
is the duty of the Chairman of the Board to ensure that     nection with preparation of the financial accounting      president’s assignments
this is done. The evaluation involves individual meet-      for the third quarter and annual financial statements,    The President is appointed and may be discharged by
ings between the Chairman of the Board and all Board        the company’s auditors report on how the company          the Board and his/her work is continuously evaluated
members. The collective opinion is that the Board’s         ensured that accounting, management and financial         by the Board, which occurs without the presence of
work during 2008 functioned well and that the Board         control function. Following the formal report, the        Company Management. Mekonomen’s President and
fulfilled the requirements of the Code pertaining to the    President and CFO leave the Board meeting to allow        CEO, Håkan Lundstedt, is also a member of the Board
Board’s assignment.                                         Board members to discuss with auditors without the        of Fjällbrynt AB and the MILKO Cooperative Associa-
   The Annual General Meeting resolved, in accord-          participation of company officials.                       tion and has no shareholdings or ownership in compa-
ance with the proposal from the Nomination Commit-                                                                    nies with significant business ties with Mekonomen.
tee, to allocate Board fees amounting to SEK 1,360,000,     reMuneration CoMMittee
of which SEK 320,000 pertains to a fee for the Chair-       During 2008, the Board of Directors formed a Remu-        Company Management
man of the Board and SEK 240,000 for the Vice Chair-        neration Committee to handle issues concerning            A presentation of Company Management is available
man, with the remaining amount to be distributed to         remuneration of senior executives. This was based on      on page 55.
the other Board members.                                    the Annual General Meeting’s resolution pertaining to
                                                            the guidelines for remuneration of Company Manage-        remuneration of Company Management
audit Committee                                             ment. The Committee comprises Fredrik Person as           Mekonomen’s Remuneration Committee makes
The entire Board of Mekonomen assumes respon-               Chairman, Marcus Storch and Anders G Carlberg. Two        decisions pertaining to remuneration of the President.
sibility for ensuring that the audit guarantees, in an      meetings were held during the year and all members        Håkan Lundstedt has a basic salary per month and
efficient manner, that the Group has acceptable pro-        were present at these meetings.                           a variable salary portion, which is based on the com-
cedures for internal control and high-quality and                                                                     pany’s profit and can amount to a maximum of 50
                                                                                                                      per cent of the basic annual salary. Under his pension
                                                                                                                      terms, payment of pension premiums is made in the
 Board of Directors                 Present at Board meetings     Dependent/independent *     Board member since      amount corresponding to 25 per cent of basic salary.
 Fredrik Persson, Chairman          8/8                           B                           August 2006             Other benefits take the form of a company car. Termi-
 Marcus Storch, Vice Chairman       8/8                           B                           August 2006             nation notice is 12 months if initiated by the Company
 Helena Skåntorp                    8/8                           O                           May 2004                and six months if notice is given by the employee.
 Antonia Ax:son Johnson             7/8                           B                           August 2006             Severance pay of six months’ salary is paid if termina-
 Kenny Bräck                        7/8                           O                           May 2007                tion is initiated by the company.
 Anders G Carlberg                  7/8                           B                           August 2006               Issues pertaining to remuneration to other senior
 Wolff Huber                        7/8                           O                           August 2006             executives are also prepared by the Remuneration
*) According to the definition in the ”Swedish Code of Corporate Governance”.                                         Committee. The principle for remuneration is based
   All Board members are independent of the company and its management.                                               on the senior executives being offered market-based
   O = Board members considered independent of major shareholders in the company.
   B = Board members considered dependent of major shareholders in the company.                                       remuneration. Thus the criteria shall be based on the
                                                                                                                      significance of assignments performed, demand for




                                                                                                                                                                                9
     Mekonomen Annual Report 2008 | Corporate governance




           competency, experience and performance and that            auditors                                                   interim reports, annual reports and press releases, as
           remuneration shall comprise the following parts:           The auditors are appointed by the Annual General           well as financial content and presentation material, in
                                                                      Meeting and are charged with reviewing the compa-          connection with meetings with the media, sharehold-
           •	 Fixed basic salary                                      ny’s financial reporting and the Board’s and President’s   ers and financial institutions.
           •	 Variable remuneration                                   management of the company. Deloitte AB, which has
           •	 Pension benefits                                        an organisation comprising broad and specialised           audit
           •	 Other benefits and severance terms                      competency that is well-suited to Mekonomen’s op-          The entire Board of Mekonomen assumes responsibil-
                                                                      erations, has been the company’s auditors since 1994.      ity for ensuring that the audit, in an efficient manner,
           The distribution between basic salary and variable         At the 2007 Annual General Meeting, Deloitte AB, with      establishes that the Group has acceptable procedures
           remuneration shall be in proportion to the senior ex-      Authorised Public Accountant Lars Svantemark as the        for internal control and high-quality financial report-
           ecutive’s responsibilities and authorities. The variable   Auditor in Charge, was appointed the auditing firm un-     ing. With regard to the preparation of the Board’s work,
           remuneration for senior executives is based partly on      til 2011. In addition to Mekonomen, Lars Svantemark is     the Board estimates that quality assurance of the
           the company’s profit and partly on individual qualita-     also the auditor of Uniflex, Securitas Direct and Oxford   financial reporting, which is conducted within the
           tive parameters and can amount to a maximum of             Aviation Academy. He has also previously been the          framework of the company’s own internal control,
           four months’ salary. Other benefits refer primarily        auditor of Sandvik, Elekta, Poolia and A-Com. Lars         corresponds to current requirements. The company’s
           to company cars. Pension premiums are paid in an           Svantemark has no assignments in companies that            auditors personally present their plans, risk assess-
           amount that is based on the ITP plan or a correspond-      are closely related to Mekonomen’s major sharehold-        ments and controls, and findings from the audit at two
           ing system for employees abroad. Pensionable salary        ers or President.                                          Board meetings during the year, which additionally
           refers to the basic salary. Severance pay if employ-       Remuneration to Deloitte,
                                                                                                                                 secures the Board’s information requirement. At these
           ment termination is initiated by the company can           SEK M                            2008 2007 2006 2005       meetings, the President and CFO leave after present-
           amount to one year’s basic salary. At the 2008 Annual      Remuneration for audit                                     ing their formal reports to enable the Board members
                                                                      assignments                       4.3   4.3   3.6    3.6
           General Meeting, it was also decided that in addition,                                                                to conduct with the auditors without the participation
                                                                      In addition to audit assign-
           upon approval by the Board of Directors, Company           ments, Deloitte has received                               of Company Management. The Board continuously
           Management may receive a cash bonus from the com-          the following remuneration                                 evaluates the need to elect an Audit Committee.
                                                                      for consulting services during
           pany. The bonus will be profit-based and calculated on     the past three years, amount
           the Group’s profit for the 2008 – 2010 financial years.    in SEK M:                         0.2   1.8   1.7    1.8   Board oF direCtors’ report on
           The bonus program, in its entirety, as a total expense                                                                internaL ControL
           for the company, may not exceed SEK 12 M for the           reporting and audit                                        In accordance with the Swedish Companies Act and
           period. The criteria for the size of an individual bonus   reporting                                                  the Swedish Code of Corporate Governance, the
           will be established by the Board.                          The Board supervises the quality of the financial          Board of Directors is responsible for internal control.
              The Board has not made any decisions pertaining         reporting through instructions to the President. Jointly   This report was prepared in accordance with the
           to share or share price-based incentive programs for       with the CFO and Communications Manager, the               Swedish Code of Corporate Governance, sections 10.5
           Company Management.                                        President’s assignment is to review and quality-assure     and 10.6, and FAR/SRS’s guidance to the Swedish Code
                                                                      all financial reporting including financial statements,    of Corporate Governance. The report is limited to deal




10
                                                                                                          Corporate governance | Mekonomen Annual Report 2008




with internal control pertaining to financial reporting      As a contribution to strengthening the internal control,    information and communication
and Mekonomen has elected to only submit a descrip-          Mekonomen prepared a financial handbook in 2007             Policies and guidelines are particularly important for
tion of how internal control is organised without sub-       that provides an overall picture of existing policies,      accurate accounting, reporting and dissemination
mitting a statement on how it functioned. This report        rules and regulations and procedures within the             of information. Within Mekonomen, policies and
does not represent a part of the formal annual report        financial area. This is a living document, which will be    guidelines are continuously updated pertaining to the
document and has not been reviewed by the com-               updated continuously and adapted to changes within          financial process. This occurs primarily within respec-
pany’s auditors.                                             the Mekonomen operation. In addition to the financial       tive Group functions aimed at the various operations
                                                             handbook, there are documents and manuals that              through e-mails, but also in connection with quarterly
Control environment                                          provide guidance for the daily work in stores, for          control meetings in which all financial managers/con-
The control environment represents the basis for the         example, pertaining to stock taking and cash-register       trollers participate. For communication with internal
internal control pertaining to the financial reporting.      reconciliation.                                             and external parties, there is a communications policy
An important part of the control environment is that                                                                     that states guidelines for communication. The aim of
decision paths, authorities and responsibilities must        risk assessment                                             the policy is to ensure that all information obligations
be clearly defined and communicated between                  Mekonomen conducts continuous surveys of the                are complied with in a correct and complete manner.
various levels in the organisation and that the control      Group’s risks. During these surveys, a number of items
documents are available in the form of policies,             were identified in the income statement and balance         Follow-up
handbooks, guidelines and manuals. Thus, a key part          sheet in which the risks for errors in the financial        The Board continuously evaluates the information
of the Board’s assignment is to prepare and approve          reporting are elevated. The company is continuously         submitted by the Company Management and audi-
a number of fundamental policies, guidelines and             working on these risks by strengthening the controls.       tors. The CEO and CFO also cooperate closely with
frameworks. These include the Board’s working                Furthermore, risks are addressed in a special forum,        the subsidiaries’ controllers on matters pertaining to
procedures, instructions for the President, Invest-          including questions affiliated to start-ups and acquisi-    accounts and reporting. The follow-up and feedbacks
ment policies and the Insider policy. The aim of these       tions.                                                      concerning possible deviations arising in the internal
policies is to create a basis for sound internal control.                                                                controls are a key part of the internal control work
Furthermore, the Board has assured that the organisa-        Control activities                                          since this is an efficient manner for the company to
tional structure provides distinct roles, responsibilities   The Group’s control structure is formed to manage           ensure that errors are corrected and that the control
and processes that benefit the effective management          risks that the Board deems significant for the internal     is further strengthened. Mekonomen has no internal
of the operation’s risks and facilitate target fulfilment.   control of the financial reporting. The aim of the appro-   audit function since the above-mentioned func-
Part of the responsibility structure includes an obliga-     priate control activities is to discover, prevent and       tions fulfil this task, however, an annual evaluation is
tion for the Board to evaluate the operation’s per-          correct errors and deviations in the reporting. The         conducted of the requirement of a specific internal
formance and results on a monthly basis, through             control activities include reconciliation of accounts,      audit function.
appropriate report packages containing income                analytic follow-up, comparison between income state-
statements, balance sheets, analyses of important key        ments and balance sheets and control stock-taking in
ratios, comments pertaining to the business status of        warehouses and stores.
each operation and also forecasts for future periods.




                                                                                                                                                                                    11
     Mekonomen Annual Report 2008 | Administration Report




            the Board and president of Mekonomen aB (publ.), Corporate registration number 556392-1971,
            hereby submit the annual report and Consolidated accounts for the 2008 financial year.

            generaL                                                   In Denmark, the distribution project and reposition-      were charged against profit. Expenses in 2009 are
            Mekonomen is Scandinavia’s leading spare parts            ing of stores toward new customer groups and              expected to amount to SEK 14 M per quarter. The
            chain with proprietary wholesale operations,              investments in new workshops created a platform           project has a repayment period of approximately
            approximately 200 stores and more than 1,000              for achieving long-term profitability. Mekonomen is       two years from 2010. In the preceding year, costs
            workshops that operate under the Mekonomen                now taking the next step into this market with a new      of SEK 15 M were charged against EBIT for the year
            brand. The Parent Company conducts operations in          Manager, Lars From, who will assume his position on       pertaining to the distribution project in Denmark.
            the form of a liability company and has its registered    1 April, 2009.                                            The aim of the project is to reduce the number of lo-
            office in Stockholm. The address of the head office          The number of affiliated workshops passed 1,000        cal warehouses and enhance distribution efficiency.
            is Smista Allé 11, SE-141 70 Segeltorp, Sweden. The       during 2008 and the total number of affiliated work-      Costs for planned growth investments were charged
            Parent Company’s share is listed on the Mid-Cap list      shops was 1,051 at the end of the year. During January    against EBIT in all countries.
            of NASDAQ OMX Nordic. The principal owner in              2009, Mekonomen Direkt was launched in Sweden.
            the Parent Company is the Axel Johnson AB Group,          One call, to +46 (0)771-72 00 00, is all a customer has   profit/loss after net financial items
            which owns 29 per cent of the votes and capital.          to do to contact Mekonomen, night or day, to book a       Profit after net financial items amounted to SEK 261
                                                                      workshop appointment, for example. The number of          M (418). Net financial items included a capital gain of
            FinanCiaL Year                                            wholly owned stores increased by 15 during the year,      SEK 151 M pertaining to the divestment of properties.
            Mekonomen had a strong year in a declining market.        of which eight were acquired in December from Micro       Net financial items, excluding gains from property
            Despite a weak economic climate, Mekonomen had            AB. The total number of stores in the chain at the end    divestments, amounted to SEK 10 M (14). Net interest
            higher sales and profit compared with the preceding       of the year was 206 (194), of which the number of         income amounted to SEK 4 M (2) and other financial
            year.                                                     wholly owned stores was 171 (156).                        items to SEK 7 M (167), of which SEK 153 M pertains to
               The strategy that was adopted and initiated during                                                               property divestments in the preceding year. Profit
            2007 continued to be pursued in 2008. A number of         revenues                                                  after net financial items includes currency effects
            investments were implemented in selected areas:           Revenues for the full year increased by 6 per cent        corresponding to an expense of SEK 3 M (pos: 13).
            The new store concepts, Mekonomen Mega and                to SEK 2,691 M (2,550). Other revenues included
            Mekonomen Medium – both concepts based on store           exchange-rate gains of SEK 14 M (14) and rental rev-      profit for the year
            and workshop in the same premises – investments           enues, property-related revenue, licenses, etc. The       Profit for the year amounted to SEK 189 M (348) and
            in the corporate market with Mekonomen Fleet and          underlying revenue increased by 4 per cent.               earnings per share to SEK 5.84 (11.03). Of profit for the
            the new workshop chain, MekoPartner. MekoPartner                                                                    year, SEK 180 M (341) was attributable to the Parent
            represents the same high quality for consumers as         eBit                                                      Company’s shareholders and SEK 9 M (7) to minority
            Mekonomen Service Centres, but the number of associ-      EBIT totalled SEK 251 M (250) and EBIT margin was         shareholders.
            ated services, such as substitute cars, is more limited   9 per cent (10). As a result of property divestments
            and the connection to Mekonomen somewhat weaker.          during the third quarter of 2007, rental expenses for     sweden
               During the year, Mekonomen also commenced              2008 increased by SEK 14 M, compared with the pre-        Net sales (external) increased by 2 per cent to SEK
            work regarding the change to the new business sys-        ceding year. Expenses totalling SEK 14 M pertaining       1,297 M (1,270). The underlying net sales increased
            tem, which was implemented in Sweden during 2008          to the project for Mekonomen’s new store concept,         1 per cent.
            and will be implemented in Norway and Denmark             which was launched during the third quarter to en-           EBIT amounted to SEK 211 M (216) and the operating
            during 2009.                                              hance the efficiency of operations and store space,       margin was 16 per cent (17). The number of stores




12
                                                                                                                  Administration Report | Mekonomen Annual Report 2008




totalled 123 (114), of which 103 (93) are wholly owned.   proprietary store was opened and one store was               able to the higher tax paid in 2008 and increased
Costs totalling SEK 3 M for the new store concept were    acquired. In connection with the acquisition in              accounts payable in 2007.
charged against profit for the year. Compared with the    Denmark, the existing store in the same district was
preceding year, rental costs increased by SEK 8 M as a    discontinued. In addition, minority shares in three          personneL
result of the property divestment during the year.        store companies were acquired. In Sweden, 15 store           The number of employees at the end of the year
                                                          managers became part-owners in individual store              totalled 1,425 (1,302) and the average number of
norway                                                    companies. Their ownership share amounts to 9 per            employees during the year was 1,363 (1,271).
Net sales (external) increased by 8 per cent to SEK       cent per store company.
630 M (584). The underlying net sales increased by                                                                     reMuneration oF senior eXeCutives
6 per cent. EBIT amounted to SEK 76 M (81) and oper-      investments                                                  Remuneration of senior executives is presented in
ating margin was 12 per cent (14). Costs totalling SEK    During the year, net investments in tangible fixed           Note 5. The Board will propose to the Annual Gen-
5 M for the new store concept were charged against        assets amounted to SEK 44 M (35). In addition, invest-       eral Meeting the following guidelines for remunera-
profit for the year. The number of stores in Norway       ments in new IT systems amounted to SEK 17 M (8)             tion to senior executives.
totalled 44 (42), of which 29 (25) are wholly owned.      during the year.                                               The company will strive to offer its senior execu-
                                                             Acquisitions of companies and operations were im-         tives market-based remuneration, whereby the crit-
denmark                                                   plemented during the year totalling SEK 63 M (27). Ac-       eria based on the significance of assignments, demand
Net sales (external) in Denmark amounted to SEK           quired assets amounted to SEK 36 M (10) and acquired         for expertise, experience and performance and remu-
704 M (661). The underlying net sales increased by        liabilities to SEK 9 M (8). In addition to goodwill, which   neration shall comprise the following:
2 per cent. As a result of property divestment in         amounted to 37 (26), no intangible surplus value was
2008, rental costs increased by SEK 6 M compared          identified in connection with the acquisitions.              •	 Fixed basic salary
with the preceding year. Costs totalling SEK 5 M for                                                                   •	 Variable remuneration
the new store concept were charged against profit         FinanCiaL position                                           •	 Pension benefits
for the year. In the preceding year, costs totalling      Cash and cash equivalents and short-term invest-             •	 Other benefits and severance terms
SEK 15 M pertaining to distribution changes were          ments amounted to SEK 85 M at the end of the
charged against profit for the year. The number of        year, compared with SEK 290 M on 31 December                 The Board’s motion for the principles complies with
stores in Denmark totalled 39 (38), of which 39 (38)      2007. The equity/assets ratio was 60 per cent (67).          the preceding year’s remuneration principles and is
are wholly owned.                                         Interest-bearing liabilities amounted to SEK 54 M            based on existing agreements between the compa-
                                                          (6) at year-end and net cash to SEK 32 M (284). The          ny and senior executives. The distribution between
aCQuisitions and start-ups                                decrease in net cash was primarily due to dividends          basic salary and variable remuneration shall be in
During 2008, ten partnership stores were acquired         to shareholders of SEK 347 M.                                proportion to the responsibilities and authority
and one new store opened in Sweden. The eight                                                                          of the senior executive. The variable remunera-
stores that were acquired from Micro AB during            Cash-FLoW stateMent                                          tion of the President and other senior executives
December are estimated to increase Mekonomen’s            During the period, cash flow was negative in the             is based partly on the Group’s profit and partly on
revenue by approximately SEK 80 M per year and            amount of SEK 205 M (pos: 194). Dividends totalling          individual qualitative parameters and shall amount
will have a neutral impact on profit in 2009. Two         SEK 347 M (318) were paid to shareholders. The               to a maximum of 50 per cent of the basic salary for
stores in Stockholm were discontinued in conjunc-         divestment of properties contributed a positive              the President and a maximum of 33 per cent of the
tion with the opening of the new workshop centre.         cash-flow effect of SEK 502 M. Cash flow from operat-        basic salary for senior executives. Senior executives
In Norway, three cooperation stores were acquired         ing activities amounted to SEK 209 M (320). The              are, in addition to the President, the ten individuals
and one new store was opened. In Denmark, one             difference between the years was primarily attribut-         that jointly comprise Group Management along




                                                                                                                                                                                13
     Mekonomen Annual Report 2008 | Administration Report




            with the President. Other benefits consist primarily     FACTORS PERTAINING TO                                        centralised warehouse is a key factor in the logistics
            of a company car. Pension premiums are paid in an        PROFIT BEFORE TAX                  Changes          Effect   flow and accordingly, great importance has been
            amount based on the ITP plan or a corresponding          Sales volume                           +1%      +2 SEK M     attached to preventive work to reduce the risk of dam-
                                                                     Exchange-rate fluctuation
            system for employees abroad. In accordance with          NOK                                    +1%      +4 SEK M
                                                                                                                                  age in the centralised warehouse.
            the employment contract, pension provisions for          EUR                                    +1%      – 1 SEK M
            the President are made in an amount corresponding        DKK                                    +1%      +0 SEK M     insurance
                                                                     Gross margin                  Change in per-   +26 SEK M
            to 25 per cent of the basic salary. Pensionable salary                               centage +1 point
                                                                                                                                  Mekonomen has Group-wide insurance solutions.
            consists of the basic salary. Severance pay on termi-    Personnel expenses                     +1%      –6 SEK M     Insurance coverage includes property, consequen-
            nation of employment by the company amounts to                                                                        tial loss, transport, the Board and President.
                                                                     risKs and unCertainties
            a maximum of one year’s salary. In addition, there
                                                                     The market trend was weak during 2008. However,
            is a specific three-year bonus programme that is                                                                      value-management risks
                                                                     there were improvements in the market for work-
            calculated on the Group’s profit for the 2008–2010                                                                    Mekonomen strives to achieve the same level of solu-
                                                                     shop services at the end of the year.
            financial years. The bonus programme in its entirety,                                                                 tions for security services, security systems and value
            in terms of total expense for the company, must not      Competition                                                  management for all companies within the Group.
            exceed SEK 12 M for the period. The criteria for the     Competition in the spare parts market is fierce
            size of the individual bonus shall be determined by      and within the brand independent trade there are             shrinkage
            the company’s Board of Directors.                        approximately 400 stores in Sweden in which the              Activities relating to shrinkage are continuously in
                                                                     four largest players, including Mekonomen, all have          progress within Mekonomen, to define what is scrap-
            sensitivitY anaLYsis                                     product ranges that cover most automotive makes.             ping, internal consumption and actual theft. The
            Mekonomen’s earnings were influenced by a                The situation is similar in both Norway and Den-             activities to combat shrinkage are based on the idea
            number of factors, which include, in addition to         mark, with only a few major players with complete            that it is important to focus on all aspects of shrink-
            changes in sales volume and expenses, exchange-          ranges, but there is also competition from a number          age, for example, by reviewing order procedures,
            rate fluctuations on imported goods, margins for         of smaller players. Accessibility is very important          delivery checks and unpacking goods. This will
            purchased goods and salary changes. Virtually all        in this market, which means that delivery rate is a          improve knowledge on procedures for managing
            imports originate from Europe where the currency         key factor in competition. Accordingly, Mekonomen            shrinkage, while providing a basis for increased
            is primarily EUR and SEK. Imports in EUR represent       attaches great importance to logistics and related           vigilance of goods that are particularly theft-prone.
            slightly less than 40 per cent of the purchased vol-     optimization activities.
            ume. Due to the high correlation between DKK and                                                                      Financial risks
            EUR, sales and purchases in these currency flows         operational risks                                            Mekonomen’s financial policy regulates how vari-
            may be matched. The table below shows the cur-           Within the company, there is significant awareness           ous types of risks shall be managed and states the
            rency effects on the net flow for each currency. NOK     that the increasingly centralised IT structure could         risk exposure that the operation can accept. The
            and DKK pertain to internal sales from Mekonomen         provide the Group with considerable advantages               main focus is to aim at a low risk profile. The policy
            Grossist AB to individual countries, and the year’s      and improved possibilities. Consequently, preven-            identifies risks pertaining to value management,
            profit in Norway and Denmark. Hedging pertaining         tive efforts are prioritized and the organisation re-        cash management and capital procurement. Refer
            to the net flows and internal receivables was imple-     sponsible for this is well developed, as is planning for     also to Note 31 for a description of the financial risks
            mented during the year.                                  continuity in operations in the event of unforeseen          identified and managed by Mekonomen.
                                                                     circumstances.
                                                                       It is very important for the Group’s fire protection       parent CoMpanY
                                                                     work that there is a well-functioning fire organisation,     The Parent Company operations comprise Group
                                                                     regular internal control and training. Mekonomen’s           management and Group-wide functions and finan-




14
                                                                                                               Administration Report | Mekonomen Annual Report 2008




cial management. Loss after net financial income was      Board oF direCtors’ WorK 2008                            proposed appropriation oF proFit
SEK 17 M (loss: 18) excluding dividends from subsidiar-   At the Annual General Meeting in May 2008, it
ies. The average number of employees was 61 (50).         was decided that the Board shall comprise seven          parent Company
                                                          ordinary members with no deputy members. All             The following profit is available for distribution by the
                                                                                                                   Annual General Meeting, SEK 000’s:
environMent                                               current members, Fredrik Persson, Marcus Storch,
                                                                                                                   Unappropriated profit
The Group does not conduct any operations                 Antonia Ax:son Johnson, Kenny Bräck, Anders G            brought forward                                         364,808
that require permits according to the Swedish             Carlberg, Wolff Huber and Helena Skåntorp were           Profit for the year                                     249,692
Environmental Code. Environmental activities are          re-elected. Fredrik Persson was re-elected Chairman      TOTAL                                                   614,500
concentrated on the best and most efficient way           of the Board.
to adapt operations environmentally in terms of              During 2008, the Board held eight meetings (eight),   The Board of Directors and President propose that profits
distribution and packaging material. These two            of which one was the statutory meeting. At Board         be distributed as follows:

“guiding principles” from the Group’s environmental       meetings, it was primarily the company’s financial       Dividend to shareholders (SEK 6.00 per share)           185,213
plan apply to both the supply and delivery of goods.      development, the launch of new concepts and the          To be carried forward                                   429,287
When procuring transport services, considerable           company’s future strategy that were addressed.           TOTAL                                                   614,500

emphasis is placed on high efficiency and less re-           Within Mekonomen’s Board of Directors, there
load ing to minimise the transport distances. At the      is a Remuneration Committee, which focuses on            the Board’s stateMent ConCerning the
centralised warehouse and store warehouses, fire-         remuneration of Company Management. This                 proposed dividend
proof rooms for chemicals and petroleum products          Committee, which held two meetings during 2008,          Following the proposed dividend, the Parent Com-
are being constructed.                                    comprises Fredrik Persson, Marcus Storch and Anders      pany’s equity/assets ratio will amount to 59 per cent
                                                          G Carlberg. Other matters are handled by the Board       and the Group’s equity/assets ratio to 48 per cent.
events aFter the end oF the Year                          in its entirety.                                         The equity/assets ratio is satisfactory considering
There were no significant events after the end of                                                                  that the company’s and the Group’s operations con-
the year.                                                 auditors                                                 tinue to operate profitably. It is estimated that cash
                                                          The auditor for the company is elected at the An-        and cash equivalents in the company and the Group
share                                                     nual General Meeting every fourth year. According        will remain at a satisfactory level.
Mekonomen’s share capital amounted to SEK 77 M            to a resolution of the Annual General Meeting,             The Board is of the opinion that the proposed divi-
and comprises 30,868,822 shares with a quotient           auditors’ fees are paid against invoices. The com-       dends do not prohibit the Parent Company or other
value of SEK 2.50 per share. All shares have the same     pany’s auditor participates in Board meetings in         Group companies from fulfilling their obligations
voting rights. Axel Johnson AB and AFA Försäkring         conjunction with the third-quarter report and at         in the short or long term. Neither do the dividends
represent more than one tenth of the voting rights.       the Board meeting when year-end reports and              influence the Group’s ability to implement required
The Axel Johnson AB Group holds an option entitling       proposals for the Annual Report are presented and        investments. Accordingly, the proposed dividends can
the company to additionally acquire up to slightly        in this connection he/she submits the report from        be justified by what is stated in the prudence principle,
more than 3 per cent of the total number of shares        the audit of the company’s financial position and        Chapter 17, Section 3, Paragraphs 1–3 of the Swedish
from the Fraim family. The option extends until the       internal control. At the 2007 Annual General Meet-       Companies Act. For further information regarding
Fraim family’s joint ownership falls below 10 per cent.   ing, the auditing firm Deloitte AB, with Authorised      the company’s and the Group’s earnings, refer to the
                                                          Public Accountant Lars Svantemark as the Auditor         following income statement, balance sheet, cash-flow
share dividend                                            in Charge, was elected for the next four-year period.    statement and accompanying notes.
The Board proposes a share dividend of SEK 6.00
(6.00) based on profit for the year and an extraordi-
nary dividend of SEK 0.00 (5.00) per share.




                                                                                                                                                                                     15
     Mekonomen Annual Report 2008 | Group




                                inCoMe stateMent
                                SEK M                                                                    Note        2008         2007

                                                                                                           1
                                Net sales                                                                  2         2,646        2,530
                                Other operating revenue                                                                45           20
                                TOTAL REVENUES                                                                       2,691        2,550


                                OPERATING EXPENSES
                                Goods for resale                                                                   –1,317       –1,294
                                Other external costs                                                       4         –456         –410
                                Personnel expenses                                                         5         –633         –560
                                Depreciation/amortisation of tangible and intangible fixed assets          6          –34          –37
                                EBIT                                                                                  251          250


                                FINANCIAL INCOME AND EXPENSES
                                Income from divestment of subsidiaries                                                  5          153
                                Interest income                                                                        12           10
                                Interest expense                                                                       –8           –9
                                Exchange-rate difference                                                                1           14
                                PROFIT AFTER FINANCIAL ITEMS                                                          261          418


                                Tax on profit for the year                                                 9          –72          –70
                                PROFIT FOR THE YEAR                                                                   189          348


                                Profit for the year attributable to:
                                Parent Company’s shareholders                                                         180          341
                                Minority owners                                                                         9            7
                                                                                                                      189          348
                                Earnings per share before dilution attributable to
                                Parent Company's shareholders, SEK*                                                   5.84        11.03


                                KEY RATIO PER SHARE
                                Number of shares at the end of the period                                       30,868,822   30,868,822
                                Shareholders’ equity , SEK                                                           27.00       31.70
                                Cash flow, SEK                                                                        6.77       10.32
                                Dividend, SEK **                                                                      6.00        11.00
                                Pay-out ratio, %                                                                   102.70        99.70

                                *) No dilution is currently applicable **) Proposed dividend for 2008.




16
                                                                       Group | Mekonomen Annual Report 2008




Cash FLoW stateMent
SEK M                                                    Note   2008       2007

OPERATING ACTIVITIES
Profit after financial items                                     261        418
Adjusted for items not affecting liquidity                27      24       –129
                                                                 285        289


Tax paid                                                         –85        –34
CASH FLOW FROM OPERATING ACTIVITIES
BEFORE CHANGE IN WORKING CAPITAL                                 200        255


CASH FLOW FROM CHANGES IN WORKING CAPITAL
Decrease(+)/increase(-) of inventories                            –4        –15
Decrease(+)/increase(-) of receivables                           –18         30
Decrease(-)/increase(+) of liabilities                            31         50
INCREASE(-)/DECREASE(+) RESTRICTED WORKING CAPITAL                9          65
CASH FLOW FROM OPERATING ACTIVITIES                              209        320


INVESTMENTS
Divestment(+)/acquisition(-) of subsidiaries              28     –58        –27
Acquisition of tangible and intangible fixed assets              –61        –43
Divestment of tangible fixed assets                              26         518
CASH FLOW FROM INVESTING ACTIVITIES                              –93        448


FINANCING ACTIVITIES
Increase(-)/decrease(+) of long-term lending                     –10          0
Amortisation of loans                                             –        –256

Loans raised                                                      36          –
Dividends paid                                                  –347       –318
CASH FLOW FROM FINANCING ACTIVITIES                             –321       –574

CASH FLOW FOR THE YEAR                                          –205        194


CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR           290         95
Exchange-rate difference in cash and cash equivalents              0          1
CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR          18      85        290




                                                                                                              17
     Mekonomen Annual Report 2008 | Group




                                BaLanCe sheet
                                                                                 31 Dec.   31 Dec.
                                SEK M                                    Note       2008     2007
                                ASSETS
                                FIXED ASSETS
                                INTANGIBLE ASSETS                          13
                                Goodwill                                            232       198
                                Capitalised expenditure for IT systems               22         8
                                TOTAL INTANGIBLE ASSETS                             254       206


                                TANGIBLE FIXED ASSETS
                                Land and buildings                         10         4         3
                                Equipment and transport                    12       112        89
                                Leased equipment and transport             12         3         5
                                TOTAL TANGIBLE FIXED ASSETS                         119        97


                                FINANCIAL FIXED ASSETS
                                Other long-term receivables                15        26        10
                                TOTAL FINANCIAL FIXED ASSETS                         26        10


                                Deferred tax assets                        14         3         2


                                TOTAL FIXED ASSETS                                  402       315


                                CURRENT ASSETS
                                Goods for resale                                    602       554
                                Properties for divestment                  10         7        22
                                Current receivables                      16,17      326       300
                                Cash and cash equivalents                  18        85       290
                                TOTAL CURRENT ASSETS                              1,020     1,166
                                TOTAL ASSETS                                      1,423     1,481




18
                                                                         Group | Mekonomen Annual Report 2008




BaLanCe sheet
                                                               31 Dec.     31 Dec.
SEK M                                                  Note       2008       2007
SHAREHOLDERS’ EQUITY AND LIABILITIES
SHAREHOLDERS’ EQUITY                                     25
Share capital, (30,868,822 shares)                                 77          77
Other contributed capital                                         343         343
Statutory reserve                                                  17           3
Profit brought forward including profit for the year              396         555
TOTAL SHAREHOLDERS EQUITY ATTRIBUTABLE TO
                                                                  833         978
PARENT COMPANY'S SHAREHOLDERS


Minority share of shareholders' equity                             18          18
TOTAL SHAREHOLDERS' EQUITY                                        851         996


LONG-TERM LIABILITIES
Leasing liabilities, interest-bearing                    19         1           2
Deferred tax liabilities, interest-free                  14        38          39
Provisions                                               20         3           3
TOTAL LONG-TERM LIABILITIES                                        42          44


CURRENT LIABILITIES
Liabilities to credit institutions, interest-bearing     21        50           1
Leasing liabilities, interest-bearing                    21         3           3
Tax liabilities                                                    22          31
Other current liabilities, non interest-bearing        21,22      455         406
TOTAL CURRENT LIABILITIES                                         530         441
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY                      1,423        1,481




MEMORANDUM ITEMS
Pledged assets                                           23        92          92
Contingent liabilities                                   23        19          20




                                                                                                                19
     Mekonomen Annual Report 2008 | Parent Company




                                inCoMe stateMent
                                SEK M                                                                              Note   2008   2007
                                                                                                                     1
                                Net sales                                                                                   77    74
                                Other operating revenue                                                                     32     6
                                TOTAL REVENUES                                                                             109    80


                                OPERATING EXPENSES
                                Goods for resale                                                                           –26    –5
                                Other external costs                                                                 4     –54   –46
                                Personnel expenses                                                                   5     –53   –47
                                Depreciation/amortisation and impairment of tangible and intangible fixed assets     6      –8    –5
                                EBIT                                                                                      –32    –23


                                FINANCIAL INCOME AND EXPENSES
                                Dividend on shares in subsidiaries                                                        300    312
                                Income from divestment of shares in subsidiaries                                            3     –3
                                Interest income                                                                            27     16
                                Interest expense                                                                          –16    –12
                                Exchange-rate difference                                                                    1      4
                                PROFIT AFTER FINANCIAL ITEMS                                                              283    294


                                Appropriations                                                                       7    –52    –44
                                Tax on profit for the year                                                           9     19     16
                                PROFIT FOR THE YEAR                                                                       250    265




20
                                                                Parent Company | Mekonomen Annual Report 2008




CASH FLOW STATEMENT
SEK M                                                    Note      2008      2007
OPERATING ACTIVITIES
Profit after financial items                                        283       294
Adjusted for items not affecting liquidity                27         –1         9
                                                                    282       303


Tax paid                                                            –54       –40
CASH FLOW FROM OPERATING ACTIVITIES BEFORE
                                                                    228       262
CHANGES IN WORKING CAPITAL


CASH FLOW FROM CHANGES IN WORKING CAPITAL
Decrease(+)/increase(-) of inventories                                0         0
Decrease(+)/increase(-) of receivables                               33        67
Decrease(-)/increase(+) of liabilities                              –48       –90
INCREASE(-)/DECREASE(+) RESTRICTED WORKING CAPITAL                  –15       –23
CASH FLOW FROM OPERATING ACTIVITIES                                 213       239


INVESTMENTS
Divestment(+)/acquisition(-) of subsidiaries                         –2         0
Acquisition of fixed assets                                         –20       –12
Divestment of tangible fixed assets                                   9         0
CASH FLOW FROM INVESTING ACTIVITIES                                 –13       –12


FINANCING ACTIVITIES
Increase(-)/decrease(+) of long-term lending                          –       221
Dividends paid                                                     –340      –309
CASH FLOW FROM FINANCING ACTIVITIES                                –340       –88

CASH FLOW FOR THE YEAR                                             –140       140
CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR              140         0
CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR          18          0       140




                                                                                                                21
     Mekonomen Annual Report 2008 | Parent Company




                                BaLanCe sheet
                                                                                31 Dec.   31 Dec.
                                SEK M                                    Note      2008     2007

                                ASSETS
                                FIXED ASSETS
                                INTANGIBLE FIXED ASSETS                   13
                                Capitalised expenditure for IT systems              22         8
                                                                                    22         8
                                TANGIBLE FIXED ASSETS
                                Equipment and transport                   12        11        13
                                                                                    11        13
                                FINANCIAL FIXED ASSETS
                                Participation in Group companies          24       249       247
                                                                                   249       247
                                TOTAL FIXED ASSETS                                 282       268


                                CURRENT ASSETS, INVENTORIES, ETC.
                                Goods for resale                                     1         1


                                CURRENT RECEIVABLES
                                Accounts receivable                                  2         1
                                Receivables in Group companies                     527       360
                                Other receivables                                    5         1
                                Prepaid expenses and accrued income       17        46        46
                                TOTAL CURRENT RECEIVABLES                          580       408


                                CASH AND BANK BALANCES                               0       140


                                TOTAL CURRENT ASSETS                               581       548
                                TOTAL ASSETS                                       863       816




22
                                                    Parent Company | Mekonomen Annual Report 2008




BaLanCe sheet
                                                      31 Dec.   31 Dec.
SEK M                                        Note        2008     2007

SHAREHOLDERS’ EQUITY AND LIABILITIES
SHAREHOLDERS’ EQUITY                          25
RESTRICTED SHAREHOLDERS' EQUITY
Share capital, (30,868,822 shares)                        77        77
Statutory reserve                                          3         3
TOTAL RESTRICTED SHAREHOLDERS' EQUITY                     80        80


NON-RESTRICTED SHAREHOLDERS' EQUITY
Profit brought forward                                   365       291
Profit for the year                                      250       265
TOTAL NON-RESTRICTED SHAREHOLDERS' EQUITY                615       556


TOTAL SHAREHOLDERS' EQUITY                               695       637


UNTAXED RESERVES                                         138        86
PROVISIONS                                    20           3         3


CURRENT LIABILITIES
Accounts payable                                           9        12
Liabilities to Group companies                             4        50
Tax liabilities                                            1        16
Other liabilities                                          2         1
Accrued expenses and deferred income          22          11        11
TOTAL CURRENT LIABILITIES                                 27        90
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY               863       816




MEMORANDUM ITEMS
Pledged assets                                23          92        92
Contingent liabilities                        23          19        20




                                                                                                    23
     Mekonomen Annual Report 2008 | Changes in shareholders’ equity




            group
                                                                                                                                                        Total attribut-
                                                                                                                                                       able to Parent                              Total
                                                                                                      Other contri-   Translation     Profit brought       Company              Minority   shareholders’
             SEK M                                                                    Share capital   buted capital      reserve             forward    shareholders             shares          equity

             OPENING BALANCE ON 1 JANUARY 2007                                                  77             343           –11                523               933                 20             953
             Translation difference pertaining to foreign operations                                                          13                                    13                                 13
             Profit for the year                                                                                                                341               341                  7             348
             TOTAL REVENUES AND EXPENSES FOR THE PERIOD                                                          0             0                341               341                  7             348
             Dividends                                                                                                                         –309              –309                –10            –318
             Acquisition of minority shares                                                                                                                                            0                0

             CLOSING BALANCE ON 31 DECEMBER 2007                                                77             343             3                555               978                 18             996


             OPENING BALANCE ON 1 JANUARY 2008                                                  77             343             3                555               978                 18             996
             Translation difference pertaining to foreign operations                                                          14                                    14                                 14
             Profit for the year                                                                                                                180               180                  9             189
             TOTAL REVENUES AND EXPENSES FOR THE PERIOD                                                          0             0                180               180                  9             189
             Dividends                                                                                                                         –340              –340                 –8            –347
             Acquisition/divestment of minority shares                                                                                                                                –1               –1
             CLOSING BALANCE ON 31 DECEMBER 2008                                                77             343            17                396               833                 18             851

            Number of shares at 31 December 2008 amounted to 30,868,822.




            parent CoMpanY
                                                                                                                                                          Statutory       Profit brought   Profit/loss for
             SEK M                                                                                                                  Share capital          reserve               forward         the year
             TOTAL, 31 DECEMBER 2006                                                                                                          77                   3                452                10
             Appropriation of profit according to Annual General Meeting resolution                                                                                                  10              –10
             Group contribution received                                                                                                                                            191
             Tax on Group contribution received                                                                                                                                     –54
             Dividends                                                                                                                                                            –309
             Profit for the year                                                                                                                                                                     265
             TOTAL, 31 DECEMBER 2007                                                                                                          77                   3                291              265


             Appropriation of profit according to Annual General Meeting resolution                                                                                                 265             –265
             Group contribution received                                                                                                                                            205
             Tax on Group contribution received                                                                                                                                     –58
             Dividends                                                                                                                                                            –340
             Profit for the year                                                                                                                                                                     250
             TOTAL, 31 DECEMBER 2008                                                                                                          77                   3                365              250




24
                                                                                                                                      Notes | Mekonomen Annual Report 2008




Note 1 accounting principles

aCCounting and vaLuation prinCipLes                       July 2008. The new interpretative statements, IFRIC          In addition to IFRS 8, IAS 1, additional amendments
The consolidated accounts were prepared in accord-        11, 12 and 14 as well as amendments to IAS 39 and            were made to IAS 23 Borrowing Costs, IAS 27
ance with International Financial Reporting Stand-        IFRS 7 do not affect the Mekonomen Group’s income            Consolidated and Separate Financial Statements,
ards (IFRS) as approved by the European Union and         statements and balance sheets.                               IAS 32 Classification of Financial Instrument, IAS 39
interpretations issued by the International Financial                                                                  Financial Instruments, Recognition and Measure-
Reporting Interpretations Committee (IFRIC) for ap-       amended accounting principles 2009                           ment, IFRS 1 First-time Adoption of IFRS, IFRS 2
plication as of 31 December 2008. Furthermore, the        The new or amended standards and interpretation              Share-based Payment, IFRS 3 Business Combina-
Swedish Financial Reporting Board’s recommenda-           statements that become effective in 2009 have not            tions, Improvements to IFRSs in 2008, IFRIC 13
tion RFR 1.1, Supplementary Accounting Regulations        been used in advance in the application of these             Customer Loyalty Programs, IFRIS 15 Agreements
for Groups, has been applied.                             financial statements. There are no plans for the             for the Construction of Real Estate, IFRIC 16 Hedges
  The functional currency of the Parent Company is        advance use of the new regulations and amend-                of a net investment in a Foreign Operation, IFRIC
Swedish kronor (SEK), which is also the Group’s report-   ments that are applicable from the 2009 financial            17 Distributions of Non-cash Assets to Owners and
ing currency. All amounts are stated in SEK M unless      year. To the extent anticipated, Mekonomen has               IFRIC 18 Transfers of Assets from Customers. IFRS
otherwise stated.                                         not yet made an assessment of the effects on the             1 and 3, IAS 27 and 29 as well as IFRIC 15, 17 and 18
  The items in the Annual Report are measured at          financial statements of the application of the new           have not yet been approved for application by the
acquisition value (cost), with the exception of certain   and amended standards below and interpretation               EU, which is why these have not been applied. It is
financial instruments, which are measured at fair         statements not described below.                              anticipated that the described amendments will not
value.                                                       IFRS 8, Operating Segments, defines what an               have any significant impact on Mekonomen Group’s
  The Parent Company’s accounts were prepared in          operating segment is and what information should             income statements and balance sheets, cash-flow
accordance with the Annual Accounts Act and RFR 2.1.      be submitted about these in financial statements.            statements and shareholders’ equity.
  The Group’s main accounting principles are              The standard requires that segment information
described below.                                          is presented based on management’s perspective,              ConsoLidated aCCounts
                                                          which means that it is presented in the same manner          The consolidated accounts include the Parent Com-
amended accounting principles 2008                        as in the internal reporting. IFRS 8 is an absolute infor-   pany and all companies over which the Parent Com-
From 1 January 2008, three interpretative state-          mation standard, which is why it does not have any           pany has a controlling influence. Controlling influence
ments were issued from IFRIC. IFRIC 11, IFRIC 2           impact on the Group’s income statement and balance           refers to companies in which Mekonomen has a right
Group and Treasury Share Transactions, IFRIC              sheets, cash flow and shareholders’ equity. Application      to formulate financial and operational strategies. This
12 Service Concession Arrangements and IFRIC              of IFRS 8 will not result in any changes in the Group’s      normally occurs through ownership and voting rights
14 The limit on a Defined Benefit Asset, Minimum          segments.                                                    of more than 50 per cent. The existence and effect of
Funding Requirements and their interaction. IFRIC            IAS 1, Presentation of Financial Statements, means        potential voting rights, which are currently available for
12 has not been approved by the EU and has thus           that the presentation of financial statements will           exercise or conversion, are taken into account when an
not been applied. During autumn 2008, IASB made           change in certain respects and that new, optional            assessment is made of whether the Group can exercise
amendments to IAS 39 and IFRS 7, which were also          terms for reports are proposed. The Mekonomen                controlling influence over another company. Subsidiar-
approved for application in the EU, which states          Group’s future presentation of financial statements is       ies are included in the consolidated accounts from the
that under specific conditions it is permissible to       thus affected by the introduction. The amendment             point in time at which controlling influence is achieved
reclassify certain financial assets effective from 1      will not have any impact on the amounts recognised.          and excluded from the consolidated accounts from the




                                                                                                                                                                                    25
     Mekonomen Annual Report 2008 | Notes




           point in time at which the controlling influence ceases.      to fair values attributable to acquisition of operations   Group as lessee
           The consolidated accounts were prepared in accord-            with functional currencies other than SEK are treated      Assets held under financial leasing agreements
           ance with the purchase method, which means that               as assets and liabilities in the acquired operations’      are recognised as fixed assets in the consolidated
           the carrying amount of shares in subsidiaries of the          currencies and translated at the exchange rates on the     balance sheets at fair value at the beginning of the
           Parent Company is eliminated against shareholders’            closing date.                                              leasing period or at the minimum leasing fees if
           equity including the proportion of equity contained                                                                      this is lower. The liability that the lessee has to the
           in the untaxed reserves of each Group company. If             Segment reporting                                          lessor is recognised in the balance sheet under the
           applicable, the accounting records of subsidiaries            The Mekonomen Group uses geographic regions as             heading “Lease agreement” divided into long-term
           are adjusted to comply with the same principles that          primary segments, since the Group’s organisation           and short-term liabilities. Leasing payments are
           apply for the other Group companies. All internal             and control is based on geographical division. The         divided between interest and amortisation of debt.
           transactions between Group companies and inter-               regions consist of each country, Sweden, Norway            Interest is divided over the leasing period so that
           company transactions were eliminated during the               and Denmark. Secondary segments are not reported           each reporting period is charged with an amount
           preparation of the consolidated accounts.                     since Mekonomen only has one line of business.             corresponding to a fixed interest rate of the liability
                                                                            Profit/loss for each segment includes the contribu-     reported during each period. Interest expenses are
           Translation of transactions in foreign currency               tion received by the segment through wholesale             recognised directly in profit and loss in the income
           Transactions in foreign currencies are translated into        operations. This is to facilitate comparison between       statement. Lease fees that are paid during operating
           Swedish kronor (SEK) according to the exchange rate           segments.                                                  lease agreements are systematically expensed over
           on the date of the transaction. Monetary items (assets                                                                   the leasing period.
           and liabilities) in foreign currencies are translated into    Revenue recognition
           SEK according to the exchange rate on closing date.           Sales of goods are recognised at delivery/handover         Remuneration to employees
           Exchange-rate gains and losses that arise in connection       of products to the customer, in accordance with            The Group has both defined-contribution and
           with such translations are recognised in profit and loss      conditions of sale. Sales are recognised net after         defined-benefit pension plans. A defined-benefit
           in the income statement as Other operating revenue            deduction of discounts and value-added tax. Sales          pension plan is a pension plan that guarantees an
           and/or Other operating expense. Exchange-rate differ-         from the centralised warehouse to stores occur in          amount, which the employee receives as pension
           ences that arise in foreign long-term loans and liabilities   the currency of the receiving country. Consequent-         benefits upon retirement, normally based on several
           are recognised in financial income and expenses.              ly, exchange-rate fluctuations only affect wholesale       different factors, for example, salary and period of
                                                                         operations. Intra-Group sales are eliminated in the        service. A defined-contribution pension plan is a
           Translation of foreign subsidiaries                           consolidated accounts.                                     pension plan in which the Group, after having paid
           When the consolidated accounts were prepared, the                Interest revenues are recognised on an accruals         its pension premium to a separate legal entity, has
           Group’s foreign operations’ balance sheets were trans-        basis over the term by applying the effective interest     fulfilled its commitments towards the employee.
           lated from their functional currencies to SEK based           method.                                                       Defined-contribution plans are recognised as an
           on the exchange rates on the closing date. The                                                                           expense in the period to which the premiums paid are
           income statements were translated at the average              Leasing                                                    attributable.
           annual exchange rate. Translation differences that            A financial leasing contract is an agreement accord-          Pension expenses for defined-benefit plans are cal-
           arose were recognised against translation reserves            ing to which the financial risks and benefits that are     culated using the Projected Unit Credit Method where-
           in shareholders’ equity. The accumulated translation          connected to ownership of an object are essentially        by expenses are distributed over the employee’s
           differences were transferred and recognised as part           transferred from the lessor to the lessee. The leasing     period of employment. These commitments, meaning
           of capital gains or capital losses in cases where foreign     object refers primarily to company vehicles, distri-       the liabilities that are recognised, are measured at the
           operations were divested. Goodwill and adjustments            bution vehicles and forklift trucks.                       present value of expected future payments, taking




26
                                                                                                                                         Notes | Mekonomen Annual Report 2008




estimated future salary increases into account, apply-       benefit plan, which is the reason why the ITP plan is        asset is recovered or the debt settled. Deferred tax is
ing a discount rate corresponding to the interest on         recognised as a defined-contribution plan in accord-         recognised as revenues or expenses in the income
first-class corporate bonds or government bonds is-          ance with IAS 19.30.                                         statement, except in cases when it pertains to transac-
sued in the same currency as the pension is to be paid          Remuneration in connection with termination               tions or events that are recognised directly against
in, with a remaining duration that is comparable to          can be paid when an employee has served notice               shareholders’ equity. The deferred tax is then also rec-
the current commitment and with deductions for the           of termination prior to the expiration of the normal         ognised directly against shareholders’ equity. Deferred
fair value of plan assets. Should a net asset arise, this    pension date or when an employee accepts voluntary           tax assets and tax liabilities are offset when they are
will be recognised only to the extent that it represents     retirement. The Group recognises liabilities and             attributable to income tax that is debited by the same
future financial benefits, for example, in the form of re-   expenses in connection with a termination of employ-         authority and when the Group intends to pay the tax
payments or reduced future premiums. Accumulated             ment, when Mekonomen is unquestionably obligated             with a net amount.
actuarial gains and losses, outside the so-called cor-       to either terminate employment prior to the normal
ridor, are recognised in profit and loss in the income       termination date or to voluntarily pay remuneration          goodWiLL
statement as revenues or expenses, distributed over          to encourage early retirement.                               Goodwill comprises the amount by which the ac-
the employee’s average remaining estimated period of            Mekonomen reports a liability and an expense for          quisition value exceeds the fair value of the Group’s
employment until retirement.                                 bonuses when there are legal or informal obliga-             portion of the acquired subsidiary’s identifiable net
   The corridor represents the higher of 10 per cent of      tions, based on earlier practice, to pay bonuses to          assets on the date of acquisition. If in conjunction
the present value of the defined-benefit pension obli-       employees.                                                   with the acquisition, the fair value of the acquired as-
gation and 10 per cent of the value of the plan assets.                                                                   sets, liabilities and contingent liabilities exceeds the
Expenses pertaining to employment during previous            taX                                                          acquisition value, the surplus is recognised directly
periods are recognised directly in profit and loss in the    The Group’s total tax expense comprises current              in profit and loss in the income statement. Goodwill
income statement unless changes in the pension plan          tax and deferred tax. Current tax is tax that shall be       has an unspecified useful life and is recognised
are subject to the employees remaining in service            paid or received pertaining to the current year and          at acquisition value with deduction for accumu-
during a stipulated period. In such cases, the expense       adjustments of prior years’ current tax. Deferred tax        lated impairments and accumulated amortisation
pertaining to the employment period from previous            is calculated based on the difference between the            implemented prior to the transition to IFRS. In the
periods will be distributed according to the straight-       carrying amounts and the values for tax purposes             divestment of an operation, the portion of goodwill
line method over the earnings period. Expenses for           of company assets and liabilities. Deferred tax is           attributable to this operation that has not been
service during the present period are recognised as          recognised according to the balance sheet method.            amortised is recognised in the calculation of gain or
personnel expenses.                                          Deferred tax liabilities are recognised in principle on      loss on the divestment. Goodwill is allocated to the
   One of the Group’s defined-benefit pension plans          all taxable temporary differences, while deferred tax        lowest cash-generating unit.
comprises a multi-employer defined-benefit pension           assets are reported to the extent that is probable that
plan (the ITP plan at Alecta). In accordance with Me-        the amount can be utilised against future taxable            other intangible assets
konomen’s accounting principles, a multi-employer            surplus.                                                     Expenditure for the development and implementa-
defined-benefit plan is recognised based on the rules           The carrying amount on deferred tax assets is             tion of IT systems can be capitalised if development
of the plans and reports its proportional share of the       assessed at each accounting year-end and reduced to          costs are estimated to exceed SEK 1 M. An individual
defined-benefit pension obligations and of plan assets       the extent that it is no longer probable that sufficient     assessment is conducted on each occasion. Capitali-
and expenses related to the plan in the same manner          taxable surplus will be available to be utilised either in   sation is permissable if it is probable that future fi-
as for any other similar defined-benefit pension plan.       its entirety or partially against the deferred tax asset.    nancial benefits will be accrued to the company and
However, Alecta has not been able to present suffi-             Deferred tax is calculated based on the tax rates         the acquisition value of the asset can be calculated
cient information to facilitate reporting as a defined       that are expected to apply for the period when the           in a reliable manner.




                                                                                                                                                                                     27
     Mekonomen Annual Report 2008 | Notes




           tangible fixed assets                                         value. Impairment losses are recognised in profit           recognised either as an asset or liability, depending
           Tangible fixed assets are recognised as assets in the         and loss in the income statement in the period in           on changes in the exchange rate. A financial asset or
           balance sheets if it is probable that future financial        which they are established.                                 financial liability is recognised in the balance sheet
           benefits will be accrued to the company and the                  With regard to goodwill items, an impairment test is     when the company becomes party to the contrac-
           acquisition value of the asset can be calculated in           conducted at least once a year. Refer also to Note 13 for   tual conditions of the instrument. Accounts receiva-
           a reliable manner. Tangible fixed assets, primarily           information on how this test is performed.                  bles are recognised when an invoice is sent and
           comprising equipment, computers and means of                                                                              accounts payable are recognised when an invoice
           transport are recognised at acquisition value with            assets held for sale                                        has been received. With the exception of cash and
           deduction for accumulated depreciation and any                Fixed assets that Mekonomen has offered for sale,           cash equivalents, only an insignificant portion of
           impairment. Depreciation of tangible fixed assets is          which are also immediately available for sale and for       the financial assets is interest-bearing, which is why
           recognised as an expense so that the asset’s value is         which the carrying amount will largely be recovered         interest exposure is not reported. The maximum
           depreciated according to the straight-line method             through the sale, are recognised as current assets.         credit risk corresponds to the carrying amount.
           over its estimated useful life. The following percent-        Such assets are valued and thereby recognised at            The terms for long-term and short-term loans are
           ages were applied for depreciation:                           the lowest of the carrying amount and fair value            stated in separate note disclosures; other financial
                                                                         after deductions for selling expenses.                      liabilities are non interest-bearing. A financial asset,
            FIXED ASSETS                                     Per cent
                                                                                                                                     or portion thereof, is eliminated when the rights
            Land improvements and
            permanent equipment in buildings                     5–10    inventories                                                 contained in the contract are realised or mature. A
            Equipment                                          10–15     Inventories are recognised at the lower of the acqui-       financial liability, or portion thereof, is eliminated as
            Vehicles                                                20   sition value and net realisable value. The acquisition      it is regulated when the commitment in the agree-
            Servers                                                 20   value is established by using the first in/first out        ment has been fulfilled or has been terminated in
            Workplace computers                                     33
                                                                         principle (FIFO).                                           another manner.
                                                                            A provision for estimated obsolescence in invento-
           impairment losses                                             ries is established when there is an objective basis to     Calculation of fair value, financial instruments
           At each accounting period, an assessment is made              assume that the Group will be unable to receive the         When establishing the fair value of derivatives,
           to determine whether there is any indication that             book value when inventories are sold in the future.         official market listings on the balance-sheet date are
           an impairment loss should be recognised on any                The size of the provision amounts to the difference         used. If no such information is available, a valuation
           of the Group’s assets. If there is such an indication,        between the asset’s carrying amount and the value of        is conducted applying established methods, such as
           the asset’s recoverable value is established. The             expected future cash flows. The reserved amount is          discounting future cash flows to the quoted market
           recoverable value is deemed to be the higher of the           recognised in profit and loss in the income statement.      rate for each term. Translation to SEK is based on the
           asset’s value in use in operations and the value that            The inventory value was reduced by the value             quoted exchange rate on the balance-sheet date.
           would be received if the asset were to be divested to         included in the inter-company profit from goods sold
           an independent party, that is, the asset’s net realis-        from the wholesaler to the company’s own stores.            Long-term receivables
           able value. The value in use is the present value of                                                                      Long-term receivables comprise primarily deposits
           all inward and outward payments attributable to the           Financial instruments                                       and lease-purchase agreements. These are recog-
           asset during the period in which it is expected to be         Financial assets recognised as assets in the balance        nised at the accrued acquisition value.
           utilised in operations, plus the present value of the         sheet include loan receivables, accounts receivables
           net realisable value at the end of its useful life. If the    and cash and cash equivalents. Liabilities in the           accounts receivable
           calculated recoverable value is less than the carry-          balance sheet include long-term and short-term              Accounts receivables are recognised net after
           ing amount, the asset is impaired to its recoverable          loans and accounts payable. A currency derivative is        provisions for possible bad debts. The expected




28
                                                                                                                                  Notes | Mekonomen Annual Report 2008




term of accounts receivable is short, which is why      Loans                                                      the Group’s and the Parent Company’s accounting
the amount is recognised at nominal value without       Liabilities to credit institutions, overdraft facilities   principles are stated below.
discounting in accordance with the method for ac-       and other liabilities (loans) are initially recognised
crued acquisition value. A provision for possible bad   at fair value net after transaction costs. Thereafter,     tax
debts on accounts receivable is made when there         loans are recognised at accrued acquisition value.         The amounts reserved as untaxed reserves consist
are objective indications to assume that the Group      Possible transaction costs are distributed over the        of taxable temporary differences. Due to the link
will not be able to receive all the amounts that are    loan period applying the effective interest method.        between accounting and taxation, the deferred tax
due for payment in accordance with the receiva-         Long-term liabilities have an estimated term longer        liabilities that are attributable to the untaxed re-
bles’ original conditions. The size of the provision    than one year while short-term liabilities have a term     serves, are not recognised separately in a legal entity.
consists of the difference between the asset’s carry-   of less than one year.                                     The changes in untaxed reserves are recognised in
ing amount and the value of estimated future cash                                                                  accordance with Swedish practice in the income
flows. The reserved amount is recognised in profit      share capital                                              statement for individual companies under the
and loss in the income statement.                       Ordinary shares are classified as share capital. Trans-    heading “Appropriations.” The accumulated value
                                                        action costs in connection with a new share issue          of provisions are recognised in the balance sheet
Cash and cash equivalents                               are recognised as a deduction, net after tax, from         under the heading “Untaxed reserves,” of which 26.3
Cash and cash equivalents comprise cash funds           proceeds from the new share issue.                         per cent are regarded as deferred tax liabilities and
held at financial institutions and current liquid in-                                                              73.7 per cent as restricted shareholders’ equity.
vestments with a term from the date of acquisition of   Cash-flow statement
less than three months, which is exposed to only an     The cash-flow statement was prepared in accord-            reporting of group contributions
insignificant risk of fluctuations in value. Cash and   ance with the indirect method. The recognised              Mekonomen recognises Group contributions and
cash equivalents are recognised at nominal value.       cash flow comprises only transactions that result in       shareholders’ contributions in accordance with the
                                                        inward and outward payments.                               statement from the Swedish Financial Reporting
derivative instruments                                                                                             Board, URF 2. Shareholders’ contributions are recog-
Mekonomen applies hedge accounting with regard          parent Company’s accounting principles                     nised directly against non-restricted shareholders’
to receivables in foreign currencies. Hedging is con-   The accounts of the Parent Company were prepared           equity with the receiver and as an increase in the
ducted using foreign-exchange forward contracts         in accordance with the Swedish Annual Accounts             item “participations in Group companies” with the
with a maximum term of three months. Hedged             Act and the Swedish Financial Reporting Board’s            provider. Group contributions that are paid and
receivables in foreign currencies are recognised at     recommendation RFR 2.1, Reporting of Legal Enti-           received with the aim of minimising the Group’s tax
the interest rate applying on the balance-sheet date    ties. Application of RFR 2.1 means that the Parent         payments are recognised as a reduction or increase
and hedging instruments are recognised separately       Company shall, in the annual accounts for a legal          in non-restricted shareholders’ equity.
at fair value in the balance sheet.                     entity, apply all of the IFRS and statements that have
                                                        been approved by the EU where this is possible             pensions
accounts payable                                        within the framework of the Swedish Annual Ac-             Defined-benefit and defined-contribution pension
The expected term for accounts payable is short,        counts Act and the law on safeguarding of pension          plans are recognised in accordance with the present
which is why the debt is recognised at nominal value    commitments and taking into account the link               Swedish accounting standard, which is based on the
without discounting according to the method for         between accounting and taxation. The recommen-             regulations in the law on safeguarding of pension
accrued acquisition value.                              dation specifies which exceptions and additions            commitments.
                                                        shall be made from IFRS. The differences between




                                                                                                                                                                              29
     Mekonomen Annual Report 2008 | Notes




           NOTE 2 reporting of geographic segments
                                                                                                                                             Eliminations and
                                                                           Sweden                        Norway              Denmark          central items             Total
                                                                      2008          2007         2008             2007   2008      2007      2008        2007   2008            2007

            REVENUES
            External net sales                                        1,297        1,270          630              584    704          661     15          15   2,646           2,530
            Internal revenues                                          603           467                             0                   0   –603        –467      0               0
            Other revenues                                               28           18            7                2      7            1      3           1     45              20
            TOTAL REVENUES                                            1,927        1,754          637              586    711          662   –585        –451   2,691           2,550


            OPERATING REVENUE                                           211          216           76               81     –2          –22    –34         –24    251             250


            Assets                                                     693           873          173              179    406          311    –60         –42   1,212           1,320
            Undistributed assets                                                                                                              211         161    211             161
            TOTAL ASSETS                                               693           873          173              179    406          311    151         119   1,423           1,481


            Liabilities                                                702           657          113               80    242          168   –477        –445    580             460
            Undistributed liabilities                                                                                                          –8          25     –8              25
            TOTAL LIABILITIES                                          702           657          113               80    242          168   –485        –420    572             485


            Investments, tangible assets                                 18           11            4                4     19           14      3           6     44              35
            Investments, IT systems                                                                                                            17           8     17               8
            Depreciation (tangible assets)                               15           14            4                5      7           12      5           6     31              37

            Average number of employees for the period                 671           637          233              202    397          382     61          50   1,363           1,271

            Number of own stores                                       103            93           29               25     39           38                       171             156
            Number of partnership stores                                 20           21           15               17      0            0                        35              38
            NUMBER OF STORES IN THE CHAIN                              123           114           44               42     39           38                       206             194


            KEY FIGURES
            EBIT margin, %*                                              16           17           12               14      0           –3                         9              10
            Sales increase, %                                            10            5            9                9      7           –0                         6               4
            Sales/employee, SEK 000s
            (converted into one-year balance)                         2,872        2,754         2,734        2,901      1,791     1,733                        1,974           2,007
            Operating profit per employee, SEK 000s
            (converted into one-year balance)                          314           339          326              399     –5          –58                       184             197

            * When calculating the EBIT margin for the segments, internal sales were excluded.
             )




30
                                                                                                                                         Notes | Mekonomen Annual Report 2008




NOTE 3 significant appreciations and assessments

The preparation of the annual accounts and applica-        properties For saLe                                            mentioned types of intangible assets can be identified.
tion of various accounting standards are based to          During 2007, the majority of the Group’s properties            The only asset that could be suitable is customer rela-
a certain extent on management’s assessments or            were sold and five of the remaining seven were di-             tions, but these are normally not so strong as to be
assumptions and appreciations that are considered          vested in 2008. The remaining two properties are               considered justifiable to report as assets separate
reasonable under the circumstances. These assump -         still classed as properties held for sale, since the           from goodwill. However, an examination is conducted
tions and appreciations are frequently based on            decision to sell these remains and activities to imple-        at each acquisition. The remaining surplus value is
historic experience but also of other factors, includ-     ment the sales are in progress.                                allocated to goodwill.
ing expectations on future events. The results
could differ if other assumptions and appreciations        CoMpanY aCQuisitions
were used and the actual outcome will, in terms of         In conjunction with acquisitions, analyses are
definition, rarely agree with the estimated outcome.       prepared in which all identifiable assets and li-
The assumptions and appreciations made by Me-              abilities, including intangible assets, are identified
konomen in the 2008 annual accounts, and which             and measured at fair value at the acquisition date.
had the greatest impact on results and assets and          In accordance with IFRS 3, acquired identifiable in-
liabilities, are discussed below.                          tangible assets, for example, customers, brands and
                                                           order backlog, shall be separated from goodwill. This
goodWiLL                                                   applies if these fulfil the criteria as assets, meaning,
In assessing the impairment requirement for good-          they are possible to separate or are based in contrac-
will, appreciations and assessments are conducted,         tual or other formal rights, and that their fair values
for example, on the relevant company’s future earn-        can be established in a reliable manner.
ings capacity and growth. These assumptions are               Pertaining to the type of operations acquired
described in detail in Note 14, Intangible fixed assets.   by Mekonomen, it is highly unusual that the above-




NOTE 4 audit expenses
                                                                            Group                 Parent Company
                                                                     2008           2007         2008             2007

DELOITTE AB
Audit fee                                                               4              4            1                 1
Consultant fee                                                          0             2             0                 1
TOTAL                                                                   4             6             1                 2



Audit assignment refers to the review of the annual        signments that rest upon the company’s auditor to              mentation of such other assignments. Everything
report and accounting as well as the Board’s and           perform and advice or other assistance resulting               else is “other assignments.”
President’s management of operations, other as-            from observations during such a review or imple-




                                                                                                                                                                                    31
     Mekonomen Annual Report 2008 | Notes




           NOTE 5 average number of employees, salaries, other remuneration
                  and social security contributions
                                                                                                                                     2008                                           2007
            AVERAGE NUMBER OF EMPLOYEES                                                                         No. of employees        Of whom, men %         No. of employees        Of whom, men %

            PARENT COMPANY
            Sweden                                                                                                             61                     53                      50                    64
            TOTAL IN PARENT COMPANY                                                                                            61                     53                      50                    64
            SUBSIDIARIES
            Sweden                                                                                                            671                     83                     637                    85
            Denmark                                                                                                           397                     88                     382                    87
            Norway                                                                                                            233                     85                     202                    87
            TOTAL IN SUBSIDIARIES                                                                                           1,302                     85                   1,221                    86
            GROUP TOTAL                                                                                                     1,363                     84                   1,271                    85


                                                                                                                                            Soc. security                                 Soc. security
                                                                                                               Salaries and other      expenses (of which      Salaries and other    expenses (of which
            SALARIES, REMUNERATION, ETC., SEK 000s                                                                  remuneration           pension costs            remuneration         pension costs
            Parent Company                                                                                                32,691                  17,290                  30,307                14,429
                                                                                                                                                  (5,287)                                       (3,772)
            Subsidiaries                                                                                                 470,311                 106,278                408,841                 97,696
                                                                                                                                                 (28,885)                                      (26,921)
            GROUP TOTAL                                                                                                  503,002                 123,568                439,148                112,125
                                                                                                                                                 (34,172)                                      (30,693)


                                                                                                                       Board and                                   Board and
            SALARIES AND OTHER REMUNERATION DISTRIBUTED BETWEEN THE PRESIDENT                                          President*                 Other            President*                   Other
            AND BOARD MEMBERS AND OTHER EMPLOYEES, SEK 000s                                                 (of which bonus, etc.)            employees (of which bonus, etc.)              employees
            PARENT COMPANY
            Mekonomen AB                                                                                                    5,872                 26,819                   6,960                23,347
                                                                                                                            (864)                   (414)                (1,703)                  (969)
            TOTAL IN PARENT COMPANY                                                                                         5,872                 26,819                   6,960                23,347
                                                                                                                            (864)                   (414)                (1,703)                  (969)

            SUBSIDIARIES IN SWEDEN                                                                                         14,002                180,895                  12,625               158,345
                                                                                                                          (1,485)                 (1,216)                (1,266)                  (960)
            SUBSIDIARIES ABROAD
            Denmark                                                                                                         1,647                172,136                   2,304               153,616
                                                                                                                             (82)                     (0)                  (248)                    (0)
            Norway                                                                                                         14,763                 86,868                  11,656                70,295
                                                                                                                            (487)                   (622)                  (260)                  (115)
            TOTAL IN SUBSIDIARIES                                                                                          30,412                439,899                  26,585               382,256
                                                                                                                          (2,054)                 (1,838)                (1,774)                (1,075)
            GROUP TOTAL                                                                                                    36,284                466,718                  33,545               405,603
                                                                                                                          (2,918)                 (2,252)                 (3,477)               (2,044)

           *) Remuneration to the Board of Directors and President includes the Parent Company and, where appropriate, subsidiaries in respective countries.




32
                                                                                                                                     Notes | Mekonomen Annual Report 2008




reMuneration to senior eXeCutives                         performance and that remuneration shall comprise             pensions
Fees are paid to the Chairman of the Board and            the following parts: - fixed basic salary, variable remu-    Commitments for old-age pension and family pen-
Board members in accordance with the resolution of        neration, pension benefits, other benefits and termina-      sion for salaried employees in Sweden are secured
the Annual General Meeting. The annual Board fee          tion terms. The variable remuneration for other senior       through insurance with Alecta. According to a state-
totalling SEK 1,360,000 (1,275,000) was established in    executives, excluding the President, is based partly on      ment from the Swedish Financial Reporting Board,
accordance with the resolution of the 2008 Annual         the Group’s profit and partly on individual qualitative      RFR 3, this is a defined-benefit plan that comprises
General Meeting. From this, SEK 320,000 (300,000)         parameters and can amount to a maximum of four               several employers. In the 2008 financial year, the
represents fees to the Chairman of the Board and          months’ salary. Other benefits refer primarily to com-       company did not have access to such information
SEK 240,000 (225,000) to the Vice Chairman.               pany cars. Pension premiums are paid in an amount            that made it possible to recognised this plan as a
  No fees are paid to the Boards of other subsidiaries.   based on the ITP plan. Pensionable salary refers to the      defined-benefit plan. ITP pension plans that are
  The President, Håkan Lundstedt, has a basic salary      basic salary. Severance pay for termination on the part      secured through insurance with Alecta are there-
of SEK 300,000 per month and a variable salary por-       of the company can total a maximum of one annual             fore reported as defined-contribution plans. The
tion, which is based on the company’s profit and can      salary. Matters pertaining to remuneration to Board          annual fees for pension policies signed with Alecta
amount to a maximum of 50 per cent of the basic an-       members shall be prepared and resolved by the Board          amounted to SEK 2 M (3). Alecta’s surplus can be dis-
nual salary. Pension provisions are paid in an amount     of Directors. At the 2008 Annual General Meeting,            tributed to policyholders and/or the insured. At the
corresponding to 25 per cent of the basic salary. Other   it was also resolved, upon approval by the Board of          end of 2008, Alecta’s surplus, in the form of the col-
benefits consist of a company car. The period of notice   Directors, that Company Management may receive               lective consolidation level, amounted to 112 per cent
is 12 months if termination is initiated by the company   a cash bonus from the company. The bonus shall be            (152). The collective consolidation level comprises
and six months if initiated by the employee. In the       profit-based and calculated on the Group’s profit for        the market value of Alecta’s assets as a percentage
case of termination on the part of the company, sever-    2008–2010 – financial years. The bonus program, in           of insurance commitments calculated according to
ance pay amounting to six months’ salary is paid.         its entirety, as a total expense for the company, shall      Alecta’s actuarial calculation commitments, which
  Remuneration of other senior executives will            amount to a maximum of SEK 12 M for the period.              are not in agreement with IAS 19.
be paid according to the principles adopted at the        The criteria for the size of an individual bonus shall
2008 Annual General Meeting. This means that the          be determined by the Board of Directors. The Board
company shall strive to offer its senior executives       of Directors intends to propose that the 2009 Annual
market-based remuneration, that the criteria shall        General Meeting approve the continued application of
accordingly be based on the significance of assign-       these basic guidelines.
ments, competency requirements, experience and



EXECUTIVES/OCCUPATION CATEGORY                                      Basic salary                  Bonus               Board fees          Other benefits     Pension premiums

Fredrik Persson, Chairman of the Board                                                                                      320
Marcus Storch, Vice Chriaman of the Board                                                                                   240
Antonia Ax:son Johnson, Board member                                                                                        160
Kenny Bräck, Board member                                                                                                   160
Anders G Carlberg, Board member                                                                                             160
Wolff Huber, Board member                                                                                                   160
Helena Skåntorp, Board member                                                                                               160
Håkan Lundstedt, President                                                3,648                      864                                             58                     912
Other senior executives, 10                                              11,541                      681                                          1,094                  2,972
                                                                         15,189                    1,545                  1,360                   1,152                  3,884




                                                                                                                                                                                  33
     Mekonomen Annual Report 2008 | Notes




           Of all the company’s officers and senior executives,      Establishment Manager, Corporate Communica-
           five are women. At year-end, the number of senior         tions Manager, Head of Business Development and
           executives was 11, who also comprise the Group’s          Head of Operations for Norway, Denmark, Sweden
           management team. In addition to the President,            and Mekonomen Grossist.
           they are the Group’s IT Manager, HR Manager, CFO,



                                                                                                      Parent Company
            SICK LEAVE, %                                                                             2008         2007

            Age category: 29 years or younger                                                            –             –
            Age category: 30 - 49 years                                                                1.8          1.9
            Age category: 50 years or older                                                            1.0          2.0
            TOTAL                                                                                      1.6          1.9
            Women                                                                                      2.4          4.1
            Men                                                                                        1.0          0.8
            Of which, long-term sick leave                                                               0             0

           The portion of employees in the 29 years and younger age category is too low to facilitate the implementation of a complete specification.




           NOTE 6 depreciation/amortisation and impairment of tangible and intangible fixed assets
                                                                                    Group              Parent Company
                                                                             2008           2007      2008         2007

            Planned depreciation of equipment and transport                    31            37          4              5
            Amortisation of capitalised expenditure for IT systems              3             –          3              –
            Planned depreciation of properties                                  0             0          –              –
            TOTAL DEPRECIATION ACCORDING TO PLAN                               34            37          8              5
            Impairment of intangible assets                                     –             –          –              –
            TOTAL DEPRECIATION/AMORTISATION AND IMPAIRMENT                     34            37          8              5




34
                                                                                                           Notes | Mekonomen Annual Report 2008




NOTE 7 appropriations
                                                                                      Parent Company
                                                                                     2008        2007
Provision, tax allocation reserve                                                     –46         –44
Changes in excess depreciation                                                         –6              0
Total appropriations                                                                  –52         –44




NOTE 8 net profit/loss on financial instruments reported in income statement
                                                                      Group           Parent Company
NET PROFIT/NET LOSS                                            2008           2007   2008       2007

Of which, financial instruments categorised as:
Holdings for trading, derivative                                 7              –1     6          –1
Accounts receivable, impairments                                –3              –3     0           0




NOTE 9 tax on profit for the year
                                                                      Group           Parent Company
CURRENT TAX                                                    2008           2007   2008       2007

SWEDEN                                                          –49            –57    –39        –37
Other countries                                                 –21            –20      –          –
TOTAL CURRENT TAX                                               –70            –77    –39        –37


Changes in deferred tax temporary differences                    –2              7      –          –
Tax on Group contributions, net                                   –              –     58         54
RECOGNISED TAX EXPENSES                                         –72            –70     19         16


TAX ON PROFIT FOR THE YEAR
Recognised profit before tax                                    261            418    231        250
Tax according to applicable tax rate, 28%                       –73           –117    –65        –70
Tax on standard interest on tax allocation reserves              –2             –1     –1          0
Tax effects on expenses that are not tax deductible
  Other non-deductible expenses                                  –1              0      0         –1
  Other non-taxable revenue                                       2              0     85         87
Tax effects on current tax, property transaction Sweden           –             43      –          –
Tax effects on deferred tax, property transaction Denmark        –              12     –           –
Tax effects on current tax, property transaction Denmark         –             –7      –           –
Effects on adjustments from the preceding year                   2              0      –           –
Tax effects utilised, non-valued,, loss carryforwards Sweden     –              1      –           –
REPORTED TAX EXPENSES                                          –72            –70     19          16




                                                                                                                                                  35
     Mekonomen Annual Report 2008 | Notes




           NOTE 10 Buildings and land
                                                                                                           Improvement costs,
                                                                                     Land and buildings     third-party property                  Total

            OPENING ACQUISITION VALUE, 1 JANUARY 2007                                                457                      3                    460
            Purchase, rebuilding and extensions, conversions                                                                  0                         0
            Reclassifications                                                                      –455                      –1                   –456
            OPENING ACQUISITION VALUE, 1 JANUARY 2008                                                  1                      3                         4
            Purchase, rebuilding and extensions, conversions                                                                  2                         2
            Sales/disposals                                                                           –1                      –                        –1
            CLOSING ACQUISITION VALUE, 31 DECEMBER 2008                                                0                      5                         5
            OPENING ACCUMULATED DEPRECIATION, 1 JANUARY 2007                                         –96                     –1                    –97
            Depreciation according to plan for the year                                                0                      0                         0
            Reclassifications                                                                         96                      –                        96
            OPENING ACCUMULATED DEPRECIATION, 1 JANUARY 2008                                           0                     –1                        –1
            Depreciation according to plan for the year                                                                       0                         0
            Sales/disposals                                                                            0                      –                         0
            CLOSING ACCUMULATED DEPRECIATION, 31 DECEMBER 2008                                                               –1                        –1
            CLOSING RESIDUAL VALUE ACCORDING TO PLAN, 31 DECEMBER 2008                                 0                      4                         4




           The buildings are depreciated at 2–4 per cent          During 2007, the majority of the Group’s properties                properties were divested, the remaining two are
           depending on classification. Permanent equipment       were divested, six of the remaining seven were                     classed as “properties held for resale,” since they are
           was depreciated at 5–10 per cent based on the calcu-   classed as “properties held for resale” at 31 Decem-               still for sale.
           lated economic lifetime.                               ber 2007. During 2008, five of the seven remaining




            PROPERTIES HELD FOR RESALE                                                      Revaluation      Carrying       Date of reclassification as
            PROPERTY/CITY/COUNTRY                                        Initial value   during the year      amount        properties held for resale
            Tunnbindaren 4, Växjö, Sweden                                           3                                3                  January 2007
            Romberga 23:25, Enköping, Sweden                                        4                                4                  January 2007
                                                                                    7                                7


                                                                       31 Dec. 2008      31 Dec. 2008 31 Dec. 2007                     31 Dec. 2007
            TAX ASSESSMENT VALUE, PROPERTIES                               Buildings     Of which, land   Buildings                    Of which, land
            Tax assessment value, Sweden                                            4                 1              3                                 1




36
                                                                                                                         Notes | Mekonomen Annual Report 2008




NOTE 11 Classification of financial assets and liabilities 2008
                                                              Loan
                                                        receivables                                Non financial
                                                      and accounts          Other       Hedging          assets/
                                                        receivables     liabilities   accounting       liabilities   Total

                                                         Amortised     Amortised            Fair
                                                              cost          cost           value

ASSETS
Intangible fixed assets                                          –               –            –              254      254
Tangible fixed assets                                            –               –            –              119      119
Deposits paid                                                    6               –            –                 –       6
Lease-purchase agreements                                       20               –            –                 –      20
Deferred tax assets                                              –               –            –                 3       3
Inventories                                                      –               –            –              602      602
Accounts receivable                                            217               –            –                 –     217
Other current receivables                                        –               –            –                21      21
Properties for sale                                              –               –            –                 7       7
Other assets (derivatives)                                       –               –            5                 –       5
Prepaid expenses and accrued income                              –               –            –                83      83
Cash and bank balances                                          85               –            –                 –      85
TOTAL ASSETS                                                   328               –            5            1,089     1,423


SHAREHOLDERS’ EQUITY AND LIABILITIES
Shareholders' equity                                             –               –            –              851      851
Provisions                                                       –               –            –                 3       3
Long-term liabilities                                            –               –            –                39      39
Current liabilities                                              –               –            –                41      41
Liabilities to credit institutions                               –             50             –                        50
Accounts payable                                                 –            268             –                       268
Current tax liabilities                                          –               –            –                22      22
Other liabilities (derivatives)                                  –               –            0                         0
Accrued expenses and prepaid income                              –               –            –              149      149
TOTAL SHAREHOLDERS’ EQUITY AND LIABILITIES                       –            318             0            1,105     1,423

During the year, the income statement was not influenced by changes in value of short-term investments.




                                                                                                                                                                37
     Mekonomen Annual Report 2008 | Notes




           NOTE 11 Classification of financial assets and liabilities 2007
                                                                                         Loan
                                                                  Investments      receivables                               Non financial
                                                                       held to   and accounts         Other         Hedge          assets/
                                                                      maturity     receivables    liabilities   accounting       liabilities   Total

                                                                   Amortised        Amortised    Amortised            Fair
                                                                        cost             cost         cost           value

            ASSETS
            Intangible fixed assets                                         –               –              –            –              206      206
            Tangible fixed assets                                           –               –              –            –                97      97
            Deposits paid                                                   –               4              –            –                 –       4
            Lease-purchase agreements                                       –               5              –            –                 –       5
            Other financial fixed assets                                    –               1              –            –                 –       1
            Deferred tax assets                                             –               –              –            –                 2       2
            Inventories                                                     –               –              –            –              554      554
            Accounts receivable                                             –             201              –            –                 –     201
            Other current receivables                                       –               –              –            –                23      23
            Properties for sale                                             –               –              –            –                22      22
            Other assets (derivatives)                                      –               –              –            –                76      76
            Prepaid expenses and accrued income                           140               –              –            –                 –     140
            Cash and bank balances                                          –             150              –            –                 –     150
            TOTAL ASSETS                                                  140             361              0            0              980     1,481


            SHAREHOLDERS’ EQUITY AND LIABILITIES
            Shareholders' equity                                            –               –              –            –              996      996
            Provisions                                                      –               –              –            –                 3       3
            Long-term liabilities                                           –               –              –            –                39      39
            Current liabilities                                             –               –              –            –                25      25
            Liabilities to credit institutions                              –               –              6            –                 –       6
            Accounts payable                                                –               –           241             –                 –     241
            Current tax liabilities                                         –               –              –            –                31      31
            Other liabilities (derivatives)                                 –               –              –            1                 –       1
            Accrued expenses and prepaid income                             –               –              –            –              139      139
            TOTAL SHAREHOLDERS’ EQUITY AND LIABILITIES                      0               0           247             1            1,233     1,481

           During the year, the income statement was not influenced by changes in value of short-term investments.




38
                                                                                                                      Notes | Mekonomen Annual Report 2008




NOTE 12 equipment and transport
                                                                            Equipment,
                                                                              transport     Leasing         Total

OPENING ACQUISITION VALUE, 1 JANUARY 2007                                          273           14          288
Purchases                                                                           30            5              35
Sales/disposals                                                                    –10            –          –10
Exchange-rate fluctuations                                                           5            0               5
OPENING ACQUISITION VALUE, 1 JANUARY 2008                                          298           19          317
Purchases                                                                           43            2              45
Sales/disposals                                                                     –9                           –9
Exchange-rate fluctuations                                                          12                           12
CLOSING ACQUISITION VALUE, 31 DECEMBER 2008                                        344           21          365
OPENING DEPRECIATION, 1 JANUARY 2007                                              –182          –11         –192
Sales/disposals                                                                      8                            8
Exchange-rate fluctuations                                                          –3            0              –3
Depreciation for the year                                                          –32           –4          –36
OPENING DEPRECIATION, 1 JANUARY 2008                                              –209          –14         –223
Sales/disposals                                                                      9                            9
Exchange-rate fluctuations                                                          –5                           –5
Depreciation for the year                                                          –27           –4          –31
CLOSING ACCUMULATED DEPRECIATION, 31 DECEMBER 2008                                –232          –18         –250
CLOSING RESIDUAL VALUE ACCORDING TO PLAN, 31 DECEMBER 2008                         112            3          115




Leasing
Leasing contracts refer to the leasing of distribution vehicles in Sweden and Norway and fork-lifts in Denmark
and Sweden.
                                                                                               2008         2007
Leasing expenses for the year                                                                     6              3




FUTURE LEASING FEES FOR IRREVOCABLE LEASING CONTRACTS
FALLING DUE FOR PAYMENT:                                                                       2008         2007
Within one year                                                                                 140          105
Later than one year but within five years                                                       367          310
After five years                                                                                181          199

                                                                                                688          614

Of the future leasing fees, leased premises represent SEK 667 M (604)




                                                                                                                                                             39
     Mekonomen Annual Report 2008 | Notes




                                                                                                           Parent Company
            EQUIPMENT AND TRANSPORT                                                                      2008        2007

            OPENING ACQUISITION VALUE                                                                       37          34
            Purchases                                                                                        3              4
            Sales/disposals                                                                                  0          –1
            CLOSING ACQUISITION VALUE                                                                       40          37
            Opening depreciation                                                                          –24          –20
            Sales/disposals                                                                                  0              1
            Depreciation for the year                                                                       –4          –5
            CLOSING ACCUMULATED DEPRECIATION                                                              –29          –24
            CARRYING AMOUNT                                                                                 11          13




           NOTE 13 intangible fixed assets
                                                                                               IT investments in
                                                                                    Goodwill   Parent Company         Total

            OPENING ACQUISITION VALUE, 1 JANUARY 2007                                   169                   9        178
            Acquisitions                                                                 26                   8         34
            Translation differences, currency                                             3                                 3
            OPENING ACQUISITION VALUE, 1 JANUARY 2008                                   198                  17        216
            Acquisitions                                                                 37                  17         54
            Divestments                                                                  –2                             –2
            Translation differences, currency                                            –1                             –1
            CLOSING ACCUMULATED ACQUISITION VALUE, 31 DECEMBER 2008                     232                  34        267
            OPENING ACCUMULATED AMORTISATION, 1 JANUARY 2007                              0                  –9         –9
            Impairment                                                                    –                   –             –
            OPENING ACCUMULATED AMORTISATION, 1 JANUARY 2008                              0                  –9         –9
            Amortisation according to plan for the year                                   –                  –3         –3
            CLOSING ACCUMULATED AMORTISATION, 31 DECEMBER 2008                            0                –12         –12
            CLOSING RESIDUAL VALUE ACCORDING TO PLAN, 31 DECEMBER 2008                  232                  22        254


           The recognised goodwill value is partly attributable to the wholesale operation and partly to Mekonomen’s
           stores in Sweden, Norway and Denmark. The amount is divided into SEK 40 M and SEK 192 M, respectively. The
           division of SEK 192 M according to countries is as follows: Sweden SEK 122 M, Norway SEK 49 M and Denmark
           SEK 21 M.




40
                                                                                                                                        Notes | Mekonomen Annual Report 2008




iMpairMent testing oF intangiBLe                            The forecast after 2012 is based on growth of 2 per          ments. In the plans that are the basis for cash flows,
FiXed assets                                                cent. The present value of the forecast cash flows is        Company Management assumes that the price
The assessment of the value of the Group’s goodwill         calculated by applying a discount rate of 10 per cent        trend will amount to only a few per cent annually.
items was based on the value in use of the cash-gene-       after tax. The same conditions apply to those mar-           The volume trend is calculated to be between 2 and
rating units. For Mekonomen, this unit means an             kets in which Mekonomen is active, which is why the          5 per cent annually up to 2012. Price and volume de-
individual store; in some cases several stores are          same rate is used for all units. With a discount factor      velopments vary a total of between 2 and 5 per cent.
included in one company and an assessment of the            of 14 per cent, the value in use for all of the units will   Assessments are conducted taking into account
individual company as a whole is conducted. The             exceed the carrying amount. Assumptions from                 the trends in the most recent years. Company Man-
value in use is based on the cash flow that the unit is     company management are included in this type of              agement estimates that, even taking into account
expected to generate in the Group in the future. The        calculation, assessment and assumption. The future           reasonable deviations from assumed prerequisites,
future cash flow used in the calculation of each unit’s     cash flows of several units are based on similar             the recoverable value will not decrease to such an
value in use is based on the 2009 business plan for         assumptions. Important assumptions, which when               extent that it is less than the carrying amount.
each unit. Subsequently, the cash flows will be based       changed have a major impact on the cash flow, are
on the unit’s business plan, which extends to 2012.         assumptions on future price and volume develop-


NOTE 14 deferred taxes
The table below states the Group’s deferred tax assets and tax liabilities for each category. The deferred tax
liabilities are recognised after deduction of any tax assets if sub-items can be offset.
                                                             Opening     Recognised                         Closing
                                                             balance,     as income     Other chan-         balance
TAX ASSETS, LOSS CARRYFORWARDS                            1 Jan. 2007    during 2007    ges in 2007    31 Dec. 2007

Deferred tax assets, Norway                                         4             –2               –               2
Estimated tax on reversed net asset goodwill                      –1               0               –              –1
Adjustment to prior years                                           –              –               1               1
Translation differences, currency                                   0              –               0               0
TOTAL TAX ASSETS, 31 DECEMBER 2007                                  3             –2               1               2

                                                               1 Jan.                                        31 Dec.
TAX ASSETS, LOSS CARRYFORWARDS                                  2008           2008            2008            2008
Deferred tax assets, Norway                                         2              2                               4
Estimated tax on reversed net asset goodwill                      –1               0                              –1
Adjustment to prior years                                           1              –             –1                0
Translation differences, currency                                   0                                              0
TOTAL TAX ASSETS, 31 DECEMBER 2008                                  2              2             –1                3

                                                               1 Jan.                                        31 Dec.
TAX LIABILITIES                                                 2007           2007            2007            2007
Untaxed reserves                                                  64               4             –5               64
Surplus value on fixed assets                                     39             –20            –17                2
Estimated tax on reversed net asset goodwill                        8              3                              10
Deferred tax asset, deficit, Denmark                              –3               1                              –2
Temporary tax benefits from inter-company profit                 –20              –2                             –22
Other                                                            –18               5                             –13
Translation differences, currency                                 –1                                               0
TOTAL TAX LIABILITIES, 31 DECEMBER 2007                           69              –9            –22               39



                                                                                                                                                                                  41
     Mekonomen Annual Report 2008 | Notes




                                                                         1 Jan.                                   31 Dec.
            TAX LIABILITIES                                               2008         2008         2008            2008
            Untaxed reserves                                                64            3            –                 67
            Surplus value on fixed assets                                    2           –2            –                  0
            Estimated tax on reversed net asset goodwill                    10            2            –                 12
            Deferred tax asset, deficit, Denmark                            –2            0            –                 –2
            Temporary tax benefits from inter-company profit               –22           –1            –                –23
            Other                                                          –13           –3            –                –17
            Translation differences, currency                                0            –            1                  1
            TOTAL TAX LIABILITIES, 31 DECEMBER 2008                         39           –1            1                 38

           Other changes during 2007 refer to the sale of the company, Bileko Konsult AB, in connection with the
           divestment of the Group’s property portfolio. Estimated tax on reversed net asset goodwill arises during
           the reversal of amortisation on net asset goodwill in the Group.




           NOTE 15 other long-term receivables
                                                                                                           Group
                                                                                                   31 Dec.             31 Dec
                                                                                                      2008               2007
            Rental deposits paid                                                                           6                  4
            Hire-purchase contract                                                                     20                     5
            Other receivables                                                                              0                  1
            TOTAL OTHER LONG-TERM RECEIVABLES                                                          26                 10

           No impairment of long-term receivables was conducted during the year.




           NOTE 16 Current receivables
                                                                                                               Group
                                                                                                     2008               2007

            Accounts receivable                                                                       217                201
            Other receivables                                                                          26                 23
            Prepaid expenses and accrued income                                                        83                 76
            TOTAL                                                                                     326                300




42
                                                                                                                     Notes | Mekonomen Annual Report 2008




                                                                                        Accounts receivable
ACCOUNTS RECEIVABLES, GROUP                                                                2008           2007

Accounts receivables                                                                         233            218
Provisions in bad debts                                                                      –16            –17
TOTAL ACCOUNTS RECEIVABLES                                                                   217            201


                                                                                      Provisions for bad debts
                                                                                           2008           2007

Provision for bad debts at the beginning of the year                                         –16            –15
Provision for companies acquired during the year                                               0                 0
Net change in provision                                                                       –2              –2
Recovered prior impairment losses                                                              2                 1
Translation difference in opening balance                                                      0              –1
TOTAL PROVISIONS FOR BAD DEBTS                                                               –16            –17




RECEIVABLES THAT ARE DUE BUT NOT IMPAIRED                                                  2008           2007

Accounts receivables
Receivables due between 0–30 days                                                             60              48
Receivables due between 31–60 days                                                            12                 3
Receivables due longer than between 60–90 days                                                 5                 1
                                                                                              77              52

Interest income on accounts receivables during the year was SEK 4 M (3).




NOTE 17 prepaid expenses and accrued income
                                                                       Group                 Parent Company
                                                                2008           2007        2008           2007

Prepaid rents                                                     18            15             2                 2
Prepaid leasing fees                                               0             1             –                 0
Prepaid insurance                                                  2             2             –                 0
Accrued supplier bonus                                            52            49            41              42
Other interim receivables                                         11             9             3                 2
TOTAL                                                             83            76            46              46




                                                                                                                                                            43
     Mekonomen Annual Report 2008 | Notes




           NOTE 18 Cash and cash equivalents
                                                                                  Group               Parent Company
                                                                        31 Dec.           31 Dec.   31 Dec.       31 Dec.
                                                                           2008             2007       2008         2007
            Bank deposits                                                     –              140         –           140
            Cash and bank balances                                           85              150         0              0
            CASH AND CASH EQUIVALENTS                                        85              290         0           140




           NOTE 19 Long-term liabilities to credit institutions and leasing companies
                                                                                                          Group
                                                                                                    31 Dec.       31 Dec.
                                                                                                       2008         2007

            SWEDEN
            Liabilities to leasing companies                                                              1             1
            NORWAY
            Liabilities to leasing companies                                                              0             1
            TOTAL LONG-TERM LIABILITIES, INTEREST-BEARING                                                 1             2




           NOTE 20 provisions
           In conjunction with the divestment of the Group’s      inspections performed. Mekonomen’s guarantee
           properties in 2007, a guarantee provision total-       commitment totalled SEK 22 M and the remaining
           ling SEK 3 M was made in the Parent Company            SEK 19 M is recognised as a contingent liability in
           pertaining to consulting responsibility for property   memorandum items.




44
                                                                                                                        Notes | Mekonomen Annual Report 2008




NOTE 21 Current liabilities
                                                                                           Group
                                                                                      31 Dec.      31 Dec.
                                                                                         2008        2007

Short-term portion of bank loans                                                            –           1
Overdraft facility                                                                         50           –
Liabilities to leasing companies                                                            3           3
TOTAL CURRENT LIABILITIES, INTEREST-BEARING                                                53           4
Accounts payable                                                                          268         241
Other liabilities                                                                          37          16
Provisions                                                                                  1          10
Accrued expenses and deferred income                                                      149         139
TOTAL CURRENT LIABILITIES, INTEREST-BEARING                                               455         406

Provisions refer to reserves in Denmark for expenses pertaining to the distribution project, which commenced in 2007.
Expenses pertain to rents for premises. The remaining portion will be paid during 2009.




NOTE 22 accrued expenses and deferred income
                                                                       Group              Parent Company
                                                               2008            2007      2008        2007

Accrued salaries                                                   5             8          2           4
Accrued holiday pay                                               66            54          3           3
Accrued social security contributions                             26            23          4           4
Prepaid rental revenue                                             –             1          –           –
Accrued bonus/contract expense                                    10             9          –           –
Other interim liabilities                                         42            44          2           0
TOTAL                                                            149           139         11          11




                                                                                                                                                               45
     Mekonomen Annual Report 2008 | Notes




           NOTE 23 Memorandum items
                                                                            Group                  Parent Company
                                                                      31 Dec.       31 Dec.     31 Dec.     31 Dec.
            LIABILITIES TO CREDIT INSTITUTIONS                           2008         2007         2008       2007
            Property mortgages, subsidiaries                               92           92          92          92
            TOTAL                                                          92           92          92          92


            CONTINGENT LIABILITIES
            Guarantee commitment, Mekonomen AB                             19           19          19          19
            Surety commitment, Norway                                       –            1           –              1

           The guarantee commitment refers to a guarantee pertaining to consulting responsibility for inspections
           performed by an external consulting company in connection with the sale of the Group’s properties in
           Denmark and Sweden. The guarantee extends for 10 years.




           NOTE 24 participations in group companies
                                                                         Corp.      Share of       No. of    Carrying
            NAME OF COMPANY/REGISTERED OFFICE, SWEDEN                  Reg. No.     equity, %      stores     amount

            Mekonomen Grossist AB/Stockholm                        556062-4875           100                        40
            Mekonomen Detaljist AB/Stockholm                       556157-7288           100                            5
            Mekonomen Finans AB/Stockholm                          556179-9676           100                            1
            Mekonomen Fleet AB/Stockholm                           556720-6031           100                            2
            Mekonomen Vilande Fyra AB/ Stockholm                   556729-1439           100                            0
            Mekonomen Vilande Fem AB/ Stockholm                    556729-1579           100                            0
            Mekonomen Vilande Sex AB/ Stockholm                    556724-9254           100                            0

            NAME OF COMPANY/REGISTERED OFFICE, DENMARK
            Mekonomen Danmark A/S / Odense                          30 07 81 28          100          39            177

            NAME OF COMPANY/REGISTERED OFFICE, NORWAY
            Mekonomen Norge AS/Oslo                                 980 748 669          100                         24
            PARTICIPATIONS IN GROUP COMPANIES, TOTAL                                                                249




46
                                                                                                                      Notes | Mekonomen Annual Report 2008




Contd. PARTICIPATION IN SUBSIDIARIES                                         Contd. PARTICIPATION IN SUBSIDIARIES
                                           Corp. Reg.   Share of    No. of                                                Corp. Reg.   Share of    No. of
NAME OF COMPANY/REGISTERED OFFICE                 No.   equity, %   stores   NAME OF COMPANY/REGISTERED OFFICE                   No.   equity, %   stores

SWEDEN                                                                       Mekonomen Motala AB/Motala                 556311-8750         100        1
Mekonomen Alingsås AB/Alingsås           556596-3690          75        1    Mekonomen Märsta AB/Sigtuna                556596-3674         100        1
Mekonomen Arvika AB/Arvika               556528-3750          80        1    Mekonomen Nacka AB/Nacka                   556204-0294         100        1
Mekonomen B2C AB/Stockholm               556767-7405         100        8    Mekonomen Norrköping AB/Norrköping         556376-2797          75        2
Mekonomen Backaplan AB/Göteborg          556226-1338         100        1    Mekonomen Norrtälje AB/Stockholm           556178-9719          60        1
Mekonomen Borås City AB/Borås            556078-9447          91        2    Mekonomen Nyköping AB/Nyköping             556244-0650          75        1
Mekonomen Bromma AB/Stockholm            556230-5101          91        1    Mekonomen Nässjö AB/Nässjö                 556187-8637         100        2
Mekonomen Enköping AB/Enköping           556264-2636         100        1    Mekonomen Osby AB/Osby                     556408-8044          91        1
Mekonomen Eskilstuna AB/Eskilstuna       556613-5637         100        1    Mekonomen Oskarshamn AB/Oskarshamn         556631-8589          75        1
Mekonomen Falkenberg AB/Falkenberg       556213-1622        70,2        1    Mekonomen Partille AB/Göteborg             556731-1401          91        1
Mekonomen Falköping AB/Falköping         556272-1497         100        1    Mekonomen Piteå AB/Piteå                   556659-8966          75        1
Mekonomen Falun AB/Falun                 556559-3927          60        2    Mekonomen Ronneby AB/Ronneby               556649-9017         100        1
Mekonomen Farsta AB/Stockholm            556528-4766          91        1    Mekonomen Sandviken AB/Sandviken           556201-1295          91        1
Mekonomen Finspång AB/Finspång           556594-1951         100        1    Mekonomen Segeltorp AB/Huddinge            556580-2351          91        1
Mekonomen Gislaved AB/Gislaved           556261-4676         100        1    Mekonomen Skellefteå AB/Skellefteå         556389-4095         100        1
Mekonomen Gävle AB/Gävle                 556353-6803          91        1    Mekonomen Skåne Ystad AB/Ystad             556565-3085         100        1
Mekonomen Göteborg Ringön AB/Göteborg    556561-6751         100        1    Mekonomen Sollefteå AB/Sollefteå           556216-9424          80        1
Mekonomen Hedemora AB/Hedemora           556308-8011         100        1    Mekonomen Sollentuna AB/Sollentuna         556462-0416          85        2
Mekonomen Helsingborg AB/Helsingborg     556044-4159          75        2    Mekonomen Solna AB/Stockholm               556213-3073          91        1
Mekonomen Hudiksvall AB/Hudiksvall       556428-1102          75        1    Mekonomen Sundsvall AB/Sundsvall           556201-1675         100        2
Mekonomen Härnösand AB/Härnösand         556217-2261          80        1    Mekonomen Söderhamn AB/Söderhamn           556509-4132          75        1
Mekonomen Hässleholm AB/Hässleholm       556678-0622          91        1    Mekonomen Södertälje AB/Södertälje         556405-5498         100        1
Mekonomen Järfälla AB/Stockholm          556660-3196          91        1    Mekonomen Sölvesborg AB/Sölvesborg         556216-4250          75        1
Mekonomen Jönköping AB/Jönköping         556237-5500         100        1    Mekonomen Torslanda AB/Göteborg            556583-3893         100        1
Mekonomen Kalmar AB/Kalmar               556236-8349          91        1    Mekonomen Trollhättan AB/Trollhättan       556515-0298          91        3
Mekonomen Karlshamn AB/Karlshamn         556649-9090         100        1    Mekonomen Täby AB/Täby                     556632-9958          91        1
Mekonomen Karlskoga AB/Karlskoga         556196-2605         100        1    Mekonomen Uddevalla AB/Uddevalla           556550-5004         100        1
Mekonomen Karlskrona AB/Karlskrona       556649-9082         100        1    Mekonomen Umeå AB/Umeå                     556483-3084        81,8        1
Mekonomen Kramfors AB/Kramfors           556496-1810          91        1    Mekonomen Uppsala AB/Uppsala               556092-4218          91        3
Mekonomen Kristianstad AB/Kristianstad   556171-9203          80        1    Mekonomen Varberg AB/Varberg               556261-0161          75        1
Mekonomen Landskrona AB/Landskrona       556646-4813         100        1    Mekonomen Vetlanda AB/Vetlanda             556653-4219         100        1
Mekonomen Lidköping AB/Lidköping         556761-3012          75        1    Mekonomen Vimmerby AB/Vimmerby             556232-5877         100        1
Mekonomen Linköping AB/Linköpin          556202-9545         100        1    Mekonomen Värnamo Norra AB/Värnamo         556530-9266          75        1
Mekonomen Ljungby Odlaren AB/Ljungby     556111-9719         100        1    Mekonomen Västberga AB/Stockholm           556192-0314          91        1
Mekonomen Ludvika AB/Ludvika             556470-4210         100        1    Mekonomen Västerås AB/Västerås             556344-5492          75        2
Mekonomen Luleå AB/Luleå                 556338-4071         100        1    Mekonomen Växjö AB/Växjö                   556192-0439         100        1
Mekonomen Lund AB/Lund                   556531-0108         100        1    Mekonomen Åkersberga AB/Österåker          556632-9966          91        1
Mekonomen Lycksele AB/Lycksele           556687-8095          75        1    Mekonomen Örebro Aspholmen AB/Örebro       556344-0717          75        2
Mekonomen Malmö Fosie AB/Malmö           556493-7018         100        2    Mekonomen Örnsköldsvik AB/Örnsköldsvik     556465-6287          75        1
Mekonomen Malmö Värnhem AB/Malmö         556530-7237         100        –    Mekonomen Östersund AB/Östersund           556296-5243         100        1
Mekonomen Mariestad AB/Mariestad         556261-0179          50        1    Primexxa Strängnäs AB/Stockholm            556422-3872          60        1
Mekonomen Mjölby AB/Mjölby               556362-0565          75        1                                                                            103
Mekonomen Mora AB/Mora                   556363-2487          80        1




                                                                                                                                                             47
     Mekonomen Annual Report 2008 | Notes




            Contd. PARTICIPATION IN SUBSIDIARIES
                                                        Corp. Reg.   Share of    No. of
            NAME OF COMPANY/REGISTERED OFFICE                  No.   equity, %   stores
            NORWAY
            Mekonomen Arendal AS/Arendal               982 434 696        100        1
            Mekonomen Askim AS/Askim                   974 209 772        100        1
            Mekonomen Björkelangen AS/Björkelangen     989 903 551        100        1
            Mekonomen Bodö AS/Bodö                     986 489 576        100        1
            Mekonomen Drammen AS/Drammen               924 843 543        100        1
            Mekonomen Fredrikstad AS/Fredrikstad       881 509 032        100        1
            Mekonomen Grenland AS/Porsgrund            984 690 703        100        1
            Mekonomen Hamar AS/Hamar                   984 006 047        100        1
            Mekonomen Harstad AS/Harstad               982 952 379        100        1
            Mekonomen Haugesund AS/Haugesund           983 509 622        100        1
            Mekonomen Horten AS/Horten                 990 815 798        100        1
            Mekonomen Jessheim AS/Jessheim             987 696 109        100        1
            Mekonomen Kolbotn AS/Oslo                  990 815 739        100        1
            Mekonomen Kongsberg AS/Kongsberg           937 161 786         75        1
            Mekonomen Kongsvinger AS/Kongsvinger       992 102 217        100        1
            Mekonomen Molde AS/Molde                   985 793 417        100        1
            Mekonomen Moss AS/Moss                     939 161 260        100        1
            Mekonomen Oslo AS/Oslo                     938 215 103        100        1
            Mekonomen Sandefjord AS/Sandefjord         990 815 844        100        1
            Mekonomen Sandnes AS/Sandnes               992 302 577        100        1
            Mekonomen Sandvika AS/Sandvika             982 707 862        100        1
            Mekonomen Sarpsborg AS/Sarpsborg           910 155 520        100        1
            Mekonomen Ski AS/Ski                       983 098 525        100        1
            Mekonomen Stavanger AS/Stavanger           983 935 214        100        1
            Mekonomen Sörlandsparken AS/Kristiansand   981 508 939        100        1
            Mekonomen Tromsö AS/Tromsö                 942 591 322        100        1
            Mekonomen Trondheim AS/Trondheim           979 462 026        100        1
            Mekonomen Tönsberg AS/Tönsberg             934 256 867         75        1
            Mekonomen Ålesund AS/Ålesund               981 929 276        100        1
                                                                                    29


            TOTAL NUMBER OF STORES                                                 171




48
                                                                                                                                   Notes | Mekonomen Annual Report 2008




NOTE 25 shareholders’ equity
share CapitaL                                           statutory reserve                                           basis for the resolution of the Annual General Meeting
The share capital amounted to SEK 77 M and consists     The purpose of the statutory reserve is to allocate         for dividends for the year.
of 30,868,822 shares at a par value of SEK 2.50 per     profit to cover any future losses.
share.                                                                                                              dividend to parent CoMpanY’s
                                                        proFit Brought ForWard                                      sharehoLders
other CapitaL ContriButions                             Comprises prior years’ profit brought forward after any     The Board of Directors proposes a dividend of SEK
The amount consists of the Parent Company’s Statu-      provisions to statutory reserves and after dividends.       6.00 per share, which gives a total dividend of SEK
tory reserve.                                           Profit for the year is included in this amount. The Par-    185,212,932.
                                                        ent Company’s Profit brought forward represents the



TRANSLATION DIFFERENCES, FOREIGN SUBSIDIARIES                                                2008        2007

Accumulated translation differences in Norway                                                 23            3
Accumulated translation differences in Denmark                                                –6            0
                                                                                              17            3




NOTE 26 Capital
Mekonomen manages its capital to ensure that the        equity, for which the proportions and changes dur-          At least once per year, the Board of Directors
units in the Group can continue to operate, while       ing the year are described in the Group’s changes           reviews the capital structure and takes this into
dividends to shareholders are maximised through a       in shareholders’ equity on page 24 and in Note 25,          account when making decisions on, for example,
good balance between liabilities and shareholders’      Shareholders’ equity.                                       dividends or raising new loans.
equity. The Group’s capital consists of shareholders’




NOTE 27 adjustments for non-cash items
                                                                      Group                    Parent Company
                                                               31 Dec.        31 Dec.        31 Dec.     31 Dec.
                                                                  2008          2007            2008       2007

Depreciation/amortisation                                           34            37                 8          5
Change in value, derivatives                                        –7              1               –6          1
Guarantee provisions                                                 –              –                –          3
Exchange-rate differences                                            6           –15                 0          0
Capital gain/loss from divestment of fixed assets                  –10          –152                –3          0
Other non-cash items                                                 0              0                0          0
                                                                    24          –129                –1          9




                                                                                                                                                                             49
     Mekonomen Annual Report 2008 | Notes




           NOTE 28 acquisitions and divestment of subsidiaries
            ACQUISITIONS DURING 2008                                                                                                2008       The amounts above include acquisition of com-
            VALUE OF ACQUIRED ASSETS AND LIABILITIES                                                                                           panies and operations, as well as the acquisition
            Tangible fixed assets                                                                                                          4   of minority shares in Västberga, Hässleholm and
            Inventories                                                                                                                30      Trollhättan. The acquired Micro stores are located
            Current receivables                                                                                                            2   in Borås, Eskilstuna, Gävle, Helsingborg, Malmö,
            Cash and cash equivalents                                                                                                      0
                                                                                                                                               Löddeköpinge, Uddevalla and Uppsala. Informa-
            Current liabilities                                                                                                        –9
                                                                                                                                               tion on company acquisitions is submitted in
            ACQUIRED NET ASSETS                                                                                                        26
            Goodwill                                                                                                                   37      aggregated form, since not every individual acqui-
            Total purchase price                                                                                                       63      sition is deemed large enough to warrant separate
            Cash and cash equivalents in the acquired companies                                                                            0   reporting. The acquisition of the eight Micro stores
            IMPACT ON THE GROUP'S CASH AND CASH EQUIVALENTS                                                                            63      represents about 50 per cent of the total purchase
                                                                                                                                               price. In addition to goodwill, no intangible surplus
                                                                      Acquisition        Shareholding and                                      value was identified in conjunction with the
            ACQUIRED SUBSIDIARIES/OPERATIONS             Country      date            share of voting rights      Object
                                                                                                                                               acquisitions. The purchase price also includes any
            Oddvar Ohlsen AS                             Norway       February                          100       Assets and liabilities
                                                                                                                                               transaction expenses, which are not recognised
            Koblingsdepotet A/S                          Denmark      May                              100        Assets and liabilities
                                                                                                                                               separately since the amounts are insignificant.
            HCJ Bilutrustning AB                         Sweden       June                              100       Assets and liabilities
            Björkelangen Bildeler AS                     Norway       July                              100       Company                        In Sweden, 15 store managers signed on as
            Bildelespesialisten AS                       Norway       November                          100       Company                      partners in individual store companies. Their share-
            AD-butik                                     Sweden       December                          100       Assets and liabilities       holding amounts to 9 per cent per store company.
            Micro stores, eight                          Sweden       December                          100       Assets and liabilities       The total purchase price for these shareholdings
                                                                                                                                               amounted to SEK 5 M.
            ACQUISITIONS DURING 2007                                                                                                2007
            VALUE OF ACQUIRED ASSETS AND LIABILITIES
            Tangible fixed assets                                                                                                       1
            Inventories                                                                                                                 6
            Current receivables                                                                                                         2
            Cash and cash equivalents                                                                                                   1
            Long-term liabilities                                                                                                      –2
            Current liabilities                                                                                                        –6
            ACQUIRED NET ASSETS                                                                                                            2
            Goodwill                                                                                                                   26
            Total purchase price                                                                                                       28
            Cash and cash equivalents in the acquired companies                                                                        –1
            IMPACT ON THE GROUP'S CASH AND CASH EQUIVALENTS                                                                            27


                                                                                            Shareholding and
            ACQUIRED SUBSIDIARIES 2007               Country       Acquisition date      share of voting rights            Object

            Skogveien Bilvaruhus AS                  Norway        February                                100             Company
            Nacka Autodelar Peter Stiebel AB         Sweden        May                                     100             Company
            Carmek AB, company                       Sweden        September                               100             Company
            GG Bildelar AB                           Sweden        October                                 100             Operation
            Autoprodukter i Ed AB                    Sweden        December                                100             Operation
            Autoprodukter i Ed AB                    Sweden        December                                100             Operation




50
                                                                                                                                    Notes | Mekonomen Annual Report 2008




NOTE 29 transactions with related parties
During the year, Mekonomen AB sold goods and services to Group companies totalling SEK 72 M (67).



NOTE 30 approval of the annual report
The Annual Report and the consolidated accounts           2009. The consolidated income statement and bal-           ment and balance sheet will be subject to the approval
were approved for issue by the Board on 16 March          ance sheet and the Parent Company’s income state-          of the Annual General Meeting on 22 April 2009.




NOTE 31 Financial risks
Mekonomen AB is exposed to risks in terms of cur-         loans and investments in the same currency. If for         term of a maximum of three months. Within this
rency, credit, interest rates and liquidity through its   some reason matching is not achieved, hedging shall        time frame, it is estimated that increased financial
operations. The management of these risks is regu-        be implemented using currencies forward contract.          expenses, as an effect of changed interest rates,
lated in accordance with the finance policy adopted       With regard to foreign shareholders’ equity, the prin-     could be offset through changes in retail prices. In
by the Board of Directors.                                cipal rule is that Mekonomen shall not hedge this          order to manage possible interest-rate risks, relevant
                                                          exposure. However, if major foreign investments are        instruments in the market can be used.
Currency risks                                            made that require separate financing, the decision
Exchange-rate risks occur when exchange-rate fluc-        can be made to recognise the entire or part of the         Financing and liquidity risks
tuations have a negative impact on the Group’s profit     financing in the acquisition currency.                     Financing risk is seen as the risk of the cost coming
and shareholders’ equity. Currency exposure arises                                                                   higher and financing opportunities limited when
in connection with cash flows in foreign currencies       Credit risks                                               loans are renewed and that the ability to pay cannot
(transaction exposure) as well as in translation of       The Group’s financial transactions give rise to credit     be met as a result of insufficient liquidity or difficul-
loans/receivables in foreign currencies and in for-       risks in relation to financial counterparties. Credit      ties in securing financing. According to the finance
eign subsidiaries’ translation of balance sheets and      risks or counterparty risks refer to the risk of loss if   policy, refinancing risks shall be managed by signing
income statements into SEK (translation exposure).        the counterparty does not fulfil its commitments.          long-term and flexible credit agreements. At the end
During 2008, exchange-rate fluctuations had a nega-       Mekonomen’s credit risks primarily comprise ac-            of 2008, the Group had no long-term credit facilities.
tive impact on the Group’s income before tax amount-      counts payable, which are distributed over a large         The Group’s cash and cash equivalents are invested
ing to SEK 3 M (pos: 13). The most important currency     number of counterparties. The maximum credit               short-term with the aim that any excess liquidity
in terms of transaction exposure is EUR, which            risk corresponds to the carrying amount of financial       shall primarily be used for amortising loans. Invest-
represents 40 per cent of imports as well as              assets. Specifications pertaining to impairment of         ments may be made in SEK, NOK and DKK with the
NOK and DKK pertaining to internal sales from             accounts payable for the year are found in Note 16.        objective of matching future loans that mature, or
the Grossist operations to Norway and Denmark.                                                                       large disbursements. In cases where the company is
NOK and DKK are the most important curren-                interest-rate risks                                        not aware of any large disbursements, the maturity
cies as regards translation exposure. The finance         Interest-rate risks refer to the risk that changes in      period for investments shall not exceed one month.
policy permits hedging of the net currency flows          market interest rates will have a negative impact          Investments may occur at or in securities issued by
using external financial contracts. Since negative        on the Group’s net interest income/expense. The            the Swedish Government or Swedish and foreign
exchange-rate fluctuations are expected to be offset      speed at which interest-rate changes will affect the       banks with not less than an A rating, according to the
in customer pricing within one to three months, the       net interest income/expense depends on the period          definition of Standard & Poor’s (S&P).
hedging horizon shall not exceed three months.            of fixed interest for the loan. At the end of the year,
With regard to financial assets and liabilities, the      Mekonomen had a negligible amount of interest-             Fair value
policy states that internal loans and investments         bearing loans. According to the finance policy,            No financial assets or liabilities were recognised at a
in foreign currencies shall be matched by external        Mekonomen shall maintain an average fixed interest         value that significantly deviated from fair value.


                                                                                                                                                                                 51
     Mekonomen Annual Report 2008 | Signatures and auditors’ report




            The Board of Directors and President hereby certify         operations, position and results and describes signifi-      give a true and fair view of the Group’s position and
            that the annual report was prepared in accordance           cant risks and uncertainties facing the company.             results and that the Board of Directors’ report for the
            with the Annual Accounts Act and RFR 2.1 and pro-              The Board of Directors and President hereby               Group gives a true and fair view of the development
            vides a true and fair view of the company’s position        certify that the consolidated accounts were prepared         of the Group’s operations, position and results and
            and results and that the Board of Directors’ report gives   in accordance with International Financial Report-           describes significant risks and uncertainties facing
            a true and fair view of the development of the Group’s      ing Standards (IFRS), as approved by the EU, and             the companies included in the Group.



                                                                                              Stockholm
                                                                                            16 March 2009

                                                              Fredrik Persson                                              Marcus Storch
                                                            Chairman of the Board                                      Vice Chairman of the Board



                          Antonia Ax:son Johnson                                             Kenny Bräck                                                Anders G Carlberg
                                 Board member                                                Board member                                                   Board member




                                 Wolff Huber                                               Helena Skåntorp                                              Håkan Lundstedt
                                 Board member                                                Board member                                                President and CEO


            the annuaL generaL Meeting oF MeKonoMen aB (puBL), Corporate registration nuMBer 556392-1971
            We have audited the annual accounts, the consoli-           examining, on a test basis, evidence supporting the          results of operations in accordance with generally
            dated accounts, the accounting records and the              amounts and other disclosures in the accounts. An            accepted accounting principles in Sweden. The
            administration of the Board of Directors and the            audit also includes assessing the accounting princi-         consolidated accounts have been prepared in accord-
            President of Mekonomen AB for the 2008 financial            ples used and their application by the Board of Direc-       ance with international reporting standards, IFRS, as
            year. The company’s annual accounts are included            tors and the President and significant estimates made        adopted by the EU and the Annual Accounts Act and
            in the printed version of this document on pages            by the Board of Directors and the President when             give a true and fair view of the Group’s results and
            12 – 52. The Board of Directors and the President are       preparing the annual accounts and consolidated               position. The Board of Directors’ report is consistent
            responsible for these accounts and the administra-          accounts as well as evaluating the overall presenta-         with the other parts of the annual accounts and the
            tion of the Company, as well as for the application         tion of information in the annual accounts and the           consolidated accounts.
            of the Annual Accounts Act when preparing the an-           consolidated accounts. As a basis for our opinion               We recommend to the Annual General Meeting
            nual accounts and the application of International          concerning discharge from liability, we examined sig-        of shareholders that the income statements and
            Financial Reporting Standards, IFRS, as adopted by          nificant decisions, actions taken and circumstances          balance sheets of the Parent Company and the Group
            the EU and the application of the Annual Accounts           of the company in order to be able to determine the          be adopted, that the profit of the Parent Company
            Act when preparing the consolidated accounts. Our           liability, if any, to the company of any Board member        be dealt with in accordance with the proposal in the
            responsibility is to express an opinion on the annual       or the President. We also examined whether any               Board of Directors’ report and that the members of the
            accounts, the consolidated accounts and the admi-           Board member or the President has, in any other way,         Board of Directors and the President be discharged
            nistration based on our audit.                              acted in contravention of the Companies Act, the An-         from liability for the financial year.
               The audit was conducted in accordance with               nual Accounts Act or the Articles of Association. We
            generally accepted auditing standards in Sweden.            believe that our audit provides a reasonable basis for       Stockholm, 16 March 2009

            This means that we planned and performed the audit          our opinion set out below.                                   Deloitte AB
            to obtain reasonable, but not absolute, assurance that         The annual accounts have been prepared in accord-
            the annual accounts and the consolidated accounts           ance with the Annual Accounts Act and give a true            Lars Svantemark
            are free of material misstatement. An audit includes        and fair view of the company’s financial position and        Authorised Public Accountant



52
                                                                                                                            Information to shareholders | Mekonomen Annual Report 2008




inForMation to sharehoLders
annual general Meeting                                               their own name with VPC, to be able to participate at              dividend
The Annual General Meeting will be held on 22 April                  the Annual General Meeting.                                        The Board proposes that the Annual General Meeting
2009, at 2:00 p.m. at the National Museum of Science                      This means that shareholders wishing such rereg-              approve a dividend of SEK 6.00 (6.00) per share. In
and Technology, Museivägen 7 in Stockholm.                           istration must inform the nominee in adequate time                 the preceding year, an extraordinary dividend of SEK
                                                                     before 16 April 2009.                                              5.00 per share was paid. The Board has proposed 27
Who is entitled to participate in the                                                                                                   April 2009 as the record day for the dividend. If the
annual general Meeting?                                              how do you register?                                               Annual General Meeting approves the proposal, the
Shareholders registered in the shareholders’ register                Shareholders wishing to participate at the Annual                  dividend will be paid on 30 April 2009.
on the record day and who have informed Mekono-                      General Meeting should register in ample time prior
men of their intention to attend in advance are entit-               to 4:00 p.m. on Thursday, 16 April at:                             reporting dates for 2009
led to participate in the Annual General Meeting.                    Mekonomen AB                                                       Interim report January – March:                            14 May
                                                                     Box 6077,                                                          Interim report April – June:                           26 August
how do you register as an owner?                                     SE-141 06 Kungens Kurva                                            Interim report July – September:                   10 November
Shareholders must be registered in the sharehold-                    Sweden                                                             Year-end report for the entire
ers’ register maintained by Euroclear Sweden AB,                     or                                                                 financial year 2009:                          18 February 2010
not later than Thursday, 16 April 2009. Shareholders                 Phone: +46 (0)8-464 00 00
whose shares are registered in the name of a nomi-                   Fax: +46 (0)8-464 00 67
nee must have temporarily registered their shares in                 E-mail: stamma@mekonomen.se




deFinitions
average number of employees                                          gross margin                                                       return on shareholders’ equity
Average full-year employees during the year.                         Gross profit, meaning net sales less expenses for goods for        Profit for the year as a percentage of average shareholders’
                                                                     resale, as a percentage of net sales.                              equity.
average number of shares
The average of the number of shares adjusted for splits, bonus       interest coverage ratio                                            return on total capital
issues and full dilution of the convertible loans, taking into ac-   Profit after net financial income increased by interest expenses   Profit for the year as a percentage of the average total assets.
count the date on which the changes occurred during the year.        divided by interest expenses.
                                                                                                                                        sales growth
Capital employed                                                     net debt/equity ratio                                              Increase in total revenues as a percentage of the preceding
Total assets reduced by non interest-bearing provisions and          Net indebtedness divided by shareholders’ equity including         year’s total revenues.
liabilities, including deferred tax liability.                       minority shares.
                                                                                                                                        sales per employee
Cash flow per share                                                  net indebtedness                                                   Sales in relation to the average number of employees.
Cash flow from operating activities, adjusted for interest on        Interest-bearing liabilities less cash and cash equivalents and
convertibles, in relation to the average number of shares.           short-term investments.                                            shareholders’ equity per share
                                                                                                                                        Shareholders’ equity excluding minority shares, adjusted for
dividend ratio                                                       operating capital                                                  convertible debentures, in relation to the number of shares at
Dividend per share in relation to earnings per share attributable    Capital employed reduced by cash and cash equivalents and          the end of the year.
to the Parent Company’s shareholders.                                short-term investments.
                                                                                                                                        underlying sales
eBit margin                                                          return on capital employed                                         Sales adjusted for the number of comparable workdays and
EBIT as a percentage of total revenues.                              Profit after net financial income increased by interest expenses   currency effects.
                                                                     as a percentage of average capital employed.
equity/assets ratio
Shareholders’ equity including minority shares as a percentage       return on operating capital
of total assets.                                                     EBIT as a percentage of average operating capital.




                                                                                                                                                                                                            53
     Mekonomen Annual Report 2008 | Board of directors




            Board oF direCtors


            Fredrik persson                                Marcus storch                                   antonia ax:son Johnson
            Chairman of the Board. Born 1968.              Vice Chairman of the Board. Born 1942.          Born 1943. B.Sc. in Psychology and Economy,
            Graduate in Business Administration, the       Graduate Engineer, Royal Swedish Institute of   University of Stockholm.
            Stockholm School of Economics and studies      Technology, Stockholm, Medicine Dr h.c.         Other assignments: Chairman of the Board of
            at Wharton School in the US.                   Other assignments: Chairman of the Board of     Axel Johnson AB, Axel Johnson Inc., and Axel
            Other assignments: President of Axel Johnson   the Nobel Foundation. Executive Vice Chair-     and Margaret Ax:son Johnson Foundation.
            International AB, Axfood AB, Novax AB,         man of Axel Johnson AB and Axfood AB. Board     Executive Vice Chairman of Nordstjernan AB.
            Servera R&S AB, Svensk BevakningsTjänst AB     member of NCC AB, AB Hannells Industrier,       Board member of Axfood AB, Axfast AB, NCC
            andÅhléns AB. Board member of AxFast AB,       Nordstjernan AB, the Royal Swedish Academy      AB, Axel and Margaret Ax:son Johnson Founda-
            Lancelot Holding AB, Svenska Handelsbanken     of Sciences, the Royal Swedish Academy of       tion for Societal Purposes and World Childhood
            Region Stockholm and Svensk Handel.            Engineering Sciences (IVA), and the Listing     Foundation.
            Shares in Mekonomen: 1,000.                    Committee.                                      Shares in Mekonomen: 8,951,958 through
            Board member since 2006.                       Shares in Mekonomen: 0.                         companies.
                                                           Board member since 2006.                        Board member since 2006.



            Kenny Bräck                                    anders g Carlberg                               Wolff huber
            Born 1966.                                     Born 1943. MBA Economics, Lund.                 Born 1942.
            Upper Secondary School Education.              Other assignments: Board member of Axel         Other assignments: Previously President of Bil
            Other assignments: Own company and             Johnson International AB, Axel Johnson Inc.,    Sweden, Volvo Car Europe and IBM Svenska AB.
            previously professional racing car driver.     Axfast AB, Bejer Alma AB, Svenskt Stål AB       Shares in Mekonomen: 0.
            Shares in Mekonomen: 1,000.                    (SSAB), Säkl AB and Sapa AB.                    Board member since 2006.
            Board member since 2007.                       Shares in Mekonomen: 0
                                                           Board member since 2006.



            helena skåntorp
            Born 1960. Graduate in Business
            Administration, University of Stockholm.
            Other assignments: President and CEO
            of Sveriges BostadsrättsCentrum AB
            andmember of the Board of Ångpanne-
            föreningen AB.
            Shares in Mekonomen: 2,000.
            Board member since 2004.




54
                                                                       Management Group | Mekonomen Annual Report 2008




ManageMent group


håkan Lundstedt                       göran Berglind                    Lena Borg
President and CEO.                    IT Manager.                       HR Manager.
Born 1966.                            Born 1944.                        Born 1961.
Shares in Mekonomen: 41,600.          Shares in Mekonomen: 19,000.      Shares in Mekonomen: 100.
Employed in 2007.                     Employed in 2006.                 Employed in 2005.




nils-erik Brattlund                   Lars From                         Marcus Larsson
Head of Retail Operations.            Head of Operations in Denmark     Head of Business Development.
Born 1951.                            from 1 April, 2009                Born 1970.
Shares in Mekonomen: 1,300.           Born 1965.                        Shares in Mekonomen: 1,000.
Employed in 2005.                     Shares in Mekonomen: 0.           Employed in 2003.
                                      Employed in 2009.



gunnar rantzow                        gunilla spongh                    Boel sundvall
Head of Retail operations in Sweden   CFO.                              Head of Corporate Communications.
Born 1952.                            Born 1966.                        Born 1959.
Shares in Mekonomen: 10,000*.         Shares in Mekonomen: 6,000.       Shares in Mekonomen: 1,500.
Employed in 2007.                     Employed in 2007.                 Employed in 2007.




Michael thorburn                      Klavs thulstrup pedersen          petter torp
Head of Wholesale Operations.         Head of Operations in Denmark.    Head of Operations in Norway.
Born 1954.                            Born 1965.                        Born 1955.
Shares in Mekonomen: 33,000*.         Shares in Mekonomen: 600.         Shares in Mekonomen: 300.
Employed in 1997.                     Employed in 2007.                 Employed in 1997.




                                                                        *) including holdings from family




                                                                                                                         55
     Mekonomen Annual Report 2008




           addresses

           Sweden

           Mekonomen AB                    Mekonomen Grossist AB   Mekonomen Fleet AB        Mekonomen Direkt
           Box 6077                        Box 542                 Box 6077                  Tel +46 771-72 00 00
           SE-141 06 Kungens Kurva         SE-645 25 Strängnäs     SE-141 06 Kungens Kurva
           Tel +46 8-464 00 00             Sweden                  Tel +46 8-464 00 00
           Fax +46 8-464 00 66             Tel +46 152-229 00      Fax +46 8-464 00 66
                                           Fax +46 152-229 41
           Visiting address:                                       Visiting address:
           Smista allé 11                  Visiting address:       Smista allé 11
           SE-141 70 Kungens Kurva         Fjädervägen 20          SE-141 70 Kungens Kurva
           www.mekonomen.se                SE-645 47 Strängnäs




           Norway                          Denmark

           Mekonomen Norge AS              Mekonomen Danmark A/S
           Postboks 524 Bedriftssenteret   Næsbyvej 6
           NO-1411 Kolbotn                 DK-5000 Odense C
           Tel +47 66-81 76 90             Tel +45 66-13 67 00
           Fax +47 66-99 11 51             Fax +45 66-14 76 71

           Visiting address:               Visiting address:
           Rosenholmveien 25               Wichmansgade/Næsbyvej
           NO-1414 Trollåsen               DK-5000 Odense S
           www.mekonomen.no                www.mekonomen.dk




56
Mekonomen Annual Report 2008
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