ENGLISH SUMMARY

The Association for the Development of Generally Accepted Accounting Principles

The Association for the Development of Generally Accepted Accounting Principles aims to promote the development of generally accepted accounting principles by working towards standardised accounting, formed on the basis of a share market perspective. The members of the association are: the Confederation of Swedish Enterprise, Stockholmsbörsen, the Swedish Institute of Authorised Public Accountants (FAR), the Swedish Bankers’ Association, the Swedish Association of Stockbrokers and the Swedish Insurance Federation. The Chairman of the association is Director Olof Lund. The Vice Chairman is the head of market monitoring at Stockholmsbörsen Anders Ackebo and the Authorised Public Accountant Göran Tidström.

The association works through its organs, the Swedish Financial Accounting Standards Council, the Emerging Issues Task Force and the Panel for Monitoring Financial Reporting, all independent entities under the association. These three entities make use of a common pool of resources for investigations and administration, under the leadership of the Managing Director, Dennis Svensson (Authorised Public Accountant). Generally speaking, the association and its organs are to follow developments in accounting via analyses and investigations. In addition, the panel have the task of monitoring the financial reporting of listed companies.

The Panel for Monitoring Financial Reporting

The panel shall monitor Swedish limited companies, which have shares registered or listed on Stockholmsbörsen or on other Swedish stock exchanges or authorised markets, to ensure that they prepare their financial reports in accordance with the recommendations of the Swedish Financial Accounting Standards Council and applicable laws or other enactments. The content of the recommendations of the Swedish Financial Accounting Standards Council is essentially the same as the content of the international standards (IFRS/IAS) published by the IASB (International Accounting Standards Board).

The purpose of the panel’s monitoring is to protect investors and maintain the general confidence in the capital market. For this purpose, the panel also works to raise awareness of general problems and, where appropriate, report to the appropriate organ for the creation of new regulations, in the first instance the Swedish Financial Accounting Standards Council.

The panel investigates issues as regards inaccuracies and deviations, which have been directly or indirectly presented to the panel or have, in some other way, been brought to its attention. The investigation is based primarily on published material, but clarifications and supplementary information concerning significant facts can, by virtue of the listings agreement, be obtained from the listed companies.

The panel determines of its own accord which issues will be selected for consideration based on the criteria of materiality and risk. The company concerned is given an opportunity to present its opinion as regards the investigation that is currently before the panel.

In conjunction with the presentation of an issue to the panel, the stock exchange or the authorised market in which the company has registered or listed shares is informed.

If a company is criticized by the panel the panel’s statement is made public. Sanctions, if any, will be imposed by the stock exchange or the market, based on the panel’s statements and investigations.

The panel is appointed for a period of two years by the association’s Board of Directors. It consists of ten experienced, competent individuals.

The Chairman of the panel is former Justice of the Supreme Court Hans-Gunnar Solerud. Director Clas Reuterskiöld and Professor Lars Östman have been appointed as Vice Chairmen. Other members of the panel include Director Ulf Egenäs, Director Catarina Fritz, Authorised Public Accountant Hans Karlsson, Director Christina Liffner, Director Kajsa Lindståhl, Director Mats-Olof Ljungquist and Director Ingvar Pettersson.

Swedish Financial Accounting Standards Council

The Swedish Financial Accounting Standards Council was founded in 1989 and was established by the Foundation for the Development of Generally Accepted Accounting Principles. In 1998 the present Association for the Development of Generally Accepted Accounting Principles was established, and this Association has taken over the Foundation’s duties and has significantly strengthened the Association’s financial resources.

An important purpose of financial reporting is to provide information which is of significance to the individuals making decisions in financial matters on the basis of such information. This is best achieved by producing annual financial statements and other financial information on the basis of standard, uniform principles and by ensuring that all relevant information is included. Such requirements are particularly applicable to capital market companies. For these companies it is also important that the financial reports maintain a level of quality meeting the requirements of the international capital markets.

Swedish trade and industry is highly international. Even for smaller companies, a large portion of sales takes place on international markets. Many Swedish companies are also owned, to varying degrees, by foreign investors. The reporting of Swedish companies should, therefore, ensure that the information is, as far as possible, easily understandable for international investors. As from 1 January 2005 companies whose shares are listed on a Swedish stock exchange or other authorised marketplaces shall apply international accounting standards in preparing their consolidated accounts. The standards which are to be applied are International Financial Reporting Standards, ifrs, and International Accounting Standards, ias. The ifrs are issued by the International Accounting Standards Board, iasb. The ias were issued by the International Accounting Standards Committee, iasc, the predecessor of the iasb. Companies shall also apply the interpretations from the International Financial Reporting Interpretations Committee, ifric, and from its predecessor, the Standing Interpretations Committee, sic. The task of the iasb is to actively work for the international harmonisation of the accounting principles applied in countries all over the world. ifrs/ias is based on a framework presented in iasc’s Framework for the Preparation and Presentation of Financial Statements.

The Financial Accounting Standards Council’s recommendations have also been formulated on the body of rules and regulations of the iasb. The intention is that the Council’s recommendations shall follow ifrs/ias and that deviations from these standards shall be permitted only if Swedish law prohibits the preparation of accounts according to ifrs/ias or of there are other strong reasons. The same starting point and intention shall form the basis of the three new recommendations which shall apply from 1 January 2005 , that is: RR 30 – RR 32. These recommendations refer to: Supplementary Accounting Regulations for Groups, Interim Reporting for Groups and Accounting for Legal Entities.

The Council’s recommendations RR 1 – RR 29, and the statements from the Council’s Emerging Issues Task Force URA 1 – URA 44, are primarily directed towards those companies whose shares are subject to public trading or which, on the basis of their size, are of major public interest. The recommendations which shall apply from 1 January 2005 , that is RR 30 – RR 32, are primarily directed towards companies whose shares are listed on Swedish stock exchanges or authorised marketplaces. Regarding the valuation of assets and liabilities and the issues concerning the point in time at which the transactions and other events are to be reported, the natural assumption is that all companies should apply similar principles. The requirements for disclosure are particularly demanding for those companies which are of interest to the capital market. The requirements are less demanding for other companies and will be limited, particularly as regards the scope and extent of the information.

The Financial Accounting Standards Council’s Emerging Issues Task Force

The Financial Accounting Standards Council’s Emerging Issues Task Force has the task of issuing statements regarding the interpretation of the Council’s recommendations and regarding accounting issues which are not addressed in existing recommendations and which are also not addressed in any recommendation under preparation. These statements are based on ifrs/ias and the statements from ifric/sic. The issues addressed are of a general nature and of general public interest.