ANNUAL REPORT INTRUM JUSTITIA A N N U A L R EP O R T 2 0 ...

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52 Notes 1 Significant accounting and valuation principles.................. 53 2 Operating segments ............................................. ........... 58 3 Revenue distribution .......................................................... 59 4 Depreciation and amortization ........................................... 60 5 Participations in associated companies.............................. 60 6 Financial income ................................................................ 60 7 Financial expenses ............................................................ 60 8 Tax ..................................................................................... 60 9 Earnings per share ............................................................ 61 10 Intangible fixed assets ....................................................... 62 11 Tangible fixed assets ........................................................ 63 12 Group companies ............................................................. 63 13 Joint ventures ................................................................... 65 14 Associated companies ...................................................... 65 15 Other shares and participations ........................................ 65 16 Purchased debt ................................................................ 65 17 Other long-term receivables ............................................. 66 18 Accounts receivable ......................................................... 66 19 Other receivables ............................................................. 66 20 Prepaid expenses and accrued income ............................ 66 21 Liquid assets ..................................................................... 67 Notes NOTE SID NOTE SID 22 Shareholders’ equity ......................................................... 67 23 Pensions ........................................................................... 67 24 Other provisions ............................................................... 68 25 Liabilities to credit institutions ........................................... 68 26 Accrued expenses and prepaid income ............................ 69 27 Pledged assets, contingent assets and contingent liabilities ......................................... 69 28 Average number of employees ......................................... 70 29 Sick leave ......................................................................... 70 30 Salaries and other remuneration ...................................... 70 31 Terms and conditions of employment for senior executives 70 32 Share-based payment ...................................................... 71 33 Fees to auditors ................................................................ 72 34 Operating leasing ............................................................. 72 35 Finance leasing ................................................................ 72 36 Investment commitments .................................................. 72 37 Financial instruments ........................................................ 72 38 Financial risks and financial policies ................................. 73 39 Business combinations ..................................................... 75 40 Critical estimates and assumptions .................................. 76 41 Related parties ................................................................. 76
NOTE 1 SIGNIfICANT ACCOUNTING AND VALUATION PRINCIPLES Accounting standards applied The annual report for Intrum Justitia AB (publ) is prepared with respect to the consolidated accounts in accordance with the International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB) and the interpretations of the International Financial Reporting Interpretations Committee (IFRIC) as approved by the EU. Further, recommendation RFR 1 Supplementary Accounting Rules for Groups from the Swedish Financial Reporting Board has been applied. The Parent Company applies the same accounting principles as the Group except in the cases noted below under the section on the Parent Company’s accounting principles. The financial reports were approved to be published by the Board of the Parent Company on March 7 2011. Assumptions The Parent Company’s functional currency is Swedish kronor (SEK), which is also the reporting currency for the Parent Company and for the Group. The financial reports are therefore presented in SEK. All amounts, unless indicated otherwise, are rounded off to the nearest million, with one decimal. Assets and liabilities are recognized at historical cost, with the exception of certain financial assets and liabilities, which are measured at fair value. The preparation of financial reports in accordance with IFRS requires the Board of Directors and Management to make estimates and assumptions that affect the application of the accounting principles and the carrying values of assets, liabilities, revenue and expenses. Estimates and assumptions are based on historical experience and a number of other factors that under current circumstances seem reasonable. The result of these estimates and assumptions is then used to determine the carrying values of assets and liabilities that otherwise are not clearly indicated by other sources. Actual outcomes may deviate from these estimates and assumptions. Estimates and assumptions are reviewed regularly. Changes in estimates are recognized in the period in which the change is made, provided it has affected only this period, or the period the change was made and future periods if the change affects both current and future periods. Estimates made by the company that have a significant impact on the financial reports and estimates, which could necessitate significant adjust- ments in financial reports in subsequent years, are described in more detail in Note 40. The accounting principles described below for the Group have been applied consistently for all periods in the Group’s financial reports, unless otherwise indicated. The accounting is based on the Group’s opening balance sheet according to IFRS as of January 1, 2004, which was included in the annual report for 2005. The Group’s accounting principles have been applied consistently in the consolidation of the Parent Company, subsidiaries, associated companies and joint ventures. Changes in accounting principles Changes that entered into force in 2010 Revised versions of IFRS 3 Business Combinations and IAS 27 Consolidated and Separate Financial Statements apply as of 2010, which means that the definition of a ‘business’ has changed, that transaction costs associated with a business combination are to be expensed, that conditional purchase prices must be set at fair value at the point of acquisition and that effects of revaluation of liabilities related to conditional purchase prices must be recognized as income or an expense in the profit/loss statement for the year. Changes have also been introduced that affect the recognition of acquisitions of companies without a controlling interest, and the recognition of acquisitions from owners without a controlling interest. The changes are only applied prospectively for acquisitions made in 2010 and onwards. Other changes of IFRS that apply from 2010 have not had any material impact on the Group’s reporting. From 2010 onwards, the Parent Company will be applying the new regulations in the Swedish Financial Reporting Board’s recommendation RFR 2 Accounting for Legal Entities, which means that the regulations in IAS 1 Presentation of Financial Statements, including the statement of comprehensive income, shall, where appropriate, also be applied by the Parent Company. Changes that enter into force in or after 2011 The Group has decided against early application of any new or amended accounting recommendations or interpretations that enter into force in or after 2011. As of 2013, IFRS 9 Financial Instruments replaces IAS 39 Financial Instruments: Recognition and Measurement. IASB has published the first of at least three phases that will together comprise IFRS 9. The first phase deals with the classification and valuation of financial assets. The categories for financial assets contained in IAS 39 will be replaced by two categories, where valuation is carried out at fair value or amortized cost. IFRS 9 also includes new rules for how changes of real value on own liabilities shall be reported. Intrum Justitia has not yet decided whether the new principles will be applied as they have been approved by the EU, prior to or as of 2013. Notes Classification issues Fixed assets and long-term liabilities in the Parent Company and the Group consist of amounts that are expected to be recovered or paid more than twelve months after the balance sheet date. Current assets and current liabilities in the Parent Company and the Group consist of amounts that are expected to be recovered or paid within twelve months of the balance sheet date. Consolidation Subsidiaries The Group applies IFRS 3 Business Combinations. The consolidated accounts include the annual accounts of all subsidiaries, i.e., companies in which the Parent Company, directly or indirectly, holds more than 50 percent of the votes or otherwise can exercise control over operations. Control means, directly or indirectly, the right to shape a company’s financial and operating strategies in order to obtain economic benefits. The consolidated accounts are prepared according to the acquisition method, which means that the acquisition of a subsidiary is treated as a transaction where the Group indirectly acquires the subsidiary’s assets and takes over its liabilities and contingent liabilities. The Group’s equity therefore includes only the portion of the subsidiary’s equity added since acquisition. The Group’s cost is determined through an acquisition analysis in connection with the acquisition. The analysis determines the cost of the shares or operations as well as the fair value of acquired, identifiable assets and assumed liabilities and contingent liabilities. The cost of the subsidiary’s shares or operations consists of the fair value of the compensation on the transfer date and transaction expenses directly attributable to the acquisition. In acquisitions where the cost exceeds the net value of acquired assets and assumed liabilities and contingent liabilities, the difference is reported as goodwill. When the difference is negative, it is recognized directly through profit or loss. Transaction costs associated with company acquisitions are expensed as they arise, except for acquisitions made before January 1, 2010, when such costs were included in the cost of the shares. Non-controlling interests arise in cases where the acquisition does not relate to the entire subsidiary. There are two options for recognizing non-controlling interests. The two options are to recognize the percentage of non-controlling interests that makes up proportional net assets, or to recognize non-controlling interests at fair value, which means that non-controlling interests form a percentage of goodwill. The method used for recognizing non-controlling interests can be made on a case by case basis. The financial reports of subsidiaries are included in the consolidated accounts from the acquisition date until control ceases. Intra-Group receivables and liabilities, revenue 53
Page 1 and 2: INTRUM JUSTITIA ANNUAL REPORT
Page 3 and 4: Net earnings amounted to SEK 452 M
Page 5 and 6: We are working to promote healthy p
Page 7 and 8: ity will increase in these countrie
Page 9 and 10: In addition to being present in 22
Page 11 and 12: We are the market-leading credit ma
Page 13 and 14: Our services Respectful credit mana
Page 15 and 16: insight to feed innovation We are a
Page 17 and 18: Payment services Information is imp
Page 19 and 20: Payment guarantee Many of our custo
Page 21 and 22: Committing to challenge We are ofte
Page 23 and 24: Credit institutions, private and pu
Page 25 and 26: Our goal is to be the employer of c
Page 27 and 28: Benefits of credit management Sound
Page 29 and 30: Regions Intrum Justitia has operati
Page 31 and 32: No. of shares traded Intrum Justiti
Page 33 and 34: financial overview Income statement
Page 35 and 36: There are several attractive commer
Page 37 and 38: NET fINANCIAL ITEMS The net financi
Page 39 and 40: GOODWILL The Group’s goodwill amo
Page 41 and 42: PROPOSED APPROPRIATION Of PROfIT Th
Page 43 and 44: Consolidated balance sheet SEK M NO
Page 45 and 46: Consolidated cash flow statement SE
Page 47 and 48: Parent Company income statement SEK
Page 49 and 50: Parent Company balance sheet SEK M
Page 51: Condensed statement of changes in s
Page 55 and 56: Legal outlays The Group incurs outl
Page 57 and 58: iod of employment of the employees
Page 59 and 60: GROUP Tangible and intangible fixed
Page 61 and 62: GROUP 2010 2009 Reconciliation SEK
Page 63 and 64: NOTE 11 TANGIBLE fIXED ASSETS GROUP
Page 65 and 66: NOTE 13 JOINT VENTURES Intrum Justi
Page 67 and 68: NOTE 21 LIQUID ASSETS GROUP PARENT
Page 69 and 70: ity amounted to SEK 168.7 M (849.7)
Page 71 and 72: SEK Base salary/fee Variable comp-
Page 73 and 74: 2010 PARENT COMPANY SEK M At fair v
Page 75 and 76: Accounts receivable The Group’s a
Page 77 and 78: Audit Report We have audited the an
Page 79 and 80: CHARLOTTE STRÖMBERG Age 51 Directo
Page 81 and 82: PER CHRISTOFFERSON Age 42, Director
Page 83 and 84: ATTENDANCE AT BOARD MEETINGS IN 201
Page 85 and 86: The Board of Directors’ report on
Page 87 and 88: able on the intranet and ongoing em
Page 89 and 90: Information for shareholderst Annua
Page 91 and 92: Intrum Justitia’s annual report 2

ANNUAL REPORT INTRUM JUSTITIA A N N U A L R EP O R T 2 0 ...

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