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

60
Notes
NOTE 4
DEPRECIATION
NOTE 5
PARTICIPATIONS IN ASSOCIATED COMPANIES
NOTE 6
fINANCIAL INCOME
GROUP PARENT COMPANY
SEK M 2010 2009 2010 2009
Capitalized expenditure for IT
development
–104.6 –84.7 -0.2 -0.3
Client relationships –14.5 –21.8 – –
Other intangibles –11.0 –9.8 – –
Computer hardware –25.3 –29.7 -0.1 0.0
Other tangible fixed assets –16.0 –18.9 0.0 –0.1
Total –171.4 –164.9 –0.3 –0.4
Depreciation has been charged to each function as an operating expense
as follows:
GROUP PARENT COMPANY
SEK M 2010 2009 2010 2009
Cost of sales –152.8 –147.8 – –
Sales and marketing
expenses
–4.9 –5.2 – –
General and administrative
expenses
–13.7 –11.9 –0.3 –0.4
Total –171.4 –164.9 –0.3 –0.4
GROUP
SEK M 2010 2009
Motus ehf (formerly Intrum á
Íslandi), Reykjavik (Iceland)
–1.7 0.3
IJCOF SAS, Lyon (France) 3.4 –
Total 1.7 0.3
GROUP PARENT COMPANY
SEK M 2010 2009 2010 2009
Interest income from
Group companies
– – 74.0 153.9
Other interest income 8.2 9.5 3.1 1.6
Dividends from Group companies – – 211.3 83.5
Distribution received
on other shares
2.9 – – –
Result from intra-Group
share transactions
– – – 1 150.8
Total 11.1 9.5 288.4 1 389.8
The Parent Company’s result from the intra-Group share transaction during
2009 relates to the profit from the sale of shares in Intrum NV, Belgium, to
group company Fair Pay Please AB. The sale was made at estimated market
value.
Other shares received relate to payment obtained in connection with the
liquidation of Netgiro International AB.
Operating earnings include interest income attributable to purchased debt
amounting to SEK 811.6 M (918.6), defined as the difference between the
year’s collected amount and amortization for the year. Amortization comprises
the portion of the cost of the portfolio that, owing to allocation under the
effective interest method, accrues over the current year.
NOTE 7
fINANCIAL EXPENSES
NOTE 8
KONCERNEN MODERBOLAGET
SEK M 2010 2009 2010 2009
Interest expenses to
Group companies
– – –16.9 –131.6
Interest expenses –70.7 –72.2 –68.6 –68.3
Exchange rate differences –8.6 4.8 –0.7 5.3
Amortization of capitalized
borrowing costs
–14.0 –1.7 –14.0 –1.7
Impairment of shares
in subsidiaries
– – –462.1 –25.7
Other financial expenses –9.1 –20.2 –8.1 –2.1
Total –102.4 –89.3 –570.4 –224.1
Exchange rate differences from accounts receivable and accounts payable
are reported in operating earnings. The amounts were negligible.
TAX
Pretax earnings and the tax charge for the year for Swedish and foreign
operations were as follows:
SEK M
Earnings before tax
2010
GROUP
2009
Sweden 18.8 –81.0
Other countries 620.5 669.4
Total
Current tax
639.3 588.4
Sweden 1.9 –18.8
Other countries
Deferred tax
–163.3 –144.7
Sweden –33.3 –47.8
Other countries 7.4 63.5
Total –187.3 –147.8
The tax expense for the year includes two significant items attributable to
previous years.
The tax dispute in Finland, details of which were given in the company’s
previous annual reports, came to a conclusion in 2010, with the Supreme
Administrative Court in Finland refusing the company leave to appeal. This
means that the ruling from the lower court, which was not in favor of the
company, still stands. The dispute concerned, among other things, the deductibility
of interest expenses in a holding company after a restructuring of
the Group in connection with a change to loan financing after its delisting
from the London Stock Exchange in 1998. As a result of the ruling, the
company has paid and expensed additional tax for 1999-2002 of SEK 41.8
M, including a tax surcharge of SEK 21.5 M. The company has appealed the
tax surcharge.
During the year, the Group’s Swedish subsidiary was refunded SEK 14.0 M
in taxes that had been expensed in 2009. The background to the transaction
is the group contributions that were paid to the Group’s Italian companies
in 2006 and 2007, according to a preliminary ruling based on the European
Court’s Marks and Spencer case. According to a decision from the Swedish
Supreme Administrative Court in 2009, the transfer to Italy was not tax
deductible, but at the request of the company, the tax authority reviewed the
taxation in 2010. This resulted in the amount being reclassified as a group
contribution to the Parent Company, which means that it can be partially
offset against loss carryforwards, for which no deferred tax assets have been
recognized.
Intrum Justitia AB is seated in Sweden where the nominal corporate tax
rate is 26.3 procent. The Group has operations in 22 countries in Europe,
with various tax rates. The following reconciliation explains the deviation
between the Group’s actual tax cost and the expetcted tax cost following a
corporate tax rate of 26.3 percent: