Fruitful growth
By the middle of this century, the population of our planet will have increased by 50 percent, from more than 6 billion to nearly 10 billion people. A growing challenge is to provide nutritious food for everyone. Take India, for example – a fertile area larger than the entire Nordic region. Here, fruit and vegetables have traditionally been processed by hand. Now change is taking place on a huge scale. Modern plants are being built that will treat raw materials more efficiently. It’s about heating, cooling, sterilising, extracting, transporting, separating and concentrating food products. These processes represent the very heart of Alfa Laval’s know-how. Today only 2 percent of India’s produce is treated in this way. In less than ten years, this figure will exceed 15 percent. Talk about growth.
125 years of Pure Performance. Alfa Laval was founded in 1883. Its starting point was the separator designed by our founder Gustaf de Laval. From the outset this set the keynote for our business: to create better everyday conditions for people. Today, our efforts are concentrated in three main areas: energy, the environment and food. Can you think of anything more important for a company to work with?
Alfa Laval AB (publ) Annual Report 2008
Board of Directors’ Report
Contents
Board of Directors’ Report 44
Consolidated cash-flow statements 56
Comments to the consolidated cash-flow statements 57
Consolidated income statement 58
Comments to the consolidated income statement 59
Consolidated balance sheet 62
Comments to the consolidated balance sheet 64
Changes in consolidated equity capital 65
Specification of changes in number of shares and share capital 66
Movement schedule for cash flow hedges booked against equity 66
Specification of accumulated translation differences reported against equity capital 66
Comments on changes in consolidated equity capital 67
Parent company cash-flow statement 68
Parent company income statement 68
Parent company balance sheet 69
Changes in parent company’s equity capital 70
Notes to the financial statements 71
Accounting principles 71
Objectives, policies and processes for managing capital 77
Financial risks 78
Operational risks 81
Notes   84
Note 1. Operating segments 84
  Divisional reporting 84
  Reporting by geographical markets 85
Note 2. Average number of employees 86
  Average number of employees - total 86
  Average number of employees - in Sweden by municipality 86
  Average number of employees - by country 86
  Sick leave among Swedish employees 86
  Distribution of men/women among managers 87
Note 3. Salaries and remunerations 87
  Salaries and remunerations - total 87
  Remunerations for Board members elected at Annual General Meeting  
  and not employed by the company 88
  Salaries and remunerations - by country 88
Note 4. Information on auditors and auditors’ fee 88
Note 5. Advertising costs 89
Note 6. Comparison distortion items 89
Note 7. Depreciation by function 89
Note 8. Depreciation by type of assets 89
Note 9. Result from other securities and receivables accounted for as non-current assets 89
Note 10. Interest income/costs and exchange rate differences 89
Note 11. Minority interest 90
Note 12. Classification of financial assets and liabilities 90
Note 13. Fair value adjustments of financial instruments 91
Note 14. Taxes on this year’s result and other taxes for the Group 91
Note 15. Goodwill and step-up values 92
  Impairment testing 95
Note 16. Intangible non-current assets 96
Note 17. Property, plant and equipment 96
  Non-current assets held for sale 96
Note 18. Other non-current assets 98
  Specification of shares in subsidiaries 98
  Specification of shares in other companies 100
Note 19. Inventories 100
Note 20. Accounts receivable 100
  Accounts receivable - overdue 101
Note 21. Other short-term receivables 101
Note 22. Prepaid expenses and accrued income 101
Note 23. Other current deposits 101
Note 24. Cash and bank 101
Note 25. Impact on cash-flow due to acquisition and sale of businesses 101
Note 26. Defined benefit obligations 102
Note 27. Other provisions 104
Note 28. Loans and net debt 104
Note 29. Other current liabilities 105
Note 30. Accrued costs and prepaid income 105
Note 31. Pledged assets and contingent liabilities 106
Note 32. Transactions with related party 106
Note 33. Work in progress on plant projects 106
Note 34. Leasing 107
Proposed disposition of earnings 108
Audit Report 109