an n ual r e p o rt

09

A n n u A l R e p o R t

A bRief look At pARtneRtechPartnerTech develops and manufactures electronic, mechanical and mechatronic products on behalf of leading businesses in the market areas of Defense and Maritime, Industry, Information Technology, MedTech & Instrumentation, CleanTech and Point of Sale Applications. PartnerTech’s role with its customers is to provide production expertise and take an integrated approach. That role requires the ability to manage the entire product life cycle, along with leading-edge skills in electronics, mechanics and systems integration. Those qualities allow us to create solutions that strengthen the customer’s competitiveness. Among our key priorities are proximity to our customers, top quality, reliable delivery, short lead-times, and customer satisfaction. PartnerTech has approximately 1,300 employees at plants in Sweden, Norway, Finland, Poland, the UK, the United States and China. PartnerTech AB (www.partnertech.com), the parent company, has its head office in Vellinge, Sweden and is listed on the OMX Nordic Exchange Stockholm.

visionOur vision is to be the obvious choice for business-to-business contract manufacturing.

MissionOur mission is to strengthen the competitiveness of our customers and their products through technical excellence and proven manufacturing skills.

business conceptPartnerTech develops and manufactures products under contract for companies with a leading position in selected business-to-business sectors of the European market. As a contract manufacturer, we enhance the profitability and competitiveness of our customers by delivering services throughout the value chain – from components to integrated systems and complete products.

2 a b r i e f look at Partn e rtech

Development Services

Supply Chain Management

PrintedCircuit BoardComponent

Cables

EnclosuresSub Assembly System

IntegrationLogisticsServices After Sales

Printed CircuitBoard Assembly

Box-Build

custoMeR centeRsPartnertech is a strong contract manufacturer for both big and small product owners, primarily in the business-to-business sector. by turning over the optimal degree of responsibility to us, customers add knowledge and expertise that shorten the time from product concept to market launch. that is the Partnertech way of helping its customers grow and succeed. Medical device and it companies are among those that have benefited in that way. in order to ensure the best possible service, Partnertech has set up local customer centers in each market where it operates. that allows us to satisfy the desire of our customers for an ongoing dialog about technology and the market. a customer center can also coordinate Partnertech’s relationship with a customer that collaborates with our plants, product development centers and distribution centers in multiple geographic markets.

centeRs of excellenceWithin its particular discipline, each center of excellence is in charge of tracking international and market trends, as well as pursuing production development, technological advances and investments on behalf of other group units. in other words, the centers of excellence serve as technological leaders. the goal is for Partnertech to boost the competitiveness of its customers in all areas and enable them to more fully benefit at each link in the value chain.

custoMeR offeRing

Partnertech offers services throughout the value chain and a product’s life cycle. the extent to which customers collaborate with Partnertech is completely up to them. Many of them start off by taking advantage of particular services, turning over greater responsibility as they grow comfortable with the relationship.

Customer

Development Customer Centerclose to customer

CustomerCenter

PrototypingCustomer Centerclose to customer

NPICustomer Centerclose to customer

ManufacturingLocation

best suitable

VolumeManufacturing

Poland/China

DistributionLocation

best suitable

a b r i e f look at Partn e rtech 3

c o n t e n t s

4 conte nts

2 ABriefLookatPartnerTech

5 2009ataGlance

6 AWordfromtheCEO

9 Market

14 ServiceOfferingandMarketAreas

21 StrategyandTargets

22 QualityAssuranceandEnvironmentalEfforts

25 EmployeesandValues

30 ShareandShareholders

32 CorporateGovernance

36 Five-yearSummary

38 ManagementReport

41 ProposedAppropriationofProfit

42 RiskManagement

44 Incomestatement

44 Statementoftotalcomprehensiveincome

45 CommentsontheIncomeStatement

46 BalanceSheet

48 CashFlowStatement

49 Equity

50 CommentsontheBalanceSheetandCashFlowStatement

51 AccountingPolicies

54 Notes

64 Auditor’sreport

65 Definitions

66 BoardofDirectors

68 GroupManagement

70 Addresses

71 AnnualGeneralMeeting

71 FinancialReportsfor2010

2009 At A glAnce

the year prioritized ongoing activities to streamline Partnertech’s industrial structure and strengthen our offering to improve customer value. as part of that effort, we decided to start up a new plant in Poland and to break our customer base down into six market areas, permitting the greater specialization for both parties. While the recession meant lower sales, having started to restructure at an early stage gave us the opportunity to be more proactive in adapting to market fluctuations. net sales were sek 2,148.0 million (2,529.0). operating loss was sek -3.5 million (28.5). loss after tax was sek -21.5 million (5.2).

Amounts in SEK million (unless otherwise stated) 2009 2008 2007 2006 2005

net sales 2,148.0 2,529.0 2,643.6 3,057.2 2,013.9

operating profit/loss -3.5 28.5 -17.7 180.0 88.0

operating margin, % -0.2 1.1 -0.7 5.9 4.4

return on operating capital (rooc), % -0.4 3.1 -1.8 20.0 12.5

equity/assets ratio, % 41.5 39.6 38.4 36.6 35.2

average full-time employees 1,382 1,670 1,886 1,747 1,369

SEK million

2 000

1 750

1 500

2 250

2005

1 250

1 000

750

500

250

0 -4

-3

-2

-1

0

1

2

3

4

%

Net sales, SEK millionOperating margin, %

6

2006 2007 2008 2009

2 500

5

2 750 7

3 000

3 250

8

9

3 500 10

nEt SAlES And opErAting mArgin

earnings per share after tax totaled sek -1.70 (0.41). cash flow after investments amounted to sek 26.6 million

(56.1). the equity/assets ratio rose to 41.5% (39.6). the board proposes that the annual general meeting

distribute no dividend (no dividend for 2008) for the 2009 fiscal year.

Partnertech announced on february 17, 2010 that rune Glavare, the current President and ceo, will be leaving his position. leif thorwaldsson will be the new President and ceo.

groUp KEY rAtioS

2009 at a G lance 5

the effort that Partnertech launched in 2008 focused on

customer service, industrial structure and new market areas,

as well as meeting challenges and taking advantage of new

opportunities. that work continued in 2009. While i had

hoped that we could swallow the entire bitter pill in 2008,

the recession forced us to take additional measures that

could adapt our capacity and efficiency to market conditions.

We were able to sustain sales in the first quarter by

mobilizing every ounce of our organizational flexibility.

because customers adjusted their volumes to avoid the

A MoRe AttRActive

offeRing

a W o r D f r o M t h e c e o

risk of stockpiling, we did not experience normal seasonal

revenue growth in the second quarter. but they replenished

their inventories after the third quarter vacation period and

we did quite well in september. fourth quarter sales returned

to levels typical of the second quarter and most of the third

quarter.

SlowEr UptUrn

Due to the recession, some of our suppliers have substan-

tially reduced their capacity. as a result, the upturn may be

6 a WorD froM the ceo

WefurtherstreamlinedPartnerTech’s

industrialstructurein2009.

Launchingthateffortatanearlystageprepared

ustoconfronttherecessionandgraduallyadapt

todecliningdemand.

Wewillcontinuetoimproveourperformance

in2010whileconcludingourmajor

reorganizationproject.

slower than the market would have liked. nevertheless, the

european contract manufacturing industry expects growth

to average 4-5 percent next year (lingering weakness in

the western countries and strength in the eastern countries).

nEw plAnt

Given our target of accelerated sales growth in eastern

europe and china, we decided to start a new Polish plant

in 2010. the plant is on major shipping routes to all of

europe and provides Partnertech with exciting growth

opportunities. the availability of highly trained employees

at lower costs than northern europe is good news for our

customers when it comes to both competition and profita-

bility.

Many of our competitors had a tough time of it last year,

and recessions tend to encourage restructuring deals. but

no significant deals were concluded in 2009. Partnertech

would benefit from an acquisition that added a new geo-

graphic market to its existing business.

a WorD froM the ceo 7

“in 2010 we will Refine the concept And woRk with ouR custoMeRs to tAke AdvAntAge of eveRy oppoRtunity thAt A business uptuRn hAs to offeR foR eAch of usrUnE glAVArEprESidEnt And CEo, pArtnErtECH

8 a WorD froM the ceo

grEAtEr foCUS on pErformAnCE

Partnertech’s action program expanded its focus on per-

formance, technology and group-wide processes. We took

an additional step in 2009 toward great uniformity and

technological expertise in our manufacturing setup. at this

point we have a joint structure through which our four

centers of excellence coordinate production and technical

innovation for all units of the group. that way we can more

easily relocate pro-

duction from one

plant to another. a

product is commonly

tested and manufac-

tured locally to start

out with and trans-

ferred to a low-cost

country once volumes

increase. toward the

end of the product’s

life cycle, local pro-

duction or the use of

a customer center to

handle logistics and distribution near the customer’s mar-

ket may again be in order. such an approach simplifies the

effort to ensure the kind of competitiveness and flexibility

that meet the varying needs of our customers.

Six mArKEt ArEAS

as of 2009, Partnertech’s existing customer base is broken

down into six market areas: Defense and Maritime, industry,

information technology, Medtech & instrumentation,

cleantech and Point of sale applications. streamlining our

industrial structure in that way presents our specialized

skills to the market in a more transparent manner. the

overhaul has already made an impact, particularly when it

comes to the sense of security and confidence that cus-

tomers feel in our various areas of expertise.

last but not least, we have optimized customer service

by centralizing our sales organization to the customer center

and plant level. that has made us more customer-oriented,

which has not gone unnoticed.

dEliVEring CUStomEr VAlUE

Partnertech delivers customer value not only by cost-

effective and flexible production, but – in line with the wishes

of many customers – by offering supplemental services

throughout a product’s value chain. for instance, we often

participate in a customer’s product development effort, not

to mention our unique method for rendering more cost-

effective the manufacture of new and existing products.

similarly we have distribution centers around the world

to meet the needs of customers that use our logistics and

after-sales services, as well as a robust strategic purchasing

function based on a global supply chain. that is important,

given that the choice of materials and the purchasing of

components has a major impact on the total costs associ-

ated with manufacturing a product.

growing StrongEr on EVErY front

by means of enhanced processes, upgraded purchasing

routines and greater market presence, our goal for 2009

was to strengthen our customer service offering. Moreover,

we wanted to broaden our logistics and after-sales services

and seek new production opportunities, particularly in

eastern europe. but we also targeted asia for this purpose.

looking back, i am satisfied that we accomplished a great

deal during the year. leif thorwaldsson has the knowledge

and experience needed to successfully lead Partnertech down

the next leg of its journey in 2010 and beyond. our goals

are to further improve performance and customer service

while building on our industrial structure and organization.

While wishing leif the best of luck, i would like to take

this opportunity to thank each of our shareholders for the

confidence and trust they have exhibited during my years

as President and ceo of Partnertech.

rune Glavare

President and ceo, Partnertech ab

we AccoMplished A gReAt deAl in 2009, And leif hAs whAt it tAkes to successfully leAd pARtneRtech down the next leg of its jouRney in 2010 And beyond

pARtneRtech Announced in febRuARy thAt leif thoRwAldsson would took oveR As pResident And ceo in spRing 2010

“

Market 9

contRAct MAnufActuRing, the logicAl choice TurningtoacontractmanufacturersuchasPartnerTech

isalogicalstep.Manyproductownersfinditeasier,

andfrequentlymoreeconomical,tooutsource

productionsothattheycandevotetheirresourcesto

marketing,applicationdevelopment,technological

upgradesandresponsivenesstotheneedsofthe

market.Theresultingdivisionofresponsibilityfrees

uptime,energyandcapitalthatcanbeusedto

promotegrowthandexpansion.

globAl And rEgionAl plAYErS

contract manufacturers fall into two main categories.

Global PlaYers

the few companies that belong to this category generally

manufacture products and electronic components for the

computer, consumer and telecommunications industries

where very large-scale production is the name of the game.

they have access to large plants in low-cost countries, a

global supply chain and the ability to ramp production both

up and down.

reGional PlaYers

these small and medium-sized companies primarily manu-

facture products or electronic components for the busi-

ness-to-business market, usually on a more limited scale.

they operate regionally in the sense that one or more

countries may be involved. such contract manufacturers

often focus on a small number of specific segments and

adapt their offering accordingly.

the category consists of only a few larger companies

(one of which is Partnertech) that can offer a broad range

of production and service options while often participating

in product development efforts. these large companies

can manufacture in low-cost countries and have a more

extensive global supply chain and purchasing network than

smaller players, which manufacture exclusively at the local

level in proximity to their customers.

10 Market

pArtnErtECH’S poSition

Partnertech is a leading european business-to-business

contract manufacturer. thus, it is among the big regional

players. Most of Partnertech’s customers are in europe,

but it operates in china and the United states as well to

provide a local presence when needed.

although the contract manufacturing sector is relatively

young, Partnertech has both industrial roots and long-

standing experience of interindustry technology. in other

words, we offer production of electronic components,

mechanical components and a combination of the two.

that ability distinguishes Partnertech from many another

regional players and lands it big contracts to manufacture

integrated systems. the breadth of Partnertech’s offering

resembles that of global players even though it produces

on a smaller scale and its products are for the business-to-

business market.

to maintain its leadership and capture additional market

share, a contract manufacturer of Partnertech’s rank must

offer high performance, a suitable range of services, a global

supply structure and access to low-cost production. among

the factors that determine where manufacturing takes

place are the scale of production, logistics, labor costs,

proximity to end-customers and product maturity. the sum

of these variables is crucial to a customer’s competitive-

ness and lowers the total cost per manufactured unit.

as the contract manufacturing sector has evolved,

Partnertech has carved out a strong position that proceeds

from its broad service offering and responsive industrial

structure, as well as its established electronics, mechanics

and mechatronics expertise.

mArKEt trEndS

the total contract manufacturing market is projected to

average 4-5% annual growth over the next few years. the

most powerful driving force is globalization and the associ-

Market 11

ated increase in competition and specialization. that is

spurring a growing number of product owners to contract

out their production, or to outsource more than they had

done previously, in order to obtain cost benefits and greater

flexibility. as a result, they also have more time for their

core operations and can respond more quickly to fluctua-

tions in the market. While consumer products have been

the most powerful catalyst by virtue of their short product

life cycles and high volumes, the need is also increasing in

the business-to-business market.

both global and regional players are striving to expand

their service offering. nowadays a contract manufacturer is

expected to be a complete technology and service partner

with leading-edge expertise in production-related areas,

and many customers with business-to-business products

need support through the entire life cycle. in addition to

production and assembly, a contract manufacturer must

therefore provide industrial design, product development,

prototype manufacture, new product introduction, logistics

and after-sales services. a purchasing function that can

create economies of scale and offer high-quality materials

and competitive prices is also essential.

When it comes to complete products and systems that

contain both software and mechanical components, custo-

mers often seek proximity of production and the market.

shipping large products over long distances to reach the

end-user is defensible from neither an environmental nor

cost standpoint. Generally speaking, central and eastern

european countries serve as low-cost options in europe,

while china plays a similar role in asia.

the situation is different for electronic components,

which are easy to handle and distribute. relocation may

also be suitable for other products when the scale of pro-

duction increases and they enter a mature phase. relocating

the manufacture of electronic components, increasingly to

the asian countries, tends to be easier.

12 Market

oVErViEw of tHE mArKEt

the global contract manufacturing market is dominated by

a handful of global players, such as foxconn and flextronics,

that focus on consumer and other electronics-based, high-

volume products. they do not compete with Partnertech,

whose customers are in the business-to-business segment

and require smaller scale production.

the 2010 global contract manufacturing market is an

estimated eUr 120 billion. europe accounts for around 25

per cent or eUr 30 billion. the segments and geographic

markets in which Partnertech operates represent approxi-

mately eUr 5 billion. Partnertech currently has just under

5% of that business.

coMPetitors

other players with Partnertech’s orientation – kitron,

benchmark, enics, note and scanfil – all have a strong

regional base and global operations proceeding from

europe and asia (the United states as well in Partnertech’s

case). Partnertech also has local rivals in individual geo-

graphic markets, but they operate in only a few disciplines

and do not compete in any real sense with Partnertech’s

total offering.

sector GroWth

rapid sector growth came to a halt in 2008, and 2009 saw

a decline of approximately 20%.* Growth is expected to

return but to be more gradual than in recent years. through

2013, the asian market is projected to grow the fastest

while the United states and europe lose some steam. the

forecast concerns the total contract manufacturing market,

of which consumer products represent by far the greatest

share. contract manufacturing of business-to-business

products is expected to largely remain in europe and the

United states. estimates are that eastern and central

europe will account for most european growth.

overall prospects for the business-to-business contract

manufacturing market remain bright. catalysts such as

greater globalization and competition, along with demands

for cost-effectiveness and short lead-times, will make

product owners increasingly keen on engaging contract

manufacturers.*source: MMi/inforum

Rest of the world

Europe

75%

25%

Consumer and automotive products

Business-to-business

54%46%

The global market for contract manufacturing

The European market for contract manufacturing

the segments and geographic markets in which Partnertech operates represent approximately eUr 5 billion, or 17%, of the total european market. Partnertech’s current share of that 17% is around 5%.

Market 13

Customer

Development Customer Centerclose to customer

CustomerCenter

PrototypingCustomer Centerclose to customer

NPICustomer Centerclose to customer

ManufacturingLocation

best suitable

VolumeManufacturing

Poland/China

DistributionLocation

best suitable

How pArtnErtECH CollAborAtES

witH itS CUStomErS

in order to ensure the best possible service, Partnertech has

set up local customer centers in each market where it

operates. that allows us to satisfy the desire of our custom-

ers for an ongoing dialog about technology and the market.

the company has the electronics, mechanics, enclosure

and systems integration

expertise required to manu-

facture products in a number

of different sectors.

Partnertech adopted measures in 2009 to further boost

its competitiveness by upgrading group-wide processes,

technologies and working methods, as well as optimizing

its strategic purchasing function. the resulting improve-

ment in flexibility and efficiency vis-à-vis our customers

generated additional cost benefits.

a sinGle Point of contact

companies have varying needs for business-to-business

contract manufacturing services. a product is commonly test-

ed and manufactured locally to start out with and relocated to

a low-cost country once volumes increase. a return to local

production may occur at the end of the product life cycle.

pARtneRtech And its

custoMeRs

regardless of where a product is manufactured, Partnertech’s

local customer center retains responsibility for it. each center

is in charge of the customers in its geographic market.

While gaining access to a global supply chain and cost-

14 service offerinG anD Market areas

PartnerTechisastrongcontractmanufacturer

forbothbigandsmallproductowners,primarily

inthebusiness-to-businesssector.

Byturningovertheoptimaldegreeofresponsi-

bilitytous,customersreducetheirtotalcostper

manufacturedunitandshortenthetimefrom

productconcepttomarketlaunch.

service offerinG anD Market areas 15

optimized production, the customer has a single point of

contact. to ensure close collaboration with Partnertech, a

business chooses the customer center that best suits its

need for expertise and geographic proximity. every product

is manufactured at the plant that is most appropriate in

terms of costs and distribution.

We have customer centers at plants in sweden, norway,

finland, the Uk, Poland and the United states. We also

maintain a far-reaching partner network of experts and

producers, enabling flexibility and stability regardless of

whether customers are growing in existing or new markets.

Partnertech currently serves customers that are based in

Germany, france and the benelux countries.

teaMs of varioUs sPecialists

to pave the way for effective cooperation, we set up a team

of Partnertech specialists before each project begins. the

purpose is to make the product more competitive and

ensure agreed-upon performance.

Partnertech has relied on process-oriented flows since

2009. in other words, a Program Manager has full responsi-

bility for deliveries and quality, including employees. the

approach is superior to a functional organization when it

comes to customer focus and service.

CEntErS of ExCEllEnCE

to further upgrade its production skills – as well as to ensure

top-class electronics, machining, enclosure and systems

integration services – Partnertech is continuing to develop

its centers of excellence. each center is run by the leading

unit in its particular sphere of expertise.

Within its specific discipline, each center of excellence

is in charge of tracking international and market trends, as

well as pursuing production development, technological

advances and investments on behalf of other group units.

the goal is for Partnertech to boost the competitiveness of

its customers in all areas and enable them to more fully

benefit at each link in the value chain.

centers of excellence.

pArtnErtECH’S SErViCE offEring

Partnertech offers services throughout the value chain and

a product’s life cycle. the extent to which customers col-

laborate with Partnertech is completely up to them. Many

of them start off by taking advantage of particular services,

turning over greater responsibility as they grow comfortable

with the relationship.

ProDUct DeveloPMent anD

UniQUe cost reDUction MethoD

Partnertech’s local customer centers meet demands by the

market for technical expertise at close range. We take part

in the product development efforts of many customers

when electronics, mechatronics, enclosure and software

skills are required.

approximately 70% of a product’s total cost is deter-

mined at the development stage, when proper design per-

mits cost-effective purchasing, assembly and testing. a

number of customers call on Partnertech to participate in

new product development. others ask us to improve the

quality and cost-effectiveness of their existing products

and prototypes, as well as to design test systems.

furthermore, our integrated value analysis/value engi-

neering (va/ve) concept provides unique expertise. in

keeping with the concept, we perform an overview of a

product so as to make it more cost-effective and optimize

it for production. for instance, we analyze product design,

as well as the choice of materials and supplier. Partnertech

actively employs va/ve to lower costs for both new and

existing products. When va/ve is fully implemented, we

can generate cost savings of 20-50% (sometimes more)

per manufactured unit.

While our development engineers are focusing on pro-

duction requirements, the customer’s product development

function can devote more of its time and energy to putting

together the kinds of applications that the market is looking

for. Development and production are two sides of the same

coin, and integrating them boosts efficiency and speeds up

the overall process while generally lowering costs.

PUrchasinG

involving Partnertech’s purchasing function early on sets the

stage for a top-quality, cost-effective product. the function

is proactive in its choice of suppliers, making sure that it

finds the right one for every purpose. We have a global

network of suppliers that meet stringent requirements for

quality and reliable delivery. for purchasing in asia, we have

a separate unit in china and advanced cooperation with

our chinese partner 3ceMs.

based on the demands of the customer’s project, we

make sure that our supplier agreements will enable it to meet

its commitments. as in all of our collaboration, we like to

establish a dialog with the customer’s purchasing division

in order to share experience and make sure that everything

starts off on the right foot.




Cables




Box-Build





Cables




Box-Build

ProDUction

Partnertech’s structure of customer centers in various ge-

ographic markets ensures not only technology and devel-

opment sharing, but production optimization. Products can

be manufactured close to the development and technical

division of the customer, in a country with lower labor costs,

or a combination of the two. because Partnertech manu-

factures for selected segments of the market, we are fully

acquainted with their requirements and specifications. our

production know-how extends across a number of disci-

plines, including printed circuit boards, encapsulated elec-

tronics, mechanical processing, sheet metal work, assem-

bly and systems integration.

before starting up production, we sit down with the

customer to review the product and its various functions. if

we are engaged at an early stage, we can set quality tar-

gets while ensuring flexibility and short lead-times during

the development effort.

loGistics anD after-sales

Many customers increasingly outsource logistics and after-

sales services to Partnertech as well. the desire to shorten

time-to-market and streamline their sales organization

contributes heavily to that decision. among our services are

warehousing near the end-customer, maintenance, repair

and distribution, including customized logistics services.

Partnertech provides such services on a regular basis for

many customers in both europe and the United states.

logistics services can be combined to meet the customer’s

requirements, enabling discretionary levels of service and

more efficient distribution.

bEttEr oVErViEw of oUr worKing mEtHodS

to provide improved customer service and make our role as

a contract manufacturer more transparent, Partnertech

carried on in 2009 with the change project it had launched

in 2008. the effort involved strengthening operating efficiency

by putting together new and better group-wide processes for

logistics, production methods and the like.

Six mArKEt ArEAS

Partnertech has many years of experience in developing

and manufacturing products for businesses in a variety of

market areas. We have long collaborated with leading com-

panies to continually upgrade our processes and production

skills.

the challenge is not simply to meet the requirements of

various standards, customers or markets. Just as important

is to understand the particular market in which a customer

does business. Partnertech’s competitive advantage over

other contract manufacturers and the in-house manufac-

turing processes of its customers stems from its flexible,

cost-effective production options.

Partnertech’s strong suit consists of its superior skills

when it comes to products with short time-to-market re-

quirements, as well as those with stringent demands for

documentation and traceability. furthermore, we can quickly

alternate between the two types of products.



dEfEnSE And mAritimE mArKEt ArEA

the Defense and Maritime market area typically manufac-

tures components that are subject to stringent security and

quality requirements, as well as products for use by the oil

and other industries.

the area is characterized by long-term relationships.

once trust has been established, contracts run for many

years. that minimizes volatility.

Partnertech, which meets the area’s special requirements

for quality, dependability and reliable delivery, is certi fied

according to the iso 9001:2000 Quality Management

standard and the iso 14001:2004 environmental Manage-

ment standard. the area offers experience with respect to

traceability, documentation and advanced measuring

equipment.

Particularly attractive services range from design to

production (including difficult raw materials) and distribu-

tion. Partnertech also offers procurement processes and

after-sales services through its global network of produc-

tion resources in europe, china and the United states.

exaMPles of ProDUcts

Partnertech has state-of-the-art skills in many segments

of the area. among the products it manufactures are radar

equipment, thermocameras, communications equipment,

vibration control systems and remote surveillance equipment.

indUStrY mArKEt ArEA

the industry market area largely manufactures components

and products for operator terminals, power & range control

units and similar segments. because a number of custom-

ers in this area are looking for large-scale production, it is

integral to spearheading the development of Partnertech’s

global structure.

Partnertech is certified in accordance with the iso

9001:2000 Quality Management standard and iso

14001:2004 environmental Management standard. the

established supply chain is highly suitable for production in

this area, which requires high-quality components to meet

stringent durability and service cost criteria.

Partnertech’s fundamental structure ensures the kind

of flexibility needed to quickly retool small-scale production

among a variety of options. furthermore, the company’s

global network of manufacturing resources in europe, china

and the United states optimizes the quality and cost-effec-

tiveness of a product throughout its life cycle.


Partnertech has decades of experience in this market area.

among the products it manufactures are systems for remote

reading of electrical meters, control units for revolving

doors, forklifts and industrial robots.


informAtion tECHnologY mArKEt ArEA

the information technology market area often obtains

major contracts for advanced, encapsulated electronic

components (box build assembly) and other products.

along with the industry market area, these products drive

the expansion of Partnertech’s global structure, given that

their size and their range of applications are frequently

suited to large-scale production.



14001:2004 environmental Management standard. be-

cause time tends to be a critical factor, Partnertech offers

its skills even during the product development phase. Just

as important are the resources that Partnertech eventually

provides when it comes to distribution and after-sales.

Partnertech can also optimize both existing and new

products to lower their production costss. savings run as

high as 50% per manufactured unit.


Partnertech has many years of experience in this area.

among the products it manufactures are security cameras,

broadband routers, videoconferencing systems, base station

antennas, microwave links and terminals for information

systems and industrial robots.

mEdtECH & inStrUmEntAtion mArKEt ArEA

the Medtech & instrumentation market area offers a vital

combination of technical, regulatory and market expertise.

Partnertech meets basic standards such as iso

9001:2000 Quality Management and iso 14001:2004

environmental Management, as well as industry-specific

standards such as iso 13485 for the production of medical

devices. the company also complies with the Quality system

regulation (Qsr) for the United states, the Pharmaceuti-

cal affairs law (Pal) for Japan, and the Medical Device

Directive (MDD) and in vitro Diagnostic Device Directive

(ivDD) for europe..

Partnertech’s many years of experience and thorough

familiarity with the market are particularly valuable for busi-

nesses that commercialize new discoveries and concepts.

the company’s knowledge of the various development

steps can help a product endure regulatory scrutiny and

win official approval. Partnertech’s local customer centers

facilitate close technical collaboration, which is particularly

important in this area.


Partnertech can boast of long, successful involvement in

medical technology production, including blood analysis,

dialysis, radiology and anesthesia equipment, allergy and

Dna testing instruments, and printed circuit boards for

various types of instruments.


ClEAntECH mArKEt ArEA

the expanding cleantech market area reflects the direction

of public policy. comprising both components and complete

systems, the area often utilizes the expertise surrounding

each of the company’s disciplines.



14001:2004 environmental Management standard. the

company’s mechanical and electronic skills provide a solid

foundation for production in this area. We offer design,

manufacture, testing and distribution in a way that ensures

proper care of the customer’s product from the very start.

Many businesses have rapidly expanding capacity

requirements. Partnertech’s size and global presence can

satisfy those needs while sparing its customers the

expense of major investment in production processes.


Partnertech has the knowledge and experience that the

manufacture of products (often complex) in this area

demands. typical products are recycling and reverse vend-

ing machines, heat pump systems and weather station

equipment.

mArKEt ArEA point of SAlE AppliCAtionS

Partnertech has many years of experience when it comes

to payment systems, card readers and similar products. the

company possess advanced, far-reaching product develop-

ment skills and is often contracted for high-level outsourcing.

customers in this area frequently outsource production of

complete systems and modules.



14001:2004 environmental Management standard. be-

sides advanced production that includes assembly and sys-

tems integration, Partnertech offers after-sales services

such as maintenance and repair at the local level. that con-

serves time resources, strengthens a customer’s service

offering and brand, and minimizes environmental impact.


Partnertech has superior precision mechanics skills that

are decisive to functional solutions in this area. among the

products it manufactures are cash handling systems, card

readers, printers for terminals and cash registers, and

equipment for paper handling and other advanced flexible

mechanics.

strateGY anD tarGets 21

Partnertech’s strategy is to scrupulously ensure that our

range of services maximize customer value. our sales or-

ganization is decentralized to the local customer centers in

the various geographical markets. such an approach maxi-

mizes market presence, facilitates customer contact and

strengthens the Partnertech brand as a contract manufac-

turer with a strong focus on customers and familiarity with

needs at the local level.

Working collaboratively, Partnertech strives to create

customer value by means of cost-effective, flexible production,

along with supplemental services throughout a product’s

entire value chain. supplemental services are associated with

product development and cost-effectiveness measures, as

well as purchasing, logistics and after-sales. in response to

the wishes that our customers have expressed with regard

to logistics and after-sales, we are building new and larger

distribution centers in europe and the United states while

expanding our range of services in this area.

a configuration and distribution center started up in

atlanta, Georgia during 2009. When the new unit for sheet

metal work and systems integration opens in Poland during

2010, customers will have greater access to distribution

services in central europe.

as Partnertech’s core activity, manufacturing must pro-

vide agreed-upon quality and performance in every respect.

thus, our units are based on uniform, overall structures and

processes that enable us to readily relocate production

among them and generate economies of scale, thereby

boosting the competitiveness of our customers.

Partnertech’s four centers of excellence, which spear-

head our production and technological progress, are con-

stantly improving. they control and manage our skills while

ensuring that all group units maintain the kind of technical

superiority that is integral to efficient, quality-assured pro-

duction processes.

Partnertech satisfies the market’s need for low-cost

production by manufacturing high volumes in Poland and

china. the new unit in southern Poland is optimally located

in terms of costs, educational level, infrastructure and prox-

imity to market. Partnertech is looking to expand its asian

offering in a similar manner.

in summary, Partnertech may very well offer the broadest

range of service and production options among regional

contract manufacturers. our vision is to be in the forefront

of every discipline while safeguarding our strong, integrated

offering and competitive industrial structure. that is the kind

of strategy that allows us to deliver greater customer value.

financial tarGets

financial strength is integral to success. as a contract

manufacturer, Partnertech operates in a young sector that

is subject to change, invests regularly in machinery and

human resources, and encounters volume fluctuations and

unforeseen developments that must be dealt with.

stRAtegy And tARgetsPartnerTechisoneoftheleadingEuropean

business-to-businesscontractmanufacturers.

Thecompanyfocusesonproductowners,

primarilyinEurope,whilemaintainingastructure

thatallowsustoaccompanycustomersas

theyenternewmarkets

PartnerTech’smajorstrategicoverhaulin2008

servedasthebasisforitseffortsin2009.

pArtnErtECH’S finAnCiAl tArgEtS

Annual growth ≥ 10%

Operating margin ≥ 7%

Capital turnover rate, multiple ≥ 3

Return on operating capital ≥ 20%

Equity/assets ratio ≥ 30%

our total Quality Management (tQM) concept dictates a

focus on customers, constant improvement, a process

orientation and fact-based decision-making. a typical con-

crete goal is to substantially shorten the time from produc-

tion order until the product leaves the plant. Partnertech’s

business system excels in

meeting the iso 9001 Quality Management standard,

iso 14001 environmental Management standard and

iso 13485 Medical Device standard

supporting customer-specific requirements, such as

fDa’s Quality system regulation (Qsr)

ConStAnt improVEmEntS

Partnertech employees must be able to make constant im-

provements while eliminating any problems and shortcom-

ings before they grow serious and compromise quality or

customer performance. a series of group-wide total Quality

Management (tQM) tools support them in that effort. as an

integral part of day-to-day operations, the tools encourage

employee commitment, as well as guiding our customer

teams as they formulate objectives and activities in partner-

ship with the customer.

the tools are broken down into four main categories.

MonitorinG anD folloW-UP

these tools include 5s, which stands for sort, systematize,

straighten up, secure and standardize. key ratios such as Yield

and overall equipment efficiency (oee) measure process

quality. the ratios are regularly reviewed at the team room

of each plant. employees can continually monitor their

quality and performance and obtain information about current

customer requirements and preferences.

intensive quAlity

AssuRAnce And enviRon-

MentAl effoRts

22 QUalitY assUrance anD environMental efforts

PartnerTechpursuesitsqualityassuranceeffort

withafocusoncustomerrequirementsand

awarenessthroughouttheorganization,shorter

lead-timesandgreaterflexibility.

TheobjectiveofPartnerTech’sgroup-wide

TotalQualityManagement(TQM)systemisto

maintainanambitiousvisionofquality.

risk eliMination

the 10-step supplier Quality assurance Plan (sQaP) tool

is used to ensure superior production quality. other tools

include producibility reviews, failure mode and effects

analysis (fMea), analyses of measurement accuracy and

serial production verification runs.

iMProvinG Processes

the six sigma tools and problem resolution teams focus

on skills development, willingness to change and efficient/

flexible production. all types of waste are to be minimized

and resources are to be used wisely. Partnertech also con-

ducts frequency and methods studies.

iMProvinG ProDUcts

these tools include value analysis/value engineering (va/ve)

and six sigma. va/ve involves an overview of a product in

order to make it as cost-effective as possible and optimize it

for production.

these quality assurance tools are vital to a business like

Partnertech for a number of reasons. they are important when

independent parties evaluate our organization in relation to

the iso 9001, iso 14001 and iso 13485 standards. the

Dnv (Det norske veritas) foundation performs reviews

throughout the year to verify that we meet our stringent

requirements and identify that which bears improving.

Six SigmA – A world-lEAding

improVEmEnt ConCEpt

six sigma is a world-leading, clearly structured quality

improvement concept for more complex problems.

Partnertech academy conducted Yellow belt trainings and

associated improvement projects during the year. the

Partnertech organization now has many Yellow belts,

Green belts and black belts (the highest level). Product

quality, efficiency, delivery times and cost-effectiveness

have benefited as a result.

worKing mEtHodS And qUAlitY ASSUrAnCE

the standardization of working methods provides

Partnertech with both quality and efficiency. as a result, we

can more easily control and monitor the assembly process.

because our customers require flexibility, we must be

able to safely and efficiently relocate production. Group-

wide trainings and processes/procedures promote skills

development and quality awareness among our production

engineers.

Partnertech uses the supplier Quality assurance Plan

(sQaP) with both customers and suppliers. sQaP is a

generally accepted method for seeing to it that a product

or process meets customer-specific requirements.

Partnertech academy conducts regular sQaP trainings to

assure and optimize quality and cost-effectiveness

throughout the value chain. our goal is to increasingly in-

volve customers and suppliers as much as possible in order

to guarantee quality, efficiency and low costs for everyone

concerned.

QUalitY assUrance anD environMental efforts 23

StAndArdizEd SUppliEr AgrEEmEntS

Partnertech put together a standardized agreement pack-

age for suppliers during the year. the group’s code of con-

duct is included in the package. the company is currently

engaged in an intensive effort to conclude agreements

with all of its large, critical and new suppliers on the basis

of the package.

foCUS on oUr EnVironmEntAl Effort

Partnertech has a group-wide environmental certificate in

accordance with iso 14001. it covers all units, as well as

future acquisitions. the company’s environmental manage-

ment system and purchasing processes place environmen-

tal demands on suppliers as well.

besides being the natural consequence of our quest for

long-term sustainable development, Partnertech’s intensive

environmental effort reflects the demands of most customers.

Questions about the use of materials, recyclability and energy

consumption are generally essential to limiting the environ-

mental impact of the products. When it comes to recycling

and phasing out hazardous substances, Partnertech follows

the restriction of the Use of certain hazardous substances

(rohs) and registration, evaluation and authorization of

chemicals (reach) regulations of the european Union.

some of Partnertech’s activities involve discharges into

the water and air, as well as consumption of cutting fluids,

which include:

• purification and recycling of waste water

• sorting of refuse to be either recycled or incinerated

• use of biofuels for heating

• replacement of solvent-based lacquer with powder lacquer

EnVironmEntAl tArgEtS in 2009 And 2010

Partnertech’s environmental targets in 2009 focused on

further reducing the use of electrical power, gas, water and

chemicals, as well as recycling more. the same targets are

in effect for 2010.

Partnertech measures carbon dioxide emissions during

shipment and has a company car policy that includes in-

centives to drive fuel-efficient vehicles. the business travel

policy stresses the importance of minimizing environmental

impact.

24 QUalitY assUrance anD environMental efforts

efficient teAMwoRk

stRengthens pARtneRtechSkilled,committedemployeeswiththeabilityto

handletheuniqueproductofeachcustomerare

decisivetoPartnerTech’sgrowthanddevelopment.

Thus,itisessentialthatwemaintainacorporate

culturethatencouragesskillsdevelopment,

motivationandcooperation,therebyimproving

ourprospectsforattractingandretainingtalented

peoplewhileensuringaflexibleorganization.

Group-wide processes, methods and tools lay the founda-

tion for efficient teamwork and makes Partnertech better

at optimizing the skills of each individual and function. that

eMPloYees anD valUes 25

strengthens the capabilities of the entire organization.

the human resources function focused on a handful

of selected tasks in 2009. the goal was to take advantage

of synergies and economies of scale to support and

strengthen both employers and the organization by syn-

chronizing working methods, processes and tools. to attract

and retain highly capable employees, we continued to up-

grade our hiring process, reward system, skills develop-

ment program and leadership training. the function pro-

ceeded from clearly defined roles and responsibilities

adapted to the needs of employees to support a finely

tuned, flexible organization based on the group’s strategy.

cultivating employee commitment that is rooted in the

company’s established values and involves active human

resources efforts at all levels requires group-wide training

through Partnertech academy.

the idea is to further strengthen human and organiza-

tional resources by means of a working method that high-

lights supervisors and employees. the goal is for the entire

group to use uniform methods, tools and processes.

A StrAtEgY implEmEntAtion tool

Partnertech academy is group management’s strategy im-

plementation tool. thus, the academy’s trainings are always

linked to maximizing customer value and process efficiency.

the goal is to strengthen the organization’s operating

capability and involve employees in Partnertech’s strategic

orientation. the main topics are leadership, sales, purchasing,

production efficiency, logistics flow and economic estima-

tion models of profitability.

the academy’s improvement teams are deeply involved

in development of the trainings. that creates a desire for

knowledge among employees and offers them a practical

way to make a difference.

heavy emphasis was placed in 2009 on creating and

conducting sales trainings, as well as identifying new in-

struction tools. in 2010, Partnertech is launching its leader-

ship concept and expanding its supply flow trainings.

EmploYEE SAtiSfACtion

Partnertech conducted an employee survey during the year.

the response rate was over 80%. Despite the restructuring

that was carried out during the year, the responses revealed

widespread satisfaction with Partnertech as an employer.

Particularly gratifying was a considerable improvement in

the employee satisfaction index. Partnertech will conduct

improvement activities at both the local and global level in

2010 to further boost employee satisfaction, and hopefully

performance as well.

implEmEnting plAnS in 2010

the human resources effort is transitioning in 2010 from

analysis and development to adoption and implementation

of group-wide working methods, processes and tools. the

human resources function, supervisors and employees will

all benefit.

leadership development is one of the most important

areas in this respect. one goal is to make sure that

Partnertech has an effective process and efficient tools for

performance reviews. another goal is to introduce a

program that can identify and prepare highly capable

employees for the challenges of the future.

human resources will also help supervisors analyze

the company’s capabilities at the functional, unit and group

level in order to define and carry out activities aimed at

maximizing those capabilities. Partnertech academy trainings

will be crucial to that effort.

26 eMPloYees anD valUes

eMPloYees anD valUes 27

Key ratios 2007 2008 2009

average full-time employees 1,886 1,670 1,382 sales per employee (sek thousand) 1,402 1,514 1,554 average age 41 41 41

EmploYEE KEY rAtioS

brEAKdown bY gEndEr

Women 29% (28%)

Men 71% (72%)

EdUCAtionAl lEVEl

college 19% (24%)

high school diploma and below 68% (63%)

offiCE worKErS/EmploYEd UndEr A CollECtiVE AgrEEmEnt

office workers 31% (32%)

employed under a collective agreement 69% (68%)

totAl groUp EmploYEES

swedish units 42% (40%)

non-swedish units 58% (60%)

AVErAgE pEriod of EmploYmEnt

1–5 years 32% (32%)

longer than 5 years 59% (57%)

academic training, 3 years or longer 13%

(13%)

shorter than 1 year 9% (11%)

SHArEd VAlUES

links to success has long provided Partnertech employees

with shared values – six clear rules of conduct that stress

the importance of personal commitment and articulate the

ways that employees and the organization can jointly im-

prove customer service:

sUccess breeDs sUccess – promoting the success of our customers ensures that we will be successful as well

YoU can coUnt on Us – we keep our promises and always deliver superior quality

We are one teaM – we have clear roles and help each other achieve common objectives

straiGht to the Point – we communicate openly and modestly, showing respect and appreciation for each other

i’ll Do it – we act in a way that is good for the company

We are cost-Wise – common sense dictates that we question unnecessary costs and look for more creative solutions

promoting oUr brAnd

links to success also serves a vital function in the group’s

brand promotion effort. adopting and following our rules of

conduct permits our employees to make Partnertech’s brand

even more credible. that communicates expertise, a service

orientation and a sense of togetherness for the purpose of

supporting our assignments, creating value and achieving our

targets. it also helps attract and retain the best employees.

HEAltH And SAfEtY

Partnertech pursues a systematic effort focused on ergo-

nomics and fitness activities aimed at promoting workplace

health and safety. the effort is governed by a separate

policy, as well as rules for systematic work environment

initiatives, and is to satisfy both psychological and social

criteria. among the objectives are suitable premises, fit-

ness allowances and the ability of employees to affect their

workstations so that their tasks are ergonomically sound.

share and shareholders

SHARE CAPITAL AND NUMBER OF SHARES On December 31, 2009, PartnerTech AB’s share capital totaled SEK 63,324,920 allocated among 12,664,982 shares. Each share entitles the holder to one vote at the annual general meeting, and all shares provide equal rights to participation in the company’s assets and profit. PartnerTech is listed on the Nasdaq OMX Stockholm Exchange.

SHAREHOLDER STRUCTURE On December 31, 2009, PartnerTech AB had 3,002 share-holders (2,824). The ten largest shareholders held 9,895 thousand (9,735) shares, representing 78.1% (76.8) of the total shares and votes. Institutions and other legal entities controlled 85.9% (88.1) of the capital and votes. Foreign shareholders accounted for 7.7% (13.8) of the capital and votes.

DIVIDEND POLICY PartnerTech targets a dividend representing 30% of its profit after tax assuming that its financial position so permits. Since listing its share on the stock exchange in 1997, PartnerTech has paid annual dividends as shown in the adjacent table.

DIVIDEND FOR 2009The Board proposes that the annual general meeting distribute no dividend for the 2009 fiscal year (SEK 0.00 per share for fiscal 2008). The proposal is based on the ongoing economic downturn, which reduced sales and earnings for the year and

makes the prospects for a rapid recovery uncertain. The group’s investment plans represent an additional factor.

OPTIONSPursuant to a decision of the April 25, 2007 annual general meeting, an option program for senior executives and other key employees of the group is currently running. The program includes warrants and employee stock options corresponding to subscription for 125,000 new shares. The redemption price is SEK 134.50 for the warrants and SEK 123.19 for the employee stock options. The program expires on May 31, 2010. Refer to Note 28 for more information.

DIVIDENDYear Amounts in SEK million % of profit after tax

1997 1.9 16

1998 3.0 18

1999 5.7 12

2000 12.5 14

2001 0.0 0

2002 0.0 0

2003 0.0 0

2004 5.7 16

2005 15.8 30

2006 38.0 31

2007 0.0 0

2008 0.0 0

2009 0.0 0 (proposed)

Change in Par value/ Change in Total share capital Total share capital ratio Type of transaction no. of shares shares (SEK) (SEK) (SEK)

1984 Company’s foundation 270,000 270,000 27,000,000 27,000,000 100

1997 Bonus issues – 270,000 10,800,000 37,800,000 100

1997 20:1 split 7,290,000 7,560,000 – 37,800,000 5

2000 Issue of new shares (subscription for options) 1,000 7,561 000 5,000 37,805,000 5

2001 Non-cash issue (acquisition of shares 647,414 8,208,414 3,237,070 41,042,070 5 in EQ Elektroniq AB)

2001 Non-cash issue (acquisition of shares 102,586 8,311,000 512,930 41,555,000 5 in Baltic Microwaves Sp. z o.o. and EQ Elektroniq AB)

2001 Issue of new shares (acquisition of shares 211,907 8,522,907 1,059,535 42,614,535 5 in Baltic Microwaves Sp. z o.o. and EQ Elektroniq AB)

2001 Non-cash issue 2,900,000 11,422,907 14,500,000 57,114,535 5

2005 Non-cash issue (acquisition of shares in KSH-Productor Oy) 407,811 11,830,718 2,039,055 59,153,590 5

2005 Issue of new shares (subscription for options) 306,666 12,137,384 1,533,335 60,686,920 5

2006 Non-cash issue (acquisition of shares in TH Kristiansen AS) 315,724 12,453,109 1,578,620 62,265,545 5

2006 Non-cash issue (acquisition of shares in Hansatech Ltd Group) 211,875 12,664,982 1,059,375 63,324,920 5

CHANGES IN SHARE CAPITAL The following changes have taken place in PartnerTech’s share capital since its foundation.

30 SHAR E AN D SHAR E HOLDE RS

PRICE PERFORMANCE AND TRADING VOLUMES OF THE PARTNERTECH SHARE The price of the PartnerTech share rose by 68% in 2009. During the same period, the Nasdaq OMX Stockholm Exchange in-creased by 47%. The PartnerTech share closed at SEK 26.00 (15.50) on December 31, 2009. PartnerTech’s market capitali-zation on December 31, 2009 was SEK 329 million. The market capitalization was SEK 196 million on December 31, 2008 and SEK 408 million at the time of the 1997 listing. A total of 4.7 million (3.2) shares, or an average of 18,749 (12,774) per session, were traded in 2009. The share was traded during all possible 2009 sessions.

PARTNERTECH’S SHAREHOLDER STATISTICS 12-31-2009

No. of shares No. of % of No. of % of shareholders shareholders shares shares

1 – 200 1,745 58.1 202,050 1.60

201 – 1 000 892 29.7 532,160 4.20

1,001 – 10,000 316 10.5 946,579 7.47

10,001 – 100,000 38 1.2 1,089,453 8.60

100,001 – 11 0.5 9,894,740 78.13

Total 3,002 100.0 12,664,982 100.0

Foreign shareholdings 115 3.8 980,566 7.7

% of shareholdings by legal entities 253 8.4 10,880,964 85.9

2009 2008 2007 2006 2005

Thousands of shares at end of year 12,665 12,665 12,665 12,665 12,137

No. of shares after dilution 12,665 12,665 12,665 12,665 12,137

Earnings per share after full income tax., SEK -1.70 0.41 -1.96 9.79 4.49

Earnings per share after full income tax and dilution, SEK -1.70 0.41 -1.96 9.79 4.49

Dividend per share, SEK* 0.00 0.00 0.00 3.00 1.30

Equity per share. SEK 42.17 43.47 44.11 47.28 36.39

Equity per share after dilution,* SEK 42.17 43.47 44.11 47.28 36.39

Closing share price for the year, SEK 26.00 15.50 35.70 127.50 103.50

Market capitalization, SEK million 329 196 452 1 615 1 256

P/E multiple neg. 37.8 neg. 13.0 23.1

Dividend yield, % 0.0 0.0 0.0 2.4 1.3

Dividend rate, % 0.0 0.0 0.0 31.0 29.7

Share price/equity, % 62 36 81 270 284

* According to proposal of the Board of Directors

SHARE DATA

500

1 000

1 500

2 000

2005 2006 2007 2008 200915

20

40

60

80

100

120

140Number of shares traded Thousands

ShareSIX General Index

PartnerTech

© NASDAQ OMX

PARTNERTECH’S 10 LARGEST SHAREHOLDERS 12-31-2009

Shareholder Thousand shares %

Bure Equity* 5,443.0 43.0

AB Traction 1,719.2 13.6

Livförsäkringsaktiebolaget Skandia 759.5 6.0

Barclays Cap Sec Cayman Client 439.5 3.5

Försäkringsaktiebolaget, Avanza pension 438.2 3.5

Länsförsäkringar Fondförvaltning AB 349.1 2.8

Verdipapirfond Odin Sverige 275.2 2.2

Fjärde AP-fonden 188.4 1.5

Awake Swedish Equity Fund 166.8 1.3

Nordnet Pensionsförsäkring AB 115.9 0.9

Total 9,894.7 78.1

* Skanditek Industriförvaltning AB and Bure Equity AB merged on January 27, 2010.

SHAR E AN D SHAR E HOLDE RS 31

32 COR PORATE GOVE R NANCE

corporate governance

PartnerTech’s corporate governance is based on Swedish legislation, primarily the Companies Act and its listing agreement with OMX Nordic Exchange. PartnerTech has complied with the Swedish Code of Corporate Governance since its amended version took effect on July 1, 2008. The company’s auditor has not reviewed this report.

ANNUAL GENERAL MEETING The annual general meeting is PartnerTech’s highest deci-sion making body and the forum at which shareholders can exercise their influence. The tasks of the meeting are gov-erned by the Companies Act and the articles of association. The meeting votes on the composition of the Board and other items. Each share entitles the holder to one vote. The meeting is to be held within six months after the close of the fiscal year. The articles of association specify that the meeting be held in Malmö, Stockholm or Åtvidaberg (to be changed to Vellinge according to a proposal to the 2010 meeting). Resolutions of the meeting are passed in accordance with provisions of the Companies Act concerning what consti-tutes a majority. All auditors and members of the Board, as well as representatives of group management, normally attend in order to address any questions that may arise.

THE APRIL 23, 2009 ANNuAL GENERAL MEETING PASSED THE FOLLOwING RESOLuTIONS AND OTHERS All of the company’s unappropriated earnings of SEK

73,197,909 are to be carried over to the 2009 accounts, as the result of which no dividend will be payable for the 2008 fiscal year (SEK 0/share for fiscal 2007).

Members of the Board and the CEO were discharged from liability for fiscal 2008.

The Board fee was set to remain at SEK 320,000 for the Chairman and SEK 160,000 for other members who are not employees of the company.

Rune Glavare, Patrik Tigerschiöld, Lennart Evrell, Thomas Thuresson, Henrik Lange and Tomas Bergström were reelected as Board members. Petter Stillström was elected as a new member. Mr. Tigerschiöld was reelected as Chairman of the Board.

unchanged guidelines were adopted governing remuneration for management.

whether with or without departure from the preferential rights of shareholders, the meeting authorized the Board to reach decisions concerning one or more issues prior to the next annual general meeting totaling no more than 1,266,490 new shares and increasing share capital by no more than SEK 6,332,450, representing dilution of just under 10% of total share capital and votes.

A January 26, 2009 extraordinary general meeting approved the divestment by PartnerTech AB’s British subsidiary of

all shares in its wholly owned PartnerTech Poole Limited subsidiary.

NOMINATING COMMITTEEPartnerTech’s nominating committee, which represents share-holders, submits proposals to the annual general meeting concerning appointments and remuneration for the Board of Directors and team of auditors. The committee follows the instructions drawn up prior to the 2009 annual general meeting. The committee consists of representatives of the three shareholders with the most votes. Before the close of the third quarter, the Chairman of the Board contacts those three shareholders, each of which appoints a representative. If any of them declines, the right goes to the shareholder with the next largest holdings. The chairman of the committee is chosen from the shareholder with the most votes but should not be the Chairman of the Board. The composition of the nominating committee is announced no later than six months before the annual general meeting. The committee reports to the meeting concerning its efforts. The committee did not receive any remuneration in 2009 for its work. PartnerTech announced on October 13 that the following members had been appointed to the nominating committee and charged with preparing proposals for the 2010 annual general meeting: Chairman Henrik Blomquist, Bure Equity*, Petter Stillström, AB Traction, Sven Zetterqvist, Livförsäk-ringsaktiebolaget Skandia, and Patrik Tigerschiöld, Chairman of the Board. The committee, which consisted of Henrik Blomquist, Skanditek Industriförvaltning (Chairman), Sven Zetterqvist, Livförsäkrings AB Skandia, Nils-Petter Hollekim, Odin Fonder and Patrik Tigerschiöld, until October 2009, held one meeting. The meeting evaluated the Board and put together a set of requirements for new members. In addition, appropriate candidates were interviewed prior to the annual general meeting. Shareholders wishing to propose Board members to the nominating committee may e-mail Marielle Noble, Communica tions and Investor Relations Manager, at [email protected] or call her at +46 40-10 26 40.

THE BOARD AND ITS wORKThe Board of Directors is currently made up of seven members chosen by the annual general meeting and two employee representatives, as well as two deputies for the employee representatives. The group’s CFO, who is not a Board member, serves as the secretary of the Board. The Board follows a fixed working agenda designed to satisfy its need for information. The agenda is prepared in accordance with the rules of procedure concerning the division of responsibility between the Board and CEO that the Board adopts at the meeting following its election.


COR PORATE GOVE R NANCE 33

For the 2009 fiscal year, the Board held a total of 11 meetings – seven scheduled and four extra. One of the extra meetings was by phone, two by correspondence and one immediately following its election. The Board had a quorum at all meetings. In addition to the members of the Board, other employees of the company participated in various reporting and administrative capacities.

FOLLOwING IS A TyPICAL BOARD MEETING AGENDA: The meeting is called to order and the agenda is approved The keeper and verifiers of the minutes are chosen The minutes of the previous meeting are read The CEO’s report on the company’s activities and the

state of the market is presented Investment matters are discussed Items involving exposure to big customers are taken upOther questions (acquisitions, incentive programs, legal

formalities, etc.) are considered The meeting is adjourned

under the Companies Act and the Board’s rules of procedure, the Board is responsible for PartnerTech’s organization and management. The Board follows the company’s performance by means of its customary duties, monthly reporting and ongoing contact among its members in order to enable preparation of and decisions about long-term overall strategies, adoption of budgets, approval of major investments and consideration of other business matters. The Board evaluates its own efforts and those of the CEO on an annual basis. Following is a more detailed presentation of the various Board members:

PATRIK TIGERSCHIöLDChairman of the Board since 2007. Member of the Board since 2000.Born 1964.CEO of Bure Equity AB.Other posts: Chairman of the boards of AcadeMedia AB, Vitrolife AB and The Chimney Pot AB. Member of the boards of Carnegie Investment Bank AB, Carnegie Asset Management A/S and Micronic Laser Systems AB.Education: M.B.A.Previous positions: SEB, including Managing Director of SEB Allemansfonder.Shareholdings on December 31, 2009: 0 shares.He is dependent on big shareholders, the company and its management in his capacity as President and CEO of PartnerTech’s largest shareholder.

RuNE GLAVAREMember of the Board since 2004.Born 1945.President and CEO, PartnerTech AB.Other posts: Chairman of the boards of Cobolt AB and Micronic Laser Systems AB, and member of the board of 3nine AB.Education: Electrical Engineer.Previous positions: Founder and CEO of contract manufacturer Essex AB. Senior VP of Sanmina Europa, a leading international contract manufacturer. CEO of Cobolt AB.Shareholdings on December 31, 2009: 70,000 shares. 126,650 warrants and employee stock options.He is independent of big shareholders but dependent on the company and its management as its CEO.

ATTENDANCE AT BOARD MEETINGS (NOT INCLUDING THE ONE IMMEDIATELY FOLLOwING ELECTION)

Patrik Tigerschiöld Chairman X X X X X X X X X X X

Rune Glavare Member (also President & CEO) X X X X X X X X X

Lennart Evrell Member X X X X X X X X X X

Henrik Lange Member X X X X X X X X

Thomas Thuresson Member X X X X X X X X X

Tomas Bergström Member X X X X X X X X X

Petter Stillström Member (elected on April 24 2009) X X X X X X X

Mikael Johansson* Employee representative X X X X X X X X X X

Lennart Pettersson* Employee representative X X X X X X X X X X

Audit RemunerationMember Post Committee Committee 1 2 3 4 5 6 7 8 9 10

Attendance at Board meetings in 2009(not including the one immediately following election)

* When the employee representatives did not attend, deputies Sirousse Shamlo and Mikael Åberg participated in their place.

TOMAS BERGSTRöMMember of the Board since 2008.Born 1971.CEO of Textilia AB.Other posts: –Education: M.B.A.Previous positions: Analysis, advisory services and corporate finance. CEO of Nordic Airways.Shareholdings on December 31, 2009: 5,000 shares.He is independent of the company, its management and big shareholders.

LENNART EVRELLMember of the Board since 2007.Born 1954.President and CEO of Boliden AB.Other posts: Member of the boards of Nordea Fonder and SveMin.Education: Bachelor of Science in Engineering and Business Administration.Previous positions: CEO of Sapa, Munters and Gustavsberg. Managing Director of subsidiaries of Asea and Atlas Copco.Shareholdings on December 31, 2009: 0 shares.He is independent of the company, its management and big shareholders.

MIKAEL JOHANSSONMember of the Board since 2006.Born 1955.Employee representative (unionen).Other posts: –Education: Electrical Engineer.Previous positions: Employed by PartnerTech since 1982 (at that time Facit). Active in the union part-time since 2004.Shareholdings on December 31, 2009: 0 shares.

HENRIK LANGEMember of the Board since 2008.Born 1961.Head of SKF’s Industrial Division.Other posts: Member of the boards of the west Sweden Chamber of Commerce and Industry and Gu School of Executive Education AB.Education: M.B.A.Previous positions: Series of managerial positions at SKF, including Managing Director of the Austrian and Polish subsidiaries. CEO of Johnson Pump AB in 2000-2003.Shareholdings on December 31, 2009: 0 shares.He is independent of the company, its management and big shareholders.

LENNART PETTERSSONMember of the Board since 2005.Born 1960.Employee representative, the Swedish Metal workers’ union.Other posts: –Education: Metalwork.Previous positions: Employed by PartnerTech since 1976 (at that time Facit). Active in the union part-time since 2004.Shareholdings on December 31, 2009: 0 shares.

PETTER STILLSTRöMMember of the Board since 2009.Born 1972.CEO of AB Traction.Other posts: Chairman of the boards of Duroc AB and Nilörngruppen AB, member of the boards of AB Traction, Softronic AB, Drillcon, etc.Education: Master of Economics.Previous positions: H&Q Bank.Shareholdings on December 31, 2009: 0 shares.He is independent of the company and its management but dependent on AB Traction, one of the company’s largest shareholders, as its CEO and major shareholder.

THOMAS THuRESSONMember of the Board since 2008.Born 1957.CFO of Alfa Laval AB.Other posts: –Education: M.B.A.Previous positions: Various leading financial positions of Alfa Laval. Shareholdings on December 31, 2009: 0 shares.He is independent of the company, its management and big shareholders.

GROUP MANAGEMENTThe President and CEO has chief responsibility for the operational management of the group. A group management team consisting of six other members assists him. Its size and composition vary with the company’s activities. The team added a central function for logistics and planning in December 2009 for the purpose of strengthening and streamlining component flow, which is integral to PartnerTech’s business. The other members of the team are the vice presidents of the company’s various functions: finances, sales, production, purchasing and human resources. A detailed presentation of the CEO’s age, education, experience and shareholdings appears above in the section about the Board and its work.

34 COR PORATE GOVE R NANCE

COR PORATE GOVE R NANCE 35

REMUNERATION COMMITTEEFor fiscal 2009, the Board appointed Board members Thomas Thuresson, Lennart Evrell and Patrik Tigerschiöld to a remuneration committee chaired by Mr. Tigerschiöld. Both Mr. Thuresson and Mr. Evrell are independent of the company and management team. The committee is in charge of drawing up principles of compensation and terms of employment for senior executives and submitting proposals to the annual general meeting. Refer to the management report for remuneration principles and guidelines. All members attended the one meeting that the committee held during the year.

AUDIT COMMITTEEAccording to a decision of the Board for fiscal 2009, the audit committee consists of the entire Board except for the CEO, given that he is a member of group management. Thus, the committee’s meetings coincide with the above-mentioned Board meetings and their attendance. The committee is repressible for preparation, quality assurance and decisions concerning audits and financial reporting. The company’s auditors are normally elected by every fourth annual general meeting. The 2007 annual general meeting chose Deloitte AB, whose current chief auditor is Per-Arne Pettersson, as the company’s auditors through the 2011 annual general meeting. The auditors are nominated on the basis of documentation and data compiled by the nominating committee and Board, along with selected employees of PartnerTech. The chief auditor attends the Board meeting at which the year-end accounts are approved and the audit – as well as the current status of monitoring, expertise and the like – is discussed.

INTERNAL MONITORING REPORTunder the Companies Act and the Swedish Code of Corporate Governance, the Board is responsible for internal monitoring of the company. The report is prepared in accordance with the code and is thereby limited to monitoring financial reporting.

MONITORING STRuCTuREThe Board’s rules of procedure and instructions for the CEO specify a clear division of roles and responsibility to promote effective internal monitoring and risk management. The ongoing effort to maintain effective internal monitoring is delegated to the CEO, who in turn delegates function-

specific responsibilities to managers at the various levels of the group. The group’s internal monitoring procedures are based on the company’s quality and management system (PIMS), which contains process descriptions, along with instructions for procedures, attestations, authorizations, etc. Financial reporting and management, which proceed from well-defined guidelines and policies, are fully supported by suitable IT systems.

RISK ASSESSMENT AND MONITORINGRisk assessment includes identification, analysis and evaluation. Risks are identified at both the group and subsidiary level. Activities to prepare internal monitoring and thereby prevent and detect risks are conducted on a continual basis. The activities include manual checks, regular reporting and verifications built into the IT and business system. An annual survey evaluates all subsidiaries within the various areas included. The evaluation leads to follow-up and activities for each subsidiary in order to ensure steady improvement of financial monitoring. Monthly performance monitoring per legal unit through the internal reporting system is another vital activity on which internal board work comments and reports. Performance monitoring includes comparison with previously established targets and key ratios. PartnerTech has no separate internal auditing function. The company has not identified any special circumstances in or outside of the company that would call for such a function.

INFORMATION AND COMMuNICATIONSignificant guidelines, manuals and the like that affect financial reporting are continually reviewed and communi-cated to group employees concerned on an ongoing basis. Employees have a number of channels through which they can communicate important information to group manage-ment and the Board. An annual financial conference is held to ensure the sharing of skills and experience among the various functions. The Board regularly meets with representatives of central functions, while the CEO and CFO keep the Board up to date about the group’s financial position, performance and any areas of risk. PartnerTech follows the guidelines for external information that apply to companies listed in Sweden, as well as the Swedish Code of Corporate Governance.

five-year summary

CONSOLIDATED INCOME STATEMENT

CONSOLIDATED BALANCE SHEET

36 F IVE-yEAR Su M MARy

Amounts in SEK MILLION 2009 2008 2007 2006 2005

Net sales 2,148.0 2,529.0 2,643.6 3,057.2 2,013.9

Cost of goods and services sold -2,055.6 -2,374.4 -2,510.7 -2,741.3 -1,830.6

Gross profit 92.4 154.6 133.0 315.9 183.3 Other operating expense -104.2 -137.6 -164.0 -145.8 -104.0

Other operating income 8.3 11.6 13.3 10.0 8.7

Operating profit/loss -3.5 28.5 -17.7 180.0 88.0 Financial income 6.8 9.4 2.6 3.9 2.6

Financial expense -26.0 -28.7 -19.1 -22.1 -14.3

Net financial income/expense -19.2 -19.3 -16.5 -18.3 -11.8 Profit/Loss after net financial income/expense -22.7 9.2 -34.2 161.7 76.2 Taxes 1.3 -4.0 9.4 -39.1 -23.1

Profit/Loss for the year -21.5 5.2 -24.8 122.6 53.1


Assets Intangible fixed assets 161.0 142.0 141.3 143.0 122.1

Property. plant and equipment 182.6 225.1 222.7 199.0 152.4

Financial assets 25.5 15.0 12.3 4.8 7.6

Total non-current assets 369.2 382.2 376.3 346.8 282.1 Inventories 440.6 527.2 559.5 619.6 449.2

Accounts receivable 396.3 405.0 434.4 522.4 447.7

Other current receivables 45.8 37.9 46.5 50.2 28.1

Liquid assets 35.8 37.6 37.5 98.8 47.3

Total current assets 918.5 1,007.7 1,077.9 1,291.0 972.3 Total assets 1,287.7 1,389.9 1,454.2 1,637.8 1,254.4

Liabilities and Equity Equity 534.1 550.6 558.7 598.8 441.7 Long-term interest-bearing liabilities 60.5 94.6 87.0 64.5 44.7

Current interest-bearing liabilities 276.9 285.1 331.1 437.8 339.0

Total interest-bearing liabilities 337.4 379.7 418.1 502.3 383.7 Provisions 7.1 7.7 16.8 37.4 33.9

Accounts payable 274.1 272.9 252.6 281.6 223.8

Other current non-interest-bearing liabilities 134.9 179.1 208.0 217.6 171.3

Total non-interest-bearing liabilities 416.1 459.7 477.4 536.7 429.0 Total liabilities and equity 1,287.7 1,389.9 1,454.2 1,637.8 1,254.4


Operating profit/loss -3.5 28.5 -17.7 180.0 88.0

Reversal of depreciation/amortization 44.8 52.2 61.7 54.1 46.2

Capital gain/loss 1.4 -3.6 -1.9 -0.5 0.2

Provisions 1.0 0.1 -0.2 -1.0 -2.8

Financial items -19.2 -19.4 -16.6 -18.3 -11.8

Tax paid -14.8 -26.9 -37.7 -27.0 -8.5

Change in working capital 41.3 56.4 147.6 -163.4 -64.0

Investments and divestments -24.3 -31.1 -68.2 -59.5 -92.6

Cash flow 26.6 56.1 67.1 -35.7 -45.3 Change in loans -27.7 -52.1 -94.8 108.7 49.3

Dividend – – -38.0 -15.8 -5.7

Issues of new shares/option premiums – – – – 22.3

Translation differences -0.7 -4.0 4.4 -5.7 5.1

Change in liquid assets -1.8 0.1 -61.4 51.5 25.7

CONSOLIDATED CASH FLOw STATEMENT

* Based on average quarterly balances

Amounts in SEK MILLION (unless otherwise indicated) 2009 2008 2007 2006 2005

Margins Gross margin, % 4.3 6.1 5.0 10.3 9.1

Operating margin, % -0.2 1.1 -0.7 5.9 4.4

Profit margin, % -1.1 0.4 -1.3 5.3 3.8

Return* Return on operating capital, % -0.4 3.1 -1.8 20.0 12.5

Return on equity, % -4.0 0.9 -4.1 23.2 13.8

Capital structure working capital (Dec. 31) 473.7 518.2 579.8 692.9 529.9

Operating capital (Dec. 31) 810.3 877.6 927.0 997.5 778.1

Equity (Dec. 31) 534.1 550.6 558.7 598.8 441.7

Interest-bearing net debt (Dec. 31) 293.8 328.7 380.6 403.5 336.5

working capital/net sales, % 22.1 20.5 21.9 22.7 26.3

Asset turnover rate, multiple 2.5 2.8 2.7 3.5 2.9

Interest coverage ratio. multiple 0.1 1.3 -0.8 8.3 6.3

Equity/assets ratio, % (Dec. 31) 41.5 39.6 38.4 36.6 35.2

Net debt/equity ratio. multiple 0.6 0.6 0.7 0.7 0.8

Share of risk-bearing capital, % (Dec. 31) 41.8 40.1 39.4 38.7 37.8

Investments 28.5 71.3 70.5 59.5 92.6

Employees Average full-time employees 1,382 1,670 1,886 1,747 1,369

Sales per employee, SEK thousand 1,554 1,514 1,402 1,750 1,471

Payroll expense & overhead per

full-time employee, SEK thousand 392 383 370 371 347

KEY RATIOS

F IVE-yEAR Su M MARy 37

38 MANAG E M E NT R E PORT

management report

OPERATIONS AND STRUCTUREPartnerTech AB (publ), corporate identity no. 556251-3308, is a contract manufacturer with longstanding experience of electronics, mechanics and mechatronics, the combination of the two. In these areas, the company has the expertise to work with its customers on product development, new product introduction, production and logistics. Most of PartnerTech’s customers are based in Europe and manufacture business-to-business products. The group has a number of develop-ment, production and sales units in various locations around the world. PartnerTech operates in Sweden, Norway, Finland, Poland, the united States, the uK and China. The company is headquartered in Vellinge, Sweden. PartnerTech is listed on the NASDAQ OMX Stockholm Exchange.

SALES AND EARNINGS FOR 2009The PartnerTech group’s net sales totaled SEK 2,148.0 million (2,529.0), while the loss for the year after financial items and tax amounted to SEK -21.5 million (5.2). The operating loss totaled SEK -3.5 million (28.5).

EMPLOYEESThe number of full-time equivalent employees averaged 1,382 (1,670) in 2009. Divestment of units, the 2008 action program and previous notices of termination reduced the number of full-time equivalent employees by 240 over the past 12 months. The group had 1,356 (1,596) full-time equivalent employees on December 31.

ENVIRONMENTAL IMPACTPartnerTech, which engages in a proactive effort to improve and have a minimum impact on the environment, holds a group-wide ISO 14001 certificate that covers all units as well as future acquisitions. Our environmental management system and purchasing processes also subject our suppliers to environmental requirements. Besides being the natural consequence of our quest for long-term sustainable devel-opment, PartnerTech’s intensive environmental effort reflects the demands of most customers. The company owns no products, but manufactures exclusively on contract. Questions about the use of materials, recyclability and energy consumption are generally important to answer in order to limit the environmental impact of the products. when it comes to recycling and phasing out hazardous sub-stances, PartnerTech follows the Restriction of the use of Certain Hazardous Substances (RoHS) and Registration, Evaluation and Authorization of Chemicals (REACH) regu-lations of the European union. PartnerTech actively helps customers develop lead-free design solutions. PartnerTech conducts activities subject to the Environ-

mental Code, permit level B for the Karlskoga plant. The permit is for consumption of cutting fluids. Mechanical processing uses cutting fluids for cooling and lubricating. Cutting fluids contain emulsions and straight oils – they are treated as hazardous waste and are shipped to be disposed of by approved contractors. Moreover: • waste water is purified and recycled• Refuse is sorted to be either recycled or incinerated• Biofuels are used for heating• Powder lacquer is used instead of solvent-based lacquer

The company also participates in various efforts to recycle electronic scrap, residual oils from mechanical processing and metallic residues from turning and milling. PartnerTech actively targeted further reductions in the use of electrical power, gas, water and chemicals, as well as recycling more, during 2009. The company will pursue those targets in 2010 as well. Our achievements in 2009 included the following:• Following adoption of a new method, we now measure

carbon dioxide emissions for all shipments that we can influence

• The updated business travel policy stresses the impor-tance of minimizing environmental impact

RESEARCH AND DEVELOPMENTPartnerTech develops products only on behalf of its cus-tomers. The company does not conduct any research.

SIGNIFICANT EVENTS DURING THE YEAR• PartnerTech and energy and environmental technology

group Opcon signed an agreement for new product intro-duction and production of Opcon Powerboxes. The agree-ment, which runs for an initial 3-year period, targets annual production capacity of 300 units within 18-24 months. PartnerTech will be Opcon Energy Systems’ primary con-tract manufacturer.

• PartnerTech and Biotage, an international company in the field of life science research, have long had far-reaching cooperation. The two companies took the next step in 2009. The new agreement involves the relocation of instrument manufacture from Biotage’s plant in Charlottesville, Virginia to PartnerTech’s customer center in Åtvidaberg, Sweden. Running initially through 2011, the agreement is worth approximately SEK 40 million annually. After the relocation, PartnerTech will manufacture nearly all Biotage instruments.

• As demonstrated by collaboration between PartnerTech and Tomra, the global macrotrend in the CleanTech mar-ket area is toward concrete transactions. Tomra Systems

MANAG E M E NT R E PORT 39

ASA in Norway chose PartnerTech to deliver its T53 re-verse vending machine for various types of beverage con-tainers. PartnerTech will supply most of the products to Tomra’s markets in the united States. Annual sales are projected to be SEK 35 million for a number of years starting in November 2009.

• PartnerTech opened a new plant for systems integration and production of thin plate in Myslowice, Poland. The in-vestment will provide PartnerTech with additional produc-tion capacity and competitiveness.

• Electronic operations in Poole were divested to further streamline PartnerTech’s industrial structure

SIGNIFICANT EVENTS AFTER YEAR-ENDPartnerTech announced on February 17, 2010 that Rune Glavare, the current President and CEO, will be leaving his post. Leif Thorwaldsson will be the new President and CEO.

PRINCIPLES OF REMUNERATION FOR THE CEO AND GROUP MANAGEMENTFor fiscal 2009, the Board appointed Board members Thomas Thuresson, Lennart Evrell and Patrik Tigerschiöld to a remuneration committee chaired by Mr. Tigerschiöld. Both Mr. Thuresson and Mr. Evrell are independent of the com-pany and management team. The committee is in charge of drawing up principles of compensation and terms of em-ployment for senior executives and submitting proposals to the annual general meeting. The meeting establishes prin-ciples and guidelines concerning the terms of remuneration for senior executives. The company shall strive to offer total remuneration that is reasonable and competitive. Remuneration shall vary in relation to individual and group performance. Total remu-neration for group management consists of fixed salaries, variable salaries, long-term incentives, insurable benefits, other benefits and severance pay. The 2009 annual general meeting set the following guide-lines and terms of remuneration for the CEO and group management:• The fixed salary shall be competitive and based on re-

sponsibility, ability and performance. The fixed salary shall be revised each year.

• The variable salary shall be based on the company’s return on operating capital, growth and specific targets for each officer’s area of responsibility. The variable salary shall be paid on a yearly basis at no more than the annual fixed salary.

• The Board intends to regularly evaluate the need for a long-term incentive program to be proposed to the annual general meeting

• Retirement pensions, sickness benefits and medical ben-efits shall be designed such that they reflect rules and practices in the employee’s native country. If possible, pension plans shall be defined contribution. Depending on the tax and/or social insurance applicable to the particular individual, other adjusted pension plans or schemes may be approved.

• Other benefits shall be awardable to members of group management, either individually or collectively. Such bene-fits shall not represent a significant percentage of total remuneration. In addition, the benefits shall be in line with the norm for the market.

• The period of notice shall be no longer than 12 months if termination is initiated by the company and 6 months if termination is initiated by a member of group manage-ment. In individual cases, the Board may approve sever-ance pay beyond the period of notice. Severance pay may be issued only after termination by the company or when a member of group management gives notice due to a significant change in his employment situation such that he cannot perform his duties in a satisfactory manner.

• The Board shall be entitled to depart from these guide-lines in individual cases when special grounds arise.

The remuneration committee is proposing that the 2010 annual general meeting approve essentially unchanged principles, with the amendments italicized below:• The variable salary shall be based on the company’s sales

and earning performance, its return on capital employed, and specific targets for each officer’s area of responsibility. The variable salary shall be paid on a yearly basis at no more than the annual fixed salary.

• Retirement pension, sickness benefits and medical benefits shall be designed such that they reflect rules and practices in the employee’s native country. Pension plans shall be defined contribution to the extent possible. Depending on the tax and/or social insurance applicable to the particular individual, other adjusted pension plans or schemes may be approved.

• The period of notice shall be no longer than 12 months if termination is initiated by the company and 6 months if termination is initiated by a member of group manage-ment. In individual cases, the Board may approve severance pay beyond the period of notice. (The following wording has been deleted: Severance pay may be issued only after termination by the company or when a member of group management gives notice due to a significant change in his employment situation such that he cannot perform his duties in a satisfactory manner.)

40 MANAG E M E NT R E PORT

COMPOSITION OF THE BOARDThe Board of Directors is currently made up of seven mem-bers chosen by the annual general meeting and two em-ployee representatives, as well as two deputies for the employee representatives. under the Swedish Code of Corporate Governance, the current composition of the Board means that four of the members chosen by the annual general meeting are independent of the company, group management and big shareholders. The company’s nominating committee has the following members: Chairman Henrik Blomquist, Bure Equity*, Petter Stillström, AB Traction, Sven Zetterqvist, Livförsäkrings-aktiebolaget Skandia, and Patrik Tigerschiöld (Chairman of the Board), Bure Equity*. The task of the committee is to nominate auditors and Board members, as well as propose their remuneration, the years that they are to be chosen.

ADDITIONAL DISCLOSURES UNDER CHAPTER 6:2A OF THE ANNUAL ACCOUNTS ACTS The 2009 annual general meeting authorized the Board to issue up to 1,266,490 new shares, boosting share capital by up to SEK 6,332,450, for a dilution of almost 10% of the company’s share capital and total voting rights. The author-ization remains in effect until the 2010 annual general meeting. The total number of PartnerTech shares is 12,664,982. Bure Equity AB* is the biggest shareholder with a total of 5,443 thousand shares, or 43%, on December 31, 2009. AB Traction, which held 1,719 thousand (13.6%) shares at the end of the year, is the next biggest shareholder. No other shareholder had more than 10% at the end of the year.

DISPUTES According to an arbitration ruling on March 16, 2009, Swe-Dish Satellite System AB was to pay PartnerTech Åtvidaberg AB almost SEK 23 million for unpaid invoices and associated expenses. PartnerTech’s pretax earnings rose by SEK 3.6 million as a result. In view of the ruling, the dispute has now been settled.

FUTURE TRENDSBy means of enhanced processes, upgraded purchasing routines and greater market presence, our goal for 2009 was to strengthen our customer service offering. Moreover, we wanted to broaden our logistics and after-sales services and seek new production opportunities, particularly in Eastern Europe. But we also targeted Asia for this purpose. The company made major progress in achieving those objec-tives during 2009. In 2010, we will continue to improve our performance, increase our customer service and upgrade our industrial structure and organization. we forecast mod-est growth of the European market over the next year. The Eastern countries are likely to account for most of the expansion. Although the state of the global economy makes any forecast highly uncertain, we are well prepared for whatever might come our way. The tools are in place to work with customers so that we can take advantage of the opportunities that an economic upturn will offer all of us. Because PartnerTech’s business and performance largely reflect the growth and performance of existing customers, we do not publish forecasts.

PARENT COMPANY PartnerTech AB, which is the parent company in the PartnerTech group, serves primarily as a holding and management company. The parent company’s 21 (25) em-ployees include both group management and some staff positions. All sales are either billing for services or group fees. PartnerTech AB reported a loss of SEK -37.8 million (-11.2) in 2009.


APPROPR IATION OF PROFITS 41

PARENT COMPANY The parent company’s unrestricted equity is as follows:Profit brought forward and premium reserve 62,035,806Profit/Loss for the year -37,803,677Total 24,232,130

THE BOARD PROPOSES THAT:A per-share dividend of SEK 0.00 be paid to shareholders 0and that the remaining amount be carried forward to the 2010 accounts 24,232,130Total 24,232,130

appropriation of profits

The annual accounts and consolidated accounts have been approved for the Board to issue on March 10, 2010. The consolidated income statement and balance sheet, as well as the parent company’s income statement and balance sheet, will be submitted for adoption by the April 27, 2010 annual general meeting.

42 R ISK MANAG E M E NT

risk management

The contract manufacturing sector is subject to stringent requirements when it comes to flexibility in meeting customer needs for ramping production up and down, freeing up capital and shortening time to market. For development and produc-tion activities in the area of contract manufacturing, special attention must be paid to minimizing potential risk exposure, so that relationships with one customer do not detrimentally affect those of others. Furthermore, by limiting its risks, PartnerTech can more accurately forecast earnings and thereby improve its competitiveness with regard to pricing and level of customer service.

OPERATING RISKS PartnerTech’s customers do business in a number of different segments, which were broken down in 2009 into six market areas: Defense and Maritime, Industry, Information Technology, MedTech & Instrumentation, CleanTech and Point of Sale Applications. The purpose of the breakdown was to deal with the special requirements of each segment in a way that would ensure the best possible service at the least risk. Among PartnerTech’s key success factors and sources of ability to minimize operating risks are: • Thriving customers• The ability to continually work with customers to improve

the competitiveness of both parties• Efficient operations in terms of income, costs and capital

tied up• Suitable expertise in product development, production

processes, etc.

Because PartnerTech does not have any products of its own, it takes no operating risks in that regard. As a rule, PartnerTech charges for all development assignments on a running or fixed basis and avoids the risks associated with payment in the form of royalties or per manufactured unit. with regard to costs, changes in the price of materials are generally transparent to customers. In other words, any change – whether an increase or decrease – is passed on to the customer.

COMPETITION RISKPartnerTech, which operates in competitive markets, seeks competitive advantages by offering a broad range of services and by other strategies. In relation to its size, the company has a broad service offering and solid production expertise that enable us to manage a product throughout the value chain and its entire life cycle. In that respect, PartnerTech is ahead of most other European contract manufacturers. All of PartnerTech’s units are also involved in an ongoing effort to streamline their production and distribution processes. PartnerTech’s organiza-tion of local customer centers represents an additional tool for meeting the competition more effectively and building more dynamic customer relationships. PartnerTech is relatively independent of how things go for individual customers, given that their size varies from year to year. PartnerTech has a broad base of a few hundred customers in various sectors. The ten biggest customers accounted for 52% of total sales in 2009 and the largest one for almost 11%.

RAw MATERIAL RISKChanges in the prices of raw materials are primarily managed by means of price and exchange-rate clauses in customer agreements for the purpose of ensuring greater transparency when it comes to both purchasing and sales. Material purchases are made by each customer center and production unit but are centrally coordinated by the group’s strategic purchasing func-tion. we focus on a small number of main suppliers.

RISK OF COMPLAINTS AND CLAIMS In rare cases, costs for complaints and claims may arise for products or features that are non-serviceable due to damaged raw material components, faulty design or equipment break-down. PartnerTech works extensively to satisfy the stringent quality requirements that it encounters at each link in the pro-duction chain. The warranty period is usually twelve months. Only in very special cases are provisions set aside for warranties.

INSuRANCE RISKPartnerTech has umbrella insurance coverage for its parent company and subsidiaries. Contractual terms are set at the group level. The overall policy is for insurance agreements to cover all major risks (fire, shipping and equipment breakdown), while the particular subsidiary involved takes care of damages involving smaller amounts.

ENVIRONMENTAL RISKPartnerTech, which engages in a proactive effort to improve and have a minimum impact on the environment, holds a group-wide ISO 14001 certificate that covers all of its units. Our environmental management system also subjects our suppliers to environmental requirements. Besides being the natural con-sequence of our quest for long-term sustainable development, PartnerTech’s intensive environmental effort reflects the demands of most customers. PartnerTech’s environmental targets in 2009 focused on reducing the use of electrical power, gas, water and chemicals, as well as recycling more. An effort is under way to measure and report carbon dioxide emissions during transport – in other words, exhaust and other discharges that harm the environment. we also adopted a new company car policy that provides greater incentive to use fuel-efficient vehicles. Similarly, our business travel policy now requires the choice of the most environmentally friendly transportation option possible.

FINANCIAL RISKS PartnerTech is exposed to a number of financial risks, including price, exchange-rate, interest-rate, liquidity and credit risks. The group’s financial policy is that these risks be as small as pos-sible. Operating activities are not to involve speculation in exchange or interest rates. PartnerTech’s financial policy, as well as its instructions for attestation and authorization, estab-lishes various credit limits. Risk management aims to identify, quantify and either minimize or eliminate financial risks.

MARKET RISKSMarket risk is defined as the risk of a change in the value of a

Reporting in accordance with IFRS begins here and continues through page 63.

R ISK MANAG E M E NT 43

financial instrument that varies along with the state of the financial market, market prices, etc.

Price risk Changes in prices for direct materials, components, etc., affect PartnerTech to a limited extent only given that its customer agreements include running adjustments for such fluctuations. An adjustment is usually made once prices have changed more than 2%.

Exchange-rate risksThe individual subsidiaries manage most of the exchange-rate risk. But PartnerTech AB enters into some overall agreements where a need to do so is identified. Generally speaking, PartnerTech’s accounts receivable involve minimal exchange-rate risk, given that its sales are predominantly in the subsidi-ary’s domestic currency, primarily the Swedish krona. The exchange-rate exposure or risk on accounts payable is higher, considering that a significant percentage of materials and components are purchased in foreign currencies, particularly the euro. Exchange-rate clauses in most agreements with customers limit such exposure. PartnerTech generally handles any net exposure by means of hedging or the equivalent in accordance with its risk policy. Translation exposure from for-eign operations is unhedged at present.

Interest-rate riskThe group’s interest-rate risk arises by way of PartnerTech’s net borrowings. As a result, the company continually monitors the size of its borrowings. The company’s liabilities have a rela-tively short fixed-interest term and the interest-rate risk is dealt with by means of contractual ceilings. The periods of the ceil-ing contracts are distributed between December 31, 2010 and December 31, 2011.

Sensitivity analysis of market risksBased on the situation at year-end and the assumption that other factors will remain unchanged, the approximate impact of market risks on the group’s pretax earnings and equity is as shown in the table below.

CREDIT RISKCredit risk is the risk that the other party to a transaction will not meet its contractual payment obligations. Such risks are managed by means of a credit policy. PartnerTech proactively monitors its credit exposure to customers and carries on a regular dialog when necessary with end-customers to promptly deal with and resolve any credit difficulties that may arise. Most of PartnerTech’s accounts receivable and customer-related in-ventory are insured by a customer credit firm. In other words, accounts receivable, inventory and fixed purchase orders are protected against non-payment due to insolvency on the part of the customer. PartnerTech uses hedge accounting pursuant to IAS 39. For the interest-rate derivatives that meet the criteria for hedge accounting, the change in value is reported directly to the hedge reserve in other total comprehensive income. The change in value for interest-rate derivatives that do not meet the criteria are reported in the income statement.

LIQuIDITy RISKBoth the parent company and subsidiaries engage in borrow-ing. The subsidiaries borrow almost exclusively by means of factoring agreements, whereby credit is obtained with accounts receivable as security. The purpose is to better handle the large variation in borrowing requirements. The parent company borrows in accordance with traditional credit practices.

CASH FLOw RISK PartnerTech’s cash flow is governed primarily by profit genera-tion, investments and changes in the magnitude of its working capital, which closely correlates with sales volumes. working capital represents approximately 22% of sales. PartnerTech’s goal is to minimize lead-times in its various processes. The amount of bank borrowing reflects the size of accounts receiv-able. That ensures efficient management of the cash flow risk when sales are volatile. Because PartnerTech’s sales are distributed fairly evenly throughout the year, its business is not subject to significant seasonal fluctuations.

SENSITIVITY ANALYSIS OF MARKET RISKS

Impact on pretax earnings Impact on equity*

Risk factor – effect in SEK million 1% 5% 1% 5%

Price risk

Change in selling price for customer 21.5 107.4 16.1 80.6

Change in sales volume 4.3 21.5 3.2 16.1

Change in price of components, including exchange rates (Clause +/- 2 %) 12.8 19.2 9.6 14.4

wage cost change 5.5 27.3 4.1 20.5

Exchange-rate risk

Exchange-rate fluctuations upon translation of earnings of foreign subsidiaries 0.1 0.4 3.1 15.3

Exchange-rate fluctuations upon translation of foreign operating assets 4.4 21.8 4.4 21.8

Interest-rate risk

Interest-rate fluctuations (considering current interest-rate derivatives) 0.1 0.6 0.1 0.5

* Option of utilizing existing loss carryforwards not considered

44 I NCOM E STATE M E NT AN D TOTAL EAR N I NGS

income statement

statement of comprehensive income

* After full income tax. with regard to dilution, see Note 28.

Group Group Parent company Parent company Amounts in SEK thousand Note 2009 2008 2009 2008

Net sales 1–2 2,148,030 2,528,992 75,845 73,543

Cost of goods and services sold 1–11 -2,055,643 -2,374,422 -33,491 -35,165

Gross profit 92,387 154,570 42,354 38,378

Selling expenses 1–10 -70,061 -99,662 -18,471 -29,357

Administrative expenses 1–10 -31,628 -34,031 -21,613 -23,904

Other operating revenue 8,306 11,595 – -

Other operating expenses -2,502 -3,933 – -

Operating profit/loss -3,498 28,539 2,270 -14,883

Earnings from shares in subsidiaries 12 – – -25,000 6,616

Earnings from receivables that are

non-current assets 13 -69 45 – –

Interest and similar income 14 6,765 9,342 4,833 9,007

Interest and similar expense 15 -26,005 -28,734 -15,958 -19,445

Profit/loss after financial items -22,807 9,192 -33,855 -18,705

Appropriations 23 – – – 589

Tax on profit for the year 16 1,290 -4,001 -3,948 6,867

Profit/loss for the year -21,517 5,191 -37,803 -11,249

Profit/loss attributable to holders

of shares in the parent company -21,517 5,191 – –

Earnings per share, SEK* -1.70 0.41 – –

Earnings per share after dilution (SEK)* -1.70 0.41 – –

Group Group Parent company Parent company Amounts in SEK thousand 2009 2008 2009 2008


Other comprehensive income, net after tax:

Exchange rate differences that arise when

translating foreign operations 1,750 -6,543 – –

Cash flow hedging 3,008 -6,951 – –

Reserve for fair value – – -8,844 7,833

Group contributions – – -2,318 9,573

Total comprehensive income for the year -16,759 -8,303 -48,965 6,157

COM M E NTS ON TH E I NCOM E STATE M E NT 45

The group’s net sales totaled SEK 2,148.0 million (2,529.0) in 2009. That represented a decrease from 2008 of SEK 428.3 million or 16.9% after exclusion of SEK 47.3 million in exchange rate effects. The corresponding decline for comparable units (i.e., excluding divested units) was SEK 321.4 million or 12.7%. Despite individual differences, lower sales in 2009 were primarily due to the general state of the economy. New customers had only a limited impact on sales in 2009. The group’s operating loss for the year was SEK -3.5 million (28.5). Excluding exchange rate differences of SEK

comments on the income statement

KEY RATIOS BY qUARTER

-2.8 million, the change from 2008 was SEK -29.2 million. The lower earnings were due to the fact that cost reduc-tions, though large, could not fully offset market fluctua-tions and the associated sales decrease. Nevertheless, there were a number of favorable developments compared with 2008. Aside from mechanical processing with cutting tools, where sales did not decline until the second half of the year, the organization exhibited significant effects. The units that were least profitable in 2008 operated in the black in 2009. Given the varying natures of the other units, they are at different stages of the adaptation process.

GROUP PERFORMANCE BY qUARTER

Amounts in SEK MILLION q1 q2 q3 q4 q1 q2 q3 q4 2008 2008 2008 2008 2009 2009 2009 2009

Net sales 612.0 694.7 571.1 651.2 594.2 519.5 478.3 556.1

Operating profit/loss -9.1 8.1 10.2 19.4 9.5 -14.9 0.5 1.5

Operating margin, % -1.5 1.2 1.8 3.0 1.6 -2.9 0.1 0.3

Asset turnover rate, multiple 2.7 3.1 2.5 2.9 2.7 2.3 2.2 2.6

Return on operating capital, % -4.0 3.5 4.5 8.6 4.2 -6.7 0.2 0.7

0

200

400

600

800

-50

-30

-10

10

30MSEK %

Operating margin, %

Net sales

Return on operating capital, %

Q12008

Q22008

Q32008

Q42008

Q12009

Q22009

Q32009

Q42009

46 BALANCE SH E ET

balance sheet

Amounts in SEK thousand Group Group Parent company Parent company Assets Note 12-31-09 12-31-08 12-31-09 12-31-08

Non-current assets Intangible fixed assets 17

Goodwill 137,312 138,219 – –

Intellectual rights 23,692 3,810 – –

Property, plant and equipment 18 Machinery, equipment and tools 139,966 169,524 2,427 2,990

Buildings and land 40,473 42,511 – –

Construction in progress 2,191 13,114 – –

Financial assets Shares and participations in group companies 19 – – 530,292 555,292

Receivables – subsidiaries – – 51,212 69,476

Participations in associated companies 19 573 642 563 563

Participations in other companies 170 214 – –

Financial derivatives 20 69 40 – –

Other long-term receivables 16 24,733 14,139 – –

Total non-current assets 369,179 382,214 584,494 628,321

Current assets Inventories, etc. Raw materials, components, and supplies 346,402 405,804 – –

work in progress 48,393 83,098 – –

Finished goods and goods for resale 52,051 54,287 – –

Advance payments from customers -6,232 -15,980 – –

Total inventories, etc. 440,614 527,209 – –

Current receivables Accounts receivable 20 396,338 405,034 20 17

Current receivables – subsidiaries – - 115,153 51,637

Current tax assets 7,513 11,597 1,903 1,554

Other current receivables 19,318 8,914 361 –

Prepaid expenses and accrued income 22 18,942 17,365 2,623 2,004

Total current receivables 442,111 442,910 120,060 55,212

Cash and bank balances 20 35,750 37,580 4,649 19,469

Total current assets 918,475 1,007,699 124,709 74,681

Total assets 1,287,654 1,389,913 709,203 703,002

BALANCE SH E ET 47

Amounts in SEK thousand Group Group Parent company Parent company Equity and liabilities Note 12-31-09 12-31-08 12-31-09 12-31-08

Equity Share capital 63,325 63,325 63,325 63,325

Other capital contributed 364,445 364,160 – –

Statutory reserve – – 282,158 282,158

Total restricted equity 345,483 345,483

Provisions 10,456 5,698 – –

Premium reserve – – 60,576 60,576

Profit brought forward 117,398 112,207 1,460 23,870


Total non-restricted equity 24,232 73,197 Total equity attributable to holders of shares in the parent company 534,107 550,581 369,715 418,680

Untaxed reserves 23 – – – – Long-term liabilities Provisions for pensions 2,471 1,470 – –

Deferred tax liabilities 16 4,613 6,212 – –

Financial derivatives 20 4,790 8,469 – –

Liabilities to credit institutions 20, 21 55,717 86,141 1,101 8,325

Liabilities to group companies – – 100 100

Total long-term liabilities 67,591 102,292 1,201 8,425

Current liabilities Liabilities to credit institutions 20, 21 273,867 280,164 4,564 –

Accounts payable 20 274,089 272,894 2,662 4 497

Liabilities to group companies – – 321,891 258,172

Current tax liabilities 16 4,314 10,271 – –

Financial derivatives 20 3,074 4,908 – –

Other current liabilities 29,041 38,613 1,017 1,050

Accrued expenses and deferred income 22 101,571 130,190 8,153 12,178

Total current liabilities 685,956 737,040 338,287 275,897 Total equity and liabilities 1,287,654 1,389,913 709,203 703,002

Pledged assets Chattel mortgages for company liabilities

to credit institutions 20 291,249 292,794 – –

Pledged accounts receivable 20 301,239 357,443 – –

Reservation of ownership, machinery 14,700 14,151 – –

Total pledged assets 607,188 664,388 – –

Contingent liabilities 24

Contingent liabilities, FPG 28 28 – –

Other contingent liabilities 276 754 9,697 8,442

Total contingent liabilities 304 782 9,697 8,442

48 CASH FLOw STATE M E NT

cash flow statement

Amounts in SEK thousand Group Group Parent company Parent company Description 2009 2008 2009 2008

Operating activities

Operating profit/loss -3,498 28,539 2,270 -14,883

Items not affecting cash flow that are part of operating profit/loss Impairment losses, depreciation and amortization, non-current assets 44,769 52,239 677 1,069 Capital gain/loss, non-current assets 1,405 -3,642 345 – Provisions 974 110 – – Interest and other financial income 6,765 9,342 4,833 9,007 Interest and other financial expenses -26,005 -28,734 -15,958 -13,694 Tax paid -14,817 -26,940 -4,297 -542 Funds provided by earnings 9,593 30,914 -12,130 -19,043

Funds tied up in operations Change in inventories 77,337 6,674 – – Change in accounts receivable -1,425 30,965 -3 34 Change in other operating receivables -12,636 20,252 -980 34,410 Change in accounts payable 12,300 18,720 -1,835 1,030 Change in other operating credits -34,246 -20,239 -4,058 92,008 Change in funds tied up in operations 41,330 56,372 -6,876 127,482

Cash flow, operating activities 50,923 87,286 -19,006 108,439

Investing activities Investments in acquired units – – – – Investments in intangible fixed assets -6,546 -290 – – Investments in property, plant and equipment -19,596 -71,035 -459 -95 Investments in financial assets -2,331 – – – Divestment of operations and non-current assets 4,168 40,176 – – Funds used for investment -24,305 -31,149 -459 -95

Cash flow after investments 26,618 56,137 -19,465 108,344

Financing activities Change in intra-group loans – – 18,467 -2,392 Change in external loans -27,738 -52,058 -11,504 -106,402 Group contributions – – -2,318 13,296 Dividend – – – 6,616 Change in financing -27,738 -52,058 4,645 -88,882

Translation differences in liquid assets -710 -3,955 – – Change in liquid assets -1,830 124 -14,820 19,462

Liquid assets, January 1 37,580 37,456 19,469 7 Balance, December 31 35,750 37,580 4,649 19,469

EQu ITy 49

equity

Other Provisions, Profit Profit/loss Group Share capital translation Hedge brought for Amounts in SEK thousand capital contributed differences reserves forward the year Total equity*

Opening equity 2008 63,325 363,934 19,192 – 112,207 558,658

Total comprehensive income -6,543 -6,951 5,191 -8,303

Employee stock option programs 226 226

Transactions with shareholders 226 226

Closing equity 2008 63,325 364,160 12,649 -6,951 112,207 5,191 550,581

Opening equity 2009 63,325 364,160 12,649 -6,951 117,398 550,581

Total comprehensive income 1,750 3,008 -21,517 -16,759

Employee stock option programs 285 285

Transactions with shareholders 285 285

Closing equity 2009 63,325 364,445 14,399 -3,943 117,398 -21,517 534,107

Fund Profit Profit/loss Parent company Share Statutory Premium for fair brought for Amounts in SEK thousand capital reserve reserve value** forward the year Total equity*

Opening equity 2008 63,325 282,158 60,576 – 6,465 – 412,524

Total comprehensive income 7,833 9,573 -11,249 6,156

Closing equity 2008 63,325 282,158 60,576 7,833 16,038 -11,249 418,680

Opening equity 2009 63,325 282,158 60,576 7,833 4,788 – 418,680

Total comprehensive income -8,844 -2,318 -37,803 -48,965

Closing equity 2009 63,325 282,158 60,576 -1,011 2,470 -37,803 369,715

Number of shares at SEK 5 each 2008 2009

At beginning of the year 12,664,983 12,664,983

At end of the year 12,664,983 12,664,983

*The majority shareholder has 100% **Caused by exchange-rate fluctuations on loans included in the parent company’s net investment. Reported after tax effect.

50 COM M E NTS ON TH E BALANCE SH E ET AN D CASH FLOw STATE M E NT

Excluding exchange rate effects of SEK 3.2 million, working capital declined by SEK 41.3 million in 2009 to SEK 473.7 million (518.2) on December 31. The fourth quarter de-crease was SEK 35.6 million. The trend primarily reflected lower sales during the year. Excluding working capital at the time of each divestment, working capital decreased by SEK 8.1 million as the result of divestments. At the end of December, operating capital totaled SEK 810.3 million (877.6). Operating capital turned over at an annual rate of 2.5 (2.8) in 2009. Cash flow after investments for 2009 was SEK 26.6 million (56.1). Investments totaled SEK 24.3 million (31.1). Net borrowing, i.e., interest-bearing liabilities less liquid assets, was SEK 293.8 million (328.7) at the end of December.

comments on the balance sheetand cash flow statement

The group is largely financed by invoice factoring and leasing of non-current assets. It also has bank overdraft facilities, of which SEK 106.9 million (128.5) had been unutilized at the end of the year. Equity came to SEK 534.1 million (550.6) on December 31. Equity was affected during the year by total compre-hensive income in the amount of SEK -16.8 million (-8.3) and by changes in the value of the group’s option program in the amount of SEK 0.3 million (0.2). The total change in equity was SEK -16.5 million (-8.1). The equity/assets ratio rose to 41.5% (39.6) on December 31.

Amounts in SEK MILLION q1 q2 q3 q4 q1 q2 q3 q4 2008 2008 2008 2008 2009 2009 2009 2009

working capital 553.4 577.8 544.6 518.2 561.2 509.7 509.3 473.7

Operating capital 894.1 920.7 908.6 877.6 910.0 859.9 843.1 810.3

Net borrowing 365.7 379.4 349.8 328.7 359.5 319.7 321.8 293.8

Equity 537.4 553.6 568.5 550.6 550.8 544.1 527.9 534.1

FINANCIAL POSITION AND LIqUIDITY

ACCOu NTI NG POLIC I ES 51

GENERAL ACCOuNTING POLICIES The consolidated accounts have been prepared in compliance with the Swedish Annual Accounts Act, International Financial Reporting Standards (IFRS), and Recommendation RFR 1.2, Supplementary Rules for Consolidated Financial Statements, of the Swedish Financial Reporting Board. For the parent company, the Annual Accounts Act and Recommendation RFR 2.2 Accounting for Legal Entities of the Swedish Financial Reporting Board have been followed. The consolidated and annual accounts, which are specified in thousands of Swedish kronor, concern January 1 – December 31 for income statement items and December 31 for balance sheet items. IFRS in this report refers to both International Accounting Standards (IAS) and IFRS, as well as to interpretations of them released by the Standards Interpretation Committee (SIC) and the International Finan-cial Reporting Standards Committee (IFRIC) as adopted by the EC.

AMENDED ACCOuNTING POLICIESIFRS 8 Segments requires new segment reporting as of 2009. Statements that have been approved by the IFRIC but not taken effect do not affect PartnerTech. IAS 1, Presentation of Financial State-ments, has been amended this year. Pursuant to IAS 1, PartnerTech has broken down the group’s total earnings to the income statement and a report of the remainder.

GROUP ACCOUNTING POLICIES CONSOLIDATED ACCOuNTS The consolidated accounts have been prepared in conformity with acquisition accounting. The consolidated accounts cover the compa-nies in which PartnerTech AB holds or has at its disposal more than 50% of the votes or has holdings and the right to exercise a control-ling influence over more than 50% of the votes. The cost of shares in group companies is allocated according to the fair values of identifi-able assets and liabilities at the time of acquisition. The acquisition analysis also sets aside a provision for deferred tax on acquired un-taxed reserves. If the cost of participations exceeds the fair value of the company’s net assets in accordance with the acquisition analysis, the difference is consolidated goodwill. Goodwill is not amortized but subject to an impairment test annually or whenever needed – refer to Impairment Losses below. Only earnings arising after the acquisition date are reported in group equity.

INTRA-GROuP SALES Intra-group sales are priced in accordance with commercial principles. Internal earnings arising from intra-group sales have been eliminated in their entirety.

uNTAXED RESERVES when preparing the consolidated balance sheet, untaxed reserves have been divided into: (i) a deferred tax liability, which is reported as a provision; (ii) an equity portion, which is reported as profit brought forward. The deferred tax liability has been calculated using the current tax rate.

accounting policies

VALuATION BASESThe valuation basis is cost for most financial assets and liabilities, but fair value for certain financial instruments.

TRANSLATION OF FOREIGN SuBSIDIARIES The functional currency for each foreign unit is examined on the basis of its primary economic environment. No foreign unit presently has the same functional currency as the parent company. For that reason, assets and liabilities are translated at the exchange rate on the re-porting date, while income and expenses are translated at the aver-age exchange rate for the year. Any exchange-rate difference arising from the translation of the net assets of foreign units at a rate that is different at year-end than at the beginning of the year is reported as a provision in equity.

ASSOCIATED COMPANIES Associated companies are non-subsidiaries in which the parent com-pany directly or indirectly holds at least 20% of the votes for all participations. Participations in associated companies are reported in accordance with the equity method. But the equity method is not employed if the accumulated share in profits is only negligible.

REPORTING OF OPERATING SEGMENTS PartnerTech complies with IFRS 8 Operating Segments. IFRS 8 requires that the operating segments that the group’s senior execu-tives manage allocate resources for and monitor be reported sepa-rately. Thus, PartnerTech reports according to geographic region as of 2009. The breakdown reflects PartnerTech’s division of responsi-bility and the way in which its operations are regularly monitored. The company is structured according to the customer centers/production units that make up the various regions.

VALuATION OF INVENTORy Inventory is valued at either cost or net realizable value, whichever is less. The first-in, first-out method is used to determine cost. Impairment losses for obsolescence are recognized for outdated or redundant products on an individual basis per item, following a review to estab-lish future needs.

INTANGIBLE FIXED ASSETS Goodwill Goodwill, which is reported in connection with acquisitions of sub-sidiaries as described above, is initially reported as an asset at cost and subsequently at cost less any accumulated impairment losses. Goodwill is not amortized but subject to an impairment test annually or whenever needed by calculating the recoverable amount for the corresponding smallest cash generating unit. If the recoverable amount for the unit is less than the carrying amount, an impairment loss is recognized – refer to Impairment Losses on the next page.

Other intangible assets Other intangible assets consist of acquired customer relationships, rental rights, software and licenses. Intangible assets are amortized on a straight-line basis over their useful life, generating an amortization period of 3-10 years.

52 ACCOu NTI NG POLIC I ES

PROPERTy, PLANT AND EQuIPMENT Property, plant and equipment is reported at cost less accumulated depreciation and impairment losses. Depreciation is based on the asset’s estimated useful life. The following depreciation periods are normally used:• Product-related tools and equipment – 3 years • Vehicles and IT equipment – 3-5 years • Numerically controlled and shift-operated machines – 8 years • Other machinery and equipment – 10 years • Buildings – 40 years

Lease agreements The PartnerTech group complies with IAS 17, Leases, when classifying lease agreements as financial or operational leases. Significant finan-cial lease agreements are reported in the consolidated balance sheet under liabilities and non-current assets. The leased asset is depreci-ated, while the debt is subject to interest and paid off. Thus, the cost of depreciation and interest affects the income statement. The allo-cation of leasing fees in the income statement is based on utilization, which can differ from that which was paid in leasing fees during the year. Other leasing commitments – i.e., operational leases – for plant and office premises, etc., are not posted to the balance sheet and the fees are reported directly as operating expenses.

IMPAIRMENT LOSSES whenever there is an indication that an asset has decreased in value, as well as on an annual basis with respect to goodwill and other assets with an indeterminate useful life, the asset’s recoverable amount is determined. The recoverable amount is defined as the asset’s net realizable value or value in use, whichever is higher. when determining the value in use, the present value of the future cash flows that the asset is expected to give rise to during its useful life is estimated. An asset is attributed to the smallest cash generating unit at which inde-pendent cash flows can be identified. An impairment loss is recog-nized when the group’s carrying amount exceeds the recoverable amount, and the impairment loss is charged to earnings for the year.

FINANCIAL ASSETS AND LIABILITIESFinancial instruments include any type of agreement that gives rise to financial assets, financial liabilities or an equity instrument in another company. The group’s financial instruments consist primarily of accounts receivable, liquid assets, accounts payable, debts to credit institutions and financial derivatives in the form of interest-rate ceilings, interest-rate floors and interest-rate swap agreements.

ClassificationFinancial instruments are broken down into the following five categories:a) Financial assets and liabilities reported at fair value in the income

statement. There are two subcategories.I. Financial assets and liabilities held for trading. The group’s interest-

rate derivative agreements are in this category.II. Financial assets and liabilities assigned to this category from the

very beginning. The group has no assets in this category.b) Investments intended to be held to maturity Financial assets are

included that have established or establishable payments and established maturities. PartnerTech has no assets in this category.

c) Loan receivables and accounts receivable. Assets with established or establishable payments. Liquid assets and accounts receivable are included.

d) Financial assets available for sale. This category includes financial assets not assigned to any other category, such as shares in listed and unlisted companies. PartnerTech has no assets in this category.

e) Other financial liabilities. This category contains financial liabilities not held for trading. PartnerTech’s accounts payable and borrow-ings are in this category.

ReportingFinancial assets and liabilities are initially reported at cost, which then corresponds to their fair value. a) Financial assets and liabilities reported at fair value in the income

statement on an ongoing basis. The group applies hedge account-ing in accordance with IAS 39 to limit exposure to interest-rate fluctuations on interest-bearing liabilities. The impact of reporting derivatives at fair value that meet the criteria for hedge accounting is posted directly to the hedge reserve in equity. A derivative meets the criteria for hedge accounting if it is 80-125% effective in pro-tecting against interest-rate fluctuations. The market value of the portion outside that range is reported directly in the income state-ment. That also applies to derivatives that do not meet the criteria for hedge accounting for other reasons.

b) Investments held to maturity are reported at accrued cost. The result is reported as net financial income/expense.

c) Accounts receivable are reported net after deduction for doubtful accounts receivable. Deductions for doubtful accounts receivable are based on individual assessments of accounts receivable given the customer’s ability to pay, expected future risk and any security obtained. This category includes liquid balances and short-term instruments at banks and similar institutions with a maturity of three months or less.

d) Financial assets available for sale are reported at fair value on an ongoing basis.

e) Other financial liabilities are initially reported at fair value, which then includes the amount received less any transaction costs. In subsequent periods, they are reported at accrued cost. Accounts payable are reported at the amount the company plans to pay the supplier in order to liquidate the debt.

HEDGE ACCOuNTINGPartnerTech uses hedge accounting pursuant to IAS 39. For the interest-rate derivatives that meet the criteria for hedge accounting, the change in value is reported directly to the hedge reserve in other total comprehensive income. The change in value for interest-rate derivatives that do not meet the criteria are reported in the income statement.

REVENuE RECOGNITION PartnerTech’s revenue stems from the sale of products and the per-formance of service assignments. Revenue from product sales is reported once the main risks and rights associated with ownership have been transferred to the purchaser. That ordinarily occurs when the products have been delivered and the prices have been set. Revenue from services is recognized once it can be calculated in a

ACCOu NTI NG POLIC I ES 53

reliable manner based on the degree of completion on the reporting date. In the case of work in progress, revenue is recognized only for development projects on behalf of the customer that can be clearly identified and reliably measured. Service assignments include specific labor carried out in connection with prototype manufacture and pilot series, the development of testing equipment and various efforts to render products more cost-effective (Value Analysis/Value Engineering).

GOVERNMENT GRANTS Government grants are obtained primarily as wage contributions, which have been taken up as income. Assistance is also received when non-current assets are acquired. The grant reduces the cost of the non-current asset.

NET FINANCIAL INCOME/EXPENSE Net financial income/expense consists of interest income and expense. For the assets and liabilities that comprise the net financial debt, net financial items also include exchange-rate gains and losses. Transaction costs for the assets and liabilities that comprise net financial indebtedness are also included. Gains from exchange rates and interest-rate derivatives are also reported in this category.

TAXCurrent and deferred income tax for Swedish and foreign units of the group are reported in the tax item of the income statement. Group companies are liable to pay taxes in accordance with current legisla-tion in the country concerned. Thus, the tax of a foreign unit is based on the tax legislation and rates of the country in which it is located. The balance sheet includes deferred tax assets and liabilities for all temporary differences between carrying amounts and tax values for assets and liabilities, as well as for other tax deductions or deficits. Deferred tax assets and liabilities are based on the expected tax rate at the time that the temporary differences are to be reversed. The effects of changes in current tax rates are taken up as income in the period that the legislation is passed. Only the portion of the value of deferred tax assets deemed to be utilizable is reported in the balance sheet.

PENSION COMMITMENTSProvisions and premium payments for pension commitments are made in accordance with various pension plans. All pension commitments that have not been taken over by insurance companies or otherwise secured by funding with an external party are reported as liabilities in the balance sheet. The great majority of PartnerTech’s commitments to its employees are various defined contribution pension plans. Pension expenses for the defined contribution plans are carried as an expense in the period during which the employees performed the associated services. The multi-employer supplementary pension plan for employees in industry and commerce, which is secured by Alecta, is a defined benefit plan according to Statement uFR 3 of the Swedish Financial Reporting Board. Because Alecta is unable to furnish PartnerTech with information that would enable the plan to be re-ported as a defined benefit plan in accordance with IAS 19, Employee Benefits, it is reported as a defined contribution plan. There are also a handful of defined benefit pension plans of lesser value.

CONTINGENT LIABILITIESContingent liabilities are reported if there is a possible commitment that is confirmed only by one or more uncertain future events and it is unlikely that an outflow of a resource will be required or that the size of the commitment cannot be calculated with sufficient accuracy.

CASH FLOw STATEMENT The cash flow statement is prepared in accordance with the indirect method, based on operating earnings for the year. The definition of liquid assets in the statement includes cash and bank balances, as well as short-term instruments that have less than three months to maturity on the acquisition date.

INCENTIVE PROGRAM AND SHARE-RELATED PAyMENTSEmployee stock options and warrants have been issued as part of the group’s incentive program. Fair value at the time of issue is calculated in accordance with the Black and Scholes option pricing model. The total cost of the program is allocated during the vesting period. The cost is allocated among the cost of goods sold, selling expenses and administrative expenses in the income statement.

PARENT COMPANY’S ACCOUNTING POLICIES The parent company’s accounting policies do not comply with IFRS in the following cases.

GROuP AND SHAREHOLDERS’ CONTRIBuTIONS Shareholders’ contributions are reported as an increase in the shares in group companies item, after which an impairment test is performed on the value of the shares. Group contributions are reported on the basis of their financial significance, i.e., to minimize the group’s total tax. Because the group contribution does not represent compensa-tion for performance, it is charged directly against profit brought for-ward, less a deduction for its tax effect.

TAX untaxed reserves, including deferred tax liabilities, reported by the parent company.

SHARES AND PARTICIPATIONS IN GROuP COMPANIES Shares and participations in group companies are reported initially at cost. If the recoverable amount as calculated in accordance with Impairment Losses above subsequently turns out to be lower, an impairment loss is recognized.

LOANS TO GROuP COMPANIESChanges in value occasioned by exchange-rate fluctuations on loans included in the parent company’s net investment are reported directly to equity in a reserve for fair value after deducting its tax impact.

TARGETS FOR EqUITY, ETC.PartnerTech has set a long-term target of an equity/assets ratio above 30%. According to the company’s dividend policy, approximately 30% of annual net profit is distributed to shareholders. Managed equity corresponds in its entirety to that which is presented in the group’s table of equity. There are no externally imposed capital adequacy requirements.

54 NOTES

notesAmounts in SEK thousand unless otherwise stated

NOTE 2 NET SALESNet sales by type of income

GroupType of income 2009 2008

Sale of goods 2,065,885 2,459,210Service assignments* 82,145 69,782

Total 2,148,030 2,528,992

* Include prototype manufacture with pilot series, development of telecom equipment, product development and production reengineering, Value Analysis/Value Engineering (VA/VE).

NOTE 3 AVERAGE NUMBER OF EMPLOYEESAverage number of full-time employees

women Total Country 2009 2008 2009 2008

Parent companySweden 7 7 22 23

Total 7 7 22 23

SubsidiaryChina 4 5 6 8Poland 62 60 342 386Finland 29 33 111 145Norway 36 41 182 211uK 79 99 146 242Sweden 167 189 552 635united States 13 12 21 20

Total 390 439 1 360 1 647Total for the group 397 446 1 382 1 670

Disclosures about operating segments

Rest of the world Nordic excl excl Nordic & 2009 Sweden Sweden Sweden Other Elimination Group

External sales 1,250,939 659,978 237,113 – – 2,148,030Group sales 32,973 2,708 398,826 – -434,507 0

Total sales 1,283,912 662,686 635,939 – -434,507 2,148,030

Operating profit/loss -11,704 11,256 1,233 -4,283 0 -3,498

Operating assets 593,155 322,218 349,272 19,959 -58,246 1,226,358Interest-bearing and otherfinancial assets (including deferred tax) – – – – 61,296 61,296

Total assets 593,155 322,218 349,272 19,959 3,050 1,287,654

Equity 534,107 534,107Operating liabilities 225,832 118,708 116,598 13,207 -58,246 416,099Interest-bearing liabilities 337,448 337,448

Total liabilities

and equity 225,832 118,708 116,598 13,207 813,309 1,287,654

Operating capital 367,323 203,510 232,674 6,752 0 810,259

Rest of the world Nordic excl excl Nordic & 2008 Sweden Sweden Sweden Other Elimination Group

External sales 1,448,423 647,312 433,257 – – 2,528,992

Group sales 48,472 2,894 424,728 – -476,094 0

Total sales 1,496,895 650,206 857,985 – -476,094 2,528,992

Operating profit/loss -8,832 25,293 27,014 -14,936 0 28,539

Operating assets 675,331 320,742 363,896 21,398 -44,030 1,337,337

Interest-bearing and otherfinancial assets (including deferred tax) – – – – 52,576 52,576

Total assets 675,331 320,742 363,896 21,398 8,546 1,389,913

Equity 550,581 550,581

Operating liabilities 246,768 121,876 115,972 19,104 -44,030 459,690

Interest-bearing liabilities 379,642 379,642

Total liabilities

and equity 246,768 121,876 115,972 19,104 886,193 1,389,913

Operating capital 428,563 198,866 247,924 2,294 0 877,647

NOTE 1 SEGMENT REPORTINGStarting in 2009, PartnerTech reports its operations broken down into geographic regions pursuant to IFRS 8. The break-down reflects PartnerTech’s division of responsibility and the way in which its operations are regularly monitored. The com-pany is structured according to the customer centers/produc-tion units that make up the various regions.

The following customer centers/production units are in each operating segment:Sweden: Åtvidaberg, Karlskoga and VellingeNordic countries excluding Sweden: Finland and NorgeRest of the world excluding the Nordic countries and Sweden: uK, Poland, united States and ChinaOther: Parent company and four inactive companies in Sweden

Disclosures about big customersPartnerTech has two big customers, each of which accounts for more than 10% of total group sales. Customer A had sales of SEK 228.4 million (265.5), while customer B had sales of SEK 230.7 million (141.8). Both customer A and customer B are in the Nordic excluding Sweden region. PartnerTech is relatively independent of how things go for individual customers, given that their size varies from year to year. PartnerTech has a broad base of several hundred customers in various sectors. The ten largest customers accounted for approximately 52% of total sales in 2009 and the largest one for almost 11%.

Disclosures about geographic areas

2009 Sweden Other countries Group

External sales 1,250,939 897,091 2,148,030

Non-current assets 163,298 180,336 343,634

2008 Sweden Other countries Group

External sales 1,448,423 1,080,569 2,528,992

Non-current assets 176,678 190,500 367,178

NOTES 55

NOTE 4 SALARIES AND OTHER REMUNERATION

Salaries and remuneration

2009 2008 CEO and Other CEO and Other Country Board employees Total Board employees Total

Parent companySweden 4,366 17,720 22,086 3,407 18,213 21,620

Total 4,366 17,720 22,086 3,407 18,213 21,620

Subsidiary

Sweden – 187,134 187,134 – 212,385 212,385

Poland – 43,330 43,330 – 51,201 51,201

Finland – 36,278 36,278 – 46,017 46,017

Norway – 83,594 83,594 – 85,651 85,651

uK – 36,360 36,360 – 70,169 70,169

united States – 9,985 9,985 – 7,786 7,786China – 2,105 2,105 – 2,607 2,607

Total for

subsidiaries – 398,786 398,786 – 475,816 475,816

Total for the group 4,366 416,506 420,872 3,407 494,029 497,436

Payroll overhead

2009 2008 CEO and Other CEO and Other Country Board employees Total Board employees Total

Parent companySweden 1,577 9,904 11,481 2,318 14,180 16,498of which, pension expense 600 4,036 4,636 614 4,494 5,108

Total 1,577 9,904 11,481 2,318 14,180 16,498

SubsidiarySweden – 74,639 74,639 – 84,849 84,849of which, pension expense – 14,630 14,630 – 15,458 15,458Poland – 5,629 5,629 – 8,093 8,093of which, pension expense – 0 0 – 0 0Finland – 8,441 8,441 – 10,443 10,443of which, pension expense – 6,610 6,610 – 7,665 7,665Norway – 17,198 17,198 – 14,496 14,496of which, pension expense – 2,064 2,064 – 1,029 1,029uK – 3,161 3,161 – 7,112 7,112of which, pension expense – 910 910 – 1,838 1,838united States – 0 0 – 0 0of which, pension expense – 0 0 – 0 0China – 29 29 – 46 46of which, pension expense – 29 29 – 46 46

Total for subsidiaries – 109,097 109,097 – 125,039 125,039of which, pension expense* – 24,243 24,243 – 26,036 26,036Total for the group 1,577 119,001 120,578 2,318 139,219 141,537of which, pension expense 600 28,279 28,879 614 30,530 31,144

* Pension expensesOf the Group’s total pension expense, SEK 4,313 thousand (4,175) is for supplementary pension for employees in industry and commerce (ITP) premiums paid to Alecta. As of December 31, 2009, Alecta’s consolidation rate for business-related funds was 141%, as opposed to 112% as of December 31, 2008.

NOTE 5 REMUNERATION FOR SENIOR ExECUTIVESBoard feesIn 2009, fees totaling SEK 1,067 thousand (907) were paid to the Board in accordance with the decision of the annual general meeting. Of the total, a fee of SEK 320 thousand (320) was paid to the Chairman. The remaining SEK 747 thousand (587) was divided equally among the other members. The annual fee to other members, including those who joined and left the Board during the year, was SEK 160 thousand (160).

CEO’s remuneration and benefitsThe CEO’s employment contract specifies a 6-month mutual period of notice. Any performance-based compensation is set each year in a discussion between the CEO and Board. The CEO received no variable compensation for 2009. Variable compensation may not exceed 70% of an annual salary.

Salaries and other benefits for group management, not including the CEOFor fiscal 2009, the other 5 (6) top executives in group manage-ment received salaries and other benefits totaling SEK 6,653 thousand (6,583), of which variable remuneration totaled SEK 0 thousand (186). The number of members of group manage-ment increased by one in mid-December. This note does not include costs for that person in 2009. Of the company’s pension expenses, SEK 1,784 thousand (2,112) was for group management. If the employment of a member of group management is terminated at his own request, a 6-month period of notice is required. If a member of group management is to be terminat-ed at the company’s request, the period of notice required is 6-12 months. A pension is payable in accordance with the pre-vailing supplementary pension for employees in industry and commerce (ITP) plan at the pensionable age of 65.

Wage policies and decision-makingAll top executives receive both fixed and variable remuneration as determined by an annual agreement. Variable remuneration is based primarily on the company’s return on operating capital, as well as specific targets within each executive’s sphere of responsibility. All programs for variable salary have specified maximum levels. The annual general meeting sets policies and levels for the CEO’s and group management’s terms of employment.

Remuneration for senior executives in 2009, SEK thousand

Basic salary/ Variable Other Pension Executive Board fee remuneration benefits** expense Total

Chairman of the Board 320 – – – 320

Other members of the Board*** 747 – – – 747

CEO 3,299 – 12 600 3,911

Group management,

not including CEO* 6,447 – 206 1,784 8,437

Total 10,813 – 218 2,384 13,415

* 5 people (6) ** Primarily vehicle benefits *** All members, including those who joined and left the Board during the year,

received the same annual fee.

Breakdown by gender – Board and group managementAll 6 (5) members of the Board are men. Both employee rep-resentatives on the Board are men. All 7 (6) members (including the CEO) of group management are men.

56 NOTES

NOTE 6 SICK LEAVE

Average employees, %

2009 2008 Sick leave Total Over Total Over Group sick leave 60 days sick leave 60 days

Swedish units 29 or younger 2.8% 0.0% 3.0% 4.7%30-49 2.2% 22.0% 2.4% 11.7%50 or older 2.8% 19.9% 6.1% 47.0%

Men 2.1% 12.1% 2.9% 24.9%women 4.0% 26.3% 5.2% 20.8%

Total 2.7% 16.4% 3.7% 31.6%

Sick leave – parent companyFor the parent company, no sick leave is reported, since very little sick leave was taken and no single age group has more than 10 employees.

NOTE 7 REMUNERATION FOR AUDITORS

Audit fees

Group Parent companyType of fee 2009 2008 2009 2008

Audit fees, Deloitte 2,540 2,974 585 555Consultation, Deloitte 138 316 57 216Total fees, Deloitte 2,678 3,290 642 771Audit fees, others 93 126 0 –Consultation fees, others 82 45 77 –

Total fees, others 175 171 77 –

NOTE 8 PURCHASES FROM/SALES TO PARENT COMPANY

The parent company conducts no operating activities and has not acquired any goods or services from group companies for its own use. Likewise, no goods have been sold to other group compa-nies All sales reported in the income statement are either billing for services or group fees.

NOTE 9 AMORTIzATION AND IMPAIRMENT LOSSES – INTANGIBLE FIxED ASSETS

Group Parent companyFunction of operating expense 2009 2008 2009 2008

Cost of goods and services sold – Impairment losses – 821 – –– Amortization 4,428 1,601 – –Selling expenses – – – –Administrative expenses – – – –

Total 4,428 2,422 – –

NOTE 10 DEPRECATION AND IMPAIRMENT LOSSES, NON-CURRENT ASSETS

Group Parent companyFunction of operating expense 2009 2008 2009 2008

Cost of goods and services sold 35,904 47,662 538 289Selling expenses 224 626 104 224Administrative expenses 4,209 1,529 35 556

Total 40,337 49,817 677 1,069

NOTE 11 GOVERNMENT SUBSIDIES AND GRANTSA total of SEK 1,290 thousand (620) for government subsidies and grants was reported for the group. The amount is primarily for wage contributions taken up as income and included in cost of goods and services sold.

NOTE 12 EARNINGS FROM SHARES IN GROUP COMPANIESAn impairment loss of SEK 25 million was recognized for shares in the PartnerTech Ltd subsidiary. No dividend was received from subsidiaries during the year. A dividend of SEK 6,616 thousand was received from PartnerTech Sp.z o.o the year before.

NOTE 13 PROFIT FROM FINANCIAL LOSSES

Group Parent company 2009 2008 2009 2008

Profit from participations in associated companies -69 45 – –

Total -69 45 – –

NOTE 14 INTEREST AND SIMILAR INCOME


Interest income, group companies – – 3,282 7,526Other interest income 3,953 2,949 42 1,481Exchange-rate differences 2,812 6,393 1,509 –

Total 6,765 9,342 4,833 9,007

NOTE 15 INTEREST AND SIMILAR ExPENSE


Interest expense, group companies – – -1,900 -9,507Other interest expense -22,225 -14,489 -12,365 -4,187Exchange-rate differences -3,780 -14,245 -1,693 -5,751

Total -26,005 -28,734 -15,958 -19,445

NOTES 57

NOTE 16 TAxESThe group’s and parent company’s tax expense consists of the following components.


Current tax expense: Tax, Sweden -1,857 1,056 -3,948 6,768Tax, other countries -4,399 -13,189 – –

Total current tax expense -6,256 -12,133 -3,948 6,768

Deferred tax expense for temporary differences: Change in untaxed reserves 2,180 3,203 – –Financial leasing of non-current assets -981 221 – –Temporary differences in non-current assets 1,495 176 – –Loss carryforwards, deferred tax assets 7,362 3,605 – –Hedge accounting -1,458 912 – 99Other -1,051 15 – –

Total deferred tax expense 7,547 8,132 – 99

Reported tax expense 1,291 -4,001 -3,948 6,867

Differences between current tax expense in accordance with the nominal Swedish tax rate of 26.3% and reported tax expense arise in the following manner.


Reported pretax profit -22,807 9,192 -33,855 -18,116Tax in accordance with current tax rate 5,998 -2,574 8,904 5,072Tax impact of expenses that are not tax-deductible -1,125 -917 -6,632 -156Tax impact of income that is not taxable 753 832 - 1,951Assessment of deferred tax assets -8,649 -641 -6,220 –Impact of new tax rate – 291 – –Adjustment of taxes from previous years 96 -1,872 – –Recalculation effects -194 -82 – –Impact of differing tax rates for subsidiaries operating abroad 4,412 962 – –

Reported tax expense 1,291 -4,001 -3,948 6,867

Temporary differences arise when the carrying amount of assets or liabilities differs from their taxable value. Temporary differ-ences in the group have resulted in deferred tax assets and liabilities with respect to the following items.

Group Parent companyDeferred tax liabilities 12-31-09 12-31-08 12-31-09 12-31-08

Tax accelerated depreciation 2,542 4,721 – –Financial leasing of non-current assets 2,501 1,435 – –Temporary differences, non-current assets 1,136 2,631 – –Other 814 112 – –Reversals -2,377 -2,687 – –

Total deferred tax liability 4,616 6,212 – – Deferred tax assets Financial leasing of non-current assets 120 35 – –Deficit 18,366 8,445 – –Hedge accounting 2,050 3,508 – –Other 4,154 4,838 – –Reversals -2,377 -2,687 – –

Total deferred tax assets 22,313 14,139 – –

The following tax items are attributable to items reported directly against shareholders’ equity. Group Parent company 2009 2008 2009 2008

Hedge accounting -1,074 2,596 – –Group contribution – – 827 –Group contribution received – – – -3,723

Total -1,074 2,596 827 -3,723

The group has tax-deductible temporary differences with respect to loss carryforwards for which deferred tax assets have not been reported. They total SEK 8,251 thousand (0).

NOTE 17 INTANGIBLE FIxED ASSETS

Goodwill


Opening accumulated cost 160,346 156,296 – –Investments for the year - - – –Translation differences -1,787 4,050 – –

Closing accumulated cost 158,559 160,346 – – Opening accumulated impairment losses -22,127 -19,090 – –Impairment losses for the year - -821 – –Translation differences 880 -2,216 – –

Closing accumulated impairment losses -21,247 -22,127 – – Closing residual value 137,312 138,219 – –

Intellectual rights


Opening accumulated cost 7,919 7,370 – –Investments for the year 6,546 290 – –Sales/disposals for the year - -785 – –Reclassifications 22,579 1,110 – –Translation differences 287 -66 – –

Closing accumulated cost 37,331 7,919 – – Opening accumulated amortization -4,109 -3,274 – –Amortization for the year -4,428 -1,600 – –Sales/disposals for the year - 782 – –Reclassifications -5,216 - –Translation differences 114 -17 – –

Closing accumulated amortization -13,639 -4,109 – – Closing residual value 23,692 3,810 – –

58 NOTES

NOTE 18 CONT’DBuildings and land


Opening accumulated cost 46,607 58,214 – –Investments for the year 510 221 – –Sales/disposals for the year – -9,592 – –Reclassifications – – – –Translation differences -1,284 -2,236 – –

Closing accumulated cost 45,833 46,607 – – Opening accumulated depreciation -4,096 -5,936 – –Depreciation for the year -1,311 -1,610 – –Sales/disposals for the year – 2,568 – –Translation differences 47 882 – –

Closing accumulated depreciation -5,360 -4,096 – – Closing residual value 40,473 42,511 – –

Construction in progress

Group Parent company

2009 2008 2009 2008Opening accumulated cost 13,114 882 – –Costs incurred for the year 8,156 13,895 – –Reclassifications -18,915 -543 – –Impairment losses for the year -30 -1,031 – –Translation differences -134 -89 – –

Closing accumulated cost 2,191 13,114 – –

Leased assets that are included in property, plant and equipment – machinery, equipment and tools above – total the following amounts. Machinery, equipment and tools

Group 2009 2008

Opening accumulated cost 168,692 142,832Investments for the year 4,317 44,218Sales/disposals for the year -49,529 -15,760Reclassifications -18,246 –Translation differences 4,191 -2,597

Closing accumulated cost 109,425 168,692 Opening accumulated depreciation -75,673 -71,857Depreciation for the year -14,334 -20,442Sales/disposals for the year 46,967 15,760Reclassifications 5,216 –Translation differences -1,409 866

Closing accumulated depreciation -39,233 -75,673 Closing residual value 70,192 93,019

Reclassifications refer to business systems that were reported as property, plant and equipment in previous years. They have been reclassified as intangible fixed assets (see Note 17). The leased assets above are financial leases. Fees paid are to re-flect the fair values of the leased assets, and the financial risks associated with ownership of the asset are essentially borne by the lessee. By the same token, the lessee enjoys any financial benefits that may arise, since the lessee is entitled to any dif-ference between the sales price and the guaranteed residual value at the end of the period of the agreement.

NOTE 18 PROPERTY, PLANT AND EqUIPMENT

Machinery, equipment and tools


Opening accumulated cost 396,498 431,260 7,838 7,743Investments for the year 10,929 56,919 459 95Sales/disposals for the year -107,196 -76,429 -1,858 –Reclassifications -3,706 -410 – –Translation differences 7,000 -14,842 – –

Closing accumulated cost 303,525 396,498 6,439 7,838 Opening accumulated depreciation -226,974 -261,739 -4,848 -3,779Depreciation for the year -38,997 -47,176 -677 -1,069Sales/disposals for the year 100,701 70,809 1,513 –Reclassifications 5,258 -157 – –Translation differences -3,547 11,289 – –

Closing accumulated depreciation -163,559 -226,974 -4,012 -4,848 Closing residual value 139,966 169,524 2,427 2,990

NOTE 17 CONT’DLeased assets included in intangible fixed assets above (intellec-tual rights) total:

Intellectual rights

Group 2009 2008

Opening accumulated cost – –Investments for the year – –Sales/disposals for the year – –Reclassifications 18,246 –Translation differences -79 –

Closing accumulated cost 18,167 –

Opening accumulated amortization – –Amortization for the year -3,000 –Sales/disposals for the year – –Reclassifications -5,216 –Translation differences 35 –

Closing accumulated amortization -8,181 –

Closing residual value 9,986 –

Reclassifications refer to business systems that were reported as property, plant and equipment in previous years. The leased assets above are financial leases. Fees paid are to reflect the fair values of the leased assets, and the financial risks associat-ed with ownership of the asset are essentially borne by the lessee. By the same token, the lessee enjoys any financial bene-fits that may arise, since the lessee is entitled to any difference between the sales price and the guaranteed residual value at the end of the period of the agreement.

NOTES 59

NOTE 19 SHARES IN SUBSIDIARIES

Shares in group companies

No. of % of capital/ Nominal value/ratio, SEK thousand Carrying amt, SEK thouSubs./Hq/Corp. id. no. shares votes 12-31-09 12-31-08 12-31-09 12-31-08

PartnerTech Karlskoga AB, Karlskoga, 556338-1242 2,000 100% 200 200 8,000 8,000PartnerTech Ljungby AB, Ljungby, 556366-2922 40,000 100% 4,000 4,000 4,000 4,000PartnerTech Åtvidaberg AB, Åtvidaberg, 556539-8012 300,000 100% 30,000 30,000 135,652 135,652PartnerTech Ltd, Hong Kong, 177284 1,000 100% 94 101 100 100PartnerTech Inc., Atlanta, uS, 658900-9779 1,000 100% 1,087 1,168 1,332 1,332PartnerTech Oy, Espoo, Finland, Corp. id. no. 0912073-8 216,720 100% 374 395 65,210 65,210PartnerTech AS, Moss, Norway, 913 593 138 1,175 100% 1,050 933 67,435 67,435PartnerTech Ltd, King’s Lynn, uK, 01041448 2,261 100% 3 3 62,512 87,512PartnerTech Sp.z o.o. Poland, Corp. id. no. 13620 384 100% 484 507 24,463 24,463PartnerTech Sieradz Sp.z o.o. Poland, Corp. id. no. 277516 4,616 100% 5,822 6,099 15,308 15,308Velllinge Electronic Holding AB, Vellinge, 556524-6278 2,000 100% 200 200 146,080 146,080PartnerTech 1000 AB, Malmö (inactive), 556590-1195 1,000 100% 100 100 100 100PartnerTech 1001 AB, Malmö (inactive), 556590-1187 1,000 100% 100 100 100 100

Total, parent company 43,514 43,806 530,292 555,292

Sub-subs./Hq/Corp. id. no.

PartnerTech Vellinge AB, Vellinge, 556527-5269 10,000 100% 1 000 1,000 85,323 85,323PartnerTech Poole Ltd, Poole, uK, 3455123 2 100% 0 0 0 0

Total 1,000 1,000 85,323 85,323

.

Participations in associated companies

Group Parent company 12-31-09 12-31-08 12-31-09 12-31-08

Opening cost 642 597 563 563

Share of net earnings for the year -69 45 – –

Closing accumulated costs 573 642 563 563

Equity in

Carrying associated

No. of % of capital/ % of amount companiesCo./Hq/Corp. id. no. shares votes Profit 12-31-09 12-31-09

Parent company

Bluewave Microsystems AB, Stockholm, 556593-3768 32,500 33/33 563

Group

Bluewave Microsystems AB, Stockholm, 556593-3768 32,500 33/33 -69 573 1,518

The group holds 585 shares in Artscan Oy, Helsinki, Finland (corp. id. no.1090421-4). The percentage of capital and voting rights is 43%. The value of these participations is SEK 0 (0).

60 NOTES

NOTE 20 FINANCIAL ASSETS AND LIABILITIESMost of PartnerTech’s financial assets are accounts receivable, but the group also has interest-rate derivatives, participations in associated companies and liquid assets. Financial liabilities consist mostly of borrowing through pledged accounts receiv-able and complementary bank overdraft facilities. Other financial instruments are accounts payable, interest-rate derivatives and financial lease liabilities. The financial assets and liabilities give rise to a number of financial risks, such as price, exchange-rate, interest-rate, liquid-ity and credit risks. Risk management aims to identify, quantify and either minimize or eliminate financial risks. PartnerTech uses hedge accounting pursuant to IAS 39. For the interest-rate derivatives that meet the criteria for hedge accounting, the change in value is reported directly to the hedge reserve in other total comprehensive income. The change in value for in-terest-rate derivatives that do not meet the criteria are reported in the income statement. PartnerTech’s risks and their manage-ment are described in greater detail in a separate section of the annual report under Risk Management on page 42.

Interest-rate riskThe group’s interest-rate risk arises by way of PartnerTech’s net borrowings. As a result, the company continually monitors the size of its borrowings. The group uses interest-rate deriva-tives to limit its exposure to rate fluctuations on its interest-bearing liabilities. They are defined pursuant to IFRS 7 as an asset held for trading. The change in value of interest-rate derivatives that did not meet the criteria for hedge accounting affected the 2009 outcome by SEK 1.1 million (-3.5). The change in value of interest-rate derivatives used in the group’s hedge strategy affected equity by SEK 3.0 million (-7.0) in 2009. The group has entered into the following agreements, which were assigned a fair value as of the reporting date.

Interest-rate derivatives

Nominal Interest Maturity Fair value Instrument amount rate date 12-31-2009 Initial date

Current asset Interest ceiling 90,000 5.5% 12-29-10 0 12-29-06

Total 0 Long-term asset Interest ceiling 50,000 5.5% 12-30-11 30 12-29-08Interest ceiling 65,000 5.5% 12-30-11 39 12-29-08

Total 69 Current liability Interest-rate swap 90,000 4.16% 12-29-10 -3,073 12-28-07Total -3 073 Long-term liability Interest floor 50,000 3.5% 12-30-11 -2,083 12-29-08Interest floor 65,000 3.5% 12-30-11 -2,707 12-29-08

Total -4,790

Total fair value -7,794

Credit risk PartnerTech is exposed to credit risks in its customer relation-ships. Such risks are managed by means of a credit policy and credit insurance. The group’s outstanding accounts receivable are specified below per age category. Provisions for doubtful accounts receivable totaled SEK 11.2 million (23.8) at the end of 2009. The impact on operating profit was SEK 5.1 million (-7.1) in 2009.

Accounts receivable

Group Parent companyBreakdown by age 2009 2008 2009 2008

Not due yet 280,106 275,419 – –1-60 days 87,439 91,261 – –61-120 days 2,384 9,740 – –Older than 120 days 37,560 52,424 20 17Provision for doubtfulaccounts receivable -11,151 -23,810 - -

Total 396,338 405,034 20 17

Provision for doubtful accounts receivable

Opening balance -23,810 -34,923 – –New provisions -4,029 -24,863 – –write-off, accounts receivable 1,306 897 – –Paid, accounts receivablepreviously written off 7,133 – – –Reversal of previous provisions 8,415 34,683 – –Translation differences -166 396 – –

Total -11,151 -23,810 – –

Liquidity risk Both the parent company and subsidiaries engage in borrowing. The subsidiaries borrow almost exclusively by means of factoring, whereby credit is obtained in exchange for pledging of accounts receivable. The parent company borrows through bank over-draft facilities. The liquidity risk is managed by means of credit agreements concerning invoice factoring and bank overdraft facilities. Because invoice factoring causes the borrowing level to follow the sales level, the risk is limited. The various loans are listed below. Liabilities to credit institutions

Group Parent companyCredit/security 12-31-09 12-31-08 12-31-09 12-31-08

Bank draft facilities used 16,236 11 4,564 0Financing loans 23,371 35,096 1,101 6,690Lease liabilities 71,495 86,588 – 1,635Interest-rate derivatives 7,864 13,377 – –Factoring liabilities 218,482 244,610 – –

Total liabilities to credit institutions 337,448 379,682 5,665 8,325

Of which, falling duewithin 12 months 276,941 290,671 4,564 7,179Of which, falling due 1-5 yearsafter the reporting date 58,302 75,641 1,101 1,146Of which, falling due later than

5 years after the reporting date 2,205 13,370 – –

Total liabilities to credit institutions 337,448 379,682 5,665 8,325

Bank overdraft facilities granted 126,107 128,474 70,000 70,000Security furnished within scope of chattel mortgages 291,249 292,794 – –Pledged assets Pledging of accounts receivable 301,239 357,443 – –

NOTES 61

NOTE 22 MAjOR ACCRUALS AND DEFERRALS

Group Parent companyDescription 12-31-09 12-31-08 12-31-09 12-31-08

Miscellaneous prepaid chargesand premiums 11,322 13,361 2,623 2,004Miscellaneous accrued income 7,620 4,004 – –

Total prepaid expenseand accrued income 18,942 17,365 2,623 2,004 Accrued salaries, remunerationand social security contributions 68,164 85,971 6,269 8,045Purchases received, not invoiced 14,550 16,117 – –Accrued interest expenses 51 256 – –Miscellaneous accrued expense 18,806 27,846 1,884 4,133

Total accrued expenseand deferred income 101,571 130,190 8,153 12,178

NOTE 23 UNTAxED RESERVES

Parent company

Income statement Balance sheetReserve 2009 2008 12-31-09 12-31-08

Excess depreciation – property, plant and equipment – 589 – –

Total – 589 – –

NOTE 24 CONTINGENT LIABILITIES Other contingent liabilities for the group total SEK 304 thousand (782), of which SEK 28 thousand (28) for pensions and SEK 276 thousand (754) for the Swedish Agency for Economic and Regional Growth. The parent company has a commitment to cover any un-settled liabilities that creditors and suppliers may maintain that PartnerTech Inc. has. As of December 31, 2009, PartnerTech Inc.’s accumulated losses were SEK 9,697 thousand (8,442). PartnerTech Inc. had no overdue debts on the reporting date.

2009 2008 Carrying Fair Carrying Fair amount value amount value

Financial assets Financial assets held for trading –interest-rate derivatives 69 69 40 40Investments intended to be held to maturity – – – –Loan receivables and accounts

receivable 432,088 432,088 442,614 442,614

Total financial assets 432,157 432,157 442,654 442,654 Financial liabilities Financial liabilities held for trading – interest-rate derivatives 7,864 7,864 13,377 13,377Other financial liabilities 603,673 603,673 639,199 639,199

Total financial liabilities 611,537 611,5376 652,576 652,576

The group’s loan agreements with SEB are conditional on the portion of the loans uncovered by transferred security (such as leasing assets, accounts receivable or the like) not exceeding earnings before interest, taxes, depreciation and amortization (EBITDA) for the past 12 months. The conditions have not been met if the limit is exceeded in two successive measure-ments (which are performed at the close of each quarter). PartnerTech was in compliance with room to spare when the last measurement was made on December 31, 2009.

NOTE 21 LEASE AGREEMENTSLease agreements Group policy is to lease certain machinery and equipment by means of financial leases. Below is an age breakdown of mini-mum leasing fees for these agreements.

Financial lease agreementsPayment due dates for fees on financial leasing agreements

Group

Minimum leasing fees 12-31-09 12-31-08

Due within 1 year 22,924 22,202Due within 2-5 years 50,523 63,111Due for payment after 5 years 2,205 5,664

Total 75,652 90,977

The average remaining term of leasing is approximately 2.4 years (3.5). All leasing agreements are based on predeter-mined payments, and no agreements have been entered into with respect to conditional leasing fees. Due to the relatively short remaining term of leasing, no minimum leasing fees have been discounted. The group also has operational leasing

agreements (see below – age breakdown of minimum leasing fees). The biggest operational leasing agreement is for rental of a property at the Finnish unit. Operational lease agreementsPayment due dates for fees on operational leasing agreements

Group Parent companyMinimum leasing fees 12-31-09 12-31-08 12-31-09 12-31-08

Due within one year 20,908 20,236 430 689Due within 2-5 years 66,452 55,959 297 477Due after 5 years 34,096 36,367 – –

Total 121,456 112,562 727 1,166Leasing expenses during the year 19,905 21,423 709 1099

Fair value of financial assets and liabilities The carrying amount of interest-bearing assets and liabilities can deviate from fair value due to changes in market rates of interest. PartnerTech reports its interest-rate derivative contracts in accordance with fair value. Thus, no differences arise with respect to these items. For other financial instruments such as accounts receivable, accounts payable and other non-interest-bearing assets and liabilities, there is not deemed to be any difference between carrying amount and fair value.

62 NOTES

NOTE 27 CRITICAL ESTIMATES AND ASSESSMENTSAccording to an arbitration ruling on March 16, 2009, Swe-Dish Satellite System AB was to pay PartnerTech Åtvidaberg AB almost SEK 23 million for unpaid invoices and associated expenses. In view of the ruling, the dispute has now been settled. Apart from the risk associated with sales declines due to the ongoing economic downturn and general market instability, events related to operating activities during 2009 are not deemed to represent any decisive change in terms of essential risks or uncertainties for the PartnerTech group. PartnerTech offers services – such as product develop-ment, new product introduction and production – on the basis of specifications. Once the services have been rendered, discussions sometimes occur in which a customer lodges a complaint. PartnerTech continually assesses and evaluates the probable outcome of such discussions. If PartnerTech deems it likely that a complaint will lead to a credit, provisions are set aside for that purpose. PartnerTech has a clearly defined com-plaint process.

NOTE 25 EVENTS AFTER THE REPORTING DATEPartnerTech announced on February 17, 2010 that Rune Glavare, the current President and CEO, will be leaving his position. Leif Thorwaldsson will be the new President and CEO.

NOTE 26 IMPAIRMENT TESTING OF INTANGIBLE ASSETS

Goodwill is reported in accordance with IFRS 3, Business Combinations. According to the balance sheet, goodwill totals SEK 137.3 million (138.2) and is mostly from major acquisi-tions in 2001, 2005 and 2006. The acquisitions appear in the table below.

Acquisitions of companies (SEK million)

Goodwill Intangible assets Year acquired

Sweden: Vellinge Electronics AB 57.4 2001Other companies 7.1 1999-2007 Nordic countries: KSH-Productor Oy 35.1 2005Th Kristiansen AS 11.1 1.7 2006 Rest of the world: Hansatech Group Ltd 16.1 2006Baltic Microwave sp.z.o.o. 10.6 2001

Total value 137.3 1.7

Goodwill is allocated to cash generating units and is tested annually along with other non-current and intangible assets in connection with the annual accounts. The recoverable amount for a cash generating unit is based on calculations of value in use. These calculations proceed from estimated future cash flow based on budgets and forecasts from each region in which the group operates. The forecasts are for three years and are based on previous experience and assessments. Cash flows beyond this time period have been extrapolated on the basis of inflation for the next 6 years. In no case is inflation assumed to exceed 3.0%. The working capital requirement beyond the 10-year period is deemed to remain the same as the ninth year. The discount rate of interest has been assumed to be 10% for all countries in the group except Poland, where it is assumed to be 12%. The interest rate is specified after tax. The test has not occasioned any impairment losses.

NOTES 63

Malmö, Sweden, March 10, 2010

Patrik TigerschiöldChairman of the Board

Henrik Lange Thomas Thuresson Lennart Evrell Tomas Bergström Petter Stillström

Lennart Pettersson Mikael Johansson Employee representative Employee representative

Rune Glavare President and CEO

The Board and CEO assure that this annual report provides a true and fair representation of the operations, sales, earnings and financial position of the group and parent company. The disclosures are consistent with the facts. Nothing of significance

has been omitted that could change the representation of the group and parent company offered by the report.

NOTE 28 SHARE-RELATED PAYMENTSThe group issued options within the scope of option programs. The table below specifies these programs.

Impact Shares Sub- Sub- on share No. of per No. of scription scription capitalOption program options option shares price period until SEK thousands

Employee

program Feb 1–May 31

2007 42,000 1 42,000 123.19 2010 210,000

warrant

program Feb 1–May 31

2007 75,000 1 75,000 134.50 2010 375,000

117,000 117,000 585,000

The April 25, 2007 annual general meeting authorized the Board to issue 92,500 warrants. Each warrant also entitles the holder to receive one employee stock option. A total of 75,000 warrants were issued in 2007. A total of 33,000 employee stock options have been forfeited. Shares may be subscribed for from February 1 to May 31, 2010. The employee stock options are tied to employment by the company.

Our auditor’s report was submitted on March 10, 2010.

Deloitte AB

Per-Arne PetterssonAuthorized Public Accountant

Change in outstanding option programs during the year No. of options

Outstanding options at beginning of the period 121,000Awarded during the period –Forfeited during the period -4,000Redeemed during the period –Expired during the period –Outstanding at the end of the period 117,000

If both programs were fully exercised, the number of shares would increase by a maximum of 0.9 % as of December 31, 2009. The fair value of each option issued is calculated according to the Black and Scholes option pricing method. Because the option programmes had no value as of December 31, 2009, no dilution arises when calculating earnings per share. For the employee stock options, the payroll expenses were calculated according to maturity and were recorded at SEK 699 thousand as of December 31, 2009.

64 Au DIT R E PORT

auditor’s report

To the annual general meeting of PartnerTech AB (publ)

Corporate identity number 556251-3308

we have audited the annual accounts, the consolidated accounts,

the accounting records and the administration of the board of

directors and the managing director of PartnerTech AB (publ)

for the financial year 2009. The company’s annual accounts

are included in the printed version of this document on pages

38-63. The board of directors and the managing director are

responsible for these accounts and the administration of the

company as well as for the application of the Annual Accounts

Act when preparing the annual accounts and the application

of international financial reporting standards IFRS as adopted

by the Eu and the Annual Accounts Act when preparing the

consolidated accounts. Our responsibility is to express an

opinion on the annual accounts, the consolidated accounts

and the administration based on our audit

we conducted our audit in accordance with generally accepted

auditing standards in Sweden. Those standards require that we

plan and perform the audit to obtain reasonable assurance that

the annual accounts and the consolidated accounts are free of

material misstatement. An audit includes examining a selec-

tion of the documents supporting the amounts and disclosures

in the accounting records. An audit includes examining, on a

test basis, evidence supporting the amounts and disclosures

in the accounts. An audit also includes assessing the accounting

principles used and their application by the board of directors

and the managing director and significant estimates made by

the board of directors and the managing director when pre-

paring the annual accounts and consolidated accounts as well

as evaluating the overall presentation of information in the

annual accounts and the consolidated accounts. As a basis for

our opinion concerning discharge from liability, we examined

significant decisions, actions taken and circumstances of the

company in order to be able to determine the liability, if any, to

the company of any board member or the managing director.

we also examined whether any board member or the managing

director has, in any other way, acted in contravention of the

Companies Act, the Annual Accounts Act or the Articles of

Association. we believe that our audit provides a reasonable

basis for our opinion set out below

The annual accounts have been prepared in accordance with the

Annual Accounts Act and give a true and fair view of the com-

pany’s financial position and results of operations in accord-

ance with generally accepted accounting principles in Sweden.

The consolidated accounts have been prepared in accordance

with international financial reporting standards IFRS as adopted

by the Eu and the Annual Accounts Act and give a true and

fair view of the group’s financial position and results of operations

The administration report is consistent with the other parts of

the annual accounts and the consolidated accounts.

we recommend to the annual general meeting that the income

statements and balance sheets of the parent company and the

group be adopted, that the profit of the parent company be

dealt with in accordance with the proposal in the administration

report and that the members of the board of directors and the

managing director be discharged from liability for the financial year.

Malmö, March 10, 2010

Deloitte AB

Per-Arne Pettersson

Authorized Public Accountant

AuDITORSDeloittePer-Arne Pettersson, Chief Auditor. Authorized Public Accountant, Deloitte AB.PartnerTech auditor since 2006.Born 1959.

DE FI N ITIONS 65

definitions

MARGINS

GROSS MARGIN Gross profit as a percentage of net sales

OPERATING MARGIN Operating profit/loss as a percentage of net sales

PROFIT MARGIN Profit/loss after financial items, as a percentage of net sales

ITEMS AFFECTING COMPARABILITy Items affecting comparability, as a percentage of net sales

RETURN

RETuRN ON OPERATING CAPITAL Operating profit/loss, as a percentage of average operating capital

RETuRN ON EQuITy Profit/loss after financial items, less paid and deferred tax pertaining to

appropriations made during the year, as a percentage of average equity

Calculation of deferred tax has taken into consideration the tax rate in

effect from time to time in each country

CAPITAL STRUCTURE

wORKING CAPITAL Total assets less interest-bearing assets and interest-free current liabilities

OPERATING CAPITAL Total assets less financial assets, liquid assets and non-interest bearing

liabilities, including deferred tax liabilities in untaxed reserves

EQuITy (FOR THE GROuP) Equity, plus untaxed reserves, less deferred tax liability

INTEREST-BEARING NET DEBT Interest-bearing liabilities less liquid assets

ASSET TuRNOVER RATE Net sales, divided by average operating capital

INTEREST COVERAGE RATIO Operating profit/loss, plus financial income, divided by financial expense

EQuITy/ASSETS RATIO Equity as a percentage of total assets

NET DEBT/EQuITy RATIO Interest-bearing net debt divided by equity

SHARE OF RISK-BEARING CAPITAL Adjusted equity, plus deferred tax liabilities, as a percentage of total assets

NET INVESTMENTS Investments in non-current assets, less sales, replacements and

investment grants

EMPLOYEES

SALES PER EMPLOyEE Net sales, divided by the average number of full-time employees

PAyROLL AND OVERHEAD EXPENSES Salaries and compensation, including social security contributions,

PER FuLL-TIME EMPLOyEE divided by average number of employees

DATA PER SHARE

EARNINGS PER SHARE AFTER TAX Profit/loss after financial items, less tax paid and deferred tax pertaining to

appropriations made during the year, divided by the average number of shares

EQuITy PER SHARE Equity divided by the number of shares at year-end

P/E RATIO The share’s market price, divided by earnings per share after tax

SHARE PRICE PAID/EQuITy The share’s market price, divided by equity per share

DIVIDEND yIELD Per-share dividend divided by share price on the reporting date

DIVIDEND RATE Per-share dividend, divided by earnings per share after full income tax

66 BOARD OF DIRECTORS

board of directorstomas bergströmMember of the Board since 2008.Born 1971. CEO of Textilia AB.

Other posts: –

Education: M.B.A.

Previous positions: Analysis, advisory services and corporate finance. CEO of Nordic Airways.

Shareholdings on December 31, 2009: 5,000 shares.

rune glavareMember of the Board since 2004.Born 1945. President and CEO, PartnerTech AB.

Other posts: Chairman of the boards of Cobolt AB and Micronic Laser Systems AB, and member of the board of 3nine AB.

Education: Electrical Engineer.

Previous positions: Founder and CEO of contract manufacturer Essex AB. Senior VP of Sanmina Europe, a leading international contract manufacturer. CEO of Cobolt AB.

Shareholdings on December 31, 2009: 70,000 shares. 126,650 warrants and employee stock options.

patrik tigerschiöldChairman of the Board since 2007. Member of the Board since 2000.Born 1964. CEO of Bure Equity AB.

Other posts: Chairman of the boards of AcadeMedia AB, Vitrolife AB and The Chimney Pot AB.Member of the boards of Carnegie Investment Bank AB, Carnegie Asset Management A/S, and Micronic Laser Systems AB.

Education: M.B.A.

Previous positions: SEB, including Managing Director of SEB Allemansfonder.

Shareholdings on December 31, 2009: 0 shares.

henrik langeMember of the Board since 2008.Born 1961. Head of SKF’s Industrial Division.

Other posts: Member of the boards of the west Sweden Chamber of Commerce and Industry and Gu School of Executive Education AB.

Education: M.B.A.

Previous positions: Series of managerial positions at SKF, including Managing Director of the Austrian and Polish subsidiaries.CEO of Johnson Pump AB in 2000-2003.


lennart petterssonMember of the Board since 2005.Born 1960. Employee representative, Swedish Metal workers’ union.

Other posts: –

Education: Metalwork.

Previous positions: Employed by PartnerTech since 1976 (at that time Facit). Active in the union full time since 2004.


BOARD OF DIRECTORS 67

SIROUSSE SHAMLODeputy (Swedish Metal Workers’ Union) since 2002.Born 1948.

Other posts: –

Education: Production engineer.

Previous positions: Employed by PartnerTech since 1985 (at that time Electrolux Mechatronics/Electronics)


MIKAEL ÅBERGDeputy (Negotiation Cartel for Salaried Employees in the Private Business Sector) since 2003.Born 1964.

Other posts: -

Education: Electrical engineering and telecommunications.

Previous positions: Employed by PartnerTech since 1994.


DEPUTiES for EMPloyEErEPrESENTaTivES

lennart evrellMember of the Board since 2007.Born 1954. President and CEO of Boliden AB.

Other posts: Member of the boards of Nordea Fonder and SveMin.

Education: Bachelor of Science in Engineering and Business Administration.

Previous positions: CEO, Sapa, Munters and Gustavsberg. Managing Director of Asea and Atlas Copco subsidiaries.


mikael JohanssonMember of the Board since 2006.Born 1955. Employee representative (unionen).

Other posts: –


Previous positions: Employed by PartnerTech since 1982 (at that time Facit). Active in the union part-time since 2004.


petter stillströmMember of the Board since 2009. Born 1972. CEO of AB Traction.

Other posts: Chairman of the boards of Duroc AB and Nilörngruppen AB, member of the boards of AB Traction, Softronic AB, Drillcon, etc.

Education: Master of Economics.

Previous positions: Active within H&Q Bank.


thomas thuressonMember of the Board since 2008. Born 1957. CFO of Alfa Laval AB.

Other posts: –

Education: M.B.A.

Previous positions: Various leading financial positions of Alfa Laval.


68 GROuP MANAGEMENT

group managementJonas arkestadCFO and Vice President Finance & Administration.Born 1963.Employed since 1999.

Other posts: –

Education: M.B.A.

Previous positions: Business Area Controller, Trelleborg Automotive (Trelleborg group), as well as a number of other financial positions earlier in the Trelleborg group and Lantmännen.

Shareholdings on December 31, 2009: 0 shares. 15,000 warrants and employee stock options.

rune glavarePresident and CEO. Born 1945. Employed since March 2008.

Other posts: Member of the Board of PartnerTech AB. Chairman of the boards of Cobolt AB and Micronic Laser Systems AB, and member of the board of 3nine AB.


Previous positions: Founder and CEO of contract manufacturer Essex AB. Senior VP of Sanmina Europa, a leading international contract manufacturer. CEO of Cobolt AB.


richard skoghVice President Supply Chain Planning and IT. Born 1969.Employed since 2006.

Other posts: –

Education: M.B.A.

Previous positions: CIO of Xsys Printsolutions, IT Manager at Trelleborg Engineering Systems and Trelleborg wheel Systems (Trelleborg group).

Shareholdings on December 31, 2009: 4,400 shares. 4000 warrants and employee stock options.

GROuP MANAGEMENT 69

Jan JohanssonVice President Operations.Born 1963.Employed since 2000.

Other posts: –

Education: Trained in the automotive and defense industries.

Previous positions: Plant and quality manager at Trelleborg Automotive (Trelleborg Group).


mats lundinVice President Sourcing.Born 1959.Employed since 2007.

Other posts: –

Education: Master of Engineering, Industrial Economics and Management.

Previous positions: Various purchasing and logistics managerial positions at Ericsson, Volvo Penta and other companies.


pontus westrupVice President Market & Sales.Born 1959.Employed since 2007.

Other posts: –

Education: Master of Economics.

Previous positions: CEO of ABB Body-in-white AB, business area manager at ABB Automotive & Manufacturing Sverige and CEO of Emtunga Offshore AB.


christer thörnVice President Human Resources.Born 1966.Employed since 2008.

Other posts: –

Education: Officer training and internal human resources training.

Previous positions: Major, VP HR Tetra Pak. Development & Engineering, Production Manager, Apoteket.

Shareholdings on December 31, 2009: 1,000 shares.

70 ADDRESSES

UNITED STATESAtlantaPartnerTech, Inc.2222 Northmont ParkwaySuite 200Duluth GA 30096uSAPhone: +1 770 680 0000Fax: +1 770 680 0001

UKCambridgePartnerTech LtdCollege Business Park, Coldhams LaneGB-Cambridge CB1 3HD uKPhone: +44 1223 27 88 50Fax: +44 1223 27 88 80

King’s Lynn PartnerTech LtdOldmedow Road,Hardwick Industrial Estate King’s Lynn, GB-Norfolk PE30 4JJ uKPhone: +44 1553 78 00 00 Fax: +44 1553 78 00 03

POLANDSieradzPartnerTech Sieradz Sp.z.o.owojska Polskiego 107PL-98-200 SieradzPolandPhone: +48 43 827 86 30Fax: +48 43 822 17 24

MysłowicePartnerTech Sp.z.o.o.Brzezinska 38 StreetPL-41-404 MysłowicePolandPhone: +48 32 746 79 00Fax: +48 32 746 79 01

SwEDENVellinge (Head office)PartnerTech AB Box 103Industrigatan 2SE-231 21 VellingeSwedenPhone: +46 40 10 26 40Fax: +46 40 10 26 49

Vellinge PartnerTech Vellinge ABBox 33Industrigatan 2SE-231 22 VellingeSwedenPhone: +46 40 45 99 00Fax: +46 40 42 22 32

ÅtvidabergPartnerTech Åtvidaberg ABörsäterfabriken SE-597 80 ÅtvidabergSwedenPhone: +46 120 810 00Fax: +46 120 151 50

NORwAYMossPartnerTech ASPostboks 765KrapfossNO-1509 MossNorwayPhone: +47 69 24 48 00Fax: +47 69 24 48 01

FINLANDTurku (Åbo)PartnerTech OyMustionkatu 2FI-20750 TurkuFinlandPhone: +358 2 273 07 00Fax: +358 2 253 07 11

Vantaa (Vanda)PartnerTech OyMyllynkivenkuja 1 FI-01620 VantaaFinlandPhone: + 358 9 88 75 50 Fax: +358 9 88 75 51 89

KarlskogaPartnerTech Karlskoga ABBofors Industrial ParkSE-691 80 KarlskogaSwedenPhone: +46 586 853 00Fax: +46-586 850 50

CHINAHong KongPartnerTech LtdRoom 701-2,7/FShun Kwong Commercial BuildingCN-No 8 Des Voeux Road westHong KongPhone: +852 2850 86 32Fax: +852 2541 62 53

ANNuAL GENERAL MEETING 71

WhEN aND WhErEThe PartnerTech annual general meeting will be called to order at 5 PM on Tuesday, april 27, 2010 at Östergatan 39, Malmö, Sweden (SEB premises).

righT To ParTiCiPaTETo have voting rights at the annual general meeting, a shareholder must be entered in the share register kept by Euroclear Sweden aB (formerly vPC aB) by Wednesday, april 21, 2010, and have prenoti fied the company of his or her attendance. in order to attend the meeting, any shareholder whose shares are registered in the name of an authorized agent must request temporary entry in the share register kept by Euroclear Sweden aB. The shareholder must inform the agent to that effect well in advance of Wednesday, april 21, 2010, at which time the register entry must have been made.

NoTifiCaTioN of ParTiCiPaTioNThe company should receive notification no later than 4 p.m. on Wednesday, april 21, 2010 at PartnerTech aB, industrigatan 2, Box 103, SE-235 21 vellinge, Sweden, by phone at +46 40-10 26 40, by fax at +46 40-10 26 49, or by e-mail at [email protected]. Please include your entire name, personal identity number and daytime phone number, as well as information about your deputy, proxy or legal representative when applicable.

DiviDEND The Board proposes that the annual general meeting distribute no dividend for the 2009 fiscal year (SEK 0.00 per share for fiscal 2008).

financial reports for 2010april 27, 2010 January-March interim report and annual general meeting

July 15, 2010 January-June interim report

october 26, 2010 January-September interim report

2010 annual general meeting

www.partnertech.com

an n ual r e p o rt

Documents