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Consilium’s Annual Report is published in Swedish and English. The Annual Report is available for download at www.consilium.se. A printed version of the Report will be distributed to shareholders and other stakeholders who have registered their interest to the Company. The Annual Report can also be ordered from [email protected].

Consilium’s interim reports are available atwww.consilium.se.

This annual report has been prepared in Swedish and translated into English. In the event of any discrepancies between the Swedish and the translation, the former shall have precedence.

03 The year in brief04 About Consilium06 Consilium’s goals and strategies11 President’s overview of the year14 Consilium’s market organisation16 Marine & Safety business area 20 Fire safety & Automation business area 23 The Consilium share 25 Multi-year overview and glossary 26 Key figures and definitions 27 Board of Directors’ report

30 Financial statements, Group34 Financial statements, Parent38 Accounting policies42 Notes54 Audit report55 Corporate governance59 Auditor’s statement60 Consilium’s Board61 Consilium’s Management62 History Addresses

Contents

Consilium

Consilium is a global niche company that develops, manufactures and markets products and systems that are used to protect people, material values and the environment. Consilium conducts its operations in two business areas – Marine & Safety and Fire safety & Automation. Consilium’s entire offering is based on delivering high-quality applications to customers who need to protect large and complex environments with high material values or large numbers of people. With a global market organisation, Consilium can offer its customers local service and support wherever in the world they are. The vision is for customers to make Consilium their choice when safety matters.

The Year in Brief

Consilium’s net sales increased by 3 percent to SEK 932.4 (908.9) million.Operating profit (EBIT) increased by 27 percent to SEK 54.4 (42.9) million.The order intake increased by 23 percent to SEK 965.7 (784.7) million.Cash & cash equivalents amounted to SEK 194.8 (121.3) million.The Board proposes a cash dividend of SEK 0.40 (0.25) per share.

All values are reported excluding divested radar operations.

Third Quarter

The order situation was improving gradually. Net sales for the third quarter amounted to SEK 228.6 (237.6) million, which was a decline of 4 percent compared with the previous year. Operating profit was SEK 19.9 (19.8) million. Consilium saw signs of a gradual improvement in the economy and expected a considerably better fourth quarter than in the same period the previous year.

Consilium’s global market organisation provides a solid base in the marine aftermarket. During the first nine months, sales to the aftermarket represented 57 percent of total marine net sales. In the Fire safety & Automation business area, sales of fire protection systems to the oil and gas industry showed positive growth, despite the recession.

Fourth Quarter

Net sales for the fourth quarter increased by 21 percent to SEK 286.1 (237.4) million, with both business areas continuing to show positive growth. Operating profit was SEK 15.4 (0.8) million. Implemented cost reductions had a positive effect on earnings, while the strong Swedish krona had an adverse effect.

Consilium sold its radar operations to Navico AS and the two companies signed a strategic cooperation agree-ment at the same time. Consilium will continue to sell and service the Consilium Selux radar line and Navico’s portfolio of Simrad products for commercial vessels.

First Quarter

The order intake for the Fire safety & Automation business area showed strong growth, which resulted in an increase of 70 percent in the Group’s total order intake. However, the strong order intake did not have an immediate impact on net sales, which declined by 8 percent to SEK 190.6 (205.9) million in the face of a continuing slump in several markets. As a result of the previous year’s cost reductions, operating profit for the first quarter of 2013 improved, despite lower net sales and a stronger Swedish krona. Operating profit for the first quarter was SEK 2.7 (1.7) million.

Consilium continued to invest in the aftermarket and specialty segments within the Marine & Safety business area, counterbalancing the decline in new construction in commercial shipping, and also in the Fire safety & Automation market, in order to also exploit the Company’s knowledge of safety in other area.

Second Quarter

After four years of recession, with the order intake being lower than net sales each year, the order backlog for the Marine & Safety business area began to increase again, which meant that the Group’s order intake exceeded net sales again. Net sales for the second quarter were higher than in the first quarter, and the increase now also had a positive impact on earnings. Net sales for the second quarter amounted to SEK 227.1 (228.0) million. Operating profit was SEK 16.4 (20.6) million. Consilium continued its long-term market initiatives and investments in areas which include product development of fire alarm systems for trains and underground railways, and in offshore.

Overview of the year Consilium – a global world-leading niche company

During 20 years as a publicly listed company, we have focused on concentrating Consilium on areas where the Company has a market-leading position or has the potential to achieve such a position. During a number of years of recession and sovereign debt problems around the world, we have put a great deal of work into improving efficiency, reducing the cost base and changing the product mix, while investing in new niche markets. The annual report for the 2013 financial year shows that Consilium is back on track as a global growth company. We are now increasing our focus on safety products and safety systems – areas in which we have long experience, extensive knowledge and in many cases a world-leading position.

Ove Hansson, President and CEO

03

Consilium is a niche company which is primarily engaged in fire and gas safety in special environments. Consilium’s development, marketing and sales of products, services and systems are organised in two business areas: Marine & Safety and Fire safety & Automation. The Marine & Safety business area also offers products and systems for navigation and the environment. The Fire safety & Automation business area also offers automation solutions. The business areas’ operations are supported by corporate functions such as business development, economy and finance.

More than 90 percent of Consilium’s sales are to markets outside Sweden. Consilium is present in the most important countries in international shipping, as well as in selected markets in the oil and gas industry. With its

A global company

global organisation, Consilium has staff who deal with sales, service and support through 45 offices in 21 countries. Another 50 or so countries are covered by appointed sales and service representatives.

About Consilium

Consilium Group2013 2012 2011

Order intake, SEK million 1) 965.7 784.7 830.8

Net sales, SEK million 1) 932.4 908.9 942.4

EBITDA, SEK million 1) 84.7 74.5 86.0

EBIT (operating profit), SEK million 1) 54.4 42.9 51.3

EBT, SEK million 1) 31.3 25.2 36.3

Operating margin, % 1) 5.8 4.7 5.4

Profit margin, % 1) 3.4 2.8 3.9

Return on operating capital, % 11.0 8.9 11.2

Return on equity, % 8.8 6.0 9.6

Equity/assets ratio, % 29 31 36

Earnings per share, SEK 1) 2) 1.14 0.68 1.37

Total earnings per share, SEK 2) 0.06 0.15 1.06

Capital expenditure, SEK million 32,3 34.7 28.9

Number of employees 1) 561 553 552

1) Continuing operations 2) Excl. non-controlling interests

04

Consilium has 45 offices in 21 countries

Net sales by business area, SEK millions

Marine & SafetyFire safety & Automation

183.6

748.8

Fire safety & Automation

The business area focuses on the inter-national oil, gas and power industry, and offers fire safety products and systems and automation systems for large facilities. The product range includes complete systems for fire and gas detection, fire-extinguishing and emergency shutdown systems, and instru-mentation and control systems. The main applications are tank farms, tank terminals, power plants and offshore facilities.

Read more on page 20.

Marine & Safety

The business area offers products and systems for fire and gas detection, navi-gation products and products and systems for environment-related applications. The international shipping industry – namely shipyards and shipping companies – is the target group for marine applications, together with companies that are active in the offshore industry. The target group for applications in the transport sector is train and vehicle manufacturers, while for land-based applications it is major property owners and safety companies.

Read more on page 16.

Business developmentEconomy and Finance

Administration

Marine &

Safety

Fire safety &

Automation

Global market organisation

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About Consilium

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Consilium’s goals and strategies


Vision

To be the customer’s first choice when safety matters.

Business concept

Consilium’s business concept is to develop and market products, services and systems that are used to protect people, material values and the environment. The business concept is supported by the philosophy of global sales with a local presence and providing customers with the best service and support on the market.

Goals

BackgroundIn its early years as a listed company, from 1994 onwards, Consilium developed a large number of different operations. In the 2000-2008 period, Consilium restructured its operations, with a focus on growth in selected areas. Between 2005 and 2008, Consilium showed average annual growth of more than 20 percent. From 2009 to 2013, Consilium’s markets were affected by a weakened global economy, which required efficiency improvements and cost control. Today, Consilium has the financial strength it needs to focus on growth again.

Consilium’s overall goal is to create value for shareholdersThis will be achieved by building on the Group’s expertise, global market organisation, long experience and innovative ability, and by being a leader within selected market and product segments.

Consilium shall offer the best customer value on the market This qualitative goal involves offering the best customer value on the market in terms of quality and function, high delivery perfor-mance and global service and support.

Consilium shall generate average growth of 10 percentConsilium’s goal is to achieve average annual growth in net sales of 10 percent during the 2013-2017 period through a combination of organic growth, partnerships and acquisitions.

Operating margin of at least 10 percentConsilium’s goal is to achieve an operating margin of at least 10 percent during the 2013-2017 period.

Return on operating capital of at least 15 percentIt is also Consilium’s goal to achieve a return on operating capital of at least 15 percent during the 2013-2017 period by improving operating profit and reducing tied-up capital.

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Growth, %

During the global recession, Consilium has focused more on efficiency and cost reduction.

Target 10%

The operating margin has been adversely affected by the recession and the strong Swedish krona.

Target 10%

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Consilium is working to reduce its tied-up capital, although a lower operating profit has a negative effect on the return on operating capital.

Target 15%

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Strategies

Consilium has a strong base to grow on, with market-leading products and systems and a global market organisation. Profitable growth will be created organically and through acquisitions, partnerships and alliances. Growth initiatives, with an increased focus on safety, will take place in product and market segments where Consilium has a leading position or has the potential to take such a position.

The strategies are as follows:– to stand for quality and reliability– to be an innovative supplier, at the

forefront of technical development– to further develop and expand the

global presence – to evaluate acquisitions and be an active

part of structural changes in the market– to seek value-creating alliances and

partnerships– to constantly strive to improve the

Company’s processes, productivity and efficiency

– to be an attractive employer and continuously improve the Group’s collective expertise

Strategic work for increased profitabilityConsilium has broken down its operations, in terms of products and systems and application areas, into three categories.

Business development is organised centrally in Consilium. This is a priority area and an important factor for the Company’s future growth. Previous projects include investments in offerings for the onshore oil and gas industry which are now a separate business area in Fire safety & Automation. Other examples are the development of a strong global market organisation, the development of Consilium Common Platform (CCP), which is a technical platform for Consilium’s future offerings, and the development of fire alarms for trains and other rolling stock.

Based on its knowledge and experience, Consilium implements initiatives in selected focus areas and currently has a number of interesting development projects. These include work to certify safety functions for future systems according to the SIL2 standard for the offshore industry and RAMS for the rail industry.

08

Business development for increased growth


High performers

Low performers

Business development

High performers are products or areas of application which generate a return that is in line with or better than the financial objectives. About 75 percent of the total volume is classified in this category. The focus for high performers is to maintain and strengthen a good return.

Low performers are products or areas of application that do not meet the financial objectives at present. About 25 percent of the total volume is classified in this category. Part of the focus for these operations is to identify why they do not reach the targets; whether there are issues associated with efficiency and costs or whether there are structural problems that require strategy changes. The aim is that these areas will be transferred to the high performers group. Otherwise, they will be divested or discontinued.

Business development is the third category, which is made up of Consilium’s business development projects. In most cases these generate a low volume, but they incur operating costs. Investment in business development projects is strategically important for future growth and is concentrated on products and areas of application that are predicted to generate good margins. The goal is for business development projects to be classified as high performers as soon as possible after their commercial launch.

Increased focus on safetyAn overall strategy for Consilium is to focus operations on segments where the Company has a leading position or has the potential to reach such a position. In the Company’s two business areas, Consilium has now increased the focus on safety products and safety systems. As part of this focus, Consilium divested its radar operations towards the end of 2013. Consilium will continue to sell and service the radar line through its global market organisation, but the development resources have been released in favour of a more concentrated safety offering.

Strategies for acquisitions and partnershipsIn addition to organic growth, Consilium must also be able to grow through acquisitions and partnerships. Consilium is primarily seeking acquisition candidates, or strategic partnerships, that meet one or more of the criteria listed below. A suitable acquisition size is companies with a turnover of between SEK 15 and 150 million.

1. Offering – products, systems or unique expertise that complement Consilium’s offering in existing niche segments.

2. Market – companies that can strengthen Consilium’s global presence.

3. Vertical integration – acquisitions that increase revenues and/or can improve Consilium’s margins and profitability through synergies.

In 2012, Consilium entered into a strategic partnership with Honeywell Life Safety AS, whereby Consilium became global distributor with responsibility for sales, servicing and spare parts for Honeywell’s fire alarm products for marine applications under the ELTEK brand. These products complemented Consilium’s existing offering effectively and gave access to a niche offshore segment. The operations are part of the Marine & Safety business area.

In 2012, Consilium acquired a majority stake in the Swedish fire safety company Incendium AB. Consilium had for some time experienced positive growth for fire

safety systems in the oil and gas industry, and Incendium had a strong offering in foam and water-based firefighting systems while also fulfilling all three acquisition criteria. The operations are part of the Fire safety & Automation business area.

Consilium acquired 51 percent of the shares in the Indian fire safety company Sureland Fire & Security Pvt Ltd in January 2014. Sureland supplies fire safety systems, primarily to customers in the energy sector. The company, with offices in Delhi, Ahmedabad and Chennai, strengthens Consilium’s presence in India, which was initially established in 2012. The operations became part of the Fire safety & Automation business area with effect from 1 February 2014.

Investing in growth

During several years of global recession, Consilium has chosen to continue investing heavily in a number of development projects, with the aim of strengthening its ability to lead the market and create growth in selected focus areas. Examples include the common technical platform for Consilium’s future offerings, the process of obtaining certification according to the SIL2 and RAMS safety standards and continuous investments in the global market organisation.

09


Change in Marine & Safety’s business risk

Consilium has reduced its business risk by gradually reducing the dependence on new construction.

2000

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10%

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5%

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Change in Fire safety & Automation’s business risk

Consilium has reduced its business risk by shifting the market focus and increasing the exposure to a less cyclically sensitive market segment.

2007

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Fire safety – medium/low cyclicality

2007

2013

80%

Automation – medium/high cyclicality

Risks and uncertainties

Consilium, in common with other com-panies, faces risks and uncertainties. The Group’s main risks and uncertainties are business risks and financial risks. Business risks may be associated with large exposure to individual sectors or companies. Financial risks are mainly currency risks which arise due to the fact that more than 90 percent of sales are outside Sweden while about two-thirds of production is in Sweden. This results in a large proportion of costs in Swedish kronor, while revenue volumes are mainly generated in foreign currencies. Management of financial risks is described in Note 13.

With regard to business risks, the assessment is that the Group has a balanced risk spread across countries, regions, sectors, segments and customers. Sales to the marine market have a good risk spread between new construction and the aftermarket, which has grown in importance, and between different types of vessels. Sales of safety systems to the oil and gas industry are increasing and in general are only affected to a minimal extent by the business cycle. However, the global economy is still a source of uncertainty for the Group’s business areas and their segments.

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President’s overview of the year Increased focus on safety

Consilium has a clear strategy for its business. The main focus is on providing safety products and high-quality systems to customers with high safety requirements. Consilium focuses on selected niche markets with the aspiration of achieving global growth with high market shares.

Consilium develops and markets products and systems for fire and gas detection, fire protection, and data recording in the event of accidents. Sales of safety systems currently represent 80 percent of total net sales.

Navigation products and systems are still important to the marine operations of the Marine & Safety business area, and environ-mental products for vessels are also marketed. Systems for automation of tank farms that are protected by safety systems are also marketed in the Fire safety & Automation business area.

Successful focus on niche marketsConsilium offers its safety products and systems primarily to niche markets such as ships, onshore and offshore oil and gas installations, power plants, trains and metros, as well as large properties with a high protection value.

Consilium seeks to achieve a strong position in selected global niche markets. We have developed products and systems for these markets, built up unique appli-cation knowledge and invested in a global organisation for sales and customer support. This strategy of focusing on selected niches has given Consilium a strong position in most niches, despite the fact that the com-petition normally consists of considerably larger companies.

Consilium is a renowned global supplier with large market shares in selected markets and segments. One in two large vessels

in the world has a Consilium product on board, and one in two large tank farms in the United Arab Emirates has been equipped with safety systems from Consilium.

Global growthConsilium is a global company with more than 90 percent of its sales outside Sweden, and, after the acquisition of the Indian fire safety company Sureland Fire & Security, it has more than 600 employees in 21 countries. We have a strong global market organisa-tion for sales, service and support for our customers through 45 offices in 21 coun-tries. More than 50 percent of sales are to customers in Asia and more than 65 percent of the employees are based outside Sweden.

The weak global economy in recent years has slowed growth and development in the Marine & Safety business area. At the same time, Consilium has maintained or increased its market shares. It is planned that our own global organisation will continue to be strengthened over the next few years. The Fire safety & Automation business area is establishing operations in additional countries in the Middle East. We have strengthened our product portfolio and our market position in the Nordic countries and India by means of establishments and acquisitions.

Customer’s first choice – when safety mattersIt is our firm belief that the combination of high-quality products and systems developed for niche markets, advanced application knowledge in these areas and a strong global organisation with local service and support creates value for customers. Our vision is for Consilium to be the customer’s first choice when safety matters.

Operations in 2013After a market slowdown during the fourth quarter of 2012 and the first quarter of 2013, there was a marked improvement in the order situation in the second quarter of 2013, and this continued in the third and fourth quarters of 2013. The order intake increased by 23 percent to SEK 965.7 (784.7) million in 2013. Net sales increased by 3 percent to SEK 932.4 (908.9) million. The order backlog increased and stood at SEK 426.2 million on 31 December 2013. Operating profit (EBIT) increased by 27 percent to SEK 54.4 (42.9) million in 2013.

As part of Consilium’s strategy of increasing the focus on safety products and safety systems, the Italian radar operations, comprising the development, manufacturing and sale of radar products, were divested during the year. In January 2014, Consilium acquired a majority shareholding in an Indian fire safety company.

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Order intake in relation to net sales

Consilium’s order situation improved during 2013 and orders were back to being higher than net sales.

Order intakeNet sales

Consilium is implementing a major development programme for fire alarms for the offshore market and trains and metros in 2013 and 2014, and we expect a significant increase in volume from these areas over the next few years. This development initiative may also bring increased sales in other market niches.

The recession and sovereign debt problems in both Europe and the United States have affected customers’ willingness to invest in Consilium’s two business areas in recent years. Orders for new commercial vessels decreased in the years of recession. However, we saw an increase in these orders in 2013, and the level of orders in early 2014 was good.

Consilium has a strong base in the marine aftermarket. Increased sales to the marine aftermarket and specialised vessels have partly compensated for the decline in orders for contruction of new commercial vessels. In 2013, sales to the aftermarket represented 56 percent of total marine net sales. The total number of sailing vessels in the world and the volume transported have increased in each of the last 25 years. This is expected to continue and is important for sales to the aftermarket. There is also an increased focus on the aftermarket in the Fire safety & Automation business area.

Marine & Safety business areaThe majority of the world’s freight is transported by sea. In an economy that is becoming more and more globalised, transportation by sea is increasing at a multiple of growth in the global economy. The total number of sailing vessels in the world and volumes transported by sea have increased steadily.

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President’s overview of the year

With an increasing global transport volume and number of sailing vessels there is more demand for service and support. Old systems are constantly being replaced and upgraded, which in turn increases demand for spare parts, servicing and services. With ships having a service life of 25 years – and even more for specialised vessels – the aftermarket is of more value than the new construction market.

Increased safety and environmental requirements create demand for new products. Consilium is also growing in new areas such as offshore and trains and metros.

The order intake for the Marine & Safety business area increased by 29 percent to SEK 796.6 (616.2) million in 2013. Net sales declined by 2 percent to SEK 748.8 (760.3) million. Operating profit (EBIT) was SEK 55.0 (55.9) million. The stronger Swedish krona adversely affected both net sales and EBIT. However, the implemented cost reductions had a positive impact on EBIT. The order situation improved in 2013 and we entered 2014 with a very strong order intake, which means that net sales should increase in 2014.

Fire safety & Automation business area Globally, large investments are being made in the onshore oil and gas industry, as well as in the offshore industry and the energy sector. Consilium focuses on sales of fire safety products and systems to these market areas, and can also supply automation systems for certain projects. Safety awareness is growing, and sales of fire safety systems have gradually increased in importance. The facilities often have a long service life, which means that the equipment must be serviced and upgraded.

Initially, Consilium’s sales were concentrated primarily on projects in the United Arab Emirates. They were then broadened to include the Nordic countries by means of a business acquisition in 2012. Operations were established in India in 2013, and a majority shareholding was acquired in an Indian fire safety company in January 2014. There are plans to establish operations in additional countries in the Middle East during 2014.

There has been a major shifting of pro-jects during the uncertain economic climate of the last few years. However, Consilium has strengthened its position in the United Arab Emirates and gradually expanded into new markets. We see good potential for further

growth in a future improvement of the economic situation, and investment in new markets will continue as planned.

The order intake for the Fire safety & Automation business area increased to SEK 169.1 (168.5) million in 2013. Net sales increased by 24 percent to SEK 183.6 (148.6) million, despite shifting of major projects. Operating profit (EBIT) was SEK 17.8 (6.5) million. In view of the continuing good order situation and the acquisition of the Indian fire safety company, net sales are expected to increase in 2014.

Conditions for growthWith a weakened global economy, there was a decline in orders for new ships and investments in new facilities during the 2009-2012 period. Volume growth came to a standstill, and the operating margin fell from 7 to 5 percent. The decline in the operating margin was mainly due to the fact that more than 90 percent of sales are to markets outside Sweden, with a large proportion of sales conducted in USD and EUR, and the fact that a reduction in shipbuilding has led to increased price competition.

Consilium has made major cost reduc-tions, and its employees have contributed to necessary changes and adjustments during several years of recession. Consilium’s focus on new niche areas has enabled net sales to be maintained during this period.

Consilium launched a bond issue of SEK 325 million in the fourth quarter of 2012, and exercised the option to issue a further SEK 75 million during 2013. This has created the financial conditions for growth and active participation in structural changes in our niche markets.

The improved order intake in 2013 has continued into 2014. Although there is still uncertainty about the global economy, we are seeing signs of a gradual improvement in the economic situation and expect continuing growth in 2014.

Financial objectivesConsilium’s overall goal is to create value for shareholders. Consilium stands by the previous year’s stated financial objectives, which are average annual growth in net sales of 10 percent in a five-year period (2013-2017), through a combination of organic growth, partnerships and acquisi-tions, and an operating margin of at least 10 percent within this five-year period. It is also Consilium’s stated objective to achieve a return on operating capital of at least 15 percent within the five year period by improving operating profit and reducing tied-up capital. The operating margin and rate of return objectives are prioritised ahead of volume objectives.

In 2013, the operating margin increased to 6 (5) percent and the return on operating capital increased to 11 (9) percent. We are working continuously on a number of improvement projects, which involve many of the employees within the Group. Our development initiatives will gradually pro-duce results. I am convinced that Consilium will emerge from the recession stronger than many of our competitors, thereby enabling us to achieve our defined objectives.

Nacka, April 2014

Ove HanssonPresident and CEO

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President’s overview of the year

Consilium has consistently invested in developing a global market organisation over the last 10 years. The process of building a global presence with Consilium’s own companies and offices has been strategically important and a key part of the Group’s business development work. The market organisation currently encompasses 45 offices in 21 countries. This means that Consilium has operations in every time zone, 24 hours a day, 7 days a week.

The market companies are responsible for marketing, customer development, sales of products, services and systems, spare parts, project planning & design, as well as local service and support. The market organisation has at its disposal each business area’s product companies, which help with the development, maintenance and purchasing of products and systems, and also the Group-wide administrative functions.

Global offering – local presenceConsilium’s products and services reach customers all over the world and the Company is a leading global player in several of its niche segments. However, in many cases, global success requires representation in each local market. Business traditions, culture and the market structure often differ accord-ing to where in the world Consilium is oper-ating. Through its own offices, Consilium can offer high flexibility, short decision-making channels and a customer focus that is adapted to local market conditions.

The global market organisation is of strategic importance in the Marine & Safety business area. Consilium’s shipyard customers often prefer to work with a local partner. This is also very much the case in the rail industry. The ability to provide service and support in many different locations strengthens Consilium’s offering to shipping

companies whose vessels are normally in constant employment on the ocean.

In the Fire safety & Automation business area, operations are concentrated on the countries of the Middle East and India, although other parts of Asia are also interesting in terms of continuing expansion of the market organisation. A local presence is strategically important.

Consilium’s market organisation

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“Consilium’s organisation works in 21 countries and cultures, with 20 languages and 15 currencies”

Geographical distribution of net sales 2013

AsiaEurope (excl. Sweden)North AmericaSwedenOther markets

7%7%

54%32%

Sales and service representativesMarket offices

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Consilium’s market organisation

Marine & Safety business area

The Marine & Safety business area develops, manufactures and markets fire and gas safety products and systems mainly for applications on board ships, trains and rolling stock and in large properties. The business area also provides products and systems for navigation and environment. The business area’s offering consists of a largely world-leading portfolio of proprie-tary products and systems, complemented by high-quality external brands.

Marine & Safety

(SEK millions) 2013 2012

Order intake 796.6 616.2

Net sales 748.8 760.3

EBITDA 83.6 83.6

EBIT (operating profit) 55.0 55.9

Assets 512.5 478.7

(of which non-current assets) (163.9) (166.1)

(of which current assets) (348.6) (312.6)

Equity and liabilities 512.5 478.7

(of which equity) (150.0) (150.0)

(of which liabilities) (362.5) (328.7)

Operating capital 294.9 276.0

For details, see Note 1 on page 42.

Key figures and financial ratios

2013 2012

Share of Group’s net sales, % 80.3 83.7

Share of Group’s operating profit, % 101.1 130.3

Operating margin, % 7 7

Return on operating capital, % 19 21

Number of employees 454 449


1%

39%

7%

8%

45%

SwedenEurope (excl. Sweden)North AmericaAsiaOther markets

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Business model

The business area’s marine customers consist primarily of international shipping companies and shipyards. The major shipbuilding countries of China, Japan and South Korea dominate the market and it is estimated that they account for just under 90 percent of global production. In certain special segments there are also shipyards in the United States and some European countries. International shipping is global, and notable shipping nations include Greece, Japan, Germany, South Korea and China.

Virtually all major shipyards and shipping companies can be found on Consilium’s customer list and the Company estimates that at least 50 percent of the world’s large vessels have a Consilium product or system on board.

Consilium’s products and solutions are designed for two market phases – new construction and the aftermarket. In new construction, shipyards traditionally made most of the investment decisions and it was therefore important to appear on a shipyard’s makers list. This is still true to a large extent, but it has recently become increasingly important to also have a close relationship with shipping companies in the new construction phase.

The aftermarket phase consists of the sale of replacement products (retrofit), spare parts, servicing, support and other services. In this phase, the customer is the shipping company or the management company, which is responsible for the operation of the ship.

In the Marine & Safety business area, Consilium also offers integrated fire safety solutions for different types of rolling stock. Customers consist of train manufacturers and operators in Asia, Australia, Europe and North America.

The main market phase is new construction, but new regulations that force vehicles undergoing major upgrades to comply with new standards have created a potential aftermarket.

Consilium also offer solutions for fire and gas safety for large properties. Customers include hospitals, major industries, Scandi-navian installation companies that deal with major construction contracts and large safety companies.

Division SafetyNavigation

Geographical market

AsiaEuropeNorth and South AmericaAfrica Australia

Market phase New constructionAftermarket

Offering Own products and systemsExternal productsOwn products for third-party systems

Sales and delivery

Own global market organisationSales and service representatives

Customers Shipyards Shipping companies Marine management companies OEM companies Train manufacturersTrain operators Safety companies Property owners

17

Examples of customersShipyardsDaewooDalianHyundaiSamsungSWSUniversal

Shipping companiesAwilco GasNCLScorpioSinopacificStolt NielsenZodiac Maritime

Train manufacturers/operatorsAlstomBombardierCAFCSR SifangLondon UndergroundMitsubishi


Main products and systems

Fire detection and fire alarmsGas detection and gas alarmsEmission measuring systemsMarine voyage data recorders (VDRs)Speed logs

Market

There are about 100,000 commercial vessels in the world and 50,000 of them are part of the international merchant fleet, which is Consilium’s main market. In addition, there are cruise ships and passenger vessels, military vessels, supply vessels to offshore installations and other specialised vessels.

About 90 percent of world trade is trans-ported by ship at some point. The need for efficient maritime transport is increasing in pace with globalisation, and there is a close correlation between growth in merchant shipping and growth in world trade. Demand for new commercial vessels is governed by world trade growth and it is a reasonable estimate that the need for transport is increasing about twice as quickly as world trade growth.

The global economic downturn which began in 2008 has had a major effect on the market. Before then, the market was characterised by growing demand, with high freight rates and full order books for shipyards and shipping companies alike. As the volumes fell, margins came under pressure due to increased price competition. This situation and the strengthening of the Swedish krona in relation to other currencies, particularly the dollar and the euro, has had a clear effect on Consilium.

The early part of 2013 was still weak, but a clear improvement in the market situation was noted in the second quarter, which became even more marked at the end of the year. This also resulted in Consilium’s order intake during the year exceeding invoicing for the first time since 2008.

World trade and demand for transport determine growth in orders for new ships. The international regulatory framework, which is designed to reduce incidents,

fatalities and maritime environmental impacts, determines the development of equipment on board ships. New regulations are constantly being introduced and existing ones updated. During the implementation phase, which may span a few years, there is often strong demand for new products and systems.

With its strong offering and market position, Consilium has, despite the market’s performance, managed to maintain and in some cases increase its market share in the turbulent market climate of recent years. The organisation has also implemented a number of measures in recent years to increase efficiency and productivity while reducing costs. These too have strengthened Consilium in 2013.

Position

Today, Consilium is a world leader in fire and gas safety in selected niche segments.

Towards SIL2

During the last two years, Consilium has been working on a development project to implement SIL and RAMS in its processes in order to supply the market with new products and systems that meet future requirements, with a focus on life-cycle costs and high safety levels. The project is the largest in Consilium’s history and will give the Company a new generation of products and systems developed for the increasing formal requirements of the future.

SIL (Safety Integrity Level) in simplified terms is a tool to verify that a safety system meets the requirements of its safety functions. In SIL, the focus is on proving that safety aspects are fulfilled through the lifecycle phases of products and systems in software and electronics development, product development, installation, com-missioning and maintenance. Consilium is working to achieve SIL2, which is the level required to deliver to the offshore industry and in many cases to the rail industry and other industries with similar safety requirements.

RAMS is a collection of standards encompassing factors such as reliability, availability, maintainability and safety. Like SIL, RAMS covers several different segments, but above all it is a requirement for delivering to trains in Europe. Consilium’s upcoming solutions for trains are currently developed in accordance with RAMS to SIL2 level, which means they provide fire protection and safety systems with a very high level of dependability and reliability and a low life cycle cost in the long term.

18

When Safety Matters

RAMSEN50126/EN50128/EN50129

When Safety Matters

IEC61508/EN50128 SIL


Consilium offers fire protection for rolling stock such as trains, metros and trams. The operations are the result of a successful previous business development project and now comprise a separate division within Marine & Safety.

Trains and metro cars are highly challenging environments. Fire protection in these environments must be able to cope with extreme pressure such as pollution, vibrations, temperature variations and interference from other equipment. Consilium offers solutions based on advanced technology developed for complex marine environments and which are installed in vessels such as submarines, cruise ships and oil tankers.

Consilium’s product range encompasses solutions for everything from high-speed trains to trams. In addition to fire protection systems, the Company is also able to integrate fire protection with other safety systems such as firefighting and control systems. In addition to the actual system, Consilium also provides project management, commissioning, servicing and support. An important part of the overall offering is training, and here Consilium shares its extensive experience and knowledge of fire safety. In addition to its own installations, Consilium also supplies products and systems from other installers, referred to as OEMs.

With a long history, stable products and systems, brand recognition and unique solutions, Consilium has succeeded in creating high or very high market shares in several of its product areas. The global market organisation that Consilium has built is unequalled in the market and places Consilium in a unique position to attract both customers and partners.

To maintain sustainable competitiveness, Consilium is focusing on a number of aspects of its business that are aimed at offering the best customer value on the market. The most important of these are:• Innovation – in existing and new

offerings.• Quality – through quality-assured

development and production. • Reliability of supply – in terms of

effective production and distribution.• Service and support – through a local

presence on a global basis.

Future development

Although weak global economic growth, limited funding opportunities and over-capacity have resulted in lower demand and a decline in orders for new commercial vessels in recent years, world trade is still completely dependent on efficiently functioning com-mercial shipping. At the same time, different segments show different demand. The market for traditional commercial vessels such as bulk and container vessels remains weak, although signs of a turnaround can be seen. However, there is continuing demand in other sectors, such as vessels associated with the oil and gas industry.

Oil and gas from offshore sources are an important part of global energy production. Offshore investments are currently higher than investments in traditional commercial shipping, and carrier vessels (transporting LNG, for example) and supply vessels

are growing in importance. Consilium is increasing its focus on offshore, an area where the Company sees large growth potential. SIL2-related investments increase the potential even more.

Consilium’s high market shares give the Company access to a large part of the new construction market which still exists. In addition, a well-developed global market organisation provides a strong position in the aftermarket. In 2013, sales to the aftermarket represented more than half of total marine net sales.

The total number of sailing vessels in the world and the volumes transported have increased in each of the last 25 years and this growth is expected to continue. Increased safety and environmental standards create demand for new products and systems, both in marine segments and other specialist areas such as trains, metros and trams.

19


Fire safety & Automation business area


7%

3%

90%

SwedenEurope (excl. Sweden)Asia

The Fire safety & Automation business area develops, manufactures and markets fire safety products, services and systems for applications in the international oil, gas and power industries. It also provides automation systems for large facilities. The business area’s offering is based on advanced knowledge of fire safety and technical solutions, where external high-quality brands are complemented by proprietary products and systems.


(SEK millions) 2013 2012

Order intake 169.1 168.5

Net sales 183.6 148.6

EBITDA 19.5 10.4

EBIT (operating profit) 17.8 6.5

Assets 164.8 142.4

(of which non-current assets) (36.0) (34.8)

(of which current assets) (128.8) (107.6)

Equity and liabilities 164.8 142.4

(of which equity) (50.0) (50.0)

(of which liabilities) (114.8) (92.4)

Operating capital 102.7 100.0

For details, see Note 1 on page 42.


2013 2012

Share of Group’s net sales, % 19.7 16.3

Share of Group’s operating profit, % 32.7 15.2

Operating margin, % 10 4

Return on operating capital, % 18 7

Number of employees 107 104

20

Division Fire safetyAutomation

Geographical market

AsiaEurope

Market phase New constructionExpansionAftermarket

Offering Own systems based on external productsExternal safety productsOwn safety products

Sales and delivery

Own market organisation

Customers Oil and gas companiesContractors in the oil and gas industryOwners of tank terminalsPower companies

Business model

The business area offers products and services for new construction and the extension or conversion of various types of large facilities. Demand for aftermarket ser-vices has also increased. Consilium has two main types of customers. In the area of new construction, Consilium normally targets its offering at international contractors with overall project responsibility. Several of the large contractors are global players repre-sented by local offices. A local presence for customer servicing is an important success factor, while it is also desirable to be able to demonstrate a global reach and capacity.

In the area of extensions, conversions and other services, customers are often oil and gas companies and power companies. End customers are largely based or operating in the Middle East, India and the Nordic region. This is also where Consilium has built up its market organisation for Fire safety & Automation, and several of the world’s largest oil com-panies are on Consilium’s customer list.

Consilium’s range of products and services includes everything from consulting services (such as technical calculations and design) to the provision of complete safety systems for oil and gas facilities and power plants.

21

A typical installation normally includes a combination of products and systems for protection and safety, which is sometimes accompanied by electrical instrumentation and automation systems.

Market

The oil and gas industries represent a key driver of the global economy. The oil industry is dominated by state-owned com-panies which account for more than half the world’s production and almost 90 percent of the total oil reserves. Four out of the world’s five largest oil companies are state-controlled. Looking at the industry as a whole, 50 pro-ducers are responsible for almost 80 percent of daily oil production, and over half of these are under state ownership.

Consilium’s geographical market comprises the countries and regions that have a well-established oil and gas industry. Most of the world’s oil reserves and natural gas deposits are located in the Middle East. Countries such as Venezuela, Brazil, the United States, China and Russia are other important markets. A future solution to the political and technical challenges could also make areas like East Africa, the Arctic and other deep-sea areas increasingly interesting.

Examples of customers

End customersADNOCENOCGulf PetroleumQatar PetroleumTAKREERVOPAK

ContractorsBelleliExterranLarsen & TourbroNico InternationalSinopecTATA


Main products and systems

Fire safety systemsGas safety systemsOther safety products and systemsTechnical consulting services in protection and safetyAutomation and instrumentation

There has been a major shifting of pro-jects during the uncertain economic climate of the last few years. However, Consilium has strengthened its position in the United Arab Emirates and gradually expanded into new markets. The Company sees good potential for further growth in a future improvement of the economic situation, and investment in new markets will continue as planned.

Strong demand from emerging economies, particularly China and India, points to a continuation of large investments in the infrastructure of the oil, gas and power industry, both in the Middle East and other parts of the world. A particularly strong driver of the oil industry is the expected doubling of the transport sector in emerging economies – a sector which is entirely dependent on oil and petroleum-based fuels. The lack of qualified alternative energy sources and growing uncertainty about nuclear power are helping to keep demand for oil and gas as energy sources strong.

Position

Consilium’s position as a supplier of advanced safety systems has strengthened, although the Company is still a small

player in a large global market. Consilium’s strategic acquisitions have strengthened its geographic presence and its expertise and offering in terms of products and systems. Consilium’s systems have a high reputation in selected markets, and the market organ-isation the Company is gradually building up is strengthening its local presence and relationships with end customers.

The business area bases its sustainable competitiveness on a number of areas aimed at offering the best customer value on the market. The most important of these are:• Cost-efficiency – through optimised

system integration delivered by an efficient organisation.

• Quality – systems with premium products.• Reliability – with qualified personnel

who understand and can resolve customers’ problems.

• Broad offering – with a complete safety programme.

Future development

The need for energy is growing in many parts of the world and driving the development of facilities for oil, gas and other energy sources. Demand for safety

systems for these facilities remains high, partly because of their high financial value but also because of increased safety requirements.

Consilium’s customers are active in both the production stage and other parts of the value chain, and include companies engaged in the trading or storage of energy products as well as large industries in need of advanced safety systems. In addition to increased growth in the existing customer categories, the Company also sees potential for increased offshore sales.

Consilium has a particularly strong market position in the United Arab Emirates at present. The previous concentration on the Middle East has now been broadened to include other parts of Asia by means of measures such as the establishment of a sales office in India in 2012 and the acquisition of the Indian fire safety company Sureland Fire & Security in early 2014. Consilium also has a strong position in the Nordic region through its acquisition of Incendium in 2012. New markets are evaluated continually.

22


The Consilium share

Consilium’s B shares were admitted to trading on the O list of the Stockholm Stock Exchange in May 1994. The shares were moved to the A list of the Stockholm Stock Exchange in 1995. The shares returned to the O list in spring 2003. Following the reorganisation of the Stockholm Stock Exchange, Consilium’s shares are now quoted on the NASDAQ OMX Stockholm Small Cap list.

Consilium’s share capital at 31 December 2013 amounted to SEK 58,511,015, divided into 11,702,203 shares (par value SEK 5). Class A shares (907,490) carry entitlement to 10 votes, while the entitlement for class B shares (10,794,713) is 1 vote. All shares carry equal entitlement to a share of the Company’s assets and profits.

Liquidity providerIn 2008, Consilium signed an agreement with Remium AB for the purpose of improving the liquidity of the Consilium share. As liquidity provider, Remium ensures a specific spread – the difference between the bid and ask price for the Company’s shares. At the same time, liquidity is added to the order book by a guaranteed volume of trading in the shares on the bid and ask

side. The aim of the guarantee is to minimise sharp price fluctuations caused by individual transactions and to stimulate trading. For the shareholders, this ultimately means better price information and a more accurate market valuation of Consilium’s shares.

Under the minimum requriments of NASDAQ OMX’s regulations, liquidity providers are required to post bid and ask prices to ensure the spread does not exceed 4 percent. The prices must be posted during a minimum of 85 percent of regular trading hours. As the Company has a liquidity provider, the designation (LP) appears next to Consilium on stock exchange lists. The average closing spread was 2 percent in 2013.

Share price developmentThe share value increased by 44 percent during the year, starting on SEK 13.65 and ending on SEK 19.60 at 31 December 2013. In the same period, Consilium’s indexes increased as follows: OMX Stockholm (PI) 21 percent, OMX Stockholm Small Cap (PI) 37 percent and OMX Stockholm Industrial Goods & Services (PI) 4 percent.

The highest price paid for the Consilium share during the year was SEK 20.50 and the lowest was SEK 13.00. At the end of 2013,

Consilium’s market capitalisation was SEK 212 (147) million.

TurnoverThere were 2,612 Consilium B transactions during the year. A total of 2,406,061 shares were traded at a value of SEK 41,686,257. The turnover rate was 22 percent.

ShareholdersThe number of shareholders at 31 December 2013 was 1,587 (1,627).

Dividend policyConsilium’s Board has decided that a cautious dividend policy will be adopted during an anticipated growth phase. The dividend will ultimately correspond to one-quarter of profit after net financial items and tax.

Proposed dividendThe Board proposes a dividend of SEK 0.40 (0.25) per share.

Dividend yieldThe proposed dividend of SEK 0.40 (0.25) per share corresponds to a yield of 2.0 (1.8) percent based on the price at year-end.

0

50

100

150

200

250

300

Number of shares traded per week, thousands

DECNOVOCTSEPAUGJULJUNMAYAPRMARFEBJAN

12

13

14

15

16

17

18

19

20

OMX Stockholm_PI

SX2700 OMXS Industrial Goods & Services_PI

OMX Stockholm Small Cap Index

Consilium B

Share price development 2013 Share price development 2009-2013

0

200

400

600

800

1,000

1,200

Number of shares traded per month, thousands

201320122011201020090

10

20

30

40

50

60

70

80

90

100

Source:

23

Largest shareholders

A shares B shares Holding Votes

Platanen Holding AB 907,490 3,873,205 40.8% 65.2%

MCT Brattberg Aktiebolag 2,160,000 18.5% 10.9%

Nordea Investment funds 722,923 6.2% 3.6%

Magnus Wahlquist 550,000 4.7% 2.8%

Avanza Pension 206,491 1.8% 1.0%

Unionen 177,804 1.5% 0.9%

Nordnet Pensionsförsäkring AB 158,545 1.4% 0.8%

Ove Hansson 100,086 0.9% 0.5%

SIX SIS AG, W8IMY 100,000 0.9% 0.5%

Lott och Nils Rosenblads stiftelse 96,399 0.8% 0.4%

Total 907,490 8,145,453 77.5% 86.6%

Per-share data

2013 2012 2011 2010 2009

Share price, SEK 19.60 13.65 17.50 26.10 29.00

Earnings, SEK 1.14 0.68 1.37 1.24 2.58

Total earnings, SEK 0.06 0.15 1.06 0.75 0.28

P/E ratio 327 91 17 35 104

Equity SEK 22.7 22.8 23.6 22.7 25.9

Share price/equity 0.86 0.60 0.74 1.15 1.12

Dividend, SEK 0.40 0.25 – – 0.35

Dividend yield, % 2.0 1.8 – – 1.2

P/S ratio 0.2 0.2 0.2 0.3 0.4

Share information Consilium BListing, NASDAQ OMX Stockholm, Small CapShort name, CONS BISIN code, SE0000236382ICB code, 2700Sector, Industrial Goods & ServicesTotal number of listed shares, 10,794,713 Highest price paid in 2013, SEK 20.50 Lowest price paid in 2013, SEK 13.00 Closing price 31/12/2013, SEK 19.60 Market cap 31/12/2013, SEK 212 million

IR ContactsOve Hansson, President and CEOTel +46 (0)8-563 053 02E-mail: [email protected]

Anna Holmgren, Financial managerTel +46 (0)8-563 053 03E-mail: [email protected]

24

The Consilium share

Financial information 2014Interim Report Jan-Mar, 20 May 2014Interim Report Jan-Jun, 28 Aug 2014Interim Report Jan-Sep, 27 Nov 2014Year-end Report 2014, 26 Feb 2015

In addition, Consilium publishes monthly information about the Group’s orders and sales.

Consolidated income statement

Amounts in SEK millions 2013 2012 2011 2010 2009

Net sales 932.4 908.9 942.4 903.5 880.6

Operating expenses -878.0 -866.0 -891.1 -862.1 -816.8

Operating profit 54.4 42.9 51.3 41.4 63.8

Financial items -23.1 -17.7 -15.0 -13.4 -10.1

Profit after financial items 31.3 25.2 36.3 28.0 53.7

Consolidated balance sheet

Amounts in SEK millions 2013 2012 2011 2010 2009

Assets

Property, plant & equipment 29.3 28.8 32.8 40.3 46.2

Intangible assets 157.6 173.0 165.9 164.2 159.7

Financial assets 93.5 76.2 68.2 74.6 50.7

Inventories 144.1 155.8 166.9 154.7 145.1

Receivables 307.1 296.0 297.2 296.3 296.4

Short-term investments 14.2 8.4 – 8.4 –

Cash & cash equivalents 180.6 112.9 36.3 36.3 48.0

Total assets 926.4 851.1 767.3 774.8 746.1

Equity 265.9 266.6 276.0 265.8 300.0

Liabilities

Non-interest-bearing non-current provisions 20.2 25.8 22.0 15.4 13.2

Non-interest-bearing non-current liabilities – – – 22.1 0.4

Interest-bearing non-current liabilities 405.6 332.3 109.0 127.4 129.2

Non-interest-bearing current provisions – – – 6.5 5.0

Non-interest-bearing current liabilities 200.4 188.3 227.3 222.8 238.2

Interest-bearing current liabilities 34.3 38.1 133.0 114.8 60.1

Total liabilities 660.5 584.5 491.3 509.0 446.1

Total equity and liabilities 926.4 851.1 767.3 774.8 746.1

Multi-year overview

Glossary

Business modelA theoretical description of how a company or business is intended to work.

Foreign companiesSubsidiaries registered in a country other than Sweden.

LNGLiquefied natural gas.

Makers listA shipyard’s list of preferred suppliers.

OEMOriginal Equipment Manufacturer. A manufacturing company that typically bases its offer on a combination of self-constructed and purchased components which are assembled into the final product.

RAMSReliability, Availability, Maintainability and Safety. A European safety standard (EN 50126) for the rail industry.

RetrofitAftermarket for the sale of replacement products.

SIL Safety Integrity Level. An international functional safety standard (IEC 61508) for the development of safety systems for machines.

VDRVoyage Data Recorder. Equipment to facilitate the investigation of vessel accidents. A VDR registers a vessel’s position and speed, heading, depth, radio traffic etc. and is the equivalent of the black box in an aircraft.

25

2013 2012 2011 2010 2009

EBITDA, SEK million 1) 84.7 74.5 86.0 73.3 91.8

EBIT, SEK million 1) 54.4 42.9 51.3 41.4 63.8

EBT, SEK million 1) 31.3 25.2 36.3 28.0 53.7

Operating margin, % 1) 5.8 4.7 5.4 4.6 7.2

Profit margin, % 1) 3.4 2.8 3.9 3.1 6.1

Return on operating capital, % 11.0 8.9 11.2 9.2 14.9

Return on equity, % 8.8 6.0 9.6 7.2 13.7

Dividend yield, % 2.0 1.8 – – 1.2

P/E ratio 2) 327 91 17 35 104

Equity/assets ratio, % 29 31 36 34 40

Risk-bearing capital, % 72 70 36 34 40

Net debt/equity ratio, % 92 93 75 77 47

Quick ratio, % 214 183 93 99 114

Earnings per share, SEK 1) 2) 1.14 0.68 1.37 1.24 2.58

Total earnings per share 2) 0.06 0.15 1.06 0.75 0.28

Equity per share, SEK 22.7 22.8 23.6 22.7 26.9

Capital expenditure, SEK million 32.3 34.7 28.9 37.5 46.6

Dividend per share, SEK 0.40 0.25 – – 0.35

Number of employees 1) 561 553 552 518 523

1) Continuing operations2) Excl. non-controlling interests


Dividend yield Dividend proposed by the Board and CEO for the financial year divided by the share price.

Earnings per shareProfit after tax attributable to owners of the parent for continuing operations divided by the average number of shares.

EBITDAEarnings before interest, taxes, depreciation and amortisation.

EBITEarnings before interest and taxes.

EBTEarnings before taxes.

Equity/assets ratioEquity, including non-controlling interest, divided by total assets.

Equity per shareEquity divided by the total number of shares at the reporting date.

Net debt/equity ratioInterest-bearing liabilities less cash and cash equivalents and short-term investments divided by equity.

Operating capitalTotal assets, less cash & cash equivalents (cash, bank deposits and other financial assets) and non-interest bearing liabilities, calculated as an annual average.

Operating marginOperating profit divided by net sales.

Operating profitEarnings before interest and taxes. Same as EBIT.

P/E ratioShare price at end of year divided by total earnings per share.

Price/equity ratioShare price at end of year divided by equity per share.

Profit marginProfit after financial items divided by net sales.

P/S ratioShare price at end of year divided by net sales per share.

Quick ratioCurrent assets (excl. inventories) divided by current liabilities.

Return on equityProfit after financial items less current tax divided by average equity.

Return on operating capitalOperating profit divided by average operating capital.

Risk-bearing capitalEquity and convertible note loans divided by total assets.

Total earnings per shareProfit after tax attributable to owners of the parent, including discontinued operations, divided by the average number of shares.

Definitions

26

The Board of Directors and CEO of Consilium AB (publ), reg. no. 556480-3327, herewith present the consolidated and parent company’s annual financial statements for the financial year 2013. Consilium is a global niche company that develops, manufactures and markets products and systems that are used to protect people, material values and the environment. With a stable base of proprietary products, complemented by high-quality external brands, and a global market organisation, Consilium ranks among the world’s leading suppliers to international shipping and the oil and gas industry. The guiding principle behind Consilium’s products and systems is to help protect people, the environment and material values.

Consilium also markets products and systems for other industries with applications which are well-suited to the Company’s products, systems and application expertise. Consilium’s product companies are responsi-ble for product development and have overall responsibility for global marketing and sales. The local market companies are responsible for local marketing, sales, project design and service and support to customers.

Consilium GroupAfter a market slowdown during the fourth quarter of 2012 and the first quarter of 2013, there was a marked improvement in the order situation in the second quarter of 2013, and this continued in the third and fourth quarters of 2013. The order intake increased by 23 percent to SEK 965.7 (784.7) million in 2013. Net sales increased by 3 percent to SEK 932.4 (908.9) million. The order back-log increased and stood at SEK 426.2 million on 31 December 2013. Operating profit (EBIT) increased by 27 percent to SEK 54.4 (42.9) million in 2013. As 93 percent of sales are to markets outside Sweden, the strong Swedish krona had a negative impact on operating profit, while implemented cost reductions had a positive effect.

In Consilium’s two business areas, the focus on safety products and safety systems is now being increased. As part of this strategy, Consilium has sold its Italian radar operations, comprising the development, manufacturing and sale of radar products. In January 2014, Consilium acquired a majority shareholding in an Indian fire safety company. Consilium is implementing a major development programme for fire

becoming more and more globalised, trans-portation by sea is increasing at a multiple of growth in the global economy. Consequently, the total number of sailing vessels in the world and the volume transported have increased steadily over the last 25 years. This trend will continue, and represents a long-term stable base for the operations.

One in every two large vessels in the world has a Consilium product on board. With an increasing global transport volume and number of sailing vessels, there is more demand for service and support. Old systems are constantly being replaced and upgraded, which in turn increases demand for spare parts, servicing and services. With specialised vessels having a lifespan of 25 years or more, the aftermarket is of more value than the new construction market.

New orders of commercial vessels increased in 2013. Increased safety and environmental requirements create demand for new products. Consilium is also growing in new areas such as offshore and trains and metros.

Consilium has maintained or increased its market shares, but net sales have declined in the face of a weak global economy and reduced shipbuilding. The stronger Swedish krona adversely affected both net sales and operating profit. However, the implemented cost reductions had a positive impact on operating profit.

The order intake for the Marine & Safety business area increased by 29 percent to SEK 796.6 (616.2) million in 2013. Net sales declined by 2 percent to SEK 748.8 (760.3) million. Operating profit (EBIT) was SEK 55.0 (55.9) million. The order backlog has improved.

Fire safety & Automation business area Globally, large investments are being made in the onshore oil and gas industry, as well as in the offshore industry and the energy sector. Consilium focuses on sales of fire safety products and systems to these market areas, and can also supply automation systems for certain of these projects.

Initially, Consilium’s sales were concen-trated primarily on projects in the United Arab Emirates. They were then broadened to include the Nordic countries by means of a business acquisition in 2012. Operations were established in India in 2013, and a

alarms for the offshore market and trains and metros in 2013 and 2014, and a signifi-cant increase in volume from these areas is expected over the next few years.

The recession and sovereign debt problems in both Europe and the United States have affected customers’ willingness to invest in Consilium’s two business areas for a long period.

Orders for new commercial vessels have declined in the recession of recent years. However, Consilium noted an increase in new orders of commercial vessels in 2013. Consilium has significant market shares and is directly affected by this trend. In a weak new construction market for commercial vessels, Consilium has retained or increased its market shares.

Consilium has a strong base in the marine aftermarket. Increased sales to the marine aftermarket and specialised vessels have partly compensated for the decline in orders for new commercial vessels. In 2013, sales to the aftermarket represented 56 percent of total marine net sales. The total number of sailing vessels in the world and the volume transported have increased in each of the last 25 years. This is expected to continue and is important for sales to the aftermarket.

The order situation for the Marine & Safety business area has improved, with the order intake increasing by 29 percent to 796.6 (616.2) million in 2013.

In the Fire safety & Automation business area, sales of fire protection systems to the oil and gas industry showed positive growth during 2013. Net sales increased by 24 per-cent to SEK 183.6 (148.6) million in 2013. In view of the continuing good order situation and the acquisition of the Indian fire safety company, net sales are also expected to increase in 2014.

During several years of recession, Consilium’s employees have contributed to necessary changes and adjustments in a weak global economy. Consilium has successfully come through that period by means of major cost reductions and reallocation of resources between market segments, while the Company has continued to invest in product and market development in new areas with growth potential.

Marine & Safety business areaThe majority of the world’s freight is transported by sea. In an economy that is

Board of Directors’ report

27

majority shareholding was acquired in an Indian fire safety company in January 2014. There are plans to establish operations in additional countries in the Middle East during 2014. Consilium sees good potential for growth, with a continuing focus on selected market areas.

There has been a major shifting of pro-jects during the uncertain economic climate of the last few years. However, Consilium has strengthened its position in the United Arab Emirates and gradually expanded into new markets. Consilium sees good potential for further growth in a future improvement of the economic situation, and investment in new markets will continue as planned.

The order intake for the Fire safety & Automation business area increased to SEK 169.1 (168.5) million in 2013. Net sales increased by 24 percent to SEK 183.6 (148.6) million, despite shifting of major projects. Operating profit (EBIT) was SEK 17.8 (6.5) million. The order backlog remains strong.

Personnel and trainingThe number of employees in continuing operations was 561 (553) during the year. Consilium continuously invests in staff training. Training activities are conducted in each business area.

Remuneration of the Board and key management personnelThe 2013 annual general meeting adopted Board fees of SEK 550,000, distributed as follows: Chairman of the Board SEK 150,000, external Board members SEK 100,000 each. The meeting also adopted guidelines relating to the compensation of key management personnel, which are essentially in line with market salaries and other terms of employment. Key manage-ment personnel’s compensation consists of the basic salary, including car allowance, and any bonuses earned. Pension is payable in accordance with the current ITP plan. Bonuses are linked to financial targets and may not exceed three monthly salaries.

Financial position and cash flowThe equity/assets ratio was 29 (31) percent. Cash & cash equivalents were SEK 180.6 (112.9) million at 31/12/2013. Interest-bear-ing liabilities amounted to SEK 439.9 (370.4) million. The cash flow for the year was SEK 67.7 million.

InvestmentsNet investments in non-current assets during the year amounted to SEK 32.3 (34.7) million. Investments are mainly in product development for Marine & Safety.

Research and developmentConsilium is a technical knowledge company which aspires to be at the forefront of technological development in selected niches. The development of products, systems and production techniques is therefore a priority area. The Company capitalises development expenses, with an amortisation period of 3-5 years.

QualityAll product companies are currently certified to ISO 9000.

EnvironmentConsilium will work to ensure its daily operations, products and manufacturing processes comply with national laws and international environmental regulations. The Company will ensure its products’ materials and manufacturing processes have minimal environmental impacts. Residual and waste products will be dealt with in an environ-mentally responsible way. The Company does not engage in any operations which are sub-ject to permit and notification requirements under the Swedish Environmental Code.

Risks and uncertaintiesThe Group’s material risks and uncertainties consist mainly of business risks and financial risks. Business risks may be associated with large customer exposure to individual sectors or companies. Financial risks are mainly cur-rency risks which arise due to the fact that over 90 percent of sales are outside Sweden while a large proportion of production is in Sweden. Management of financial risks is described in Note 13. The Group has a relatively good risk spread across customers and markets, although the global financial crisis and slowdown in economic growth represent a risk and uncertainty.

Financial risk managementIn the course of its operations, the Group is exposed to a large number of different financial risks. The Group’s overall risk management policy focuses on the unpre-dictability of the financial markets and aims

to minimise unfavourable effects on the Group’s financial results. The Group uses derivative instruments to cover some of its risk exposure. Risk management is dealt with by each product-owning subsidiary according to policies defined by the Board. The Board formulates written policies for overall risk management and also for specific areas such as currency risk, interest rate risk, credit risk, use of derivative and non-derivative financial instruments and investment of surplus cash.

Financial instruments recognised in the balance sheet include cash & cash equivalents, trade receivables, current and non-current receivables, trade payables, loans and other liabilities. The Group classifies financial assets into the following categories: cash & cash equivalents, loans and receivables and available-for-sale financial assets.

Financial assets are classified on the basis of the purpose for which they were acquired. Management makes a classification decision on initial recognition and reviews the decision at each reporting date.

Corporate governance reportThe corporate governance report can be found on page 55.

Events after the reporting dateConsilium acquired 51 percent of the shares in Indian fire safety company Sureland Fire & Security Pvt Ltd in January 2014. The company, which has about 100 employees, is expected to achieve a turnover of approx. SEK 80 million in 2014. Sureland Fire & Security supplies fire safety systems to customers in the energy sector. The company has offices in Delhi, Ahmedabad and Chennai.

Outlook for 2014The improved order intake in 2013 has continued into 2014, and we expect continuing growth during the year.

Parent CompanyConsilium AB, reg. no. 556480-3327, is the Parent Company of the entities which make up Consilium, and encompasses Group-wide functions. The Parent Company’s net sales amounted to SEK 1.2 (3.1) million and relate to time charged to Group companies.

Operating expenses amounted to SEK -19.7 (-24.0) million. Operating profit was

28

Board of Directors’ Report

profitably. The liquidity of the Company and the Group is expected to be maintained at a satisfactory level. It is the Board’s assessment that the proposed dividend will not prevent the Parent Company or other Group com-panies from discharging their obligations or making necessary investments. The proposed dividend can therefore be justified pursuant to the provisions of the Swedish Companies Act, Chapter 17, section 3, para. 2-3 (the precautionary principle).

Proposed distribution of profits

Amounts in SEK thousands

The following amounts are at the disposal of the annual general meeting:

Share premium reserve 130,361

Retained earnings -50,401

Profit/loss for the year -6,363

Total 73,597

The Board proposes that the profit be distributed as follows:

Cash dividend of SEK 0.40 per share to shareholders -4,681

Carried forward 68,916

29

Board of Directors’ Report

SEK -18.5 (-20.9) million. Profit/loss after financial items amounted to SEK -7.4 (-25.4) million. Profit/loss after tax was SEK -6.4 (-22.7) million.

Consilium’s shareholdersConsilium has approx. 1,600 (1,600) shareholders. The largest shareholder is the Rosenblad family’s holding company Platanen Holding AB, which owns 40.8 percent of the capital and 65.2 percent of the votes. Other major shareholders in terms of capital are MCT Brattbergs AB with 18.5 percent, Placeringsfond Nordea with 6.2 percent, Magnus Walquist with 4.7 percent and Avanza Pension with 1.8 percent.

Statement by the Board pursuant to chapter 18, section 4, of the Swedish Companies ActAfter the proposed dividend, the Parent Company’s equity/assets ratio will be 29 percent and the Group’s equity/assets ratio will be 29 percent. The equity/assets ratio is satisfactory considering that the Company and the Group continue to operate

SEK millions Note 2013 2012

Sales revenue 1 932.4 908.9

Cost of sales 20 -605.6 -601.3

Gross profit 326.8 307.6

Distribution and marketing costs 2, 9, 20 -146.3 -141.1

Administrative expenses 2, 3, 4, 9, 20 -86.3 -85.0

Research & development expenses 9, 10, 20 -40.0 -39.3

Profit/loss from investments in associates 12 0.2 0.7

Other operating income 0.0 0.0

Operating profit/loss 54.4 42.9

Finance income and exchange gains 5 13.3 5.5

Finance costs and exchange losses 6 -36.4 -23.2

Profit/loss after financial items 31.3 25.2

Income tax 7 -7.8 -9.0

Profit/loss for the year from continuing operations 23.5 16.2

Profit/loss for the year from discontinued operations 31 -12.6 -7.7

Profit/loss for the year 10.9 8.5

Other comprehensive income

Cash flow hedges 1.5 1.2

Deferred tax on cash flow hedges -0.3 -0.3

Exchange differences 0.3 -6.5

Total other comprehensive income 1.5 -5.6

Total comprehensive income 12.4 2.9

Profit/loss for the year attributable to:

Owners of the Parent 0.7 1.8

Non-controlling interests 10.2 6.7

Total profit/loss for the year 10.9 8.5

Earnings per share (EPS), owners of the Parent

EPS before and after dilution, SEK, continuing operations 1.14 0.68

EPS before and after dilution, SEK, discontinued operations -1.08 -0.53

Total earnings per share 0.06 0.15

Total comprehensive income attributable to:

Owners of the Parent, continuing operations 14.8 2.4

Owners of the Parent, discontinued operations -12.6 -6.2

2.2 -3.8


Total comprehensive income 12.4 2.9

Proposed dividend per share, SEK 0.40 0.25

Consolidated income statement and other comprehensive income

30

Assets, liabilities and equity at 31 December, SEK millions Note 2013 2012

Non-current assets

Property, plant & equipment

Land and buildings, land improvements 9 16.2 16.3

Plant and machinery 9 3.7 2.0

Equipment, tools and fixtures & fittings 9 9.4 10.5

Total property, plant & equipment 29.3 28.8

Intangible assets

Capitalised development expenditure 10 117.5 132.7

Patents, licences and similar rights 10 1.0 1.0

Goodwill 10 39.1 39.3

Total intangible assets 157.6 173.0

Financial assets

Investments in associates 12 1.0 1.2

Other securities held as non-current assets – 0.1

Non-current receivables 30 46.3 35.2

Deferred tax assets 8 46.2 39.7

Total financial assets 93.5 76.2

(of which restricted funds in non-current receivables) 23 (29.3) (19.2)

Total non-current assets 280.4 278.0

Current assets

Inventories 14 144.1 155.8

Receivables

Trade receivables 15 244.3 216.6

Prepayments and accrued income 17 26.8 34.6

Other receivables 8 36.0 44.8

Short-term investments 14.2 8.4

Cash & cash equivalents 180.6 112.9

Total current assets 646.0 573.1

(of which restricted funds in other receivables) 23 (1.9) (4.9)

Total assets 926.4 851.1

Equity and liabilities

Equity

Share capital 18 58.5 58.5

Other paid-in capital 206.2 206.2

Other reserves -29.9 -31.4

Retained earnings, incl. profit for the year -5.7 3.6

Capital and reserves attributable to owners of the Parent 229.1 236.9


Total equity 265.9 266.6

Liabilities

Non-current liabilities

Liabilities to credit institutions 21 5.6 7.3

Bond issues 21 400.0 325.0

Retirement benefit obligations 19 1.1 6.2

Other provisions 19 19.1 19.6

Total non-current liabilities 425.8 358.1

Current liabilities

Trade payables 126.1 113.4

Current tax liabilities 3.9 5.4

Liabilities to credit institutions 21 34.3 38.1

Other provisions 19 1.1 0.0

Other liabilities 18.4 23.0

Accruals and deferred income 22 50.9 46.5

Total current liabilities 234.7 226.4

Total equity and liabilities 926.4 851.1

Pledged assets 23 37.2 30.1

Contingent liabilities 24 2.5 2.5

Consolidated balance sheet

31

Share capital

Otherpaid-in capital

Otherreserves

Retained earnings,

incl. profit for the year Total

Non- controlling

interestsTotal

equity

Opening balance, 1 Jan 2012 58.5 206.2 -25.8 7.7 246.6 29.4 276.0

Translation differences – – -6.5 – -6.5 – -6.5

Cash flow hedges – – 1.2 – 1.2 – 1.2

Deferred tax on cash flow hedges, currency derivatives – – -0.3 – -0.3 – -0.3

Total other comprehensive income – – -5.6 – -5.6 – -5.6

Profit/loss for the year – – – 1.8 1.8 6.7 8.5

Total comprehensive income – – -5.6 1.8 -3.8 6.7 2.9

Dividend paid – – – -5.9 -5.9 – -5.9

NCI share of equity – – – – – -6.4 -6.4

Total owner transactions recognised in equity – – – -5.9 -5.9 -6.4 -12.3

Closing balance, 31 Dec 2012 58.5 206.2 -31.4 3.6 236.9 29.7 266.6

Opening balance, 1 Jan 2013 58.5 206.2 -31.4 3.6 236.9 29.7 266.6

Translation differences – – 0.3 – 0.3 – 0.3

Cash flow hedges – – 1.5 – 1.5 – 1.5

Deferred tax on cash flow hedges, currency derivatives – – -0.3 – -0.3 – -0.3

Total other comprehensive income – – 1.5 – 1.5 – 1.5

Profit/loss for the year – – – 0.7 0.7 10.2 10.9

Total comprehensive income – – 1.5 0.7 2.2 10.2 12.4

Dividend paid – – – -10.0 -10.0 – -10.0

NCI share of equity – – – – – -3.1 -3.1

Total owner transactions recognised in equity – – – -10.0 -10.0 -3.1 -13.1

Closing balance, 31 Dec 2013 58.5 206.2 -29.9 -5.7 229.1 36.8 265.9

Consolidated statement of changes in equity

32

Note 2013 2012

Operating activities

Operating profit before financial items 54.4 42.9

Depreciation/amortisation 9, 10 30.3 31.6

Other non-cash items 28 -13.4 -19.3

71.3 55.2

Interest received 5 4.9 1.5

Other financial items -0.3 -3.3

Interest paid 6 -27.6 -15.9

Income taxes paid -3.4 -4.8

Cash flow from operating activities before changes in working capital 44.9 32.7

Increase/decrease in inventories 14 -4.1 11.1

Increase/decrease in trade receivables 15 -27.7 12.8

Increase/decrease in other current receivables 40.6 -11.5

Increase/decrease in trade payables 12.8 -38.1

Increase/decrease in other current operating liabilities 2.3 -1.0

Cash flow from operating activities 68.8 6.0

Investing activities

Investments in property, plant & equipment 9 -6.3 -4.9

Investments in intangible assets 10 -26.0 -29.8

Restricted funds -10.1 -0.5

Increase in other short-term investments -5.8 -8.4

Other 0.2 -0.2

Acquisitions and disposals of subsidiaries and other business units, net -12.6 -8.1

Cash flow from investing activities -60.6 -51.9

Financing activities

Corporate bond issues 75.0 325.0

Repayment of liabilities -5.5 -196.6

Dividend to investors in joint ventures and minority owners -7.1 -5.9

Dividend to shareholders -2.9 0.0

Cash flow from financing activities 59.5 122.5

Cash flow for the year 67.7 76.6

Cash & cash equivalents at beginning of year 112.9 36.3

Cash & cash equivalents at end of year 180.6 112.9

Consolidated cash flow statement

33

SEK millions Note 2013 2012

Sales revenue 1.2 3.1

Gross profit 1.2 3.1

Administrative expenses 2, 3, 4 -19.7 -24.0

Operating profit/loss -18.5 -20.9

Interest and similar income 5 21.9 4.0

Profit/loss from investments in group companies 20.0 0.0

Interest and similar expense 6 -30.8 -8.5

Profit/loss before tax -7.4 -25.4

Tax on profit/loss for the year 7 1.0 2.7

Profit/loss for the year -6.4 -22.7

Income statement, Parent

34

Assets, liabilities and equity at 31 December, SEK millions Note 2013 2012

Non-current assets

Property, plant & equipment

Equipment, tools and fixtures & fittings 9 0.0 0.0

Total property, plant & equipment 0.0 0.0

Financial assets

Investments in Group companies 11 124.1 124.1

Deferred tax assets 8 19.6 18.0

Total financial assets 143.7 142.1

Total non-current assets 143.7 142.1

Current assets

Receivables

Receivables from Group companies 350.9 319.8

Prepayments and accrued income 17 8.6 6.3

Short-term investments 14.2 8.4

Other current receivables 0.4 1.0

Cash & cash equivalents 94.0 70.0

Total current assets 468.1 405.5

Total assets 611.8 547.6


Equity

Restricted equity

Share capital 18 58.5 58.5

Statutory reserve 31.7 31.7

Total 90.2 90.2

Unrestricted equity

Share premium reserve 130.4 130.4

Retained earnings -50.4 -24.7

Profit/loss for the year -6.4 -22.7

Total 73.6 83.0

Total equity 163.8 173.2

Liabilities

Non-current liabilities

Bond issues 21 400.0 325.0

Liabilities to Group companies 40.2 40.2

Total non-current liabilities 440.2 365.2

Current liabilities

Trade payables 1.0 2.7

Other liabilities 0.6 0.9

Accruals and deferred income 22 6.2 5.6

Total current liabilities 7.8 9.2

Total equity and liabilities 611.8 547.6

Pledged assets 23 – –

Contingent liabilities 24 2.5 5.7

Balance sheet, Parent

35

Share capital Statutory reserve

Share premium reserve Retained earnings Total equity

Opening balance, 1 Jan 2012 58.5 31.7 130.5 -24.7 196.0

Repurchase of warrants – – -0.1 – -0.1

Dividend paid – – – – –

Profit/loss for the year – – – -22.7 -22.7

Closing balance, 31 Dec 2012 58.5 31.7 130.4 -47.4 173.2

Opening balance, 1 Jan 2013 58.5 31.7 130.4 -47.4 173.2

Dividend paid – – – -2.9 -2.9

Other – – – -0.1 -0.1

Profit/loss for the year – – – -6.4 -6.4

Closing balance, 31 Dec 2013 58.5 31.7 130.4 -56.8 163.8

Statement of changes in equity, Parent

36

Note 2013 2012

Operating activities

Operating profit before financial items -18.5 -20.9

Depreciation/amortisation 9 0.0 0.1

Other non-cash items 28 -0.6 –

-19.1 -20.8

Interest received 5 21.9 4.0

Interest paid 6 -30.8 -8.5

Cash flow from operating activities before changes in working capital -28.0 -25.3

Increase/decrease in other current receivables -32.8 -143.8

Increase/decrease in trade payables -1.7 -0.5

Increase/decrease in other current operating liabilities 0.3 4.9

Cash flow from operating activities -62.2 -164.7

Investing activities

Shareholder contributions 0.0 -10.0

Sale of subsidiaries 11 – 1.8

Increase in other short-term investments -5.8 -8.4

Cash flow from investing activities -5.8 -16.6

Financing activities

Corporate bond issues 21 75.0 325.0

Repayment of loans 0.0 -74.0

Dividend paid -2.9 –

Repurchase of warrants – -0.1

Group contributions received 20.0 –

Other -0.1 –

Cash flow from financing activities 92.0 250.9

Cash flow for the year 24.0 69.6

Cash & cash equivalents at beginning of year 70.0 0.4

Cash & cash equivalents at end of year 94.0 70.0

Cash flow statement, Parent

37

Accounting policies

All amounts are in SEK millions unless otherwise stated.

Accounting PoliciesThe most important accounting policies applied in pre-paring the consolidated financial statements are described below. These policies have been applied consistently for all presented years unless otherwise stated.

Basis of preparationThe consolidated financial statements for the Consilium Group have been prepared in accordance with the Swedish Annual Accounts Act, RFR 1 Supplementary Accounting Rules for Groups, International Financial Reporting Standards (IFRS) and IFRIC interpretations as adopted by the EU. They have been prepared using the cost method, apart from the revaluation of land and buildings, available-for-sale financial assets and financial assets and liabilities (including derivatives) at fair value through profit or loss.

Preparation of financial statements in accordance with IFRS requires use of critical accounting estimates. In addition, management is required to make certain judgements when applying the Group’s accounting policies. Areas involving a high degree of judgement are those which are complex or those for which the use of critical accounting estimates is of significant importance to the consolidated financial statements.

Amendments to accounting policies and disclosuresNew and amended standards applied by the GroupStandards applied by the Group for the first time for the annual period beginning 1 January 2013 and which have a significant effect on the consolidated financial statements are as follows: IAS 1 Presentation of Financial Statements has introduced amendments with regard to other comprehensive income. The most significant change to IAS 1 is the requirement for items presented in other comprehensive income to be divided into two groups: items that may be reclassified to profit or loss (reclassification adjustments) and items that may not.

Amendments to IFRS 7 Financial Instruments: Disclosures, which concerns disclosures related to netting of assets and liabilities. The amendment requires new disclosures in order to facilitate comparisons between companies that prepare their financial statements according to IFRS and those that prepare their financial statements according to US GAAP.

IFRS 13 Fair Value Measurement provides more consistent and less complex measurement of fair value. The standard defines fair value, sets out in a single IFRS a framework for measuring fair value and requires disclosures about fair value measurements. The standard provides guidance on fair value measurement for all types of assets and liabilities, both financial and non-financial. IFRS 13 does not determine when an asset or liability is measured at fair value. Rather, provides guidance to measurement and disclosure requirements of IFRS 13 apply when another IFRS requires or permits the item to be measured at fair value.

An amendment to IAS 36 Impairment of Assets has been published – Recoverable Amount Disclosures for Non-Financial Assets. The amendment, which is a consequential amendment to IFRS 13, removes the requirement for disclosures on the recoverable amount of cash-generating units. The amendment is not mandatory for the Group until 1 January, 2014 but the Group has elected to apply the amendment from 1 January 2013. IAS 19 Employee Benefits was amended in June 2011. Past service cost is recognised immediately. Interest expenses and expected return on plan assets will be replaced by a net interest calculated using the discount rate, based on the net surplus or net deficit of the defined benefit plan.

New standards and interpretations not yet adopted by the GroupA number of new standards and interpretations effective for annual periods beginning on or after 1 January 2013 have not been applied in preparing the financial statements. These are not expected to have a material impact on the consolidated financial statements, with the following exceptions: IFRS 10 Consolidated Financial State-ments, which is based on existing principles, establishes control as the basis for consolidation.

The standard provides additional guidance in determining whether control exists when this is difficult to assess. The Group will apply IFRS 10 for the financial year beginning 1 January 2014, and has not yet evaluated its full impact on the financial statements.

IFRS 11 Joint Arrangements focuses on the rights and obligations of the parties in a joint ownership rather than the legal form of the joint arrangement. There are two types of joint arrangements – joint operations and joint ventures. Under a joint operation, the parties that have joint control of the arrangement have direct rights to the assets, and obligations for the liabilities, relating to the arrangement. In such an arrangement, the joint operator recognises assets, liabilities, revenues and expenses in relation to its interest in the joint operation. A joint venture is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the net assets of the arrangement. Joint ventures must be accounted for using the equity method from 2014, as proportionate consolidation is no longer permitted. The Group already uses the proportionate method. IFRS 11 is expected to have the following effect on income statement items (based on 2013 figures):

Sales -43.3Gross profit/loss -24.6Operating profit/loss -2.4Profit/loss after financial items -1.9

IFRS 12 Disclosure of Interests in Other Entities includes disclosure requirements for subsidiaries, joint arrangements, associates and unconsolidated structured entities. The Group will apply IFRS 12 for the financial year beginning 1 January 2014, and has not yet evaluated its full impact on the financial statements.

IFRS 9 Financial Instruments deals with the classification, measurement and reporting of financial assets and liabil-ities. IFRS 9 was issued in November 2010 for financial assets and in October 2011 for financial liabilities and replaces the parts of IAS 39 relating to the classification and measurement of financial instruments. The categories in IAS 39 are replaced by two classifications – those measured at fair value and those measured at amortised cost. The classification is determined at initial recognition using a business model test and a contractual cash flow characteristics test. For financial liabilities, there are no significant changes compared with IAS 39. The main change relates to liabilities designated as measured at fair value. For these liabilities, the amount of change in the fair value that is attributable to the credit risk of the liability is required to be presented in other compre-hensive income rather than in profit or loss, unless this causes an accounting mismatch. The Group has not yet evaluated the impact. The Group will assess the effects of the remaining phases of IFRS 9 when they are completed by the IASB.

Significant accounting estimates and assumptionsPreparation of the financial statements in accordance with IFRS requires use of critical accounting estimates. In addition, management is required to make certain judgements when applying the Group’s accounting policies. Areas involving a significant amount of judgement, which are complex or require use of critical accounting estimates are as follows:

Assumptions used in goodwill impairment testingThe Group tests goodwill for impairment in accordance with the accounting principles described under intangible assets. The assumptions and estimates regarding projected cash flows and the discount rate using a weighted average capital cost are described in Note 10. Cash flow projec-tions are based on the best estimate of future income and operating expenses. Impairment testing has not identified any goodwill impairment and the margin used in the testing was such that company management does not believe any reasonable changes in individual variables will cause the value in use to fall below the carrying amount. Management also believes that even a certain amount of movement in the most critical variables will still not result in impairment losses.

Assumptions used in impairment testing of capitalised development expenditureThe Group annually tests capitalised development expenditure for impairment in accordance with the accounting principles described under intangible assets. Cash flow projections are based on the best estimate of future income and operating expenses. Impairment testing has not identified any impairment of capitalised development expenditure. The margin used in the testing was such that company management does not believe any reasonable changes in individual variables will cause the value in use to fall below the carrying amount. Management also believes that even a certain amount of movement in the most critical variables will still not result in impairment losses.

Assumptions used in impairment testing of deferred tax assetsA deferred tax asset is recognised in the balance sheet for the carryforward of unused tax losses to the extent that it is probable that future taxable profit will be available against which the unused losses can be utilised. The Group’s forecasts are used as a basis for defining future profit. The carrying amount of a deferred tax asset is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow the deferred tax asset to be utilised. Uncertainty regarding the future economic situation or other difficulties in the assessment of future profit may result in a lower taxable profit in subsidiaries which have unused tax losses. The probability of the Group being able to utilise unused tax losses is based on factors such as estimates and recent years’ results. All unused tax losses have been recognised as deferred tax assets.

Trade receivablesReceivables are recognised at net amounts due less any provision for doubtful debts, which are assessed on an individual basis. The net value reflects the amounts ex-pected to be received based on the known circumstances at the reporting date. Changed circumstances, such as an increased number of defaults or a change in an existing customer’s financial position, may result in deviations in the net value measurement. The current market situation has resulted in an increased focus on customer credit ratings and monitoring of trade receivables.

DisputesConsilium is involved in disputes in the course of its normal business operations. Disputes may concern product liability, alleged errors in deliveries of goods and other issues connected with Consilium’s operations. Disputes may prove costly, time-consuming and disruptive to normal business operations. At present, there are not considered to be any disputes of significance in progress.

Cash flowThe cash flow statement is prepared using the indirect method. Reported cash flows only concern transactions

38

in the consolidated income statement and balance sheet. The Group’s share of the profit or loss of associates is recognised after tax.

Foreign currency translationThe individual financial statements of each Group entity are presented in the currency of the primary economic environment in which the entity operates (its functional currency). The consolidated financial statements are pre-sented in Swedish kronor, which is the parent company’s functional and presentation currency. The subsidiaries’ balance sheets are translated at the rates prevailing at the reporting date and the income statements are translated at the average rate for the year. Exchange differences are recognised directly in consolidated equity.

Significantexchange rates

Closing rate, 31 December2013 2012

USD 6.44 6.52

EUR 8.87 8.62

GBP 10.65 10.49

Significantexchange rates

Average rate2013 2012

USD 6.52 6.74

EUR 8.66 8.70

GBP 10.22 10.70

Foreign currency assets and liabilities are measured at the closing rate. Exchange gains and losses on transaction payments and translation of monetary assets and liabilities are reported in the income statement under net sales or cost of sales. Transactions entered into to hedge certain foreign currency risks are recognised in profit or loss until the hedging instrument expires.

Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities in the entity and are translated at the closing rate.

Intra-group extended equity transactions in foreign currency are not translated at the closing rate, but at the transaction date rate.

Business areasConsilium has two business areas – Marine & Safety and Fire safety & Automation. The business areas are monitored internally by the chief operating decision maker, namely the President and CEO.

Units within each business area have a similar risk profile and development. Consequently, the Group classifies the business areas as cash generating units when conducting goodwill impairment testing.

Revenue recognitionRevenue comprises the fair value of the sale of goods and services, net of value-added tax and discounts, after elimination of intra-group sales. Revenue is recognised as follows.

Sale of goodsThe Group’s net sales comprise the fair value of the sale of goods. Consilium recognises revenue when the risks associated with the goods have been transferred to the customer under the terms of delivery and it is probable that payment of the trade receivable that arises from the sale will flow to the Group. Sales are recognised net of VAT, discounts, returns and exchange differences on foreign currency sales, and after elimination of internal Group sales.

Rendering of services and construction contractsRevenue and costs relating to the provision of services and construction contracts are recognised by reference to the stage of completion at the reporting date, often referred to as the percentage of completion method. The

stage of completion is measured based on the proportion of contract costs incurred for work performed to date relative to the estimated total contract costs. Where the outcome of a contract to provide services or a con-struction contract cannot be estimated reliably, contract revenue is recognised to the extent of the contract costs incurred that are likely to be recoverable. An expected loss is recognised as an expense immediately.

Interest incomeInterest income is recognised over the relevant period using the effective interest method.

Dividend incomeDividend income is recognised when the dividend has been adopted and the shareholders’ rights to receive payment have been established.

Government grantsGovernment grants are recognised at fair value when there is reasonable assurance that the grant will be received and the Group will comply with the conditions attaching to it. Government grants related to expense items are deferred and recognised over the periods necessary to match them with the related costs which they are intended to compensate.

Borrowing costsBorrowing costs are recognised in profit or loss in the period in which they are incurred. Consilium does not have any loans that are directly attributable to the Company’s development expenditure.

TaxesDeferred tax is recognised on all temporary differences between the carrying amounts of assets and liabilities and their corresponding tax bases, and is accounted for using the balance sheet liability method. Unused tax losses are recognised as deferred tax assets to the extent that it is probable that taxable profits will be available against which they can be utilised. Unused tax losses include accumulated losses at the date of acquisition and subse-quently arising losses. Deferred tax assets and liabilities are measured using tax rates that have been enacted by the reporting date, and are reported as financial assets or non-current liabilities in the balance sheet. Income tax for the year consists of current tax and deferred tax. If the outcome differs from the amounts initially recognised, these differences will affect the provisions for current and deferred tax and profit for the year. Deferred tax liabilities are recognised for temporary differences arising on in-vestments in subsidiaries and associates, except where the Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future.

Intangible assetsThe Group’s intangible assets comprise capitalised development expenses, goodwill and patents, licences and similar rights.

GoodwillGoodwill represents the difference between the cost of the shares in an acquired subsidiary and the acquisi-tion-date fair value of the subsidiary’s net assets. Goodwill arising on the acquisition of an associate is included in the carrying amount of the investment and is assessed for impairment as part of the total investment. Goodwill is reported separately and tested for impairment annually. Goodwill impairment is not reversed. A gain or loss on the disposal of an entity includes the residual carrying amount of the goodwill that relates to the entity. Goodwill is allocated at the date of acquisition to the cash generating units which are expected to benefit from the business combination that gave rise to the goodwill item.

that involve cash inflows and outflows. Cash & cash equivalents comprise cash and bank deposits.

Basis of consolidationThe consolidated financial statements incorporate the financial statements of the parent company and entities controlled by the parent company (subsidiaries). Control is achieved where the parent company owns, directly or indirectly, more than half of the voting power and has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities.

The consolidated financial statements have been prepared in accordance with the acquisition method. The cost of an acquisition comprises the fair value of assets transferred, equity instruments issued and liabilities incurred or assumed at the transfer date. The acquiree’s equity is defined as the difference between the fair values of identifiable assets, assumed liabilities and contingent liabilities based on a market valuation conducted at the date of acquisition. The subsidiary’s equity is eliminated in its entirety, which means the Group’s equity only includes the portion of equity arising after the business combination. Goodwill represents the excess of the cost of acquisition over the Group’s interest in the net fair value of the identifiable assets of the subsidiary recognised at the date of acquisition. Business combinations during the year are consolidated from the date on which the Group gains control at amounts relating to the period after the acquisition. Subsidiaries which have been disposed of are deconsolidated from the date on which control ceases. Subsidiaries which have been portioned out to shareholders are deconsolidated from the distribution date. Internal transactions, balances and gains are eliminated in their entirety, without taking into account non-controlling interests.

Acquisitions of non-controlling interestsAcquisitions of non-controlling interests are reported as a transaction within equity, i.e. between the owners of the parent (within retained earnings) and non-controlling interests. Consequently, these transactions do not give rise to goodwill. Changes to holdings of non-controlling interests are based on their proportionate share of net assets.

Joint venturesA joint venture is an arrangement whereby Consilium and one or more venturers have joint control. The Group is only engaged in joint ventures that constitute a separate legal entity. The 50/50-owned joint venture companies have been consolidated using proportionate consolidation due to the absence of control. Proportionate consolidation means the Group’s share of the assets, liabilities, income and expenses of the jointly-controlled entity are combined with the corresponding items in the consolidated income statement and balance sheet on a line-by-line basis.

AssociatesAn associate is an entity over which the Parent Company has significant influence and is not a subsidiary. Holdings in associates are normally between 20% and 50%. Investments in associates are recognised in the consolidated financial statements using the equity method of accounting, and are initially measured at cost. The Group’s share of the profit or loss of an associate after its acquisition is recognised in the income statement, and its share of changes in reserves is recognised under Reserves. Accumulated post-acquisition changes are reported as a change in the holding’s carrying amount. When the Group’s share of the losses of an associate amounts to or exceeds its holding, the Group does not recognise any subsequent losses. Any unrealised internal gains are eliminated to the extent of the Group’s share of the gain. Unrealised losses are also eliminated. The share of profit or loss of associates is reported on separate lines

39

Accounting policies

For a description of the methods and assumptions used for impairment testing, see Note 10.

Product development and researchExpenditure relating to development projects for the construction and testing of new or improved products is capitalised under intangible assets to the extent that such expenditure is expected to generate future economic benefits. Other development expenditure is recognised as an expense in the period in which it is incurred. Development costs previously recognised as an expense are not capitalised in subsequent periods. Capitalised development costs are amortised using the straight-line method over 3-5 years (the period in which future economic benefits are expected to flow to the company) from the date on which commercial production begins. In accordance with the IFRS transitional provisions in 2005, Consilium has reclassified the previously recognised goodwill arising from the acquisition of the net assets of Nittan and Servoteknikk in 2003 and 2004. The reclassification of the acquired net assets of Nittan and Servoteknikk means that Consilium’s consolidated financial statements now show product development acquisitions. At the acquisition date, the estimated useful lives and amortisation schedules were defined as 20 and 10 years, respectively. As these amortisation schedules are the same as those for previously recognised goodwill, there is no difference in amortisation charges compared with previously. Amortisation is reported in the income statement under Research and development costs.

Expenditure on research activities is recognised as incurred. Research in the strict sense of the word is not conducted to any great extent in the Group, but is an ongoing process which forms an integral part of day-to-day operations. This type of expenditure can be difficult to distinguish as research, and does not in any case represent any significant amounts.

Patents, trademarks and licencesPatents, trademarks and licences are recognised at cost. Patents, trademarks and licences have finite useful lives, and are recognised at cost less accumulated amortisation. Amortisation is applied to patents, trademarks and licences using the straight-line method over their estimated useful lives (5-10 years).

Property, plant & equipmentItems of property, plant & equipment, including land and industrial buildings, are stated at cost less subsequent depreciation. Cost includes costs directly related to the acquisition of the asset. Expenditure on improving an asset’s performance from its original level increases the asset’s carrying amount. Repair and maintenance costs are recognised as an expense. Depreciation is charged to operating profit in the income statement and is applied using the straight-line method over the assets’ useful lives, based on the difference between their cost and residual value. Consilium applies the following useful lives:

Industrial buildings used in the business 25 yearsPlant and machinery 5-7 yearsEquipment, tools and fixtures & fittings 5 years

The residual values and useful lives of assets are reviewed annually and adjusted if necessary. If an asset’s carrying amount exceeds its estimated recoverable amount, it is written down to the recoverable amount. Depreciation is not applied to land.

Capital gains and losses are determined by comparing the selling price and the carrying amount. Capital gains and losses are recognised in profit or loss.

LeasesLease contracts for non-current assets where the Group essentially has the same risks and rewards as

those incidental to direct ownership are classified as finance leases.

Assets held under finance leases are recognised at their fair value at the inception of the lease, or, if lower, at the present value of the minimum lease payments. Finance leases are reported under non-current assets and financial liabilities in the balance sheet. Future lease payments are apportioned between reduction of the lease obligation and finance charges so as to achieve a constant rate of interest on the remaining balance of the liability for each period. Depreciation of leased assets is on a basis consistent with the normal depreciation policy for similar assets. Costs of leases are reported under depreciation and interest in the income statement. The Group did not hold any assets under finance leases in 2013 or in 2012.

A lease is classified as an operating lease if it does not transfer substantially all the risks and rewards of owner-ship. Lease payments are recognised as an expense on a straight-line basis over the term of the lease. Operating leases are reported under operating expenses in the income statement. Leased cars, computers and premises are normally classified as operating leases.

ImpairmentDepreciation/amortisation is not applied to assets with an indefinite useful life, such as goodwill; instead, they are tested annually for impairment. The Group reviews the carrying amounts of assets whenever there is an indication that they may be impaired. If the recoverable amount of an asset is estimated to be less than its carrying amount, the carrying amount is reduced to the asset’s recoverable amount.

The recoverable amount is the higher of the asset’s fair value less costs to sell and its value in use. Impairment losses are recognised by cash-generating unit. Assets, other than financial assets and goodwill, for which impairment losses have previously been recognised are tested at each reporting date to determine whether there is any need for reversal of the previous impairment.

InventoriesInventories consist of finished and semi-finished products and raw materials. Inventories are measured on a first-in first-out basis at the lower of cost and net realisable value at the reporting date. Finished and semi-finished products are measured at the manufacturing cost, including raw materials, direct labour, other direct overheads and production-related costs based on normal production. Net realisable value is the estimated selling price in the ordinary course of business, less the estimated variable costs necessary to make the sale. Collective measurement is used for groups of products with similar characteristics. Inventory measurement does not include interest costs. A deduction is made for internal gains arising from intra-group deliveries. An obsolescence provision has been recognised.

Financial instrumentsFinancial instruments recognised in the balance sheet include cash & cash equivalents, trade receivables, current and non-current receivables, trade payables, loans and other liabilities.

The Group classifies financial assets into the following categories: cash & cash equivalents, loans and receivables and available-for-sale financial assets. Financial assets are classified on the basis of the purpose for which they were acquired. Management makes a classification decision on initial recognition and reviews the decision at each reporting date.

Loans and receivablesLoans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are reported under current assets unless the settlement date is more than

12 months after the reporting date, in which case they are classified as non-current assets. Loans and receivables are reported under trade receivables and other current and non-current receivables in the balance sheet. Loan receivables are recognised at amortised cost using the effective interest method.

Trade receivables are initially measured at fair value and thereafter at amortised cost using the effective interest method less any provision for impairment losses. A provision for impairment losses is recognised when there is objective evidence that the carrying amount of receivables will not be recovered, and an impairment loss is recognised when the loss is actually identified.

Available-for-sale financial assetsAvailable-for-sale financial assets are non-derivative financial assets that have been designated as available for sale or have not been classified in any of the other categories. They are reported under non-current assets if management does not intend to dispose of them within 12 months of the reporting date. The assets are measured at fair value and any changes in fair value are recognised in other comprehensive income. An impairment loss is recognised if there is objective evidence of impairment. On disposal of the asset, the cumulative gain/loss previously recognised in other comprehensive income is reclassified to profit or loss. Investments in equity instruments that do not have a quoted market price in an active market and whose fair value cannot be reliably measured are measured at cost. Purchases and sales of financial assets are recognised at the trade date, i.e., the date on which the Group commits itself to purchase or sell the asset. Financial assets are derecognised when the right to receive cash flows from the instrument has ex-pired or been transferred, and the Group has transferred substantially all the risks and rewards of ownership.

Cash & cash equivalentsCash & cash equivalents comprise cash on hand, bank deposits and short-term investments with an original maturity of three months or less. Cash & cash equivalents are initially recognised at fair value and thereafter at amortised cost.

Hedge accountingConsilium uses derivative financial instruments to cover risks associated with foreign currency exposure. Consilium designates certain derivatives as hedges of commercial foreign currency exposure in the form of highly probable forecast transactions (cash flow exposure) within the framework of the financial policy defined by the Board. Consilium applies hedge accounting for contracts which qualify for hedge accounting under IAS 39 Financial Instruments. At the inception of the hedge and on an ongoing basis, the Group documents whether the hedging instrument used is highly effective. Unrealised gains and losses arising on the market valuation of hedging instruments and which meet the criteria for hedge accounting are recognised in comprehensive income. See also Note 13.

The entire fair value of a derivative which is a hedging instrument is reported under non-current assets or liabilities when the hedged item has a term to maturity of more than 12 months, and is reported under current assets or liabilities when it has a term to maturity of less than 12 months.

The effective portion of changes in the fair value of derivatives that are designated as cash flow hedges and qualified for hedge accounting is reported in equity. The gain or loss relating to the ineffective portion is recognised immediately in profit or loss as finance income or expense. Amounts deferred in equity are recycled in profit or loss in the periods in which the hedged item affects profit or loss (e.g. when the forecast hedged transaction occurs). Hedge accounting is discontinued when the

40

Accounting policies

hedging instrument expires or is soled or no longer qualifies for hedge accounting. Any cumulative gain or loss deferred in equity at that time remains in equity and is released to the income statement when the forecast transaction is ultimately recognised in profit or loss. When a forecast transaction is no longer expected to occur, the cumulative gain or loss that was deferred in equity is recognised immediately in profit or loss as finance income or expense.

Share capitalOrdinary shares are classified as equity. Transaction costs directly attributable to the issue of new shares or options are recognised in equity, net of tax, as a deduction from the issue proceeds.

Trade payablesTrade payables are initially carried at fair value and thereafter at amortised cost using the effective interest method.

BorrowingBorrowing costs are initially recognised at fair value, net of transaction costs. Borrowing costs are subsequently measured at amortised cost, and any difference between the amount received and the repayment amount is recognised in profit or loss over the term of the loan using the effective interest method.

ProvisionsProvisions are recognised as current and non-current liabilities in the balance sheet when the Group has a present obligation (legal or constructive) as a result of a past event and it is probable that an outflow of resources will be required to settle the obligation, and a reliable estimate of the amount can be made. Restructuring provisions are recognised when a detailed formal plan is in place and a valid expectation that the plan will be implemented has been raised in those affected. Provisions for future warranty claims concern the next two years and are based on historical warranty claim information and any trends indicating that future claims may deviate from the historical pattern. No provisions are recognised for future operating losses.

Repurchase of treasury sharesIn the case of repurchase of treasury shares, the purchase consideration, including any directly attributable transaction costs (net of tax), i.e. the capitalised gain, is reduced until the shares are cancelled or sold. In the event of subsequent disposal of these shares, the proceeds (net of directly attributable transaction costs and tax effects) are recognised in retained earnings.

Employee benefitsEmployee benefits are accounted for in accordance with IFRS 19, Employee Benefits. Group companies have different types of pension plans. The plans are normally funded by payments to insurance companies. The Group provides defined benefit and defined contribution pension plans. A defined benefit pension plan is a plan which defines the post-retirement benefit an employee receives, normally based on one or more factors such as age, length of service or salary. Under defined contribution plans, the Group pays fixed contributions into a separate legal entity (a fund).

The pension plans are funded by payments from Group companies. The defined benefit pension plans in Sweden relate to ITP plans, which are insured with Alecta. These are reported as defined contribution plans as Alecta is unable to provide sufficient information to allow them to be reported as defined benefit plans. See also Note 19. The Group’s payments to retirement benefit plans are recognised as an expense in the period when employees have rendered service entitling them to the contributions.

Defined benefit liabilities recognised in the balance sheet represent the present value of the defined benefit obligation at the reporting date less the fair value of plan assets. The defined benefit pension obligation is calculated annually by an independent actuary in accordance with the projected unit credit method. The present value of the defined benefit obligation is determined by discounting expected future cash flows by reference to market yields on high quality corporate bonds of a currency and term consistent with the currency and term of the retirement benefit obligation.

For defined contribution pension plans, the Group pays contributions into publicly or privately managed pension insurance plans on a mandatory, contractual or voluntary basis. The Group has no additional payment obligations once the contributions have been paid. The contributions are recognised as personnel expenses when due for payment.

DividendsDividends are recognised as a liability when they have been adopted by the annual general meeting.

Accounting policies – Parent CompanyThe Parent Company’s annual financial statements have been prepared in accordance with the Swedish Annual Accounts Act and the Swedish Financial Reporting Board’s recommendation RFR 2 Accounting for Legal Entities. RFR 2 requires the Parent Company to prepare separate financial statements in accordance with the International Financial Reporting Standards (IFRS) and statements adopted by the EU to the extent allowed within the framework of the Swedish Annual Accounts Act, and taking into account the relationship between tax expense and accounting profit. The recommendation also specifies exceptions from and additions to IFRS. Differences between the accounting policies of the Group and the Parent Company are described below.

Financial instrumentsNon-current financial assets are measured at cost less impairment, while current financial assets are measured at the lower of cost and net realisable value.

Leased assetsIn the Parent Company, all leases are reported as operating leases.

Group contributions and shareholder contributions for legal entitiesGroup contributions received are recognised in accordance with RFR 2 as finance income in the income statement.

Investments in subsidiariesShares in subsidiaries are recognised at cost less impairment losses. If there is an indication that shares and interests in a subsidiary or associate may be impaired, the recoverable amount is calculated. If this is lower than the carrying amount, an impairment loss is recognised. Impairment losses are recognised under financial items in the income statement.

Investments in associatesIn the Parent Company’s annual financial statements, investments in associates are recognised at cost less impairment losses. The Parent Company recognises income only to the extent that it receives distributions from the profits of the associate arising subsequent to the date of acquisition.

41

Accounting policies

Note 1 BUSINESS AREAS

The Group is organised in two business areas. Marine & Safety develops and markets fire alarm, gas detection and emission systems, marine voyage data recorders and navigation products. Fire safety & Automation provides fire protection and automation solutions for the oil and gas industry. Other operations encompass Group-wide functions. Transfers or transactions between segments are conducted under normal market terms and conditions. This also applies to external parties. Operating segment assets attributable to the business areas consist mainly of intangible assets, property, plant & equipment, inventories, receivables and operating cash. Both business area are reported with an equity that corresponds to the Group’s equity ratio. Operating segment liabilities attributable to the business areas consist of operating liabilities, but not items such as tax and certain company borrowing. Investments consist of property, plant & equipment and intangible assets.

The business areas’ accounts for 2013 and 2012 are shown below.

SEK millions Marine & SafetyFire safety & Automation Other Elimination Group

Financial year 2013

Net sales 748.8 183.6 0.0 932.4

Operating profit/loss 55.0 17.8 -18.4 54.4

Operating margin 7% 10% 6%

Operating profit includes

Depreciation/amortisation 28.6 1.7 0.0 30.3

Assets

Property, plant & equipment 14.7 2.9 11.7 29.3

Intangible assets 140.5 17.1 0.0 157.6

Intra-Group receivables 0.0 0.0 229.4 -229.4 0.0

Restricted cash 29.3 29.3

Other financial assets 8.7 16.0 39.5 64.2

Total non-current assets 163.9 36.0 309.9 -229.4 280.4

Inventories 110.6 31.0 2.5 144.1

Receivables 183.6 84.5 37.1 305.2

Cash and cash equivalents, restricted cash and investments 54.4 13.3 129.0 196.7

Total current assets 348.6 128.8 168.6 646.0

Total assets 512.5 164.8 478.5 -229.4 926.4


Equity 150.0 50.0 65.9 265.9

Bond issues 0.0 0.0 400.0 400.0

Liabilities to credit institutions 4.1 31.8 4.0 39.9

Intra-Group liabilities 195.2 34.2 0.0 -229.4 0.0

Other non-current liabilities 8.0 12.2 0.0 20.2

Other current liabilities 155.2 36.6 8.6 200.4

Total liabilities 362.5 114.8 412.6 -229.4 660.5

Total equity and liabilities 512.5 164.8 478.5 -229.4 926.4

Operating capital 294.9 102.7 82.2 479.8

Return on average operating capital 19% 18% 11%

Notes

42

SEK millions Marine & SafetyFire safety & Automation Other Elimination Group

Financial year 2012

Net sales 760.3 148.6 0.0 908.9

Operating profit 55.9 6.5 -19.5 42.9

Operating margin 7% 4% 5%

Operating profit includes

Depreciation/amortisation 27.7 3.9 0.0 31.6

Assets

Property, plant & equipment 15.3 2.4 11.1 28.8

Intangible assets 140.0 17.1 15.9 173.0

Intra-Group receivables 0.0 0.0 174.7 -174.7 0.0

Restricted cash 19.2 19.2

Other financial assets 10.8 15.3 30.9 57.0

Total non-current assets 166.1 34.8 251.8 -174.7 278.0

Inventories 110.0 25.8 20.0 155.8

Receivables 165.1 79.2 46.8 291.1

Cash and cash equivalents, restricted cash and investments 37.5 2.6 86.1 126.2

Total current assets 312.6 107.6 152.9 573.1

Total assets 478.7 142.4 404.7 -174.7 851.1


Equity 150.0 50.0 66.6 266.6

Bond issues 0.0 0.0 325.0 325.0

Liabilities to credit institutions 7.5 33.9 4.0 45.4

Intra-Group liabilities 156.0 18.7 0.0 -174.7 0.0

Other non-current liabilities 13.3 7.6 4.9 25.8

Other current liabilities 151.9 32.2 4.2 188.3

Total liabilities 328.7 92.4 338.1 -174.7 584.5

Total equity and liabilities 478.7 142.4 404.7 -174.7 851.1

Operating capital 276.0 100.0 115.6 491.6

Return on average operating capital 21% 7% 9%

Consilium’s countries (apart from Sweden) with the highest net sales:

2013 2012Italy 75.2 76.2

China 226.6 248.9

Middle East 183.6 208.9

Netherlands 58.6 52.6

South Korea 105.4 102.6

Germany 57.5 43.9

USA 58.0 51.1

Net sales includes revenues from:Net sales

2013 2012Goods 73.8% 74.1%

Services 10.5% 12.5%

Construction contracts 15.7% 13.4%

100.0% 100.0%

43

Notes

Note 2 SALARIES, OTHER EMPLOYEE BENEFITS AND SOCIAL SECURITY CONTRIBUTIONS

2013 2012

Salaries and other remuneration

Social security contributions

(of which pension costs)Salaries and other

remuneration

Social security contributions

(of which pension costs)Parent 5.1 3.3 (1.0) 7.3 3.9 (1.1)

Subsidiaries 203.5 36.8 (23.6) 193.6 35.8 (23.7)

Group 208.6 40.1 (24.6) 200.9 39.7 (24.8)

Group ParentPersonnel 2013 2012 2013 2012Swedish operations:

Parent 4 7 4 7

Subsidiaries 186 184

Total, Sweden 190 191 4 7

Foreign operations, subsidiaries/joint ventures:

Belgium 2 2 – –

Finland 4 5 – –

United Arab Emirates 140 135 – –

Greece 4 5 – –

India 21 19 – –

Italy 10 10 – –

Japan 6 5 – –

China 57 64 – –

Netherlands 16 16 – –

Norway 10 10 – –

Oman 3 – – –

Qatar 9 10 – –

Saudi Arabia 3 – – –

Singapore 18 16 – –

Spain 10 9 – –

UK 4 2 – –

South Korea 22 22 – –

Germany 18 17 – –

USA 14 15 – –

Total 371 362 4 7

Total, Group 561 553 4 7

24 (20) percent of the Group’s employees in 2013 were female. The Parent Company has 4 (7) employees, 1 (1) of whom is female.

Employees in Sweden are distributed as follows:Group Parent

2013 2012 2013 2012Gothenburg 158 165 0 1

Stockholm 32 26 4 6

Total 190 191 4 7

44

Notes

Note 2 SALARIES, OTHER EMPLOYEE BENEFITS AND SOCIAL SECURITY CONTRIBUTIONS, CONT’D

Salaries and employee benefits (boardmembers and other employees) by country

2013 2012Board and CEO Other employees Board and CEO Other employees

Parent 3.2 1.9 2.9 4.4

Subsidiaries, Sweden 3.7 85.6 3.1 83.5

Foreign subsidiaries

Finland 0.5 1.7 0.5 2.0

United Arab Emirates 4.3 39.7 3.8 37.8

Greece 0.5 0.9 0.4 0.8

India 0.0 1.3 0.0 1.2

Italy 1.0 2.9 1.0 2.9

Japan 0.4 1.5 0.5 1.5

China 0.8 6.7 0.7 6.3

Netherlands 2.6 6.4 2.7 5.4

Norway 1.3 4.4 1.2 5.5

Oman 0.0 0.1 – –

Qatar 0.0 1.8 0.0 1.7

Saudi Arabia 0.0 0.3 – –

Singapore 1.4 5.1 1.3 3.5

Spain 0.4 1.1 0.3 0.9

South Korea 1.1 5.5 1.0 5.4

Germany 1.0 8.8 1.1 7.6

USA 1.2 9.5 1.5 8.5

Total. subsidiaries 20.2 183.3 19.1 174.5

Total. Group 23.4 185.2 22.0 178.9

Note 3 REMUNERATION OF AUDITORS

Administrative expenses include the following fees paid to auditors.

Group Parent2013 2012 2013 2012

PWC

Audit 1.5 1.0 1.0 0.8

Other auditing assistance 0.1 – – –

Other services – – – –

Total 1.6 1.0 1.0 0.8

Other auditing firms

Audit 1.2 0.8 – –

Other services 0.3 0.2 – –

Total 1.5 1.0 – –

Total 3.1 2.0 1.0 0.8

PWC has not provided any tax advisory or other services.Other auditing firms have not provided any tax advisory services.

Note 4 OPERATING LEASES

The nominal value of future minimum lease payments under non-cancellable operating leases due for payment in the following periods:

Group Parent2013 2012 2013 2012

Within one year 19.0 20.9 0.7 0.6

Between one and five years 13.3 17.7 0.2 0.2

After five years – – – –

Operating lease costs and revenues for the year:

Group Parent2013 2012 2013 2012

Lease costs 21.3 22.1 0.6 0.6

Of which:

minimum lease payments 8.0 9.6 0.1 0.2

contingent rents 13.3 12.5 0.7 0.4

Apart from normal premises rental and car leasing contracts, the Group has no other operating leases of significance.

Note 5 FINANCE INCOME

Group Parent2013 2012 2013 2012

Interest 4.9 1.5 15.1 2.0

Exchange differences 8.4 4.0 6.8 2.0

Total 13.3 5.5 21.9 4.0

Note 6 FINANCE COSTS

Group Parent2013 2012 2013 2012

Interest expenses -27.6 -17.4 -24.8 -6.2

Exchange differences -5.2 -3.6 -4.4 -1.1

Other 1) -3.6 -2.2 -1.6 -1.2

Total -36.4 -23.2 -30.8 -8.5

1) Applies primarily to finance charges.

Note 7 TAX ON PROFIT/LOSS FOR THE YEAR

Group Parent2013 2012 2013 2012

Current tax for the year -6.0 -5.8 1.0 2.7

Current tax attributable to prior years -1.8 -0.1 0.0 0.0

Effect of reduced Swedish corporate income tax on deferred tax assets and liabilities 0.0 -3.1 0.0 0.0

Total -7.8 -9.0 1.0 2.7

Difference between tax expense and 22 percent tax

Profit/loss before tax (after discontinued operations) 18.7 17.5 -7.4 -25.4

22 percent tax -4.1 -3.8 1.6 5.6

Tax on profit/loss for the year -7.8 -9.0 1.0 2.7

Difference -3.7 -5.2 -0.6 -2.9

Specification of difference

Effect of

Foreign tax, prior years -1.1 -0.1 0.0 0.0

Foreign tax rates -0.9 -1.0 0.0 0.0

Non-deductible expenses -1.7 -1.0 0.0 0.0

Effect of reduced Swedish corporate income tax on deferred tax assets and liabilities 0.0 -3.1 0.0 -2.9

Other 0.0 0.0 -0.6 0.0

Total -3.7 -5.2 -0.6 -2.9

Note 8 DEFERRED TAX

Deferred tax assets relate to unused tax losses and deferred tax on cash flow hedges. There are no other taxable temporary differences.

Group Parent2013 2012 2013 2012

Tax effect of:

Cash flow hedges -0.6 -0.3 – –

Unused tax losses in Swedish operations 36.8 35.6 19.6 18.0

Unused tax losses in foreign operations 16.2 14.4 – –

Total 52.4 49.7 19.6 18.0

No deferred tax assets have expired.

Reported in the consolidated income statement: Deferred tax attributable to cash flow hedges SEK -0.3 (-0.3) million, tax loss carryforwards SEK 3.0 (3.7) million

Reported in the Parent Company’s income statement:Deferred tax attributable to tax loss carryforwards SEK 1.6 (2.7) million.

Deferred tax assets are reported in the balance sheet under financial assets and current assets.

45

Notes

Note 9 PROPERTY, PLANT & EQUIPMENT

Land and buildings

Machinery Equipment Total

At 1 January 2012

Cost of acquisition 24.1 20.9 76.1 121.1

Accumulated depreciation -7.6 -17.1 -63.6 -88.3

Carrying amount 16.5 3.8 12.5 32.8

1 January – 31 December 2012

Opening balance 16.5 3.8 12.5 32.8

Exchange differences -1.0 -0.2 0.3 -0.9

Investments 1.4 0.5 5.6 7.5

Disposals 0.0 0.0 -1.7 -1.7

Depreciation -0.6 -2.1 -6.2 -8.9

Closing balance 16.3 2.0 10.5 28.8

At 31 December 2012




At 1 January 2013





Opening balance 16.3 2.0 10.5 28.8

Exchange differences 0.1 0.1 0.1 0.3

Investments 0.0 2.6 4.2 6.9

Disposals 0.8 0.0 -3.9 -3.1

Depreciation -1.0 -1.0 -1.5 -3.5

Closing balance 16.2 3.7 9.4 29.3

At 31 December 2013




ParentEquipment 2013 2012Opening cost 1.2 1.2

Investments 0.0 0.0

Disposals -1.2 0.0

Closing cost 0.0 1.2

Opening depreciation 0.0 -1.1

Depreciation for the year 0.0 -0.1

Closing depreciation 0.0 -1.2

Carrying amount 0.0 0.0

Depreciation of buildings is divided equally between Cost of sales, Distribution costs, Administrative expenses and Research and development expenses. Depreciation of machinery is charged to cost of sales. Depreciation of equipment is divided equally between Cost of sales, Distribution costs, Administrative expenses and Research and development expenses.

Note 10 INTANGIBLE ASSETS, GROUP

GoodwillCapitalised

development

Patents,trademarksand licences Total

At 1 January 2012


Accumulated amortisation – -152.3 -14.0 -166.3

Carrying amount 36.8 128.5 0.6 165.9


Opening balance 36.8 128.5 0.6 165.9

Exchange differences -0.4 – – -0.4

Acquisitions/investments 2.9 30.6 0.5 34.0

Disposals – – – –

Amortisation – -26.4 -0.1 -26.5

Closing balance 39.3 132.7 1.0 173.0

At 31 December 2012


Accumulated amortisation – 178.7 -14.1 -192.8

Carrying amount 39.3 132.7 1.0 173.0

At 1 January 2013



Carrying amount 39.3 132.7 1.0 173.0

Carrying amount1 January – 31 December 2013

Opening balance 39.3 132.7 1.0 173.0

Exchange differences -0.2 0.0 0.1 -0.1

Acquisitions – 26.9 0.0 26.9

Disposals 0.0 -15.6 0.0 -15.6

Amortisation 0.0 -26.5 -0.1 -26.6

Closing balance 39.1 117.5 1.0 157.6

At 31 December 2013



Carrying amount 39.1 117.5 1.0 157.6

Goodwill impairment testingDistribution of goodwill in the Group at business area level:

2013 2012Marine & Safety 22.0 22.2

Fire safety & Automation 17.1 17.1

Units in Consilium’s two business areas have a similar risk profile and development. Consequently, the Group classifies the business areas as cash-generating units for goodwill allocation and impairment testing. The discount rate used is 7.0 percent with annual growth of 3-5 percent.

Goodwill allocation is based on the business areas’ estimated revenues and value in use. These values are obtained from projected cash flows, with the forecast for first year based on the budget defined by the Board. The assumed rate of growth for subsequent years is in line with GDP forecasts, in other words at a level which reflects long-term inflation.

Budgeted operating margins are defined on the basis of previous results and expectations of future market development. It is the Company’s opinion that the effects of reasonable changes in annual growth, the operating margin, the pre-tax discount rate and other assumptions would not be sufficient to individually cause the recoverable amount to fall below the carrying amount. Annual impairment testing did not identify any impairment losses.

46

Notes

Note 11 INVESTMENTS IN SUBSIDIARIES

Parent2013 2012

Opening cost 124.1 115.9

Shareholder contributions 0.0 10.0

Acquisition of shares – –

Internal disposal/acquisition of shares – -1.8


Share ofequity

Share ofvotes

Numberof shares

Carryingamount

Consilium Marine Group AB 100% 100% 500,000 84.1

Consilium Marine & Safety AB 100% 100% 220,000 40.0

124.1

Company/reg. no.Reg’d office

Number of shares/interests

Share ofcapital/

votesSwedish subsidiaries

China Marine Techtrade AB556560-0664 Nacka 1,000 100%

Consilium Incendium AB556828-7881 Kungälv 570 57%

Consilium Marine Group AB556063-8503 Nacka 500,000 100%

Consilium Marine & Safety Group AB556519-2134 Nacka 30,000 100%

Consilium Fire & Gas AB556611-5811 Gothenburg 25,000 100%

Consilium Marine & Safety AB556070-9353 Gothenburg 220,000 100%

Consilium Transport Safety AB 556109-5794 Gothenburg 120,000 100%

Consilium Security Group AB556547-6123 Nacka 10,000 100%

Consilium Navigation Group AB556519-2126 Nacka 1,000 100%

Consilium Navigation AB556045-1733 Nacka 100,000 100%

Consilium Research & Development AB 556080-5441 Nacka 1,000 100%

Consilium Marine & Safety Sales & Support AB556709-9220 Gothenburg 1,000 100%

Consilium Nittan R&D AB556599-4505 Gothenburg 1,000 100%

Markground Industri AB556046-1328 Nacka 2,150

100%

Storm & Co. Skeppsradio AB556083-7840 Gothenburg 2,000

100%

Foreign subsidiaries

Consilium Marine A/S Copenhagen/Denmark 100%

Consilium Hongkong Ltd Hong Kong/China 100%

Consilium GmbH Hamburg/Germany 100%

Consilium Italy Srl Florence/Italy 100%

Consilium Shanghai Co. Ltd Shanghai/China 100%

Consilium Trading Co. Ltd Shanghai/China 100%

Consilium Norway AS Oslo/Norway 100%

Consilium BV Schonhoven/Netherlands 100%

Consilium Marine US Inc. Fort Lauderdale/USA 100%

Consilium Marine Korea Ltd Pusan/South Korea 100%

Consilium Marine Italy Srl Genoa/Italy 100%

Consilium Marine Singapore Ltd Singapore/Singapore 51%

Consilium Middle East (FZC) Dubai/United Arab Emirates 70%

Consilium Qatar LLC Doha/Qatar 70%

Consilium Marine India Pte Ltd Mumbai/India 70%

Consilium RMI Spain SA Bilbao/Spain 51%

Investments in joint venturesCompany/reg. no. Reg’d office Share of capital/votesCN System AB 556714-2244 Gothenburg/Sweden 50%

Consilium Nittan Japan Ltd Tokyo/Japan 50%

Consilium Marine Hellas Ltd Piraeus/Greece 50%

Consilium Säkerhet Väst 556702-3857 Gothenburg/Sweden 50%

Consilium Säkerhet Öst 556693-0235 Stockholm/Sweden 50%

Consilium Marine Oy Helsinki/Finland 50%

Summary of proportionate share of joint ventures:

2013 2012Current assets 36.7 35.2

Non-current assets 1.6 1.7

Current liabilities -17.2 -16.5

Non-current liabilities -1.1 -1.2

Sales revenue 75.8 73.8

Operating expenses -69.0 -68.4

Net finance income/expense 0.8 -0.2

Note 12 INVESTMENTS IN ASSOCIATES

Group2013 2012

Opening cost 1.2 0.5

Reclassification -0.4 –

Acquisitions – –

Share of profit/loss for the year 0.2 0.7

Closing cost 1.0 1.2

Number of Company/Reg. no. shares/interests

Share of capital/votes

Carryingamount

Consilium Säkerhet Syd AB, 556629-7825 333 33.3% 0.7

Consilium Vietnam JSC 99 49.0% 0.3

The associates do not have any liabilities, contingent liabilities or commitments regarding future investments for which the Group may have a pecuniary obligation.

Note 13 FINANCIAL RISK MANAGEMENT

Financial risk managementThe Consilium Group is exposed to various types of financial risk in the course of its operations. Group policies defined by the Board form the basis of management of these risks at different levels in the Group. The policies are designed to provide an integrated picture of the risk situation, minimise negative impacts on earnings and clarify responsibility and authority in the Group. Defined policies are monitored regularly at local and central level, with reporting back to the Board.

Currency riskTransaction exposureAs the Group’s companies have revenues and expenses in different currencies, it is exposed to risks associated with currency fluctuations. This risk, which affects operating profit, is referred to as transaction exposure.

Net currency exposure converted to SEK millions(net exposure refers to revenues less costs)

2013 USD EUR NOK GBP JPY DKK TotalMarine & Safety 181.5 80.2 -7.0 -38.0 -9.2 -1.2 206.3

2012 USD EUR NOK GBP JPY DKK TotalMarine & Safety 202.4 76.2 -6.6 -55.6 -19.3 -5.4 191.7

The aim of currency risk management is to minimise in the short term the negative effects of exchange rate movements on the Group’s earnings and financial position. Each subsidiary manages its transaction risks locally. The hedging instruments normally used are forward exchange contracts. Consilium regularly hedges all foreign currency orders apart from regular service and spare parts sales. The hedges are designated as highly effective, as only signed contracts are hedged and not expected orders. A large proportion of forward contracts qualify for hedge accounting.

47

Notes

Note 13 FINANCIAL RISK MANAGEMENT, CONT’D

The table below shows foreign exchange contracts at the reporting date translated to SEK millions. All amounts are due within 12 months.

Group2013 2012

Forward exchange contracts – cash flow hedges

EUR 60.5 43.4

USD 105.5 65.6

GBP -27.9 -16.2

YEN -4.6 -11.8

Due within 12 months 133.5 81.0

The effect of cash flow hedges on the income statement is SEK 3.3 (4.4) million, which is reported under operating profit.

Gains and losses on forward exchange contracts at 31 December 2013 will be transferred from equity to the income statement at various dates between 3 months and 2 years after the reporting date.

2013 2012Average prices of forward contracts

EUR 8.82 8.65

USD 6.59 6.81

GBP 10.29 10.80

YEN 0.07 0.08

The Group applies IAS 39 with effect from 1 January 2005. Consilium believes that all its derivative instruments qualify for hedge accounting. Changes in the fair value of derivative instruments are therefore recognised in equity. At the end of 2013, there were surplus values of SEK 2.7 (-0.9) million for derivatives. At 31 December 2013, there were no negative changes in the fair value of the contracts.

Sensitivity analysisNet exposure is highest in USD.

Factor Change, +/-

Effect on operating profit,

SEK millionNet sales 1% +/- 3.3

Interest expenses 1% +/- 4.4

Personnel expenses 1% +/- 2.7

Depreciation/amortisation 1% +/- 0.3

Exchange rate movements, USD 1% +/- 1.8

Exchange rate movements, EUR 1% +/- 0.8

The forward contracts move the earnings effect forward in time, as the majority of the forecast flows for the coming twelve months period are covered by signed contracts. During that time, measures can be taken to minimise the effects.

Translation exposureConsilium presents its income statements and balance sheets in SEK. Several Group companies have a different presentation currency. This means the Group’s earnings and equity are exposed during consolidation when foreign currencies are translated to SEK. This exposure, referred to as translation exposure, mainly affects equity and is not normally hedged.

Price riskConsilium is exposed to price risk associated with the purchase of components. Purchases of components amounted to SEK 429.6 (474.9) million and consist of a wide variety of inputs with differing price trends over time. For lasting material changes, companies can in most cases obtain compensation in the price, although clauses allowing such compensation are an exception.

Interest rate riskAs Consilium does not have any significant interest-bearing assets, the Group’s revenues and cash flow from operating activities are essentially unaffected by changes in market rates. Consilium’s net finance income and costs and earnings are affected by fluctuations in borrowing interest rates. The Group is also indirectly affected by the effects of interest rates on the overall economy. It is Consilium’s opinion that short-term fixed interest bears a risk which is commensurate with the Group’s operations. Consequently, borrowings normally have a fixed-interest period of up to 12 months. Short-term interest rates have also been lower than long-term rates over the last decade, which has had a positive effect on the Group’s results.

BorrowingLiabilities to credit institutions consist of a few small borrowing facilities in different currencies with different terms and conditions. Interest rates vary between 2.5 percent and 8.0 percent. The average interest on overdrafts is 6.5 percent. There is an additional limit charge on the granted borrowing facilities. The average for this charge is 0.2 percent. The Company is currently using a derivative instrument of approx. SEK 40 million. All loans carry variable interest rates with fixed-interest periods of up to 90 days. See also Note 21.

Net debt at the end of the year amounted to approx. SEK 259.3 (257.5) million. A one-percent change in interest rates would affect earnings by SEK 4.4 (2.6) million.

Credit riskCredit risk is the risk that receivables due from customers will not be settled. The size of each customer’s credit is assessed individually. All new customers undergo a credit check. The idea is that the credit limits will reflect the customer’s ability to pay. The Group has a good risk spread, with sales spanning different sectors and companies. In general, the economic decline has had an adverse effect on companies’ financial situation, with the risk of customer defaults increasing. Consilium’s customer defaults have historically been low. Losses on receivables arise when customers are declared bankrupt or are unable to fulfil their payment commitments for some other reason. Consilium does not believe there to be any significant credit risk associated with any particular customer, counter-party or geographical region.

Cash & cash equivalents, which consist entirely of cash and bank deposits, were SEK 180.6 (112.9) million. In the subsidiary Consilium Middle East, SEK 31.2 (18.2) million of cash & cash equivalents are pledged as collateral for bank guarantees and letters of credit.

Liquidity riskConsilium has loans which mature at various dates. A large proportion of the liabilities are overdraft facilities with contractual terms of one year. Refinancing risk is the risk that Consilium will be unable to fulfil its commitments due to cancellation of loans and difficulties in setting up new loans. Consilium manages this risk by ensuring it has good cash preparedness.

Group Parent2013 2012 2013 2012

Available cash 180.6 112.9 94.0 70.0

Overdraft facilities 50.0 50.0 – –

Utilised overdraft facilities -39.9 -45.4 – –

Current liquidity 190.7 117.5 94.0 70.0

Maturity analysis of liabilities, including interest due for each period under the loan agreement.

31/12/20130-6

months

6 months -1 year

1-2 years

2-5 years

Borrowing – 34.3 5.6 400.0

Trade and other payables 200.5 12.2 – –

Forward exchange contracts – 133.5 – –

200.5 180.0 5.6 400.0

Management of capital riskThe Group’s goal for capital structure is to continue to expand operations so that they generate a return to shareholders, while keeping capital costs at a reasonable level. The capital structure can be changed by raising or lowering the dividend, issuing new shares, repurchasing shares and selling assets. Capital risk is expressed as the net debt/equity ratio, which is interest-bearing liabilities less cash & cash equivalents divided by equity. The aim is to create manoeuvrability by having a low debt/equity ratio. The net debt/equity ratio at the last two year-ends was as follows:

Group 2013 2012Interest-bearing liabilities 439.9 370.4

Cash and short-term investments -194.8 -121.3

Net debt 245.1 249.1

Equity 265.9 266.6

Net debt/equity ratio, % 92 93

Financial instruments per category within the Group

31/12/2013 Receivables

Derivatives used forhedging

Available- for-sale

financial assets Total

Other non-current receivables 93.5 – – 93.5

Trade receivables 307.1 – – 307.1

Short-term investments 14.2 – – 14.2

Cash & cash equivalents 180.6 – – 180.6

595.4 – – 595.4

48

Notes

Note 14 INVENTORIES

Group2013 2012

Raw materials 47.2 74.9

Products in progress 34.2 28.1

Finished products 57.8 48.6

Advances from customers 7.1 5.7

Impairment of inventories -2.2 -1.5


Note 15 TRADE RECEIVABLES

Group2013 2012

Trade receivables 247.7 219.5

Provision for doubtful debts -3.4 -2.9


GroupMaturity structure of trade receivables 2013 2012Not past due 150.8 124.6

Past due 1-30 days 38.1 38.5

Past due 31-90 days 36.6 36.3

Past due over 90 days 22.2 20.1

247.7 219.5

GroupProvision for doubtful debts 2013 2012Opening balance -2.9 -2.6

Reversal of previous provisions 1.7 0.4

Transfers during the year -2.2 -0.7

Closing balance -3.4 -2.9

Note 16 CONTRACT WORK IN PROGRESS

Group2013 2012

Contract revenue recognised during the period 179.6 136.6

Accumulated contract costs and recognised profit less recognised losses 137.4 113.5

Advances received 0.7 0.2

Retentions 20.8 20.8

Amounts due from client for contracts in progress 57.7 39.7

Amounts due to client for contracts in progress 25.9 19.1

Note 17 PREPAYMENTS AND ACCRUED INCOME

Group Parent2013 2012 2013 2012

Prepaid rents 2.6 1.9 0.2 0.2

Prepaid lease payments 1.4 1.4 0.0 0.0

Prepaid insurance premiums 0.8 0.7 0.1 0.1

Derivative instruments 2.1 2.1 0.0 0.0

Percentage of completion, projects in progress 0.0 5.3 0.0 0.0

Bond expenses 5.2 5.3 5.2 5.3

Other 14.7 17.9 3.1 0.7

Total 26.8 34.6 8.6 6.3

Note 18 SHARE CAPITAL DEVELOPMENT

Date Transaction Increase in share capital, SEK Total share capital, SEK Number of shares1993 Establishment of Company 50,000 10,000

1994 New share issue 20,575,000 20,625,000 4,125,000

1994 New share issue 4,375,000 25,000,000 5,000,000

1994 Conversion 7,500 25,007,500 5,001,500

2001 Conversion 60,900 25,068,400 5,013,680

2002 Conversion 5,000 25,073,400 5,014,680

2004 New share issue 5,500,000 30,573,400 6,114,680

2004 Conversion 2,100 30,575,500 6,115,100

2006 Conversion 550 30,576,050 6,115,210

2006 Conversion 4,915,805 34,491,855 6,898,371

2006 Warrants 12,160 35,504,015 7,100,803

2006 New share issue 11,834,665 47,338,680 9,467,736

2006 Conversion 266,660 47,605,340 9,521,068

2007 Conversion 4,905,675 52,511,015 10,502,203

2007 Non-cash issue 1,500,000 54,011,015 10,802,203

2007 New share issue (registered 03/01/2008) 500,000 54,511,015 10,902,203

2009 New share issue 4,000,000 58,511,015 11,702,203

The par value of the share is SEK 5. The shares comprise class A and class B shares.Votes

A shares 907,490 10 votes 9,074,900

B shares 10,794,713 1 vote 10,794,713

11,702,203 19,869,613

49

Notes

Note 19 PROVISIONS

GroupProvisions 2013 2012Provisions for pensions etc. 1.1 6.2

Provision for warranty obligations 5.2 6.4

Provisions for additional purchase consideration 11.0 11.0

Other provisions 2.9 2.2

Total 20.2 25.8

The subsidiaries provide a certain type of warranty service and undertake to repair or replace parts not performing satisfactorily. A provision of SEK 5.2 (6.4) million for expected warranty claims was recognised at the reporting date, based on previous experience of the level of repairs and replacement parts. Warranty obligations are normally valid for two years.

GroupProvisions for pensions etc. 2013 2012Provisions at beginning of period 6.2 5.8

Provisions during the period 0.0 0.4

Sale of operations -5.1 0.0

Provisions at end of period 1.1 6.2

GroupPensions 2013 2012Provisions for pensions and similar obligations:

Greece 0.1 0.2

Italy 1.0 6.0

Total 1.1 6.2

GroupThe main actuarial assumptions used 2013 2012Discount rate 3.2% 2.7%

Future salary increases 1.5% 1.5%

Inflation 2.0% 2.0%

GroupAmounts recognised in the income statement 2013 2012Current service cost 0.1 0.6

Interest expenses 0.0 0.1

Actuarial losses 0.0 -0.2

Total 0.1 0.5

Amounts recognised in the balance sheet, calculated by reference to:

Group2013 2012

Present value of unfunded obligations 1.1 6.2

Fair value of plan assets 0.0 0.0

Total 1.1 6.2

Pension provisions 2013 2012Opening balance 1 Jan 6.2 5.8

Provisions during the year – 0.4

Sale of operations -5.1 –

Reversals during the year – –

Closing balance 1.1 6.2

Included in non-current liabilities 31 Dec 1.1 6.2

Defined benefit pension plansThe Group has defined benefit pension plans, under which employees are entitled to post-employment benefits based on the final salary and length of service.The pension plans are in Greece and Italy.

2013 2012 2011 2010 2009As at 31 December

Present value of defined-benefit obligations 1.1 6.2 5.8 6.6 6.8

Fair value of negotiation assets – – – 0.5 0.8

Deficit/surplus in the plan 1.1 6.2 5.8 7.1 7.6

Pension expenses 2013 2012Total pension expenses recognised in the consolidated income statement are as follows:

Total cost of defined benefit plans 0.2 0.2

Total cost of defined contribution plans 24.4 24.6

Total pension expenses 24.6 24.8

Pension expenses 2013 2012Allocation of pension costs in the consolidated income statement:

Cost of sales 8.0 8.3

Distribution costs 8.5 8.2

Administrative expenses 8.1 8.3

Total 24.6 24.8

Pension insurance with AlectaThe retirement benefit and family pension obligation for employees in Sweden is covered by insurance with Alecta. According to Statement URA 42 issued by the Swedish Financial Accounting Standards Council’s Emerging Issues Task Force, this is a multi-employer defined benefit plan. For the 2013 financial year, the Group did not have access to sufficient information to enable it to report this plan as a defined benefit plan. Consequently, the ITP pension plan insured through Alecta is reported as a defined contribution plan. Alecta’s surplus may be distributed to policyholders and/or the insured parties. The collective consolidation level is the market value of Alecta’s assets as a percentage of its insurance obligations calculated by reference to Alecta’s actuarial assumptions. This is not consistent with IAS 19.

Post-employment medical benefitsThe Group does not have any post-employment medical benefits.

Note 20 COSTS BY NATURE OF EXPENSE

Group2013 2012

Raw materials and consumables used 417.9 425.9

Changes in inventories of finished goods and products in progress 11.7 11.1

Personnel expenses 270.6 253.0

Marketing expenses 4.1 4.2

Rental costs 19.0 18.0

Transport and travel expenses 29.7 31.3

Depreciation/amortisation 30.3 31.6

Other external services 33.5 35.3

Other costs 61.4 56.3

Total 878.2 866.7

50

Notes

Note 21 BORROWING

Group Parent2013 2012 2013 2012

Non-current

Bank loans 5.6 7.3 – –

Bond issues 400.0 325.0 400.0 325.0

Current

Overdraft facilities 34.3 38.1 – –

Undrawn borrowing facilities at the end of the year amounted to SEK 9.8 (28.1) million.

Contractual renegotiation dates:

Within 6months

6-12months

1-5 years

After5 years Total

At 31 December 2013

Total borrowing 0.0 34.3 405.6 – 439.9

At 31 December 2012

Total borrowing 0.0 38.1 332.3 – 370.4

Maturity of long-term borrowing:

Group Parent2013 2012 2013 2012

1-2 years 5.6 7.3 – –

2-5 years 400.0 325.0 400.0 325.0

After 5 years – – – –

Effective interest at reporting date:

Group ParentPercent 2013 2012 2013 2012Overdraft facilities 6.0 6.5 – –

Bank loans 6.5 5.5 – –

Other loans 6.7 6.8 6.7 6.8

Bond issuesOn 1 November 2012, Consilium issued a 5-year unsecured bond totalling SEK 325 million. Consilium has exercised the right to issue a further SEK 75 million in 2013. Interest is paid quarterly and is subject to three months STIBOR plus 5.50 percent.

The maturity structure of Consilium’s total borrowing at the end of the year is as follows:

Maturity structure of Consilium’s borrowing 2013 20122013 – 45.4

2014 34.3 –

2015 5.6 –

2016 – –

2017 400.0 325.0

The table shows the Group’s financial assets and liabilities measured at fair value at 31 December 2013

Level 1 Level 2 Level 3 TotalAssets

Derivatives used for hedging – 166.0 – 166.0

Total assets – 166.0 – 166.0

Liabilities

Derivatives used for hedging – 32.5 – 32.5

Total liabilities – 32.5 – 32.5

Note 22 ACCRUALS AND DEFERRED INCOME

Group Parent2013 2012 2013 2012

Accrued interest expense 4.6 3.8 4.6 3.8

Holiday pay 23.3 21.7 0.6 0.6

Accrued social security contributions 5.8 5.3 0.3 0.4

Warranty provisions 2.7 1.8 – –

Other items 14.5 13.9 0.7 0.8

Total 50.9 46.5 6.2 5.6

Note 23 PLEDGED ASSETS

Group Parent2013 2012 2013 2012

Own liabilities and provisions

Floating charges 6.0 – – –

Pledged net assets in subsidiaries – 6.0 – –

Cash & cash equivalents 31.2 24.1 – –

Total own liabilities and provisions 37.2 30.1 – –

Note 24 CONTINGENCIES AND GUARANTEE COMMITMENTS

Group Parent2013 2012 2013 2012

Guarantee commitments on behalf of other Group companies – – 2.5 5.7

Bank guarantees 2.5 2.5 – –

Sureties for associates – – – –

Total contingencies 2.5 2.5 2.5 5.7

The Group rents a number of office premises. The Group also holds various types of plant and machinery and cars under leases. The rental contracts and leases are subject to different terms and conditions and include a renewal option. The above types of contingent liabilities are not expected to result in any significant liabilities.

Note 25 RELATED PARTY TRANSACTIONS

Intra-group purchases and sales100 (100) percent of the Parent Company’s sales for the year were to its subsidiaries. Intra-group purchases and sales are subject to the same pricing principles as transactions with external parties. No goods or services were purchased from associates during the year.

Purchase of goods and services from related partiesGroup Parent

2013 2012 2013 2012Platanen AB, management and administrative services

Management services 3.8 3.5 3.8 3.5

Administrative services 0.4 0.3 0.4 0.3

Fastighetsbolag Henriksborg HB, rent 2.6 3.7 0.7 0.7

Total 6.8 7.5 4.9 4.5

Management services relate to the Chairman of the Board. Purchased administrative services relate to ongoing financial reporting. Services purchased from Platanen AB and its subsidiary Fastighetsbolaget Henriksborg HB are charged at standard market terms. Management services and rent from related parties are charged at standard market terms.

51

Notes

Note 26 BOARD MEMBERS AND SENIOR EXECUTIVES

2013 2012Number at

reporting date

Of which male

Number at reporting

dateOf which

maleGroup (with subsidiaries):

Board members 20 (92%) 20 (92%)

CEOs and other Senior executives 18 (91%) 18 (91%)

Parent:

Board members 6 (83%) 6 (83%)

CEO and other Senior executives 4 (75%) 5 (80%)

Board fees are defined at the annual general meeting of shareholders. No other special fees are paid to the Board. No fees are paid to the Group’s employees for board assign-ments in the subsidiaries. Remuneration of the CEO and management group comprises the basic salary, including car allowance, and bonuses. Pension is payable in accordance with the current ITP plan. The management group consists of the President & CEO, the managers of the two business areas, the Finance manager and Treasurer and the Parent Company’s Group controller. Bonuses are linked to financial targets and may not exceed three monthly salaries. The remuneration arrangements for the CEO are determined by the Board. The remuneration arrangements for senior executives are determined by the Chairman of the Board and the CEO.

Board fees of SEK 550 (450) thousand were paid during the year. SEK 150 (150) thousand of this amount was paid to the chairman. Payment for management services is described in Note 25. There are no pension obligations to the Board. There are no pension obligations to the Chairman for 2012 or 2013. The CEO received an annual salary of SEK 2,318 (2,113) thousand. Bonuses of SEK 275 (346) thousand were paid, plus car allowances. Pension is payable in accordance with the current ITP plan. The retirement age for the President & CEO and the managers of the subsidiaries is 65 years.The period of notice for the President & CEO is 12 months. No special severence pay or retirement benefits are paid in the event of termination. Senior management in Consilium AB and its subsidiaries have normal salary agreements without any special retirement benefits in the event of termination. In the event of involuntary termination, members of senior management receive up to one annual salary, including normal pension costs.

Note 27 REMUNERATION AND BENEFITS DURING THE YEAR

Board fees/2013 basic salary Bonus

Pension costs

Car allowance Total

Board

Chairman, Carl Rosenblad 0.2 – – – 0.2

Board Member, Fredrik Nygren 0.1 – – – 0.1

Board Member, Peter Carlberg 0.1 – – – 0.1

Board Member, Ann-Marie Åström 0.1 – – – 0.1

Board Member, Erik Lindborg 0.1 – – – 0.1

Nomination committee

Chairman, Lennart Norling 0.0 – – – 0.0

Rasmus Palmqvist 0.0 – – – 0.0

Carl Rosenblad – – – – –

Management 4.2 0.3 1.0 0.3 5.8

(of which CEO) (2.3) (0.3) (0.5) (0.1) (3.2)

Total 4.8 0.3 1.0 0.3 6.4

Board fees/2012 basic salary Bonus

Pension costs

Car allowance Total

Board

Chairman, Carl Rosenblad 0.2 – – – 0.2

Board Member, Fredrik Nygren 0.1 – – – 0.1

Board Member, Peter Carlberg 0.1 – – – 0.1

Board Member, Ann-Marie Åström 0.1 – – – 0.1

Nomination committee

Chairman, Lennart Norling 0.0 – – – 0.0

Rasmus Palmqvist 0.0 – – – 0.0

Carl Rosenblad – – – – –

Management 6.5 0.3 1.1 0.3 8.2

(of which CEO) (2.1) (0.3) (0.5) (0.1) (3.0)

Total 7.0 0.3 1.1 0.3 8.7

Note 28 ADJUSTMENTS FOR NON-CASH ITEMS

Group Parent2013 2012 2013 2012

Provisions 5.6 3.8 – –

Other -7.8 -23.1 -0.6 –

Total -13.4 -19.3 -0.6 –

Note 29 EARNINGS PER SHARE

Group2013 2012

Calculation is based on:

Profit/loss for the year attributable to owners of the Parent 0.7 1.8

Average number of shares 11,702,203 11,702,203

Note 30 NON-CURRENT RECEIVABLES

Consilium has no past-due non-current receivables at 31/12/2013.

Note 31 BUSINESS COMBINATIONS

Company acquisitions in 2013Consilium did not acquire any operations in 2013.

Divestment of radar operationsConsilium has divested its radar operations in the fourth quarter of 2013. Consilium will continue to sell and service the radar line, which means that only external direct sales from the Italian radar operations will reduce Consilium’s net sales.

The results from the divested radar operations and discontinued operations in 2012 have been analysed and are as follows:

2013 2012Revenues 36.4 41.2

Costs -50.1 -49.3

Operating profit -13.7 -8.1

Financial items -1.4 -1.5

Profit/loss before tax -15.1 -9.6

Tax 2.5 1.9

Profit/loss for the year from discontinued operations -12.6 -7.7

The radar operations showed a net operating profit/loss of SEK -6.5 million in 2013. Consilium received cash proceeds of SEK 23.8 million from the sale of the radar operations. Divested net assets measured at fair value amounted to SEK 22.4 million. The capital gain/loss on the sale was SEK -6.1 million after impairment losses and reserves.

Transferred assets and liabilities related to the divested radar operations are as follows:

2013Property, plant & equipment 2.2

Intangible assets 13.0

Inventories 15.8

Non-current liabilities (personnel-related) -5.7

Current liabilities (personnel-related) -2.9

Total divested net assets 22.4

Trade receivables and payables were not transferred.

52

Notes

The Board and CEO confirm that the consolidated annual financial statements have been prepared in accordance with international financial reporting standards (IFRS), as adopted by the EU, and provide a true and fair view of the Group’s financial

performance and position. The Parent Company’s annual financial statements have been prepared in accordance with generally accepted accounting principles in Sweden and provide a true and fair view of the Company’s financial performance and

position. The Board of Directors’ report presents the operations, financial position and performance of the Group and Parent Company, and describes material risks and uncertainties to which the Parent Company and Group companies are exposed.

Stockholm 22 April 2014

Carl Rosenblad Peter Carlberg Erik Lindborg Chairman of the Board Board Member Board Member

Fredrik Nygren Carl Adam Rosenblad Ann-Marie Åström Board Member Board Member Board Member

Ove Hansson Chief Executive Officer

Our audit report was submitted in Stockholm on 25 April 2014

Sten HåkanssonChief Auditor

Öhrlings PricewaterhouseCoopers AB

Note 32 EVENTS AFTER THE REPORTING PERIOD

Consilium acquired 51 percent of the shares in the Indian fire safety company Sureland Fire & Security Pvt Ltd in January 2014. The company, which has about 100 employees, is expected to achieve a turnover of approx. SEK 80 million in 2014.

Note 33

The income statements and balance sheets for the Parent Company and Group will be presented for adoption at the annual meeting on 20/05/2014.

53

Notes

To the annual meeting of the shareholders of Consilium AB (publ), corporate identity number 556480-3327.

Report on the annual accounts and consolidated accountsWe have audited the annual accounts and consolidated accounts of Consilium AB (publ) for the year 2013. The annual accounts and consolidated accounts of the company are included in the printed version of this document on pages 27-53.

Responsibilities of the Board of Directors and the Managing Director for the annual accounts and consolidated accountsThe Board of Directors and the Managing Director are responsible for the preparation and fair presentation of these annual accounts in accordance with the Annual Accounts Act and of the consolidated accounts in accord-ance with International Financial Reporting Standards, as adopted by the EU, and the Annual Accounts Act, and for such internal control as the Board of Directors and the Managing Director determine is necessary to enable the preparation of annual accounts and consolidated accounts that are free from material misstatement, whether due to fraud or error.

Auditor’s responsibilityOur responsibility is to express an opinion on these annual accounts and consolidated accounts based on our audit. We conducted our audit in accordance with International Standards on Auditing and generally accepted auditing standards in Sweden. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the annual accounts and consolidated accounts are free from material misstatement.

An audit involves performing proce-dures to obtain audit evidence about the amounts and disclosures in the annual accounts and consolidated accounts. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the annual accounts and consolidated accounts, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the company’s preparation and fair presentation of the

annual accounts and consolidated accounts in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the Board of Directors and the Managing Director, as well as evaluating the overall presentation of the annual accounts and consolidated accounts.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.

OpinionsIn our opinion, the annual accounts have been prepared in accordance with the Annual Accounts Act and present fairly, in all material respects, the financial position of the parent company as of 31 December 2013 and of its financial performance and its cash flows for the year then ended in accordance with the Annual Accounts Act. The consolidated accounts have been prepared in accordance with the Annual Accounts Act and present fairly, in all material respects, the financial position of the group as of 31 December 2013 and of their financial performance and cash flows for the year then ended in accordance with International Financial Reporting Standards, as adopted by the EU, and the Annual Accounts Act. The statutory administration report is consistent with the other parts of the annual accounts and consolidated accounts.

We therefore recommend that the annual meeting of shareholders adopt the income statement and balance sheet for the parent company and the group.

Report on other legal and regulatory requirementsIn addition to our audit of the annual accounts and consolidated accounts, we have also audited the proposed appropriations of the company’s profit or loss and the administration of the Board of Directors and the Managing Director of Consilium AB (publ) for the year 2013.

Responsibilities of the Board of Directors and the Managing DirectorThe Board of Directors is responsible for the proposal for appropriations of the company’s

profit or loss, and the Board of Directors and the Managing Director are responsible for administration under the Companies Act.

Auditor’s responsibilityOur responsibility is to express an opinion with reasonable assurance on the proposed appropriations of the company’s profit or loss and on the administration based on our audit. We conducted the audit in accordance with generally accepted auditing standards in Sweden.

As a basis for our opinion on the Board of Directors’ proposed appropriations of the company’s profit or loss, we examined the Board of Directors’ reasoned statement and a selection of supporting evidence in order to be able to assess whether the proposal is in accordance with the Companies Act.

As a basis for our opinion concerning discharge from liability, in addition to our audit of the annual accounts and consolidated accounts, we examined significant decisions, actions taken and circumstances of the company in order to determine whether any member of the Board of Directors or the Managing Director is liable to the company. We also examined whether any member of the Board of Directors or the Managing Director has, in any other way, acted in con-travention of the Companies Act, the Annual Accounts Act or the Articles of Association.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinions.

OpinionsWe recommend to the annual meeting of shareholders that the profit be appropriated in accordance with the proposal in the statutory administration report and that the members of the Board of Directors and the Managing Director be discharged from liability for the financial year.

Stockholm, 25 April 2014

Öhrlings PricewaterhouseCoopers AB

Sten Håkansson Authorized Public Accountant

Auditor’s report

54

Consilium’s shares are listed on NASDAQ OMX Stockholm. Consilium adopted the Swedish Corporate Governance Code (the Code) on 1 July 2008 in accordance with the stock exchange rules. This corporate governance report constitutes part of the formal annual report and has been reviewed by the Company’s auditor. The Board’s internal control report can be found at the end of this corporate governance report.

The main purpose of the corporate governance report is to describe the bodies, control & management resources and prin-ciples Consilium applies in order to achieve the Group’s overall goal of creating value for shareholders. Consilium did not derogate from the Code during 2013.

General Meeting of ShareholdersShareholders’ influence in the Company is exercised at the shareholders’ meeting, which is Consilium’s highest decision-making body. Shareholders wishing to participate in a shareholders’ meeting and vote their shares must be listed in the register of shareholders no later than 5 working days before the meeting, and must notify the Company of their intention to participate in the meeting, indicating any advisors attending, as instructed in the notice of the meeting.

Shareholders unable to attend may exercise their rights through a proxy, in accordance with the Swedish Companies Act.

Annual General MeetingThe annual general meeting of shareholders is held within six months of the end of the financial year. The annual general meeting deals with the election and remuneration of Board members and auditors, establish-ment of guidelines for remuneration of key management personnel, adoption of the income statement and balance sheet, allocation of profit and the discharging of Board members and the CEO from liability for the financial year.

If there is reason to convene a share-holders’ meeting before the next annual general meeting, the shareholders are called to an extraordinary general meeting. Consilium did not hold any extraordinary general meetings in 2013.

2013 AGMThe annual general meeting of the share-holders of Consilium for the 2012 financial year was held in Nacka on 16 May 2013. In addition to the business described above, the meeting adopted resolutions as follows: payment of a dividend of SEK 0.25 per share

to shareholders, Board mandate to issue new shares or convertible bonds (with a deroga-tion from preferential rights for shareholders) for financing of possible acquisitions.

All serving Board members were re-elected and Carl Rosenblad was re-elected as Chairman. Shareholders present at the meeting represented 77 percent of the votes and 61 percent of the capital.

Nomination CommitteeThe task of the nomination committee is to propose candidates for election to the Board prior to the annual general meeting. In 2013, the nomination committee consisted of Lennart Norling (Chairman, independent of the Company and major shareholder), Chairman of the Board Carl Rosenblad and Rasmus Palmqvist (independent of the Company, representing one of the major shareholders, Sound Invest). The nomination committee held one (1) meeting in 2013.

The nomination committee is also responsible for the composition and working procedures of the Board. A presentation of the nomination committee’s work was given at the 2013 AGM. The committee’s independent members have received compensation of SEK 10,000 per person, and reimbursement for expenses, in accordance

Corporate Governance

Elected/appointed by

Informs/reports to

External regulations

Swedish Companies Act Swedish Accounting ActSwedish Annual Accounts ActRules for IssuersSwedish Corporate Governance Code

Internal Controls

Articles of AssociationBoard’s Work PlanCEO’s InstructionsGroup policies and instructionsBusiness plan, goals and strategies

55

Corporate Governance Model

Board President & CEO



General Meeting of Shareholders

Management Group

Auditor

Nomination Committee

with the decision of the 2013 annual general meeting.

BoardConsilium’s Board has ultimate responsibility for managing the Company’s affairs between the annual general meetings. The Board appoints the President and CEO, and makes decisions on issues concerning the strategic direction of the business and the Company’s overall organisation. Since the annual general meeting in May 2013, Consilium’s Board has consisted of six members.

The Board is composed of persons representing the Company’s major share-holders and persons who are independent of the major shareholders. The CEO does not serve on the Board, but is always present at Board meetings. The Finance manager also normally attends the meetings and acts as

Minutes Secretary. Other employees in the Group may also attend Board meetings in a reporting capacity.

In 2013, the Board held six meetings at which minutes were taken. Matters dealt with at the meetings included the year-end report, interim financial reports, the market situation and outlook, business plans, goals and strategies, financial risk management, budgets, long-term financing, strategic co operation and acquisitions, sales of operations, investments and present and new accounting standards. The attendance and independence of the Board and co-opted members is shown in the table below.

Chairman of the BoardThe Chairman is responsible for ensuring the work of the Board is conducted effi ciently and that the Board performs its tasks. The Chairman organises and leads the work with the aim of creating the best possible conditions for the Board’s members. The Chairman also remains in regular contact with the Company’s CEO in order to ensure the Board has access to sufficient information to allow it to follow the Company’s performance and financial position, and to plan accordingly. Carl Rosenblad is Chairman of the Board.

Work of the BoardThe Board of Directors has adopted a formal work plan which defines the division of work between the Board and CEO. The formal work plan also regulates the Board’s areas of responsibility, duties and decision-making powers. The main duties involve making decisions on strategic issues, assuming responsibility for the Company’s capitalisation and capital structure, ensuring

the Company is efficiently managed and making decisions on other matters of importance such as large investments and acquisitions. The Board’s formal work plan also contains rules on information man-agement and on evaluation of the work of the Board and the CEO. A written set of instructions for the CEO defines the division of work between the Board and CEO, and regulates the powers of the CEO.

An important task is to ensure correct and timely reporting in the Company, and to the Board and share market. Accordingly, the Board receives regular reports detailing significant events, order intake trends, invoicing, results, cash flow, financial position and the number of employees in the Group and its companies. During the year, the Board has at least one meeting with the chief auditor who also maintains regular contact with the Chairman of the Board.

CommitteesThe Board of Consilium has decided that the size of the Company does not warrant the appointment of an audit committee. Audit matters are dealt with by the full Board. On at least one occasion during the year, Consilium’s auditors report in person to the Board on their observations from the audit and their evaluation of the Group’s internal control. Matters concerning exchange rate movements, investments, acquisitions and strategic direction are also dealt with.

For the reason mentioned above, Consilium has decided the full Board will deal with remuneration matters rather than establishing a special remuneration committee. The main work involves defining the CEO’s employee benefits, and preparing share-based payment programmes, such as option schemes, for adoption by the annual general meeting.

President and Group managementThe President and Chief Executive Officer of Consilium is Ove Hansson. The division of work between the CEO and Board and the CEO’s powers are regulated in the instructions to the CEO, which are defined and revised on an annual basis. Group management consists of the President & CEO, the Finance manager, the Parent Com-pany’s Group controller and the managers of Consilium’s business areas. More information about Group management can be found on page 61.

56


Board members – attendance, relationship and fees:

ElectedAttendance

2013Relationship

ConsiliumRelationship

major owners FeesCarl Rosenblad, Chairman 1994 6(6) Non-independent Non-independent 150,000

Carl Adam Rosenblad 1996 6(6) Non-independent Non-independent –

Fredrik Nygren 2007 5(6) Independent Independent 100,000

Peter Carlberg 2008 5(6) Independent Independent 100,000

Ann-Marie Åström 2009 5(6) Independent Independent 100,000

Erik Lindborg 2012 6(6) Independent Non-independent 100,000

Ove Hansson, CEO – 6(6) – – –

Anna Holmgren, sec’y – 5(6) – – –

More information about members of the Board can be found on page 60.

Consilium’s organisation

Business developmentEconomy and Finance

Administration

Marine &

Safety

Fire safety &

Automation

Global market organisation

Operational controlConsilium’s operations are organised into a number of divisions in the two business areas, Marine & Safety and Fire safety & Automation, which are responsible for Consilium’s offering and global market organisation. The operations are organised into a clear functional structure, allowing leveraging of synergies and economies of scale in development, production, purchasing, marketing and sales, and are led by the two business area managers.

The Group’s business organisation is structured according to the principle of decentralised responsibility and authority. Each business area has its own subsidiary board of which the Group President is chairman. Like the Parent Company, the subsidiaries have a formal work plan for their board and written instructions for their managing director. The subsidiaries also have a number of policies and instructions governing operations, including the business areas’ divisions. These areas include IT, environment, quality, equality, authorisation procedures, financing and currency hedging.

The Group President has overall responsibility for day-to-day operations and their control, and the managers of the subsidiaries report on weekly order intake, invoicing and order backlog for each profit centre. Monthly financial statements are also prepared for each profit centre. These are analysed at different levels and consolidated at Group level.

ReportingInternal reporting takes place within the same system used for preparation of the consolidated financial statements and their quarterly presentation to the market. In addition to the income statements and balance sheets, the closing financial reports contain key financial ratios and other relevant information. Analyses are made of inventory levels and movements, trade receivables and customer credit periods.

The fundamental principle of the Group’s reporting and follow-up systems is that they are characterised by transparency and decentralisation. The management of each subsidiary is strongly committed to developing and rationalising these processes. A key to success is having access to relevant and correct information, which is measured and followed up. Much effort has been

devoted to the implementation and deve-lopment of business systems for measuring the profitability of individual transactions, customers, sectors and geographical markets. Individual costs are monitored and measured at critical stages in production, administration and sales. These are then compared with previous results and targets.

Remuneration of the Board and key management personnelThe 2013 annual general meeting adopted Board fees of SEK 550,000, distributed as fol-lows: Chairman of the Board SEK 150,000, other Board members SEK 100,000 each.

The meeting also adopted guidelines relating to the compensation of key man-agement personnel, which are essentially in line with market salaries and other terms of employment. Key management personnel’s remuneration consists of the basic salary, annual variable compensation, any long-term share-based incentive schemes, retirement benefits, other benefits and conditions for termination and severance pay. The annual variable compensation is always capped at a maximum of 3 monthly salaries. None of the key management personnel has a period of notice exceeding 12 months. Annual variable compensation and long-term share-based incentive schemes must primarily be linked to the earnings and value development of the Company/Group. Retirement benefits are always contribution-based.

AuditorThe auditor’s task is to examine Consilium’s financial statements and accounting records and the administration of the Board and CEO. The chief auditor also submits an audit report to the annual general meeting.

Shareholders have the opportunity to put questions to the auditor at the meeting.

Consilium’s auditor is elected by the annual general meeting. The 2010 annual general meeting elected Sten Håkansson from Öhrlings PricewaterhouseCoopers AB as auditor for a period of four years. At the 2013 annual general meeting, it was decided that auditors would be paid against invoice in accordance with approved purchasing principles.

Fees paid to Öhrlings Pricewaterhouse-Coopers AB in 2013 amounted to SEK 1.6 million (auditing services SEK 1.5 million, other services SEK 0.1 million).

Consilium’s stakeholdersConsilium is dependent on a large number of external parties. Cooperation and contacts with these parties may take the form of contractual and informal relationships or partnerships. The Company’s stakeholders are parties who affect or can be affected by Consilium’s actions. The simplified stakeholder model above does not show fragmented stakeholders such as competitors with whom the Company does not have any clear relationship. Added to the model are phrases expressing values which are inherent in the relationships or which Consilium seeks to establish.

SustainabilityIt is Consilium’s ambition to embrace the principles of sustainable development in its operations. Consilium sees sustainable development as “development that meets the needs of the present without compromising the ability of future generations to meet their own needs” (UN 1987). The Group’s sustain-able development work will also focus on

Interest model

Consilium AB

Customers

Shareholders

Suppliers Partners

Community Employees

Global supplier base

Responsibility, consideration and respect

Creating and delivering value

Attracting and motivating staff

Strengthening our own organisation

Best customer value on the market

57


The Natural Step’s four sustainability princi-ples and the environmental quality objectives adopted by the Swedish parliament.

It is Consilium’s goal that all product companies and production units will have an environmental management system according to ISO 14000. It is important that the Company’s operations are planned, implemented, monitored and improved according to this standard in order to reduce adverse environmental impacts. Consilium sees this work as a natural part of its commitment to the Company’s stakeholders. In addition, it is Consilium’s firm belief that a successful environmental programme also generates economic benefits, both in the short and long term.

Environmental policyBased on the Company’s own requirements and the expectations of the outside world, Consilium works for a better environment and endeavours to offer environmentally- friendly products and solutions that promote sustainable development. Consilium regards legislation and regulations as a minimum requirement and, as in all its operations, aims for constant improvement and reduction of the Group’s environmental impacts, In order to achieve this, Consilium will:

• allocate sufficient resources for environmental work

• integrate environmental issues into its quality management system

• in an overall perspective, treat environ mental measures as a long-term investment

• encourage and develop environmental awareness among employees

• cooperate with environmentally-aware suppliers and partners.

The Board’s internal control report for 2013

Consilium’s Board is responsible for ensuring internal control is conducted in accordance with the Swedish Companies Act and the Swedish Corporate Governance Code. Consilium’s financial reporting follows the legislation and regulations for companies listed on NASDAQ OMX Stockholm and the local regulations in the Company’s countries of operation. Consilium’s financial reporting will:

• be correct and complete, and prepared in accordance with current laws, standards and recommendations

• provide a true and fair description of the Company’s operations

• support a rational and well-informed valuation of the Company’s operations.

In addition to these goals, internal financial reporting must support correct business decisions at all levels in the Group. The Board’s description of internal control is based on the structure of COSO’s (Committee of Sponsoring Organisations of the Treadway Commission) framework for internal control.

Control environmentIn order to create and maintain a functioning control environment, the Board has adopted a number of fundamental documents of key importance to financial reporting. These include the Board’s formal work plan and the instructions for the CEO. The CEO is primarily responsible for ensuring the control environment adopted by the Board is upheld in the day-to-day operations and reports regularly to the Board in accordance with defined procedures. Reports are also submitted by the Company’s auditor. The internal control structure is also based on a management system which reflects the company’s organisation and method of operating, with clearly defined roles, areas of responsibility and delegation of authority.

The Group’s control documents, such as policies, guidelines and code of business ethics, also play an important role in the control structure. Control documents dealing with financial reporting are the most important components of the financial reporting control environment. These documents are regularly updated to reflect amendments to reporting standards, legislation and listing regulations.

Risk assessmentThe Group carries out regular risk assess-ment in order to identify significant risks associated with financial reporting. The main risk associated with financial reporting relates to material misstatements and insufficient disclosure in the financial statements, which can occur during recognition and meas-urement of assets, liabilities, income and expense. Other risks include fraud, loss or

embezzlement of assets. Risk management is incorporated into each process, and different methods are used to assess and limit risks and to ensure the risks to which Consilium is exposed are managed in accordance with adopted policies, instructions and established monitoring procedures, and that these minimise potential risks and support correct accounting, reporting and disclosure.

Control activitiesControl activities are designed to manage what the Board and management consider to be significant risks, and in doing so to prevent, identify and correct any errors in financial reporting. These control activities may be clear decision-making procedures and processes for important decisions such as acquisitions, other major investments, disposals, agreements and analytical mon-itoring. An important task for Consilium’s staff functions is to implement, develop and maintain the Group’s control routines and carry out internal controls focusing on business-critical areas. Process managers at different levels are responsible for carrying out the necessary controls relating to financial reporting.

Accounting and reporting processes have controls relating to measurement, accounting policies and accounting estimates. All entities in the Group have their own controllers/financial managers who participate in the evaluation of their own reporting. Continuous analysis of financial reporting at both entity and Group level represents an important way of ensuring financial reports do not contain material misstatements. The Group’s control organisation plays a key part in the internal control process and is respon-sible for ensuring each entity submits correct, complete and timely financial reports.

Information and communicationConsilium has internal information and communication paths which support complete and correct financial reporting. These include control documents such as internal directives, guidelines and policies on financial reporting. Regular updates and briefings about changes in account-ing policies and reporting and disclosure requirements are communicated and made available to all employees concerned. The Group’s intranet gives the organisation access to policies and guidelines. The Board

58


Internal control in Consilium

Control environment

Information

Control structure

Monitoring

Risk assessmentreceives regular financial reports. External

information and communication is governed by the Company’s information policy which describes Consilium’s general principles for information-sharing.

MonitoringThe Group’s compliance with adopted policies and guidelines is monitored by the Board and Company management. The Company’s financial situation is dealt with at each Board meeting. Consilium’s management monitors the financial results on a monthly basis by analysing deviations from the budget, forecast and previous year. All monthly accounts are discussed with the management of each business area. Financial reporting is reviewed by the Board prior to publication of quarterly and annual reports.

The auditors also examine internal control in the Group as part of their annual audit. The Board meets the auditors in order to review internal control and, if applicable, to give the auditors special internal control assignments. It is the auditors’ opinion that internal control is good.

Internal controlConsilium has an internal risk assessment function which reports directly to the President & CEO. Where control measures include visits to subsidiaries or their divisions, the activity is carried out in accordance with a specially created control process. This process has been developed in order to optimise working methods and

delivery of value-creating reports. Internal control has also developed a uniform risk management process for areas such as customer credit policy and insurance solutions, which will further strengthen corporate governance in the Group.

Consilium does not have a special internal audit function. It is the Board’s opinion that there are no special circumstances in the Company or its operations which warrant the establishment of such a function.

To the annual meeting of the shareholders of Consilium AB (publ), corporate identity number 556480-3327.

It is the Board of Directors who is responsible for the Corporate Governance Statement for the year 2013 on pages 55-59 and that it has been prepared in accordance with the Annual Accounts Act.

We have read the corporate governance statement and based on that reading and our

knowledge of the company and the group we believe that we have a sufficient basis for our opinions. This means that our statutory examination of the Corporate Governance Statement is different and substantially less in scope than an audit conducted in accordance with International Standards on Auditing and generally accepted auditing standards in Sweden.

In our opinion, the Corporate Governance Statement has been prepared and its statutory

content is consistent with the annual accounts and the consolidated accounts.

Stockholm, 25 April 2014Öhrlings PricewaterhouseCoopers AB

Sten HåkanssonAuthorized Public Accountant

Auditor’s report on the Corporate Governance Statement

Stockholm, 22 April 2014

Carl RosenbladChairman of the Board

Peter Carlberg Erik Lindborg Fredrik Nygren Board Member Board Member Board Member

Carl Adam Rosenblad Ann-Marie Åström Board Member Board Member

Ove HanssonChief Executive Officer

59


Consilium’s Board

All directorships are correct at 31 December 2013.

Carl Rosenblad

b. 1935.LL.B. M.Sc Business and Economics.Elected to the Board 1994.Elected Chairman 2000.

Other directorships:Chairman of the Board of Consilium AB, Svenska Bostadsfonden 1-12 AB, Platanen AB, Tessin Fastighets AB, Svenska Bostadsfonden Management AB, Svenska Bostadsfonden Institution 1 AB.

Shareholding in Consilium, see page 24.

Peter Carlberg

b. 1955.Graduate engineer.Elected to the Board 2008.CEO of Alfa Laval Korea.

Other directorships: Chairman of the Board of Swedish Chamber of Commerce South Korea.

Shareholding in Consilium: 1,000.

Ann-Marie Åström

b. 1965.LL.B.Elected to the Board 2009.CEO of Gotland Tankers AB.

Other directorships:Director of Rederi AB Gotland, Wisby Shipmanagement AB and Hafnia Management A/S.


Erik Lindborg

b. 1952.M. Eng.Elected to the Board 2012.CEO of MTC Brattberg AB.

Other directorships:MCT Brattberg AB, Fururitas AB and Utveckling i Karlskrona AB.

Shareholding in Consilium: 0.

Carl Adam Rosenblad

b. 1965.M.Sc Business and Economics.Elected to the Board 1996.Manager Marine & Safety business area.

Other directorships:Director of Consilium AB subsidiaries and Platanen AB.


Fredrik Nygren

b. 1966.B.Sc. (Econ).Elected to the Board 2007.Chairman of ExeoTech Invest AB (publ) and subsidiaries.

Other directorships:Chairman of the Board of Twinblade Technologies Holding Sweden AB (publ), Director of MRT Wind GmbH.


60

Consilium’s Management

AuditorSten Håkansson

Chief Auditor, appointed 2010.Öhrlings PricewaterhouseCoopers AB113 97 Stockholm

Ove Hansson

b. 1955.LL.B. M.Sc Business and Economics.

Present position:President & CEO of Consilium AB. Chairman of the Board in Consilium’s subsidiaries.

Previous positions and directorships:Director of Consilium AB 2000-2004.


Carl Adam Rosenblad

b. 1965.M.Sc Business and Economics.

Present position:Manager Marine & Safety business area. Director of Consilium AB, Consilium Group companies and Platanen AB.

Previous positions and directorships:Manager Marine & Safety Navigation.


L. Gilbert Babu

b. 1959.Engineer

Present position:Manager Fire safety & Automation business area. MD of Consilium Middle East FZC. Director of Consilium Middle East FZC and subsidiaries.

Previous positions and directorships:CEO of SAAB Rosemount Middle East FZC.


Anna Holmgren

b. 1965.Diploma in Economics.

Present position:Finance manager and Treasurer of Consilium AB.

Previous positions and directorships:CFO of Consilium’s subsidiaries.


Roger Orreteg

b. 1956.M.Sc Business and Economics.

Present position:Group controller of Consilium AB.

Previous positions and directorships:CFO of Consilium’s subsidiaries.

Shareholding in Consilium 500.

61

History

Consilium’s brands have been on the market a long time and bear the hallmark of a long tradition and history. Consilium’s marketed trademarks have been installed and used, and have gained respect over many decades. Consilium has developed many of the products and systems it offers, while others have been acquired.

Consilium speed logs can be traced back to 1912. Early gas detection and fire alarm systems were developed in the 1950s and 1960s. These products and systems, along with many others, came to the Company through an acquisition in 1985.

Below is a selection of events in Consilium’s modern history after the 1994 stock exchange introduction.

Consilium’s shares are admitted to trading on the O list of the Stockholm Stock Exchange on 11 May.

Consilium launches the world’s first integrated fire alarm and gas detection system. In the same year, Consilium acquires a VDR development project.

Consilium acquires Japanese Nittan’s marine fire alarm operations.

Consilium develops a fire alarm system customised for the rail market.

Consilium acquires the Norwegian competitor Servoteknikk (fire alarms).

Consilium and Japanese company Nittan merge their Scandinavian fire alarm operations for the land market to form a new company, CN System AB.

Consilium and Japanese company Nittan merge their Scandinavian fire alarm operations for the land

market to form a new company, CN System AB.

As part of its efforts to establish a clearer focus on products and systems for safety and navigation, Consilium Group portions out Precomp Solutions AB (publ), formerly Consilium Components, to its shareholders.

Consilium establishes a new business area in response to increasing demand from the oil and gas industry, particularly in the Middle East. The Automation business area started life as a project

within Consilium’s business development.

Consilium merges the operations in the Fire & Gas and Navigation business areas to form a new business area: Consilium Marine & Safety.

As a result of the progressive increase in sales of fire safety systems to the on-shore oil and gas industry, the name of the Automation business area is changed to Fire safety & Automation.

Consilium signs a global agreement with Honeywell Life Safety for the sale and servicing of Eltek’s marine products. Consilium acquires a majority stake in the Swedish fire protection company Incendium. Consilium issues a bond of SEK 325.0 million, making the Company financially independent of bank financing for its own growth and creating opportunities for active participation in the restructuring of the market during the current recession.

Consilium increases its focus on security and sells the radar operations. Major development resources are invested in the process of certifying future system safety functions in accordance with SIL2 and RAMS.

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Addresses

HEAD OFFICEConsilium ABVästra Finnbodavägen 2-4P.O. Box 5028131 05 NackaTel: +46 8 563 05 300Fax: +46 8 563 05 [email protected]

SWEDENConsilium Marine & Safety ABSalsmästaregatan 21P.O. Box 8763402 76 GothenburgTel: +46 31 710 77 00Fax: +46 31 710 78 00

Västra Finnbodavägen 2-4P.O. Box 5021131 05 NackaTel: +46 8 563 05 100Fax: +46 8 563 05 199

Storm & Co Skeppsradio ABSalsmästaregatan 21P.O. Box 8763402 76 GothenburgTel: +46 31 710 77 00Fax: +46 31 710 78 00

Consilium Säkerhet Syd ABTopplocksgatan 3212 41 MalmöTel: +46 40 36 50 60Fax: +46 40 36 50 61

Florettgatan 39254 67 HelsingborgTel: +46 42 453 03 79Fax: -46 42 40 36 50 61

Consilium Säkerhet Väst ABMarieholmsgatan 64415 02 GöteborgTel: +46 31 710 79 00Fax: +46 31 25 69 79

Consilium Säkerhet Öst ABHammarby Fabriksväg 25120 33 StockholmTel: +46 8 563 05 200Fax: +46 8 563 05 279

Consilium Incendium ABRattgatan 21442 40 KungälvTel: +46 303 44 00 30

BELGIUMConsilium BVGraaf Jansdijk 228380 ZeebruggeTel: +32-50 70 30 97Fax: +31-182 386 675

CHINAConsilium Trading Co. LtdRoom 108, Block 2HangXing Business BuildingNo. 27, Lane 258 CaoXi RoadShanghai 200235Tel: +86-21 5152 22 50/60/70/80Fax: +86-21 5152 22 90

Consilium SFS Pvt. LtdPlot No. 293, Kehar Singh Estate,Westend Marg, Said-ul-Ajab,New Delhi - 110 030Tel: +91-11 4050 6600Fax: +91-11 4050 6666

ITALYConsilium Italy S.r.IVia dell’ Artiginato 51 50056 Montelupo F. no Firenze Tel: +39-0571 1738922Fax: +39-0571 1738939

Via XII Ottobre 2 1–16121 Genua Tel: +39-010 5533 900Fax: +39-010 5533 900

JAPANConsilium Nittan Marine Ltd3 Fl, KDC Sasazuka Bldg.54-5, Sasazuka 1-chome, Shibuya-ku,Tokyo 151-8535Tel: +81 3 5333 7060Fax: +81 3 5333 8631

NETHERLANDSConsilium BVAchterwetering 13-152871 RK SchoonhovenTel: +31-182 382 422Fax: +31-182 386 675

NORWAYConsilium Norway ASKarihaugveien 89NO-1086 OsloTel: +47-22 30 90 30Fax: +47-22 30 92 05

QATARConsilium Qatar LLCAl Matar Street, (Airport Road)Near Old Al Rameez BuildingDoha, QatarTel: +974-4442 48 49Fax: +974-4441 76 02

SINGAPOREConsilium Marine Singapore Pte Ltd7030 Ang Mo Kio Avenue 505-58 NorthstarSingapore 569880Tel: +65-6570 8998Fax: +65-6570 8698

SPAINConsilium RMI Spain S.A.C/Gran Vía 81- 5 Planta Dpto 548011 Bilbao (Vizcaya)Tel: +34 94 404 2121Fax: +34 94 404 2122PSO. Frederica Montseny, 1 1º - 2ª08390 Montgat, Barcelona Tel: +34 6888731196

C/Torre de Punta Carnero, 10 3º A11207 Algeciras, CadizTel: +34 688815611

Consilium Shanghai Co. LtdRoom E, Level 4,No. 129, North Fu Te RoadWai Gao Qiao Free Trade ZoneShanghai 200131Tel: +86-21 5868 37 16/17/18Fax: +86-21 5868 37 15

Consilium DaLianRoom 201, Unit 1, No 65 North Zhelin Garden, Gan JingZi District, DaLian City, LiaoNing Province 116034, LiaoNing Province 116033 Kina, PC 116034 Tel: +86 411 3904 78 00Fax: +86 411 3904 78 0

Consilium QingDaoRoom 301, Unit 2, No. 14 Sakura DistrictHuaCheng Road, ChengYang District, QingDao City ShanDong Province 200168KinaTel: +86 0532 8786 94 76Fax: +86 0532 8786 94 76

Consilium Hong Kong Co Ltd22/F, Hang Seng Bank North Point Branch Building, 339 King’s Road, North Point,Hong KongTel: +852 3521 19 14Fax: +852 2772 07 30

FINLANDConsilium Marine OyVapaalantie 2A501650 VantaaTel: +358-405 25 28 25Fax: +358-425 25 28 25

GERMANYConsilium GmbHGrootsruhe 4D-20537 HamburgTel: +49-40-822 22950Fax: +49-40-822 229599

GREECEConsilium Marine Hellas Ltd19, Zoodohou Pigis Str185 38 PireausTel: +30-210 428 7097/8Fax: +30-210 428 7165

INDIAConsilium Marine India Pvt. Ltd210, Raheja ArcadeSector - 11, CBD BelapurNavi Mumbai - 400 614Tel: +91 22 679 351 50/52/53Fax: +91 22 679 379 21

501, Sai Krishna ComplexRly, New ColonyVisakhapatnam – 530 016Tel: +91 891 3010 320Fax: +91 891 3010 319

1st Floor, Velyn Villa, Kurisupalli Road, Perumanoor (PO)Kochi – 682 015Tel: +91 484 2384 298Fax: +91 484 2385 298

SOUTH KOREAConsilium Marine Korea LtdRoom 1136, Ocean Tower760-2 Woo 1 DongHaeundae-guPusanTel: +82-51 740 58 69/71-4Fax: +82-51 740 58 70

UNITED ARAB EMIRATESConsilium Middle East (FZC)Warehouse No B3/22P.O. Box 8018SAIF Zone, Sharjah, DubaiTel: +971 6557 0740Fax: +971 6557 0741

UNITED KINGDOMConsilium Marine UKUnit 34, Space Business CentreKnight RoadME2 2BF RochesterKentTel: +44-1268 417 745Fax: +44-1268 417 051

USAConsilium Marine US Inc4370 Oaks Road, Suite 721Fort LauderdaleFL 33314Tel: +1-954 791 7550Fax: +1-954 791 7599

395 E 4TH STApt. 36Long Beach, CA 90802Tel: +1-562 726 1190

VIETNAMConsilium Vietnam J.S.C.R4-52, Hung Phuoc 4, Phu My Hung, Tan Phong Ward, Dist 7Ho Chi Minh CityTel: +84 8 5410 1338Fax: +84 8 5410 1339

No. 48, Alley 113, Dao Tan Str.Ngoc Khanh Ward, Ba Dinh Dist. HanoiTel: +84 4 3211 5975Fax: +84 4 3211 5976

Production: Consilium and IR StockholmPhotos: Magnus Fond (CEO, Board, Management), Getty Images: Art at its best, Buena Vista Images, Dan Barnes, Richard Clark, Robert Ellis, Richard Gaydos, Arda Guldogan, Hybrid Images, Evgeny Kuklev, Wesley Pohl, Dan Prat, Monty Rakusen, Vicki Reid, Dragan Saponjic, Lothar Schulz, Juan Silva, Phillip Spears.Print: Ineko 2014

Västra Finnbodavägen 2-4P.O. Box 5028SE-131 05 [email protected]

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