Atlas Copco - Annual Report 1999

NOTES TO THE FINANCIAL STATEMENTS
of Atlas Copco Controls resulted in a capital gain before tax of
223 for the Atlas Copco Group.
Other operating income includes commissions received of 26
(39), capital gains of 38 (190) on the sale of fixed assets, surplus
due to repatriation of pension debt – (18), and profits from insurance
activities. Other operating income for the Parent Company
includes commissions received totaling 94 (61), capital gains of
21 (–) on the divestment of real estate and surplus due to repatriation
of pension debt – (10).
Other operating expenses refer to operating exchange-rate
losses attributable to operations.
6
Financial income and expense
Group Parent Company
1999 1998 1999 1998
Profit from shares in
Group companies
Dividends received 518 455
Group contributions
Capital gain/loss on
562 809
divestment of shares 6 11
Profit from shares and
participation in associated
companies
1,086 1,275
Dividends – 81
– 81
Profit from financial
fixed assets
Dividends received 1 1 – –
Interest income
Group companies 596 237
Others 7 5 – –
Capital gains 1 7 0 7
Write-downs – –3 – –3
9 10 596 241
Other interest income
Interest income
Group companies 648 651
Others 142 210 55 81
142 210 703 732
Interest expenses and
similar expenses
Interest expense
Group companies –67 –94
Others –1,183 –895 –1,044 –715
Foreign exchange
differences –26 –33 –2 –1
–1,209 –928 –1,113 –810
Financial income
and expenses –1,058 –708 1,272 1,519
20 ATLAS COPCO 1999
The interest portion of provision for pensions is not charged
against operating income but is shown as interest expense for
both Swedish and foreign companies. The amount is based on
the average of the opening and closing pension provisions. For
Swedish companies, interest has been calculated at 3.6 percent
(4.9). The interest portion for 1999 amounted to 71 (99), of
which Swedish companies accounted for 7 (39). In the Parent
Company, the corresponding amount was 4 (20).
The interest differential between international and Swedish
interest rates on forward contracts and swap agreements used
to hedge shareholders’ equity in non-Swedish companies in the
Group was negative, at –8 (–6).
7 Appropriations
Tax legislation in Sweden and in certain other countries allows
companies to retain untaxed earnings through tax-deductible
allocations to untaxed reserves. By utilizing these regulations,
companies can appropriate and retain earnings within the business
without being taxed. The untaxed reserves created in this
manner cannot be distributed as dividends.
The untaxed reserves are subject to tax only when they are
utilized. If the company reports a loss, certain untaxed reserves
can be utilized to cover the loss without being taxed.
Parent Company
1999 1998
Difference between tax depreciation and
depreciation according to plan
Buildings 2 –
Equipment etc. –1 –
Appropriation to tax allocation reserve
Dissolution of /Appropriation to foreign
–154 –177
exchange reserve 42 –64
Dissolution of tax equalization reserve 57 57
–54 –184