Scania annual report 2003

Note 28 continued
The other members of the Executive Board, if the company terminates
their employment, are entitled to severance pay equivalent to a maximum
of two years’ salary, in addition to their salary during six months’
notice period. If they obtain new employment within 18 months, counting
from their termination date, their severance pay ceases. In case of
a substantial change in the ownership structure of Scania, the members
of the Executive Board are entitled to resign of their own volition with
severance pay amounting to two years’ salary.
Compensation issues for the President and the Executive Board
are decided by the Board after preparation by a committee that was
established earlier, the Remuneration Committee, which now consists
of Bernd Pischetsrieder, Chairman; Peggy Bruzelius; Rolf Stomberg;
and Clas Åke Hedström. During 2003, the Committee met on three
occasions.
Salaries and other remuneration to the Chairman of the Board, the
President and Group Management executive officers are shown in the
table on page 69 (excluding employers’ contribution according to law).
NOTE 29 Fees and other remuneration to auditors
Fees and other remuneration to independent auditors, reported as
expenses during the year:
2003 2002
Auditing Other Auditing Other
Auditing firm assignments assignments assignments assignments
KPMG Bohlins AB 22 6 20 10
Ernst & Young 7 2 5 2
Other auditors 10 7 13 9
Total 39 15 38 21
NOTE 30 Net assets in foreign currencies
Net assets in foreign currencies consist of net Group-external assets in
foreign subsidiaries and net Group-external receivables and liabilities
of Swedish companies that are not hedged by funding in the corresponding
currency.
2003 2002 2001
Euro (EUR) 5,361 5,675 5,154
British pound (GBP) 846 863 717
Other European currencies 966 1,051 1,091
US dollar (USD) –285 103 –614
Latin American currencies 2,050 2,659 3,512
Other currencies 1,202 1,046 690
Total 10,140 11,397 10,550
Of these net assets, SEK 2,825 m. consisted of tangible fixed assets
translated at historical exchange rates. About SEK 350 m. of net foreign
assets were hedged by forward contracts related to EUR.
For information on accumulated exchange rate differences that are
reported directly against shareholders’ equity, see Note 15.
NOTE 31 Currency exposure in operating income
The net amount of operating revenues and operating expenses exposed
to foreign currencies, by currency.
2003 2002 2001
Euro (EUR) 8,400 7,900 7,300
British pound (GBP) 4,600 3,400 2,700
Other European currencies 2,100 2,100 2,100
Korean won (KRW) 1,500 1,300 1,000
US dollar (USD) 300 500 1,800
Latin American currencies 1) 0 – –
Other currencies 1,400 1,200 2,000
Total 18,300 16,400 16,900
1) The year’s calculation shows a balance in the flow of local Latin American
currencies. In prior years, these currencies have fluctuated sharply, with sizeable
price and cost changes as a result. For this reason, a description of currency
rate effect/exposure in earlier years is not meaningful.
Currency spot rate effects were about SEK –770 m. compared to 2002.
This was offset by positive currency hedging income of SEK 620 m.,
resulting in a negative net effect of SEK 150 m. During 2002, currency
hedging had a positive influence of SEK 500 m. on earnings. Compared
to 2002, the total currency rate effect was thus SEK –650 m.
NOTE 32 Effect of exchange rate differences
on net income
Net income was affected by exchange rate differences (excluding flowrelated
forward contracts) as shown in the following table:
2003 2002 2001
Sales revenue –80 45 243
Cost of goods sold 137 2 –132
Selling expenses –16 26 53
Income from Customer Finance –1 3 2
Operating income 40 76 166
Financial income and expenses –58 –160 –25
Taxes 5 –14 –83
Effect on net income –13 –98 58
The amounts above refer to exchange rate gains minus exchange
rate losses on the difference between the invoicing exchange rate and
the exchange rate on the payment date, on receivables and liabilities
and exchange rate differences that arise when using the monetary/nonmonetary
translation method. For information on accumulated exchange
rate differences that are reported directly against shareholders’ equity,
see Note 15.
ANNUAL REPORT 2003
70