ANNUAL REPORT 2006 - Skanska

Note 33
Assets pledged
Assets pledged, contingent liabilities and contingent assets
2006 2005
Mortgages, current-asset properties 5 5
Shares and participations 1,344 1,444
Receivables 385 381
Total 1,734 1,830
The use of shares and participations as assets pledged refers to shares in joint
ventures belonging to Infrastructure Development. These assets are pledged as
collateral when obtaining outside lending for these joint ventures.
Receivables include liquid assets in escrow as collateral in conjunction with construction
projects.
Assets pledged for liabilities
Shares and
Property mortgages receivables Total
2006 2005 2006 2005 2006 2005
Own obligations
Liabilities to credit institutions 1 1 1 1
Other liabilities 385 381 385 381
Total own obligations 1 1 385 381 386 382
Other obligations 4 4 1,344 1,444 1,348 1,448
Total 5 5 1,729 1,825 1,734 1,830
Contingent liabilities
Contingent liabilities are reported in compliance with IAS 37, ”Provisions, Contingent
Liabilities and Contingent Assets”. See ”Accounting and valuation principles,”
Note 1.
2006 2005
Contingent liabilities related to construction consortia 4,313 5,518
Contingent liabilities related to joint ventures 674 1,495
Other contingent liabilities 1,300 2,090
Total 6,287 9,103
The Group’s contingent liabilities related to construction consortia totaled about
SEK 4.3 billion (5.5). This amounted referred to the portion of the joint and several
liability for the obligations of construction consortia affecting consortium
members outside the Group. Such liability is often required by the customer. To
the extent it is deemed likely that Skanska will be subject to liability claims, the
obligation is reported as a liability in the balance sheet.
Contingent liabilities related to joint ventures refer mainly to guarantees issued
when joint ventures belonging to the Infrastructure Development business
stream have raised loans.
Most of the Group’s other contingent liabilities, SEK 1.3 billion (2.1), were
related to obligations attributable to the operations of Residential Development
Nordic
During 1988–1990 the Skanska Group, through partly owned companies, purchased
holdings in aircraft. The depreciation deductions that were made by several
of these companies were disallowed by the tax authorities. Due to differing
views regarding the consequences for subsequent tax years due to disallowed
depreciation deductions, tax litigation has arisen concerning later tax years as
well. During 2006, however, the Swedish Tax Board withdrew claims, with the
result that several of the legal actions have ended and Skanska has received
refunds of previously paid additional taxes. The remaining tax litigation is not
deemed to constitute a risk to the Group.
Since September 2006, the main hearings have been underway at Stockholm
City Court in a suit filed by the Swedish Competition Authority against a number
of companies in the asphalt and civil construction business, among them
Skanska, concerning alleged collusive anti-competitive practices. The Competition
Authority has requested total fines of SEK 1.2 billion, of which Skanska’s
share in SEK 557 M. Skanska has denied the Competition Authority’s allegations.
The case is unusually extensive, and there is great uncertainty about the
outcome of the suit.
Skanska and another company suspected of having participated in cartel
activities in Sweden have been sued by a number of Swedish municipalities,
which maintain that they have suffered damage in procurements alleged to
have been the object of collusive cartels between the contractors. Skanska has
been sued for a total of SEK 57 M. Skanska denies the allegations.
In Finland, the main hearings at the Market Court concerning alleged anticompetitive
activities in the asphalt and civil construction sector were completed
in December 2006. A ruling is expected to be issued during the first half of
2007. The amount of infringement fines requested totals about SEK 100 M for
Skanska’s part. Skanska denies the alleged infringement. The outcome of the
legal action in Finland is characterized by great uncertainty.
No provisions have been made for the above litigation, since the outcome of
these cases is characterized by great uncertainty. In accordance with the
accounting principles applied by Skanska, the amounts requested have not been
included in the table of the Group’s contingent liabilities either.
Contingent assets
The Group has no contingent assets of significant importance in assessing the
position of the Group.
See ”Accounting and valuation principles,” Note 1.
Skanska Annual Report 2006 Notes, including accounting and valuation principles 109