annual report 2006 eng

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The Volito Group 4-8

Real Estate – Volito Fastigheter 9-14

Structured Finance – Nordkap Bank 15-18

Aviation – Volito Aviation 19-24

Aviation – Scandinavian Aviation Academy 25-26

Pro forma 27

Board of Directors and Management 28

Annual report and Auditors’ report 29-54

Addresses and Definitions 55

Contents

This English version is a translation of the Swedish original.

In the case of any dispute as to the interpretation of this

document, the Swedish version shall prevail.

Volito AB is a privately-owned investment company based in Malmö. The company runs ope-rations in the areas of Aviation, Real Estate and Structured Finance. Volito AB structures its activities in operating subsidiaries and in other investments within its three business areas.

The Real Estate business area includes the wholly-owned Volito subsidiary, Volito Fastigheter AB. Volito Fastigheter mainly focuses on commercial real estate in the Öresund Region. Real Estate also includes Volito’s ownership in Peab AB (publ). Peab is a construction and civil engineering company, listed on the Stockholm Stock Exchange.

Structured Finance encompasses Volito’s ownership in Nordkap Bank AG. Nordkap Bank offers structured financing solutions, and its customers are primarily in developing regions of the world. The bank runs its operations from Zürich, Switzerland.

The Aviation business area covers the leasing of commercial jet aircraft in the narrow-body segment, mainly Boeing 737 and Airbus 319/320. The leasing business is operated by the wholly-owned subsidiary, Volito Aviation AB, and the majority-owned Volito Aviation AG, headquartered in Switzerland.

SAA AB, in Västerås, is also part of the Aviation business area. The SAA

Group runs training courses for pilots and other personnel in the aviation industry, and has activity in Sweden, Switzerland and the USA.

The Aviation business area also administers Volito’s holding in CTT Systems AB (publ), a company listed on the Stockholm Stock Exchange. CTT develops and sells humidity control systems for commercial aircraft.

Volito’s overall objective is to create long-term, balanced value growth for the shareholders. 2006 saw growth in adjusted equity of 36%. The Volito Group’s adjusted equity amounted on 31 December 2006 to SEK 1 272,9 million.

Business concept, structure and objective

Volito AB

4 annual report 2006 | Volito AB

The Group | Volito

STRUCTUREDFINANCE

AVIATIONREALESTATE

• The Volito Group’s net asset value increased by 36% to SEK 1 272,9 million (934,8).

• The Volito Group’s profit before tax amounted to SEK 144,5 million (79,0).

• Volito Fastigheter reported another year of solid profit generation and is well positioned for future growth in the expansive Öresund Region.

• The strategic cooperation with Peab continued to deepen, while the holdings in Peab have shown good value growth during the year.

• Nordkap Bank continued to develop better than envisaged in 2004, and is on the way to becoming one of Volito’s most valuable assets.

• Volito Aviation signed an agreement with the American investment bank Goldman Sachs, that commits both parties to build a jointly-owned company comprising of the respective companies’ current and future operations within aircraft leasing. Volito has management responsibility for the joint fleet.

• During 2006, SAA focused on the integration of acquired businesses, and is expected to return to profitability in 2007.

• CTT Systems has taken further orders and also prepared for production of the company’s Zonal Dryer product for the Boeing 787.

2006 in brief

annual report 2006 | Volito AB 5

The Group | Volito

The results for 2006, measured as growth in adjusted equity, was again very good. The value increase for the year amounted to 36% and was generated by both the contribution of current earnings and the growth in value of existing investments. The Volito Group’s adjusted equity amounted at year-end to SEK 1 272,9 million, which gives a stable platform for the future.

As stated, Volito Aviation signed an agreement in late 2006 with

Goldman Sachs. Both companies will place their respective aircraft fleets in a joint company, which will be served by Volito Aviation. The transaction is a clear sign of the solid expertise that has been built up over the years within Volito to cover all aspects of aircraft leasing.

The transaction with Goldman Sachs brings with it a number of benefits from a financial perspective. Volito realises a part of the value

that has been built up in recent years in Volito Aviation’s portfolio. The transaction also means a lower balance sheet total, which clearly improves some of the Volito Group’s key ratios. It also provides risk diversification, as Volito retains its nominal exposure for the aircraft leasing operation, but spread over a larger number of aircraft. In addition, there is a release of liquid funds that can be used for continued expansion of the business area.

Comments from the CEO2006 was yet another successful year for the Volito Group. In value terms, the company achieved growth of 36% in adjusted equity, and virtually all operations within the Group have continued to develop in a positive direction. A major event for the year was the agreement Volito Aviation signed with the American investment bank Goldman Sachs. The agreement means that Volito Aviation merges most of its aircraft fleet with the existing fleet of Goldman Sachs and that future aircraft leasing operations will be run jointly. Volito Aviation will own 25,5% of the new company.


The Group | Volito

Sven HolmgrenCEO and President, Volito AB

Volito Fastigheter generated a very satisfactory profit during the year and is well positioned for the future in the expansive Öresund Region. The company has noted an increase in competition indicated by a growing interest in the region as an attractive place for real estate investments. Due to this, the company did not expand the property portfolio during the year. The company is actively seeking growth opportunities and looking for new ways to further grow its portfolio.

Volito’s investment in Peab developed positively in value terms during the year. The strategic ties with Peab have also been strengthened and a clear sign of this was that Volito Fastigheter signed an agreement on the acquisition of a property in Klagshamn outside Malmö with Peab as the contractor. The transaction was carried out in early January 2007.

Nordkap Bank continued to develop strongly in 2006. The bank generated

a profit before tax of CHF 8,8 millionand has again shown that an organisa-tion is in place which can generate a number of qualitative transactions in a market characterised by considerable competition and high liquidity. The bank has also moved up in the value chain and during the year completed its first transactions in the market as Lead Arranger. This is further proof of the quality in the organisation and guarantees continued profitability and growth in the years to come.


The Group | Volito

The Volito, Group Five-year summary

SEK million 2006 2005 2004 2003 2002

Profit/Loss before tax 144,5 79,0 30,7 70,7 -6,5

Adjusted equity 1 273 935 663 563 497

Return on adjusted equity, (%) 36 41 18 13 0

Equity ratio, (%) 26 23 26 25 25

Assets 4 010 3 575 2 267 2 029 1 792

97 98 99 00 01 02 03 04 05 06

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SEK million The Volito Group, adjusted equity

SAA suffered a tragic accident in February 2006 when, during a training flight in San Diego, one of the company’s aircraft was involved in a midair collision with another small aircraft. Three people died in the accident, including an instructor and student from SAA. All the necessary support measures were immediately deployed to help the relatives.

In terms of profit, SAA had a tough year. The company considerably increased its revenues during the period, but integration of the acquisitions made in 2005 and 2006 has been more expensive and

time-consuming than originally anticipated. SAA also sustained a number of extraordinary costs as a result of the implemented acquisitions and this has further reduced profitability. However, the profit in operations has improved during the year and we have well-founded hopes that SAA will return to profitability in 2007.

As well as the development of our operations, I feel strongly that we will continue to develop as people within the Volito Group. We continue to build on our core values of trust, integrity, long-term business view

and respect for our business partners, and naturally it is the personnel within Volito who are behind this ”construction”. With all this in mind, we can leave another successful year behind us and raise well-founded hopes that 2007 will also be an interesting and prosperous year. I would like to take this opportunity to sincerely thank our customers, owners, personnel and all our partners for the year that has passed.

Sven HolmgrenPresident and CEO

The Group | Volito


REALESTATE

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In January 2007, Volito Fastigheter completed the acquisition from Peab of the Lastbryggan 2 property in Klagshamn. The property covers 1 158 sq.m. and establishes Volito in a market that, with its proximity to the Öresund Bridge and extended infrastructure, is expected to have considerable development and growth potential in the future.

“The acquisition of the property in Klagshamn is positive in several respects. It demonstrates the strategic

cooperation we have with Peab, and also establishes us in a market where we see great potential and good development prospects for the future. Klagshamn is definitely a market in which we will grow and create a greater volume to manage in the years to come”, says Per Hammarström, CEO of Volito Fastigheter.

Work on the City Tunnel in central Malmö has progressed during the year. Volito Fastigheter has a strong

portfolio in close proximity to the City Tunnel and is now working actively and strategically to position these properties for the shift of the centre in Malmö that the City Tunnel’s opening is expected to bring about.

The market in the Öresund Region has otherwise continued to generate great interest among more players in the real estate sector. This has resulted in continued falls in yield levels and thus a rise in real estate

Per Hammarström,CEO , Volito Fastigheter AB

Strong results in a market where prices continued to rise

Volito Fastigheter continued to generate strong operating results and cash flow during the year. The company reported a profit for the year before tax of SEK 26,5 million (56,2). A property in Klagshamn, outside Malmö, was acquired by the company from Peab. This acquisition, which was completed in January 2007, is proof of the strategic cooperation that exists with Peab. The market in the Öresund Region has otherwise been marked by strong demand, with falling yield levels and rising prices as a result.


Real Estate | Volito Fastigheter

prices. During the year, Volito Fastigheter has analysed several potential acquisitions, but these have not been able to fulfil the company’s acquisition criteria.

Market developments have meant that the value of Volito Fastigheter’s portfolio increased by 12% during the year to SEK 998,6 million (890,7). The value is calculated at a yield of 6,2%. This figure is considered as conservative by the company and

does not include a premium that can probably be added if Volito’s entire real estate portfolio was to be offered for sale on the market.

Volito Fastigheter has for several years been a well-established manager of real estate in Malmö and signed a 10-year agreement in 2006 with NetOnNet, which has decided to establish a warehouse store in Malmö.

The vacancy level has risen somewhat during the year and at year-end was 12,6% (11,6%). The company expects the level to fall in the coming quarter, as some rental contracts under negotiation will be settled and the positive employment trend in the Öresund Region will continue.

In view of the interest rate trend during the year, the company decided in 2006 to fix its rates



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Volito’s real estate holding at Skeppsbron

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Ran 8, Skeppsbron 7The property was built in 1929 and has been modernised at various times over the years. During 2005-2006 major rebuilding work was carried out at the property including a new ventilation system and adaptations for new tenants

Total area: approx. 1 050 sq.m.

Ran 9, Jörgen Kocksgatan 1 / Stormgatan 6Modern property, built in1992, which consists of office and shop/exhibition premises as well as 34 residential apartments. The base-ment level has a large garage with some 80 parking spaces.

Total area: 8 000 sq.m., of which approx. 5 800 sq.m. is offices/shops, and the rest residential apartments.

Ran 4, Skeppsbron 3The property was built in 1910 and in recent years has been sensitively renovated, so that modern and efficient office premises have been created while retaining the building’s authentic atmosphere.


Aegir 1, Skeppsbron 1 (Centralposthuset)Built in 1906, this property is now a listed building. The creator was the leading architect of the time, Ferdinand Boberg, who considered this building, the post house in Malmö, one of his best works.


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for a larger part of its loan portfolio. At year-end, the company had a total loan portfolio of SEK 556,7 million (567,7), of which SEK 387,6 million (70%) carried fixed rates of interest. The average maturity term for the whole portfolio at year-end was 3,4 years.

Volito Fastigheter’s profit before tax for 2006 amounted to SEK 26,5 million (56,2). The previous year’s profit included a capital gain of 30,2 million. The return on the company’s equity amounted to 12,2% (28,5%).

During the year, Volito increased its holding in Peab AB (publ) and in December acquired a further 1 075 000 B-Class shares in the company. Volito’s holding thereby amounts to 4 300 000 B-Class shares, which corresponds to 2,5%of the votes and 4,9% of the capital in Peab. At year-end, the holding had a value of SEK 698,8 million.

Peab continued to develop strongly during 2006 with increased turnover and rising profit as a result. The share price, including dividend, rose by 62% in comparison with the OMX All Share Index, which went up by 24% in the same period.

In the autumn, Peab’s board proposed that the Peab AGM in May 2007 shall decide on the distribution of the company’s industrial operations to the shareholders. The proposed form of dividend is shares in a subsidiary called Peab Industri AB. This distribution creates improved possibilities and increased competitiveness for both Peab’s construction and civil engineering projects and for Peab Industri that over time is expected to lead to an increase in share holder value.

As mentioned previously, the strategic cooperation with Peab has also generated business for Volito Fastigheter during the year. This trend is expected to continue in years to come, as the holding is a way for Volito Fastigheter to gain earlier entry into real estate projects.

Real Estate | Other developments

97 98 99 00 01 02 03 04 05 06

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Adjusted equity, SEK million Distribution of rent by category and m2

Offices Trade Industry Residential

Volito Fastigheter AB, Five-year summary

SEK million 2006 2005 2004 2003 2002

Rental income 81,5 79,3 73,9 70,2 66,1

Profit/Loss before tax 26,5 56,2 42,2 19,6 15,6

Return on equity, (%) 12,2 28,5 24,7 25,5 19,6

Equity 166,2 148,1 135,8 108,3 86,0

Real estate market value 998,6 890,7 764,7 748,0 743,0

© Hans Bjurling / Johnér

STRUCTUREDFINANCE


Stuctured Finance | Nordkap Bank

During the year, Nordkap Bank took further steps in the strategy that has been established for just over two years. Over 30 loan transactions were carried out in 2006, adding a total volume of approx. CHF 150 million to the bank’s existing portfolio. The average margin on the transactions

has been 3,1% (2,9%). Growth has also been achieved with a considerable focus on costs, which means that for 2006, Nordkap Bank achieved a cost/revenue ratio of 37,6% (41,3%). The bank has a long-term aim to hold the cost/revenue ratio under 40%. The high price of raw materials

has led to a more intensive rate of investment in the infrastructure sectors of the developing countries. Both these trends have been favourable for Nordkap Bank during 2006, as the bank is active in both raw material and infrastructure financing.

Nordkap Bank reports good results

Nordkap’s loan portfolio increased by 57% during 2006 and amounted at year-end to CHF 418 million (267). The expansion has been carried out with good profitability and the average margin for the loan portfolio at year-end was 3,1% (2,9%). During the year, Nordkap was engaged to arrange a number of structured transactions, some-thing that strengthens the bank’s future profitability potential and secures confidence in the bank among other players in the market.

Niclaus Hasler, CEO Nordkap Bank AG

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The bank has not suffered any credit losses during the year, which confirms that Nordkap’s routines and processes for monitoring the development of the loan portfolio is well managed.

Nordkap acted as Lead Arranger in a number of transactions in 2006. These mandates have been secured in competition with some of the world’s most respected players in

the respective areas and is further confirmation of the quality in the bank’s organisation and business strategies. Nordkap’s profitability regarding these mandates is very

Nordkap Bank AG, Four-year summary

CHF million 2006 2005 2004 2003

Profit before tax 8,8 8,0 2,1 1,1

Return on equity, (%) 9,4 9,6 2,6 1,2

Equity 95,9 88,6 84,4 75,4

Loan and insurance portfolio 450,2 413,2 388,9 212,7 Energy Industry Others

Distribution of loan and insurance portfolio per sector

Transportation& Telecom



good, as the revenues are generated in a fee structure that is applied in addition to the normal credit spread that constitutes Nordkap Bank’s fundamental revenue model.

For 2006, Nordkap generated a profitbefore tax of CHF 8,8 million (8,0).The profit has been positively affected by an increase in lending, while revenues from the insurance portfolio taken over from Sirius in 2004

decreased in comparison with the previous year.

The return on equity during the year was 9,4% (9,6%). This return shows the fact that the bank continues to be overcapitalised with a capital coverage at year-end of 22,3%. When Nordkap achieves a more optimal capital structure, the return on equity will increase and should establish itself on a sustainable level above 25%.

Nordkap Bank expects developments to continue in a positive direction in the coming years. The considerable demand for capital is continuing in the markets where Nordkap is active. The bank also sees considerable possibilities to add further products and revenue sources to the current business model and thus also create risk diversification in its business model.

AVIATION


Aviation | Volito Aviation

The agreement signed at the end of the year with Goldman Sachs means that during 2007 Volito Aviation will merge the major part of its fleet with the existing fleet of Goldman Sachs in a new company based in Ireland, VGS Aircraft Holding Ltd. (VGS). Volito Aviation’s share of ownership in VGS will be 25,5%. As part of the transaction, Letters of Intent were signed in the autumn to jointly acquire a further five aircraft which will also be added to VGS in early 2007. With the inclusion of these aircraft, VGS is expected to initially own about 40 aircraft with a book-value in excess of USD 550 million.

If market conditions are favourable, the aim is to gradually increase the fleet.

“We are very satisfied with the VGS transaction, which is undeniably a milestone in the development of Volito Aviation. The transaction makes evident the value in our portfolio while also positioning us for continued growth. The fact that Volito Aviation will manage the future fleet is also clear proof of the competence and quality possessed by our team,” says Karl-Axel Granlund, acting CEO of Volito Aviation.

During the year, three of the company’s aircraft were remarketed to new lessees. In April, an Airbus 320, which came back from MyTravel, was leased out to the Ukranian airline, Donbassaero Airlines, until April 2012. In November, one of the company’s Airbus 319 aircraft was placed with the Brazilian airline, TAM. The agreement with TAM is for 78 months and runs until March 2014. This aircraft came back from TACA in El Salvador. Finally, in December a Boeing 737 was placed with Rumanian airline, Blue Air, on a lease until March 2012. This aircraft came back from

Transaction with Goldman Sachs positions Aviation for

continued growth

Volito Aviation AB, through the 51%-owned company Volito Aviation AG, continued to invest in its aircraft portfolio during 2006. At year-end, the fleet consisted of 22 aircraft with a book-value of USD 318,9 million.

Karl-Axel Granlund, Acting CEO, Volito Aviation AB



Luxair in accordance with the conditions of the previous lease. These transactions have been carried out with limited downtime, which is a further confirmation of the competence within Volito Aviation. The contracts for one B737-3G7 on lease to US Airways and two Airbus 320-231 on lease to Indian Airlines have been extended until 2010.

Volito Aviation also sold an aircraft during the year. In June, a Boeing

737 was sold to the Ukrainian airline,Dniproavia. The aircraft had previously been leased out to easyJet in England, and the transaction resulted in a substantial capital gain. The sale was yet further proof that in recent years Volito Aviation has built up considerable surplus value in its aircraft fleet.

In April, Volito Aviation increased its existing credit facility with HSH Nordbank to USD 250 million (pre-

viously USD 150 million). A facility brings additional flexibility as well as possibilities to rapidly respond to investment opportunities that arise. HSH Nordbank is one of the world’s leading banks within global transport, and cooperation with HSH gives Volito Aviation both credibility and increased leverage in the market.

In addition to continued investment in aircraft, Aviation continued to



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US Airways (America West)2 Boeing 737-300

USA

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COPA 2 Boeing 737-700

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Denim Air 2 Fokker 50

The Netherlands

TAM Airbus 319-132

Brazil

TAP Airbus A319-112

Portugal

Aircraft MSN/year Engine Model Registration Operator Lease Expiry

Fokker 50 20210/1991 PW100-125 PH-FZH Denim Air, The Netherlands Feb 2009

Fokker 50 20252/1992 PW100-125 PH-KXM Denim Air, The Netherlands Feb 2009

Boeing 737-33A 24094/1989 CFM56-3B2 LN-KKS Norwegian Air Shuttle, Norway April 2010

Airbus 320-232 0872/1998 IAE V2527-A5 B-6256 Sichuan Airlines, China July 2011

Airbus 320-231 0230/1991 IAE V2500-A1 UR-DAB Donbassaero, Ukraine April 2012

Boeing 737-4C9 25429/1992 CFM56-3C1 YR-BAD Blue Air, Romania March 2012

Boeing 737-4C9 26437/1992 CFM56-3C1 EI-DGM Luxair/Blue Panorama, Luxembourg/Italy Dec 2006

Airbus 319-132 1074/1999 IAE V2524-A5 9V-SBA SilkAir, Singapore April 2010

Airbus 319-132 1098/1999 IAE V2524-A5 9V-SBB SilkAir, Singapore April 2010

Boeing 737-3L9 27061/1992 CFM56-3B2 9M-AAG Air Asia, Malaysia March 2010

Airbus 319-132 1575/2001 IAE V2524-A5 PR-MBI TAM, Brazil March 2014

Boeing 737-3G7 24009/1988 CFM56-3B1 N302AW US Airways, USA May 2010

Boeing 737-3G7 24010/1988 CFM56-3B1 N303AW US Airways, USA Nov 2007

Airbus 320-231 0308/1992 IAE V2500-A1 VT-EVS Indian Airlines, India March 2010

Aircraft Fleet

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Norwegian Air ShuttleBoeing 737-300

Norway

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Luxair/Blue PanoramaBoeing 737-400

Luxembourg

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Aigle Azur 2 Airbus 320-200

France

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Indian Airlines2 Airbus 320-200

India

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Air Asia Boeing 737-300

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SilkAir 2 Airbus 319-100

Singapore

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Sichuan AirlinesAirbus 320-200

China

Blue AirBoeing 747-4C9

Romania

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DonbassaeroAirbus 320-231

Ukraine

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CCM 2 Airbus A319-112

Aircraft MSN/year Engine Model Registration Operator Lease Expiry

Airbus 320-231 0314/1992 IAE V2500-A1 VT-EVT Indian Airlines, India March 2010

Airbus 320-233 0558/1995 IAE V2527E-A5 F-HBAE Aigle Azur, France April 2009

Airbus 320-233 0561/1995 IAE V2527E-A5 F-HBAD Aigle Azur, France March 2009

Boeing 737-71Q 29047/1999 CFM56-7B HP-1369CMP COPA, Panama April 2009

Boeing 737-71Q 29048/1999 CFM56-7B HP-1370CMP COPA, Panama June 2009

Airbus A319-112 0629/1996 CFM56-5B6/2P CS-TTQ TAP, Portugal March 2012

Airbus A319-112 1068/1999 CFM56-5B6/2P F-GYFM CCM, Corsika, France Nov 2008

Airbus A319-112 1145/1999 CFM56-5B6/2P F-GYJM CCM, Corsika, France Feb 2009

Letters of Intent

Airbus A319-112 1102/1999 CFM56-5B6P2 EI-DEY Meridiana, Italy June 2009

Airbus A319-112 1283/2000 CFM56-5B6P2 EI-DEZ Meridiana, Italy March 2009

Airbus A319-112 1305/2000 CFM56-5B6P2 EI-DFA Meridiana, Italy March 2009

Boeing 737-800 28829/2000 CFM56-7B27 ZS-SJD South African Airways, South Africa May 2010

Boeing 737-800 30567/2001 CFM56-7B27 ZS-SJJ South African Airways, South Africa May 2011



strengthen its organisation during the year. Expertise has been added in the technical area and in accounting, administration and finance. Further recruitment has been initiated in order to fully meet the demands that come with servicing and managing a larger fleet. With an aim to enable

more efficient management of a larger portfolio, investments have been made in systems to improve financial reporting.

Volito Aviation’s profit before tax for the year amounted to SEK 103,2 million (8,8). The profit has been

positively affected by the doubling of the fleet carried out in 2005. Also included in the profit is a capital gain of SEK 4,3 million (0,0),and reversed maintenance reserves on disposed aircraft, SEK 28,5 million. The company’s return on equity for the year amounted to 26,7% (3,1%).

Volito Aviation AB, Five-year summary

SEK (USD) million 2006 2005 2004 2003 2002

Revenues 396,1 (52,9) 210,8 (28,1) 98,9 (13,2) 79,0 (9,7) 57,2 (6,1)

Profit before tax 103,2 (10,8) 8,8 (1,6) 12,0 (1,3) 29,9 (2,2) 17,9 (1,6)

Return on equity, (%) 26,7 3,1 15,3 16,2 10,0

Equity 259,6 (27,3) 200,3 (21,3) 161,8 (15,0) 141,4 (13,7) 120,9 (11,5)

Assets 2 669,5 (341,8) 2 466,2 (309,6) 1 171,8 (129,6) 777,8 (80,3) 684,2 (61,6)

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SEK million

’02 ’03 ’04 ’05 ’06


Aviation | Scandinavian Aviation Academy

In 2006, SAA achieved continued good growth in revenues. These increased by 38,0% and amounted for the full-year to SEK 116,1 million (84,1). However, integration work of the operations in the USA and Switzerland has proved to be more costly and time-consuming than originally anticipated.

In February 2006, SAA Inc. in San Diego suffered a tragic accident when, during a training flight, one of the company’s aircraft was involved in a midair collision with another small aircraft. Three people died in the accident, including a student and instructor from SAA. The accident is being investigated by the National Transportation Safety Board (NTSB), which will present its conclusions during 2007.

The year has otherwise been marked by the integration of the operations that were acquired in 2005 (SAA Inc. in the USA) and 2006 (Twinair

S.A. in Switzerland). The work has aimed to develop a competitive product offering with an efficient organisation in view of the market’s current demand for pilots, which is expected to grow in the years to come.

The integration work has also resulted in management changes at both SAA Inc. and Twinair. This has been a natural step in developments to create a coherent and efficient structure for the different companies within the SAA Group. Organisational changes have also taken place at SAA in

Sweden, mainly with an aim to strengthen the organisation from an expertise perspective.

In late 2006, SAA Inc. gained accreditation from the Chinese equivalent of the Swedish Civil Aviation Administration Board. This means that operations in San Diego are well equipped to accept and train Chinese pilots, and the first students are expected to start their training during 2007. SAA has also established contacts in India that mean SAA Inc. will take in its first students from India as early as January 2007. Both China and

Mats Holmgren, CEOScandinavian Aviation Academy AB

A year characterised by integration work


Aviation | Scandinavian Aviation Academy

India are expected to account for a considerable part of total training within SAA Inc in the future.

The strong cooperation with Ryanair continued during 2006. A total of 152 (104) pilots were recruited and trained in cooperation with SAS Flight Academy. Cooperation with Ryanair looks set to increase in the future with a rise in the number of training courses in the coming year in type rating courses as well as in MCC (Multi Crew Cooperation). In addition to Ryanair training, 35 self-financed type rating courses have been carried out.

For 2006, SAA reported a loss before tax of SEK -7,3 million (2,3). The results include one-off costs of SEK 4,1 million (0,0) and goodwill de-preciation of SEK 1,7 million (0,9).

The company’s operating cash flow has, despite the results, been positive and amounted for the full-year to SEK 2,5 million (0,3). Consequently, the return on equity was negative (4,6%).

Looking to the future, the company sees no reason to change its strategy, which was established last year. This is based on providing a full service as a One Stop Shop Facility concerning training courses directed at airlines worldwide. The strategy has been conceived for a future in which airlines will outsource more of their training to subcontractors. The company expects a clear improvement in earnings during 2007.

CTT Systems AB (publ) took further orders during the year and continued to develop in a positive direction. In February, Monarch Airlines UK ordered 27 Zonal Drying systems for installation in its entire fleet. CTT won a strategic order in October when Continental Airways ordered 41 Zonal Drying systems for its Boeing 757 fleet. The order was important, as it was CTT’s first major order in the US market.

Otherwise, 2006 has been characterised by continued preparations for delivery of the Zonal Drying system for the Boeing 787, in which CTT’s product will be standard. Boeing has had great success with the 787 and so far there are about 450 firm orders for the model. The first systems will be delivered by CTT in 2007.

The development of CTT’s share price was negative during the year. The price has fallen by 31% in comparison with the OMX All Share Index, which in 2006 rose by 24%. This share price development should be regarded in the light of 2005, when the share was one of the best performing on the Stockholm Stock Exchange with an increase of 473%.

In early 2006, Volito reduced its holding in CTT. In total, 230 333 shares were sold, which resulted in a capital gain of SEK 10,6 million. Volito’s continuing holding in CTT amounts to 1 103 000 shares, which corresponds to 12,3% of the votes and capital in the company. Volito is CTT’s biggest shareholder and the holding at year-end was worth SEK 52,3 million.

Aviation | Other developments

Scandinavian Aviation Academy AB, Five-year summary

SEK million 2006 2005 2004 2003 2002

Revenues 116,1 84,1 53,6 49,1 48,5

Profit/Loss before tax -7,3 2,3 2,3 2,4 3,7

Return on equity, (%) neg 4,6 11,7 14,3 6,9

Equity 4,0 11,9 11,2 9,9 9,8

Assets 69,3 63,6 38,4 37,8 38,2


Pro forma

Volito Aviation AB signed an agreement with Goldman Sachs in late 2006. Both companies will place their respective aircraft fleets in a joint company (VGS Aircraft Holding Ltd.), which will be served by a subsidiary of Volito Aviation. Volito Aviation’s ownership share in VGS will amount to 25,5%.

The agreement concerning VGS was signed on 6 December, and the transaction is expected to be fully implemented during 2007. The agree-ment will mean a number of economic and financial consequences for the Volito Group, which has acted as the driving force from Volito’s side in the realisation of the transaction.

• The earnings effect from the transaction amounts to approx. SEK 145 million and will be recorded during 2007.

• The equity/assets ratio of the Volito Group is strengthened considerably and expected to be approx. 39,5% (16,3%) after the transaction.

• The transaction releases approx. SEK 185 million in liquid funds, which strengthens the Volito Group’s liquidity situation.

• Risk diversification within Volito Aviation is improved, as the Volito Group’s total aviation exposure is now spread over considerably more aircraft and lessees than previously.

Due to the major change in the Volito Group’s consolidated position caused by the transaction, a pro forma balance sheet as per 31 December 2006 is shown below as if the transaction had been carried out on this date.

Volito Aviation’s Joint Venture changes the Group’s

financial conditions

Pro forma balance sheet 31 December 2006

MSEK Actual Pro forma

Assets

Fixed assets 3 863 2 037

Current assets 147 323

Total assets 4 010 2 360

Equity and liabilities

Equity 545 692

Minority interests 109 241

Liabilities 3 356 1 427

Total equity and liabilities 4 010 2 360

4

5

1

2

3

4

5

1

2 3

Board Member

Bo Olsdal, born 1945, Master of ScienceBoard Member of Volito Aviation AB, Volito Fastigheter AB, SAA AB, Ste-Nic Skogsförvaltning AB, Access AS, Norway and Barkevik Bruk AS, Norway.

Chairman of the Board

Karl-Axel Granlund, born 1955, Master of ScienceChairman of the Board at Volito Aviation AB, Volito Fastigheter AB, CTT Systems AB and Avansys AB.Board Member of PEAB AB and others.

Board Member

Lennart Blecher, born 1955, Bachelor of LawsChairman of the Board at Nordkap Bank AG, Zürich. Board Member of Volito Aviation AB, Volito Fastigheter AB, AIG Private Bank, Zürich, Converium AG, Zürich and Brunswick Rail Leasing, Russia. Advisory Board Member of EQT Opportunity Fund, Stockholm.

President and CEO

Sven Holmgren, born 1961, Bachelor of LawsChairman of the Board at SAA AB. Board Member of Volito Fastigheter AB, Nordkap Bank AG and others. Deputy Board Member of Volito Aviation AB and others.

Vice President and CFO

Anders Wehtje, born 1964, Graduate in Business AdministrationBoard Member of LUVIT AB, NSP Holding AB and others. Deputy Board Member of CTT Systems AB and others.

Board of Directors and Management

Board of Directors and Management


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Administration report 30-32

Consolidated income statement 33

Consolidated balance sheet 34-35

Pledged assets and contingent liabilities 36

Summary of changes in equity 37

Cash flow statement 38

Supplement to cash flow statement 39-40

Accounting principles and notes to the accounts 41-53

Signatures 53

Auditors’ report 54

Addresses and definitions 55

Contents


Administration report The business in brief

Volito AB (Corp. ID. No. 556457-4639) is the Parent company in a Group,

which operates in the business areas Aviation, Real Estate and Structured

Finance. Aviation includes Volito Aviation (aircraft leasing), SAA (training)

and Volito’s holding in CTT Systems AB (publ). The Real Estate business

area consists of Volito Fastigheter and Volito’s holding in Peab AB (publ).

Structured Finance includes Volito’s ownership in Nordkap Bank AG.

Volito’s other investments are listed under the headline ”Other holdings”.

The holdings remain from Volito’s time as an active investor in young and

newly started companies, something that in principle Volito ceased doing

in autumn 2003.

Profit before tax for the Parent company amounted to SEK 7,6 million

(168,5) and for the Group SEK 144,5 million (79,0). The balance sheet total

for the Parent company was SEK 985,1 million (822,1) and for the Group,

SEK 4 010,2 million (3 574,7). The equity amounted to SEK 511,5 million

(511,5) and 544,8 million (469,1) for the Parent company and Group

respectively.

AviationLeasing - Volito Aviation AB group

Volito Aviation was established in the spring of 2001 as a subsidiary of

Volito AB. The company runs operations in aircraft leasing.

During the year, Volito Aviation AB has, through the 51%-owned company

Volito Aviation AG, invested in its aircraft portfolio, a total of USD 59,0

million (168,5) corresponding to SEK 438,5 million (1 290,6). At year-end,

the fleet consisted of 22 aircraft with a book-value of SEK 2 505,7 million.

In December, Volito Aviation signed an agreement with Goldman Sachs

that means Volito Aviation merges the major part of its fleet with the

existing fleet of Goldman Sachs in a company based in Ireland, VGS

Aircraft Holding Ltd. Volito Aviation’s ownership in VGS will be 25,5%.

During the autumn, Volito signed an agreement to acquire a further five

aircraft together with Goldman Sachs. These aircraft will be added to VGS

in early 2007.

During the year, three of Volito Aviation’s aircraft were remarketed to

new lessees. In April, an Airbus 320, which came back from MyTravel,

was leased out to the Ukranian airline, Donbassaero Airlines, until April

2012. In November, one of the company’s Airbus 319 aircraft was placed

with the Brazilian airline, TAM. The agreement with TAM is for 78 months

and runs until March 2014. This aircraft came back from TACA. Finally, in

December a Boeing 737 was placed with Rumanian airline, Blue Air, on a

lease until March 2012. This aircraft came back from Lux Air in accordance

with the conditions of the previous lease.

Volito also sold an aircraft during the year. In June, a Boeing 737 was sold

to the Ukrainian airline, Dniproavia. The aircraft had previously been

leased out to easyJet and the transaction resulted in a capital gain of SEK

4,3 million and reversed maintenance reserves of SEK 28,5 million.

In April, Volito Aviation increased its existing credit facility with HSH

Nordbank to USD 250 million (previously USD 150 million).

Volito Aviation’s profit before tax for the year amounted to SEK 103,2 mil-

lion (8,8). The profit has been positively affected by the doubling of the

fleet carried out in 2005. Also included in the profit is the above mentio-

ned capital gain of SEK 4,3 million and the reversed maintenance reserve

on disposed aircraft, SEK 28,5 million. The company’s return on equity for

the year amounted to 26,7% (3,1%).

Training - Scandinavian Aviation Academy AB group

SAA runs training courses for personnel in the aviation industry,

principally pilots.

In 2006, the company achieved continued good growth in revenues.

These increased by 38,0% and amounted for the full-year to SEK 116,1

million (84,1). In early 2006, shares corresponding to 67,4% of the shares

in Twinair S.A. were acquired via a direct share issue. Twinair runs train-

ing operations in Lausanne, Switzerland. In parallel with this acquisition,

integration of SAA Inc. in San Diego continued during the year.

In February 2006, SAA Inc. in San Diego suffered a tragic accident when,

during a training flight, one of the company’s aircraft was involved in a

midair collision with another small aircraft. Three people died in the ac-

cident, including a student and instructor from SAA. The accident is being

investigated by the National Transportation Safety Board (NTSB), which

will present its conclusions during 2007.

There have been management changes both at SAA Inc. and Twinair

during the year. This has been done with an aim to create a coherent and

efficient structure for the different companies within the SAA group.

Organisational changes have also taken place at SAA in Sweden, mainly

with an aim to strengthen the organisation from an expertise perspective.

In late 2006, SAA Inc. gained accreditation from the Chinese equivalent

of the Swedish Civil Aviation Administration Board. This means that ope-

rations in San Diego are well equipped to accept and train Chinese pilots,

and the first students are expected in 2007. SAA has also established

contacts in India that mean SAA in the USA will take in its first students

from India as early as January 2007.

The strong cooperation with Ryanair continued during 2006. A total of

152 (104) pilots were recruited and trained in cooperation with SAS Flight

Academy.

For 2006, SAA reported a loss before tax of SEK -7,3 million (2,3).

The results include one-off costs of SEK 4,1 million (0,0) and goodwill

depreciation of SEK 1,7 million (0,9). Consequently, the return on

equity was negative (4,6%).

Other holdings - CTT Systems AB (publ)

CTT is a Swedish technology company that develops and markets hu-

midity control systems for commercial aircraft. The company’s share is

listed on the Stockholm Stock Exchange.

CTT has taken a number of further orders in 2006. In February, Monarch

Airlines UK ordered 27 Zonal Drying systems for installation in its entire

fleet. CTT won a strategic order in October when Continental Airways

ordered 41 Zonal Drying systems for its Boeing 757 fleet. The order

was CTT’s first major order in the US market.

Otherwise, 2006 has been characterised by continued preparations for

delivering the Zonal Drying system for Boeing 787, in which CTT’s product

will be standard. At year-end, Boeing had about 450 firm orders for the

model. The first systems will be delivered by CTT in 2007.

The development of CTT’s share price was negative during the year.

The price has fallen by 31% in comparison with the OMX All Share Index,

which in 2006 rose by 24%. This share price development should be

regarded in the light of 2005, when the share was one of the best perfor-

ming on the Stockholm Stock Exchange with an increase of 473%.

In early 2006, Volito reduced its holding in CTT. In total, 230 333 shares

were sold, which resulted in a capital gain of SEK 10,6 million. Volito’s

holding thereafter in CTT amounts to 1 103 000 shares, which corresponds

to 12,3% of the votes and capital in the company. Volito is CTT’s biggest

shareholder, and the holding at year-end was worth SEK 52,3 million.


Financial Information | Administration report

Real EstateVolito Fastigheter AB group

Volito Fastigheter’s business consists of the management of, and trans-

actions in, commercial properties. The group’s portfolio is located on the

Swedish side of the Öresund Region with a focus on Malmö. The portfolio

properties have a total area of 86 916 sq.m.

Volito Fastigheter did not invest in any new properties during the year.

The market in the Öresund Region has continued to generate great

interest among more players in the real estate sector. This has resulted

in continued falls in yield levels and thus a rise in real estate prices.

Market developments have meant that the value of Volito Fastigheter’s

portfolio increased by 12,1% during the year to SEK 998,6 million (890,7).

The value is calculated at an average yield of 6,2%.

Work on the City Tunnel in central Malmö has progressed during the year.

Volito Fastigheter has a strong portfolio in close proximity to the City

Tunnel and is now working actively and strategically to position these

properties for the shift of the centre in Malmö that the City Tunnel’s

opening is expected to bring about.

Volito Fastigheter has for several years been a well-established manager

of real estate in Malmö and signed a 10-year agreement in 2006 with

NetOnNet, which has decided to establish a warehouse store in Segeholm.

The vacancy level has risen somewhat during the year and was 12,6%

(11,6%) at year-end.

In view of the interest rate trend during the year, the company decided in

2006 to fix its rates for a larger part of its loan portfolio. At year-end, the

company had a total loan portfolio of SEK 556,7 million (567,7), of which

SEK 387,6 million (70%) carried fixed rates of interest. The average

maturity term for the whole portfolio at year-end was 3,4 years.

Volito Fastigheter’s profit before tax for 2006 amounted to SEK 26,5 mil-

lion (56,2). The previous year’s profit included a capital gain of SEK 30,2

million. The return on the company’s equity amounted to 12,2% (28,5%).

Other holdings - Peab AB (publ)

Peab is a construction and civil engineering company that is listed on the

Stockholm Stock Exchange.

During the year, Volito increased its holding in Peab AB (publ) and in

December acquired a further 1 075 000 B-Class shares in the company.

Volito’s holding thereby amounts to 4 300 000 B-Class shares, which

corresponds to 2,5% of the votes and 4,9% of the capital in Peab.

At year-end, the holding had a value of SEK 698,8 million.

Peab continued to develop strongly during the year with increased

turnover and rising profit as a result. The share price, including

dividend, rose by 62% in comparison with the OMX All Share

Index, which went up by 24% in the same period.

In the autumn, Peab’s board proposed that the Peab AGM in May 2007

shall decide on the distribution of the company’s industrial operations to

the shareholders. The proposed form of dividend is shares in a subsidiary

called Peab Industri AB. This distribution creates improved possibilities

and increased competitiveness for both Peab’s construction and civil

engineering activities and for Peab Industri that over time is expected

to lead to an increase in shareholder value.

The strategic cooperation with Peab has also generated business for

Volito Fastigheter during the year (see under important events after

the end of the financial year).

Structured FinanceNordkap Bank AG

Nordkap Bank is a Swiss commercial bank specialising in structured

financing solutions.

Nordkap’s loan portfolio increased by 57% during 2006 and amounted

at year-end to CHF 418 million (267). Just over 30 loan transactions were

added to the bank’s existing portfolio. The expansion has been carried

out with good profitability and the average margin for the loan portfolio

at year-end was 3,1% (2,9%). During the year, Nordkap has also gained its

first mandates as Lead Arranger for loan transactions.

Growth has also been achieved with a focus on costs, which means that

for 2006, Nordkap Bank achieved a cost/revenue ratio of 37,6% (41,3%).

There have been no credit losses during 2006.

For 2006, Nordkap generated a profit before tax of CHF 8,8 million (8,0).

The profit has been positively affected by an increase in lending, while

revenues from the insurance portfolio taken over from Sirius in 2004

decreased in comparison with the previous year.

The return on equity for the year was 9,4% (9,6%).

Other holdings Volito has ownership shares in AB Nordsidan, Bokks AB, Galenica AB,

Itesco AB and St Victor s.a.r.l. The holdings in Facino AB and Protista

International AB were sold during the year. The combined group-value

of these holdings amounted at year-end to SEK 7,1 million.

In early 2006, Volito AB acquired SimCenter A/S Copenhagen. The purcha-

se price was SEK 6,2 million. The aim was to run simulator operations in

close proximity to Copenhagen’s Kastrup airport. This investment has

been put on ice until further notice, as the agreement that was intended

to become the basis for the operation’s revenues has not been realised.

Important leasing agreementsVolito Aviation’s aircraft fleet is leased out under operational leasing

agreements. The period during which aircraft are leased out ranges from

one to six years. There are a number of lessees that have options to

extend the existing leasing agreements, see note 5.

Volito Fastigheter has a rental rate of 87,4% (88,4%). The breakdown of

rentals is 97% commercial properties and 3% residential. The commercial

rental income is divided between 106 contracts in a number of different

sectors. For more information, see notes 5 and 19. In addition to the real

estate within Volito Fastigheter, there is a property within the Parent

company, with 22 contracts divided between residential (36%) and com-

mercial premises (64%).

Important events after the end of the financial yearIn January 2007, Volito Fastigheter completed the acquisition of shares

in KB Snickaren 208 from Peab. The company owns the Lastbryggan 2

property in Klagshamn. The property has a rentable space of 1 158 sq.m.



In addition, KB Snickaren 208 has signed an agreement with Peab on the

acquisition of the Malmö Skytteltrafiken 2 property, which will have a

rentable premises area of 775 sq.m. and 942 sq.m residential when it is

completed, which is expected to be in the latter half of 2007.

The CEO for Volito Aviation AB left his position, as agreed with the

company, on 31 January 2007. In connection with this, Volito AB acquired

the convertible bond in Volito Aviation AB that had been signed by

a company wholly owned by the CEO. The purchase price amounted

to SEK 22,2 million, which was SEK 6,0 million above the convertible

bond’s nominal amount.

Expectations concerning future developmentsThe Group and Parent company

Volito expects a continuing positive trend, during 2007. Volito Aviation’s

transaction with Goldman Sachs will be implemented during the year

and this is expected to contribute considerably to Volito’s income. The

transaction will mean that Volito realises a part of the value that in recent

years has been built up in Volito Aviation’s portfolio as well as lead to a

lower balance sheet total. The risk diversification will be greater, as Volito

retains its nominal exposure for the aircraft leasing operations, but

spread over a larger number of aircraft. Furthermore, the transaction

will lead to a release of liquid funds.

SAA is expected in 2007 to reverse the negative results of 2006 and

return to profit. The growth will be driven by an increased intake of

students and higher utilisation of capacity.

Volito Fastigheter is optimistic about growth in the Öresund Region.

This positive trend is expected to affect employment in the region,

something that should lead to a lower vacancy level over time.

Nordkap Bank is expected to continue expanding its credit portfolio

and increase its profitability.

To sum up, the conditions are good for a continued positive trend in

profit and value growth during 2007.

Finance policyThe Volito Group is through its business activities exposed to various types

of financial risks. Financial risks relate to changes in exchange rates and

interest rates that affect the company’s cash flow, profit and thereby asso-

ciated equity. The financial risks also include credit and refinancing risks.

The financial risk situation is presented quarterly to the Board, which

use it as a basis for decisions on any measures to change or affect the

risk situation at any given time, see note 34.

Currency exposure

In its business activities the Volito Group is exposed to risks relating to ex-

change rate changes principally through its involvement in aircraft leasing.

Income from the leasing business is set and paid in USD. This exposure is

counterbalanced to a large degree in that interest and amortisation are

similarly USD-based. For long-term liabilities that make up the financing

of aircraft, there is no translation at accounting year-end. Latent exchange

profits (according to valuation at the accounting year-end exchange rate)

from these loans amount to SEK 228,0 million. Any latent exchange profits

or exchange losses released by disposals are counterbalanced in that

aircraft are entered in the accounts at the original purchase exchange rate.

This method constitutes a far-reaching hedging of the balance sheet for

that part of the Group’s activities which concern aircraft leasing. Latent

exchange losses for aircraft amount to SEK 314,3 million. The market

value of the aircraft considerably exceeds the book-value.

Due to the transaction with Goldman Sachs, the Volito Group’s profit/loss

will be less sensitive to changes in the USD exchange rate than previously.

The Volito Group’s holding in Nordkap Bank AG is partly hedged against

changes in the CHF exchange rate through certain borrowings in CHF.

However, a certain amount of the holding is exposed to changes in the

CHF exchange rate. Exchange rate differences related to translation of

foreign subsidaries are posted in the equity.

The Board of Volito has decided to accept the exposure for USD and

CHF according to the above, as this exposure in itself constitutes a risk

diversification within the Volito Group. The extent of this exposure will be

decided according to continuous review.

Interest rate exposure

The Volito Group is exposed to changes mainly in short-term interest ra-

tes through its involvement in the groups; Volito Fastigheter AB and SAA

AB. Within the Parent company, Volito AB, there is also a certain exposure

regarding short-term interest rates.

Taken together, the Volito Group’s total loans exposed to short-term

interest rates amount to approx. SEK 500 million. This means that the

Group’s profit before tax is affected by SEK 500 thousand when there is

an increase or decrease in the short-term interest rate of 0.10%.

In 2005, the Volito Group began to manage part of its interest rate risks

using interest rate swaps.Hedging relating to 32% of the debt portfolio of

the Volito Fastigheter AB group is being managed with swaps, something

that gives the company a higher degree of flexibility in terms of future

debt management. See note 34,

Proposed allocation of the company’s profit The Board of Directors and CEO propose that the profit available for

disposal, SEK 368 524 950,42 is allocated as follows (SEK K):

Dividend, [1 220 000 at SEK 25 per share] 30 500

Carried forward 338 025

368 525

The proposed dividend reduces the Group’s equity ratio to 15,5% from

16,3%. The equity ratio is prudent, in view of the fact that the company’s

activities continue to operate profitably. Liquidity in the Group is likewise

expected to be maintained at a similarly secure level.

The Board’s understanding is that the proposed dividend will not hinder

the company in carrying out its duties in the short or long term nor from

conducting necessary investment. The proposed dividend can thus be

seen in accordance with sections 2 and 3 of Paragraph 3 of ABL 17

(prudence principle).

For further information on the company’s income and position, refer to

the subsequent income statements and balance sheets, and related notes

to the accounts.



Consolidated Income Statement The Group The Parent Company

Note Amounts in SEK K 2006 2005 2006 2005

2 Net sales 550 879 375 038 4 291 4 144

3 Other operating income 47 997 31 057 4 928 4 772

1, 5 598 876 406 095 9 219 8 916

Operating expenses

4 Other external costs -131 121 -103 249 -10 772 -11 040

6 Personnel costs -74 892 -51 899 -11 816 -9 980

7 Depreciation and write-downs

of tangible and intangible fixed assets -165 995 -112 697 -484 -483

37 Dissolution of negative goodwill 169 166 – –

8 Other operating expenses -7 093 -825 -137 -1

Operating profit/loss 219 944 137 591 -13 990 -12 588

Result from financial income and expenses

9 Result from participations in group companies – -96 2 092 157 008

10 Result from participations in associated companies 21 680 -7 600 40 -494

11 Result from other securities and

receivables held as fixed assets 20 708 52 910 19 283 40 938

12 Interest income and similar income 46 496 11 098 13 167 5 289

13 Interest expenses and similar expenses -164 343 -114 935 -12 998 -21 383

14 Profit/loss after financial income and expenses 144 485 78 968 7 594 168 770

Appropriations

15 Appropriations – – – -307

Profit/Loss before tax 144 485 78 968 7 594 168 463

16 Taxes -20 200 -9 744 3 638 7 505

Minority interests’ participation in result for the year -29 159 -1 631 – –

NET RESULT FOR THE YEAR 95 126 67 593 11 232 175 968


Financial Information | Consolidated Income Statement

Consolidated Balance Sheet The Group The Parent Company

Note Amounts in SEK K 2006-12-31 2005-12-31 2006-12-31 2005-12-31

ASSETS Fixed assets

Intangible fixed assets

17 Other intangible assets 671 182 – –

18 Goodwill 5 681 7 337 – –

6 352 7 519 – –

Tangible fixed assets

19 Real estate 742 573 728 211 32 794 32 686

20 Aircraft 2 545 362 2 323 673 – –

21 Aircraft inventories 741 909 – –

22 Equipment, tools and installations 9 704 6 350 2 269 1 512

Construction in progress and advance

23 payments relating to tangible fixed assets 16 012 6 286 5 011 –

3 314 392 3 065 429 40 074 34 198

Financial fixed assets

24 Participations in group companies – – 516 121 509 804

25 Receivables from group companies – – 77 213 82 386

26 Participations in associated companies 95 882 88 516 16 440 24 459

27 Receivables from associated companies 89 696 91 685 21 488 18 304

28 Other securities held as fixed assets 272 075 120 170 257 291 105 386

29 Deferred tax assets 50 235 48 817 16 531 13 291

30 Pre-paid borrowing expenses 27 005 27 158 10 20

31 Other long-term receivables 7 105 8 927 1 649 1 649

541 998 385 273 906 743 755 299

Total fixed assets 3 862 742 3 458 221 946 817 789 497

Current assets

Inventories etc.

Raw materials and necessities 4 413 2 487 14 –

4 413 2 487 14 –

Current receivables

Accounts receivable - trade 9 605 5 389 7 10

Receivables from group companies 19 030 15 562 32 846 28 264

Receivables from associated companies 8 466 4 056 2 901 500

Current income tax receivables 732 1 243 377 852

Other receivables 24 228 4 106 90 1 615

32 Prepaid expenses and accrued income 20 920 26 651 866 677

82 981 57 007 37 087 31 918

33 Short-term investments 644 605 644 605

Cash and bank balances 59 381 56 375 579 49

Total current assets 147 419 116 474 38 324 32 572

1 TOTAL ASSETS 4 010 161 3 574 695 985 141 822 069


Financial Information | Consolidated Balance Sheet

Consolidated Balance Sheet The Group The Parent Company

Note Amounts in SEK K 2006-12-31 2005-12-31 2006-12-31 2005-12-31

EQUITY AND LIABILITIES

35 Equity

Restricted equity

Share capital (1 220 000 shares at nom. SEK 100) 122 000 61 000 122 000 61 000

Issue with option 5 005 5 005 5 005 5 005

Restricted reserves/Statutory reserve 69 497 55 297 16 000 16 000

196 502 121 302 143 005 82 005

Non-restricted equity

Non-restricted reserves/Profit brought forward 253 157 280 226 357 293 253 503

Net profit/loss for the year 95 126 67 593 11 232 175 968

348 283 347 819 368 525 429 471

544 785 469 121 511 530 511 476

Minority interests 108 972 75 405 – –

36 Untaxed reserves

Accumulated accelerated depreciation – – 2 342 2 342

– – 2 342 2 342

Provisions

29 Provisions for deferred taxes 97 590 79 985 – –

8 Other provisions 6 065 – – –

103 655 79 985 – –

Long-term liabilities

38 Convertible loans 16 170 16 170 – –

39 Other liabilities to credit institutes 2 174 035 2 013 884 82 446 18 805

41 Other liabilities 233 611 177 315 11 249 10 449

2 423 816 2 207 369 93 695 29 254

Current liabilities

39 Liabilities to credit institutes 615 724 574 340 156 991 49 580

40 Bank overdraft facilities 104 693 83 073 79 679 61 144

Advance payment from customers 5 572 4 019 – –

Accounts payable - trade 21 345 7 607 1 000 1 303

Liabilities to Parent company 424 4 404 424 4 404

Liabilities to group companies – – 131 267 157 250

Liabilities to associated companies 444 1 040 – –

Current income tax liabilities 3 695 383 – –

Other liabilities 4 422 13 048 404 283

42 Accrued expenses and deferred income 72 614 54 901 7 809 5 033

828 933 742 815 377 574 278 997

TOTAL EQUITY AND LIABILITIES 4 010 161 3 574 695 985 141 822 069


Financial Information | Consolidated Balance Sheet

Consolidated Pledged Assets and Contingent Liabilities The Group The Parent Company

Amounts in SEK K 2006-12-31 2005-12-31 2006-12-31 2005-12-31

Pledged assets

For own liabilities and provisions

Property mortgages 646 235 646 325 44 000 44 000

Chattel mortgages 36 330 42 675 10 000 10 000

Shares 239 847 110 343 229 023 99 519

Shares in subsidiaries 199 399 181 439 276 008 276 008

Receivables 26 000 26 000 – –

Aircraft mortgages 1 755 778 1 962 259 – –

Other 1 000 – 1 000 –

Total pledged assets 2 904 589 2 969 041 560 031 429 527

Contingent liabilities

Guarantees for group companies – – 65 797 34 566

Ongoing tax case relating to claimed deductible deficiency 56 212 54 269 56 212 54 269

Ongoing tax case relating to claimed deductible deficiency 31 408 –

Put option 15 261 – 15 261 –

Claim for tax-fee capital gain 7 196 7 196 – –

Ongoing tax case relating to claim

for tax-free dividend 8 810 6 284 5 879 4 185

Claim for tax-free dividend 4 967 4 783 4 235 3 619

Other contingent liabilities 1 700 1 650 5 464 1 650

Total contingent liabilities 125 554 74 182 152 848 98 289

The Group

The Swedish Tax Authority has imposed a tax payment on Volito, equivalent to a total cost exposure of SEK 56 million (54) related to the tax

assessment years 2000 and 2001. Volito has appealed against the decision, and the appeal was upheld in the County Administrative Court.

The Swedish Tax Authority has now appealed against the County Administrative Court’s decision.

The Swedish Tax Authority has not approved the deductible deficiency in connection with the acquisition of Volito Finance AB.

Utilised and valued deductible deficiencies amount to SEK 112,2 million.

Since 2001, the Volito Group has received dividends from its Peab shares equivalent to SEK 49,2 million. As the holding is business-contingent,

the Group has claimed a deduction for the dividend as non-taxable income. The Swedish Tax Authority has rejected the claim for the years 2001

to 2004, but Volito has appealed against this decision and this appeal has been upheld in the County Administrative Court. In its turn, the Swedish

Tax Authority has appealed against the County Administrative Court’s decision. As long as the legal process continues, tax on the accumulated

dividends as above and capital gains from the sale of Peab shares, which amount to SEK 25,7 million, up to and including 2006, will be accounted

for as a contingent liability.

The Parent Company

The Swedish Tax Authority has imposed a tax payment on Volito, equivalent to a total cost exposure of SEK 56 million (54) related to the tax

assessment years 2000 and 2001. Volito has appealed against the decision, and the appeal was upheld in the County Administrative Court.

The Swedish Tax Authority has now appealed against the County Administrative Court’s decision.

Since 2001, Volito AB has received dividends from its Peab shares equivalent to SEK 36,1 million. As the holding is business-contingent,

the Group has claimed a deduction for the dividend as non-taxable income. The Swedish Tax Authority has rejected the claim for the years

2001 to 2004, but Volito has appealed against this decision and this appeal has been upheld in the County Administrative Court. In its turn,

the Swedish Tax Authority has appealed against the County Administrative Court’s decision. As long as the legal process continues, tax on

the accumulated dividends as above, up to and including 2006, will be accounted for as a contingent liability.


Financial Information | Pledged Assets and Contingent Liabilities

Consolidated Summary of Changes in Equity The Group The Parent Company

Restricted Non-restricted Restricted Non-restricted

Amounts in SEK K Share capital reserves equity Share capital reserves equity

Balance carried forward according to

balance sheet of 31 December 2004 61 000 88 034 255 846 61 000 21 005 227 204

Movements between unrestricted

and restricted equity – -30 937 30 937 – – –

Profit/loss for the year – – 67 593 – – 175 968

Dividend – – -6 100 – – -6 100

FX/translation diff for the year – 3 205 -457 – – –

Group contribution – – – – – 45 000

Tax effects on Group contribution – – – – – -12 600

Equity as of 31 December 2005 61 000 60 302 347 819 61 000 21 005 429 471

Movements between unrestricted

and restricted equity – 22 891 -22 891 – – –

Profit/loss for the year – – 95 126 – – 11 232

Dividend – – -12 200 – – -12 200

Share issue 61 000 – -61 000 61 000 – -61 000

FX/translation diff for the year – -8 691 1 429 – – –

Group contribution – – – – – 1 420

Tax effects on Group contribution – – – – – -398

Equity as of 31 December 2006 122 000 74 502 348 283 122 000 21 005 368 525

Note 35 contains further information on equity.


Financial Information | Summary of Changes in Equity

Consolidated Cash Flow Statement The Group The Parent Company

Amounts in SEK K 2006-12-31 2005-12-31 2006-12-31 2005-12-31

Operating activities

Result after financial income and expenses 144 485 78 967 7 594 168 770

Adjustments for items not included in cash flow, etc 102 398 53 195 -13 726 -187 447

246 883 132 162 -6 132 -18 677

Income taxes paid -333 -816 475 -477

Cash flow from operating activities before

changes in working capital 246 550 131 346 -5 657 -19 154

Cash flow from changes in working capital

Increase(-)/Decrease(+) in inventories -1 926 309 -14 –

Increase(-)/Decrease(+) in current receivables -41 655 -36 594 -4 499 15 131

Increase(+)/Decrease(-) in current liabilities 123 584 184 795 -5 464 10 129

Cash flow from operating activities 326 553 279 856 -15 634 6 106

Investment activities

Acquisition of subsidiaries -7 441 -14 641 -6 557 -35 000

Disposal of subsidiaries – -6 260 132 120

Acquisition of intangible fixed assets -424 – – –

Acquisition of tangible fixed assets -470 554 -1 314 424 -6 489 -263

Disposal of tangible fixed assets 76 267 83 095 104 41

Investments in financial assets -160 707 -25 500 -160 642 -29 812

Disposal/reduction of financial assets 20 402 79 532 24 902 73 274

Cash flow from investment activities -542 457 -1 198 198 -148 550 8 360

Financing activities

Paid-in capital from minority interests – 53 950 – –

Proceeds from borrowing 630 694 1 311 360 285 280 108 716

Repayment of borrowing -407 992 -415 770 -118 261 -117 333

Dividends paid - 2 305 -6 100 -2 305 -6 100

Cash flow from financing activities 220 397 943 440 164 714 -14 717

Cash flow for the year 4 493 25 098 530 -251

Liquid funds at beginning of period 56 375 31 257 49 300

Exchange rate difference in liquid funds -1 487 20 – –

Liquid funds at end of period 59 381 56 375 579 49


Financial Information | Consolidated Cash Flow Statement

Supplement to Consolidated Cash Flow Statement The Group The Parent Company

Amounts in SEK K 2006-12-31 2005-12-31 2006-12-31 2005-12-31

Interest paid and dividends received

Dividends received 9 764 9 459 8 339 9 923

Interest received 4 020 3 997 640 948

Interest paid -144 643 -91 461 -8 646 -7 652

Adjustments for items not included in the cash flow, etc

Less: Profit participation in associated companies -21 640 7 600 – –

Depreciation and write-downs of fixed assets – – -2 200 -248 913

Depreciation of prepaid loan expenses 165 826 112 697 484 483

Write-downs and reversed write-downs 14 181 6 840 9 9

Unrealised exchange rate differences -1 051 -12 139 -1 051 -11 575

Gains/losses from disposal of fixed assets -4 387 -27 772 25 –

Gains/losses from disposal of subsidiaries – – 108 93 739

Gains/losses from disposal of financial assets -13 918 -31 166 -10 093 -21 280

Cost reduction in interest on profit participation loan -3 764 – – –

Unrealised exchange rate differences 3 502 -2 699 -1 008 90

Reversed maintenance reserves -42 416 – – –

Other 6 065 -166 – –

102 398 53 195 -13 726 -187 447

Transactions that do not involve payments

Acquisition of assets through a seller promissory

note has been carried out – 700 – –

Acquisition of subsidiaries and other business units

Acquired assets and liabilities:

Intangible fixed assets 318 8 282 – –

Tangible fixed assets 10 453 134 039 – –

Financial fixed assets – 329 – –

Operating receivables 9 571 6 202 – –

Liquid funds 808 10 760 – –

Total assets 21 150 159 612 – –

Minority liabilities 4 476 – – –

Provisions 1 200 1 548 – –

Loans 5 358 125 709 – –

Operating liabilities 1 867 6 254 – –

Total provisions and liabilities 12 901 133 511 – –

Purchase price 8 249 26 101 – –

Less: Promissory note 0 -700 – –

Purchase price paid 8 249 25 401 – –

Less: Liquid funds in the acquired operations -808 -10 760 – –

Effect on liquid funds (minus=increase) 7 441 14 641 – –


Financial Information | Supplement to Consolidated Cash Flow Statement

Supplement to Consolidated Cash Flow Statement The Group The Parent Company

Amounts in SEK K 2006-12-31 2005-12-31 2006-12-31 2005-12-31

Disposal of subsidiaries and other business units

Disposal of assets and liabilities:

Tangible fixed assets – 302 – –

Financial fixed assets – 113 – –

Operating receivables – 6 806 – –

Liquid funds – 6 260 – –

Total assets – 13 481 – –

Operating liabilities – 12 481 – –

Total provisions and liabilities – 12 481 – –

Sales price – 1 000 – –

Less: Promissory note – -1 000 – –

Purchase price received – – – –

Less: Liquid funds in disposed-of operations – -6 260 – –

Effect on liquid funds – -6 260 – –

Liquid funds

The following components are included in liquid funds:

Cash and bank balances 59 381 56 375 579 49

Unutilised credit facilities

Unutilised credit facilities amount to SEK 120 803 (120 404) K for the Group and SEK 78 554 (104 433) K for the Parent Company.

Investments

Investments made that can be considered to have raised the operation’s capacity level amount to SEK 471 million.

The Parent Company’s investments in tangible fixed assets amounts to SEK 6,5 million, of which SEK 5,5 million relates to investments

in the company’s real estate.

Furthermore, the Parent Company has invested in a further 1 075 000 shares in Peab. The acquisition value for these shares

amounted to SEK 156,3 million

Amounts in SEK K 2006-12-31 2005-12-31 2006-12-31 2005-12-31

Change in net debt

Net debt at beginning of period 2 547 372 1 497 225 165 440 168 172

Proceeds from new interest-bearing borrowings 630 694 1 311 360 285 280 108 716

Reclassifications to interest-bearing borrowings – 40 000 – 27 500

Repayment of interest-bearing borrowings -407 992 -415 770 -118 261 -117 333

Unrealised exch. rate diff. in interest-bearing borrowings -5 243 -1 935 -6 956 3 652

Other changes in interest-bearing borrowings 2 496 121 234 -1 476 -38 787

Investments in new interest-bearing assets – – – -4 920

Disposal/reduction of interest-bearing assets 2 783 20 000 7 151 19 880

Unrealised exch. rate diff. in interest-bearing receivables 5 948 -764 5 948 -3 562

Other changes in interest-bearing assets -2 565 1 140 -5 831 1 871

Changes in liquid funds -3 006 -25 118 -530 251

Net debt at end of period 2 770 487 2 547 372 330 765 165 440


Financial Information | Supplement to Consolidated Cash Flow Statement

Accounting principles and notes to the accountsAmounts are in SEK K, unless otherwise stated.

General accounting principlesThe Annual Accounts have been drawn up in accordance with the Swedish Annual Accounts Act and the recommendations of the Swedish Financial Accounting Standards Council and the pronouncements of its Emerging Issues Task Force, with the exception of RR 18, information on earnings per share, which is a recommendation only for listed companies, and to some parts of RR8, for more information see ”Foreign currency translation of foreign subsidiaries”.

The accounting principles have been the same as last year.

The company’s registered office, etc Volito AB runs its operations in the legal form of a limited company, and its registered office is in Malmö. The head office address is Södra Förstadsgatan 4, SE-211 43 MALMÖ.

Reporting on segmentsThe primary basis for classification of the Group’s segments is the lines of business; Aviation, Real Estate and Structured Finance.

Classification, etcFixed assets, long-term liabilities and provisions essentially consist only of amounts that are expected to be recovered or paid after more than 12 months calculated from accounting year-end. Current assets and short-term liabilities consist essentially only of amounts that are expected to be recovered or paid within 12 months calculated from accounting year-end.

Valuation principles, etcAssets, provisions and liabilities have been valued at the acquisition value, unless otherwise stated below.

Intangible assets Intangible assets that are acquired by the company are reported at the acquisition value minus accumulated depreciation and write-downs.

Depreciation Depreciation is linear over the asset’s period of use and is shown as expenses in the income statement.

The following depreciation periods are applied: The Group Parent companyOther intangible assets 5 years 5 yearsSoftware 5 years –Goodwill 5 years _

Depreciation principles for tangible fixed assetsDepreciation according to plan is based on the original acquisition values reduced by the calculated residual value. Depreciation is linear over the period the asset is expected to be used.

The following depreciation periods are applied: The Group Parent companyBuildings 100 years 100 yearsEquipment, tools and installations 5 years 5 yearsComputer equipment 3-5 years 3-5 years

AircraftProportional depreciation is applied annually for aircraft so that the booked value is 15% of the acquisition value when the aircraft is 25 years old.

The fuselages of the aircraft used in training operation are written off over 15 years. The length of life of engines is based on the number of flying hours, and depreciation of these stems from the number of utilised flying hours.

Loan chargesAmortisation of prepaid loan charges is based on the term of the loan. In the Parent company, loan charges are debited to the profit/loss statement in the period to which they are related. In the Consolidated accounts, subsidiaries loan charges are charged to the profit/loss statement over the term of the loans. Loan charges refer to set-up charges and other charges associated with obtaining the loan.

Write-downsThe booked values of the Group’s assets are checked at each accounting year-end to determine if there is any indication of a need for write-downs. If there is such an indication, the recovery value of the asset is calculated as the highest of the utilisation value and net sales value. The asset is written down if the recovery value is less than the booked value. When calculating the utilisation value, the future cash flow is dis-counted to a rate of interest before tax that aims to take into consideration the market assessment of risk-free interest and the risk associated with the asset in question. An asset that is dependent on other assets is not considered to generate any indepen-dent cash flows. Such an asset is assigned instead to the smallest cash-generating unit where the independent cash flows can be stated. A write-down is reversed if a change has taken place in the calculations used to determine the recovery value. A reversal is only carried out to the extent that the asset’s booked value does not exceed the booked value that would have been shown, with a deduction for the depreciation, if there was to be no write-down.

ReceivablesAfter individual valuation, receivables have been reported at the sum at which they are calculated to be received.

Receivables and debts denominated in foreign currenciesReceivables and debts in foreign currencies have been translated at the accounting year-end exchange rate in accordance with recommendation No.8 of the Swedish Financial Accounting Standards Council. Exchange rate differences for operating re-ceivables and operating liabilities are included in the operating profit/loss, while dif-ferences for financial receivables and financial liabilities are reported among financial income and expense items.

Regarding aircraft reported in the aircraft leasing operation, financing and flow of in-come are tied to USD, which means extensive hedging. Therefore, long-term liabilities in USD that constitute financing of aircraft are not translated at accounting year-end.

To the extent that receivables and liabilities in foreign currencies have been secured under a forward contract, they have been translated to the forward rate.

InventoriesInventories, valued according to recommendation No.2:02 of the Swedish Financial Accounting Standards Council, are reported at the lowest of either the acquisition value or the net realisable value. In this way, the risk for obsolescence has been taken into account.

Short-term investmentsShort-term investments are valued according to the Swedish Annual Accounts Act as the lowest of either the acquisition value or the actual value.

Financial instruments and securities holdingsOther long-term securities holdings are valued at the acquisition value. In those cases where the market value is lower than the book value, the potential need for a write-down is checked in accordance with the above-mentioned principle.

Other long-term receivables are valued at the sum at which they are calculated to be received.

Real estate The company and the Group apply the Swedish Financial Accounting Standards Council’s recommendation RR24, Real estate. Real estate is reported in the balance sheet at the acquisition value with deductions for accumulated depreciation and any write-downs, as well as additions for any write-up. The actual value of real estate is stated in the supplementary information.

Remuneration to employeesBenefit-based pensions:Pensions for 46 of the Group’s employees have been secured through insurance with Alecta. According to a pronouncement of the Emerging Issues Task Force, URA 42, this is a benefit-determined plan that covers several employers. The company has not had access to such information for the financial years 2004 to 2006 that would make it possible to report this plan as a benefit-determined plan. The pension plan according to ITP, which is secured through insurance with Alecta, is therefore reported as a contribution-determined plan.

Contribution-based pensions:For all other employees, the company’s obligation for each period is comprised of the amounts that the company will contribute for the period in question. Consequently, no actuarial adoption is required to calculate the obligation or cost, and there is no possibility of any actuarial profits or losses. The obligations are calculated without dis-counting, except in those cases where they do not in their entirety fall due for payment within 12 months after the end of the period during which the employees carry out the related services.

TaxThe company and the Group apply the Swedish Financial Accounting Standards Council’s recommendation RR.9, Income taxes. The total tax is made up of the current tax and deferred tax.

Taxes are reported in the income statement, except where the underlying transaction is charged to the equity, in which case the associated tax effect is reported in the equity. Current tax is tax that is to be paid or received relating to the current year. Adjustments of current tax relating to earlier periods come into this category. Deferred tax is calcula-ted according to the balance sheet method based on temporary differences between the reported values and fiscal values of assets and liabilities. The sums are calculated based on how the temporary differences are expected to be evened out and by the application of the tax rates and tax rules that have been adopted or announced at accounting year-end. Temporary differences are not taken into account in the goodwill for the Group or in the differences relating to the participations in subsidiaries and associated companies that are not expected to be taxed in the foreseeable future. Untaxed reserves including deferred tax liabilities are reported in the legal entity. In the Consolidated accounts on the other hand, untaxed reserves are divided into deferred tax liabilities and equity.

Deferred tax receivables concerning deductible temporary differences and deductible deficiencies are only reported to the extent it is likely that these will mean lower tax payments in the future.

Provisions (excluding negative goodwill and deferred tax)A provision is reported in accordance with RR 16, Provisions, contingent liabilities and possible assets, in the balance sheet when the company has a formal or informal commitment as the result of an event that has occurred and it is likely that an outflow of resources is required to regulate the commitment, and that a reliable estimate of the amount can be made. Present value calculations are made to take time effects into account for important future payments.


Financial Information | Notes

Accounting of incomeAccounting of income is done according to the Swedish Financial Accounting Stan-dards Council’s recommendation No.11, Income. Income accounting is done in the income statement when it is probable that the future economic benefits will go to the company and these benefits can be calculated in a reliable way. Income includes only the gross inflow of economic benefits that the company receives, or can receive, for its own use. Income from sale of goods is reported as income when the company of the buyer has transferred the important risks and advantages that are associated with the ownership of the goods, and the company does not have any actual control over the goods that are sold. Income is reported at the actual value of what has been recei-ved, or will be received, with a deduction for rebates given. Remuneration is received in liquid funds and income is made up of the remuneration.

The criteria for income accounting are applied for each individual transaction.

Remuneration in the form of interest/royalties/dividends due to another’s use of the company’s assets is reported as income when it is likely that the economic benefits that are associated with the transaction go to the company and that they can be calcu-lated in a reliable way. Dividends are reported when the shareholder’s right to receive the payment is assessed as secure.

Leasing – lesseesRecommendation RR 6:99 of the Swedish Financial Accounting Standards Council is applied. Leasing is classified in the Consolidated accounts as either financial or ope-rational leasing. Financial leasing is used when the economic risks and advantages associated with ownership are essentially transferred to the lessee. If this is not the case, it is a matter of operational leasing.

Leasing and rental income are reported on a linear basis over the term of the leasing contract.

For the Group and Parent company, all leasing agreements are reported according to the rules for operational leasing. There are no significant financial leases.

Consolidated financial statements The consolidated financial statements have been prepared according to recommen-dation RR 1:00 of the Swedish Financial Accounting Standards Council.

SubsidiariesSubsidiaries are companies in which the Parent company directly or indirectly has more than 50% of the votes or in other ways has a deciding influence over operational and financial control. Subsidiaries are normally reported according to the acquisition method. The acquisition method means that the acquisition of the subsidiary is consi-dered as a transaction from which the Parent company indirectly acquires the assets of the subsidiary and takes over its debts. The income and expenses, identifiable as-sets and debts as well as the goodwill or negative goodwill of the acquired company are included in the Consolidated accounts from the day of acquisition.

GoodwillGoodwill for the Group arises when the acquisition value on acquiring participations in a subsidiary exceeds the actual value of the acquired company’s identifiable net assets. Goodwill is reported at the acquisition value with deductions for accumulated depreciation and write-downs, if any.

Negative goodwillNegative goodwill arises when the acquisition value of participations on acquiring the subsidiary is less than the actual value of the acquired company’s identifiable net assets. If the negative goodwill that arises relates to future costs or future losses, the negative goodwill is accounted for as a provision in the balance sheet and is resolved in line with the costs (losses) that arise. If instead the negative goodwill arises due to other reasons, the negative goodwill is accounted for as a provision in the balance sheet to the extent that it does not exceed the actual value of the acquired identifiable non-monetary assets. That part which exceeds this value is immediately taken up as income. That part of negative goodwill that does not exceed the actual value of acqui-red identifiable non-monetary assets is taken up as income in a systematic way over a period that is calculated as the remaining balanced average period of utilisation for the acquired identifiable assets that are depreciable.

Associated companiesShareholdings in associated companies, in which the Group has at least 20% and at most 50% of the votes or in other ways has significant influence over the operation and finan-cial running of the company, are normally reported using the equity method. The equity method means that the value of shares in the associated company booked in the Group corresponds to the Group’s participation in the equity of the associated company as well as any residual value in the Group’s overall surplus value or under value. The Group’s participation in the associated company’s profit/loss after tax adjusted for any amorti-zation or resolution of acquired surplus or under value is reported in the Consolidated balance sheet as “Participation in associated companies’ profit/loss”. Profit shares built up after the acquisition of associated companies that have not yet been realised through dividends are allocated to the Group’s restricted equity. In cases where associated com-panies make losses, these are included in the Group’s non-restricted equity.

The associated company, Nordkap Holding AG has been reported according to IFRS, inclu-ding the recommendations not adopted by the EU Commission. No translation according to the Parent company’s accounting principles has been done, due to practical difficulties.

Elimination of transactions between companies in the GroupReceivables and debts within the Group, transactions between companies in the Group, and associated unrealised profits are all totally eliminated. Unrealised profits deriving from transactions with associated companies and joint ventures are elimi-

nated to the extent that the Group owns participations in the company. Unrealised profits arising as a result of transactions with associated companies are eliminated in “Participation in associated companies”. Unrealised losses are eliminated in the same way as unrealised profits, providing that there is no write-down requirement.

Foreign currency translation of foreign subsidiaries or other operations abroadThe translation of foreign currencies is done according to recommendation No.8 of the Swedish Financial Accounting Standards Council. The current method is applied for currency translation of income statements and balance sheets in independent foreign operations.

The current method means that all assets, provisions and liabilities are translated at the accounting year-end rate, and that all items in the income statement are transla-ted at the average exchange rate. Exchange rate differences are posted as equity.

SAA Inc.,Twinair SA, SimCenter A/S and Volito AG are translated according to the cur-rent method.

In principle, the monetary method means that monetary assets and liabilities are trans-lated at the accounting year-end exchange rate, whereas non-monetary items and cor-responding items in the income statement are translated at the exchange rates on the dates of the transactions. Other profit/loss items are translated at the average exchange rate. Differences in exchange rates that arise are included in the year’s profit/loss.

The foreign subsidiaries in the Volito Aviation AB Group are independent foreign operations, but they are translated according to the monetary method. This policy is in line with the Finance Policy in the Volito Group. The method gives a true and fair view on the policy for the Volito Group relating to foreign currency risks in the Volito Aviation business. A strict application to RR8, would have the effect that the transla-tion of the currency to SEK would not be uniform since the leasing business is set and paid in USD, and would therefor be translated differently due to in which country the business is run.

The deviation from RR8 has the following effects:– the profit after tax is SEK 8,4 million higher– the fixed assets are SEK 186,5 million higher– the loan portfolio is SEK 150,9 million higher– the total equity is SEK 30,0 million higher– and the minority iterests are SEK 6,5 million lowerwhen translated according to the monetary method compared to the current method.

Group contributions and shareholders’ contributionsThe company reports Group contributions and the shareholders’ contributions according to the pronouncements of the Emerging Issues Task Force of the Swedish Financial Accounting Standards Council.

The shareholders’ contribution is entered directly against the equity at the recipient and is activated in shares and participations at the donor, to the extent that a write-down is not required.

Group contributions are reported according to economic significance. This means that the Group contributions submitted aimed at minimising the Group’s total tax are repor-ted directly against retained profit/loss after deduction for the current tax effect.

Group contributions that can be likened to a dividend are reported as a dividend. This means that the Group contributions received and their current tax effect are reported in the income statement. The Group contributions submitted and their current tax ef-fect are reported directly against retained profit/loss.

Group contributions that can be likened to a shareholders’ contribution are reported, taking into account the current tax effect, at the recipient directly against retained profit/loss. The donor reports the Group contribution and its current tax effect as investment in participations in Group companies to the extent that a write-down is not required.

Application of the Swedish Financial Accounting Standards Council’s recommendationsThe Volito Group has chosen to follow the recommendations of the Swedish Financial Accounting Standards Council. There have been no significant changes in 2006 and the-refore no changes have been made in the Group’s accounting principles during the year.

Information about the GroupThe company is a subsidiary of AB Axel Granlund, corporate identity number 556409-6013 with registered office in Malmö. AB Axel Granlund owns 81,1% (81,1%) of the share capital and votes in the Volito Group and prepares the Consolidated accounts for the largest Group.

Of the Group’s total purchases and sales in Swedish kronor, a minor part of the purchases and sales apply to other companies within the whole group of companies to which the Group belongs.

Of the Parent company’s total purchases and sales in Swedish kronor, 13% (13%) of the purchases and 52% (35%) of the sales apply to other companies within the whole group of companies to which the company belongs.

Information about acquisitions and disposals during the periodIn January 2006, Volito AB acquired 51% of the shares in SimCenter A/S in Denmark. The purchases price was SEK 6,2 million.

SAA has acquired 67,4% of the shares in the Swiss company, Twinair SA, for SEK 2,0 million.



Related partiesThe GroupThe Group is owned by AB Axel Granlund (81,1%), as well as Lennart Blecher (10,0%), and Bo Olsdal and sons (8,9%).

Parent companyIn addition to the close relationships that are stated for the Group, the Parent company has close relationships that mean a controlling influence with its subsidiaries, see note 24.

Related party transactions The GroupThe transactions that take place between companies concern normally occurring transactions such as administration fees, rent, interest and loans. Prices are setaccording to market conditions.

Volito AB has a receivable at the parent company AB Axel Granlund of SEK 15,4 million(previous year a debt of SEK 4,4 million).

Volito AB has sold all shares in Cartela AB at a book-value of SEK 8,7 million. In addition to this a call- and a put option have been set up between Volito AB and AB Axel Granlund.

With associated companiesAs of 31 December 2006 associated companies had a debt to the Volito Group ofSEK 98,2 million (95,7). The largest item relates to a loan that Volito AG made to Nordkap Holding AG for SEK 68,2 million. Transactions with associated companies are priced according to market conditions.

Volito AB has received a dividend of SEK 40 K from Galenica.

With key peopleIn 2004, the CEO and Deputy CEO of Volito AB both acquired promissory notes combined with separable options, which entitles subscription for new shares in Volito AB. Each option gives the owner a right to subscribe for one share in Volito AB during the period 1 - 30 April 2009. In total, the promissory notes are combined with 100 000 options. The promissory notes and options have been issued according to market conditions. The price is SEK 300 per share.

The CEO for Volito Aviation AB has signed a convertible bond in Volito Aviation AB that amounts to SEK 16,2 million. The amount can be converted to a maximum of 110 000 shares in Volito Aviation AB during the period 1 November - 1 December 2008. The convertible bond has been issued according to market conditions, see note 39.As the CEO for Volito Aviation AB left his position on 31 January 2007, Volito AB acquired the convertible bond, see events after accounting year-end.

For salaries and other remuneration, expenses and obligations concerning pensions and similar benefits, agreements concerning severance payments as well as loans to the Board and the CEO, see note 6.

Events after accounting year-endIn January 2007, Volito Fastigheter completed the acquisition of shares in KB Snickaren 208 from Peab. The company owns the Lastbryggan 2 property in Klagshamn. The property has a rentable space of 1 158 sq.m.

In addition, KB Snickaren 208 has signed an agreement with Peab on the acquisition of the Malmö Skytteltrafiken 2 property, which will have a rentable premises area of 775 sq.m. and 942 sq.m residential when it is completed, which is expected to be in the latter half of 2007.

The CEO for Volito Aviation AB left his position, as agreed with the company, on 31 January 2007. In connection with this, Volito AB acquired the convertible bond in Volito Aviation AB that had been signed by a company wholly owned by the CEO. The purchase price amounted to SEK 22,2 million, which was SEK 6,0 million above the convertible bond’s nominal amount.

Note 1 Information on lines of business Primary segment Aviation Real Estate Structured Finance Other Elimination Total 2006 2005 2006 2005 2006 2005 2006 2005 2006 2005 2006 2005

IncomeExternal sales 512 222 296 581 86 295 109 390 – – 359 914 – -790 598 876 406 095Internal sales – – – – – – 4 569 6 713 -4 569 -6 876 – –

Total income 512 222 296 581 86 295 109 390 – – 4 928 7 627 -4 569 -7 666 598 876 406 095

Profit/Loss Operating profit/loss 192 138 83 432 45 120 70 682 -229 -444 -17 085 -15 289 – -790 219 944 137 591

Interest expenses -134 496 -77 874 -23 757 -21 046 -2 324 -1 781 -11 720 -20 840 7 954 6 606 -164 343 -114 935Interest income 31 690 6 673 7 022 3 063 2 571 2 213 13 167 5 680 - 7954 -6 531 46 496 11 098Profit participations/dividends 10 519 11 553 9 675 19 105 19 642 5 973 2 552 8 514 – 69 42 388 45 214Tax expenses for the year -7 320 -3 158 -10 646 -14 386 – – -2 234 7 800 – – -20 200 -9 744

Profit/loss before minority interests 92 531 20 626 27 414 57 418 19 660 5 961 -15 320 -14 135 – -646 124 285 69 224Minority interests -30 336 -1 631 1 177 – – – – – – – -29 159 -1 631

Net profit/loss for the year 62 195 18 995 28 591 57 418 19 660 5 961 -15 320 -14 135 – -646 95 126 67 593 Aviation Real Estate Structured Finance Other Elimination Total 2006 2005 2006 2005 2006 2005 2006 2005 2006 2005 2006 2005

Other informationAssets 2 748 884 2 536 834 888 113 852 755 79 931 82 922 69 800 65 053 -144 524 -171 555 3 642 204 3 366 009Equity share/securities 22 810 26 801 243 807 87 502 88 784 75 295 12 556 19 088 – – 367 957 208 686

Total assets 2 771 694 2 563 635 1 131 920 940 257 168 715 158 217 82 356 84 141 -144 524 -171 555 4 010 161 3 574 695

Total liabilities 2 483 031 2 336 223 831 154 668 971 64 809 67 798 230 906 204 138 -144 524 -171 555 3 465 376 3 105 575

Investments 447 187 1 301 802 22 110 12 357 – – 1 400 – -143 – 470 554 1 314 159Depreciation -156 330 -104 435 -7 601 -6 949 – – -167 -277 – – -164 098 -111 661Costs, exc. depr., not matched by paym. -20 041 -7 288 -674 -588 – – – – – – -20 715 -7 876

Secondary segments (geographic markets), SEK million Sweden Rest of Europe Asia USA South and Central America Total 2006 2005 2006 2005 2006 2005 2006 2005 2006 2005 2006 2005

External sales 182 363 209 221 212 074 70 059 106 472 74 671 34 873 21 653 63 094 30 491 598 876 406 095Assets 1 177 941 978 065 1 445 617 1 083 061 779 929 868 093 94 538 106 937 512 136 538 539 4 010 161 3 574 695Investments 30 489 21 180 432 822 421 178 5 928 230 073 1 315 102 376 – 539 617 470 554 1 314 424 The internal price between the Group’s various segments is set according to the “arm’s length” principle, i.e. between parties who are independent of each other, well-informed and with an interest in the transactions.

Sales between the Group’s various segments relate to administrative fees and rents. The administrative fees have been allocated according to actual costs and utilisation. The rents conform to market conditions.

Loans between Group companies have been marked for interest according to the current finance policy. The interest rates conform to market conditions.

The segments’ profit/loss, assets and liabilities (including provisions) include directly attributable items and items that can be allocated to the segments in a reasonable and reliable way.



The segments’ investments in tangible fixed assets include all investments, except investments in short-term inventories and inventories of minor value.

Lines of businessLines of business constitute the Group’s primary basis for classification. The Group consists of the following lines of business, which follow the structure described in the administration report:Aviation: Operations are run in aircraft leasing and pilot training. Real Estate: The business focuses on real estate transactions and management, prin-cipally involving commercial properties in the Malmö region.Structured Finance: This segment reports the Volito Group’s participation in the profit of Nordkap Bank.Other holdings : Volito’s other holdings and other items that are not included in any of the above.

Geographical marketsGeographical markets make up the Group’s secondary basis for classification. The information presented relating to the segment’s income refers to the geographical areas grouped according to where customers are localised.

Information relating to the segment’s assets and the period’s investments in tangible fixed assets is based on geographical areas grouped according to where the assets are localised.

Note 2 Net turnover breakdown 2006 2005

The Parent companyNet turnover by main types of incomeReal Estate 4 291 4 144 Note 3 Other operating income 2006 2005

The GroupCapital gains from sale of fixed assets 4 458 27 772Exchange rate differences 1 123 1 394Income from commission – 1 133Guarantee reserve – 377Income from administration – 231Maintenance compensation within aircraft leasing 42 416 –Other – 150

47 997 31 057

The Parent companyIncome from administration 4 882 4 395Guarantee reserve – 377Capital gains from sale of fixed assets 46 –

4 928 4 772

In connection with Volito Aviation selling one of its aircraft to Dniproavia, maintenance reserves corresponding to SEK 28,5 million have been recovered. Other revenue linked to the maintenance reserves has arisen from changes of lessee.

Note 4 Auditing: fees and expenses 2006 2005

The Group ÖHRLINGS PRICEWATERHOUSECOOPERS

Audit assignments 2 140 1 569Other assignments 40 182KPMG

Audit assignments 18 68Other assignments 40 12OTHER AUDITORS

Audit assignments 126 89

The Parent companyÖHRLINGS PRICEWATERHOUSECOOPERS

Audit assignments 363 335Other assignments 2 46KPMG

Other assignments 4 12

Note 5 Leasing fees related to operational leasing 2006 2005

The Group Agreed future leasing income with reference to non-revocable contracts in the aviation business due for payment: Within one year 283 350 306 714 Between one and five years 621 725 526 549 Later than five years 64 107 13 138

969 182 846 401

Important leasing agreementsAviationIn 2001, Volito Commuter KB acquired two Fokker 50 aircraft, which are leased to Denim Air B.V. The leasing agreement runs until the end of February 2009.

In March 2002, Volito South Pacific AB acquired a Boeing 737-33A. The aircraft is leased out to Norwegian Air Shuttle, Norway. The leasing agreement runs until the end of April 2009.

In July 2005, the Airbus 320-232, which had previously been owned by the subsidiary, Volito Altitude KB was transferred to the Irish subsidiary, Cryfield Ltd. Since then the plane has been leased to Sichuan Airlines in China, and the leasing agreement runs until the end of 2011.

Volito Aviation Leisure KB acquired an Airbus 320-231 aircraft in September 2002, which was leased to My Travel Airways. During the year, the aircraft has changed les-see to Donbassaero under contract until the end of April 2012.

In December 2003, Volito Aviation Deux Lux AB, acquired two Boeing 737-4C9 aircraft, which were leased to Lux Air under contract until the end of October and De-cember 2006, respectively. On of the aircraft changed lessee to Blue air of Rumania in December. The leasing contract runs until the end of March 2012. A letter of Intent has been signed with Ukraine International regarding the other aircraft.

In October 2004, Regana Company Ltd (registered office in Cyprus) acquired two Airbus 319 aircraft. The aircraft are leased to Volito Twilight AB (registered office in Malmö, Sweden), which in turn leased the aircraft to Silk Air, a subsidiary of Singapore Airlines, under a leasing contract until the end of March 2010.

In September 2004, Volito Malaysian Holding AB acquired a Boeing 737-300 air-craft. The aircraft is leased to Volito Aviation Malaysian Limited (registered office in Labuan, Malaysia), which in turn leased the aircraft to Air Asia according to a leasing contract until the end of March 2010.

Volito Overseas AB acquired two Boeing 737-3G7 aircraft in May 2005. Bothaircraft are leased to America West Airlines, USA, under a leasing contract until May and November 2007, respectively. One contract has been extended until 2010.

In June 2005, two Airbus 320-231 aircraft were acquired by Bragina Company Ltd (registered office in Cyprus), which, via Volito Worldwide AB, leases out the aircraft to Indian Airlines. The leasing contract runs until the end of March 2007. The contracts have been extended until 2010.

In April 2005, Gribanova Company Ltd (registered office in Cyprus) acquired an Air-bus A319-132, which was leased to TACA, El Salvador until the end of October 2006. The aircraft then changed lessee to TAM of Brazil, under a leasing contract running until the end of March 2014.

Volito Global Ltd (registered office in Cyprus) acquired two Airbus 320-233 aircraft in July 2005. Both aircraft were, until November 2005, leased to TACA, El Salvador. New leasing contracts were signed afterwards with Aigle Azur, France, which run to the end of March and April 2009, respectively.

In December 2005, Volito Universal Ltd (Cyprus) acquired two Boeing 737-71Q aircraft. Both aircraft are leased to COPA, Panama until April and June 2009, respec-tively.

In March 2006, Volito Sunrise Ltd (registered office in Cyprus) acquired an Airbus A319-112 aircraft. The aircraft is leased under contract to TAP,Portugal, until the end of March 2012.

In June 2006, Volito Cirrus Ltd acquired two A319-112 aircraft. The aircraft are leased out to Compagnie Aerienne Corse Mediterranee of France, until the end of November 2008.

Translation of contracts in USD has been done at the accounting year-end exchange rate of USD 1 = SEK 6,8725 (SEK 7,9525).

Real EstateRental income in the Volito Fastigheter group and Volito AB was according to the contract portfolio at year-end divided between 97% commercial properties and 3% residential. The commercial rental income, including real estate within Volito AB, was divided between 122 contracts in a number of different sectors. With the aim of limit-ing exposure to credit losses, regular follow-ups are made of tenants’ credit ratings. There is no sector or tenant that accounts for more than 10% of the rental income.

The contract portfolio for commercial premises in the Volito Group expires as below. The stated amounts refer to contracted closing rents in the portfolio:

Within one year 15 176Between one and five years 56 769Later than five years 7 292

79 237



Note 6 Staff and personnel costs of which, of which, Average number of employees 2006 men 2005 men

Parent companySweden 7 43% 7 43% SubsidiariesSweden 68 76% 61 75%USA 20 75% 10 70%Switzerland 9 78% – 0%Denmark 1 100% – 0%

Total in subsidiaries 98 77% 71 74% Group total 105 74% 78 71% Gender distribution in 2006 2005company management Percentage of women Percentage of women

The Group and Parent companyBoard of Directors 0% 0%Other executive managers 0% 0%

Salaries, other remuneration and social security expenses 2006 2005 Salaries and Social security Salaries and Social security remuneration expenses remuneration expenses

Parent company 6 767 4 297 6 033 3 745(of which, pension costs) 1) (1 391) 1) (1 421)Subsidiaries 48 985 14 678 27 622 12 015(of which, pension costs) (3 485) (2 868)

Total for the Group 55 752 18 975 33 655 15 760(of which, pension costs) 2) (4 876) 2) (4 289)

1) Of the Parent company’s pension costs, SEK 774 K (previous year: SEK 758 K) refers to the group: Board and CEO. The company has no outstanding pension obligations to them.

2) Of the Group’s pension costs, SEK 2 211 K (previous year: SEK 1 955 K) refers to the group: Board and CEO. The Group has no outstanding pension obligations to them.

The subsidiary SAA has signed pension insurance for 46 employees with Alecta and Collectum. All other employees in the Group have individual pension insurance, which is contribution-based.

According to a pronouncement from the Emerging Issues Task Force, URA 42, ITP plans at Alecta are a benefit-determined plan that covers several employers. It is a similar case for Collectum. The company has not had access to such information for the financial year 2006 that would make it possible to report these plans as benefit-determined plans. The pension plan according to ITP, which is secured through insurance with the above-men-tioned companies, is therefore accounted for as a contribution-determined plan.

Salaries and other remuneration by country and between Board Members etc. and the other employees 2006 2005 Board Other Board Other and CEO employees and CEO employees

Parent company Sweden 1 860 4 907 1 530 4 503

Subsidiaries Sweden 7 573 29 848 7 400 19 772

Subsidiaries abroad USA 34 3 892 65 385Switzerland 1 864 4 691 – –Denmark 1 083 – – –

Subsidiaries total 10 554 38 431 7 465 20 157

Group total 12 414 43 338 8 995 24 660 Of the salaries and remuneration paid to the other members of staff in the Group, SEK 1 350 K (SEK 1 040 K) refers to leading executive managers other than the Board and the CEO.

Severance paymentsAgreements have been signed with executive managers regarding severance payments amounting to between six month’s and one year’s salary.

Note 7 Depreciation and write-downs of tangible and intangible fixed assets 2006 2005

The GroupOther intangible assets -241 -91Goodwill -1 656 -945Real estate -7 554 -6 880Aircraft -154 869 -103 033Aircraft inventories -168 -167Equipment, tools and installations -1 507 -1 581

-165 995 -112 697

The Parent companyReal estate -317 -307Equipment, tools and installations -167 -176

-484 -483

Note 8 Other operating expenses 2006 2005

The Group Exchange losses on receivables/liabilities of an operating nature -953 -804Provision for acquisition of promissory note exceeding the nominal amount -6 000 –Capital loss -137 -1Other -3 -20

-7 093 -825The Parent company Capital loss -137 -1

SEK 6 000 K has been accounted for as a provision in the balance sheet.

Note 9 Profit/loss from participations in Group companies 2006 2005

The Group Other – -96

– -96

The Parent companyCapital gain/loss on disposal of participations -108 -93 740Write-downs – -69Dividends received 2 200 2 000Anticipated dividends – 248 913Other – -96

2 092 157 008

Note 10 Profit/loss from participations in associated companies 2006 2005

The Group Dividend 40 –Capital gain/loss on disposal of participations and receivables 3 825 -899Write-downs of receivables – -5 000Profit participations in associated companies’ profit/loss for the year 17 815 -1 701

21 680 -7 600

The Parent company Dividend 40 –Write-downs of receivables – -5 000Reversed write-downs – 4 506

40 -494

Note 11 Profit/loss from other securities andreceivables that are fixed assets 2006 2005

The GroupDividend 9 675 9 448Write-downs -14 –Reversed write-downs 1 065 12 235Capital gain/loss on disposals 9 982 31 575Other – -348

20 708 52 910



The Parent company Dividend 8 250 8 260Capital gain/loss on disposals 9 982 20 791Write-downs -14 –Reversed write-downs 1 065 12 235Other – -348

19 283 40 938

Note 12 Interest income and similar profit/loss items 2006 2005

The GroupInterest income, Group companies 120 21Interest income, others 5 729 5 945Exchange rate difference 36 724 3 895Cost reduct. in interest on profit partic. loan 3 763 –Profit/loss on short-term investments 111 499Dividend from short-term investments 49 –Other – 738

46 496 11 098

The Parent company Interest income, Group companies 2 926 2 373Interest income, others 1 792 2 368Profit/loss from short-term investments 111 488Exchange profit 8 289 –Dividends 49 11Other – 49

13 167 5 289

The major part of exchange profits, SEK 28,5 million, is attributable to Volito Aviation,as the foreign subsidiaries are translated in accordance with the monetary method.

Note 13 Interest expenses and similar profit/loss items 2006 2005

The GroupInterest expenses, Group companies -40 -1 784Interest expenses, others -149 203 -97 010Amortisation on prepaid borrowing expenses -14 181 -6 840Exchange rate difference -352 -8 792Other -567 -509

-164 343 -114 935The Parent companyInterest expenses, Group companies -5 145 -6 307Interest expenses, others -7 277 -6 179Amortisation on prepaid borrowing expenses -9 -9Exchange rate difference – -8 379Other -567 -509

-12 998 -21 383

No interest expenses have been set up as assets in the acquisition value of the assets.

Note 14 Exch. rate differences that have affected the profit/loss 2006 2005

The Group Exchange rate differences that have affected operating profit/loss 170 590Financial exchange rate differences 36 372 -4 897 The Parent company Financial exchange rate differences 8 289 -8 379

Note 15 Appropriations 2006 2005

Difference between booked depreciation and depreciation according to planReal estate – -307

Note 16 TaxThe GroupTax 2006 2005

Current tax -4 156 146Deferred tax -16 044 -9 890

Total reported tax expenses -20 200 -9 744

The Parent companyTax 2006 2005

Current tax – -64Deferred tax 3 638 7 569

Total reported tax expenses 3 638 7 505

Reconciliation of effective tax rate 2006 2005The Group Per cent Amount Per cent Amount

Profit/loss before tax 144 485 78 968Tax according to the current tax rate for the Parent company 28,0% -40 456 28,0% -22 111Effect of other tax rates for foreign subsidiaries -11,4% 16 475 -2,8% 2 192Non-deductible expenses 1,7% -2 493 26,9% -21 255Tax-exempt income -4,7% 6 741 -43,7% 34 534Previously unassessed deductible deficiency -4,0% 5 801 -0,5% 379Tax relating to previous years 4,2% -6 018 0,3% -244Unreported tax on ass. companies’ profits -1,7% 2 525 3,0% -2 405Unassessed deficiency in foreign subsidiaries 1,9% -2 775 0,9% -685Other 0,0% 0 0,2% -149

Reported effective tax 14,0% -20 200 12,3% -9 744 Reconciliation of effective tax rateThe Parent company Per cent Amount Per cent Amount

Profit/loss before tax 7 594 168 463Tax according to the current tax rate for the Parent company 28,0% -2 126 28,0% -47 170Non-deductible expenses 4,0% -301 12,3% -20 775Tax-exempt income -75,6% 5 739 -43,0% 72 378Tax relating to previous years 1,8% -138 0,1% -196Previously unassessed deductible deficiency -6,1% 463 0,0% –Write-downs/reversed write-downs of shares 0,0% – -1,9% 3 268

Reported effective tax -47,9% 3 683 -4,5% 7 505

Tax items charged to equity 2006-12-31 2005-12-31

The Group Estimated tax in received/submitted Group contributions – –

The Parent company Estimated tax in received/submitted Group contributions 398 12 600

Note 17 Other intangible assets 2006-12-31 2005-12-31

Accumulated acquisition values At beginning of year 1 206 1 206New acquisitions 424 –Acquisitions of subsidiaries 316 –Translation difference for the year -10 –

At year-end 1 936 1 206

Accumulated depreciation according to plan At beginning of year -1 024 -933Depreciation according to plan for the year -241 -91

At year-end -1 265 -1 024

Reported value at end of period 671 182

Not 18 Goodwill 2006-12-31 2005-12-31

Accumulated acquisition values At beginning of year 8 282 –New acquisitions – 8 282 Accumulated depreciation according to plan At beginning of year -945 –Depreciation according to plan for the year -1 656 -945

At year-end -2 601 -945

Reported value at end of period 5 681 7 337



Not 19 Real Estate 2006-12-31 2005-12-31

The GroupAccumulated acquisition valuesAt beginning of year 808 441 724 684New acquisitions 1 137 208Acquisitions of subsidiaries 9 532 134 566Final settlement of acquisitions of subsidiaries – -692Sales/disposals – -56 701Reclassifications 11 358 6 376Exchange rate difference for the year -111 –

830 357 808 441

Accumulated depreciation according to plan At beginning of year -80 230 -67 726Acquisitions of subsidiaries – -9 054Sales/disposals – 3 430Depreciation according to plan for the year -7 554 -6 880

-87 784 -80 230

Reported value at end of period 742 573 728 211 Of which, land Accumulated acquisition values 84 422 84 422

2006-12-31 2005-12-31

The Parent companyAccumulated acquisition valuesAt beginning of year 35 027 35 027New acquisitions 425 –

35 452 35 027 Accumulated depreciation according to plan At beginning of year -2 341 -2 034Depreciation according to plan for the year -317 -307

-2 658 -2 341

Reported value at end of period 32 794 32 686 Of which, land 4 371 4 371

The Group The Parent Company

Reported value at end of periodReal estate 730 228 32 793Buildings and land 12 345 –

742 573 32 793 Accrued rebuilding costs relating to properties classified as real estate are entered under the item on-going new construction, extensions or rebuilding: 2006-12-31 2005-12-31

The Group 16 012 6 286The Parent Company 5 011 –

Information on actual value of real estate 2006-12-31 2005-12-31

The GroupAccumulated actual valueAt beginning of year 947 700 821 700At year-end 1 078 600 947 700

The Parent companyAccumulated actual valueAt beginning of year 57 000 57 000At year-end 80 000 57 000

The company has on 31 December 2006 carried out an internal market valuation of the Group’s real estate. The valuation was done according to the guidelines applied by SFI/IPD Swedish Real Estate Index. Based on this valuation, the market value of the real estate amounts to SEK 1 078,6 million (947,7). The value is calculated as a yield averaging 6,2%.

The value assessment has, regarding rents, value levels and key ratios, been checked by authorised real estate valuers.

Real Estate - Effect on profit/loss for the period 2006-12-31 2005-12-31

The GroupRental income 86 295 83 585Direct costs for real estate that generated rental income during the period(operational and maintenance costs, property tax and ground rent) -24 684 -26 512

The Parent companyRental income 4 291 4 144Direct costs for real estate that generated rental income during the period(operational and maintenance costs, property tax and ground rent) -878 -1 459

2006-12-31 2005-12-31 The GroupTax assessment value, buildings (in Sweden) 309 588 309 649Tax assessment value, land (in Sweden) 128 735 128 824

The Parent companyTax assessment value, buildings (in Sweden) 16 352 16 352Tax assessment value, land (in Sweden) 8 362 8 362

The tax assessment values above refer in their entirety to the Group’s real estate.Other buildings and land are not assigned a tax assessment value.

Borrowing expensesNo capitalised interest has been included in the acquisition values.

LeasingProperties leased under operational leasing contracts are included with the following amounts: 2006-12-31 2005-12-31

The GroupAcquisition values 817 760 805 418Accumulated depreciation at beginning of year -80 040 -76 650Depreciation for the year -7 492 -6 820Depreciation on sold properties – 3 431

730 228 725 379

The Parent companyAcquisition values 35 452 35 027Accumulated depreciation at beginning of year -2 341 -2 034Depreciation for the year -317 -307

32 794 32 686

The contract portfolio for commercial premises within the Volito Group as of 31 December 2006 expires according to the table below. Stated amounts refer to contracted closing rents in the portfolio.

The Group 2006-12-31 2005-12-31

Within one year 15 176 8 488Between one and five years 56 769 68 362Later than five years 7 292 4 774

79 237 81 624

Counterparty risks in rental incomesRental income according to the contract portfolio at year-end was divided between 97% commercial properties and 3% residential. The commercial rental income was divided between 122 (136) contracts in a number of different sectors. With the aim of limiting exposure to credit losses, regular follow-ups are made of tenants’ credit ra-tings. No sector or tenant accounts for more than 10% of the rental income.

Note 20 Aircraft 2006-12-31 2005-12-31

The GroupAccumulated acquisition valuesAt beginning of year 2 563 950 1 260 724Acquisitions of subsidiaries – 11 942New acquisitions 444 149 1 298 685Sales/disposals -82 718 -8 446Reclassifications 7 429 –Exchange rate differences for the year -1 584 1 045

2 931 226 2 563 950



Accumulated depreciation according to plan At beginning of year -240 277 -137 232Acquisitions of subsidiaries – -4 549Sales/disposals 8 511 4 941Depreciation according to plan for the year -154 869 -103 033Exchange rate differences for the year 771 -404

-385 864 -240 277

Accumulated write-downs At beginning of year – -905Reversed write-downs during the year – 905

Reported value at end of period 2 545 362 2 323 673

LeasingAircraft that are leased under operational leasing contracts are included with the following amounts: 2006-12-31 2005-12-31

The GroupAcquisition values 2 878 743 2 512 402Accumulated depreciation at beginning of year -222 727 -123 232Depreciation for the year -150 504 -99 495Depreciation on sold aircraft 6 800 –

2 512 312 2 289 675

The period’s leasing income amounts to 348 277 208 540

Future leasing income that relates to non-revocable operational leasing contracts falls due for payment as below:

2006-12-31 2005-12-31

The GroupWithin one year 283 350 306 714Between one and five years 621 725 526 549Later than five years 64 107 13 138

969 182 846 401

The greater part of leasing income is USD-based. Translation has been done at the accounting year-end exchange rate of USD 1 = 6,8725 SEK (USD 1 = SEK 7,9525).

Note 21 Aircraft inventories 2006-12-31 2005-12-31

The GroupAccumulated acquisition valuesAt beginning of year 1 174 1 174

Accumulated depreciation according to plan At beginning of year -265 -98Depreciation according to plan for the year based on acquisition values -168 -167

-433 -265

Reported value at end of period 741 909

Note 22 Equipment, tools and installations 2006-12-31 2005-12-31

The Group Accumulated acquisition valuesAt beginning of year 12 477 6 591New acquisitions 4 184 3 504Acquisitions of subsidiaries 1 223 2 203Sales/disposals -479 -229Disposal of subsidiaries – -504Reclassifications – 782Exchange rate differences for the year -777 130

16 628 12 477

Accumulated depreciation according to plan At beginning of year -6 127 -3 432Acquisitions of subsidiaries -114 -1 411Sales/disposals 351 185Disposal of subsidiaries – 202Depreciation according to plan for the year based on acquisition values -1 507 -1 581Exchange rate differences for the year 473 -90

-6 924 -6 127


The Parent Company Accumulated acquisition values At beginning of year 3 083 2 855New acquisitions 1 052 263Sales/disposals -479 -41

3 656 3 083

Accumulated depreciation according to plan At beginning of year -1 571 -1 395Sales/disposals 351 –Depreciation according to plan for the year based on acquisition values -167 -176

-1 387 -1 571



LeasingInventories obtained through financial and operational leasing agreements amount to insignificant sums.

Note 23 Construction in progress and advances with respect to tangible fixed assets 2006-12-31 2005-12-31

The Group At beginning of year 6 286 1 417Reclassifications -11 358 -7 158Investments 21 084 12 027


The Parent Company Investments 5 011 –

Reported value at end of period 5 011 –


Note 24 Participations in Group companies 2006-12-31 2005-12-31

Accumulated acquisition valuesAt beginning of year 519 703 307 056Purchases 6 557 276 008New issue – 35 000Submitted shareholders’ contribution – 7 500Sales -240 -105 861

526 020 519 703

Accumulated write-downs1) At beginning of year -9 899 -20 899Sales – 11 000

-9 899 -9 899


1) Reversed write-downs and write-downs are shown in the income statement on the line “Profit/loss from participations in Group companies.” No write-downs or rever-sed write-downs occurred during the year.



Note 21 continued.List of the Parent company’s and Group’s participations in Group companies 2006-12-31 2005-12-31 Share Reported Reported Subsidiary/Corp. ID no./Registered office No. of shares in % 1) value value

Volito Aviation AB, 556603-2800, Malmö 1 222 000 100,0 173 788 173 788 Volito South Pacific AB, 556004-0452, Malmö 100,0 Volito Altitude Partner AB, 556627-7280, Malmö 100,0 Volito Altitude KB, 916539-3852, Malmö 100,0 Volito Leisure Partner AB, 556631-7987, Malmö 100,0 Volito Aviation Leisure KB, 916543-6115, Malmö 100,0 Volito Commuter KB, 916550-3872, Malmö 100,0 Volito Aviation Annika HB, 969688-2647, Malmö 100,0 Volito Aviation Cornelia HB, 969707-7387, Malmö 100,0 Volito Aviation November 2003 AB, 556604-0498, Malmö 100,0 Volito Aviation Deux Lux AB, 556604-0506, Malmö 100,0 Volito Aviation Finance AB, 556435-2952, Malmö 100,0 Volito Aviation Christine AB, 556585-5326, Malmö 100,0 Volito Overseas AB, 556507-0223, Malmö 100,0 Volito Aviation Services AB, 556603-2800, Malmö 100,0 Volito Aviation AG, CH - 170.3.027.511-0, Zürich 51,0 Regana Company Ltd, Cyprus HE 15 27 14, Limassol 100,0 Volito Twilight AB, 556661-7451, Malmö 100,0 Bragina Company Ltd, Cyprus - HE 15 36 54, Limassol 100,0 Volito Worldwide AB, 556669-1514, Malmö 100,0 Gribanova Company Ltd, HE 15 50 87, Limassol 100,0 Volito Aviation Management AB, 556663-9646, Malmö 100,0 Volito Malaysian Holding AB, 556662-7609, Malmö 100,0 Volito TakeOff Ltd, HE 15 83 17, Limassol 100,0 Volito Global Ltd, HE 16 27 53, Limassol 100,0 Volito Universal Ltd, HE 16 29 51, Limassol 100,0 Volito Aviation Malaysian Ltd, LL 04516 , Labuan 100,0 Volito Aviation Ltd, 324448, Dublin, Ireland 100,0 – – Cryfield Ltd, 324614, Dublin, Ireland 100,0

Tailwind AB, 556330-7825, Malmö 100,0 – –Volito Fastigheter AB, 556539-1447, Malmö 423 000 100,0 276 008 276 008 Volito Fastighetsutveckling AB, 556375-6781, Malmö 100,0 Volito Fastighetsförvaltning AB, 556142-4226, Malmö 100,0 Fastighetsbolaget Flygledaren HB, 916762-2035, Malmö 100,0 HB Ran Förvaltning, 916766-5224, Malmö 100,0 Volito Fastighetskupolen AB, 556629-1117, Malmö 100,0 Fastighets AB Centralposthuset i Malmö, 556548-1917, Malmö 100,0 Volito Leisure AB, 556541-9164, Malmö 100,0

Kattegat Invest AB, 556381-1388, Malmö 6 500 100,0 638 638BF Scandinavian Aviation Academy AB, 556182-0910, Västerås 50 000 100,0 14 309 14 309 Scandinavian AirTech AB, 556522-7849, Borlänge 100,0 Hangarbolaget i Bromma AB, 556267-2369, Västerås 100,0 Bromma Flygskola AB, 556129-1880, Västerås 100,0 Scandinavian Aviation Academy Inc, San Diego 100,0 Twinair SA, Lausanne, Switzerland 67,4

Volito 2001 AB, 556599-8217, Malmö 11 000 100,0 3 145 3 145SimCenter A/S, Köpenhamn, Denmark 51,0 6 196 –Volito AG, CH-170.3.026.619-3, Zug, Switzerland 100 100,0 40 596 40 596Other subsidiaries dormant 1 441 1 320

516 121 509 8041) Refers to the share of the capital, which also agrees with the share of votes for the total number of shares.

Note 25 Receivables in the Group companies 2006-12-31 2005-12-31

The Parent companyAccumulated acquisition valuesAt beginning of year 82 386 79 587Exchange rate differences for the year -5 173 2 799


Note 26 Participations in associated companies 2006-12-31 2005-12-31

The Group Accumulated acquisition valuesAt beginning of year 90 514 80 207Purchases 102 13 174Sales -8 721 -2 360Participations in the profit/loss of associated companies for the year 17 815 -1 701Capital gains/losses 3 825 -262Reclassifications 600 -1 347Exchange rate differences for the year -6 255 2 803

97 880 90 514Accumulated write-downsAt beginning of year -1 998 -1 998

-1 998 -1 998


The Parent company Accumulated acquisition valuesAt beginning of year 28 057 13 266Purchases 102 11 191Sales -10 321 –Reclassifications 600 3 600

18 438 28 057Accumulated write-downs At beginning of year -3 598 -6 504Write-downs connected to sold participations 1 600 –Reversed write-downs – 4 506Reclassifications – -1 600

-1 998 -3 598


The year’s write-downs are entered in the income statement on the line“Profit/loss from participations in associated companies”.

List of the Parent company’s and Group’s participations in associated companies 2006-12-31 Shares Proportion of Reported Associated company /no. as equity’s value value in / Corp. ID no. Reg. office Market value % 1) in the Group the Parent

Directly ownedSaint Victor s.a.r.l. 433 613 676, Frankrike – 40,0 – –Galenica AB, 556567-7449, Malmö – 20,1 2 079 5 377Itesco AB, 556574-0759, Stockholm – 24,1 1 188 4 814DMH Ltd, 165299, Ireland – 40,0 710 17AB Nordsidan, 556058-3212 – 90,0 2 923 5 632Bokks AB, 556623-2137, Malmö – 30,0 198 600Indirectly ownedNordkap Holding AG,CH -170.3.026.601- 4, Switzerland – 40,0 88 784 Nordkap Bank AG, Switzerland –

95 882 16 440



List of the Parent company’s and Group’s participations in associated companies 2005-12-31 Shares Proportion of Reported Associated company /no. as equity’s value value in / Corp. ID no. Reg. office Market value % 1) in the Group the Parent

Directly owned Saint Victor s.a.r.l., 433 613 676, Frankrike – 40,0 – –Cartela AB, 556597-7013, Lund – 34,1 4 896 8 721Galenica AB, 556567-7449, Malmö – 20,1 2 331 5 276Itesco AB, 556574-0759, Stockholm – 24,1 1 057 4 814DMH Ltd, 165299, Ireland – 40,0 650 17AB Nordsidan, 556058-3212 – 90,0 4 286 5 632 Indirectly ownedNordkap Holding AG,CH - 170.3.026.601 - 4, Switzerland – 40,0 75 296 – Nordkap Bank AG, Switzerland – –

88 516 24 459

Shares in profits from associated companies are shown in the Consolidated income statement on the line “Profit/loss from participations in associated companies.”

1) Refers to owned share of the capital, which also agrees with the share of the votes for the total number of shares, with the exception of AB Nordsidan, of which Volito owns 47% of the votes, but 90% of the capital.

Note 27 Receivables in associated companies 2006-12-31 2005-12-31

The Group Accumulated acquisition valuesAt beginning of year 96 685 92 306Additional receivables 3 960 5 916Settled receivables – -5 100Exchange rate differences for the year -5 949 3 563

94 696 96 685Accumulated write-downs At beginning of year -5 000 –Write-downs for the year – -5 000


The Parent company Accumulated acquisition valuesAt beginning of year 23 304 18 724Additional receivables 3 960 3 816Exchange rate differences for the year -776 764

26 488 23 304Accumulated write-downsAt beginning of year -5 000 –Write-downs for the year – -5 000


Note 28 Holdings in other long-term securities 2006-12-31 2005-12-31

The Group Accumulated acquisition valuesAt beginning of year 128 873 169 783Additional assets 157 062 7 092Deductible assets -6 223 -48 002

279 712 128 873Accumulated write-downsAt beginning of year -8 702 -20 937Reversed write-downs during the year 1 065 12 234

-7 637 -8 703


The Parent companyAccumulated acquisition valuesAt beginning of year 108 440 135 753Additional assets 57 062 15 913Deductible assets -6 223 -43 226

259 279 108 440Accumulated write-downsAt beginning of year -3 053 -15 288Reversed write-downs during the year 1 065 12 234

-1 988 -3 054


Note 28 continuedThe Group Market value 2006-12-31 Market value 2005-12-31List of securities or equivalent Number of shares Reported value or equivalent Number of shares Reported value

Peab AB (publ) 698 750 4 300 000 239 847 328 950 3 225 000 83 542CTT Systems AB (publ) 52 282 1 103 000 22 810 91 000 1 333 333 26 801Protista AB – – – – 256 600 634Bear Stearns (fonder) 2 648 1 938 2 212 1 550GFA Domain de Brescou – 218 1 568 – 218 1 499Båstadtennis & Hotell AB – 18 333 3 960 – 18 333 3 960Other – 1 952 – 2 184

272 075 120 170The Parent Company Market value Market value List of securities or equivalent Number of shares Reported value or equivalent Number of shares Reported value

Peab AB (publ) 621 562 3 825 000 229 023 280 500 2 750 000 72 718CTT Systems AB (publ) 52 282 1 103 000 22 810 91 000 1 333 333 26 801Protista AB – – – – 256 600 634Bear Stearns (fonder) 2 648 1 938 2 212 1 550GFA Domain de Brescou – 218 1 568 – 218 1 499Other – 1 952 – 2 184

257 291 105 386



Not 29 Deferred tax Deferred Deferred tax recoverable taxes liabilities Net

The Group 2006Accelerated depreciation Real estate – 15 370 -15 370 Aircraft – 52 935 -52 935Group surplus value Real estate – 25 844 -25 844 Aircraft – 1 838 -1 838Other – 4 987 -4 987Deductible deficiency 53 619 – 53 619

53 619 100 974 -47 355Offset -3 384 -3 384 –

Net deferred tax liabilities 50 235 97 590 -47 355 The Group 2005Accelerated depreciation Real estate – 13 223 -13 223 Aircraft – 48 905 -48 905 Machines and inventories – 17 -17Group surplus value Real estate – 24 540 -24 540 Aircraft – 1 984 -1 984Tax allocation reserve – 47 -47Deductible deficiency 57 548 – 57 548

57 548 88 716 -31 168Offset -8 731 -8 731 –

Net deferred tax liabilities 48 817 79 985 -31 168

The Parent company 2006Deductible deficiency 16 531 – 16 531

Net deferred recoverable taxes 16 531 – 16 531 The Parent company 2005Deductible deficiency 13 291 – 13 291

Net deferred recoverable taxes 13 291 – 13 291

The change in the Parent company between years has been shown as deferred tax expenses/income, except those amounts that according to note 35 are charged di-rectly against equity.

Deferred taxes are valued based on the nominal rate of tax. The only exception to this rule is the acquisition of material assets in which the tax assessment was a significant part of the business transaction when the deferred tax is valued based on the purcha-se price. All deferred taxed have been valued at a nominal amount on December 31 2006 (the same applies for the previous year).

Unreported deferred recoverable taxesDeductible temporary differences and fiscal deductible deficiencies for which deferred recoverable taxes have not been reported in the income statement and balance sheet:

2006-12-31 2005-12-31

Fiscal deficit 23 375 55 057

Deferred recoverable taxes have not been reported for these items, as it appears unlikely that the Group will utilise them for settlement against future taxable profits within the next three years.

Note 30 Prepaid borrowing expenses 2006-12-31 2005-12-31

The Group Accumulated acquisition valuesAt beginning of year 54 568 21 925Additional items 15 321 33 526Settled items -4 172 -883

65 717 54 568Accumulated amortisation At beginning of year -16 342 -10 079Settled items 3 995 578Amortisation for the year -14 183 -6 841

-26 530 -16 342 Prepaid borrowing expenses 39 187 38 226 Reported value at year-end, long-term comp. 27 005 27 158Reported value at year-end, short-term comp. 12 182 11 068

39 187 38 226

Note 31 Other long-term receivables 2006-12-31 2005-12-31

The Group Accumulated acquisition valuesAt beginning of year 9 284 7 868Additional receivables via acquired subsidiaries 56 –Additional receivables 163 2 043Settled receivables -2 043 -20Reclassifications – -600Exchange rate differences for the year 2 -7

7 462 9 284Accumulated write-downs At beginning of year -357 -357

Reported value at year-end 7 105 8 927 The Parent companyAccumulated acquisition valuesAt beginning of year 1 649 2 249Reclassifications – -600

Reported value at year-end 1 649 1 649

Note 32 Prepaid expenses and accrued income 2006-12-31 2005-12-31

The Group Short-term comp. of prepaid borrowing expenses 12 182 11 068Prepaid expenses 4 834 5 211Accrued income 2 673 9 546Accrued interest income 1 081 676Accrued expenses compensation 150 150

20 920 26 651

The Parent company Short-term comp. of prepaid borrowing expenses 9 9Prepaid expenses 369 302Accrued interest income 338 216Accrued income 150 150

866 677

Note 33 Short-term investments

The Group and Parent company 2006-12-31 2005-12-31List of Market value Reported Market value Reported securities or equivalent value or equivalent value

Listed participations 780 644 638 605

Note 34 Finance policy

Finance policyThrough its operations, the Volito Group is exposed to various types of financial risks.Financial risks refer to changes in exchange rates and interest rates that affect the company’s cash flow, profit/loss and thereby the related shareholders’ equity. Financial risks also include credit risks and refinancing risks.

Exposure applying to the different operations is presented quarterly for the respective companies’ boards, which make current decisions regarding risk management based on the market situation and macroeconomic information.



Below is a summary of the Group’s loan portfolio divided according to currency and due dates.

Due date of loan Nominal amount in 1 year 1-5 >5 original currency Interest % or less years years Total

Real estate SEK 396 411 See below 239 215 120 881 36 315 396 411SEK, interest swap 27 530 4,1% – 27 530 – 27 530SEK, interest swap 13 765 2,3% – 13 765 – 13 765SEK, interest swap 41 295 2,8% – 41 295 – 41 295SEK, interest swap 27 530 3,1% – – 27 530 27 530SEK, interest swap 27 530 3,3% – – 27 530 27 530SEK, interest swap 4 000 4,1% – – 4 000 4 000SEK, interest swap 12 500 4,1% – – 12 500 12 500SEK, interest swap 25 000 4,1% – – 25 000 25 000SEK, credit line 1 726 1 726 – – 1 726SEK 155 875 NSSU + 0,8% 155 875 – – 155 875Aviation USD 5 193 6,9% 9 981 39 316 – 49 297USD 7 235 7,2% 7 347 45 758 – 53 105USD 7 172 5,4% 52 643 – – 52 643USD 9 828 6,6% 8 679 61 543 – 70 222USD 6 742 8,0% 7 080 34 810 21 199 63 089USD 18 217 6,6% 10 925 167 628 – 178 553USD 35 844 6,0% 19 028 248 265 – 267 293USD 31 052 6,7% 26 475 213 945 – 240 420USD 19 553 Lib + 1,5% 9 095 129 000 – 138 095USD 25 020 5,6% 19 279 171 940 – 191 219USD 40 271 5,9% 18 570 299 987 – 318 557USD 13 209 7,0% 9 694 32 583 59 158 101 435USD 29 934 7,4% 16 329 200 845 – 217 174USD, credit line 796 Stib + 1,25% 5 468 – – 5 468SEK 16 481 Stib + 2,9% 3 242 13 239 – 16 481SEK, credit line 7 Vecu +3,08% 7 – – 7SEK 32 867 4,0% 2 267 11 335 19 265 32 867OtherSEK, credit line 30 950 NSSU+0,65 30 950 – – 30 950SEK, credit line 28 609 NSSU+0,8 28 609 – – 28 609USD credit line 20 120 USDU+0,8 20 120 – – 20 120SEK, credit line 17 813 NBU + 1% 17 813 – – 17 813DKK 2 568 – 3 117 – 3 117CHF 5 750 3,3% – 32 378 – 32 378CHF 5 750 3,5% – 32 378 – 32 378

720 417 1 941 538 232 497 2 894 452

Volito’s policy concerning borrowing is that the due dates for loans shall be spread over time. The policy relating to interest is that the fixed term periods for the portfolio shall be well balanced and assessed at all times against the company’s current view of the interest rate market.

Part of Volito’s borrowing is linked to the fulfilment of financial key ratios. These key ratios are followed up on a continuous basis and constitute part of the management’s framework for the financial planning of the business.

Currency risks The Volito Group is exposed to exchange rate changes mainly in the US dollar through its involvement in the Volito Aviation group. Income in the form of leasing fees is USD-based and is set against amortisation and interest payments on loans, which are similarly USD-based.

Due to the transaction with Goldman Sachs, the Volito Group’s profit/loss will be less sensitive to changes in the USD exchange rate than previously.

The Volito Group’s holding in Nordkap Bank AG is partly hedged against changes in the CHF exchange rate through certain borrowings in CHF. However, a certain amount of the holding is exposed to changes in the CHF exchange rate. Exchange rate differences related to translation of foreign subsidiaries are posted in the equity. The Board of Volito has decided to accept the exposure for USD and CHF according to the above, as this exposure in itself constitutes a risk diversification within the Volito Group. The extent of this exposure will be decided according to continuous review.

Interest risksThe Volito Group is exposed to changes mainly in short-term interest rates though its involvement in the groups Volito Fastigheter AB and SAA AB. Within the Parent company, Volito AB, there is also a certain exposure relating to short term interest rates.

Taken together, the Volito Group’s total loans that are exposed to short-term interest rates is approx. SEK 500 million. This means that the Group’s profit before tax is affected by SEK 500 K from any increase or decrease in the short-term interest rate by 0.10%.

During 2005, the Volito Group began to manage part of its interest rate risks using interest rate swaps. The hedging relating to 32% of the debt portfolio in the Volito Fastigheter AB group is managed with swaps, something that gives the company a higher degree of flexibility in terms of future debt management.

Volito Fastigheters booked value in outstanding rate swaps as per 31 December amounts to SEK 179 150 (137 650) K. Per 31 December the fixed rates varies between 2,28% (1,78%) and 4,13% (3,29%) and the floating interest rate is STIBOR 3 months when borrowing in SEK.

Financial exposure - outstanding derivativesThe Group 2006-12-31 2005-12-31Liabilities Booked value Market value Booked value Market value

Rate swaps 179 150 174 196 137 650 135 879

There are no derivatives accounted for in the balance sheet at the year-end. The market value has been accounted as if the contracts had been closed at the year-end.

Note 35 Equity Share Restricted Non-restricted capital reserves equity

The GroupBalance carried forward according to balance sheet of 31 Dec 2004 61 000 88 034 255 846 Transfers between non-restricted and restricted equity -30 937 30 937Profit/loss for the year 67 593Dividend -6 100FX/translation difference for the year – 3 205 -457

Equity on 31 December 2005 61 000 60 302 347 819 Transfers between non-restricted and restricted equity 22 891 -22 891Profit/loss for the year 95 126Dividend -12 200Share issue 61 000 – -61 000FX/translation difference in equity – -8 691 1 429

Equity on 31 December 2006 122 000 74 502 348 283 Share Restricted Non-restricted capital reserves equity

The Parent companyBalance carried forward according to balance sheet of 31 Dec 2004 61 000 21 005 227 203Profit/loss for the year 175 968Dividend -6 100Group contributions 45 000Tax effect on group contributions -12 600

Equity on 31 December 2005 61 000 21 005 429 471

Profit/loss for the year 11 232Dividend -12 200Share issue 61 000 – -61 000Group contributions 1 420Tax effect on group contributions -398

Equity on 31 December 2006 122 000 21 005 368 525

Issue with option During 2004, Volito AB issued two promissory notes combined with separable op-tions, which entitles subscription for new shares in Volito AB. Each option gives the owner the right to subscribe for one share in Volito AB during the period 1-30 April 2009. In total the promissory notes are combined with 100,000 options. If all options are converted they will amount to 7,57% of the total number of shares in Volito AB.

Number of issued shares Fully paid Not fully paid Nominal amount

Class B shares 1 220 000 – 100

Disclosure of accumulated exchange rate differences in foreign operations has been done from the beginning of 1999.



Specification of accumulated exchange rate difference in equity: 2006-12-31 2005-12-31

Acc exchange rate difference at beginning of year 1 897 -851Exch rate diff for the year in foreign subsidiaries -7 163 2 651Exch rate diff for the year in foreign ass companies -99 97

Acc exchange rate difference at year-end -5 365 1 897

The Board of Directors and CEO propose that of disposable standing profit, SEK 30 500 000 is distributed to shareholders.

Note 36 Untaxed reserves 2006-12-31 2005-12-31

The Parent companyAccumulated depreciation in excess of plan:Real estate 2 342 2 342

Of the untaxed reserves, SEK 656 (656) K is deferred tax. The deferred tax is not included in the Parent company’s balance sheet, but is included in the Group’s.

Note 37 Negative goodwill 2006-12-31 2005-12-31

The GroupAccumulated negative goodwill from acquisitionsAt beginning of year and year-end 765 765Additional negative goodwill 169 –

At year-end 934 765

Accumulated dissolutionsAt beginning of year -765 -599Dissolutions for the year - other negative goodwill -169 -166

At year-end -934 -765

Reported value at the end of year – –

Note 38 Convertible loans Volito Aviation AB has outstanding loans that are convertible or combined with options for new subscription of shares according to the following:

Convertible promissory note, SEK 16,170 KEntitles exchange for class B shares with 1 vote per share at a nominal SEK 100. Conversion rate amounts to SEK 147 per share. Conversion is possible during the period 1 November-1 December 2008. The loan runs with an interest rate equivalent to 3 month’s STIBOR plus 1%.

Note 39 Other debts to credit institutes, long-term 2006-12-31 2005-12-31

The Group Due date, 1-5 years from acc year-end 1 933 432 1 767 387Due date, later than five years from acc year-end 240 603 246 497

2 174 035 2 013 884

The Parent companyDue date, 1-5 years from acc year-end 69 220 4 464Due date, later than five years from acc year-end 13 226 14 341

82 446 18 805

The Group intends to refinance those credits that fall due in 2007. The assessment of the company is that amortisation in 2007 will amount to SEK 187,4 million for the Group and SEK 1.1 million for the Parent company, which in accordance with RR 22 is reported as short-term.

Note 40 Bank overdraft facilities 2006-12-31 2005-12-31

The GroupGranted credit limit 225 496 203 477Unutilised part -120 803 -120 404

Utilised credit amount 104 693 83 073 The Parent companyGranted credit limit 158 233 165 577Unutilised part -78 554 -104 433

Utilised credit amount 79 679 61 144

Note 41 Other debts, long-term and short-term 2006-12-31 2005-12-31

The GroupDebts that fall due later than 1 year fr acc year-end 233 611 177 315Debts that fall due later than 5 years fr acc year-end – –

The Parent companyDebts that fall due later than 1 year fr acc year-end 11 249 10 449Debts that fall due later than 5 years fr acc year-end – –

In a number of leasing contracts there is an agreement that the lessees make regular payments to Volito that are allocated to a maintenance reserve that is utilised for future maintenance on aircraft. The cash-in and cash-out in the maintenance reserve is controlled by the lessee’s utilisation of the aircraft and by foreseen and unforeseen maintenance costs. The maintenance reserve amounted at 31 December 2006 to SEK 222,3 million (166,2).

Note 42 Accrued expenses and prepaid income 2006-12-31 2005-12-31

The Group Personnel-related items 10 117 7 788Accrued interest expenses 16 024 11 424Prepaid rental income 14 887 12 751Prepaid leasing income 11 505 10 650Other prepaid income 4 662 5 262Other accrued expenses 15 419 7 026

72 614 54 901

The Parent company Personnel-related items 2 800 1 889Accrued interest expenses 3 719 2 225Prepaid rental income 577 357Other items 713 562

7 809 5 033

Malmö, 28 February 2007

Karl-Axel Granlund Bo Olsdal Lennart Blecher Sven Holmgren Chairman CEO

Our auditors’ report was submitted 2 March 2007

Åke Christiansson Olle NilssonAuthorised public accountant Authorised public accountant

The Group’s income statement and balance sheet, and the Parent company’s income statement and balance sheet, will be confirmed at the Annual General Meeting on 5 March 2007.



Audit report

To the annual meeting of the shareholders of Volito ABCorporate identity number 556457-4639

We have audited the annual accounts and the consolidated accounts on pages 29-53, the accounting records and the administration of the board of directors and the managing direc-tor of Volito AB for the year 2006. These accounts and the administration of the company and the application of the Annual Accounts Act when preparing the annual accounts and the consolidated accounts are the responsibility of the board of directors and the managing director. Our responsibility is to express an opinion on the annual accounts, the consolidated accounts and the administration based on our audit.

We conducted our audit in accordance with generally accepted auditing standards in Sweden. Those standards require that we plan and perform the audit to obtain reasonable assurance that the annual accounts and the consolidated accounts are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the ac-counts. An audit also includes assessing the accounting principles used and their application by the board of directors and the managing director and significant estimates made by the board of directors and the managing director when preparing the annual accounts and consolidated ac-counts as well as evaluating the overall presentation of information in the annual accounts and the consolidated accounts. As a basis for our opinion concerning discharge from liability, we exa-mined significant decisions, actions taken and circumstances of the company in order to be able to determine the liability, if any, to the company of any board member or the managing director. We also examined whether any board member or the managing director has, in any other way, acted in contravention of the Companies Act, the Annual Accounts Act or the Articles of As-sociation. We believe that our audit provides a reasonable basis for our opinion set out below.

The annual accounts and the consolidated accounts have been prepared in accordance with the Annual Accounts Act and give a true and fair view of the company’s and the group’s fi-nancial position and results of operations in accordance with generally accepted accounting principles in Sweden. The statutory administration report is consistent with the other parts of the annual accounts and the consolidated accounts.

We recommend to the annual meeting of shareholders that the income statements and ba-lance sheets of the parent company and the group be adopted, that the profit of the parent company be dealt with in accordance with the proposal in the administration report and that the members of the board of directors and the managing director be discharged from liability for the financial year.

Malmö, March 2, 2007

Åke Christiansson Olle G NilssonAuthorized Public Accountant Authorized Public Accountant


Financial Information | Auditors’ report

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annual report 2006 eng

Documents

aviation volito aviation

volito aviation ab

volito ab structures

real estate volito fastigheter

owned volito subsidiary

aviation business area

volito groups profit

areas of aviation