Salcomp Annual Report

Annual Report 2007
1088 Vuosikertomus_2007.indd 1 5.3.2008 16:47:57

Powering The
Mobile World
Salcomp’s promise is about leading the way forward. Globally, we are recognized above all
as a company that produces high-quality products, as well as for our active research and
development, together with close interaction with our customers from all over the world.
These, together with local service, superior production and effective logistics, are the factors
that have enabled us to achieve our pioneering position and, we believe, will enable us to
maintain it.
As one of the leading developers and manufacturers of mobile phone and other electronic
device chargers, we are creating opportunities for new ways to use technology and for the
effective use of innovations, both for work and leisure. We believe that through our sustained
work effort we can be involved in taking the world in a more mobile direction. Therefore, we
can proudly stand behind our promise.

Salcomp Plc 2
2007 in brief 4
CEO’s review 6
Vision, strategic goals and values 8
Business 11
Risks and risk management 18
Corporate responsibility 20
Personnel 22
Environment 24
Shares and shareholders 27
Corporate Governance 33
Board of Directors 38
Management Team 39
Financial Statements 41
Report of the Board of Directors 42
Consolidated income statement 46
Consolidated balance sheet 47
Consolidated cash flow statement 48
Consolidated statement of changes in equity 49
Notes to the consolidated financial statements 50
Parent company income statement 76
Annual Report 2007
Parent company balance sheet 77

Parent company cash flow statement 78
Notes to the parent company financial statements 79
Key figures 87
Calculation of key figures 88
Auditors’ report 89
Glossary 90
Information for investors 92
Contact information 93

Salcomp plc
Salcomp is a global developer, manufacturer and marketer of chargers whose main

customers include the major mobile phone manufacturers. In 2007, Salcomp manu-
factured over 262 million chargers, meaning that nearly one in four of the world’s mobile
phone chargers were manufactured by Salcomp. In addition, Salcomp manufactures
chargers for other electronic devices.
Products The Market

• Salcomp manufactures chargers for mobile phones and other Salcomp primarily operates in the mobile phone market where
growth in 2008 has been forecast as approximately 12% when
hand-held electronic devices, such as cordless fixed-line
phones and bluetooth headsets, as well as MP3 players. expressed as the number of units sold. A total of approximately
1.3 billion mobile phones and, therefore, mobile phone chargers are
• Salcomp specializes in switch mode chargers that are estimated to be sold in 2008. In 2007, Salcomp’s share of the
technically more advanced, energy efficient, fast and small. global mobile phone charger market was approximately 23%. In
• Salcomp’s current switch mode charger range comprises four addition, Salcomp has increasing operations in other charger
segments. Salcomp has a strong market position: in the mobile
different product platforms: Eagle, Robin, Mini and Cosmo.
phone charger market in 2007, Salcomp achieved the position of
• All of these platforms are specified and developed by market leader, and in the combined market of all the various
Salcomp, technologically-flexible and safety-approved chargers Salcomp was among the five largest players.
chargers.
Salcomp’s Global Operations
Salcomp’s headquarters are in Salo, Finland with production
plants located in China, Brazil and India. At the end of 2007,
Salcomp employed some 9,700 people: 70% in China, 16% in
Brazil and 13% in India, as well as 1% in Finland and the United
States.
2 Salcomp Plc

key milestones
2007
Launching of a plant in India.

Annual volume 262 million chargers – in October,
the billion charger milestone was exceeded at
the Salcomp plant in China.
2006
Stock exchange listing.
Annual volume 230 million chargers.
2005
A production plant in Brazil.
The journey to
one billion chargers
2004
The company originated from Salcomp Oy, which was
founded in Uusikaupunki, Finland, in the 1970s and Transfer of production to China.
which was a subsidiary of the television manufacturer Annual volume 116 million chargers.
Salora Oy. Salcomp’s history is considered to have
begun when the Kemijärvi factory was established in
1975. 1999
Spin-off from Nokia and expansion of customer
base to all major mobile phone manufacturers.
1998
Contract manufacturing begins in China.
1995
A strategic decision to focus
on mobile phone power supplies.
1988
Salcomp manufactured the first switch mode charger
in 1988. Compared to the current Mini charger (on the The world’s first switch mode
left), the size, weight and number of components have quick charger for mobile phones.
decreased significantly due to active product deve- Annual volume 1,000 chargers.
lopment.
1983
Acquired by Nokia.
1982
The manufacture of power supplies begins.
1975
Salcomp is founded.
Salcomp Plc 3

2007 in brief
At Salcomp, 2007 was a year of positive development: net sales grew by some 10% and
operating profit by 67%. The number of chargers delivered increased by 14%, and the
market position remained strong. The market share in mobile phone chargers was approxi-
mately 23%. A new charger plant started operations in India, which balances and strength-
ens Salcomp’s global production and logistics. Strategic focal points were directed at new
charger segments where additional growth will be sought.
Key Events in 2007 • During its history, Salcomp has manufactured over a billion
• The first chargers from the new charger plant constructed

chargers – the billion charger milestone was exceeded in
October at the Salcomp plant in China.
in Chennai, India, were delivered to customers in June.
• During the summer, the main ownership of Salcomp was • Salcomp introduced the new Cosmo charger platform, which
transferred from EQT to the Swedish investment company enables the charging of mobile phones and other mobile
Nordstjernan AB – by the end of the year, Nordstjernan devices via a USB cable – the Cosmo chargers open up
owned 56.0% of Salcomp. opportunities to expand the customer base to cover those
other than the mobile phone charger segment.
• At the Extraordinary General Meeting in September, the
shareholders re-elected Kari Vuorialho, Andreas Tallberg and
Jorma Terentjeff as members and elected Mats Heiman and
Peter Hofvenstam as new members of the Board. The latter
two are employed by Nordstjernan. All Salcomp’s releases can be found
on the company’s homepage at
www.salcomp.com
4 2007 in brief

salcomp group key figures share price development
• Salcomp’s shares are quoted on the Nordic Exchange in
Helsinki in the Information Technology sector’s Mid Cap.
2007 2006 Change,
%
• During 2007 the share price strengthened by 51%.
Net sales, EUR million 286.2 259.0 +10.5 EUR share
5.0
Delivered chargers, million pcs 262.4 230.5 +13.8
4.5
Operating profit, EUR million 25.8 15.5 +66.7
% of net sales 9.0 6.0
4.0
Earnings per share, EUR* 0.54 0.28 +92.9
* Excluding the deferred tax

3.5
Personnel at the end
of the year 9,722 7,910 +22.9
3.0
Equity ratio, % 37.7 30.5
Gearing, % 34.0 83.7 2.5
Market value,
152.8 101.3 +51.0 2.0
EUR million 4/06 7/06 10/06 1/07 4/07 7/07 10/07 12/07
net sales development operating profit development
EUR million EUR million

300 30
25
250
20
200
15
* Before goodwill amortization

150 10
5
100
50
–5
0 –10
2003 2004 2005 2006 2007 2003* 2004 2005 2006 2007
FAS IFRS IFRS IFRS IFRS FAS IFRS IFRS IFRS IFRS
cash flow development personnel on 31 december
EUR million 1,000 persons

40 10
35
30 8
25
20 6
15
10 4
0 2
–5
–10 0
2003 2004 2005 2006 2007 2003 2004 2005 2006 2007
2007 in brief 5

ceo’s review
solid growth – strong profit
At Salcomp, 2007 was a year of solid growth and excellent profit- For Salcomp, 2007 was the first full year as a listed company.
ability. We grew at a more moderate pace than the previous year, During 2007, we also got a new important shareholder when
which in fact saw unusually strong growth. In turn, we focused on the family-owned Swedish investment company Nordstjernan
developing the efficiency in all our operations, for example by became Salcomp’s largest shareholder. We are pleased because
increasing the output of our production, strengthening our materi- Nordstjernan is in favor of long-term ownership. This will enhance
al sourcing and by improving the cost structure of our products. our aim to continue the implementation of our growth strategy in
We had excellent success, and as a result we achieved the mar- mobile phone chargers, as well as other new selected charger
ket leader position in mobile phone chargers and our profitability segments.
improved considerably.
The mobile phone market is expected to grow by some 12% in
A significant milestone in 2007 was the start-up of our new charger 2008, which translates into a sales volume of some 1.3 billion
plant in India in June. During the first seven months, over 10 mobile phones, and, therefore, chargers. This forms a good basis
million chargers were manufactured at our India plant, and the to achieve further growth in our delivered charger volumes as well
total annual capacity grew to some 50 million chargers by the end as in net sales.
of the year. We are very satisfied that the project progressed
quickly and according to the budget set out for the plant construc- Our strategic target for 2008 is to maintain the global market
tion. Presence in the growing Indian market gives us a competi- leader’s position in mobile phone chargers and in addition
tive edge as so far Salcomp is the only major mobile phone charg- to broaden our customer portfolio in selected other charger
er manufacturer in India. segments, such as bluetooth headsets and cordless fixed-
line phones. Our long-term target is also to achieve entry into
Another important milestone was reached in October when in the selected medium power range charger segments.
history of the company’s manufacturing operations, Salcomp
produced its billionth charger. Manufacturing one billion chargers
and delivering them to customers around the world has also
called for strong logistics, which is one of Salcomp’s key success
factors.
6 CEO’s review

2007 was the first full year that I acted as the President and CEO
of Salcomp. I have been pleasantly surprised by the sound skills
and knowledge of Salcomp’s employees, its excellent customer
relations, its pioneering in R&D innovations as well as its
cost-effectiveness in operations and superior logistics. I am
particularly happy to see the high motivation of all at Salcomp as
“Our strategic target for 2008
well as the true commitment to common financial and operational is to maintain the global market
targets, the proof of which was the significant increase in our
profitability in 2007. I do indeed strongly believe that with this
leader’s position in mobile phone
personnel and these competitive edges, Salcomp has every chargers and in addition to
possibility to continue to grow and to develop, and thus become a
more versatile power supply equipment industry player.
broaden our customer portfolio in
selected other charger segments,
I wish to say thank you to our entire personnel, our customers,
material suppliers, shareholders and other stakeholders for the such as bluetooth headsets and
good work carried out over the past year and for their trust in us. cordless fixed-line phones. Our
Let us continue powering the mobile world.
long-term target is also to achieve
entry into selected medium power
Markku Hangasjärvi range charger segments.”
President and CEO
CEO’s review 7

vision, strategic goals and values
Salcomp’s vision is to strengthen the global market leadership in mobile phone

chargers and to achieve a strong market position in other selected charger segments.
In 2007, Salcomp implemented its strategy by increasing its production capacity,
improving its profitability and cash flow, and by further enhancing its operations,
as well as seeking to gain further growth in new charger segments.
strategic competitive advantages Strategic steps in 2007

Salcomp’s strategic competitive advantages are derived from its • The start-up of the plant in India which balances
customer base, long-term experience and technology leadership, global production and logistics.
as well as the efficiency of its global operations.
• Operational enhancements, which improved the
company’s profitability and increased its cash flow.
In mobile phone chargers, Salcomp focuses on the five largest
mobile phone manufacturers and on acting as their key supplier, • Maintaining the company’s market position in
which enables the company to outperform market growth. In other mobile phone chargers.
charger segments, the focus is on cordless fixed-line telephones
and bluetooth headsets. Salcomp is also a pioneer in research and • The search for additional growth in new charger segments
development, as well as production, due to its very long-term – as a primary example, the Cosmo charger product platform,
experience in the design and mass production of power supplies. which is compliant with the USB charging standard,
In fact, Salcomp is the largest manufacturer of chargers based on will enhance opportunities to expand the customer base
the switch mode technology which has captured the market, and outside the mobile phone charger segment.
Salcomp’s efficient purchasing and production operations are
superior when compared with competitors. This enables scaling
benefits in production and logistics. Salcomp has production plants
near customer operations in China, Brazil and India.
8 Vision, strategic goals and values

Strategic targeting For a number of years, Salcomp has been providing chargers for
In the 1980’s, Salcomp made a strategic decision to focus the lower voltage segment, i.e. chargers of less than 15 watts.
primarily on mobile phone chargers, which has provided the com- This segment includes, among other things, cordless fixed-line
pany with extensive experience and enabled it to achieve a tech- phones and bluetooth headsets. Furthermore, Salcomp aims to
nological leadership position. Although the annual mobile phone establish a foothold in selected medium power range charger
market is forecast to continue its growth at 10 per cent over the segments, i.e. the 15–50 watt segment.
next few years, the growth has, nevertheless, slowed down. There-
fore, Salcomp aims to seek further growth from within new charg-
er segments and to balance its customer and product portfolio.
The implementation of strategy progressing as planned

Salcomp’s mission is to create added value for the customers by providing increasingly more competitive adapters and chargers
for mobile phones and other electronic devices.
2003 2004 2005 2006 2007 2008–2010 Vision 2010

Expansion of customer base • To increase market share • To strengthen the global
in mobile phone chargers market leadership in
Globalization of operations, production plants in strategically by focusing on all the mobile phone chargers
important and low-cost countries top-5 CMT manufacturers
• To achieve strong market
CHINA BRAZIL INDIA • To achieve add-on growth position in other selected
from new charger segments low power range (<15 W)
Focusing on mobile phone switch mode chargers, and increase the product charger segments such as
which have captured over 90% of the market and customer portfolio cordless fixed-line phones
and bluetooth headsets
Stock exchange • To expand production
listing capacity and component • To achieve entry to
supplier base, especially selected medium
Strengthening of market position – market share increased from 10% to 23% in India and continue to power range (15–150 W)
develop also China and charger segments
Enhancement of operations, improving Brazil operations
profitability and increasing cash flow
First steps • To sustain better
in seeking profitability vs. competition
additional by increasing efficiency in
growth from all functions
new charger
segments, such • To sustain better cash
as the Cosmo flow vs. competition by
charger product optimizing supply chain
platform, which and increasing capacity
is compliant with low capital
with the USB expenditures
charging
standard
Values
Values guide our daily operations and relationships with our customers and other cooperation partners.
Customer satisfaction Respect and responsibility

Customer satisfaction is the basis of all our operations. We aim We respect human rights and the generally accepted ethical prin-
to fulfill the current and future needs of our customers and take ciples, and we value our customers, colleagues and other cooper-
into account their expectations in all our operations. The continuous ation partners. We accept diversity and treat each and every
development of customer satisfaction is our aim. person equally. We take responsibility for our products and
operations as well as the environment.
Achievement
We are committed to the common strategic vision and goals, and Continuous learning
we understand that the company’s profitability is the basis for We constantly develop our operations, skills and working meth-
continued operations, and promoting this is our responsibility. We ods. We remain open to new ideas, methods and feedback whilst
aim to increase the value of the company through successful and encouraging individual and progressive thinking. We identify any
profitable operations and by complying with good business practice. needs for change and development, reacting promptly to such
needs. We also accept mistakes and aim to learn from them.
Vision, strategic goals and values 9

11 Business
Salcomp is a leading manufacturer
of mobile phone chargers, as well as
a strong player in other selected
electronic device segments.
Salcomp’s strengths are the superior
efficiency in global production and
logistics as well as charger technology
leadership in product development
and innovation.

business
Salcomp manufactures mobile phone chargers and chargers for other electronic devices.
In 2007, Salcomp produced some 262 million chargers. Its global market share in mobile
phone chargers was approximately 23%, and Salcomp also has a growing market position
in other selected charger segments. Salcomp’s strengths include superior efficiency in
production and logistics as well as charger technology leadership in product development
and innovation.
BUSINESS DEVELOPMENT Net sales in 2008 are expected to continue to grow. However, due
At Salcomp, 2007 was a year of positive development: net sales to declining mobile phone charger prices the operating profit in
grew by 10% to EUR 286.2 million and the number of chargers value is expected to grow only to some extent or to remain at the
sold to 262.4 million. Operating profit grew by 67% to EUR 25.8 same level as 2007.
million and earnings per share excluding the deferred tax to
EUR 0.54. Operating profit was improved by an increase in the In addition to mobile phone chargers, Salcomp’s target is to
number of units delivered and a higher gross margin compared to broaden the customer portfolio in other selected charger seg-
last year, which was due to more effective production and ments, such as bluetooth headsets and cordless fixed-line
purchasing operations and continuous improvements in product phones.
cost structure.
12 Business

BUSINESS ENVIRONMENT
Market mobile phone market
The size of the mobile phone charger market, calculated by the development
number of units sold, depends on global mobile phone deliveries,
as the charger is a part of the mobile phone package sold to the Million pcs Growth Y-o-Y
end customer. The mobile phone market grew by approximately
1,800 18%
14% in 2007, and some 1.1 billion mobile phones, and according-
ly mobile phone chargers, were sold. 16%
Source: Salcomp, companies. E = estimate

1,600
1,400 14%
According to estimates published by Salcomp’s main customers
and various market research companies, the mobile phone mar- 1,200 12%
ket is expected to increase during 2008 by approximately 12%
1,000 10%
compared with 2007. Measured by the number of units, this
would mean approximately 1.3 billion mobile phones, and there- 800 8%
fore chargers, to be sold during 2008.
600 6%
For a number of years now, the highest growth in the mobile 400 4%
phone market has been seen in the so-called developing markets,
200 2%
such as Asia. This growth is increasingly seen in lower price range
mobile phones. The trend is forecast to continue unchanged. 0 0%
2006 2007 2008E 2009E 2010E 2011E
Salcomp also manufactures chargers for cordless fixed-line tele-

phones and bluetooth headsets. The market for cordless phones
mobile phone market
is growing steadily, but at a somewhat moderate pace. In the wire-
less bluetooth headset market, growth is more rapid; forecast to development by area
be approximately 50% in 2008.
africa and latin america north america
Million middle east
pcs
Customers 1,600
asia eastern europe western europe
The manufacture of mobile phones is highly concentrated within

1,400
the top-5 companies: Nokia, Motorola, Samsung, SonyEricsson
Source: Salcomp, companies. E = estimate

and LG. Consolidation in the market continued in 2007, and 1,200
Salcomp’s main customers increased their combined market
share. According to Salcomp’s estimates, the top-5 mobile phone 1,000
manufacturers represented as much as 83% of the market in
2007. 800
600
Development in the mobile phone market will continue to favor
the major mobile phone manufacturers. Deepening the customer 400
relationships with the top-5 companies is Salcomp’s primary goal.
200
In recent years, Salcomp has balanced its customer portfolio. As

0
a result, in 2007, the proportional share of Salcomp’s biggest 2005 2006 2007 2008E 2009E 2010E 2011E
customer, with regard to sales, was below 40%, whereas in 2003
the figure was approximately 78%. The increase in the proportional
share of new customers is emphasized by the fact that Salcomp’s
absolute total deliveries have grown significantly.
Salcomp’s market position
The cordless fixed-line phone market is also headed by a few In 2007, Salcomp’s market share, approximately 23%, was at the
major players, such as Panasonic and Siemens. The market share same level as the previous year. These estimates are based
held by major companies totals approximately 80%. on the number of chargers delivered and various companies’
and research institutes’ assessment of sales by mobile phone
In addition to major mobile phone manufacturers, owners of manufacturers.
proprietary brands of wireless bluetooth headsets also include
Plantronics and GN. Salcomp has a strong market position: in the mobile phone charger
market Salcomp is the market leader, and in the combined market
of all the various chargers, it is among the five largest players.
Salcomp’s growing market position in the cordless fixed-line

phone and bluetooth headset charger markets is based on long
experience and knowledge of mobile phone chargers as well as
tailored own product platforms.
Business 13

Competition Salcomp’s position is especially strong in the more advanced
The mobile phone charger business has been consolidating for switch mode technology, which is used almost exclusively by
several years, because the major mobile phone manufacturers mobile phone manufacturers. Salcomp is a pioneer of this techno-
are reducing the number of component suppliers in order to logy, being the first to begin the mass production of mobile phone
improve operational efficiency. However, in 2007, a few new switch mode chargers in 1988.
manufacturers entered the market, which tightened the competi-
tion further. On the other hand, some of the smaller charger compa- Switch mode chargers are smaller, lighter and faster to charge
nies withdrew from the market. than linear chargers, which form the other charger technology.
Particularly significant are the environmentally-friendly and energy-
In 2007, the combined market share of the top three mobile efficient aspects of the switch mode chargers: their energy and
phone charger manufacturers was over 60%. Customers’ de- raw material consumption is approximately 60–70% lower than
mands for cost-efficient, large-scale production and global logis- that of linear chargers. In addition, the smaller size of switch
tics services have further increased and especially favor major mode chargers enables lower transport costs. In 2007, switch
players such as Salcomp. mode chargers accounted for more than 98% of Salcomp’s sales
volume and net sales.
Salcomp is in a favorable position in the mobile phone charger
market as one of the three major charger suppliers. The other OEM and ODM products
major suppliers are Astec, an American company part of the Salcomp’s products can be divided into two groups: OEM prod-
Emerson Group, as well as a German company, Friwo, whose ucts, i.e. tailored charger concepts determined by customers, and
mobile phone charger business was sold to the Singapore-based ODM products, i.e. charger concepts based on Salcomp’s own
Flextronics in February 2008. product platforms.
The main players in the cordless fixed-line phone charger market OEM products
are Friwo and some Chinese, Taiwanese and Japanese manufac- OEM (Original Equipment Manufacturer) products are chargers
turers. The wireless bluetooth headset charger market is fairly tailored specifically to customer needs. They are normally
fragmented, and competitors primarily include small Chinese man- manufactured in large volumes and developed in cooperation with
ufacturers and some other mobile phone charger manufacturers. the customer. The majority of Salcomp’s production is based on
OEM solutions.
PRODUCTS
Typically, in one OEM product family, several variants are produced
Salcomp manufactures mobile phone chargers and chargers for for different markets. On the other hand, one product family may
other electronic devices, such as cordless fixed-line phones and well be designed to function with several phone models or other
bluetooth headsets, as well as MP3 players. In 2007, mobile electronic devices. OEM products may be constructed from initial
phone chargers accounted for over 95% of Salcomp’s sales stages or, alternatively, Salcomp’s technically-flexible product
volume and net sales. Most of Salcomp’s products are tailored to platforms can be tailored to meet the customer’s specific
meet the customers’ exact needs. requirements.
14 Business

Salcomp’s position is especially
strong in the more advanced
switch mode technology, which
is used almost exclusively by
mobile phone manufacturers.
Switch mode chargers are smaller,
lighter and faster than linear
chargers, and particularly significant
are the environmentally-friendly and
energy-efficient aspects of the
switch mode chargers: their energy
and raw material consumption is
approximately 60–70% lower than that
Salcomp’s switch mode charger range
of linear chargers.
comprises four different product platforms:
Eagle, Robin, Mini and Cosmo.
ODM products Another type of USB charger with a fixed cable and a micro or
ODM (Original Design Manufacturer) product platforms are speci- mini-USB connector can also be found in the market. This option
fied and developed by Salcomp. They are technologically-flexible has particular support from the mobile phone industry’s OMTP
and safety-approved chargers. ODM product platform chargers are (Open Mobile Terminal Platform) forum. Salcomp’s Cosmo charger
sold as they are or with minor changes, made into a charger product product platform will also support chargers equipped with a fixed
family tailored to the specific needs of each individual customer. cable and a micro or mini-USB connector.
ODM products are cost-efficient and enable fast access to the
market. Charger price development
The average sales prices in euros in 2007 decreased slightly
In addition to the products tailored to specific customer needs, particularly due to technological development and reduced
Salcomp has developed its own switch mode charger range, com- numbers of the components required, as well as lower component
prising four different product platforms, Eagle, Robin, Mini and costs. On the other hand, the decreasing price trend was slowed
Cosmo. due to tightening environmental demands, which has led to more
expensive material and component solutions. Material costs
The standardization of charger technologies usually account for approximately 70% to 80% of the total cost of
In the fall, Salcomp introduced its new Cosmo charger product each charger. In 2008, a slight decline is expected in average
platform, enabling the charging of mobile phones and many other sales prices.
electronic devices by a separate cable equipped with a USB
connector. From July 2007, any new mobile phones sold in the
Chinese market have had to support a USB charger instead of
manufacturer-specific applications. This means that the charger
has no fixed cable; instead, it has a USB connection, familiar from
computer applications, with the corresponding separate cable to
be found in the mobile phone package.
Cosmo
Business 15

RESEARCH AND DEVELOPMENT
Salcomp’s aim is to continue to provide customers with new
ideas and solutions through close cooperation. The main aims of
R&D processes Salcomp’s R&D are two-fold. Primarily, Salcomp serves custom-
ers’ needs by seeking new, more cost-effective solutions for the
Salcomp’s R&D operations are carried out in two different current charger technology. At the same time, Salcomp’s R&D
processes: Research and New Technology Development, looks to find alternative solutions and develop the power supplies
as well as Engineering. The majority of resources are of the future. The company’s pioneering strategy also involves
dedicated to Engineering. close cooperation with many research and educational institu-
tions.
RESEaRCH AND NEW TECHNOLOGY DEVELOPMENT For Salcomp, one of its most important success factors are its
skills and knowledge in demanding product development projects

carried out in cooperation with the customers. Salcomp’s product
The aim is to expand knowledge of new power
development knowledge is demonstrated both in its ability to
supply concepts and energy sources as well as
optimize the devices to be designed for mass production and in
develop technologies for future use
creating new technological solutions.
In cooperation with customers, universities
and suppliers Operating policy
Major mobile phone manufacturers usually require highly-tailored
New production concepts to be tested products to meet their own special requirements. As normal
and validated procedure, mobile phone manufacturers aim to spread the
manufacture of the specific chargers they require, between 2 to
The suitability of new concepts for 4 suppliers to whom the delivery orders are allocated.
engineering needs to be ensured
The specifications of a new charger are usually developed in
cooperation with a single charger manufacturer, after which this
manufacturer can be the first to start mass deliveries. The speci-
fications of a new charger will also be submitted to the competi-
ENGINEERING
tors of the supplier responsible for the design, and they will aim
A new product aimed at mass production is to develop their own solutions to produce a charger with the
developed, together with its production required specifications. This will ensure that each new charger will
process and tools be produced by more than one supplier who will be competing
mainly on the basis of quality, delivery assurance and pricing.
A crucial competitive factor in Salcomp’s business sector is the

ability to respond quickly to customer demands during the critical
phase when the customer solicits proposals for a new charger.
Salcomp spends most of its R&D resources on charger products

and technologies related to mobile phones. However, the
company can also dedicate resources to other selected charger
segments.
During 2007, Salcomp’s R&D function comprised 110 people on

average. Research and development costs were EUR 4.8 million,
or 1.7% of net sales.
Focus areas and challenges

During 2007, the company focused on improving the cost struc-
ture of existing products, researching the new integrated circuit
technology and strengthening the human resources in product de-
velopment. Salcomp also developed a new charger product family,
the Cosmo charger, which enables charging via a USB cable.
The future R&D challenges will include the development of faster

and more efficient chargers, improvement in the energy-effective-
ness of chargers and, especially, reducing the stand-by energy
consumption. Requirements relating to the environmentally
friendly aspect of chargers will also have an impact on their
development, e.g. rFR issues (Restriction of Flame Retardants).
Salcomp is also involved in the research into alternative energy
sources, such as fuel cells and solar energy, even though they
do not at present have considerable significance.
16 Business

PRODUCTION Logistics
Salcomp’s production plants are located in Shenzhen, China, For Salcomp’s customers, the ability to deliver large volumes
Manaus, Brazil and Chennai, India. To some extent, Salcomp also globally and to function seamlessly as a part of their own
uses outsourced contract manufacturing. logistics system, are essential selection criteria for suppliers.
Efficient logistics and the ability to provide global services give
Salcomp is the only major mobile phone charger manufacturer Salcomp a crucial competitive edge.
with its own production in China, South America and India.
As is common within the business sector, Salcomp’s business is
mainly based on non-binding volume forecasts received from
Production resources customers, as opposed to binding orders and agreements.
Shenzhen plant, China Salcomp mainly supplies its products to customers through
• The number of personnel consignment stocks maintained by customers or third parties
was approximately 6,800, located in various geographical areas. The finished products
with an annual capacity remain the property of the company until the customer has taken
of over 250 million them into use from the consignment stock. Salcomp manu-
chargers at the end of factures chargers for these consignment stocks on the basis of
2007 volume forecasts given by its customers. Salcomp continues to
• Highly optimized work in close cooperation with its key customers and suppliers to
ensure efficiency and a high level of customer service all along
production system,
enabling operations at the supply chain.
very low working capital
and small material QUALITY
inventories Salcomp complies with extensive quality control systems and
• Manufactures chargers for mobile phones, cordless fixed-line policies, which are applied not only to Salcomp’s manufacturing
phones and bluetooth headsets, as well MP3 players processes but also to the processes of its suppliers and subcon-
tractors. A wide range of quality performance metrics is continual-
• Still possible to achieve a fast and cost-effective increase in ly collected and monitored.
the plant capacity
In addition to its own quality control measures and internal
audits, Salcomp’s major customers and independent rating
Manaus plant, Brazil institutions regularly conduct quality audits of the company’s
• The number of personnel operations. The company’s production plants in China, Brazil and
was approximately 1,600, India are ISO 9001 certified, as are its R&D, product development
with an annual capacity and sales and marketing globally.
of over 40 million chargers
at the end of 2007
ENVIRONMENT
• Manufactures chargers for With regard to the environment, Salcomp aims to develop both its
mobile phones, cordless
products and operations to be as efficient as possible. Environ-
fixed-line phones and
mental thinking has been extended to cover the entire life cycle of
bluetooth headsets
the products, and environmental and safety issues are considered
from the outset, i.e. from the product design and development
stages. The company’s production plants in China, Brazil and
Chennai plant, India
India are ISO 14001 certified, as are its R&D and sales and
• First customer deliveries marketing globally.
in June 2007
• Over 10 million chargers Chargers manufactured by Salcomp are energy-efficient, and the
manufactured during 2007 use of materials is tightly controlled. From the beginning, Salcomp
has focused on chargers based on the environmentally-friendly
• Aiming to achieve an switch mode technology.
annual capacity of
100 million chargers Due to continuous development, Salcomp’s production processes
during 2008 are efficient, with continuous optimization ensuring the lowest
• The land where the production building stands allows for possible environmental load per unit produced. This favorable
trend can also be seen in all key figures obtained by monitoring
expansion if required
the Group’s environmental system, both globally and locally.
Further information on environmental issues can be found on
São Paulo, Brazil pages 24–25 of the Annual Report.
• Contract manufacturing
• Manufactures chargers for mobile phones
Business 17

risks and risk management
The purpose of Salcomp’s risk management is to identify the risks and possibilities
that may have an impact on the implementation of Group strategy. The aim of risk
management is to support the achievement of goals set out in the strategy by ensuring
that the Group’s risk-taking activities are in proper equilibrium with its risk-bearing
capacity. Salcomp’s risk management policy, strategic choices and long-term financial
goals form the basis of its risk management.
Risk Management Policy Risk Management Development

The Group’s Board of Directors approves a risk management policy, Risk management development is primarily based on business
which determines its risk-bearing capacity and risk-taking princi- requirements. The Group aims to prevent risks by developing
ples, as well as risk management principles. The risk management processes and personnel skills.
policy also details the company’s business risks, risk management
functions, responsibilities and organization, risk management proc- Risks and Risk Management
esses and risk management control.
Salcomp has adopted a holistic approach to risk management.
Risk has been defined as any internal or external threat or uncer-
Risk Management Organization tainty that can prevent or jeopardize operations and the achieve-
Salcomp’s Board oversees the company’s risk management. ment of goals. Risks are categorized as strategic and business
Salcomp’s management is responsible for organizing and over- risks or financial risks. Further information on financial risks and
seeing the risk management process in day-to-day operations. their management can be found on pages 68–71 of the Annual
The management is also responsible for customer relations and Report.
risk-taking activities within the limits set out in the company’s risk
management policy.
18 Risks and risk management

Risks related to the achievement of strategic goals and the imple-
mentation of company strategy are studied and analyzed annually
as part of the strategic process, and whenever deemed neces-
sary. At the same time, changes that have taken place or are
expected to take place within the business environment and the
competitive situation, are evaluated together with their possible
effects on the implementation of the strategy.
The most significant operational risks at Salcomp are related to

the general development of the mobile phone market, the ever-
increasing competition, standardization of the charger technology,
dependence on key customers, business activities in the develop-
ing market, price development in raw materials and components,
as well as the availability of professional personnel and manage-
ment.
Major risks
Dependence on the general development of
the mobile phone market
Approximately 95% of Salcomp’s sales are derived from mobile
phone chargers, with sales volumes closely following the number
of new mobile phones sold. The mobile phone market trend over
the last few years has been favorable, and research institutes
expect this positive trend to continue.
Competition in the mobile phone market

Competition in the mobile phone market is fierce, and Salcomp’s
global competitors also include large enterprises. New companies
with greater resources than those of Salcomp may also enter the
market. Salcomp’s most significant competitive factors include
product quality, cost-efficiency, product development, global
operations and logistics, as well as flexibility. Operations in the developing market
Salcomp has production operations in the developing markets of
Standardization of charger technology China, Brazil and India. Additional risks are involved when operat-
ing in these market areas, possibly causing extra expenses that
The standardization of mobile phone chargers, including USB-type
are difficult to predict, or otherwise weakening the company’s
chargers, could, in the future, lead to a development where the
financial position. Such risks include changes made by the
charger is not always necessarily included in the mobile phone
authorities to the regulations governing operations in the industry,
sales package. This could have an impact on Salcomp’s current
interpretations placed on these regulations, exchange rate
business model. Salcomp also manufactures chargers based on
variations, unexpected changes to customs or trading regulations,
the USB charger standard. These include Salcomp’s own Cosmo
energy availability, possible strikes, as well as political and
charger platform products, as well as customer-specific USB
financial instability.
chargers. Further information on the standardization of the charger
technology can be found on page 15 of the Annual Report.
Raw material and component price development
Dependence on key customers In the future, there may be an over-demand for some raw materials
and components required for mobile phone chargers, or it may be
Salcomp’s customer base is concentrated and deterioration in the
that some materials can only be ordered from a limited number of
financial position of a major customer may have a negative
suppliers. Salcomp aims to limit the risks related to the availability
impact on Salcomp’s sales and profitability. Although Salcomp’s
of raw material components by using at least two different
biggest customer’s share of the Group’s net sales is below 40%,
suppliers for each component.
the few major customers together account for over 95% of net
sales. In addition, Salcomp is relatively small compared to its
main customers. However, Salcomp’s management believes that Dependence on professional management and
Salcomp is well poised to improve its position as a key supplier personnel
to its current customers. Switching to a new supplier would result Salcomp’s success is largely dependent on the skills and contri-
in significant transfer costs to the customer and would take bution of its key personnel. The Group’s future success is also
some time because of the need to ramp up the capacity required dependent on its ability to strengthen the organization through
to replace Salcomp. the recruitment of new personnel. In each country, Salcomp aims
to be an attractive employer and by various ways to encourage a
low turnover of personnel.
Risks and risk management 19

corporate responsibility
Responsibility is the cornerstone of Salcomp’s operations and an integral part of every-

day activities. Salcomp develops its business operations according to the principles of
sustainable development and carries out international competition according to
accepted ethical principles. In 2007, the company focused particularly on the
development of interest group cooperation and continued to harmonize and
streamline practices and guidelines.
guiding the responsibility Salcomp’s operations are guided by

Responsible operations at Salcomp are based on compliance with
both international and national laws and regulations, as well as • Corporate Governance Statement
respect for international human rights and employees’ rights. • Code of Conduct
• Mission, Vision and Values
As part of the harmonization of Salcomp’s practices, at the end of • Policy Statements
2007, upgrading and recording the Code of Conduct guidelines • Standard Operating Procedures
was started. These guidelines lay down ethical operating methods • Global Working Instructions
and principles that comply with good business practice. The • Local Working Instructions
Code of Conduct was completed and introduced at the beginning
of 2008. The Code of Conduct can be found on Salcomp’s website at
www.salcomp.com – Corporate Responsibility.
20 Corporate responsibility

Responsibility within the various In addition, theme-based training programs aimed at all employ-
interest groups ees and covering subjects as health, hygiene and safety were
launched.
Salcomp aims to be a reliable and responsible partner with all
interest groups.
Practical examples of interest group
Customers and customer satisfaction are the basis of all cooperation in 2007
Salcomp operations. Customer satisfaction is monitored by the In connection with the launch of the plant in India, Salcomp was
customer satisfaction survey, carried out twice a year. The results involved in the organization of a training program aimed at young
from these surveys are used for the continued development and mothers in the state of Tamil Nadu. The aim of the program is to
improvement of Salcomp’s processes and procedures. support the well-being of mothers by increasing their knowledge
of health-impacting factors.
Salcomp is a significant purchaser of raw materials, components
and services: in 2007, Salcomp purchased approximately 16 In their Christmas campaign, the Brazil plant personnel in
billion components. Salcomp aims to use only suppliers who are Manaus collected foodstuffs and gifts to be donated to those with
committed to following ethical operating methods and legislation. limited means.
This is monitored by visits to suppliers and auditing. Suppliers
are also met during annual supplier events. In June, Salcomp’s plant in Shenzhen received recognition
from the regional authorities as a responsible employer for
Salcomp is a significant local player in China, Brazil and India. the conscientious compliance with the laws and regulations
Regular and open cooperation with local authorities and other pertaining to the labor market.
local communities ensures that both parties benefit from the
operations. Product Safety
Product safety is a significant part of corporate responsibility and
Personnel is one of Salcomp’s most important interest groups. one of the most important quality factors for Salcomp. Product
Through cooperation and communication, Salcomp aims to safety is ensured at the planning stage, and each charger is
increase the personnel’s motivation, skills and commitment to designed to meet the necessary electrical and product safety
common goals. Special attention has also been given to working standards of their market areas. Product safety is verified at
and living conditions which are particularly important at the plant in Salcomp’s test laboratories. In addition, Salcomp always uses an
China, where the majority of the employees live in dormitories approval policy performed by a third party.
near the plant. Renovations of dormitories continued and free-
time activities were increased.
Corporate responsibility 21

personnel
Professional, motivated and skilled personnel committed to company goals is a significant
factor in the realization of Salcomp’s goals. In 2007, the focus was especially on securing
growth; among other things, over 1,200 people were hired at the plant in India, which
began operations in June.
human resources management Challenges for human resources

At Salcomp, human resources management is based on company management
strategy, goals, human resources policy and performance reviews, Global operations and the large number of personnel create
as well as interaction at different levels. The objective of human challenges to Salcomp’s human resources management. To
resources management is to create a basis for operations, ensure continued trouble-free operations, both during internal
secure resources and guide operations in order to achieve goals. changes and within the changing environment, explicit and
planned human resources management is required. The purpose
The most important tool for the development of management and within the varying cultures is to act according to the Salcomp
skills is the performance review, which at Salcomp is called a Spirit and to observe the generally agreed rules, as well as local
SAMPO discussion. At these discussions, organized at least twice laws, statutes and current agreements.
a year, the personal achievements of each employee will be
evaluated and future targets set. The purpose is to ensure that Development of personnel skills
each person understands their agreed targets, receives feedback
and is thereby able to develop his/her skills according to a Salcomp’s main business is information technology, which is one
personal development plan. of the most rapidly growing and developing sectors. This places
special importance on the need for development of the company
and its personnel. The personnel’s ability to perform their tasks
well is maintained and improved by continuous skills develop-
ment. The continuous development of personnel through training
guarantees that Salcomp has skilled personnel, prepared to do
well in new situations or with changing requirements. The purpose
of training is to provide the personnel with opportunities to
develop and improve their skills, which also enhances the
advancement opportunities of each individual.
22 Personnel

incentive system
An incentive system, or a so-called Bonus System, which rewards
good performance, applies to all Salcomp employees. The aim of personnel by geographical area
the incentive system is to encourage employees to achieve peak
performances by sharing the Group’s success with the personnel,
and to enhance the commitment of personnel to the established
goals. The incentive system indicators include the Group’s brazil 16%
operating profit, cash flow and various indicators linked to
processes, personal targets and projects. In 2007, Salcomp paid
a total of EUR 36.2 million in salaries and fees.
india 13%
Equal opportunities
china 70% finland and
The basis for Salcomp’s operations is fair treatment for all. At the united
Salcomp, each individual is respected regardless of their gender, states
beliefs, age or other factors. The workplace is developed in such 1%
a manner that it will not set any barriers to the implementation of
equal opportunities. Gender, age, beliefs or family policy factors
shall not disadvantage people with regard to remuneration,
bonuses, reorganizations, training or recruitment.
Personnel in 2007
At the end of 2007, Salcomp employed a total of 9,722 people,
of whom 65 worked in Finland; 1,586 in Brazil; 6,815 in China;
1,253 in India; and 3 in the United States. The increase in the personnel by operations
number of personnel was mostly due to increased production
volumes and the start-up of the plant in India.
Focus areas in 2007

In 2007, human resources management at our various sites were
enhanced. In October, Niilo Oksa was appointed as Vice President administration,
of Human Resources and a member of the Management Team. sales &
The number of personnel increased by over 20%, which created marketing
production
2%
its own challenges in regard to the induction and embracing 97%
of corporate culture. Over 1,200 employees were recruited for
R&D
the new plant constructed in India. At each site, training was
1%
organized for both new and existing employees.
Goals for 2008

The Global HR Management Team, which was created at the end
of the year, has set as its goal the creation of common operating
guidelines and human resources management processes for
the entire Group. In addition to Group representatives, the HR
Management Team comprises the HR Managers from all
Salcomp’s production plants. The work has already started and
ethical operating principles have been recorded in the common personnel by gender
Code of Conduct document. Also, a common HR Policy has been
created for the Group, and the key performance indicators relating
to 2008 have been agreed upon. These include: reducing the
turnover of personnel, further enhancing recruiting methods and
quality, as well as enhancing training activity. The aim is also to
carry out a personnel survey of the entire Group concerning the
positive aspects of Salcomp’s corporate culture, as well as any female 86%
areas that require further development. Furthermore, the aim is
to continue the development of operations according to the
company values, enhance the management practices and
methods, determine the needs for skills development by function
and area, enhance internal interaction and communication, as male 14%
well as human resources management, especially at Group level,
and to harmonize the expatriate administration.
Personnel 23

environment
Salcomp aims to develop both its products and operations to be as environmentally-friendly
as possible. Corporate responsibility in environmental issues means the prevention and
minimization of environmental effects and risks throughout the product’s life cycle. In 2007,
the company focused particularly on the environmental certification of the plant in India,
the improvement of energy-efficiency of the machines at the plant in China and
increasing the level of the recycling of plastic raw materials.
Salcomp’s Environmental Policy Due to continuous development, Salcomp’s production processes

The management of Salcomp’s environmental issues is based on are efficient, with continuous optimization ensuring the lowest
the development programs and guidelines derived from the Group’s possible environmental load per unit produced. This favorable trend
environmental policy, as well as its risk management policy. can also be seen in all key figures obtained by monitoring the
Group’s environmental system, both globally and locally.
Key principles: Salcomp operates in an industry sector where its customers are
• Successful business operations require sustainable particularly well aware of environmental protection issues, which
also encourages Salcomp to exceed official requirements for the
environmental activities, which take into account the
entire life cycle of a product. products and the company itself.
• We maintain an open, active and ethical approach to From the outset, Salcomp has focused on the manufacture of
chargers based on the environmentally-friendly switch mode
environmental issues.
technology. First introduced by Salcomp in 1988, this charger
• We are committed to complying with the laws and technology has now almost completely replaced the older linear
regulations governing environmental issues. technology in mobile phone charging. Chargers based on the switch
• We aim to continuously improve our environmental activities mode technology have the advantage of a better utilization ratio
and clearly better stand-by energy consumption. In addition, the
by regularly setting new goals according to the principles
of sustainable development. smaller size of switch mode chargers enables lower transportation
costs and reduces the amount of materials to be used.
The products’ effects on the environment
Environmental certifications and programs
Salcomp’s chargers are energy-efficient, and the use of materials is
tightly controlled. Environmental thinking has been extended to The company’s production plants in China, Brazil and India are ISO
cover the entire life cycle of the products, and environmental and 14001 certified, as are its R&D and sales and marketing globally.
safety issues are considered from the outset, i.e. from the product
The implementation of environmental protection is regularly
design and development stages. The products and their packaging
monitored through internal and third-party inspections as part of
are continuously being improved to make them easier to recycle.
the standardized environmental system. Moreover, many customers
24 Environment

require a stricter application of environmental criteria than the
official regulations and ISO standards. Salcomp requires that its
material and services suppliers commit to the same philosophy.
energy consumption
Key environmental figures
kWh/charger
Salcomp constantly monitors effects on the environment. The most
0.18
significant environmental considerations at Salcomp relate to
energy and water consumption, the use of materials and raw 0.16
materials, as well as the generation of waste.
0.14
0.12
Environmental events in 2007
In 2007, the key focus was on the environmental certification of 0.10
the new charger manufacturing plant in India. This progressed 0.8

according to the planned schedule, and the certification was
granted to Salcomp in September 2007. The improvement of the 0.6
energy-efficiency of the machinery at the plant in China also went 0.4

according to plan, achieving savings in power consumption of
approximately 10% per charger produced. 0.2
0
Due to a project carried out together with a key customer, to 2004 2005 2006 2007
increase the level of recycling of plastic materials, the amount of
plastic materials used decreased by 5,000 kg during the year. As
a knock-on effect of the project, the requirement for raw materials
will be reduced by 170,000 kg in 2008.
water consumption
During the year, Salcomp has successfully implemented all product
requirements related to environmental protection set by authorities Liters/charger
and its customers. Moreover, the regular assessments performed 4.5
by several customers and authorities on the environmental system,
and the requirements aimed at continuous development, have been 4.0
taken into account, and the system has been further developed to 3.5
meet growing customer demands.
3.0
In 2007, the company did not exceed the permitted limits, nor were
2.5
there any cases recorded where the company would not have
complied with environmental regulations as appropriate. 2.0
1.5
Goals in 2008
1.0
Salcomp annually aligns its Group-level environmental goals at
the time when its strategy is formulated, with each unit actively 0.5
applying and following these goals. Salcomp’s management also 0

regularly monitors the trends in these key figures. 2004 2005 2006 2007
In product development, the company focuses on further improving

the environmentally-friendly properties of its products. The most
important targets are the utilization ratio, stand-by efficiency and
the selection of environmentally-friendly raw materials. waste
The technology used in various key processes is reassessed in g/charger Recycling

order to improve the level of raw materials use and to reduce the ratio
10 100%
amount of waste. The energy consumption and amount of waste at
Salcomp’s plants are monitored monthly and assessed against set 9 90%
targets. 8 80%
In addition, together with local suppliers, the company aims to 7 70%

reduce its use of packing board and adopt recyclable packaging. 6 60%
REACH, the European Union chemicals regulation, became effective 5 50%

as of the beginning of 2007. The new regulation significantly 4 40%
increases the registration, testing and risk evaluation costs for
3 30%
chemical products to be sold in or imported to the EU and those
already in general use. Currently, Salcomp is not manufacturing or 2 20%
importing to the EU any materials covered by REACH. 1 10%
0 0%
2004 2005 2006 2007
Environment 25

27 Shares and
shareholders
Salcomp’s shares have been quoted on
the Nordic Exchange in Helsinki since
March 2006. During 2007, the share price
strengthened by 51%. At the end of the
year, Salcomp had 1,210 shareholders.
Foreign ownership accounted for
60.0% of Salcomp’s shares.

shareS and shareholders
Salcomp’s shares are quoted on the Nordic Exchange in Helsinki. During 2007, the share
price strengthened by 51%. The Annual General Meeting will be held on 10 April 2008,
and the Board of Directors will propose to the General Meeting a distribution of
dividends for 2007 of EUR 0.15 per share. Further details can be found on page 92.
The total for the shares sold was EUR 72.1 million and the
number of shares sold 19.0 million shares. The market value for
Basic Information of the Share the total number of shares at the end of the year was EUR 152.8
million.
• The shares of Salcomp Plc have been quoted on Ownership
the Nordic Exchange in Helsinki in the Information
Technology sectors’ Mid Cap from March 2006. At the end of 2007, Salcomp Plc had 1,210 registered sharehold-
ers. Foreign ownership accounted for 60.3% of Salcomp’s shares,
• The ticker is SAL1V and the 56.0% held by the Swedish company Nordstjernan AB. Another
ISIN code FI0009013924. large ownership group comprised Finnish financial and insurance
institutions with a 21% holding.
• The market value of Salcomp on 31 December 2007
was EUR 153 million. Flagging
On May, 2007, DWS Investment GmbH, a subsidiary of Deutsche
• The average price in 2007 was EUR 3.76 and the Bank AG, announced that its holding of Salcomp Plc’s shares and
closing price EUR 3.92 at the end of the year.
voting rights had decreased to less than 5%. At the time of the
announcement, DWS Investment GmbH held 1,755,000 shares,
• Overall trading totaled EUR 72.1 million corresponding to 4.5% of Salcomp’s shares and voting rights.
and 19.0 million shares.
EQT II B.V., acting on behalf of EQT II Swedish Non-Registered
Partnership, and Nordstjernan AB announced on 25 June 2007
that they had signed a sale and purchase agreement under which
EQT sold 11,653,581 Salcomp shares to Nordstjernan. In addi-
Share Capital and Shares tion, Nordstjernan had the option to acquire the remaining shares
The company’s registered share capital amounts to EUR held by EQT and Nordstjernan used the option on 16 August
9,832,735.12 divided into 38,975,190 fully paid shares. At the 2007. After the relevant authority approvals had been received,
Annual General Meeting in March, the Articles of Association were the acquisition was completed on 12 September 2007. After this,
amended to include the possibility of increasing or reducing the Nordstjernan owned 20,382,131 Salcomp shares which corre-
share capital and increasing or reducing the number of shares with- sponded to 52.3% of the share capital and votes. EQT’s holding
out having to change the Articles of Association. This amendment decreased to zero.
was registered in the Trade Register on 23 April 2007.
According to the Securities Market Act, Nordstjernan was obliged
The company has one series of shares, and all the shares entitle to make a mandatory bid for all outstanding shares and securities
to equal rights in the company. The share has no nominal value. entitling to the shares in Salcomp at the highest price for which
The company’s shares have been incorporated into the Finnish Nordstjernan had acquired shares in Salcomp during the previous
book-entry system. six months, i.e. EUR 4.01 per share and EUR 0.98 per option right.
The offer period of the tender offer commenced on 14 September
At the end of 2007, the company, or its subsidiaries, did not hold 2007 and expired on 5 October 2007. Seventy shareholders, hold-
any company shares, nor has the General Meeting of Sharehold- ing 850,622 shares in Salcomp and representing 2.2% of the
ers authorized the company to acquire any own shares. shares and votes, tendered their shares in Nordstjernan’s public
tender offer. Nordstjernan’s holding rose to 21,232,753 shares
Trading with Salcomp Shares and 54.5% of the outstanding shares. At the end of the year, Nord-
stjernan’s holding in Salcomp was 56.0%.
During the year, the Salcomp share price fluctuated between
EUR 2.63 and EUR 5.03. The average price was EUR 3.76 and
the closing price at the end of the year EUR 3.92. The share price
strengthened by 51% during the year.
28 Shares and shareholders

Dividend Principles Premium Fund
The Board of Directors of the company adopted dividend princi- The AGM decided, in accordance with the Board’s proposal, to
ples whereby the Board of Directors intends to annually propose reduce the premium fund on the Parent Company’s balance sheet
to the General Meeting of Shareholders a distribution of dividend on 31 December 2006 by transferring the total amount of the
of no more than one-third of the average long-term earnings, pro- premium fund, EUR 23,690,992.21, into the company’s invested
vided this will not jeopardize the growth requirements stated in unrestricted equity. The realization of the decision required the
the company’s strategy. The amount of dividend, if any, will be implementation of publication proceedings according to Chapter
subject to the company’s future earnings, financial position, cash 14 of the Companies Act, and it was completed in August 2007.
flow, working capital needs, investments, and terms and condi-
tions, as well as covenants of financing agreements among other Management Share and Option Right
factors.
Holding
Dividend Distribution Proposal 2007 On 31 December 2007, the Board members, the CEO and the
Management Team members of Salcomp held a total of 650,607
The Board has decided to propose to the General Meeting of shares, i.e. 1.7% of the voting rights.
Shareholders a distribution of dividends for 2007 of EUR 0.15
per share. Dividends determined at the General Meeting of Share- At the end of 2007, the Company Management Team held
holders shall be distributed to all shareholders who, on the 265,000 option rights 2007A in Salcomp. The Board members
record date 15 April 2008, have been entered in the share- did not hold option rights at the year end.
holders’ register, maintained by the Finnish Central Securities
Depository. The share and option right holdings of the Board and the Manage-
ment Team can be found on the homepage of the company’s
Share-based Incentive Systems website www.salcomp.com – Investors – Insiders.
The Annual General Meeting in spring approved the Board proposal
of granting stock options to key personnel of the company and, Shareholder Agreements
as well as a fully-owned subsidiary of the company, Salcomp Salcomp is not aware of any shareholder agreements associated
Manufacturing Oy. The options rights 2007A, 2007B and 2007C with the company’s shareholding and voting rights.
will give the right to subscribe for up to 2,047,500 new shares of
the company.
The Board’s Authority to increase Share
A total of 610,000 stock options 2007A were distributed to the Capital
Group key personnel. The rest of the stock option 2007A, 47,500 The AGM authorized the Board of Directors to decide on offering a
option rights, were granted to Salcomp Manufacturing Oy. maximum of 8,000,000 new shares for subscription through a
share issue pursuant to Chapter 9, Section 2 (2) of the Compa-
The share subscription period for stock options 2007A will be nies Act or by granting options or other special rights entitling to
1 April 2010–31 March 2012, for stock options 2007B 1 April shares referred to in Chapter 10 of the Companies Act. The Board
2011–31 March 2013 and for stock options 2007C 1 April has, based on the authorization, the right to deviate from the
2012–31 March 2014. In accordance with the Board resolution, shareholders’ pre-emptive right to subscribe new shares. The
the share subscription period for 2007A will begin on 1 April 2010, authorization is valid until 30 June 2008. The authorization has
at the earliest, provided that the total shareholder return of not been used.
Salcomp Plc (value increase + dividends) has been at least 8% per
annum.
IR Principles
The share subscription price for stock option 2007A was EUR 3.03, The aim of the Investor Relations at Salcomp is to provide all capi-
i.e. the trade volume weighted average quotation of the company tal market participants with regular and equal access to correct,
share on the Nordic Exchange in Helsinki during twenty trading days sufficient and up-to-date information as a basis for the Salcomp
preceding the 2007 Annual General Meeting of Shareholders of the share price.
company held on 29 March 2007, EUR 0.06 dividend distributed
for the financial year 2006 deducted, and for stock option 2007B, Salcomp has defined a two-week silent period preceding the publi-
the trade volume weighted average quotation of the company share cation of its full-year result and Interim Reports. During this period,
on the Nordic Exchange in Helsinki during twenty trading days after Salcomp will not meet with capital market representatives.
the publishing of the company’s financial statements for the finan-
cial year 2007, and for stock option 2007C, the trade volume
weighted average quotation of the company share on the Nordic
Exchange in Helsinki during twenty trading days after the publishing
of the company’s financial statements for the financial year 2008.
Dividends distributed annually will be deducted from the share
subscription prices.
The terms and conditions of the stock options 2007 are available
on the company’s homepage at www.salcomp.com – Investors –
Share Information. Information on option rights is also provided in
the Notes to the Consolidated Financial Statements.

shareholders
By the number of shares 31 December 2007
Shares Shareholders Shares
Number of % Number of %
1–1,000 770 63.6 365,066 0.9
1,001–5,000 288 23.8 704,717 1.8
5,001–10,000 68 5.6 488,751 1.3
10,001–50,000 46 3.8 1,026,043 2.6
50,000– 38 3.1 36,390,613 93.4
Total 1,210 100.0 38,975,190 100.0
shareholders
The 20 largest shareholders according to the 31 December 2007 shareholders’ register
Shareholder Number of shares Holding, %
Nordstjernan AB 21,841,753 56.04

Sampo Life Insurance Company Limited 3,724,000 9.55
OP-Finland Small Firms Fund 1,418,447 3.64
Kaleva Mutual Insurance Company 1,218,473 3.13
Thominvest Oy 802,284 2.06
Odin Förvaltnings AS 786,560 2.02
Carnegie Share Fund 735,378 1.89
Veikko Laine Oy 591,066 1.52

Ilmarinen Mutual Pension Insurance Company 500,000 1.28
Laakkonen Mikko Kalervo 500,000 1.28
Vuorialho Kari Tapio 447,286 1.15

SEB Gyllenberg Small Firm Fund 337,643 0.87
Sijoitusrahasto Aktia Capital 330,000 0.85
Laine Mika 300,000 0.77
Nordea Bank Finland Plc 250,000 0.64

Aktia Secura Fund 220,000 0.56
Onnivaatio Oy 199,948 0.51

FIM Securities Ltd 192,674 0.49
Onninen-sijoitus Oy 180,000 0.46
Suomen Outperform Oy 90,000 0.23
Nominee registered 837,136 2.15
Others 3,472,542 8.91
Total 38,975,190 100.00
30 Shares and shareholders

share indicators
Ownership Distribution
31 December 2007
2007 2006
Basic earnings per share

0.47 0.20
(EPS), EUR
Diluted earnings per share
0.47
(EPS), EUR households
foreign 10%
Earnings per share excluding
0.54 0.28 owners 60%
the deferred tax, EUR public
corporations
Equity per share, EUR 1.76 1.36 2%
financial and
P/E ratio 8.4 12.9 insurance
institutions
21%
Average price, EUR 3.76 2.88
companies 7%
Highest share price, EUR 5.03 3.69
Lowest share price, EUR 2.63 2.13
Share price on 31 December,

3.92 2.60 share price development
EUR
Market value 31 December,
152.8 101.3 EUR share omx helsinki index
EUR million
5.0
Traded shares, EUR million 72.1 88.7

4.5
Number of shares traded 18,985,963 29,208,378
% of total 48.7 74.9 4.0
Average number
38,975,190 37,808,067
of shares 3.5
Number of shares at the

38,975,190 38,975,190
end of period 3.0
Diluted weighted average

39,057,819 2.5
number of shares
2.0
4/06 7/06 10/06 1/07 4/07 7/07 10/07 12/07
calculation of share
indicators
Earnings per share Profit for the period share trading volume
Weighted average number of
shares outstanding Million pcs pcs/month
6.0
Earnings per share, Profit for the period

5.0 *
diluted Weighted average number of shares
outstanding, adjusted for the share
issue 4.0
3.0
Equity per share Equity
Number of shares outstanding
2.0
on 31 December
1.0
P/E ratio Closing price
(price per earnings) Earnings per share
0
3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12
2006 2007
Market value Closing price x number of shares * Excluding the 11 million shares sold in the initial public offering
on 31 December

33 Corporate
Governance
Salcomp Plc is a public limited liability

company, which, in its decision-making
and administration, complies with the
Finnish Companies Act, other regulations
and recommendations concerning
public companies and Salcomp’s
Articles of Association.

Corporate governance
Salcomp Plc is a public limited liability company, which, in its decision-making and
administration, complies with the Finnish Companies Act, other regulations concerning
public companies and Salcomp’s Articles of Association. In addition, Salcomp complies
with the Guidelines for Insiders by the Nordic Exchange in Helsinki and the Corporate
Governance Recommendation for Listed Companies issued in 2003 by Hex Plc, the
Central Chamber of Commerce of Finland, and the Confederation of Finnish Industry
and Employers.
GENERAL MEETINGS address of the shareholder entered into the share register at
The highest decision-making power at Salcomp is exercised by least seventeen days before the meeting. The notice to convene
the company’s shareholders at General Meetings convened by shall state the matters to be discussed at the General Meeting.
the company’s Board of Directors. These meetings consist of
Annual General Meetings and, if necessary, Extraordinary Gene- The notice to convene the 10 April 2008 General Meeting of
ral Meetings. Shareholders has been published in the Finnish newspapers
Helsingin Sanomat and Kauppalehti.
The Annual General Meeting must be held by the end of May
each year and is to deal with all matters that fall under its aut- The prospective candidates for the Board of Directors notified to
hority according to the Articles of Association, as well as other the Board should be disclosed in the notice to convene or, if the
proposals made to the General Meeting. When considered notice has already been published, by some other method befo-
necessary, an Extraordinary General Meeting is convened to re the General Meeting, provided that they have given their
discuss a specific proposal made to the General Meeting. written consent for their election and are supported by at least
10% of the total votes of all the company shares.
Usually, a General Meeting deals with all matters included in the
agenda by the Board of Directors. Major matters subject to the The candidates proposed after the delivery of the notice to con-
decision-making power of a General Meeting include: vene should be disclosed separately. In addition, the proposal
for the election of an external auditor given by a majority share-
• amendments to the Articles of Association holder or prepared by the Board should be disclosed in the
• increases and decreases to the share capital notice to convene.
• decisions on the number, election and remuneration Attendance
of all Board members
• the adoption of the Financial Statements A shareholder who has been registered as a shareholder in the
• the distribution of profit company’s shareholders’ register, held by the Finnish Central
Securities Depository Ltd, ten days prior to the meeting, has the
According to the Finnish Companies Act, a shareholder may pre- right to participate in a General Meeting. A shareholder wishing
sent a written request to the company’s Board of Directors to to attend a General Meeting must register in advance before the
place a matter on the agenda of the next General Meeting. If a date stated in the notice to convene.
shareholder, or shareholders, holding a minimum of 10 per cent
of all shares, or the company’s auditor, request in writing for the Shareholders may exercise their right at the General Meeting,
discussion of a specified matter at a General Meeting, the either in person or through an authorized representative. Each
Board of Directors shall, without delay, convene the General shareholder or representative may also have one assistant at
Meeting to deal with the requested matter. the meeting.
In 2007, the Annual General Meeting of Salcomp was held Minutes are kept at the General Meeting, and they are made
on 29 March 2007 and an Extraordinary General Meeting on available to shareholders within two weeks of the General Mee-
4 September 2007. ting taking place. The decisions made by the General Meeting
are published in a stock exchange release after the meeting.
Advance information
Shareholders are invited to a General Meeting by the publishing Attendance of the Members of the Board and the
of a notice to convene in two newspapers with nationwide circula- Managing Director
tion in Finland, or by sending the notice to convene via registered The Managing Director, Chairman of the Board and the members
mail or by delivering it in an otherwise verifiable method to the of the Board should attend the General Meetings unless there
are well-founded reasons for their absence.
34 Corporate Governance

A person proposed for the first time as a member of the Board Duties
should participate in the General Meeting which will decide on The duties of the company’s Board of Directors are set forth in
his/her election unless there are well-founded reasons for their the Companies Act and other applicable legislation. The Board
absence. has also approved internal rules of procedure.
Decision-making The Board shall devote time and resources to increase the
The company has one series of shares. Each share entitles its value of the shareholders’ holdings in the long run and to look
holder to one vote at the General Meeting. Generally speaking, after the interests of the company and all of its shareholders.
resolutions of a General Meeting require the support of a simple More specifically, Salcomp’s Board of Directors is responsible
majority of the votes cast at the meeting in question. In the for the company’s management and the proper arrangement of
case of a tie, the Chairman will have the casting vote. In an elec- the operations of the company. In addition, the Board is respon-
tion, the person receiving the highest number of votes shall be sible for the proper arrangement of the accounting and for the
deemed as elected. However, prior to an election, the General supervision of its financial management.
Meeting may decide that in order to be elected, a person should
receive more than half of the votes cast. In an election, a tie will According to the rules of procedure and the Finnish Companies
be decided by drawing lots. However, according to the Finnish Act, the task of Salcomp’s Board of Directors is to:
Companies Act, there are several matters, such as an amend-
ment to the Articles of Association or an increase of share capi- • decide on company strategy and values
tal by deviating from the shareholders’ pre-emptive right to • confirm and follow the business plan and budget
subscribe new shares, in which any decision requires the sup- • handle and approve Interim Reports, the Annual Report
port of 2/3 of the votes cast and of the shares represented at and the Report of the Board of Directors
the meeting. The Articles of Association of Salcomp do not • decide on individual investments, acquisitions or
include voting limitations or redemption clauses. divestments and contingent liabilities that are strategically
or financially significant
BOARD OF DIRECTORS • approve the Group financing policy
Composition and term • confirm risk management and reporting procedures
• decide on bonus and incentive schemes for the management
According to the Articles of Association, Salcomp’s Board of • decide on the company’s structure and organization
Directors consists of at least three and at the most eight
members. According to the Articles of Association, the term of
• appoint the Managing Director and decide on his
remuneration, and
each Board member expires at the close of the next Annual
General Meeting following the election.
• assume responsibility for all other such duties as have
been stipulated for Boards of Directors in the
Companies Act and elsewhere
The General Meeting elects all members of the Board of Direc-
tors. The Articles of Association set no upper age limit on Board Decision-making
members nor restrict in any other way the decision-making
The Chairman of the Board of Directors is responsible for conve-
power of the General Meeting in electing Board members.
ning the Board meetings and for the meeting agenda. A meeting
However, the General Meeting shall, in accordance with the
of the Board of Directors constitutes a quorum when more than
Corporate Governance Recommendation, take into account the
half of the members of the Board are present. Presence of the
fact that a person has the qualifications required to take care
Chairman or the deputy Chairman of the Board of Directors is
of the duties of a member of the Board and the availability to
also a condition for the quorum.
devote sufficient time for the work.
The Board of Directors is always obliged to act in the company’s
Board composition in 2007 interests and in such a manner that its acts or measures are
Salcomp’s Annual General Meeting held on 29 March 2007 not likely to produce unjustified benefits to any shareholder or
elected Kari Vuorialho, Timo Leinilä, Andreas Tallberg, Jorma third party. A Board member may not participate in any decision-
Terentjeff, Petri Myllyneva and Panu Halonen as ordinary making process where a contract between the Board member
members of the Board. The Board of Directors elected Kari and the company is being discussed. When votes are cast, the
Vuorialho as Chairman of the Board and Jorma Terentjeff as Vice majority opinion will be the Board’s decision and, in the case of
Chairman. a tie, the Chairman will have the casting vote. In an election, a
tie will be decided by drawing lots.
The Extraordinary General Meeting held on 4 September 2007
elected Kari Vuorialho, Andreas Tallberg and Jorma Terentjeff as Meeting practice and self-evaluation
members of the Board of Directors and elected Mats Heiman
Salcomp’s Board of Directors meets approximately ten times a
and Peter Hofvenstam as new members of the Board of
year. The Board has not allocated any special areas of focus in
Directors. At its organizing meeting following the EGM, the
terms of business monitoring to its members.
Salcomp Board of Directors elected Mats Heiman as Chairman
of the Board and Kari Vuorialho as Vice Chairman. The term
According to the rules of procedure of the Board of Directors,
shall expire at the Annual General Meeting in 2008.
the Managing Director ensures that the company provides the
Board with sufficient information to assess the operations and
The background and personal data of the current Board mem-
financial situation of the Group, supervises the implementation
bers are presented on the company’s website and on page 38
of Board decisions and reports to the Board on any deficiencies
of this Annual Report.
or problems in implementation. The secretary of the Board of
Directors is the company’s CFO.

The Board of Directors evaluates its operations and working pro- The Managing Director of Salcomp is Markku Hangasjärvi. In 2007,
cedures regularly and by carrying out an annual self-evaluation. his salaries, fees and benefits in kind amounted to EUR 203,223.
In 2007, Salcomp’s Board held 21 meetings, 7 of which were The Managing Director may convert a part of his salary so as to
telephone conferences. The Board members’ attendance at benefit from the use of a company car. In addition, the Managing
meetings amounted to 95.2%. Director is entitled to certain customary benefits, such as
healthcare and travel insurance.
Remuneration and other benefits
The Annual General Meeting decides on the remuneration and Upon termination of the Managing Director’s agreement by the
compensation for costs to be paid to the members of the Board company, and in the absence of any breach of duties by the
of Directors. Managing Director, the Managing Director is entitled to twelve
months’ salary. When giving notice to the Managing Director,
In accordance with the resolution made at the 2007 Annual the notice period is six months.
General Meeting, the members of the Board for the term of offi-
ce expiring at the Annual General Meeting 2008 are remunera- MANAGEMENT TEAM
ted as follows: Salcomp has a Management Team consisting of the Managing
Director (President and CEO) and the heads of the most impor-
• EUR 30,000 to the Chairman of the Board tant company operations. The President and CEO acts as the
• EUR 25,000 to the Vice Chairman of the Board Chairman for the Management Team.
• EUR 20,000 to the ordinary members of the Board
The Management Team is not a separate company organ, but
A total of EUR 128,333 was paid to the Board as fees in 2007. an advisory body, which assists the Managing Director in the
management of the company.
Committees
Salcomp’s Board of Directors has not established any Commit- Members of the Management Team are presented on the
tees. This is because, according to the Board, in Salcomp’s company’s homepage and on page 39 of the Annual Report.
case, the function of the Board is at its most efficient when the
entire Board takes part in the so-called Committee work. Retirement age and benefits
There is no mandatory retirement age or retirement benefit
Evaluation of independence system for the Managing Director or other members of the
The Board of Directors evaluates the independence of its mem- Management Team.
bers of the company and of the company’s significant share-
holders. Based on this evaluation, the majority of the Board INCENTIVE SCHEMES
members are independent of the company and two of the Board
members representing this majority are independent of the Bonus program
company’s significant shareholders. The Company has a salary-based bonus program for its employees.
The Board decides on the application of the bonus program.
Based on the evaluation:
• the following Board members are independent of the Remuneration payable on the basis of the incentive scheme,
depending on the employee’s position, may vary between 5 and
company: Mats Heiman, Peter Hofvenstam,
Andreas Tallberg and Jorma Terentjeff 60 per cent of the employee’s regular annual salary. The
• the following Board members are independent of the payment of the remuneration in accordance with the incentive
scheme is tied, in a manner depending on the given personnel
company’s significant shareholders: Andreas Tallberg,
Jorma Terentjeff and Kari Vuorialho. group, to the meeting of goals set in advance and related to the
Company, the business processes central to the job description
MANAGING DIRECTOR of a given employee and the given employee.
The Managing Director, in Salcomp referred to as the President and
Option program
CEO, is responsible for the day-to-day management of the company
in accordance with the instructions and rules given by the Board of The AGM 2007 decided to issue, in accordance with the Board’s
Directors, also ensuring that the accounting of the company comp- proposal, stock options to key personnel of the Group. The
lies with the law and that the financial management of the compa- maximum total number of stock options 2007 issued is
ny has been arranged in an appropriate manner. 2,047,500 and they entitle their holders to subscribe for a
maximum of 2,047,500 new shares in Salcomp Plc. At the
The Managing Director presents the matters to be discussed at end of 2007, a total of 610,000 option rights 2007A were in
Board meetings and is responsible for preparing draft resolutions. the holding of Salcomp’s key personnel.
The Managing Director may, at his discretion, choose to appoint
another member of the Group’s Management Team to present a The conditions of the option program can be found on the
matter at a Board meeting or to prepare a draft proposal. company’s homepage at www.salcomp.com – Investors – Share
Information. Information on option rights is also provided in the
The Board of Directors elects the Managing Director and deci- Notes to the Financial Statements.
des on the remuneration and other terms of the Managing
Director’s contract. The terms of duty of the Managing Director
have been agreed upon in writing. The Managing Director is
elected until further notice.

AUDITING Salcomp’s Board oversees the company’s risk management.
The main function of statutory auditing is to verify that financial It accepts a risk management policy, which determines its
statements provide true and fair view on the Group’s performance risk-bearing capacity and risk-taking principles, as well as risk
and financial position for the financial year. Salcomp’s financial management principles. The risk management policy also
year is the calendar year. details the company’s business risks, risk management func-
tions, responsibilities and organization, risk management
The auditor is obliged to audit the correctness of the company’s processes and risk management control. The Management
accounting and Financial Statements for the financial year, and Team is responsible for organizing and overseeing the risk
to provide the General Meeting with an auditor’s report. In addi- management process in day-to-day operations. However, the
tion, Finnish law requires that the auditor also monitors the le- Board of Directors recognizes that it retains the ultimate responsi-
gality of the company’s administration. The auditor reports to bility for risk management.
the Board of Directors at least once a year.
The Management Team regularly monitors the key financial figu-
res and indicators on operations. Significant deviations from the
Auditor
budget or forecasts are reported to and handled by the Board.
According to the Articles of Association, Salcomp has one audi- The Board monitors the risk management process, with risk
tor elected by the Annual General Meeting. The term of an audi- management issues regularly being reported to the Board.
tor terminates at the close of the Annual General Meeting follo-
wing the election. The auditor shall be a firm of auditors At Salcomp, a separate risk management function has not been
authorized by the Central Chamber of Commerce. established. Instead, risk management has been made an integ-
ral aspect of the business process. Risk management and pro-
The 2007 Annual General Meeting of Salcomp elected the Aut- cess development is primarily based on business requirements.
horized Public Accountants KPMG Oy Ab as the auditor of the The Group aims to prevent risks by developing processes and
company. Mr Tapio Raappana, APA, has been appointed as the personnel skills. As far as possible, decision-making, implemen-
responsible auditor. tation and monitoring are kept as separate entities within risk
management and process development.
The auditors are paid on the basis of an approved invoice. In
2007, the compensation for auditing services was EUR 121,200 Business risks have been described on pages 18–19 and
and for other services EUR 135,900. financial risks on pages 68–71 of the Annual Report.
INTERNAL CONTROL INSIDERS AND INSIDER ADMINISTRATION

The objective of internal control is to provide reasonable The Insider Rules of Salcomp observe the Insider Guidelines of the
assurance concerning the achievement of the company’s objecti- Nordic Exchange in Helsinki, yet setting somewhat more stringent
ves with regard to the reliability of financial reporting, effective- requirements in certain respects. Salcomp’s Insider Rules are
ness and efficiency of operations and compliance with appli- updated and compliance therewith monitored on a regular basis.
cable laws and regulations.
Pursuant to Salcomp’s Insider Rules, the shareholding data of
The Managing Director, other members of the Management the so-called Public Insiders are in the public domain and acces-
Team and the management of the subsidiaries ensure that the sible either via the Finnish Central Securities Depository or via
accounting and governance in their sphere of responsibility Salcomp’s homepage.
comply with the law, Group operating principles, as well as
instructions and rules given by the Board of Directors. The du- Under the Insider Rules, the following persons belong to the
ties and responsibilities of the Board of Directors and Managing Group of Public Insiders: the members of the Board of Directors,
Director are set forth in the Finnish Companies Act. the Managing Director, the members of the Management Team
and the Responsible Auditor.
Internal audit
Currently the Group does not have an internal audit function, as Public Insiders, together with the other key persons designated
the Board of Directors does not consider that the scale of as permanent insiders of Salcomp, form the Group of so-called
Salcomp’s operations warrants the establishment of a separate Permanent Insiders of Salcomp. Three principal rules govern any
internal audit function. trading by Permanent Insiders in Salcomp’s securities or deriva-
tives. Firstly, trading is generally permitted only during the three-
RISK MANAGEMENT week period following the date of publication of the Annual
Results or of an Interim Report (the ”Open Window”). Secondly,
The purpose of Salcomp’s risk management is to identify the
trading may be exceptionally permitted outside of the Open
risks and possibilities that may have an impact on the imple-
Window upon prior approval to such effect by Salcomp’s Insider
mentation of Group strategy. The aim of risk management is
Officer. Thirdly, trading is always prohibited during the four-week
to support the achievement of goals set out in the strategy
period preceding the release of the Annual Results or of an
by ensuring that the Group’s risk-taking activities are in proper
Interim Report and on the date of publication itself (the “Closed
equilibrium with its risk-bearing capacity.
Window”). In addition, specific trading restrictions apply to
project-specific insiders.
Salcomp’s values, strategic choices and long-term financial
goals form the basis of its risk management.

Salcomp’s Board of Directors comprises
Mats Heiman, Chairman (front right) and
Kari Vuorialho, Vice Chairman, as well as
Peter Hofvenstam (rear right),
Jorma Terentjeff and
Andreas Tallberg.
board of directors
Mats Heiman – Chairman Peter Hofvenstam Jorma Terentjeff

Born: 1950 Born: 1965 Born: 1949
Education: M.Sc. (Engineering), MBA Education: M.Sc. (Econ.) Education: M.Sc. (Techn.)
Present position: Senior Investment Manager Present position: Vice President of Nordstjernan AB Relevant work experience: CEO of JOT Automation
at Nordstjernan AB Relevant work experience: partner in E. Öhman J:or Group Oyj 1995–2000, Managing Director of
Relevant work experience: President and CEO Fondkommission AB 1996–1999, CFO and Teknoventure Management Oy 1993–1995,
of Sirius Machinery 2004–2006, Management member of the Executive Committee at AB Aritmos CEO of Aspocomp Oy 1987–1993
Consultant at Booz Allen & Hamilton 1994–2004, 1993–1995, analyst at Proventus AB 1991–1993 Board membership: member since
management positions at Alfa Laval 1980–1993 Board membership: member since 4 September 2007, Vice Chairman 1999–2007
Board membership: Chairman since 4 September 2007 Relevant present positions of trust: Chairman of the
4 September 2007 Relevant present positions of trust: Chairman of the Board of Directors of Avanti Management Oy,
Relevant present positions of trust: Chairman of the Board of Directors at Ramirent Plc, Board member of member of the Supervisory Board of Kaleva
Board of Directors in KMT Group, Sirius Machinery AB Exel Oyj, GP Plastindustri AB and Sirius Machinery AB Mutual Insurance Company
and GP Plastindustri AB, member of the Board of Holding in Salcomp Plc: – Holding in Salcomp Plc: 74,290 shares
Directors in Etac AB, Vingruppen i Norden and VinUnic Fees in 2007: 6,667 euros Fees in 2007: 23,333 euros
Holding in Salcomp Plc: 20,000 shares
Fees in 2007: 10,000 euros Andreas Tallberg
Born: 1963
Kari Vuorialho – Vice Chairman Education: M.Sc. (Econ.) The secretary of the Board of Directors is
Born: 1952 Present position: CEO of GWS Group Antti Salminen, CFO at Salcomp Plc.
Education: B.Sc. (Eng.) Relevant work experience: EQT 1997–2006, Panu Halonen, Timo Leinilä and Petri Myllyneva
Relevant work experience: CEO of Salcomp Oy MacAndrews & Forbes 1992–1995, were members of the Board of Directors until
1996–2005, management positions at Salcomp Amer Group 1987–1991 4 September 2007.
1977–1996 Board membership: member since 1999 Shareholding of the Salcomp Board of Directors
Board membership: Vice Chairman since Relevant present positions of trust: Chairman of the on 31 December 2007.
4 September 2007, Chairman 2005–2007 Board of Directors at Detection Technology Oy and
Relevant present positions of trust: member of the Glaston Oyj, Vice Chairman of the Board of Directors
Board of Directors of Aspocomp Group and at Perlos Corporation, member of the Board of
Meka-Pro Oy Directors at Finn-Power Oy and Myllykoski Oy
Holding in Salcomp Plc: 447,286 shares Holding in Salcomp Plc: –
Fees in 2007: 28,333 euros Fees in 2007: 20,000 euros

Salcomp’s Management Team comprises
Osmo Oja (rear left), Antti Salminen,
Antero Palo, Markku Saarikannas and Niilo Oksa,
as well as Juha Raussi (front left),
Markku Hangasjärvi and
Päivi Luoti.
management team
Markku Hangasjärvi, born: 1966 Niilo Oksa, born: 1948 Markku Saarikannas, born: 1956
Education: M.Sc. (Electrical Engineering) Education: M.Sc. (Pol.) Education: LL.M., trained on the bench
Position at Salcomp: President and CEO since 2006 Position at Salcomp: Vice President, Human Position at Salcomp: Vice President, Strategic Planning
Relevant work experience: President and CEO of Efore Resources since October 2007 since 2005
Plc 2001–2006, Vice President, Thermal Power Relevant work experience: Managing Director of Relevant work experience: CFO at Salcomp
Business Unit of Fortum Engineering Ltd 2000–2001, Oy JL-Outsourcing Ab 2005–2007, Private Advisor 2001–2005, Director at Fleming Aros/ArosMaizels
Vice President, Marketing of Fortum Engineering Ltd 2004–2005, Senior Vice President, HR and investment banking operations 1998–2001, Director
1996–2000, Regional Director, Russia and other CIS Administration of Eimo Corporation and CEO of at ABN Amro Bank N.V. 1995–1998 and various
Countries of IVO International Ltd 1993–1996, Eimo Americas 2000–2004, Executive Vice President, expert and leading positions at the Union Bank of
Managing Director of Finnish Energy Conservation HR and Administration at Neste and Fortum Finland Group and Postipankki Group 1980–1995
Group 1992–1996, Corporate Planner of Imatran Corporations 1985–2000, Head of Department in Relevant present positions of trust: –
Voima Ltd 1991–1992 The Employer’s Federation (Ship owners) 1974–1985 Holding in Salcomp Plc: 11,797 shares
Relevant present positions of trust: – Relevant present positions of trust: – Option rights: 25,000 option rights 2007A
Holding in Salcomp Plc: – Holding in Salcomp Plc: –
Option rights: 60,000 option right 2007A Option rights: 25,000 option right 2007A Antti Salminen, born: 1963
Education: M.Sc. (Econ.)
Päivi Luoti, born: 1962 Antero Palo, born: 1961 Position at Salcomp: CFO since 2005
Education: M.Sc. (Econ.) Education: MBA Relevant work experience: independent consultant
Position at Salcomp: Communications Manager Position at Salcomp: Vice President, 2004–2005, CFO of Raisio plc 2002–2004,
since 2006 Sales & Marketing since 2005 CFO of Teleste Oyj 1997–2002 and various financial
Relevant work experience: Information Officer in Relevant work experience: CEO of Salcomp’s Brazilian management positions at KCI Konecranes
Raisio plc Corporate Communications 1998–2006, Sales Company 2001–2005, leading positions in International Oyj 1988–1997
various communications and marketing positions Sales and Marketing at Finnair Oyj 1989–2001 Relevant present positions of trust: –
in Raisio plc 1987–1998 Relevant present positions of trust: – Holding in Salcomp Plc: 15,501 shares
Relevant present positions of trust: – Holding in Salcomp Plc: 1,503 shares Option rights: 35,000 option right 2007A
Holding in Salcomp Plc: 2,000 shares Option rights: 35,000 option right 2007A
Option rights: 15,000 option right 2007A
Juha Raussi, born: 1963
Osmo Oja, born: 1947 Education: Engineer In 2007, the Management Team also comprised
Education: B.Sc. (Mechanical Engineer) Position at Salcomp: Vice President, Juha Samsten and Heikki Turtiainen.
Position at Salcomp: Vice President, Research and Development since 2006 Shareholding of the Salcomp Management Team
Global Operations since 2003 Relevant work experience: Senior Manager of on 31 December 2007.
Relevant work experience: leading positions at technology development at Nokia Corporation
Salcomp, amongst others in production, logistics 2004–2006, R&D Manager in Nokia Mobile Phones
and material operations 1994–2003, leading 1997–2004, various R&D positions at Nokia
positions at Nokia Cable Harness 1980–1994 1987–1997
Relevant present positions of trust: – Relevant present positions of trust: –
Holding in Salcomp Plc: 78,230 shares Holding in Salcomp Plc: -
Option rights: 35,000 option right 2007A Option rights: 35,000 option right 2007A

41 Financial
Statements
The Consolidated Financial Statements

of Salcomp Group have been prepared
in accordance with the International
Financial Reporting Standards (IFRS).
The parent company Financial
Statements have been prepared
according to the Finnish Accounting
Standards (FAS).

REPORT OF THE BOARD OF DIRECTORS
Business Environment Capital Expenditure

During 2007, the mobile phone market grew by approximately Capital expenditure for the year totaled EUR 11.3 million (EUR
14%. Approximately 1.1 billion mobile phones, and accordingly 9.3 million). It mainly involved construction of the India plant and
mobile phone chargers, were sold. Consolidation in the market boosting the production capacity in China and Brazil.
continued, and Salcomp’s main customers, major mobile phone
manufacturers, increased their combined market share. According Customer deliveries at the Salcomp’s charger plant in Chennai,
to Salcomp’s estimates, the top-5 mobile phone manufacturers India began in June. The construction work, commenced in au-
represented as much as 83% of the market (81%) in 2007. Com- tumn 2006, progressed according to the schedule and budget.
petition tightened in the mobile phone charger market due to new The total value of the capital expenditure was approximately EUR
manufacturers. On the other hand, some of the smaller charger 9 million. The capacity at the end of the year was some 50 mil-
companies withdrew from the market. lion chargers, and it can be raised to some 100 million chargers.
The leased land also allows expansion of the production building.
Net Sales
Salcomp Group’s net sales in 2007 increased by 10% to EUR Financing
286.2 million (EUR 259.0 million in 2006). The increase in net The cash flow from operating activities was EUR 36.6 million (EUR
sales was due to the number of chargers sold growing by 14% to 3.9 million). The increase in cash flow was mainly due to the posi-
262.4 million chargers (230.5 million). The market share in mobile tive profitability development, as well as good working capital
phone chargers for the entire year was approximately 23% (23%). management. The cash flow was positively affected by the EUR
9.7 million increase in sold receivables. Without the increase in
Result sold receivables, the cash flow would have been EUR 26.9 mil-
lion.
The Group’s operating profit increased by 67% to EUR 25.8
million (EUR 15.5 million). The operating profit was improved by The Group’s equity ratio at the end of the year was 37.7%
an increase in the number of units delivered and a higher gross (30.5%), and gearing was 34.0% (83.7%). The key figures of the
margin compared to last year, which was due to more effective balance sheet were improved by good cash flow and a smaller
production and purchasing operations and continuous improve- amount of debt. At the end of the year, interest-bearing net debt
ments in product cost structure. The Group’s operating profit stood at EUR 23.3 million (EUR 44.4 million).
percentage was 9.0% (6.0%).
The Group’s net finance expenses were EUR 3.2 million (EUR 4.3 Environment and Quality
million). Finance expenses were decreased by a smaller amount The management of Salcomp’s environmental and quality issues
of debt. The finance items include EUR 0.7 million income, is based on the Group’s environmental and quality policies, devel-
resulting from currency differences related to intra-group loans. opment programs and guidelines, as well as its risk management
Taxes for the period totaled EUR 4.3 million (EUR 3.6 million). policy. The focus in the management of environmental and quality
They include a deferred tax of EUR 3.0 million (EUR 3.0 million), issues is to minimize and prevent the effects on the environment
resulting from the parent company’s tax-deductible goodwill and people.
amortization.
The total amount of harmful chemicals used in production is
Salcomp’s profit for the period totaled EUR 18.3 million (EUR 7.6 small, and no harmful emissions are caused by the processes.
million). Earnings per share were EUR 0.47 (EUR 0.20) and
earnings per share, excluding the deferred tax, EUR 0.54 (EUR The Group’s production plants are ISO 14001 and ISO 9001 certi-
0.28). Basic earnings per share were EUR 0.47. fied. In addition, Salcomp has the environmental permits required
for its operations.
R&D
In addition to Salcomp’s own quality and environmental control,
During the financial year, the Group’s R&D expenditure was EUR customers and authorities regularly conduct quality and environ-
4.8 million (EUR 5.4 million), or 1.7% of net sales (2.1%). Over mental audits, and the results of the audits are used for constant
the year, an average of 110 people was working in R&D. The development of the processes.
focus was on the development of new mobile phone chargers for
current and new customers and on the continued improvement of
the product cost structure. Personnel and Management Team
The number of Group personnel at the end of the year totaled
In the autumn, Salcomp introduced to the market a new Cosmo 9,722 (7,910): 6,815 were employed in China, 1,586 in Brazil
charger product platform that enables charging mobile phones and 1,253 in India. The increase in the number of personnel was
and other mobile devices with a USB cable. The USB standard- mostly due to the start-up of the India plant and increased pro-
based chargers open new opportunities for Salcomp to expand its duction volumes.
customer base beyond the mobile phone charger segment.
42 Financial Statements

Salcomp’s President and CEO during the financial year was According to the Securities Market Act, Nordstjernan was obliged
Markku Hangasjärvi. Other Management Team members were to make a mandatory bid for all outstanding shares and securities
Antti Salminen (CFO), Antero Palo (VP, Sales & Marketing), Juha entitling to the shares in Salcomp at the highest price for which
Raussi (VP, R&D), Osmo Oja (VP, Global Operations), Markku Nordstjernan had acquired shares in Salcomp during the previous
Saarikannas (VP, Strategic Planning) and Päivi Luoti (Communi- six months, i.e. EUR 4.01 per share and EUR 0.98 per option
cations Manager). In addition, Niilo Oksa was appointed VP, right. The offer period of the tender offer commenced on 14 Sep-
Human Resources and a member of the Management Team as of tember 2007 and expired on 5 October 2007. Seventy sharehold-
19 October 2007. From the other members of the Management ers, holding 850,622 shares in Salcomp and representing 2.2%
Team, Heikki Turtiainen, CTO, retired as planned at the end of of the shares and votes, tendered their shares in Nordstjernan’s
June, and Juha Samsten, VP, Quality and Environment, passed public tender offer. Nordstjernan’s holding rose to 21,232,753
away unexpectedly in July. They were not replaced by new shares and 54.5% of the outstanding shares. At the end of the
Management Team members. year, Nordstjernan’s holding in Salcomp was 56.0%.
Shares and Shareholders General Meetings

Salcomp’s registered share capital amounts to EUR The Annual General Meeting of Salcomp was held on 29 March
9,832,735.12, divided into 38,975,190 fully paid shares. The 2007 in Helsinki. The 2006 Financial Statements were approved
company has one series of shares, and all the shares entitle the at the AGM and the members of the Board and the President and
shareholder to equal rights in the company. CEO were discharged from liability.
During the financial year, the Salcomp share price fluctuated In accordance with the Board’s proposal, the AGM decided to pay
between EUR 2.63 and EUR 5.03. The closing price at the end of dividend of EUR 0.06 per share. The dividend was paid out on
the year was EUR 3.92 and the average price EUR 3.76. Share 12 April 2007.
trade amounted to EUR 72.1 million and 19.0 million shares.
According to the book-entry system, Salcomp had 1,210 share- The AGM decided to leave the composition of the Board of Direc-
holders at the end of the year. The foreign ownership was 60.3%, tors unchanged. Thus, the Members of the Board of Directors
and the market value for the total number of shares EUR 153 were Kari Vuorialho as its Chairman, Jorma Terentjeff as Vice
million. Chairman, as well as Panu Halonen, Timo Leinilä, Petri Myllyneva
and Andreas Tallberg. The AGM decided that the remuneration for
On May, 2007, DWS Investment GmbH, a subsidiary of Deutsche the Board of Directors also remained unchanged.
Bank AG, announced that its holding of Salcomp Plc’s shares and
voting rights had decreased to less than 5%. At the time of the The Authorized Public Accountants KPMG Oy Ab continued as the
announcement, DWS Investment GmbH held 1,755,000 shares, Company auditor.
corresponding to 4.5% of Salcomp’s shares and voting rights.
Based on the Board of Directors’ proposal, a decision was made
EQT II B.V., acting on behalf of EQT II Swedish Non-Registered to amend the Articles of Association to better comply with the
Partnership, and Nordstjernan AB announced on 25 June 2007 new Companies Act, valid from 1 September 2006.
that they had signed a sale and purchase agreement under which
EQT sold 11,653,581 Salcomp shares to Nordstjernan. In The AGM authorized the Board of Directors to decide on offering a
addition, Nordstjernan had the option to acquire the remaining maximum of 8,000,000 new shares for subscription. The authori-
shares held by EQT and Nordstjernan used the option on 16 zation is valid until 30 June 2008. The authorization has not been
August 2007. After the relevant authority approvals had been used.
received, the acquisition was completed on 12 September 2007.
After this, Nordstjernan owned 20,382,131 Salcomp shares The AGM decided, in accordance with the Board’s proposal, to
which corresponded to 52.3% of the share capital and votes. reduce the premium fund on the Parent Company’s balance sheet
EQT’s holding decreased to zero. on 31 December 2006 by transferring the total amount of the pre-
mium fund, EUR 23,690,992.21, into the Company’s invested un-
restricted equity. The realization of the decision was completed in
August 2007.
Salcomp Group Key Figures
2007 2006 2005

Net sales, EUR million 286.2 259.0 156.0
Operating profit, EUR million 25.8 15.5 12.5
% of net sales 9.0 6.0 8.0
Return on equity, % 30.0 18.8 23.3
Equity ratio, % 37.7 30.5 19.1
R & D expenses, EUR million 4.8 5.4 4.0
% net sales 1.7 2.1 2.6
Personnel on average 8,622 7,567 5,612
Total wages and salaries, EUR million 36.2 29.6 15.8

The Board proposal of granting stock options to the company’s The Board’s Proposal for Profit
key personnel was approved. The stock options will give the right Distribution
to subscribe for up to 2,047,500 shares of the company. At the
end of 2007, a total of 610,000 option rights 2007A were in the The Board of Directors has adopted dividend principles whereby
holding of Salcomp’s key personnel. The rest of the stock options the Board intends to propose annually to the General Meeting of
were granted to Salcomp Manufacturing Oy. The share subscrip- Shareholders that no more than one-third of the average long-term
tion period for stock options 2007A will be 1 April 2010–31 result be distributed as dividends, provided that the growth
March 2012, for stock options 2007B 1 April 2011–31 March requirements stated in the company strategy are not jeopardized.
2013 and for stock options 2007C 1 April 2012–31 March 2014. The amount of future dividend, if any, will be subject to the
In accordance with the Board resolution, the share subscription company’s future result, its financial position, cash flow, working
period for 2007A will begin on 1 April 2010, at the earliest, pro- capital needs, capital expenditure, terms and conditions of
vided that the total shareholder return of Salcomp Plc (value in- financial agreements and covenants among other factors.
crease + dividends) has been at least 8% per annum.
The Board will propose to the Annual General Meeting of Share-
The Extraordinary General Meeting of Salcomp was held in Helsinki holders that a dividend of EUR 0.15 per share for 2007 be
on 4 September 2007. The EGM re-elected Kari Vuorialho, distributed, a total of EUR 5.8 million, and the remainder of the
Andreas Tallberg and Jorma Terentjeff as members of the Board distributable equity to be carried over as retained earnings.
of Directors and elected Mats Heiman and Peter Hofvenstam as
new members of the Board of Directors. At its organizing meeting Dividends determined at the General Meeting shall be distributed
following the EGM, the Salcomp Board of Directors elected Mats to all shareholders who on the record date of 15 April 2008, have
Heiman as Chairman of the Board and Kari Vuorialho as Vice been entered in the shareholders’ register maintained by the Finn-
Chairman. ish Central Securities Depository.
Risks and Uncertainties in the Near Future Outlook for 2008

Salcomp’s business involves uncertainty factors that may affect According to the estimates published by Salcomp’s main customers
the company’s financial development in the near future. These and by the various market research companies, the mobile phone
include the general development of the mobile phone markets, market is expected to grow during 2008 by approximately 12%,
substantial changes in the purchase prices of charger compo- compared with 2007. Measured by the number of units, this
nents, and significant changes in competition in the mobile phone would mean approximately 1.3 billion mobile phones, and therefore,
charger markets. Salcomp’s customer base is concentrated and mobile phone chargers, to be sold in 2008. This forms a good
deterioration in the financial position of a major customer may basis to achieve further increases in Salcomp’s net sales in
have a negative impact on Salcomp’s sales and profitability. 2008. In addition, Salcomp’s target is to broaden the customer
Furthermore, the standardization of mobile phone chargers, portfolio in other selected charger segments, such as bluetooth
including USB-type chargers, can, in the future, lead to a develop- headsets and cordless fixed-line phones.
ment where the charger is not always necessarily included in the
mobile phone sales package which can have an impact on Sal- Net sales in 2008 are expected to continue to grow. However, due
comp’s current business model. In addition, major changes in to declining mobile phone charger prices the operating profit in
exchange rates can be considered as an uncertainty factor, espe- value is expected to grow only to some extent or to remain on
cially the exchange rate of the US dollar in relation to the euro 2007 level.
and to currencies in those countries in which Salcomp has opera-
tions. Risks are managed to the extent that the company has
influence over them.
Helsinki, 7 February 2008
Mats Heiman Kari Vuorialho

personnel on 31 december Peter Hofvenstam Andreas Tallberg
Persons Jorma Terentjeff Markku Hangasjärvi

President and CEO
10,000
9,000
8,000
7,000
6,000
5,000
4,000
3,000
2,000
1,000
0
2003 2004 2005 2006 2007

net sales sold chargers
EUR million Million pcs

300 300
250 250
200 200
150 150
100 100
50 50
0 0
2003 2004 2005 2006 2007 2003 2004 2005 2006 2007
FAS IFRS IFRS IFRS IFRS
operating profit earnings per share*
EUR million EUR

30 0.6
25
0.4
20
15 0.2
10
0
5
*Excluding the deferred tax

0 –0.2
–5
–0.4
–10
–0.6
–15
–20 –0.8
2003 2004 2005 2006 2007 2003 2004 2005 2006 2007
equity ratio return on capital employed
% %
40 30
35 25
20
30
15
25
10
20 5
15 0
–5
10
–10
5
–15
0 –20
2003 2004 2005 2006 2007 2003 2004 2005 2006 2007

consolidated income statement
1 000 e Note 2007 2006
Net sales 1 286 231 259 049

Cost of sales 4, 5 –244 785 –228 794
Gross margin 41 446 30 255
Other operating income 2 482 363

Sales and marketing expenses 4, 5 –2 471 –1 981
Administrative expenses 4, 5 –8 701 –7 503
Research and Development expenses 4, 5 –4 845 –5 421
Other operating expenses 3 –117 –240
Operating profit 25 794 15 473
Finance income 6 958 276

Finance expenses 7 –4 203 –4 547
Profit before income tax 22 549 11 202
Income tax expense 8 –4 281 –3 573

Profit for the period 18 268 7 629
Attributable to 9
Equity holders of the parent 18 268 7 629
Earnings per share for profit of the year attributable to the equity holders of the parent:
Basic earnings per share 9 0.47 0.20
Diluted earnings per share 9 0.47

consolidated balance sheet
1 000 e Note 31 December 2007 31 December 2006
assets
Non-current assets
Property, plant and equipment 10 24 808 20 139
Goodwill 11, 12 66 412 66 412
Other intangible assets 11 481 229
Deferred tax assets 13 3 184 3 023
94 885 89 803
Current assets
Inventories 14 24 114 21 918
Trade and other receivables 15 48 475 54 923
Cash and cash equivalents 16 14 611 7 845
87 200 84 686
Total assets 182 085 174 489
Equity and liabilities
Equity attributable to equity holders of the parent 17

Share capital 9 833 9 833
Premium fund 0 22 035
Invested unrestricted equity 22 035 0
Retained earnings 36 773 21 113
Total equity 68 641 52 981
Non-current liabilities
Deferred tax liabilities 13 12 075 8 915
Interest-bearing liabilities 20 28 542 43 797
Provisions 19 40 40
40 657 52 752
Current liabilities
Trade and other payables 21 63 382 60 351
Interest-bearing current liabilities 20 9 405 8 405
72 787 68 756
Total liabilities 113 444 121 508

Total equity and liabilities 182 085 174 489

consolidated cash flow statement
1 000 e 2007 2006
Cash flow from operating activities

Adjustments:
Non-cash transactions 4 982 5 268
Other income and expenses –86 –123
Interest and other finance expenses 4 203 4 547
Interest income –958 –276
Income taxes 4 281 3 573
Change in net working capital:
Change in trade and other receivables 6 641 –24 752
Change in inventories –2 031 2 568
Change in trade payables and other liabilities 5 016 11 419
Interest received 70 41
Interest paid –2 978 –5 576
Income taxes paid –816 –465
Net cash flow from operating activities 36 592 3 853
Cash flows from investing activities

Acquisition of subsidiary, net of cash acquired 0 –1 658
Acquisition of property, plant and equipment and intangible assets –11 053 –7 235
Proceeds from disposal of property, plant and equipment 86 319
Net cash flow from investing activities –10 967 –8 574
Cash flows from financing activities

Withdrawal of loans 5 000 68 993
Repayment of borrowings –19 611 –77 615
Dividends paid –2 339 0
Paid share issue 0 16 962
Net cash flow from financing activities –16 950 8 340
Change in cash and cash equivalents

Net increase (+)/decrease (–) in cash and cash equivalents 6 766 2 119
Cash and cash equivalents at January 1 7 845 5 726

Effect of exchange rate fluctuations –1 909 –1 500
Cash and cash equivalents at December 31 14 611 7 845

consolidated statement of changes
in equity
1 000 e
Attributable to equity holders of the parent
Share Share Premium Invested Translation Retained Total

capi- issue fund unrestricted differences earnings equity
tal equity
Equity at January 1, 2006 8 285 105 5 934 618 13 258 28 200
Translation differences –392 –392

Total recognised income and expense for the period 0 0 0 –392 7 629 7 237
Share issue 1 548 –105 16 101 17 544
Equity at December 31, 2006 9 833 0 22 035 226 20 887 52 981
Translation differences –445 –445

Total recognised income and expense for the period 0 –445 18 268 17 823
Option costs 176 176
Transfer from premium fund to invested unrestricted equity –22 035 22 035
Dividends –2 339 –2 339
Equity at December 31, 2007 9 833 0 0 22 035 –219 36 992 68 641

NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
Salcomp Plc’s parent company From January 1, 2007, the Group has adopted the following new
During the financial period, Salcomp Plc has become a subsidiary and revised standards and interpretations:
of Nordstjernan AB (registered office in Stockholm). A copy of the
consolidated financial statements of Nordstjernan Group is availa- • IFRS 7 Financial Instruments: Disclosures. IFRS 7 requires
ble from the internet address www.nordstjernan.se or the Group’s the disclosure of information on the significance of financial
parent company headquarters at Stureplan 3, SE-103 75 instruments for the entity’s financial position and performance,
Stockholm, Sweden. as well as on the nature and extent of risks arising from
financial instruments. This standard has increased the number
The subgroup’s parent company of notes to the consolidated financial statements, with the
The parent company of Salcomp Group is Salcomp Plc (registered new notes mostly concerning sensitivity analyses.
office in Salo). A copy of the consolidated financial statements is
available from the internet address www.salcomp.com or from the
Group’s headquarters at Salorankatu 10, 24100 Salo, Finland.
• Amendment to IAS 1 Presentation of Financial Statements
– Capital Disclosures. The amended IAS 1 requires information
to be disclosed on the entity’s capital level and its
Salcomp Plc’s Board of Directors has in its meeting on February 7, management during the financial period. These regulations
2008 approved these financial statements for publishing. have extended the notes to the consolidated financial
statements.
Accounting Policies
Basic information of the company and description of • IFRIC 8 Scope of IFRS 2. IFRIC 8 applies to transactions
where equity instruments are granted and where the
the business identifiable consideration received is less than the fair value
Salcomp Plc is a Finnish limited liability company domiciled in of the equity instruments granted. The Group has not had
Salo, Finland, and the registered address is Salorankatu 10, any arrangements mentioned in this interpretation, either
24100 Salo. Salcomp Plc is the parent company of the Salcomp during the financial period ended or during any previous
Group. Salcomp is a manufacturer of chargers for mobile phones. financial periods.
The company has a global sales and distribution network, and its
production plants are situated in China, India and Brazil. The
headquarters are located in Salo.
• IFRIC 9 Reassessment of Embedded Derivatives. IFRIC 9
requires that the separation of an embedded derivative from
the host contract should not be reassessed, unless there is a
Basis of preparation change in the terms of the contract that significantly modifies
The Salcomp Group’s Consolidated Financial Statements have the original cash flows of the host contract. The adoption of
been prepared in accordance with the International Financial Re- this interpretation has not affected the consolidated financial
porting Standards (IFRSs) published by the International Account- statements.
ing Standards Board (IASB). The IFRSs include the IAS and IFRS
standards as well as the SIC and IFRIC Interpretations. In the • IFRIC 10 Interim Financial Reporting and Impairment. The
Finnish Accounting Act and ordinances based on the provisions of interpretation prohibits the reversal of impairment losses
the Act, IFRSs refer to the standards and to their interpretations recorded in interim financial statements for goodwill,
adopted in accordance with the procedures laid down in regulation investment in an equity instrument classified as available
(EC) No 1606/2002 of the EU. The notes to the Consolidated for sale or financial assets carried at cost (such as unquoted
Financial Statements also comply with the requirements of the equity instruments), in subsequent financial statements.
Finnish Accounting Standards (FAS) and Companies Act. This interpretation had no effect on the consolidated
financial statements.
The Consolidated Financial Statements are prepared on the
historical cost basis except as disclosed in the accounting
policies. The Consolidated Financial Statements are presented in
euro, rounded to the nearest thousand.

Use of judgements and estimates Business Segments
The preparation of financial statements requires management to Salcomp Plc has only one primary business segment as defined
make judgements, estimates and assumptions that affect the in IAS 14 Segment Reporting, chargers. Salcomp reports its
reported amounts of assets and liabilities, the disclosure of geographical areas – Europe, Asia Pacific, North and South America
contingent assets and liabilities in the notes to the financial – as its secondary segments.
statements and the reported amounts of revenues and expenses
during the reporting period. Although these judgements and Revenue recognition
estimates are based on the latest available information, actual Revenue from the sale of goods is recognized when the significant
results may differ from these amounts. The judgements and risks and rewards have been transferred to the buyer and no
estimates mainly relate to deferred tax assets, goodwill and material uncertainties remain as to the payments, associated
impairment testing. Information on the judgements made and costs, or the possible return of the goods by the buyer. Usually
items that are most affected by the management’s judgement is this means the moment when goods have been handed over to
provided in the accounting policies in the chapter Accounting the customer in accordance with the agreed terms of delivery.
policies requiring the management’s judgement and key sources
of estimation uncertainty. Net sales are reported after indirect taxes and cash discounts.
By the time of publishing the consolidated financial statements, Employee benefits

the Group management is not aware of any key assumptions
The pension plans of the Group companies are based on the local
concerning the future and such key sources of estimation uncer-
conditions and practices in the countries in which they operate.
tainty at the balance sheet date that have a significant risk of
The Group has no defined benefit plans as defined in IAS 19
causing a material adjustment to the carrying amounts of assets
Employee Benefits. Payments related to defined contribution pen-
and liabilities within the next financial year.
sion plans are expensed in the period to which they relate.
Principles of consolidation
Share-based payments
The Consolidated Financial Statements incorporate the parent
The Group has an incentive arrangement whereby payments are
company, Salcomp Plc, and all subsidiaries in which it holds
made as equity instruments (options). Benefits are measured at
directly or indirectly over 50% of the voting rights, or in which the
fair value at the time they are granted and recognized as expens-
parent company otherwise has control. Control is the power to
es on the income statement in equal installments during the
govern the financial and operational policies of an entity so as to
vesting period.
obtain benefits from its activities. The subsidiaries acquired or
established during the financial period are consolidated from the
Any expense determined at the time of granting the options, is
date that control was obtained by the Group until control ceases.
based on the Group assessment of the number of options for
which a right is assumed to arise by the end of the vesting peri-
The subsidiaries are consolidated by using the purchase method.
od. The Group will then update the assumption of the number of
All intragroup transactions, receivables, liabilities and unrealized
options on each closing date. Changes in assessments will be on
gains, as well as intragroup distribution of profits, are eliminated.
the income statement. The fair value of the option is determined
The distribution of the profit for the period between the parent
on the basis of the Cox-Ross-Rubinstein binomial model.
company owners and the minority is shown in the Income State-
ment and minority interests in the subsidiaries are shown as a
When exercising options, payments received on the basis of share
separate item in the consolidated balance sheet.
subscriptions, adjusted by possible transaction expenses, are
recognized on the company’s invested unrestricted equity.
Translation of the foreign subsidiaries’ financial
statements Translation of items denominated in foreign currency
The Consolidated Financial Statements are presented in euro that In their own day-to-day accounting the Group companies translate
is the functional currency of the parent company. The functional transactions in foreign currencies into their own functional currency
currency is the currency that best reflects the economic circum- at the rates of exchange prevailing on the dates of the transactions.
stances of the company. The income statements and cash flows At the end of the accounting period the foreign currency monetary
of foreign subsidiaries whose functional currency is not the euro, receivables and liabilities are translated at the rates of exchange
are translated into euro each month at the average monthly prevailing at the balance sheet date. Foreign exchange gains and
exchange rate while the balance sheets of such subsidiaries are losses related to sales and purchases are treated as adjustments
translated at the exchange rate prevailing at the balance sheet to purchases. Non-monetary items are translated using the
date. Translation differences resulting from the translation of exchange rates at the dates of the transactions. Foreign currency
income statement items and balance sheet items are recognized loan exchange rate gains and losses are included in the finance
as a separate component of the Group’s equity. Also the income and expenses. The Group hedges operative sales and
translation differences arising from the application of the purchases in foreign currency with derivatives. The effects related
purchase method of accounting are recognized into the Group’s to the hedging transactions are recognized as adjustments to the
equity. purchases. The Group does not apply hedge accounting as
defined in IAS 39 Financial Instruments: Recognition and Measure-
ment.

Property, plant and equipment Research and development costs
Property, plant and equipment are carried at cost less accumulat- Salcomp Plc has research and development activities. In accord-
ed depreciation and impairment losses. Subsequent costs are ance with the principles of IAS 38 Intangible Assets, the costs
capitalized and depreciated over their estimated useful lives if the relating to research activities are expensed. The development
economic benefits will flow to the company and the cost of the costs that meet the special criteria of IAS 38 are capitalized. The
item can be measured reliably. If an asset consists of compo- product development costs of Salcomp Plc mainly relate to
nents with different useful lives, these components are regarded customer projects. The product development costs are included
as separate assets. Depreciation is recognised on a straight-line in the value of the inventories as an allocation of fixed costs, if
basis over the estimated useful lives of the assets. Land and they are caused by the customer projects occurred after a sales
water areas are not depreciated. Expenses related to ordinary order.
repairs and maintenance are recognised in the income statement
in the period in which they occur. Impairment
At each balance sheet date, the carrying amounts of the Group’s
Gains and losses on disposal are included in the operating profit. assets are reviewed to determine whether there is any indication
of impairment. For the purposes of impairment testing, the busi-
The expected useful lives of property, plant and equipment are as ness activities of the Salcomp Group are divided into cash-gener-
follows: ating units which are smaller than segments, i.e. smallest identifi-
able group, which is independent from other units and whose
• Buildings and constructions 25–30 years cash flows are separable. If an indication of impairment exists,
• Machinery and equipment 3–10 years the asset’s or cash-generating unit’s recoverable amount is esti-
• Other tangible assets 5–10 years mated based on value in use or fair value less costs to sell. The
Salcomp Group has used in its calculations the value in use that
The residual values and useful lives are reviewed at each balance is determined by discounting the future cash flows expected to be
sheet date. If these differ significantly from previous estimates, derived from an asset or a cash-generating unit to their present
the depreciation periods will be adjusted accordingly. If an asset value.
is classified as held for sale under IFRS 5 Non-current Assets Held
for Sale and Discontinued Operations, depreciation is ceased at Goodwill, intangible assets with indefinite useful lives and assets
the moment of classification. that are not ready for use are tested annually for impairment.
Group has no assets with indefinite useful lives. An impairment
Goodwill loss is recognized if the recoverable amount of an asset or cash-
Goodwill from business combinations is presented as goodwill. generating unit is less than its carrying amount. The impairment
Goodwill is the excess of the cost of the business combination loss is recognized in the income statement. An impairment loss
over the Group’s share in the net fair value of the acquiree’s for cash-generating unit is allocated first to reduce the carrying
identifiable assets, liabilities and contingent liabilities at the date amount of goodwill allocated to the cash-generating unit and then
of acquisition. Goodwill is allocated to the cash generating units. other assets of the unit pro rata.
In the case of a business combination taken place before 2004,
goodwill equals to the carrying amount according to the previous If there has been some favourable changes in the estimates for
accounting standards that has been used in the transition as the recoverable amount since the previous recognition of impairment
deemed cost according to IFRS. Instead of being amortised, loss, the impairment loss is reversed only to the extent that the
goodwill is tested annually for impairment. asset’s carrying amount does not exceed the carrying amount
that would have been determined had no impairment loss been
Other intangible assets recognized in prior periods. Impairment loss recognized for
Other intangible assets are recognized on the balance sheet at goodwill is not reversed.
their historical cost, if the cost can be determined reliably and if it
is likely that the economic benefit related to the asset will benefit Non-current assets held for sale and discontinued
the Group. The intangible assets of the Group have a finite useful operations
lives which they are recognized as straight-line depreciation costs. Non-current assets (or a disposal group), as well as assets and
liabilities relating to a discounted operation are classified as held
The amortization periods of other intangible assets: for sale, if their carrying amounts will be recovered principally
through a sales rather than through continuing use. Those non-
• Computer programs 5–10 years current assets (or a disposal group), as well as the assets and
liabilities relating to a discontinued operation that are classified
Borrowing costs as held for sale are measured at the lower of their carrying
Borrowing costs are charged to the income statement during the amounts and fair values less costs to sell. The depreciation
financial period in which they occur. and amortization on these assets is ceased at the moment of
classification. Information on a discontinued operation is provided
in the notes. At the date of the financial statements, the Group
had no such category of assets.

Inventories Available-for-sale assets
Inventories are stated at the cost or a lower probable net realizable Available-for-sale assets are those non-derivative financial assets
value. Cost of inventory is determined on weighted average cost that are designated as available for sale or are not classified into
formula, which is close to the FIFO principle. any other category. They are included in non-current assets
unless the Group has an intention to hold the instrument for less
The cost of finished goods and work in progress includes materi- than 12 months from the closing date, in which case they are
als, wages and salaries, social expenses, subcontracting expens- included in current assets. Available-for-sale assets consist of
es, other variable expenses, and an allocation of the variable and shares and interest-bearing investments and are measured at fair
fixed production overheads. Inventories are presented net of value or, when the fair value cannot be determined reliably, at
deductions for obsolete items. amortized cost. The fair value of these assets has been
measured based on quoted market prices in an active market,
Financial instruments being the bid price at the balance sheet date. Changes in the fair
value of available-for-sale financial assets are recognized in the
The Group’s financial assets and liabilities are classified in
fair value reserve in equity. The cumulative gain or loss previously
accordance with IAS 39 Financial Instruments: Recognition and
recognized in equity is released in the Income Statement when
Measurement as follows: financial assets and liabilities at fair
the investment is sold or it is impaired. The Group has no finan-
value through profit or loss, held-to-maturity financial assets,
cial assets classified as available for sale at the moment.
loans and receivables, and available-for-sale financial assets. The
classification is made on initial recognition and it is based on the Trade receivables
nature of the item. For the moment the Group has no financial Trade receivables are measured at their invoiced amount less any
assets classified as held to maturity. impairment losses. Trade receivables do not include cash flows
from the sold receivables. The credit risk related to the sold trade
Transaction costs are included in the initial measurement of finan- receivables is transferred to the buyer at the moment of sale. The
cial assets that are not measured at fair value through profit and expenses related to the sale of trade receivables have been
loss. The purchases and sales of financial assets are accounted recognized as other financial expenses. Credit losses are
for at trade date. recognized in the Income Statement as other financial expenses.
A financial asset is derecognized when the Group has lost its Cash and cash equivalents
contractual rights to the cash flows or it has transferred substan- Cash and cash equivalents include cash on hand, bank deposits
tially all the significant risks and rewards of ownership of the on demand and other short-term, very liquid investments. Cash
financial asset to an external party. and cash equivalents have a maturity period of three months or
less. The balances of accounts with overdraft facility are included
Financial assets at fair value through profit or loss in current liabilities.
This category is divided into two subgroups, assets held-for-trad-
ing and assets designated as at fair value through profit or loss Derivative instruments and hedge accounting
upon initial recognition. Assets classified as held for trading have Derivatives are initially recognized at cost equal to their fair value.
been acquired principally for the purpose of short-term profit- Subsequent to initial recognition derivatives are measured at fair
taking. Derivatives that do not qualify for hedge accounting have value.
been classified as held for trading assets. Financial assets clas-
sified as held for trading and those maturing within 12 months Although certain derivatives qualify for effective hedging as
are included in current assets. Financial assets in this category defined by the Group’s risk management, they do not fully meet
are measured at the fair value based on quoted prices in an ac- the requirements for hedge accounting as set in IAS 39, even
tive market. Both realized and unrealized gains and losses relat- though they are effective financial hedging instruments. As the
ed to the changes in the fair value are recognized in the Income company does not apply hedge accounting as defined in IAS 39
Statement in the period in which they occur. the changes in the fair values of derivatives are recognized in the
Income Statement in the period in which they occur, even if the
Loans and receivables hedged item does not affect the Income Statement within a fu-
Loans and receivables are non-derivative financial assets with ture period. The changes in the fair value of currency hedges are
fixed or determinable payments that are not quoted in an active included in operating profit and of interest hedges in financial
market and they are not held for trading. This category includes items.
Group’s financial assets that arise from the transfer of cash,
goods or services to a debtor. They are measured at amortized The fair values of derivatives are determined on the basis of
cost and recognized in current or non-current assets; non-current, market prices and generally used valuation models. The data and
if they mature after 12 months. assumptions used in the valuation models are based on verifiable
market prices. The fair values of derivatives maturing within a
year are presented within current receivables or liabilities. The fair
values of derivatives with maturities in excess of a year are
presented within non-current receivables or liabilities.

Financial liabilities Operating profit
Financial liabilities are initially recorded at their fair value on the The Group has determined operating profit (EBIT) as follows:
basis of consideration received. Transaction costs are included in operating profit is the net amount obtained when other operating
the original cost. After the initial recognition, all financial liabilities income is added to the net sales, subtracted by purchase expens-
are measured at amortized cost using the effective interest rate es adjusted by changes in finished and non-finished inventories,
method. The financial liabilities are included in non-current and subtracted by costs resulting from employee benefits, depreciation,
current liabilities and may be either interest-bearing or non-interest- amortization and impairment losses, as well as other operating
bearing. expenses. All other items, apart from the above-mentioned
income statement items, are entered below operating profit.
Provisions and contingent liabilities Exchange rate gains and losses are included in operating profit if
A provision is recognized when the Group has a legal or construc- they result from business-related items; otherwise, they are
tive obligation as a result of a past event, the outflow of resources booked under financial items. Changes in the fair value of deri-
is probable and the amount of the obligation can be reliably esti- vatives are included in operating profit for currency hedges and in
mated. When part of the provision is expected to be reimbursed the financial items for interest hedges.
by another party, the reimbursement is treated as a separate
asset. The reimbursement is recognized only when it is virtually Dividends
certain that it will be received. Provisions are measured at the Dividends proposed by the Board are not recognized until they
present value of the expenditure that is required to settle the have been approved by the shareholders at the Annual General
obligation. Meeting.
At the date of the financial statements, the Group had no such Accounting policies requiring the management’s
probable warranty obligations that would have qualified for
recognition as a warranty provision.
judgement and key sources of estimation uncertainty
Management judgements made in the application of the account-
Contingent liability is a contingent obligation caused by past ing policies of the Group that have major impact on figures in the
events. This obligation will realize, when the uncertain trans- financial statements relate to impairment testing and deferred tax
action, not controlled by the Group, will occur. Also an obligation receivables.
which probably does not require a cash settlement or on which
the value cannot be reliably estimated will be treated as a contin- Goodwill and unfinished intangible assets are tested annually for
gent liability. A contingent liability is presented in the notes. impairment and indications of impairment are assessed as a part
of the management’s monthly business follow-up. Recoverable
amounts of the cash generating units are based on value-in-use
Leases
calculations. Preparation of these calculations requires the
Leases are accounted for as finance leases in accordance with management to make judgements.
IAS 17 Leases, when the lease transfers substantially all the risks
and rewards incidental to ownership to the Group. A deferred tax asset is recognized to the extent that it is probable
that taxable profit will be available against which the unused tax
In an operating lease, substantially all the risks and rewards are losses can be utilized. The recognition of deferred tax assets is
retained by the lessor. Rental payments under operating leases based on the calculations of the expected future profits. Prepara-
are recognized as other operating expenses on a straight-line tion of such calculations requires the management to make
basis over the lease term. judgements.
Income taxes By the publication of the Consolidated Financial Statements, the

Income taxes are based on the taxable earnings of the Group Group is not aware of any future key assumptions nor of any
entities and calculated in accordance with the local tax regula- significant uncertainties regarding the estimates made at the
tions of each country. Income taxes consist of the current taxes balance sheet date that might have a significant risk of causing
and the tax adjustments for the prior periods. Income taxes also material adjustment to the carrying amounts of assets and
include any changes in deferred tax liabilities and assets. The tax liabilities within the next financial year.
effect on items recognized directly in equity is also charged or
credited directly in equity.
Deferred tax liabilities or assets are recognized on temporary

differences between the tax base of the entities’ assets and
liabilities and their carrying amounts for financial reporting
purposes, and for differences relating to consolidation. Most
significant temporary differences arise from tax losses carried for-
ward. Deferred tax assets and liabilities have been computed
using each country’s statutory tax rate for the following fiscal
period. A deferred tax asset is recorded on the basis of losses
only if it is probable that the loss in question can be used to
offset taxable income in future fiscal years. Deferred tax liabilities
are reported in full.

New or amended standards and interpretations • IFRS 8 Operating Segments (effective for financial periods
IASB has published the following new or revised standards and beginning on or after 1 January 2009). IFRS 8 replaces IAS 14
interpretations that are not yet in force, and which the Group has Segment Reporting. According to this new standard, segment
not yet applied. The Salcomp Group will adopt each standard and reporting is to be based on internal management reporting
interpretation on the day they enter into force or, if the effective and the accounting principles complied with in this reporting.
date is other than the first day of the financial period, from the IFRS 8 requires disclosure of the Group’s products, services,
beginning of the financial period following the effective date. geographical areas and major customers. The Group is also
required to disclose information on the specific grounds
• IFRIC 11 IFRS 2 – Group and Treasury Share Transactions

whereby the reportable segments are determined, as well as
on the accounting principles applied to segment reporting.
(effective for financial periods beginning on or after 1 March
2007). This new interpretation clarifies the scope of Also, according to the standard, a reconciliation of segment
application of share-based payment transactions (IFRS 2) reporting to certain Income Statement and Balance Sheet
and requires reassessment of such transactions in the items must be presented. According to the Group
subsidiaries. The new interpretation will have no impact on assessment, the new standard will not essentially change its
the next consolidated financial statements. current segment reporting, because the business segments
determined according to internal reporting are currently the
• IFRIC 12 Service Concession Arrangements (effective for

primary reporting format of the Group. The manner in which
geographical segment information is presented, will change.
financial periods beginning on or after 1 January 2008).
The Group does not have any contracts with the public sector, According to the Group assessment, the adoption of IFRS 8
as mentioned in this interpretation, and, therefore, the will mostly affect the way that segment information will be
interpretation will have no impact on the next consolidated presented in the notes to the next consolidated financial
financial statements. The interpretation has not yet been statements.
approved for adoption within the EU.
• Amendment to IAS 23 Borrowing Costs (effective for financial
• IFRIC 13 Customer Loyalty Programmes (effective for financial

periods beginning on or after 1 January 2009). The amended
standard requires that borrowing costs that are directly
periods beginning on or after 1 July 2008). The Group does
not have any loyalty arrangements with its customers, as attributable to the acquisition, construction or production
mentioned in this interpretation, and, therefore, the inter- of a qualifying asset, such as a production plant, shall be
pretation will have no impact on the next consolidated capitalized as part of the cost of that asset. According to the
financial statements. The interpretation has not yet been previously-accepted practice, the Group has recognized
approved for adoption within the EU. borrowing costs as expenses in the financial period during
which they arose. According to the Group assessment,
• IFRIC 14 IAS 19 – The Limit on a Defined Benefit Asset,

however, the adoption of this amendment will not have
material impact on the next consolidated financial statements.
Minimum Funding Requirements and their Interaction
(effective for financial periods beginning on or after The amended standard has not yet been approved for
1 January 2008). This interpretation is applied to IAS 19 adoption within the EU.
compliant, defined benefit, post-employment arrangements
and other long-term employee benefit plans, when said • Amendment to IAS 1 Presentation of Financial Statements
arrangements involve a minimum funding requirement (MFR). (effective for financial periods beginning on or after 1 January
The interpretation also clarifies when to recognize an asset on 2009). The revised standard will change the way that financial
the balance sheet when taking into account future refunds or statements are presented. According to the Group
reductions in future contributions. In certain countries, assessment, this amendment will mostly affect the way that
the Group has defined benefit pension plans, as mentioned in the income statement and the statement of changes in equity
the interpretation. The Group is currently assessing the effects are presented. The way that the “earnings per share” ratio
of the interpretation. However, according to the preliminary is determined, will not change. The revised standard has
assessment, the new interpretation will not have a significant not yet been approved for adoption within the EU.
impact on the next consolidated financial statements. The
interpretation has not yet been approved for adoption within
the EU.

1. segment reporting
Salcomp Group’s primary reporting segments are business segments and secondary reporting segments are geographical segments.
These segments are based on the Group’s internal reporting and organisational structure.
Business segments
Salcomp Group operates in the markets of power supplies for mobile electrical and electronic equipment. The power supplies include
batteries, rechargeable batteries and chargers for them as well as kinetic power supplies, photocells and fuel cells. The Group’s main
market area is the mobile telecommunication devices. In practice the rechargeable batteries in this market area are the only power
supply which is integrated to the device. The primary reporting segments of the Group consist of chargers that are used to charging
these rechargeable batteries. The Group’s products’ profitability or risks do not differ from each other and so the Group does not
monitor product-specific risks or profitability.
The customer profitability has the strongest effect on the Salcomp Group’s risks and profitability. Because Salcomp operates globally the
contracts with the customers are done globally. The location of the production is chosen on the grounds of what is the most expedient
at the time, taking account of the production capacity and the geographical location of a global customer. The Group management does
not monitor the profitability of the geographical segments.
Geographical segments
Secondary geographical segment is divided into three geographical areas:
• Europe
• Asia-Pacific
• North and South Americas
In the presenting information on the basis of geographical segments, segment sales are based on the geographical location of the
customers. Segment assets and investments are based on the geographical location of the assets.
There are no inter-segment sales in the Group.
Segment assets
Segment assets include items directly attributable to the segment as well as those that can be allocated on a reasonable basis.
Segment assets comprise tangible and intangible assets (including goodwill), inventories and non interest-bearing receivables (trade and
other receivables as well as accrued income and other receivables), as well as cash and cash equivalents.
1 000 e
Europe Asia- North and Unallocated Group

Pacific South items total
Americas
Geographical segments 2007

Revenue 40 320 153 677 92 234 0 286 231
Assets 98 733 56 768 26 584 0 182 085
Capital expenditures 382 9 885 1 023 0 11 290
Geographical segments 2006

Revenue 49 672 138 643 70 734 0 259 049
Assets 117 493 42 387 14 609 0 174 489
Capital expenditures 1 429 6 911 924 0 9 264

1 000 e 2007 2006
2. OTHER OPERATING INCOME

Gains on disposal of property, plant and equipment and intangible assets 98 172
Rental income 163 72
Reversal of impairment losses on trade receivables 196 0
Other income 25 119
Total 482 363
3. OTHER OPERATING EXPENSES
Losses on disposal of property, plant and equipment and intangible assets and scrapping 12 32
Impairment losses on trade receivables 105 191
Other expenses 0 17
Total 117 240
4. DEPRECIATION, AMORTISATION AND IMPAIRMENT LOSSES
Depreciation and amortisation by asset type
Property, plant and equipment

Buildings 78 38
Machinery and equipment 4 111 4 694
Other tangible assets 482 446
Total 4 671 5 178
Intangible assets
Intangible rights 135 90
Total 135 90
Total depreciation and amortisation 4 806 5 268
Depreciation and amortisation by function

Production 4 462 4 926
Sales 28 13
Administration 90 69
Research and Development 226 260
Total 4 806 5 268
Impairment losses
In the financial years 2007 and 2006 no impairment losses on property, plant and
equipment and intangible assets were recognised in the Income Statement.
5. EMPLOYEE BENEFITS
Wages and salaries 29 677 24 895

Pension expenses – defined contribution plans 920 835
Options settled in shares 176 0
Other social expenses 5 424 3 876
Total 36 197 29 605
Information on the employee benefits of the Group management is presented

in the note 27 Related Party Transactions.
Information on the granted options is presented in the note 18 Share-based payments.
The average number of personnel in the Group during the financial year

Sales 23 20
Total 8 622 7 567

1 000 e 2007 2006
6. FINANCE INCOME
Interest income 70 38
Exchange gains 888 238
Total 958 276
Items above the operating profit include exchange gains
EUR 6.3 million in 2007 (EUR 5.4 million in 2006).
7. FINANCE EXPENSES
Interest expenses –2 980 –3 458

Exchange losses –420 –661
Other finance expenses –803 –428
Total –4 203 –4 547
Items above the operating profit include exchange losses

EUR 5.5 million in 2007 (EUR 4.7 million in 2006).
8. INCOME TAXES
Income taxes in Income Statement
Current tax expense –1 352 –290
Tax adjustments for prior years 70 8
Deferred tax expense –2 999 –3 291
Total –4 281 –3 573
Reconciliation of the income tax expense in the Income Statement and the income tax
expense calculated using the Salcomp Group’s domestic corporation tax rate:
Profit before tax 22 549 11 202
Income tax calculated using the parent company’s tax rate (26%) 5 863 2 912
Effect of tax rate in foreign subsidiaries –1 884 –970
Use of previously unrecognised tax losses –558 –582
Effect of unrecognised tax losses utilised 899 2 078
Other items –39 135
Income tax expense 4 281 3 573
9. EARNINGS PER SHARE

The basic earnings per share is calculated as follows:
Profit for the year attributable to equity holders of the parent

Weighted average number of ordinary shares outstanding during the financial year
Information on the changes in the number of the shares is provided in the note 17
Capital and Reserves.
Profit for the year attributable to equity holders of the parent 18 268 381 7 629 278
Weighted average number of ordinary shares outstanding during the financial year 38 975 190 37 808 067
Basic earnings per share (e/share) 0.47 0.20
Diluted earnings per share, EUR:
Equity holders of the parent 18 268 381
Weighted average number of ordinary shares outstanding during the financial year 38 975 190
Dilution effect of option rights to the number of shares 82 629
Diluted weighted average number of shares 39 057 819
Diluted earnings per share (e/share) 0.47
Information on the incentive program is presented in the note 18.

1 000 e
10. PROPERTY, PLANT AND EQUIPMENT
Land Buildings* Machinery Other Advance Total

areas and tangible payments
equipment assets
Cost January 1, 2007 20 3 362 51 342 6 870 997 62 591

Additions 4 899 6 777 89 106 11 871
Disposals and transfers between classes –7 486 –875 –979 –9 340
Exchange difference –172 –222 –394
Cost December 31, 2007 20 8 261 50 462 5 863 123 64 728
Accumulated depreciations and impairments January 1, 2007 –2 502 –38 007 –1 944 –42 452
Depreciation charge for the year –78 –4 111 –482 –4 671
Disposals and transfers between classes 6 993 6 993
Exchange difference 134 76 210
Accumulated depreciations and impairments December 31, 2007 –2 580 –34 991 –2 350 –39 921
Carrying amounts January 1, 2007 20 860 13 335 4 927 997 20 139

Carrying amounts December 31, 2007 20 5 681 15 470 3 513 123 24 808
Cost January 1, 2006 20 3 362 46 563 5 885 219 56 049

Additions 7 086 1 363 884 9 333
Disposals and transfers between classes –1 394 –106 –1 500
Exchange difference –913 –378 –1 291
Cost December 31, 2006 20 3 362 51 342 6 870 997 62 591
Accumulated depreciations and impairments January 1, 2007 –2 464 –34 946 –1 564 –38 974
Depreciation charge for the year –38 –4 694 –446 –5 178
Disposals and transfers between classes 1 205 1 205
Exchange difference 428 66 494
Accumulated depreciations and impairments December 31, 2006 –2 502 –38 007 –1 944 –42 452
Carrying amounts January 1, 2006 20 898 11 617 4 322 219 17 075

Carrying amounts December 31, 2006 20 860 13 335 4 927 997 20 139
*The Group owns of a property located in Kemijärvi, Finland. The property comprises production areas and office premises. The property has
been partly unoccupied from the early 2004. The carrying amount of the property is EUR 0.8 million December 31, 2007 (EUR 0.9 million
December 31, 2006). The Group has no intention to use these facilities in production, but the property can not yet be classified as an asset
held for sale. The property has not been classified as an investment property as the Group has no intention to keep the property as a
non-current asset nor to gain rentals for capital appreciation. The carrying amount of the property does not exceed its fair value at the end of
year 2007.

1 000 e
11. INTANGIBLE ASSETS
Goodwill Intangible Total

rights
Cost at January 1, 2007 66 412 1 858 68 270

Additions 399 399
Disposals and transfers between classes 8 8
Exchange difference –11 –11
Cost December 31, 2007 66 412 2 238 68 650
Accumulated amortisation and impairments January 1, 2007 –1 629 –1 629

Amortisation for the year –135 –135
Exchange difference 7 7
Accumulated amortisation and impairments December 31, 2007 –1 757 –1 757
Carrying amounts January 1, 2007 66 412 229 66 642

Carrying amounts December 31, 2007 66 412 481 66 894
Cost at January 1, 2006 66 412 1 847 68 259

Additions 37 37
Cost December 31, 2006 66 412 1 858 68 270
Accumulated amortisation and impairments January 1, 2006 –1 445 –1 445

Amortisation for the year –90 –90
Accumulated amortisation and impairments December 31, 2006 –1 629 –1 629
Carrying amounts January 1, 2006 66 412 296 66 709

Carrying amounts December 31, 2006 66 412 229 66 642

1 000 e
12. Impairment test for the cash-generating units including goodwill
For the purposes of impairment testing according to IAS 36 Impairment of Assets, goodwill has been allocated to the geographical segments of
Europe and Asia-Pasific. The goodwill was not allocated to other segments as the goodwill relates to the functions in Finland and China. The
aggregate goodwill amount totalled EUR 66.4 million at December 31, 2007. The amount has not changed since the previous balance sheet
date.
The assets of the cash-generating units December 31, 2007 were as follows:
2007 2006
The assets on test of which goodwill The assets on test of which goodwill
Finland 96 132 59 760 87 787 59 760

China 37 189 6 640 32 221 6 640
Total 133 321 66 400 120 008 66 400
Other Group assets 48 764 54 481

Total 182 085 174 489
In the impairment testing of the goodwill the recoverable amount of the business segments is based on value in use calculations, which have
been calculated based on forecast discounted cash flows. Those calculations use cash flow projections based on actual operating profit and
the five-year plans approved by the Group management. Cash flows for further periods beyond five years are extrapolated using an estimation
of uniform 1.5% growth rate. From the Group management’s point of view, this growth rate is consistent with the business development of the
Group at a long-term forecast period for the industry. This growth rate has been used for all units. The discount rate used in the calculations
is pre-tax WACC; 10.4% in Europe and 13.3% in China. Based on the test there is no need for impairment of the goodwill. Besides the good-
will the Group has not other intangible assets that have indefinite useful lives.
From the Group management’s point of view, a reasonably estimable possible change in any key parameter used in the calculations would
not cause the segment’s carrying amount to exceed its recoverable amount.

1 000 e
13. DEFERRED TAX ASSETS AND LIABILITIES
Dec 31, 2006 Recognised in the Recognised Dec 31, 2007

income statement in equity
Deferred tax assets and liabilities during 2007:
Deferred tax assets:
Effects of consolidation and eliminations 223 161 384

Tax losses carried forward 2 800 0 0 2 800
Total 3 023 161 0 3 184
Deferred tax liabilities:
Taxable temporary differences 8 915 3 160 12 075

Total 8 915 3 160 0 12 075
Net deferred tax liability 5 892 2 999 0 8 891
Dec 31, 2005 Recognised in the Recognised Dec 31, 2006

income statement in equity
Deferred tax assets and liabilities during 2006:
Deferred tax assets:
Effects of consolidation and eliminations 29 194 223

Tax losses carried forward 2 800 0 0 2 800
Total 2 829 194 0 3 023
Deferred tax liabilities:
Taxable temporary differences 6 012 2 903 8 915

Taxes related to items recognised directly to equity 0 582 –582 0
Total 6 012 3 485 –582 8 915
Net deferred tax liability 3 183 3 291 –582 5 892
At December 31, 2007 the parent company had tax loss carry forwards totalling EUR 38.3 million (EUR 45.9 million in 2006). Additionally the
parent company has postponed depreciations (in taxation) totalling EUR 13.6 million. Deferred tax assets have been recognised amounting to
EUR 2.8 million due to uncertainty of utilisation of the tax loss carry forwards. These tax losses carry forwards expire in 2013–2015.
Deferred tax liabilities comprise mainly of goodwill amortisation in the financial statements of the parent company.
The change in deferred tax liabilities recognised in equity during 2006 is included in the transaction cost related to the share issue. These
transaction costs have been recorded a deduction of equity and are included in the share issue.

1 000 e 2007 2006
14. inventories
Raw materials and consumables 10 338 6 060

Finished products 13 776 15 858
Total 24 114 21 918
The carrying amount of the inventories was reduced by recognising an impairment loss amounting to EUR 2.2 million (EUR 1.5 million in 2006)
to comply with the net realisable value of the inventories.
In 2007 or in 2006 the total value of inventories does not include reversals of previously recognised impairment losses.
1 000 e 2007 2006
15. TRADE AND OTHER CURRENT RECEIVABLES
Trade receivables 42 710 48 817

Accrued income and deferred expenses 5 290 5 902
Other receivables 475 204
Total 48 475 54 923
During the current financial year the Group has written down receivables totalling EUR 0.1 million (EUR 0.2 million in 2006). In addition, a
reversal of previous years write downs of receivables is totalling EUR 0.2 million. The carrying amounts represent best its maximum credit risk
exposure at the balance sheet date, without taking into account of the fair value of any collateral, in the event of other parties failing their
obligations under financial instruments.
The material items included in accrued income and deferred expenses relate to advance payments paid to the subcontractors, EUR 0.8
million at the end of 2007 (EUR 1.9 million at the end of 2006). There are hedging instrument accruals EUR 0.4 million at the end of the
financial year (EUR 0.1 million at the end of 2006). In addition accrued income and deferred expenses include a EUR 3.1 million deposit
relating to taxation recognised in the Manaus company (EUR 2.9 million in 2006).
1 000 e 2007 2006
16. CASH AND CASH EQUIVALENTS
Cash on hand and at bank 14 263 7 591

Short-term bank deposits (< 3 months) 348 254
Total 14 611 7 845
Cash and cash equivalents in the statement of cash flows are as follows:
Cash on hand, at bank and short-term bank deposits 14 611 7 845

Total 14 611 7 845

1 000 e
17. CAPITAL AND RESERVES

Number of Share Share Invested Premium Total
shares capital issue unrestricted fund
(1 000 pcs) equity
December 31, 2005 3 284 8 285 105 5 934 14 324
Registration of share issue 14 34 –105 71 0

Change in the counter value 29 677 0
Share issue 6 000 1 514 16 030 17 544
December 31, 2006 38 975 9 833 0 22 035 31 868
Transfer from premium fund to invested unrestricted equity 22 035 –22 035 0
December 31, 2007 38 975 9 833 0 22 035 0 31 868
According to the Salcomp Plc’s Articles of Association, the company has one serie of shares. At December 31, 2007 the number of shares
issued and fully paid was 38,975,190 pieces.
At December 31, 2007 the shares owned by the members of the Board, CEO and the Management team totalled 650,607 pieces (877,017
pieces at December 31, 2006). Additionally, stock options owned by related party totalled 265,000 pcs at year-end.
At the Annual General Meeting in March, the Articles of Association were amended so, that the share capital and the number of shares can be
increased or decreased without amending the Articles of Association. This amendment has been registered to the Trade Register at April 23,
2007.
The Annual General Meeting authorized the Board of Directors to decide on offering a maximum of 8,000,000 new shares for subscription
through a share issue pursuant to Chapter 9, Section 2 (2) of the Companies Act or by granting options (excluding personnel stock options)
or other special rights entitling to shares referred to in Chapter 10 of the Companies Act. The Board has, based on the authorization, the right
to deviate from the shareholders’ pre-emptive right to subscribe new shares. The authorization is valid until 30 June 2008. This authorization
has not been used.
Transfer of premium fund to invested unrestricted equity has taken place during the year according to Finnish Companies Act.
After the balance sheet date, the Board has decided to propose to the General Meeting of Shareholders a distribution of dividends for 2007 of
EUR 0.15 per share.

2007
18. share-based payments
During the financial year the Group established an incentive program to the Group key personnel.
As stated in the terms of the incentive program, stock options are granted free of charge.
Incentive program is conditional. Basic terms of the program are presented below.
Program symbol Option right 2007A

The nature of the incentive Stock option
Grant date May 2, 2007
Options granted during the year (pcs) 622 500
Original excercise price (e/option) 3.09
Dividend adjustment 0.06
Exercise price (e/option) 3.03
Share price at grant date 3.51
Number of personnel in option program (year end) 45
Vesting conditions 3 years’ period of employment
and at least 8% shareholder
return per annum
Movements in the year
Outstanding at 1 January 0
Granted during the year 622 500
Forfeited during the year –12 500
Excercised during the year 0
Expired during the year 0
Outstanding at 31 December 610 000
Excercisable at 31 December 0
The fair value has been determined using the Cox-Ross-Rubinstein binomial model.
Expected volatility has been defined based on the historical share price development
of the parent taken into consideration the remaining contractual life of the options.
The fair value of the shares in option program has been based on the quoted share price.
Assumptions used in fair value calculation (option right 2007A):
Expected volatility 32%

Expected contractual life of the option at grant date 4.9 yrs
Risk-free interest rate 4.2%
Fullfillment of option conditions (share price + dividends) 3.89–4.54 e
Expected personnel deductions 9.4%
Fair value of the instrument at grant date 1.44 e

1 000 e
19. provisions
Restructing provision
The restructuring provision comprises the estimated building maintenance costs originated from the unoccupied production facilities located
in Kemijärvi, Finland.
January 1, 2007 40
Provisions made during the year 0
Provisions used during the year 0
Provisions reversed during the year 0
December 31, 2007 40
January 1, 2006 40
Provisions made during the year 0
Provisions used during the year 0
Provisions reversed during the year 0
December 31, 2006 40
1 000 e 2007 2006
20. INTEREST-BEARING LIABILITIES
Non-current
Loans from financial institutions 28 542 43 797
Total 28 542 43 797
Current
Current portion of non-current loans from financial institutions 9 405 8 405
Total 9 405 8 405
The interest-bearing liabilities are carried at amortised cost. The liabilities are
comprised of floating rate loans denominated in euro, linked to the 3 month
euribor. The loans contains market-based financial and other covenants.
Group’s floating rate loans
Group’s interest-bearing liabilities with floating rates at contractual

repricing periods:
Below 6 months 4 750 3 750

6–12 months 4 750 4 750
1–5 years 28 890 44 500
over 5 years
Total 38 390 53 000
The weighted averages of the effective interest rates of the Group’s

interest-bearing liabilities at the balance sheet date were as follows:
Bank loans 6.44% 5.91%

Other loans 6.96%
Bank overdrafts 6.44% 5.91%

1 000 e 2007 2006
21. TRADE AND OTHER CURRENT LIABILITIES
Trade payables 52 104 50 745

Accrued personnel, social security and pension expenses 4 383 1 967
Accrued interest expenses and other financial items 6 11
Advances received 191 645
Other accrued expenses and deferred income 5 643 4 371
Other liabilities 1 055 2 612
Total 63 382 60 351
Main items in other accrued expenses and deferred income
Tax and tax-related accruals 4 345 3 066

Accrued expenses (e.g. water, electricity and leases relating to properties) 851 938
Others 447 367
Total 5 643 4 371

22. MANAGEMENT OF FINANCIAL RISKS
In normal business activities, the Group is exposed to several financial risks. The Group’s objective is to protect the company from changes
occuring in the financial markets and thus to minimize the unfavorable effects on the Group’s profit. The most significant financial risks are
foreign exchange risks, interest rate risks, credit risks and liquidity risks. The general risk management principles are approved by the Board. The
Group Treasury, together with the local companies, is responsible for the implementation in practice.
Group Treasury function is centralized to the parent company.
Foreign exchange risk

Group companies are exposed in their business to exchange rate risk as a varying part of their sales and purchases being denominated
in foreign currencies. In addition, part of their sales and purchases are determined in currency other than the invoicing currency. The most
important sale and purchase currency is USD. The Group’s principle is to hedge the net position remaining after the integration of forecast
income and expenses in USD. The target is to hedge 50–100% of the next six months forecast net position. Hedging is done with currency
options and forwards.
The exchange rate risk related to subsidiaries’ equity has not been hedged. Currency position is reviewed regurlarly, both currency- and company-
wise.
Even though the derivatives, being the effective hedging instruments, fulfill the requirements of hedge effectiveness defined by the Group Risk
Management, they do not fully meet the hedge accounting requirements set up in IAS 39. After initial recognition, the derivatives are measured
at fair value. Both realized and unrealized gains and losses arising from changes in fair value are recognised through profit or loss as they occur.
Below is presented the net position by currency relating to trade receivables, cash and cash equivalents and trade payables, taking into account
the hedged amount of the currency.
1 000 e
USD EUR RMB BRL INR HKD
2007
Trade receivables 18 453 369 10 875 11 159 1 853
Cash and cash equivalents 4 947 929 3 171 2 938 2 552 74
Trade payables –17 258 –488 –13 548 –4 310 –1 329 –15 171
Hedging –6 636
Open net position –494 810 498 9 787 3 076 –15 097
2006
Trade receivables 31 447 551 12 971 3 848
Cash and cash equivalents 5 032 754 1 466 261 294 33
Trade payables –18 826 –783 –11 844 –1 259 –18 033
Hedging –3 606
Open net position 14 047 522 2 593 2 850 294 –18 000
Below is presented the effect of 10% change in currency rate to the Group’s profit before taxes related to net currency position.
1 000 e
Change in currency, % USD RMB BRL INR HKD
2007 10 –55 55 1 087 342 –1 677

–10 45 –45 –890 –280 1 372
2006 10 1 546 356 317 33 –2 000
–10 –1 265 –291 –259 –27 1 636

Interest rate risk
The Group’s interest rate risk is mainly related to the floating rate loan portfolio. The Group’s whole loan portfolio is tied to the 3 months
euribor. Changes in the market rates have a direct impact on the Group’s future interest rate cash flows. More than 50% of the loan portfolio
is hedged against rise in market interest rates and both interest options and interest swaps have been used.
Even though the derivatives, being the effective hedging instruments, fulfill the requirements of hedge effectiveness defined by the Group Risk
Management, they do not fully meet the hedge accounting requirements set up in IAS 39. After initial recognition, the derivatives are
measured at fair value, both realized and unrealized gains and losses are recognized through the Income Statement as they occur.
The table below presents the effect of a one percentage point change in interest rate to the Group’s profit before taxes related to the Group’s
loan portfolio with variable interest rate.
1 000 e
Change in interest rate, % Effect to profit before taxes
2007 1 –101
–1 172
2006 1 –230
–1 305
The Group’s loan portfolio is euro denominated.

Raw material price risk
The most important materials of components of the end products are plastic resin and copper. Generally the Group does not buy these raw
materials directly. The short-term price risk related to these raw materials is hedged with fixed (on average 3 to 6 months) price contracts.
The global market prices of the raw materials affect the Group’s purchases prices for the long term. The Group does not use hedging
instruments for hedging from long-term price risk.
Credit risk
Group policy determines the credit rating requirements of customers and counterparties of treasury transactions and derivative contracts.
Products are sold only to companies with good credit worthiness. Customer receivables are followed regularly. The counterparties of the
derivative contracts and treasury transactions have a good credit rating. The maximum amount on the Group’s credit risk equals the carrying
amount of the financial assets (note 15).
The tables below present the aging of trade receivables and their geographical distribution.
1 000 e 2007 2006
Aging of trade receivables

Not past due 33 916 28 488
Past due less than 30 days 7 227 9 045
30–60 days 895 10 173
61–120 days 365 658
Over 120 days 307 453
Total 42 710 48 817
Geographical distribution
Asia and Pacific Ocean area 21 725 27 197
Europe 5 678 14 341
North and South America 15 307 7 279
Total 42 710 48 817
The clientele is comprised of a few large groups, meaning that trade receivables have significant credit risk concentrations. These groups
have good credit worthiness.

Liquidity risk
The Group continuously strives to estimate and monitor the amount of financing required in order to have a sufficient liquidity position from
which to finance its business activities and make loan repayments. The Company strives to safeguard the availability and flexibility of its
financial reserves through credit facility agreements and by using several banks for its financing activities. The Groups’ financing agreements
have customary terms and conditions that are related to the position of the financiers, financial key figures and the use of collaterals.
The table below presents the Group’s payment obligations based on the undiscounted cash flows of the contracts.
1 000 e 2007 2008 2009 2010 2011 2012
2007
Interest bearing liabilities 11 414 13 302 12 620 5 164
Other liabilities 1 055
Trade payables 52 104
Total 64 573 13 302 12 620 5 164
2006
Interest bearing liabilities 11 224 11 431 13 549 10 980 12 878 1 159
Other liabilities 2 612
Trade payables 50 745
Total 64 581 11 431 13 549 10 980 12 878 1 159

23. FAIR VALUES OF FINANCIAL ASSETS AND LIABILITIES
Financial assets
For financial assets the fair value equals their initial carrying amount as the discounting has no material effect considering the short maturity
of these items.
Financial liabilities
The maturities of all financial liabilities are maximum five years (last repayment in 2011). At the balance sheet date the interest rate of the
interest-bearing liabilities are tied to 3 months market rate. For these liabilities the fair values do not materially differ from their carrying
amounts as the discounting has no material effect and the company-specific risk premium has not materially changed.
The fair values of the financial assets and financial liabilities, which equal to their carrying amounts, are presented in the below table:
1 000 e Note 2007 2006
Carrying amount Fair value Carrying amount Fair value
Financial assets
Trade and other receivables 15 43 185 43 185 49 021 49 021
Cash and cash equivalents 16 14 611 14 611 7 845 7 845
Interest derivatives 15 204 204 0 0
Currency derivatives 15 173 173 139 139
Financial liabilities
Interest bearing liabilities 20 37 947 37 947 52 202 52 202
Trade and other payables 21 53 159 53 159 53 357 53 357
Interest derivatives 15 0 0 26 26
1 000 e 2007 2006
24. ADJUSTMENTS TO CASH FLOWS FROM THE OPERATING ACTIVITIES
Non-cash transactions:
Depreciation and amortisation 4 806 5 268
Recognition of option costs 176 0
Total 4 982 5 268

1 000 e 2007 2006
25. OPERATING LEASES
Group as lessee
Minimum lease payments on non-cancellable operating leases

are payable as follows:
Less than one year 2 358 1 511

Between one and five years 5 953 2 653
More than five years 0 1 127
Total 8 311 5 291
The Group has leased factory facilities and office premises located in Salo Finland, in China and in Brazil. These leases are classified as
operating leases. The leases run for a period of 3–5 years with an option to renew the lease after that date.
EUR 2.2 million was recognised as lease expense in the income statement in respect of operating leases during the year ended December
31, 2007 (EUR 2.0 million in 2006).
1 000 e 2007 2006
26. COMMITMENTS AND CONTINGENCIES
Collateral for own commitments

Bank loans 38 390 53 000
Company mortgage 170 000 170 000
Other collateral for own commitments 209 254

27. RELATED PARTY TRANSACTIONS
Salcomp Group has related party relationships with the Board members, CEO and with the Management Team.
Management team consists of 7 persons and the CEO.
Group Group
Companies owned by the Group and the parent company Country
holding (%) voting (%)
Parent Salcomp Plc, Salo Finland

Salcomp Manufacturing Oy, Salo Finland 100.0 100.0
Salcomp Ltda, São Paulo Brazil 99.8 99.8
Salcomp (Shenzen) Co. Ltd, Shenzen China 100.0 100.0
Salcomp Industrial Eletronica da Amazonia Ltda Brazil 100.0 100.0
Salcomp Manufacturing India Private Ltd India 100.0 100.0
During the financial period, Salcomp Plc has become a subsidiary of Nordstjernan AB. Salcomp Group has not had related party transactions
with companies belonging to Nordstjernan group.
1 000 e 2007 2006
The Group has entered into related party transactions as follows:
a) Related party ownership changes
The number of the parent company’s shares the current key management personnel have sold 69 896 pcs 448 833 pcs
The number of the parent company’s shares the former key management personnel have sold 156 514 pcs 491 756 pcs
Related party ownership:

Shares 650 607 877 017
Option rights 265 000 0
b) Related party compensations
Salaries and other benefits 1 109 1 336

Post-employment benefits (cost according to the Finnish Employees’ Pension Act) 244 400
Share-based payments 76 0
Total 1 429 1 736
Management remuneration
Chairman of the Board Mats Heiman (from September 4, 2007) 10 0
Vice Chairman of the Board Kari Vuorialho (Chairman of the Board until September 4, 2007) 28 94
Members of the Board:
Jorma Terentjeff (Vice Chairman until September 4, 2007) 23 25
Peter Hofvenstam (from September 4, 2007) 7 0
Andreas Tallberg 20 20
Panu Halonen (until September 4, 2007) 13 20
Timo Leinilä (until September 4, 2007) 13 20
Petri Myllyneva (until September 4, 2007) 13 20
CEOs:
Mats Eriksson 78 278
Markku Hangasjärvi 203 30
Total 408 507
There are no pension plans in the Group with terms deviating from the Finnish Employees’ Pension Act.
c) Loans to related parties
There were no loans or commitments granted to the related parties.

28. capital management
The target of the Group’s capital management is to support the business by ensuring the normal operational preconditions, as well as to
increase the shareholder value with an objective of the best possible return. The optimal capital structure ensures also lower amount of
capital expenses.
Capital structure is influenced for instance through dividend distribution and share issues. Group can change or adjust the dividend distribution
or the amount of returned equity to the shareholders. Additionally, the number of issued shares can be adjusted. Decisions can also be made
on sales of assets to repay the liabilities.
Group capital structure development is monitored with key figures for example on Net Debt to EBITDA, which is also one of the covenants in
the loan portfolio:
1 000 e 2007 2006
Interest bearing liabilities (gross) 38 390 53 000

Cash and cash equivalents –14 611 –7 845
Net Debt 23 779 45 155
EBITDA 30 600 20 741
Net Debt to EBITDA 0.8 2.2
Gearing 34.0% 83.7%
29. events after the balance sheet date
After the balance sheet date no material events that would have effected the Financial Statements presented here have been noticed.

parent company income statement
1 000 e Note 2007 2006
Net sales 1 164 252 182 138

Cost of goods sold 3, 4 –139 520 –154 112
Gross margin 24 732 28 026
Sales expenses 3, 4 –1 621 –1 492

Administrative expenses 3, 4 –3 853 –6 209
Research and Development expenses 3, 4 –3 433 –3 767
Other operating income 2 234 235
Other operating expenses 2 –11 375 –11 391
Operating profit 4 684 5 403
Finance income and expenses 5 –3 093 –3 159
Profit before appropriations and taxes 1 591 2 244
Income taxes 6 0 0
Other direct taxes 6 0 9

parent company balance sheet
1 000 e Note December 31, 2007 December 31, 2006
assets
NON-CURRENT ASSETS
Intangible assets 7
Goodwill 20 880 32 256
Other capitalized long-term expenditure 210 241
21 142 32 547
Tangible assets 8
Land and water areas 20 20
Buildings and constructions 823 860
Advances paid and assets under construction 0 119
2 937 4 147
Investments 9
Investments in Group companies 27 740 27 740
CURRENT ASSETS
Inventories
Finished goods 8 960 11 480
Receivables
Non-current 10
Prepaid expenses and accrued income 314 615
Current 11
Receivables from Group companies 32 177 13 239
Prepaid expenses and accrued income 1 648 2 417
52 434 46 940
Cash in hand and at banks 3 664 5 288

Total assets 117 191 128 758
Shareholders' equity and liabilities
SHAREHOLDERS' EQUITY 12
Share capital 9 833 9 833
Premium fund 0 23 691
Profit (loss) from previous financial years 10 421 10 508
Profit (loss) for the period 1 591 2 252
45 536 46 284
LIABILITIES
Non-current 13
Current 14
Payables to Group companies 26 700 26 236
Other payables 160 184
Accrued expenses and deferred income 1 606 1 429
42 765 37 974
Total shareholders' equity and liabilities 117 191 128 758

parent company cash flow statement
1 000 e 2007 2006
Cash flow from operating activities

Profit before extraordinary items 1 591 2 244
Adjustments:
Depreciation and amortisation according to plan 12 624 13 223
Finance income and expenses 3 093 3 159
Other adjustments –70 –128
Cash flow before change in working capital 17 238 18 498
Change in working capital:

Increase (–)/decrease (+) in current non-interest bearing receivables 3 272 –11 618
Increase (–)/decrease (+) in inventories 2 520 2 284
Increase (+)/decrease (–) in current non-interest-bearing payables 3 791 1 400
Cash flow from operating activities before financial items and taxes 26 821 10 564
Interests paid and other finance expenses –5 028 –6 588

Interest income from operating activities 41 120
Cash flow before extraordinary items 21 834 4 096
Cash flow from operating activities 21 834 4 096
Cash flow from investing activities

Investments in property, plant and equipment and intangible assets –382 –1 429
Gains on disposal of property, plant and equipment and intangible assets 443 201
Loans granted –7 900 –12 061
Investments in shares of subsidiaries 0 –1 658
Repayments of loan receivables 1 200 252
Interests of investments 130 0
Cash flow from investing activities –6 509 –14 695
Cash flow from financing activities

Paid share issue 0 19 200
Repayments of current loans 0 –60 615
Withdrawals of non-current loans 5 000 70 000
Repayment of non-current loans –19 610 –17 000
Cash flow from financing activities –16 949 11 585
Net change in cash and cash equivalents, increase (+)/decrease (–) –1 624 986
Cash and cash equivalents at the beginning of the financial year 5 288 4 302
Cash and cash equivalents at the end of the financial year 3 664 5 288

Notes to the parent company
financial statements
accounting policies
The parent company Financial Statements are prepared according to Finnish Accounting Standards (FAS). The Salcomp Group Consoli-
dated Financial Statements are prepared according to IFRS (International Financial Reporting Standards) and the Financial Statements
of the Parent company comply with the Accounting Policies of the Group wherever possible. Below are presented the Accounting Policies
which differ from the Group Accounting Policies. Otherwise the Group’s Accounting policies are applied.
Property, plant and equipment and intangible assets

The Accounting Policies of the Group are applied into the property, plant and equipment and intangible assets. Contrary to the Group’s
Accounting Policies, the parent company continues to recognise amortisation of the goodwill.
Research and Development expenses

All research and development expenses are expensed as incurred.
Share-based incentive arrangement

The accounting treatment of Salcomp Plc’s option program is described in the Salcomp Group’s accounting principles. Salcomp Plc
prepares its Financial Statements in accordance with FAS and thus no expense from the option program is recognised in the Salcomp
Plc’s Income Statement.

notes to the parent company income statement
1 000 e 2007 2006
1. net sales by market area
Europe 39 958 49 417

Asia and the Pacific 93 243 94 420
North America 23 313 31 344
South America 7 738 6 957
Total 164 252 182 138
2. OTHER OPERATING INCOME AND EXPENSES
Other operating income

Lease income 163 71
Gains from disposal of property, plant, equipment and intangible assets 70 128
Other income 1 35
Total 234 235
Other operating expenses

Other expenses 0 7
Amortisation of goodwill 11 375 11 375
Losses from disposals of property, plant, equipment and intangible assets 0 8
Total 11 375 11 391
3. PERSONNEL EXPENSES AND THE AVERAGE NUMBER OF PERSONNEL
Personnel expenses
Wages and salaries 5 112 4 746
Pension expenses 850 835
Other indirect employee expenses 323 624
Total 6 285 6 205
Remuneration of Board members 127 203
The company has made no special pension arrangements.
Average number of personnel during the financial year

Production 10 10
Sales and marketing 11 12
Total 67 65

1 000 e 2007 2006
4. DEPRECIATION, AMORTISATION AND IMPAIRMENT LOSSES
Depreciation and amortisation according to plan

Intangible assets
Goodwill 11 375 11 375
Other capitalised long-term expenditure 48 41
Property, plant and equipment

Buildings and constructions 37 41
Total 12 624 13 223
Depreciation and amortisation by function

Sales and marketing 3 3
Administration 57 9
Total 1 249 1 848
5. FINANCE INCOME AND EXPENSES
Income from other investments in non-current assets

From Group companies 1 11
Income from other investments in non-current assets, total 1 11
Other interest and finance income

From Group companies 1 153 501
From others 43 252
Other interest and finance income, total 1 196 753
Interest and other finance expenses

From Group companies 452 0
To others 3 838 3 923
Interest and other finance expenses, total 4 290 3 923
Finance income and expenses, total –3 093 –3 159
The item "Interest and financial income" includes exchange rate losses (net) 55 170
6. INCOME TAXES
Income taxes from actual operations 0 0

Income taxes, total 0 0
OTHER DIRECT INCOME TAXES

Other direct income taxes 0 –9
Other direct income taxes, total 0 –9

notes to the parent company balance sheet
1 000 e
7. INTANGIBLE ASSETS Intangible Goodwill Other long-term Total

rights expenses
Cost January 1, 2007 1 474 114 347 895 116 716

Increases 16 0 16 32
Decreases 0 0 –27 0
Cost December 31, 2007 1 490 114 347 884 116 721
Accumulated amortisation and impairment losses January 1, 2007 1 424 82 091 654 84 169
Accumulated depreciation on deductions –27
Amortisation for the year 14 11 375 48 11 437
Accumulated amortisation and impairment losses December 31,
1 438 93 466 675 95 579
2007
Carrying amounts December 31, 2007 52 20 881 209 21 142

Carrying amounts December 31, 2006 50 32 256 241 32 547
8. PROPERTY, PLANT AND EQUIPMENT Land Buildings Machinery Advance Total

areas and payments
equipment
Cost January 1, 2007 20 3 362 32 123 119 35 624

Increases 0 0 469 0 469
Decreases 0 0 –4 339 –119 –4 458
Cost December 31, 2007 20 3 362 28 253 0 31 635
Accumulated depreciation and impairment losses January 1, 2007 0 2 501 28 974 0 31 475
Disposals and transfers 0 0 –3 965 0 –3 965
Depreciation for the year 0 37 1 150 0 1 187
Accumulated depreciation and impairment losses December 31, 2007 0 2 538 26 159 0 28 697
Carrying amounts December 31, 2007 20 823 2 094 0 2 937

Carrying amounts December 31, 2006 20 860 3 148 119 4 147
Carrying amounts of the production machinery and equipment

December 31, 2007 1 627
December 31, 2006 2 922

1 000 e
9. investments Shares in Group companies
Cost January 1, 2007 27 740

Increases 0
Cost December 31, 2007 27 740
Carrying amounts December 31, 2007 27 740

Carrying amounts December 31, 2006 27 740
Group companies Company’s holding, %
Salcomp Ltda, Brazil 99.8

Salcomp Manufacturing Oy, Finland 100.0
1 000 e 2007 2006
10. non-current receivables
Prepaid expenses and accrued income from other Group companies 314 615
Non-current receivables, total 314 615
11. CURRENT RECEIVABLES
Current receivables
Receivables from Group companies

Trade receivables 10 706 661
Loans receivable 19 248 12 061
Prepaid expenses and accrued income 2 223 518
Total 32 177 13 239

Prepaid expenses and accrued income
Advance payments 676 1 949
Derivative receivables 377 143
Others 595 325
Prepaid expenses and accrued income, total 1 648 2 417
Current receivables, total 52 434 46 940

1 000 e 2007 2006
12. SHAREHOLDERS’ EQUITY

RESTRICTED EQUITY
Share capital January 1 9 833 8 285
Increase of share capital 0 1 548
Share capital December 31 9 833 9 833
Premium fund January 1 23 691 5 934

Transfer from premium fund to invested unrestricted equity August 6, 2007 –23 691 0
Issue premium 0 17 757
Premium fund December 31 0 23 691
UNRESTRICTED EQUITY
Invested unrestricted equity January 1 0
Increase in invested unrestricted equity August 6, 2007 23 691
Invested unrestricted equity December 31 23 691
Profit/loss from previous financial years January 1 12 760 10 508

Profit/loss from previous financial years December 31 10 421 10 508
Profit/loss for the year 1 591 2 252
Shareholder's equity, total 45 536 46 284
Distributable funds December 31

Retained earnings 10 421 10 508
Income for the financial year 1 591 2 252
Total 35 703 12 760
2007 2006
Breakdown of share capital by share series

pcs r pcs r
Shares (1 vote/share) 38 975 190 9 832 735 38 975 190 9 832 735

1 000 e 2007 2006
13. NON-CURRENT LIABILITIES
Non-current loans
Total 28 890 44 500
Non-current liabilities, total 28 890 44 500
14. CURRENT LIABILITIES
Current loans
Payables to Group companies

Total 26 700 26 236
Other payables 160 184

Accrued expenses and deferred income 1 606 1 429
Current liabilities, total 42 765 37 974
Material items in accrued expenses and deferred income
Wages and salaries including employer contributions to social security 1 521 1 279
Interests 6 11
Other 79 139
Total 1 606 1 429

1 000 e 2007 2006
15. COLLATERAL AND CONTINGENT LIABILITIES
Mortgages given for own debt
Corporate mortgages 100 000 100 000

Mortagaged subsidiary shares 27 487 27 487
Loan receivables from subsidiaries 6 800 8 000
Total of mortgages given 134 287 135 487
Other collateral given
Other collateral for own commitments 209 254

Guarantees given on behalf of subsidiaries 1 157 1 291
Total of other collateral given 1 366 1 545
Contingent liabilities
Amounts payable on leases

Payable during the next financial year 515 242
Payable later 881 417
Total 1 396 659
Lease liabilities
Payable during the next financial year 75 79
Total 75 79
Derivative contracts
Nominal value of currency options 9 500 4 750
Market value of currency options 173 41
Nominal value of interest rate options 15 000 15 000
Market value of interest rate options 95 56
Nominal value of interest rate swap contracts 14 105 15 000
Market value of interest rate swap contracts 109 45

key figures
2007 2006 2005 2004 2003

IFRS IFRS IFRS IFRS FAS
MEUR (Unless otherwise stated)

Net sales 286.2 259.0 156.0 141.2 106.3
Change, % 10.5 66.0 10.5 32.8 –18.1
EBITDA 30.6 20.7 17.2 13.1 4.8
% of net sales 10.7 8.0 11.0 9.3 4.5
Operating profit/(loss) 25.8 15.5 12.5 7.9 –19.9
% of net sales 9.0 6.0 8.0 5.6 –18.7
Profit/(loss) before taxes 22.5 11.2 8.2 4.4 –23.5
% of net sales 7.9 4.3 5.3 3.1 –22.1
Profit/(loss) for the period 18.3 7.6 5.8 0.2 –25.1
% of net sales 6.4 2.9 3.7 0.2 –23.6
Capital expenditure 11.3 9.3 9.0 4.5 6.9

% of net sales 3.9 3.6 5.8 3.2 6.5
Research and Development costs 4.8 5.4 4.1 3.6 4.8
% of net sales 1.7 2.1 2.6 2.6 4.5
Average number of personnel during the financial year 8 622 7 567 5 612 4 091 2 454
Return on equity, % 30.0 18.8 23.3 1.0 –81.0

Return on capital employed, % 25.3 16.2 14.3 8.8 –18.7
Return on net assets (RONA), % 72.3 54.1 68.0 38.8 –48.3
Equity ratio, % 37.7 30.5 19.1 18.3 17.4
Gearing, % 34.0 83.7 194.6 282.2 347.4
Interest-bearing net debts 23.3 44.4 54.9 59.9 70.3

Shareholders’ equity 68.6 53.0 28.2 21.2 20.2
Balance sheet total 182.0 174.5 148.0 116.2 116.6
Earnings per share, EUR 0.47 0.20 0.18 0.01 –0.83

Equity per share, EUR 1.76 1.36 0.86 0.65 0.68
Dividend per share, EUR 0.15* 0.06 0.00 0.00 0.00
Dividend per profit for the period, % 31.9* 30.7
Effective dividend yield, % 3.8* 2.3
Number of shares at the end of the period 38 975 190 38 975 190
Average number of shares 38 975 190 37 808 067 32 839 450 32 660 610 30 286 730
Diluted weighted average number of shares 39 057 819
* Board’s proposal

Calculation of key figures
Average personnel Average of the number of personnel at end of each month
Return on equity (%) Profit for the period

x 100
Equity (on average)
Return on capital employed (%) Profit before taxes + interest charges and other financial costs
x 100
Balance sheet total – non-interest-bearing debt (on average)
Return on net assets (%) Operating profit x 100

Property, plant, equipment and intangible assets
– goodwill and deferred tax assets + inventory + receivables
– current non-interest-bearing debt (on average)
Equity ratio (%) Equity

x 100
Balance sheet total – received advance payments
Gearing (%) Interest-bearing debt – cash and cash equivalents

x 100
Equity
Earnings per share Profit for the period

Weighted average number of shares outstanding
Equity per share Equity

Number of shares outstanding on 31 December
Earnings per share, diluted Profit for the period

Weighted average number of shares outstanding, adjusted for the share issue

auditors’ report
To the shareholders of Salcomp PLC

We have audited the accounting records, the report of the Board of Directors, the financial statements and the administration of
Salcomp Plc for the period 1.1.–31.12.2007. The Board of Directors and the Managing Director have prepared the consolidated
financial statements, prepared in accordance with International Financial Reporting Standards as adopted by the EU, containing the
consolidated balance sheet, income statement, cash flow statement, statement on the changes in equity and notes to the financial
statements, as well as the report of the Board of Directors and the parent company’s financial statements, prepared in accordance with
prevailing regulations in Finland, containing the parent company’s balance sheet, income statement, cash flow statement and notes to
the financial statements. Based on our audit, we express an opinion on the consolidated financial statements, as well as on the report
of the Board of Directors, the parent company’s financial statements and the administration.
We conducted our audit in accordance with Finnish Standards on Auditing. Those standards require that we perform the audit to obtain
reasonable assurance about whether the report of the Board of Directors and the financial statements are free of material misstate-
ment. An audit includes examining on a test basis evidence supporting the amounts and disclosures in the report and in the financial
statements, assessing the accounting principles used and significant estimates made by the management, as well as evaluating the
overall financial statement presentation. The purpose of our audit of the administration is to examine whether the members of the Board
of Directors and the Managing Director of the parent company have complied with the rules of the Companies Act.
Consolidated financial statements

In our opinion the consolidated financial statements, prepared in accordance with International Financial Reporting Standards as adopted
by the EU, give a true and fair view, as defined in those standards and in the Finnish Accounting Act, of the consolidated results of
operations as well as of the financial position.
Parent company’s financial statements, report of the Board of Directors

and administration
In our opinion the parent company’s financial statements have been prepared in accordance with the Finnish Accounting Act and other
applicable Finnish rules and regulations. The parent company’s financial statements give a true and fair view of the parent company’s
result of operations and of the financial position.
In our opinion the report of the Board of Directors has been prepared in accordance with the Finnish Accounting Act and other applicable
Finnish rules and regulations. The report of the Board of Directors is consistent with the consolidated financial statements and
the parent company’s financial statements and gives a true and fair view, as defined in the Finnish Accounting Act, of the result of
operations and of the financial position.
The consolidated financial statements and the parent company’s financial statements can be adopted and the members of the Board of
Directors and the Managing Director of the parent company can be discharged from liability for the period audited by us. The proposal by
the Board of Directors regarding the disposal of distributable funds is in compliance with the Companies Act.
Helsinki, 7 February 2008

KPMG Oy Ab
Tapio Raappana
Authorized Public Accountant

glossary
Bluetooth ODM solutions

An open standard for wireless communications between devices ODM product platforms feature Salcomp-specified and developed
at close range. chargers that can be customised to meet the customer’s
particular needs and are developed together with the
EMC customer (Original Design Manufacturer).
Electromagnetic Compatibility; it ensures that different
manufacturers’ devices are compatible. OEM solutions
OEM products are chargers customised according to the
Linear charger customer’s specific needs (Original Equipment Manufacturer).
A charger mainly for low-voltage use, for instance for cordless
phones, power tools and outdoor electronic devices. In the future, OMTP
linear chargers will be replaced by switch mode chargers. A forum created by Mobile Phone Manufacturers and
Mobile Network Operators (Open Mobile Terminal Platform).
90 Glossary

REACH system Stand-by consumption
The European Union chemicals regulation, effective as of 2007. Energy consumed by the device in stand-by mode.
In the REACH system (Registration, Evaluation and Authorisation
of Chemicals), chemical manufacturers and importers are Switch mode charger
required to assess the risks from the use of their substances
and to provide guidelines for their safe use. Technologically more advanced, small, fast and more
environmentally-friendly chargers for mobile phones and
other electronic devices (see linear charger).
rFR
Restriction of Flame Retardants. USB

Universal Serial Bus is a serial bus architecture for the
RoHS connection of peripherals to computers or other devices.
Restriction of the use of certain hazardous substances
in electronic equipment.
Design & production: Briiffi Ltd

Cover photo: Johanna Myllymäki, Fotonokka
Other photos: K. Karunakaran, Juha-Pekka Palmulaakso, Harri Pälviranta, José Carlos Miranda and Rauno Johansson
Printed in: Painoprisma Ltd
Most of the people in the pictures of this report are Salcomp’s own employees.
Glossary 91

information for investors
Basic share information Investor Information

Listed on: Nordic Exchange, Helsinki The aim of the Investor Relations at Salcomp is to provide all
Ticker: SAL1V capital market participants with regular and equal access to
List: The Main List correct, sufficient and up-to-date information as a basis for the
Sector: Information Technology Salcomp share price.
ISIN code: FI0009013924
GICS code: 45203010 Salcomp’s website, www.salcomp.com, offers varied investor
information: financial reports, stock exchange and press releases,
General Meeting of Shareholders contact information of investment analysts following Salcomp, as
well as the largest shareholders and the insiders of the company.
The Annual General Meeting of Salcomp Plc will be held on
Thursday, 10 April 2008 at 4 p.m. at the Marina Congress Center, Salcomp has defined a silent period that covers two weeks
Katajanokanlaituri 6, Helsinki. The right to participate is held by preceding the publication of its full-year result and interim
all shareholders who by 31 March 2008 will be entered in the reviews. During this period, Salcomp will not meet with capital
shareholders’ register maintained by the Finnish Central market representatives.
Securities Depository and who will notify of their participation
by no later than 4 p.m. on 4 April 2008. Notifications to be re- Annual Reports can be ordered from www.salcomp.com – Investors
ceived by telephone +358 40 810 5445, fax +358 201 875 450, – Publications and presentations, or from Salcomp Communications
email [email protected] or by letter to Salcomp Plc, by email: [email protected].
AGM/Päivi Luoti, P.O. Box 95, FI-24101 Salo.
Investor Information Contacts

Payment of dividends
CFO
The Board proposes the payment of dividends worth EUR 0.15 Antti Salminen
per share. Tel. +358 40 535 1216
[email protected]
Dividend ex-date April 11, 2008
Dividend payment record date April 15, 2008 Communications Manager
Dividend payment April 22, 2008 Päivi Luoti
Tel. +358 50 358 6012
Financial reporting 2008 [email protected]
Financial Statements Release 2007 February 7, 2008
Annual Report 2007 wk 12/2008
Annual General Meeting of Shareholders April 10, 2008
Interim Report for January–March 2008 May 8, 2008
Interim Report for January–June 2008 August 12, 2008
Interim Report for January–September 2008 October 31, 2008
92
Kemijärvi
Salo
Lund
Chicago
Leesburg
Seoul
Shenzhen
Manaus
Chennai
São Paulo
HEADQUARTERS
Salcomp Plc
P.O. Box 95, Salorankatu 10 Headquarters
FI-24101 Salo, Finland
Tel. +358 201 875 511 Production
Fax +385 201 875 450 Sales office
Domicile Salo, Finland
Business ID 1509923-4 Sales representative
MORE INFORMATION ABOUT SALCOMP AND

CONTACT INFORMATION OF ALL SALCOMP’S
OFFICES AND PRODUCTION PLANTS IS
AVAILABLE AT WWW.SALCOMP.COM
93

www.salcomp.com

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Annual Report 2007

1088 Vuosikertomus_2007.indd 1 5.3.2008 16:47:57

1088 Vuosikertomus_2007.indd 2 5.3.2008 16:48:00

Shares and shareholders 27

Parent company balance sheet 77

1088 Vuosikertomus_2007.indd 3 5.3.2008 16:48:02

Salcomp is a global developer, manufacturer and marketer of chargers whose main

Products The Market

1088 Vuosikertomus_2007.indd 4 5.3.2008 16:48:04

Launching of a plant in India.

1088 Vuosikertomus_2007.indd 5 5.3.2008 16:48:07

1088 Vuosikertomus_2007.indd 6 5.3.2008 16:48:08

* Excluding the deferred tax

net sales development operating profit development

EUR million EUR million

* Before goodwill amortization

cash flow development personnel on 31 december

EUR million 1,000 persons

1088 Vuosikertomus_2007.indd 7 5.3.2008 16:48:10

solid growth – strong profit

1088 Vuosikertomus_2007.indd 8 5.3.2008 16:48:14

1088 Vuosikertomus_2007.indd 9 5.3.2008 16:48:19

Salcomp’s vision is to strengthen the global market leadership in mobile phone

strategic competitive advantages Strategic steps in 2007

8 Vision, strategic goals and values

1088 Vuosikertomus_2007.indd 10 5.3.2008 16:48:20

The implementation of strategy progressing as planned

2003 2004 2005 2006 2007 2008–2010 Vision 2010

Customer satisfaction Respect and responsibility

Vision, strategic goals and values 9

1088 Vuosikertomus_2007.indd 11 5.3.2008 16:48:21

1088 Vuosikertomus_2007.indd 13 5.3.2008 16:48:26

1088 Vuosikertomus_2007.indd 14 5.3.2008 16:48:27

Source: Salcomp, companies. E = estimate

Salcomp also manufactures chargers for cordless fixed-line tele-

The manufacture of mobile phones is highly concentrated within

Source: Salcomp, companies. E = estimate

In recent years, Salcomp has balanced its customer portfolio. As

Salcomp’s growing market position in the cordless fixed-line

1088 Vuosikertomus_2007.indd 15 5.3.2008 16:48:28

1088 Vuosikertomus_2007.indd 16 7.3.2008 14:09:04

1088 Vuosikertomus_2007.indd 17 7.3.2008 14:05:58

A crucial competitive factor in Salcomp’s business sector is the

Salcomp spends most of its R&D resources on charger products

During 2007, Salcomp’s R&D function comprised 110 people on

Focus areas and challenges

The future R&D challenges will include the development of faster

1088 Vuosikertomus_2007.indd 18 5.3.2008 16:48:34

1088 Vuosikertomus_2007.indd 19 5.3.2008 16:48:35

Risk Management Policy Risk Management Development

18 Risks and risk management

1088 Vuosikertomus_2007.indd 20 5.3.2008 16:48:37

The most significant operational risks at Salcomp are related to

Competition in the mobile phone market

Risks and risk management 19

1088 Vuosikertomus_2007.indd 21 5.3.2008 16:48:40

Responsibility is the cornerstone of Salcomp’s operations and an integral part of every-

guiding the responsibility Salcomp’s operations are guided by

1088 Vuosikertomus_2007.indd 22 5.3.2008 16:48:42