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Falck Annual Report 2010

Annual Report 2010

Management review 1Highlights of the year 4Key figures and financial ratios 6Business areas 8 Assistance 10 Emergency 14 Healthcare 20 Training 24Financial review 28Corporate governance 36Risk factors 42 Business risks 42 Financial risks 44Report on corporate social responsibility 46 Group financial statements 49 Income statement 50 Statement of comprehensive income 51 Balance sheet 52 Equity statement 54 Cash flow statement 55 Notes 56 Parent company financial statements 97 Income statement 98 Statement of comprehensive income 99 Balance sheet 100 Equity statement 102 Cash flow statement 103 Notes 104 Management’s statement 112Independent auditors’ report 113Board of Directors, Executive Management Board and auditors 114 Legal entities in the Falck Group 116Definitions of ratios 119

01

49

97

BrasilEmergencyTraining920 employees

USAEmergencyTraining1,050 employees(LifeStar Response2,040 employees)

TrinidadTraining53 employees

SpainEmergency387 employees

Great BritainEmergencyHealthcareTraining100 employees

GermanyTraining

NetherlandsEmergencyTraining382 employees

DenmarkEmergencyAssistanceHealthcareTraining9,498 employees

NorwayEmergencyAssistanceHealthcareTraining474 employees

SwedenEmergencyAssistanceHealthcare1,511 employees

FinlandEmergencyAssistance61 employees

RussiaTraining

TurkyEmergency3 employees

EstoniaAssistance20 employees

BelgiumEmergency270 employees

RomaniaEmergency219 employees

United Arab EmiratesTraining72 employees

IndiaEmergencyHealthcare2 employees

NigeriaTraining74 employees

MalaysiaHealthcareTraining75 employees

ThailandTraining9 employees

VietnamTraining7 employees

SingaporeTraining7 employees

SlovakiaEmergencyHealthcare1,593 employees

PolandEmergencyHealthcare2,356 employees

203,000Falck’s 35 training centres worldwide provided safety training to 203,000 people in 2010, representing a year-on-year increase of 10,000

Training

8The international expansion continued with new tasks in India, Malaysia, Poland, Slovakia, the United Kingdom and Sweden. Falck now operates healthcare or medical clinics in eight countries

Healthcare

600Falck now operates close to 600 US ambulances and similar vehicles and is the third-largest ambulance service provider in the United States

Emergency

12%In 2010, Falck provided 1,458,000 assistance responses, 12% more than in the previous year

Assistance

Falck’s international expansion continued during 2010, and Falck now has activities in 25 countries on five continents. We feel an obligation to use the competencies we have gained during our 104 years of operation in preventing accidents, rescuing people in emergency and in rehabilitating people

Management review

Global expansionIn 2010, Falck took new important steps towards becoming a global organisation. Our ambulances now also serve people in both North and South America. Never before have we trained so many people in rescue and safety operations through our steadily growing network of training centres worldwide, and we have significantly strengthened our Assistance business in the Nordic region through new agreements with strong business partners.

At the end of the year, we had operations in 25 countries on five continents, up from 23 countries of operation in 2009.

In 2010, our consolidated revenue rose by 11.1% to DKK 8.4 billion. As in previous years, revenue from activities outside Denmark increased, accounting for 36.7% of revenue up from 34.6% a year earlier. Our growth in markets outside Denmark was 18.2%, of which organic growth accounted for 6.7%. The rate of organic growth in Denmark was 4.2%.

This growth is reflected in our results for the year, with a 16.3% EBITA increase to DKK 839 million, which was in line with our guidance. The increase met Management’s expectations of an increase in our EBITA margin to 10.0% We made progress in our Emergency, Healthcare and Training business, whereas our Assistance business was significantly affected by long periods of severe winter weather in the early and late months of the year, resulting in a substantial increase in responses to our subscription customers.

In 2010, we acquired Care, an ambulance service provider ba-sed in California, and shortly after the turn of the year, LifeStar on the US east coast became a member of the Falck family. With these acquisitions, we now operate close to 600 ambu-lances and similar vehicles in the United States and are the third-largest ambulance service provider in the country. We also acquired Toesa, the leading ambulance service provider in Rio de Janeiro, Brazil, which gave us a solid foothold as an ambulance service provider in South America, and we expect to expand further on that continent.

In the Assistance business, we signed new agreements with a number of the largest insurance companies in the Nordic region for roadside assistance as well as travel assistance to their customers. And through the acquisition of Swedish-based Smart Safety, we can now offer a wide range of new security and safety services to our existing customers, and the acquisi-tion has also significantly increased our customer portfolio.

We expanded our position as the world’s leading provider of rescue and safety training courses for the off-shore and maritime sectors. The number of participants in our courses rose to 203,000 at our 35 training centres in 14 countries on five continents.

In our Healthcare business, we signed new agreements in Swe-den, Slovakia as and Poland. Moreover, we opened healthcare clinics in connection with our training centres in the United Kingdom and Malaysia. We also opened a clinic in India during the year.

Concurrently with this expansion, we also increased the range of services we offer in all of our business areas, thereby further strengthening the basis for our future growth.

Like all businesses, Falck needs to grow. But at Falck we do not just want to grow to expand our business. We also feel an obli-gation to use the competencies we have gained during our 104 years of operation in preventing accidents, rescuing people in emergency and in rehabilitating people after illness and injury – starting in Denmark, then expanding to the Nordic region, and later on to Europe. We can’t save the whole world, but it is our responsibility to do our very best to help people anywhere we can – because we can.

Lars Nørby Johansen Allan Søgaard LarsenChairman of the Board President and CEO

Highlights of the year

JanuaryPartnership agreement signed with an Indonesian safety service providerFalck acquired a non-controlling interest in P.T. Samson Tiara, the leading provider of safety and training services in Indonesia. This investment paves the way for offering a large number of internationally recognised and certified safety and emergency training services in Indonesia.

February Falck to operate more ambulances in Slovakia – and an air ambulance service in DenmarkA tender process for ambulance services in Slovakia ended with Falck winning the contract to manage 91 ambulance stations in Slovakia, after having managed 74 ambulance stations in the country for five years. As a result, ambulances and ambulance staff uniforms in one-third of Slovakia now bear the Falck logo, making Falck the largest ambulance company in the country.

AprilAcquired strong competencies in fire and explosion hazard managementFalck acquired British-based Resource Protection International, a firm having provided high-quality consultancy in fire and explosion hazard management to industrial customers for many years, and whose customers include the international oil industry and the petrochemical industry.

Falck DRF Luftambulance also won a contract to operate an an emergency medical helicopter that will be operating in the Capital Region and the Zealand Region in Denmark.

4 Falck Annual Report 2010 | Management review

DecemberAcquired Californian-based ambulance company and announcement of new co-ownerFalck acquired US-based ambulance company Care Ambulance Service, which operates more than 135 ambulances in Los An-geles and Orange County in California, USA, and provides more than 150,000 responses per year.

Also in December, the Lundbeck Foundation acquired a 36% stake in Falck. The Lundbeck Foundation donates substantial funding to top-level biomedical and natural science research.

In January 2011, Falck acquired ambulance service operator Lifestar.

AugustAcquired Brazilian ambulance companyFalck will be operating ambulances outside of Europe for the first time with its acquisition of Brazilian ambulance company Toesa, which operates 121 ambulances and has close to 1,000 employees. The company is the leading ambulance company in Rio de Janeiro and also operates in other cities in Brazil.

SeptemberAcquired Swedish company Smart SafetyFalck bought Smart Safety, a Swedish provider of safety and assistance services. Smart Safety provides a broad range of services ranging from bicycle registration in the largest bicycle register in the Nordic region, which is a unique tool for finding stolen bicycles, to pet registration and credit card blocking. The acquisition gives Falck access to 500,000 new unique customers in the Nordic region.

OctoberAnnounced intention to acquire an ambulance company on US east coastFalck signed a letter of intent defining the framework for its acquisition of LifeStar, a provider of ambulance and patient transport services in six states on the US east coast. LifeStar operates 440 ambulances and similar vehicles and provides more than 400,000 responses per year.

NovemberFinished cleaning up after oil spill disaster in the Gulf of MexicoFalck completed its assistance in connection with the clean-up after the Deepwater Horizon oil spill disaster. Since the accident occurred in April, Falck has trained more than 5,000 people in cleaning up the oil in animal habitats, on beaches and at sea.

Management review | Falck Annual Report 2010 5

Key figures and financial ratios

KEY FIGURES DKK million 2006 2007 2008 2009 2010

Income statement Revenue 5,382 6,271 7,066 7,529 8,367Operating profit before amortisation and depreciation, costs from business combinations and exceptional items (EBITDA) 689 815 842 989 1,119Operating profit before costs and amortisation from business combinations and exceptional items (EBITA) 445 570 587 721 839 Profit before financials 442 578 574 702 763Financials etc. (195) (176) (201) (114) (122)

Profit before tax 247 402 373 588 641Income taxes (66) (91) (98) (171) (183)

Profit for the year 181 311 275 417 458Amortisation of intangible assets and costs from business combinations 4 9 13 19 50Exceptional items (1) (17) - - 26Tax on normalisation (2) 4 (2) (4) (7)

Normalised profit after tax 182 307 286 432 527

Cash flow statement EBITA 445 570 587 721 839Amortisation, depreciation and impairment 244 245 255 268 280

EBITDA 689 815 842 989 1,119Change in working capital including operating provisions 143 (31) 6 379 (113)Investments in intangible assets and property, plant and equipment (232) (257) (295) (336) (401)Sales of non-current assets 35 21 13 64 237

Free cash flow 635 548 566 1,096 842Free cash flow after exceptional items, interest and tax 407 236 300 801 478Investements in acquisitions (390) (59) (460) (73) (720)Dividends paid, repayments, and changes in interest-bearing debt 48 (99) 258 (528) 166

Change in cash and cash equivalents 65 78 98 200 (76)

Balance sheet Current assets excluding cash and cash equivalent, etc. 603 754 813 1,020 1,464Liabilities excluding credit institutions, income taxes, etc. (1,607) (1,706) (1,766) (2,365) (2,612)Operating provisions (74) (74) (75) (68) (85)Non-current assets excluding goodwill 1,544 1,562 1,635 1,690 1,665

Net operating assets excluding goodwill 466 536 607 277 432Goodwill 3,387 3,594 3,897 4,075 4,711Intangible assets from acquisitions 15 28 93 81 261Income taxes (19) (15) (24) (22) (40)

Net operating assets including goodwill 3,849 4,143 4,573 4,411 5,364 Total equity 542 834 908 1,407 1,788Net interest-bearing debt 3,336 3,139 3,377 2,577 2,949Provisions for deferred tax 100 102 63 93 205Non-operating assets and liabilities (129) 68 225 334 422

Financing 3,849 4,143 4,573 4,411 5,364

KEY RATIOS

Income statement Revenue growth % 13.8 16.5 12.7 6.6 11.1Organic growth % 9.5 7.3 9.3 4.3 5.1EBITA margin % 8.3 9.1 8.3 9.6 10.0Effective tax rate, normalised for change in tax rate in 2007 % 26.6 26.4 26.3 29.0 28.6Earnings per share (EPS) DKK 1.7 3.2 2.9 4.4 4.8Diluted earnings per share (DEPS) DKK 1.7 3.1 2.7 4.3 4.6 Cash flow statement Cash conversion rate % 142.7 96.1 96.4 152.0 100.4Net capital investments less depreciation DKKm (47) (9) 27 (8) (120)Cash flow from operating activities DKKm 565 449 575 1,063 546 Balance sheet Total assets DKKm 6,083 6,355 6,979 7,635 9,089 Equity ratio % 8.9 13.1 13.0 18.4 19.7Return on equity % 63.8 60.1 32.6 36.0 28.9Return on equity excluding exceptional items % 4.5 57.1 32.6 36.0 30.6Net interest-bearing debt to EBITDA, normalised Factor 4.46 3.85 3.76 2.64 2.48 Other financial ratios Number of employees at year-end Number 13,813 15,083 16,044 16,457 19,174

The Group focuses on a number of key figures and ratios which are not all derived directly from the income statement, cash flow statement and balance sheet. Theese key figures and ratios are shown above.

In the Group, cash flows are divided into free cash flow, investments in acquisitions and dividends paid, repayments and change in interest-bearing debt. In the free cash flow, investment in intangible assets and property, plant and equipment is deducted as the Group invests in vehicles, infrastructure and similar assets as part of ordinary operations. Thus, the free cash flow reflects the amount available for acquisitions, and repayments on financing.

For definitions of ratios, see page 119.

6 Falck Annual Report 2010 | Group

Revenue growthDKK million %

9,000

8,000

7,000

6,000

5,000

4,000

3,000

2,000

1,000

0

18

16

14

12

10

8

6

4

2

0

2006 2007 2008 2009 2010

EBITA and EBITA marginDKK million %

900

800

700

600

500

400

300

200

100

0

18

16

14

10

10

8

6

4

2

0

2006 2007 2008 2009 2010

Cash conversion rate and Free cash flowDKK million %

1,200

1,000

800

600

400

200

0

150

125

100

75

50

25

0

2006 2007 2008 2009 2010

Net capital investments less depreciationDKK million

50

25

0

-25

-50

-75

-100

-125

2006 2007 2008 2009 2010

Revenue growth Organic growth Revenue

Cash conversion rate Free cash flow

EBITA margin Operating profit before costs and amortisation from business combinations and exceptional items ( EBITA)

Operating assets and liabilitiesDKK million

2,800

2,400

2,000

1,600

1,200

800

400

0

2006 2007 2008 2009 2010

Net interest-bearing debt to EBITDA, normalisedDKK million

3,500

3,000

2,500

2,000

1,500

1,000

500

0

7

6

5

4

3

2

1

0

2006 2007 2008 2009 2010

Operating assets Operating liabilities Net interest-bearing debt to EBITDA, normalised Net interest-bearing debt

Group | Falck Annual Report 2010 7

Business area developments

Ville Kalliomäki, age 29,assistance rescue officer,provides roadside assistance near Helsinki, Finland. Falck has provided roadside assi-stance in Finland since 2005.

Falck’s assistance business is concentrated in four Nordic countries: Denmark, Sweden, Norway and Finland - and in Estonia

1.5 million

responses were provided. In a year with huge amounts of snow during the winter throughout the Nordic region, the number of roadside assistance responses surged, resulting in a good inflow of new subscription customers.

Assistance

Assistance

•1.5 million responses in 2010 – a year-on-year increase of 12%

•SwedishcompanySmartSafety,whichsafeguardshomesandproperty,nowapartofFalck

•25,000newautomobilesubscribersinSweden

•OneinthreenewalarmsystemssoldinDenmarkwasaFalckAlarm.

Falck’s assistance services provide customers with the greatest possible security and peace of mind, either by preventing ac-cidents or by providing fast and competent assistance should an accident occur.

Services include roadside, person, home and travel assistance and are mostly based on subscriptions for individual, business and public-sector customers.

Falck’s Assistance business is concentrated in four Nordic coun-tries (Denmark, Norway, Sweden and Finland) and in Estonia as well.

The year 2010 saw huge amounts of snow throughout the Nor-dic region in January, February, November and December. This meant that many car owners with automobile subscriptions needed assistance, and Falck rescue staff and dispatch centre staff worked hard to help people under the extreme weather conditions. The severe winter weather resulted in a good inflow of new subscription customers.

In Denmark and Sweden, earnings were temporarily adversely affected by the severe winter weather due to customers’ incre-ased use of roadside subscription responses, whereas earnings rose temporarily in Norway, Finland and Estonia, where respon-ses are to a great extent provided on a pay-per-use basis.

Assistance provides customers with security and peace of mind through advice, prevention and fast assistance. In 2010, this business generated both revenue growth and organic growth, and 500,000 new customers were added

2,500 busses are now equiped with Falck Sirius Eco Drive, a fleet management system which promotes more environmentally friendly and economical driving.


In early 2011, Falck entered into an agreement to provide road-side assistance to the customers of Norway’s largest insurance company, Gjensidige. The agreement covers approximately 700,000 vehicles, and with the new partnership, Falck’s respon-ses to Norwegian car owners are expected to increase from 120,000 annually to around 170,000.

More than 200,000 car owners from one of Denmark’s largest insurance companies, Topdanmark, gained Falck as their provider of roadside assistance in the course of the year; this collaboration with Topdanmark was expanded to also cover the insurer’s industrial and agricultural customers.

Falck’s customers in Denmark have readily accepted the new offer of a rental car when their own car is in for repair: 80 pas-senger cars with the Falck logo and colour can now be seen on the roads of Denmark.

In the business market, 2,500 busses have been equipped with Falck Sirius Eco Drive, and an additional 500 are scheduled to have the system installed. Falck Sirius Eco Drive is a fleet ma-nagement system which measures driver behaviour, providing an opportunity to promote more environmentally friendly and economical driving.

In home services, more Falck subscribers needed assistance when a number of heavy rainfalls in August flooded basements and caused other water damage across Denmark.

Growth in the alarm market continued in 2010: in Denmark, about one in three alarms sold was a Falck Alarm. Falck has also begun selling alarms in Sweden.

To provide customers with even better opportunities to safe-guard their homes and property, Falck acquired Smart Safety, a Swedish company with revenues of DKK 100 million per year. Smart Safety provides a number of subscription-based safety services, including recording bicycles in a register which helps retrieve and return them to their rightful owners if stolen. The company also offers an easy and convenient credit card block-ing service and a service for fast return of lost keys with a Falck key tag.

Falck TravelCare won a contract in 2010 to provide travel as-sistance to Topdanmark customers, and a contract for similar services has been entered into with another Danish insurance company, Alka, effective 1 January 2011. Moreover, Falck Tra-velCare already has agreements for travel care services with the Swedish government, Swedish insurance company Folksam and travel agency Apollo.

In 2010, Falck provided assistance services to 1.3 million private customers, 100,000 of whom were served through public insti-tutions and private-sector companies. The SmartSafety acquisi-tion added more than 500,000 new customers, bringing Falck’s total customer portfolio to 1.8 million by the end of 2010. Falck provided a total of 1,458,000 responses over the course of the year, a 12% year-on-year increase.

RevenueDKK million

2,500

2,000

1,500

1,000

500

0

06 07 08 09 10

Organic growth%

10

8

6

4

2

0

06 07 08 09 10

Subscribers

2,000,000

1,500,000

1,000,000

500,000

0

06 07 08 09 10


Emergency

Valnizete Trindade de Moura, age 29, nurse,helps an injured person in Brazil. Falck established a presence in the Brazilian market in 2010 and now operates 121 ambulances and has around 1,000 employees.

In 2010, Falck provided ambulance services in seven European countries as well as in the United States and Brazil. Falck also provided fire-fighting and fire-prevention services in ten countries

1907 Was the year when Falck acquired its first ambulance, and it is the com-petencies from its ambulance services that Falck has used to develop its other business areas.

Emergency

•EstablishedapresenceintheUnitedStatesasthethird-largestambulanceserviceprovider

•Currentlyoperates121ambulancesinBrazil

•Successfullybidforadditional17ambulancestationsinSlovakiainatenderprocess

•Woncontractsforfire-fightingservicesatamilitaryairfieldandanuclearpowerplantinSweden

Falck is the largest international ambulance service provider in Europe. With more than 1,200 ambulances, Falck treats close to two million sick or injured people a year in nine countries. In ad-dition, Falck is the biggest private fire service in the world, provi-ding fire-fighting and fire-prevention services in ten countries.

In 2010, Falck established a presence as an ambulance ser-vice provider in the United States through its acquisition of Care Ambulance Service, which provides more than 150,000 ambulance responses per year for individuals and authorities in California. Early in 2011, Falck also acquired the LifeStar ambulance company, which provides more than 400,000 ambulance responses per year in six states – New York, New Jersey, Maryland, Pennsylvania, Alabama and Georgia – and in Washington, D.C. Following this acquisition, Falck now runs almost 600 ambulances and similar vehicles in the United States and is that country’s third-largest ambulance company.

In the Emergency business, Falck strengthened its leading position in Europe in 2010 and also expanded into North and South America

2 million Falck treats and assists up to two million sick or injured persons a year in nine countries.


It is Falck’s ambition to use the two companies, on the east and west coasts of the United States respectively, as a platform for expansion in all of North America.

Falck also gained a foothold as an ambulance service provider in South America in 2010 when it acquired the Brazilian company Toesa, which is based in Rio de Janeiro and operates 121 am-bulances. Moreover, the company provides a number of other pre-hospital services such as transportation of newborns to and from hospitals.

Following a tender process, Falck won new four-year ambu-lance contracts in Slovakia, where it has been in charge of 74 ambulance stations for the past five years. In the new tender, Falck won 91 stations and now handles a third of all Slovakia’s ambulance services.

In Denmark, Falck covers roughly 85% of the population with its ambulance services. This includes a collaboration between Falck and German-based DRF Luftrettung to operate the first emer-gency medical helicopter base in Denmark, namely at Ringsted on the Danish island of Zealand. From the base in Nibøl, Slesvig, in northern Germany, the two operators also provide medical helicopter services to southern Jutland.

Moreover, the five Danish regions increasingly use paramedics in pre-hospital emergency services, which justifies Falck’s ende-avours to raise the training level of its staff. This was also seen when Falck won a number of small tenders for paramedic units and emergency response doctor’s vehicles. In the Northern Jut-land Region, Falck deployed a bus fitted with modern hospital equipment – a so-called rolling intensive care ward – used to transport patients between hospitals.

RevenueDKK million

5,000

4,000

3,000

2,000

1,000

0

06 07 08 09 10

Organic growth%

12

10

8

6

4

2

0

06 07 08 09 10

Falck ambulances

1,200

1,000

800

600

400

200

0

06 07 08 09 10

A leading fire-service providerFalck is among the world’s leading private fire services and also provides fire consulting services in most parts of the world.


In 2010, Falck won a contract in Germany for the delivery of both fire and emergency services to a large railway-tunnel pro-ject. Falck has set up a German organisation aimed at tendering for the ambulance contracts expected to be offered in Germany in the next few years.

In Saudi Arabia, Falck provided crew for air ambulance heli-copters in collaboration with the Red Crescent. The project included rescue staff from Denmark, the United Arab Emirates, Norway, Poland, Slovakia, Sweden and South Africa.

In its fire business area, Falck operates and develops fire and rescue services for large industrial customers. In Spain, Falck is a leading provider of this type of services, not least to the nuclear power industry; in Romania, Falck has contracts with large petrochemical plants; and in Slovakia, Falck mainly helps the automobile industry prevent fires and other accidents.

With the acquisition of the two US ambulance companies, Care Ambulance and LifeStar, Falck now runs almost 600 ambulances and similar vehicles in the United States, making it the third-largest ambulance company in that country

85%In Denmark, Falck covers roughly 85% of the population with its ambulance services.

Falck provided 438,590 ambulance responses in Denmark over the course of the year, against 444,649 in 2009. For a growing number of patients, treatment is handled on site by ambulance rescue staff, paramedics or doctors.

Falck ambulances have also provided services to individuals and the authorities in Norway, Sweden, Finland, Belgium and Poland for a number of years.


Falck’s Dutch fire activities primarily focus on providing consul-ting and training in fire prevention and handling to both public- and private-sector customers.

With its acquisition of the British company Resource Protection International, which has provided high-quality consulting ser-vices to customers in most parts of the world for a number of years, Falck expanded its competencies in the fire area and, with that, Falck’s total product offering now fully meets the demand on that market.

Falck operates fire-fighting services at Sweden’s largest Airport, Arlanda, and in 2010 also won a contract for fire fighting at the Såtenäs military airport and the Forsmark nuclear power plant.

In addition, Falck established a small fire-related presence in Brazil.

In Denmark, a number of municipalities put their fire-fighting services out to tender: Falck lost its contracts in a few of them and won new contracts in other municipalities. At the end of the year, Falck was providing fire-fighting services in 65 of 98 Danish municipalities. Falck’s fire service was re-certified in 2010 and is currently the only Danish fire service with ISO 9001 certification.

In its Emergency activities, Falck also helps reduced-mobility passengers at Copenhagen Airport and provided some 83,000 instances of these responses in 2010.

Falck offers industrial companies to handle the operation and development of their fire services. Customers for this service include the automobile industry, petrochemical plants and nuclear plants

83,000 In 2010, Falck assisted some 83,000 passengers with reduced mobility through Copenhagen Airport in Denmark.


Healthcare

Kelly Paterson, age 30, nurse,measures the blood pressure of an offshore employee at Falck’s training centre in aberdeen, Scotland.Every day, Kelly Paterson and her healthcare colleagues at the centre check persons working offshore in the oil and gas industry.

Falck operates more than 200 healthcare og medical clinics in Denmark, India, Malaysia, Norway, Poland, Slovakia, the United Kingdom and Sweden

260.000 people in Sweden are now covered by Falck’s healthcare service via 30 new agreements, several of them with insu-rance companies.

Healthcare

•Providedaccesstohealthclinicsforanadditional55,000peopleinDenmark

•SignedanumberofnewcontractsinSweden

•Helped60,000peopleinsixDanishmunicipalitiesreturntothelabourmarket

•Continueditsinternationalexpansion

Healthcare continued its international expansion in 2010. Falck operates 12 primary care centres in Poland whose general practitioners and specialists handled a total of more than 50,000 clinical consultations during the year. A number of new agreements were signed in Poland, including with two large insurance companies. In Slovakia, Falck operates four healthcare clinics and also bought LaSalus, a provider of healthcare sche-mes to a number of companies. In India, Falck also established a healthcare clinic in a luxury hotel.

An important part of Falck’s work in the Nordic region within this business area is preventing illness and job strain. Another part of this business area, just as important, is helping people on sick leave return to work as early as possible.

There are four primary gains to be had from the preventive approach: each individual worker has a better, longer and healt-hier working life; job satisfaction is improved, and sick leave and job strain costs are reduced; the public sector saves money on sickness benefits, social assistance benefits and early pension payments; and insurance companies save on compensation paid for loss of earning capacity.

A key element of Falck’s efforts in this area is the interdiscipli-nary teams that work together closely on each case. A person on long-term sick leave may have a team comprising a doctor, a nurse, a psychologist and a social worker. If physical treatment is required, physiotherapists, chiropractors, massage therapists and reflexologists can also work together to treat a client.

Falck Healthcare helps create healthy people and healthy workplaces

25,000 In 2010, 25,000 people received psychological assistance from Falck.


Falck provides interdisciplinary treatment at more than 200 healthcare centres in Denmark, where half a million people receive treatment for pain, e.g. in the back, shoulders or arms. In 2010, an additional 55,000 people in Denmark became eligible for this treatment through their pension or insurance companies. In the course of the year, Falck provided psychological as-sistance to 25,000 people and conducted more than 20,000 preventive health checks in workplaces.

Also in Sweden, Falck helps companies and public-sector institutions reduce sickness absence among employees. Thirty new agreements – several of them with insurance companies – were signed in 2010, so Falck now offers healthcare services to 260,000 people in Sweden.

In Norway, Falck Healthcare has a small staff and is currently expanding its agreements with the insurance companies. It is expected that customer demand will increase.

Falck also provides temporary staffing services to the public healthcare sector in the three Scandinavian countries. The temporary healthcare staffing sector in Denmark was affected by the decision by the Danish regional authorities to curb in their use of external temporary staff. However, Falck is winning market share in this area.

Falck Hjælpemidler (assistive aids) won a number of contracts and is now operating assistive aid depots for ten Danish mu-nicipalities, equivalent to coverage of about 12% of people in Denmark needing assistive aids.

Falck Jobservice supports municipal job centres in their efforts to help people get back to work after a period on sickness be-nefit or otherwise help clarify the situation these people are in. Through their work in six municipalities, Falck Jobservice helped some 60,000 people get back to work in 2010.

Falck Healthcare also collaborates with its sister business area Training in operating clinics attached to Falck training centres in Malaysia and the United Kingdom. The clinics opened in 2010.

RevenueDKK million

1,200

1,000

800

600

400

200

0

06 07 08 09 10

Organic growth%

30

20

10

0

-10

-20

06 07 08 09 10

Numbers of healthcare professionals

3,000

2,500

2,000

1,500

1,000

500

0

06 07 08 09 10

60,000Falck Jobservice helped get 60,000 people in Denmark back to work in 2010.


Olugbenga Kuku, age 38, training instructor,is training a group of offshore workers in suvival at sea in the event of an accident in their workplace. The course is held at a training centre in Ipara, Nigeria, operated by Falck in collaboration with a local partner.

Training

Falck provides rescue and safety courses in locations adjacent to workplaces in the offshore oil and gas industry worldwide

203,000 persons participated in rescue and safety training courses in 2010 at Falck’s 35 training centres on five continents.

Training

•Trained10,000morepeoplethanin2009

•Trained5,000peopletoremediateoilpollutionintheUnitedStates

•OpenedhealthcareclinicsinMalaysiaandtheUnitedKingdom

•Obtainedaccreditationforeighttrainingcentres

Falck provides safety and rescue training courses and other safety services at a total of 27 training centres in 14 countries across five continents targeting the offshore industry and operates 8 centres for advanced fire training, making Falck the world’s leading operator in this field.

The maritime sector, the wind turbine industry, the chemical industry, the aviation industry and the armed forces in Denmark and Sweden also make use of Falck’s 104 years of rescue ser-vices experience in training their staff to take care of themsel-ves and each other.

At the training centres, people are instructed in safe conduct to avoid accidents in the workplace, and they are taught how to react correctly – also under extreme conditions – if accidents do occur. Falck’s training centres are designed to allow almost perfect simulation and creation of an illusion of real disasters, fires and explosions.

Falck is the world’s leading provider of rescue and safety training courses especially for the offshore industry. Course participants are trained to prevent accidents and to take care of their colleagues and themselves if accidents do occur

5,000 Following the explosion of the Deepwater Horizon oil platform in the Gulf of Mexico in April 2010, Falck trained 5,000 people to remediate pollution.


Falck also offers training of fire-fighters and provides safety and emergency analysis and crisis management for high-risk indu-stries that focuses on employees and the environment. To this can be added other safety services Falck provides, such as fire-related emergency services, fire-proof welding areas, and the services of specially trained safety managers and paramedics.

It is Falck’s ambition to help create a high level of more stan-dardised quality in rescue and safety training worldwide. Falck constantly works to help develop new training methods and technologies in this field, including training on board offshore installations and vessels, e-learning services, and use of simula-tor training. All these activities reflect the latest requirements from both customers and regulatory authorities.

The disaster in the Gulf of Mexico, when the Deepwater Horizon offshore oil platform exploded in April 2010 and caused one of the largest oil spills in world history, had a huge impact on Falck’s training activities. On the one hand, Falck, like the rest of the industry, was affected by the consequences of a temporary ban on deepwater oil and gas exploration. On the other hand, a strong demand arose for Falck’s experience in handling ac-cidents. As a result, Falck trained more than 5,000 people in remediating oil pollution of animal habitats, the beaches and the ocean.

In 2009, Falck opened new training centres in Nigeria, Thailand, Germany, the United States and Vietnam, and the focus in 2010 was on integrating these training centres into Falck. Moreover, a new centre was opened in 2010, in Houston, Texas, in the United States.

Falck’s training centres in Germany and Denmark are specially designed for safety training of staff working in the wind turbine industry, and it is Falck’s ambition to be the leading provider of services in this field.

At centres in Malaysia and the United Kingdom, Falck has estab-lished healthcare clinics where course participants can have their health checked before they take off for an offshore job.

Courses at eight centres in the United States, Brazil, Malaysia, Nigeria, Trinidad & Tobago, and Vietnam obtained accreditation in 2010.

A total of 203,000 people received Falck training in 2010, up from 193,000 in 2009. It turned out to be an advantage to Falck’s Asian-based customers that their staff could be safety trained in Malaysia, Singapore, Thailand and Vietnam. The cen-tres in Brazil, Denmark, Nigeria and Trinidad and Tobago also recorded growing activity during the year.

RevenueDKK million

1,000

800

600

400

200

0

06 07 08 09 10

Organic growth%

20

15

10

5

0

-5

06 07 08 09 10

Number of course participants

250,000

200,000

150,000

100,000

50,000

0

06 07 08 09 10


Financial review

Falck’s revenue grew by 11.1% in 2010 to DKK 8,367 million of which organic growth accounted for 5.1%. The revenue growth and organic growth met Management’s expectations. The percentage of Group revenue generated outside Denmark rose to 36.7% (2009: 34.6%), as the growth rate for markets outside Denmark was 18.2%, of which organic growth accounted for 6.7%. The rate of organic growth in Denmark was 4.2%.

Operating profit before costs and amortisation from businees combinations and exceptional items (EBITA) was DKK 839 mil-lion (2009: DKK 721 million) and was on a level with Manage-ment’s quidance. This brought EBITA growth to 16.3%, which met Management’s expectations as the EBITA margin increased to 10.0%. This was attributable to growth in the Emergency, Healthcare and Training business areas. The Assistance business experienced a substantial adverse impact from the long periods of severe winter weather in January/February and November/December, resulting in a major increase in the number of responses.

Profit for the year rose by 9.8% to DKK 458 million (2009: DKK 417 million).

Falck generated a free cash flow of DKK 842 million in 2010 (2009: DKK 1,096 million), representing a cash conversion rate of 100.4% (2009: 152.0%) in terms of conversion of EBITA into cash.

The ratio of net debt to EBITDA dropped from 2.64x in 2009 to 2.48x in 2010, which was attributable to the increase in earnings and the cash flow generated.

Change in accounting policies

A number of new financial reporting standards and interpreta-tions have been implemented with effect for the financial year 2010.

With the exception of the implementation of IFRS 3 Business Combinations, and IAS 27 Consolidated and Separate Financial Statements, the implementation of these financial reporting standards, improvements and interpretations has not affected recognition and measurement in 2010. The effect of IFRS 3 and IAS 27 was a reduction of profit for the year by DKK 22 million, a reduction of equity and the balance sheet (goodwill) by DKK 49 million and diluted earnings per share by DKK 0.2.

See note 1 to the consolidated financial statements for a complete overview of new financial reporting standards and interpretations implemented with effect for the financial year 2010.

Basis of presentation

The financial review is based on the financial highlights and key ratios on page 6 and cannot be derived directly from the conso-lidated financial statements.

Group performance in 2010

Consolidated income statementConsolidated revenue for 2010 was DKK 8,367 million, equiva-lent to a growth rate of 11.1%, of which organic growth ac-counted for 5.1%. During the past five years, revenue has grown by an average of 12.1%, of which organic growth accounted for 7.1%.

Other operating income amounted to DKK 70 million (2009: DKK 41 million). The increase in 2010 was attributable to gains on sales of properties in Denmark.

EBITA was DKK 839 million (2009: DKK 721 million), equivalent to an EBITA margin of 10.0% (2009: 9.6%).

Revenue and Organic growthDKK million %

10,000

9,000

8,000

7,000

6,000

5,000

4,000

3,000

2,000

1,000

0

10

9

8

7

6

5

4

3

2

1

0

2006 2007 2008 2009 2010

Organic growth Revenue


Costs and amortisation from business combinations total-led DKK 50 million (2009: DKK 19 million). The year-on-year increase was mainly attributable to changes in accounting policies, under which costs related to business combinations are no longer capitalised but rather recognised in the income statement when incurred. Moreover, amortisation of intangible assets from business combinations increased as a result of the acquisitions made during the year.

Exceptional items amounted to an expense of DKK 26 million (2009: DKK 0 million) and represented costs related to prepara-tion of a potential IPO.

Profit from investments in associates came to a break-even (2009: a loss of DKK 1 million).

Financials amounted to a net expense of DKK 122 million (2009: DKK 113 million). The increase in net financials was at-tributable to falling exchange rate gains which were, however, partially offset by lower interest expenses.

Profit before tax was DKK 641 million (2009: DKK 588 million). The increase was attributable to a significant improvement of EBITA which was, however, partially offset by higher amortisati-on and impairment of intangible assets from business combi-

nations, the change in the accounting treatment of acquisition costs and exceptional items.

Tax on the profit for the year was DKK 183 million (2009: DKK 171 million), equivalent to an effective tax rate of 28.6% (2009: 29.0%). The lower tax rate was primarily the result of a fall in non-capitalised tax losses and prior-year adjustments of tax.

Profit for the year rose by 9.8% to DKK 458 million (2009: DKK 417 million).

Normalised profit after tax for the year rose by 22.0% to DKK 527 million (2009: DKK 432 million).

Consolidated cash flow statementThe free cash flow was DKK 842 million (2009: DKK 1,096 million). The free cash flow as a percentage of EBITA (the cash conversion rate) was 100.4% (2009: 152.0%).

The free cash flow in 2010 was affected by an increase in trade receivables which was primarily related to higher pay-per-use activity in the Assistance business in November/December and growing activity in Travelcare and Training in the fourth quarter of 2010 as compared with 2009. This was offset by an increase in prepayments from customers and lower capital investments.

EBITA and EBITA marginDKK million %

1,000

900

800

700

600

500

400

300

200

100

0

10

9

8

7

6

5

4

3

2

1

0

2006 2007 2008 2009 2010

Profit for the yearDKK million

500

450

400

350

300

250

200

150

100

50

0

2006 2007 2008 2009 2010

EBITA margin Operating profit before costs and amortisation from business combinations and exceptional items (EBITA)


In 2010, DKK 45 million (2009: DKK 116 million) was invested in property, plant and equipment related to expansion and start-up of activities out of total investments of DKK 160 million (2009: DKK 262 million). Investments in 2010 were affected by the divestment of non-current assets.

Income taxes paid amounted to DKK 195 million (2009: DKK 166 million). Income taxes paid under Danish joint taxation amounted to DKK 120 million (2009: DKK 112 million).

Interest paid amounted to DKK 143 million (2009: DKK 129 mil-lion). The year-on-year increase was attributable to costs related to the raising of and changes to the terms of long-term loans.

Payments for acquisitions totalled DKK 720 million (2009: DKK 73 million) and primarily related to the acquisition of Care Ambulance Services in the United States, Toesa Service in Brazil and S Reg in Sweden.

Dividends paid, changes in interest-bearing debt and other equity movements relating to shareholders generated a cash inflow of DKK 166 million (2009: a cash outflow of DKK 528 million). The year-on-year increase in the cash inflow was attri-butable to a loan of DKK 777 million raised to finance the year’s acquisitions, which was partially offset by payments to buy back warrants and service debt.

Consolidated balance sheet

Net operating assetsConsolidated net operating assets excluding goodwill stood at DKK 432 million (2009: DKK 277 million).

The increase in net operating assets was attributable to acquisi-tions, which increased net operating assets excluding goodwill by DKK 193 million.

Consolidated net operating assets including goodwill stood at DKK 5,364 million (2009: DKK 4,411 million). The increase was attributable to the year’s additions of goodwill and intangible assets from acquisitions.

EquityEquity attributable to Falck A/S rose by 28.0% to DKK 1,723 million (2009: DKK 1,346 million). The increase primarily consi-sted of profit for the year attributable to Falck A/S of DKK 444 million.

Non-controlling interests totalled DKK 65 million (2009: DKK 61 million) and primarily related to non-controlling interests in the not wholly-owned training operations in Nigeria and emergency operations in Spain and Slovakia.

EBITA, Free cash flow and Cash conversion rateDKK million %

1,200

1,000

800

600

400

200

0

150

125

100

75

50

25

0

2006 2007 2008 2009 2010

Net operating assets excluding goodwillDKK million

700

600

500

400

300

200

100

0

2006 2007 2008 2009 2010

Cash conversion rate, % Free cash flow Operating profit beføre costs and amortisation from business

combinations and exceptional items (EBITA)


Netinterest-bearingdebtThe Group’s net interest-bearing debt increased by DKK 372 million to DKK 2,949 million from a starting point of DKK 2,577 million at year-end 2009.

Provisionsforacquisitionsofoperationsandnon-controllinginterestsContingent consideration and earn-outs payable totalled DKK 146 million (2009: DKK 59 million). The increase primarily related to the acquisition of Toesa. In addition, a receivable of DKK 56 million relating to acquisitions was recognised under other receivables. Provisions for acquisition of non-controlling interests were recognised in the amount of DKK 311 million (2009: DKK 227 million) based on expected earnings at the time of use. The year-on-year increase was primarily attribu-table to the acquisitions of Toesa Service and Care Ambulance Service. If a non-controlling interest elects not to sell its shares, Falck has an equivalent right to buy the shares in an agreed period.

If the obligation to acquire non-controlling interests is determi-ned based on earnings recognised in the financial statements for 2010, the obligation to acquire non-controlling interests amounted to DKK 193 million (2009: DKK 160 million), bringing the total net liability relating to acquisitions of operations and non-controlling interests to DKK 283 million (2009: DKK 219 million).

AcquisitionsThe Falck Group’s most important acquisitions in 2010 were:

Care Ambulance ServiceIn December, the Group acquired all the shares of Care Am-bulance Service, a provider of emergency and non-emergency ambulance services in California, USA.

Toesa ServiceIn October, the Group acquired 60% of the shares of Toesa Ser-vice, which operates ambulance services and healthcare clinics in a number of major cities in Brazil.

S Reg (Smart Safety)In September, the Group acquired all the shares of Swedish-based S Reg, a provider of safety and assistance services.

Resource Protection International (RPI)In March, the Group acquired all the shares of RPI, which provi-des consulting services specialising in fire fighting in the oil and gas industry.

Acquisitions after the balance sheet date:

On 1 January 2011, Falck signed an agreement to acquire all the shares of LifeStar Response Corporation in the United States for DKK 186 million. Lifestar Response provides ambulance services in six states and in Washington D.C. on the east coast of the Uni-ted States and operates 440 ambulances and similar vehicles.

In 2010, payments for acquisitions totalled DKK 720 million


Performance by business area Assistance Revenue from the Assistance business increased 13.2% to DKK 2,470 million (2009: DKK 2,183 million) and accounted for 29.5% of consolidated revenue. The organic growth rate was 8.0% (2009: 4.2%).

Performance in 2010 was affected by the severe winter weather in the Nordic region, and the number of responses increased 12% year on year. In Denmark and Sweden, the many extra responses had an adverse impact on profit as a large number of the customers are subscription customers, whereas earnings in Norway, Finland and Estonia increased as responses there are provided on a pay-per-use basis.

In home services, more Falck subscribers needed assistance in 2010 when a number of heavy rainfalls in August flooded basements and caused other water damage.

The good performance in the alarm market continued in 2010 and Falck began selling alarms in Sweden. The establishment of Falck Travelcare in 2009 and the acquisition of S Reg in 2010 increased the product portfolio in the fields of travel assistance and safety and security services for the home and contributed to the revenue growth generated in 2010.

The severe winter weather and the heavy rainfalls during the summer caused EBITA to fall by DKK 58 million to DKK 269 million.

EmergencyRevenue from the Emergency business, which accounted for 57.8% of consolidated revenue, rose to DKK 4,834 million in 2010, equivalent to a growth rate of 13.2%. The rate of organic growth was 7.6% (2009: 11.4%) as a result of high growth rates in several markets.

The emergency business in Denmark generated satisfactory revenue growth in 2010 as a result of a high level of activity in the ambulance business where Falck provides ambulance services to about 85% of the Danish population. Emergency also increased its sales of response services to the Assistance busi-ness in 2010 as a consequence of the severe winter weather. The five Danish regions increasingly use paramedics, and Falck

won a number of contracts for paramedic units and doctors’ emergency cars in 2010.

Emergency in Sweden also generated satisfactory growth in revenue, especially as a consequence of the breakthrough in fire fighting where Falck now has contracts for fire services at airports and a nuclear power plant.

The ambulance contracts in Norway won in 2009 were success-fully put into operation in 2010.

Activities in Slovakia grew in 2010 as Falck won an additional 17 ambulance stations and now operates 91 stations, equivalent to a third of Slovakia’s total ambulance service.

With the acquisitions of ambulance companies Toesa in Brazil in October 2010, Care Ambulance in the United States in Decem-ber 2010 and LifeStar in the United States in early 2011, Falck has obtained a significant and important foothold on the North and South American markets where the companies provide both emergency and non-emergency ambulance services. In 2010, only Toesa contributed to revenue growth.

The growth in activity in the Emergency business in 2010 resulted in a satisfactory EBITA of DKK 329 million, equivalent to a year-on-year increase of 48.9%. The profit was favourably affected by an increase in the use of the response services provided by Emergency Denmark to the Assistance business. In addition, the acquisitions of Toesa and Resource Protection In-ternational contributed to the year-on-year increase in earnings.

HealthcareHealthcare’s share of consolidated revenue fell to 14.3% in 2010 (2009: 15.1%). Revenue rose by 4.9% to DKK 1,196 million (2009: DKK 1,139 million). The rate of organic growth was minus 4.2% (2009: minus 11.0%).

Healthcare in Denmark saw a drop in revenue from sales of staffing services for the healthcare sector as a number of Danish regions have increasingly decided to insource staffing services. This was to some extent offset by higher revenue in Falck Job-service, which assists the job centres of Danish municipalities in their efforts to help people get back to work after a period on sickness benefit.


The healthcare clinics in the United Arab Emirates contributed to the growth generated in 2010 but were discontinued at the end of 2010.

EBITA rose by DKK 26 million or 54.3% to DKK 75 million (2009: DKK 49 million). This substantial growth in EBITA was attributable to restructuring in Sweden in 2009, which now contributes to earnings. Moreover, the organisation for staffing services was successfully adjusted following the substantial decline in revenue in 2009 and 2010.

TrainingRevenue from the Training business rose to DKK 958 million (2009: DKK 921 million) and accounted for 11.4% of consoli-dated revenue (2009: 12.2%). The rate of organic growth was minus 1.5%, partly because of the oil spill disaster in the Gulf of Mexico which led to a temporary ban on deepwater oil and gas exploration, affecting activities in the United States in particu-lar.

Revenue in the Netherlands was also adversely affected by restraint in the market and a lower level of activity as a conse-quence of the economic downturn.

However, significant growth was seen in a number of countries of operation in 2010, primarily in Brazil, Nigeria, Thailand and Trinidad & Tobago. In Brazil, oil production is growing rapidly, which has increased demand for training services. In Nigeria, a breakthrough was achieved at Falck’s newly established training centre and a significant increase was seen in the number of course participants. Conversely, the start-up in the United Arab Emirates was more difficult, and the expected level of activity was not reached.

EBITA for the Training business rose by 15.1% to DKK 142 mil-lion (2009: DKK 124 million). The fall in activity in the United States and the Netherlands and an EBITA loss from the start-up in the United Arab Emirates were more than offset by EBITA growth in the other countries and income for accounting purposes from a change of a defined-benefit pension plan to a defined-contribution plan.

Revenue and organic growth by business area

DKK million Revenue EBITA EBITA margin (%)

Organic % of total1) 2010 2009 2010 2009 2010 2009 growth

Assistance 29.5 2,470 2,183 269 327 10.9 15.0 8.0 Emergency 57.8 4,834 4,271 329 221 6.8 5.2 7.6 Healthcare 14.3 1,196 1,139 75 49 6.3 4.3 (4.2)Training 11.4 958 921 142 124 14.8 13.5 (1.5)Other 24 Elimination (13.0) (1,091) (985) Group total 100.0 8,367 7,529 839 721 10.0 9.6 5.1

1) Revenue in DKK for 2010 as a percentage of consolidated revenue


Performance by area

DenmarkRevenue in the Denmark was DKK 5,292 million (2009: DKK 4,928 million), equivalent to a 7.4% increase, of which 4.2% was organic growth.

As a result of the revenue growth, EBITA increased to DKK 542 million (2009: DKK 449 million).

The EBITA margin for 2010 was 10.2% (2009: 9.1%).

NordicregionRevenue from operations in the Nordic region (excluding Denmark) increased by DKK 308 million or 24.9% to DKK 1,541 million. The rate of organic growth was 9.9% and was generated by the Assistance and Emergency business.

EBITA was DKK 108 million (2009: DKK 40 million), equivalent to an EBITA margin of 7.0% (2009: 3.2%). The increase in EBITA and the EBITA margin was attributable to higher earnings from Norway, Sweden and Finland.

EuropeRevenue in Europe (excluding Denmark and the Nordic region) totalled DKK 1,087 million (2009: DKK 1,040 million), equivalent to a growth rate of 4.5%, of which organic growth

Revenue and organic growth by business area

DKK million Revenue EBITA EBITA margin (%)

Organic % of total1) 2010 2009 2010 2009 2010 2009 growth

Denmark 63.3 5,292 4,928 542 449 10.2 9.1 4.2 Nordic region 18.4 1,541 1,233 108 40 7.0 3.2 9.9 Europe 13.0 1,087 1,040 121 156 11.1 15.0 1.3 Rest of the world 5.3 447 328 68 76 15.2 23.2 12.0Group total 100.0 8,367 7,529 839 721 10.0 9.6 5.1

1) Revenue in DKK for 2010 as a percentage of consolidated revenue

accounted for 1.3%. The growth was primarily attributable to an increase in the level of activity in the Emergency business in Slovakia, Romania and Spain, whereas lower activity was seen in the Emergency and Training business in the Netherlands in 2010.

EBITA was DKK 121 million (2009: DKK 156 million), equivalent to an EBITA margin of 11.1% (2009: 15.0%). The fall in EBITA and the EBITA margin was due to lower earnings in Slovakia and the Netherlands as compared with 2009.

RestoftheworldRevenue in the rest of the world was DKK 447 million (2009: DKK 328 million), equivalent to a growth rate of 36.5%, which was primarily attributable to the Training activities in Brazil and Nigeria and the acquisition of the ambulance service provider Toesa in October 2010. Conversely, the training activities in the United States experienced falling revenue due to the oil spill disaster in the Gulf of Mexico. The organic growth rate was 12.0%.

EBITA was DKK 68 million (2009: DKK 76 million). The 10.5% decline in earnings was due to the fall in revenue from the trai-ning activities in the United States and costs of building up the training centre in the United Arab Emirates. The EBITA margin showed a corresponding decline to 15.2% from 23.2% in 2009.


Outlook for 2011The Group expects continued positive organic growth in 2011. Combined with the acquisitions in 2010 and 2011, this is expected to lift revenue by around 15%. EBITA is expected to increase correspondingly.

Forward-looking statements

Certain statements in this financial review are forward-looking statements. Such statements are based on current expectations and are by their nature subject to a number of uncertainties that could cause actual results and performance to differ mate-rially from future results or performance, expressed or implied, by the forward-looking statements.

Other matters

In December 2010, the Lundbeck Foundation acquired 36% of the shares in Falck A/S through its wholly-owned subsidiary, LFI A/S. Following this, the company’s shareholders, each of whom hold more than 5% of the shares, are:

Shareholders in Falck A/S

Name Ownership

Falck L.P., Jersey 43.9%LFI A/S, Hellerup 36.0%ATP PEP 1 K/S, Copenhagen 6.4%Liberatio A/S, Aarhus 5.2%

Events after the balance sheet dateAt an extraordinary general meeting held on 25 February 2011, the Board of Directors was authorised to establish a new war-rant programme. At a meeting of the Board of Directors held on 15 March 2011, the Board passed a resolution to establish a new warrant programme for the Executive Management Board. The new warrant programme comprises 4,443,120 warrants. Each warrant entitles the holder to subscribe for one share with a nominal value of DKK 0.50 at DKK 125 per share on 30 December 2015. The warrants issued were acquired at market price and no conditions were attached to the acquisition.

On 1 January 2011, Falck signed an agreement to acquire all the shares of LifeStar Response Corporation in the United States for DKK 186 million. Lifestar Response provides ambulance services in six states and in Washington D.C. on the east coast of the Uni-ted States and operates 440 ambulances and similar vehicles.

Revenue in the rest of world was DKK 447 million, equivalent to a growth rate of 36.5%


Corporate governance 2010

BackgroundThe Board of Directors and the Executive Management Board of Falck monitors developments within corporate governance on a regular basis. Although the company is not a listed company, Falck wishes to ensure that the Group is managed, internally as well as externally, in a manner that is consistent with national and international rules and in line with the corporate mission and which also matches the expectations of the different stakeholder groups, including shareholders, employees and customers.

Corporate governance recommendations in Denmark are issued by the Committee on Corporate Governance in Denmark. The Committee most recently updated its recommendations on 8 April 2010. This was the third revision of the recommendations, originally published in 2005.

Following the latest revision, the corporate governance recommendations are set out under nine main headings, 1–9, and appendix 1 on board committees. Each main section begins with a general rationale that explains why recommendations have been prepared with respect to that theme. The specific recommendations are set out below the rationale. Finally, comments are given on the recommendations to varying degrees.

The nine main headings are: 1. The role of the shareholders and their interaction with the

management of the company 2. The role of stakeholders and their importance to the

company and the company’s corporate social responsibility 3. Openness and transparency 4. The tasks and responsibilities of the supreme and the

central governing bodies 5. Composition and organisation of the supreme governing

body 6. Remuneration of Management 7. Financial reporting 8. Risk management and internal control 9. Audit

Below is a description of Falck’s position on the updated cor-porate governance recommendations in accordance with the ‘comply or explain’ approach which has its roots in the Danish Financial Statements Act and the stock exchange rules. The

description below only includes the introduction to each main section (the complete recommendations are available at www.corporategovernance.dk).

Falck’smanagementThe company is managed by a Board of Directors comprising not less than five and not more than ten members, who may not have turned 70 years of age. Members of the Board of Directors are elected by the shareholders at the annual general meeting for terms of one year. In addition to the members elected by the shareholders, the Board of Directors includes members elected pursuant to the statutory rules on employee representation on the Board of Directors.

Members of the Board are: Lars Nørby Johansen (Chairman) Lars Terney (Deputy Chairman) Thorleif Krarup (Deputy Chairman) Steen Hemmingsen Kim Gulstad Johannes Due Mats Jansson Thorhild Widvey Vagn Flink Møller Pedersen (elected by the employees) Jan Heine Lauvring (elected by the employees) Per Aastrup (elected by the employees)

None of the above is a member of both the Board of Direc-tors and the Executive Management Board of Falck A/S. Kim Gulstad (NC), Lars Terney (NC), Thorleif Krarup (LF) and Steen Hemmingsen (LF) represent major shareholders on the Board, namely Nordic Capital (NC) and the Lundbeck Foundation (LF), respectively. Lars Nørby Johansen is former President and CEO of Falck.

ExecutiveBoardThe company’s Executive Management Board consists of Allan Søgaard Larsen, President and CEO, and Morten Reignald Peder-sen, Deputy CEO.

1. The role of the shareholders and their interaction with the management of the companyThe company’s shareholders, employees and other stakeholders have a joint interest in the company always being capable of adju-sting to changing demands, which allows the company to continue


to be competitive and to create value. Positive interaction between management and shareholders is therefore essential. Shareholder influence is exercised at the general meeting. As owners of the company, the shareholders should actively exercise their rights and use their influence resulting in the management protecting the interests of the shareholders as best as possible and ensuring an appropriate and balanced development of the company both in the short and the long term.

Good corporate governance depends on appropriate frameworks which make it easy for the shareholders to enter into a dialogue with the management of the company. This can be encouraged by ensuring that the shareholders are always well-informed of the company’s situation and outlook and that the general meeting ser-ves as a forum for communication and discussion and is the place where shareholders express their views and make decisions.

Falck’spositionFalck believes that it complies with the recommendations under heading 1 in all respects.

Falck aims to be a credible and transparent player in the equity market. Falck releases information via the Internet, due to the ease of accessibility for a broad group of stakeholders. Falck’s website will always contain all current and released information in both Danish and English.

The Board of Directors evaluates the company’s capital struc-ture at suitable intervals to ensure it is in the interests of the shareholders and the company. Generally, the Group is not subject to any special capital requirements other than standard statutory requirements. The company’s share capital is not divided into share classes. The capital structure has been deter-mined based on an assessment of how large a debt the Group is able to service as well as the amounts of earnings and cash flows generated in the Group while still providing opportunities for investing in growth.

General meetings constitute the highest governing authority at Falck. This is where the company’s shareholders are free to sub-mit proposals, take the floor and ask any questions to the Board of Directors and the Executive Management Board. If a matter is put to the vote, shareholders can exercise a direct influence on important decisions at Falck.

General meetings are convened by the Board of Directors pursuant to the rules of the Danish Companies Act. The annual general meeting shall be held once a year in Greater Copenha-gen in due time for the audited and approved annual report to the submitted to the Danish Commerce and Companies Agency to be received by the Agency within five months after the end of the financial year.

2. The role of stakeholders and their importance to the company and the company’s corporate social responsibility In order for a company to be able to adjust readily to changing demands and thus stay competitive and deliver value-adding performance, it is essential for the company to have, in addition to the dialogue with its shareholders, a good relationship with its stakeholders.

The management of the company should operate and develop the company with due consideration of its stakeholders and to a reasonable extent engage in active dialogue with its stakeholders to develop and strengthen the company. Such dialogue may take place at investor meetings etc.

Falck’spositionFalck believes that it complies with the recommendations under heading 2 in all respects. Falck’s policy on corporate social responsibility and our stakeholder policy, corporate values and code of conduct are available on falck.com.

As a business and as a business partner, Falck’s activities are based on basic principles of working to prevent accidents, diseases and emergency situations, to rescue and assist people in an emergency quickly and competently and to rehabilitate people after illness and injury. Pursuing this mission gives Falck a special responsibility to show corporate social responsibility, as an employer, service provider and as a customer.

In step with the growing internationalisation of the Group’s activities, this has been made more visible through the adop-tion and subsequent implementation of a code of conduct describing the Falck Group’s social, environmental and ethical guidelines. We expect and require that everybody complies with this code, employees, suppliers and partners alike. The guidelines were adopted by the Board of Directors in 2008 and were subsequently confirmed by the Group’s Worldwide Workers Council.


3. Openness and transparencyShareholders, including potential shareholders, and other stake-holders have different needs for information about the company. Their understanding of and relations to the company depend on the amount and the quality of information published by the company.

Openness and transparency are essential conditions for ensuring that the company’s shareholders and other stakeholders are able to regularly evaluate and relate to the company and its future.

Openness and mutual respect are prerequisites for a fruitful interac-tion between the company and its stakeholders.

A thorough and updated communication strategy will help the company provide timely, trustworthy, accurate and up-to-date internal and external information of high quality and comply with the disclosure requirements in force from time to time.

Falck’spositionFalck believes that it complies with the recommendations under heading 3 in all essentials.

Falck’s annual reports are prepared in accordance with Inter-national Financial Reporting Standards (IFRS) and additional Danish disclosure requirements for annual reports. The reports are prepared in Danish as well as English and contain, in addi-tion to the financial information, a review of the Group’s affairs and position with respect to corporate social responsibility, corporate governance and risk factors. Moreover, the annual reports describe developments in the Group’s four business areas. Accordingly, the company believes that the annual report

includes all relevant financial and non-financial information of interest to the company’s stakeholders.

Due to Falck’s general public service assignments, Falck and Falck’s activities may attract great attention from the media and other external stakeholders. An important element of Falck’s communications strategy is that inquiries from the media and other external stakeholders are met with open-ness, locally, regionally, nationally as well as internationally. Falck can always make statements on its activities and specific actions. However, Falck is not allowed to provide information on the condition of patients or clients, the cause of accidents, personal information or actual conditions that may possibly hamper police investigations or the like. Moreover, Falck is not prepared to provide information on matters which should only be commented on by the public authorities. In order to ensure sufficient credibility, Falck voluntarily provides information on positive and negative affairs in the organisation that may be as-sumed to have material significance to the general public.

4. The tasks and responsibilities of the supreme and the central governing bodiesThe supreme governing body is responsible for safeguarding the interests of the shareholders with care and due consideration of the other stakeholders.

The most important tasks of the supreme governing body include appointing a qualified executive board, establishing its tasks, conditions of employment and distribution of work and preparing guidelines for accountability, planning, follow-up and risk manage-ment. The supreme governing body is responsible for supervising

An important element of Falck’s communications strategy is that inquiries from the media and other external stakeholders are met with openness, locally, regionally, nationally as well as internationally


the executive board and preparing guidelines for how to exercise this supervision.

The supreme governing body is responsible for ensuring the profes-sional development and retention or dismissal of the members of the executive board as well as ensuring that the remuneration of the members of the executive board reflects the long-term value creation in the company as well as the independent performance of the members of the executive board.

Both the supreme governing body and the central governing body shall ensure that the necessary financial resources are in place at any given time.

The central governing body is in charge of the overall and strategic management of the company. The central governing body must define the company’s strategic goals and make sure that the neces-sary conditions for achieving such goals are present in the form of financial as well as competence resources and is responsible for the proper organisation of the company’s activities.

It is essential that the central governing body ensures ongoing development of and follow-up on the company’s strategic goals and determines whether the conditions for achieving these goals are present.


The Board of Directors and the Executive Management Board are responsible for managing the company’s affairs. The framework for the work of the Board of Directors, including general guidelines for the tasks, duties and responsibilities of the chairman and the deputy chairman, is defined in the rules of procedure for the Board of Directors, which are believed to be adequate. Falck has not prepared additional scope of work and task lists specifying the tasks, duties and responsibilities of the chairman and deputy chairman.

The Board of Directors defines guidelines for the Executive Ma-nagement Board’s performance of the day-to-day management of the company in instructions to the Executive Management Board, which deal with matters such as responsibility, distribu-tion of responsibilities, reporting by the Executive Management

Board to the Board of Directors, communication by the Board of Directors and the Executive Management Board, evaluation of the work of the Executive Management Board, and risk manage-ment. The day-to-day management does not include transacti-ons which, according to the company’s circumstances, are of an unusual nature or of particularly great importance.

The Executive Management Board is responsible for the day-to-day development and operations, with primary focus on de-veloping and implementing strategies, and submits significant initiatives for approval by the Board of Directors. Moreover, the Executive Management Board is responsible for ensuring that the Board of Directors is informed about all material matters.

5. Composition and organisation of the supreme governing bodyIn companies where the board of directors constitutes the supreme governing body, the board of directors should be composed in such a way as to allow it to perform its managerial tasks, including overall and strategic tasks.

It is essential that the supreme governing body of a company be composed in such a way as to ensure effective performance of its control tasks and, at the same time, ensure a constructive and qua-lified dialogue with the executive board. It is also essential that the members of the supreme governing body always act independently of special interests.

The supreme governing body should regularly assess whether its composition and the skills of its members, individually and col-lectively, reflect the demands posed by the company’s situation and circumstances. Diversity may improve the quality of the work performed by the supreme governing body. To increase value crea-tion, the supreme governing body should carry out an evaluation of its members every year and ensure integration of new talent while maintaining continuity.

Falck’spositionFalck believes that it complies with the recommendations under heading 5 in all essentials. We have not defined formal recruitment criteria for new members of the Board of Directors. Falck’s Board of Directors assesses on a regular basis the need for adding supplementary skills to the Board of Directors, with due regard to the company’s development and ownership. If required, the Board of Directors may establish a nomination


committee for this purpose. In Falck, two of the three members of the Audit Committee represent major shareholders and the company therefore does not meet the recommendation that a majority of the members of a management committee should be independent. However, the Board of Directors has conside-red it important that committee members hold the necessary qualifications in accounting or auditing, whereas the Board of Directors always has the final responsibility for the decisions prepared by the Audit Committee.

The rules of procedure provide that our Board of Directors must ensure that the Board of Directors possesses relevant and adequate knowledge and skills to manage the company when nominating candidates to the shareholders at the general meeting. The Board of Directors aims to nominate candidates who are 67 years of age as a maximum. Prior to any election of members of the Board of Directors by the shareholders, candi-dates’ CVs are disclosed, including information about executive positions in other companies.

The Board of Directors meets whenever the chairman deems it necessary or when requested by a member of the Board of Directors or a member of the Executive Management Board. At least five meetings of the Board of Directors are held each year.

6. Remuneration of ManagementOpenness and transparency about all important issues regarding the principles for and amounts of the total remuneration offered to members of the governing bodies are essential. The principles of the remuneration policy should support a long-term value-creation for the company.

Competitive remuneration is a prerequisite for attracting and retaining competent members of the governing bodies. The total remuneration package, i.e. the fixed and variable components and other remuneration components, should be reasonable and reflect the governing body members’ independent performance, responsi-bilities and value creation in the company. The variable component of the remuneration should be based on actual achievements over a period of time with a view to long-term value creation.


The general principle is for the remuneration of the Board of Directors in Falck to be at a level considered comparable with companies listed on NASDAQ OMX Copenhagen of a similar size and internationalisation profile. The company does not use in-centive pay for the Board of Directors. The following guidelines apply to the fixed remuneration of the Board of Directors:

•TheChairmanoftheBoardreceivesthreetimesthebasicremuneration

•TheDeputyChairmenoftheBoardreceivetwicethebasicremuneration

•Thebasicremunerationisnotsubjecttoanyadjustmentmechanisms

•AdditionalseparateremunerationispaidtoBoardmemberswho sit on Board committees. However, the total remu-neration for Board work paid to the Chairman and Deputy Chairman of the Board of Directors and to other members of the Board of Directors may not exceed four times and twice the basic remuneration, respectively.

We aim for members of the Executive Management Board to receive a fixed salary considered competitive relative to, and comparable with, the salaries paid to the executive boards by other companies of similar size, and which is reasonable relative to the tasks performed. The remuneration of the Executive Management Board is reviewed annually at the initiative of the Chairman of the Board of Directors. Falck’s annual report does not disclose the remuneration paid to each member of the Exe-cutive Management Board. We believe this would not provide additional relevant information compared with disclosure of the total remuneration paid to the Executive Management Board.

Incentive pay in Falck serves to better align the interests of our Executive Management Board and our shareholders. We do this by motivating the Executive Management Board to achieve the goals defined for the company, and by making it less attractive for members of the Executive Management Board to leave the company prematurely. Incentive pay can also be a useful tool to attract new Executive Management Board members. Such pro-grammes may comprise remuneration in the form of options, warrants, shares and/or bonus agreements.

7. Financial reportingEach member of the supreme governing body and the executive board is responsible for preparing the annual report and other


financial reports in accordance with current legislation, applicable standards and any further requirements concerning financial state-ments stipulated in the articles of association, etc.

The members of the said governing bodies must ensure that the financial reporting is easy to understand and balanced and provides a true and fair view of the company’s financial position, performan-ce and cash flow. The management commentary must give a true and fair presentation of the state of affairs, including the outlook.


Falck has set up an Audit Committee. The objective of the Audit Committee is to evaluate the Group’s financial reporting, accounting policies and the internal control and risk manage-ment environment. In addition, the Committee makes relevant recommendations in relation to these issues to the Board of Directors and ensures follow-up on the implementation of ini-tiatives to be initiated by the Executive Management Board. The Committee receives information from a number of head office departments and from the company’s auditor.

The Audit Committee meets a minimum of three times a year. The members of the Audit Committee are three members ap-pointed by the Board of Directors. Furthermore, the Executive Management Board and the Chief Financial Officer attend the meetings of the Audit Committee. The company’s auditor attends the meetings of the Audit Committee to the extent necessary.

8. Risk management and internal controlEffective risk management and an effective internal control system contribute to reducing strategic and business risks, to ensuring observance of current rules and regulations and to ensuring the quality of the basis for management decisions and financial repor-ting. The company’s choice of strategy naturally involves risk. It is essential that the risks are identified and communicated, and that the risks are managed appropriately.

Effective risk management and internal control are a precondition for the supreme governing body and the executive board to ef-ficiently perform the tasks bestowed upon them. Consequently, it is essential that the supreme governing body ensures effective risk management and effective internal control systems.


In Falck, risk management is considered an important and natu-ral element of the work to realise our goals and strategy. There are risks inherent in our day-to-day activities, in implementation of the strategy defined and in the continuous exploitation of business opportunities, so the handling of these risks is conside-red a natural and integral part of day-to-day work and a way of ensuring stable and reliable growth.

Falck’s management continuously discusses and regularly consi-ders the Group’s risks and how these should be handled for the individual business areas and the Group as a whole in order to ensure that risk management is efficient. To assist the Executive Management Board and the rest of the organisation, a head of-fice Risk Management Department has been established as well as a department for Group Controlling.

9. AuditEnsuring an independent, competent and thorough audit is an es-sential element of the work of the supreme governing body.

Falck’spositionFalck believes that it complies with the recommendations under heading 9 in all respects. Falck has not established an internal audit function. However, Group Controlling regularly evaluates business procedures and internal controls in subsidiaries and reports the conclusions of controller visits to the Audit Commit-tee.

Business procedures and internal controls include, among other things, segregation of functions and areas of responsibility, de-scriptions of functions, procedures, control measures and analy-tical controls. The Group finance function has defined a number of reporting requirements comprising financial data, specifica-tions, analytic basis and commenting thereon. This reporting is required on a monthly basis from the individual companies of the Group. Together with business procedures and internal controls established in the companies, this has been defined with a view to ensuring that the monthly reporting from the individual companies takes place in a documented and well-planned manner.


Risk factors

The Board of Directors and the Executive Management Board of Falck regularly monitors and assesses the Group’s overall risk exposure relative to probability and implications as well as established risk measures. A policy has been established for material risks under which key persons have been designated with a view to ensuring necessary controls and monitoring of risks. The Board of Directors and the Executive Management Board monitors developments in risks relative to an established risk strategy.

This description of risk factors includes examples of the risks which Management estimates may have an impact on the Group’s future growth, activities, financial position and results of operations.

The following sections do not contain an exhaustive description of all risks associated with the activities of the Group. The risk factors are divided into business risks and financial risks and are described in random order.

Business risksPoliticalrisksSome of Falck’s activities are based on contracts with public authorities. Falck’s opportunity of renewing existing contracts and winning additional contracts is dependent on the poli-tical decision-making process with regard to outsourcing of public-sector operating activities. If Falck does not have the opportunity to renew or successfully tender for these contracts, or if contracts are terminated, it may therefore have a material adverse impact on Falck’s business.

Image Falck has a strong image built up over a long period of time which to some extent is the product of Falck operating in a number of areas that are subject to a high level of public inte-rest. This strong image is of material importance to the Group’s ability to retain and develop Falck’s activities. There is conse-quently very high focus on ensuring that Falck operates morally and ethically correctly and with a high quality of the services provided.

CoststructureFalck’s activities are labour-intensive and consequently affected by the cost of labour, pensions, regulations on working hours, social security contributions and other employee benefits provided to Falck’s employees. Falck may be affected by non-acceptance by the market of price increases, including increases in payroll costs. However, historically, it has been possible to include a large proportion of increases in payroll costs in Falck’s pricing.

Especially in the Assistance business and to some extent in the Healthcare business, the costs are also dependent on the extent to which customers use the resources provided for in the subscription contracts. For instance, increased use of assistance by subscribers of roadside assistance will entail increased costs related to such responses.

AttractingandretainingemployeesFalck relies on being able to attract and retain employees with special competencies and experience in order to achieve its business goals. The special competencies are to a great extent built up during the employment relationship. The Group has historically had a low staff turnover rate, but continually imple-ments initiatives both locally and in the Group as a whole aimed

The Board of Directors and Executive Management Board monitors developments in risks relative to an established risk strategy


at ensuring that Falck continues to be an attractive and well-reputed organisation. A visible effect of these initiatives was the Danish “Workplace of the Year 2008” award.

The table below shows a breakdown of the Group’s employees:

Full time equivalent employees (FTE)

2010 2009

1 January 11,637 11,567 New employees 4,236 2,236 Dismissed employees (1,286) (916)Resigned and retired employees (860) (1,250)31 December 13,727 11,637

GrowthAn important element of Falck’s business strategy is to expand and grow in new markets or product areas, also through acqui-sitions. However, persistently high growth may result in pres-sure on management resources and other factors. Thus Falck’s ability to generate growth depends on its ability to retain and strengthen management, on attracting, training and retaining its staff, and on the organisation’s ability to continuously im-plement and optimise operational, financial and other manage-ment information systems in a timely manner.

Growth also depends on Falck’s ability to continue to attract new customers and retain a substantial number of its existing customers and on its continued ability to offer products adapted to the conditions on the individual markets. Falck has substantial market shares in certain markets, such as in Denmark, which requires that products must be competitive and provide added value to customers in order for Falck to be preferred over any competitors in the market.

EnvironmentalimpactFalck endeavours to maintain a standard that is better than statutory environmental requirements. However, the Group’s activities imply to a certain extent a potential risk of environ-mental hazards and consequently of claims being lodged or orders issued by public authorities or other interested parties.

DependenceonITandcommunicationssystemsFalck’s business model and operations are to a great extent de-pendent on well-functioning IT and communications systems.

Falck’s central systems handling operations are designed to withstand power and data-line breakdowns and similar events to the greatest possible extent. Historically, the operational re-liability of Falck’s systems has been very high, and the individual systems are continuously optimised.

CompetitionOne of the characteristics of Falck is that there are local or global competitors within the individual business areas, but no competitor matches Falck’s product portfolio. However, there is nevertheless a risk that a major competitor with the necessary capital resources may set out to conquer markets or business areas in which Falck operates.

In the field of the Assistance business, the existing competitors are mainly marketing/franchise networks, whereas in the rest of Europe there are a number of large assistance operators run as membership clubs and by insurance companies.

In the field of the Emergency business, there are very few pri-vate ambulance operators, and none of them operate interna-tionally. The competition thus often consists of small opera-tors. Within fire-fighting, the competition mostly consists of municipal fire services whereas, for industrial fire services, the competition mainly consists of in-house corporate fire services.

The Healthcare business is characterised by a number of small competitors, especially in Denmark, whereas the market in Sweden is more mature and thus characterised by a number of large competitors.

In the Training business, there are only few global training operators, whereas there are often small local training centres in the local markets. Falck considers it an advantage that it is able to serve customers globally according to a uniform, high standard.


Financial risksInterest rate and foreign exchange riskThe Group’s interest rate risk is mainly affected by the Group’s overall financing. Based on the current market situation, the Executive Management Board and the Board of Directors have decided that the financing is to be based on short-term interest rates.

Interest collars covering DKK 1,709 million with a floor of 3.25% and a cap of 5.5% have been entered into to hedge interest rate risks.

Credit institutions, floating-rate loans

DKK million 2010 2009

DKK 2,271 1,595EUR 855 999USD 249 249Other - 30Total 3,375 2,873

The Group is therefore sensitive to fluctuations in market inte-rest rates, and a fluctuation by 1% would change the Group’s interest expense by DKK 13 million as the market rate for the current year is below the floor of the interest rate collars. With-out an interest rate collar, a fluctuation by 1% would change the Group’s interest expense by DKK 34 million.

Sensitivity analysis, market-rate fluctuations of 1%

DKK million 2010 2009

DKK 7 7EUR - 1USD 2 2Total 9 10

The Group monitors developments in market interest rates clo-sely in order to be able to react if the market situation changes.

The exchange rate exposure of the Group’s transactions is limited since subsidiaries outside Denmark largely operate in local currencies, to the effect that the revenues and most of the expenses of the individual subsidiaries are denominated in the same currency. The main exchange rate exposure faced by the Group relates to the translation into Danish kroner of the financial results and equity of subsidiaries.

In the event of a concurrent fall in all exchange rates by 1%, this would reduce revenue by DKK 31 million, EBITA by DKK 3 mil-lion and equity by DKK 17 million. In the event of a change in the DKK/EUR exchange rate by 1%, the Group’s debt would change by DKK 9 million, which would be recognised in the income statement. Fluctuations in the DKK/USD exchange rate have no impact on the income state-ment or equity as the Group’s debt is hedged.

The Group regularly assesses its foreign exchange risks in order to determine whether the exposure should be hedged by loans in the same currencies or forward exchange contracts.

CreditriskWhen entering into significant contracts, the Group makes a credit assessment of the customer in order to assess the poten-tial credit risk. Trade receivables are monitored and evaluated on a continuing basis in order to assess any need to make provisions for bad debts.

The Group’s credit exposure to large customers is considered low as the Group’s large customers are, to a great extent, public authorities.

Subscription sales to private and corporate customers are not deemed to involve material risks to the Group as the amounts are small for the individual subscriptions, and general as well as individual write-downs are made for anticipated bad debts. As at 31 December 2010, receivables from such subscriptions totalled approximately DKK 76 million (2009: DKK 45 million).


LiquidityriskThe Group’s liquidity risk primarily concerns its ability to meet its obligations to pay its employees and creditors and to service its debts. The Group continuously monitors its free cash flow in order to assess its liquidity risks. Certain of the Group’s loans, including the debt of Falck A/S, are subject to certain loan covenants, and the Group continuously monitors whether the covenants are observed.

The Group’s cash reserve comprises cash and cash equivalents and unused credit facilities. Management believes that the Group’s cash resources are fully sufficient. The Group aims to have sufficient cash resources to allow it to continue to operate adequately in case of unforeseen fluctuations in cash.

At year-end 2010, the Group’s unused credit facilities were in the region of DKK 720 million. With the addition of available cash and cash equivalents of DKK 745 million, total cash resour-ces were in the region of DKK 1,465 million.

Agreements have been entered into with the Group’s principal bankers for facilities to finance potential future acquisitions. These facilities fall due in 2013 and 2015 respectively.

CapitalstructureThe Group is not subject to any general capital requirements other than standard statutory requirements. The company’s share capital is not divided into share classes. The capital

structure has been determined based on an assessment of how large a debt the Group is able to service as well as the amounts of earnings and cash flows generated in the Group while still providing opportunities for investing in growth. The Group is financed by an overall syndicated loan raised in the parent company. The outstanding debt as at 31 December 2010 was DKK 3,046 million. The outstanding debt increased by DKK 259 million in 2010 as a result of new debt raised. Through regular instalments payable on the syndicated loan in the period 2011 to 2012, the debt will be reduced to DKK 2,406 million, of which DKK 2,184 million must be repaid in 2013 and DKK 222 million in 2015.

Moreover, the Group has mortgage loans totalling DKK 384 million and other interest-bearing debt of DKK 355 million. The Group monitors and manages its capital structure with a view to ensuring that it can meet its financing obligations.

As at 31 December 2010, the Group’s net interest-bearing debt stood at DKK 2,949 million, while equity stood at DKK 1,723 million, which is deemed to be a reasonable level relative to the desired financial flexibility.

The company’s Articles of Association do not include special powers to the shareholders in general meeting or to the Board of Directors to distribute the company’s capital, and the company’s Articles of Association do not include any restricti-ons on ownership interests.

The Group monitors developments in market interest rates closely in order to be able to react if the market situation changes


Report on corporate social responsibility

Statutory report on corporate social responsibility. See section 99 a of the Danish Financial Statements Act.

As a business and as a business partner, Falck’s activities are based on basic principles of working to prevent accidents, disea-ses and emergency situations, to rescue and assist people in an emergency quickly and competently and to rehabilitate people after illness and injury.

Pursuing this mission gives Falck a special responsibility to show corporate social responsibility, as an employer, service provider and as a customer.

In step with the growing internationalisation of the Group’s activities, this has been made more visible through the adop-tion and subsequent implementation of a code of conduct describing the Falck Group’s social, environmental and ethical guidelines. We expect and demand that everybody, employees, suppliers and business partners, adhere to these standards. The guidelines were adopted by the Board of Directors in 2008 and were subsequently confirmed by the Group’s Worldwide Workers Council. The Worldwide Workers Council is a forum established based on an agreement with the Union Network International as a forum for dialogue between employees and management. One annual meeting is held with participation of employees from the Group’s countries of operation based on the number of employees in the respective countries and representatives appointed by the Group Management.

The Group has established a special task force to deal with the Group’s corporate social responsibility which is to ensure that the rules are implemented and that the activities are in accor-dance with developments in the CSR field.

As part of the implementation, the Falck Group has introdu-ced a reporting structure designed to ensure that all officers holding business responsibility in the respective business areas report to the HR Department any incidents that constitute a breach of the code of conduct.

Falck’s code of conduct

The rules adopted by the Falck Group are based on the prin-ciples of the United Nations Global Compact, which cover the following areas:

HumanrightsThe company should•supportandrespecttheprotectionofinternationallypro-

claimed human rights within the area in which it operates and has influence;

•makesurethatitisnotcomplicitinhumanrightsabuses.

LabourstandardsThe company should•upholdthefreedomofassociationandtheeffectiverecogni-

tion of the right to collective bargaining;•supporttheeliminationofallformsofforcedandcompulsory

labour;•supporttheeffectiveabolitionofchildlabour;•supporttheeliminationofdiscriminationinrespectof

employment and occupation.

EnvironmentThe company should•supportaprecautionaryapproachtoenvironmentalchallen-

ges;•undertakeinitiativestopromotegreaterenvironmental

responsibility;•encouragethedevelopmentanddiffusionofenvironmentally

friendly technologies.

Anti-corruptionThe company should•workagainstallformsofcorruption,includingextortionand

bribery.

Each company of the Falck Group holds individual responsibility for complying with and implementing the principles of the code of conduct and for reporting any violations thereof to the Group’s HR function. At its annual meeting, the Workers Council reviews all items of the code of conduct with a view to reporting any violations thereof. No violations were reported following the meeting in 2010.

In 2010, a number of tools were introduced to be used by sup-pliers and business partners to help them ensure that they com-ply with Falck’s code of conduct by making a risk assessment and by giving them access to conducting control for Falck.


In 2010, the task force began its work to monitor the initiatives of individual companies and to prepare guidelines in this respect.

General information

Falck is involved in a number of partnerships with hospitals, researchers and authorities regarding innovation with respect to the health and safety of people.

Moreover, the Falck Group supports a number of projects, including:

FirstaidFalck is active in increasing the attention on first aid in a number of countries. In Slovakia, a number of first aid courses are held each year for children in kindergartens and schools. In Poland, Falck has conducted first aid training on beaches to increase the attention on first aid and the dangers on the beach.

NicaraguaIn 2003, a project was initiated with the primary objective of lifting the level of competency among rescue staff in Nicaragua and to improve vehicles and equipment in the fire and rescue service. The project is run jointly by Falck and the Danish labour union 3F and receives direct subsidies of DKK 0.10 per work-ing hour via the union agreement and Falck donations of fully equipped rescue vehicles and equipment via a Danida project. In 2010, six ambulances and four fire engines were donated and 20 rescue staff from Denmark and Nicaragua participated in job exchanges. Moreover, a training platform was added to the

project in 2010 and a number of Nicaraguan instructors were trained in conducting training programmes to upgrade the training of all employees of the Nicaraguan fire service.

TraininginfirefightingforyoungpeopleinGreve,DenmarkIn 2010, a number of fire fighting courses were held for spe-cially selected children and young people in this suburb south of Copenhagen. They were primarily trained in fire fighting but also learnt about fire hazards. The project was initiated against the background of events of arson and young people chal-lenging fire fighting in the area. The course will be continued in the years to come and is popular among the young people and it has won an award for its contribution to building a bridge between society and young people with a difficult background.

EnvironmentIt is a natural part of Falck’s philosophy and ethics to show consideration for its surroundings, including the environment and climate. Falck is therefore working actively to protect the environment and climate for the future and continuously evaluates how to reduce its consumption of resources. Falck has no activities that can be characterised as particular sources of pollution.

The most important environmental impact from Falck is:•Fuelconsumption•Powerconsumption•Heatconsumption•Waterconsumption•Wasteproduction

The Group has established a special task force to deal with the Group’s corporate social responsibility which is to ensure that the rules are implemented and that the activities are in accordance with developments in the CSR field


Falck generally endeavours to minimise its consumption of re-sources and the discharge of pollutants from the sources listed above. In the pursuit of its activities, Falck pays attention to reducing the negative environmental impact and continuously logs its consumption. Registration of environmental data ensu-res that performance in the area can constantly be monitored and optimised.

An example of Falck’s environmental initiatives is the introduc-tion with effect from 2011 of electronic pay slips which replace almost 10,000 pay slips per month.

Falck has also installed a monitoring system in 30 vehicles in Denmark. The system monitors rapid acceleration, hard breaking, sharp turning and idle running of engines, all of which affect fuel consumption and wearing parts. This is expected to lead to changes in driving behaviour that will save 5-20% of fuel costs.

EmployeerelationsThe Falck Group respects the freedom of association of its employees and other workers with respect to legal labour unions and recognises the employees’ right to collective bargaining. The Falck Group ensures a safe and healthy working environment which protects against accidents and injury.

The work on safety and prevention of injury at work is carried out in collaboration with the operational and safety organisati-ons in the individual countries of operation. They develop and hold courses in transfer techniques, lifting/carrying techniques, information material, and material for use in activities relating to the psychological working environment. Likewise, the safety organisation intends to ensure that Falck has the right safety equipment for its employees, such as patient lifts, lifting cushi-ons for patients lying on the ground, electric stair climbers for the airport, etc.

In 2001, Falck introduced a new health service for its employees in Denmark by way of “Interdisciplinary Treatment” with a view to treating and preventing work-related injuries which reduce both employee well-being and productivity and should there-

fore be efficiently prevented. Outside the areas where Falck has concepts of its own to handle such injuries, external suppliers or in-house specialists are used. Later on, this health service was expanded to include health consulting, including assistance to understand and use the healthcare system.

At injury or accident sites, rescue officers and fire fighters experience events that can be very intense and potentially impair their quality of life and working capacity. As in the case of physical injury, there are defined guidelines on how to act, if such problems arise. Since 1993, Falck has ensured that its employees can get crisis therapy, which includes internal debriefing as well as assistance from psychologists and other trauma experts. Based on this experience, both crisis therapy and interdisciplinary treatment are now important elements of the services Falck offers its customers, and the pursuit of corporate social responsibility has thus given Falck opportuni-ties for product innovation for the benefit of both Danish and international companies.

In spite of the many preventive and curative initiatives, Falck staff, especially ambulance staff, do on occasion suffer physical injuries which prevent them from continuing in their job. The psychological consequences of the job may also make it neces-sary for an employee to stop his or her career as an ambulance officer. There is great focus on either finding a different job in-house for such employees or on establishing special jobs that match what the employee can handle in his or her new situation.

In 2010, the largest project to date within health and safety at work was initiated aimed at minimising the number of back injuries among rescue staff. The project runs over 20 months in a partnership with the Danish Technological Institute and the Danish Prevention Fund. The project involves about 375 rescue officers from all regions of Denmark.

The Falck Group’s code of conduct naturally requires that human rights are observed, including that child labour or forced labour does not occur. Moreover, rules have been defined in order to avoid discrimination relating to working and employ-ment conditions.


Financial statementsIncome statement 50Statement of comprehensive income 51Balance sheet 52Equity statement 54Cash flow statement 55

Notes to the financial statements 1. Accounting policies 56 2. Accounting estimates and judgements 66 3. Segment information 67

Notes to the income statement 4. Revenue 70 5. Other operating income 70 6. Fees to auditors appointed at the

annual general meeting 71 7. Staff costs 71 8. Amortisation and depreciation 72 9. Amortisation of intangible assets and

costs from business combinations 72 10. Exceptional items 72 11. Financial income 72 12. Financial expenses 72 13. Income taxes 73 14. Earnings per share 73

Contents of the Group financial statements

Notes to the balance sheet 15. Intangible assets 74 16. Property, plant and equipment 76 17. Investments in associates 77 18. Inventories 77 19. Trade receivables 77 20. Cash and securities 78 21. Equity, treasury shares and dividends 78 22. Pension obligations 79 23. Other employee obligations 81 24. Deferred tax 81 25. Provisions for acquisitions of operations

and non-controlling interests 82 26. Other provisions 83 27. Credit institutions 83 28. Other payables 85 29. Deferred income 85

Notes to the cash flow statement 30. Net financials 85 31. Investments in subsidiaries,

non-controlling interests and operations 85 32. Divestments of subsidiaries,

non-controlling interests and operations 88 33. Dividends paid to non-controlling interests 88 34. Other movements relating to shareholders 88

Supplementary notes 35. Contingent liabilities, contractual obligations

and collateral security 89 36. Financial instruments 90 37. Related parties 96 38. New financial reporting regulations 96 39. Events after the balance sheet date 96


Income statement for the year ended 31 December

Note DKK million 2010 2009

4 Revenue 8,367 7,529 5 Other operating income 70 41

Total revenue 8,437 7,570

Cost of sales and external assistance (1,149) (865) 6 Other external costs (1,563) (1,354) 7 Staff costs (4,655) (4,362) 8 Amortisation and depreciation (307) (287)

Total costs (7,674) (6,868)

Analysed as: Operating profit before costs and amortisation from business combinations

and exceptional items 839 721 9 Amortisation of intangible assets and costs from business combinations (50) (19) Operating profit before exceptional items 789 702 10 Exceptional items (26) -

PROFIT/(LOSS) BEFORE FINANCIALS 763 702 17 Income after tax from associates - (1) 11 Financial income 33 52 12 Financial expenses (155) (165)

PROFIT BEFORE TAX 641 588 13 Income taxes (183) (171)

PROFIT FOR THE YEAR 458 417

PROFIT ALLOCATION Falck A/S 444 402 Non-controlling interests 14 15

TOTAL 458 417

14 EARNINGS PER SHARE Earnings per share (EPS) 4.8 4.4 Diluted earnings per share (DEPS) 4.6 4.3


Statement of comprehensive income for the year ended 31 December


Foreign exchange differences 86 60 Tax on foreign exchange differences (33) (45) Actuarial adjustment of pension provisions 2 10 Tax on changes in actuarial estimates of pension provisions (1) (3) Value adjustment of currency hedging instruments 13 (25) Tax on value adjustment of currency hedging instruments (3) 6 Value adjustment of interest hedging instruments 2 (27) Tax on value adjustment of interest hedging instruments (1) 7 Value adjustment of available-for-sale securities 180 41

Other comprehensive income 245 24 Profit for the year 458 417

TOTAL COmPREHENSIvE INCOmE 703 441

PROFIT ALLOCATION Falck A/S 687 426 Non-controlling interests 16 15

TOTAL 703 441


Balance sheet as at 31 December


Assets

Goodwill 4,711 4,075 Intangible assets from acquisitions 261 81 Other intangible assets 97 94

15 TOTAL INTANGIBLE ASSETS 5,069 4,250

Land and buildings 712 726 Leasehold improvements 57 56 Fixtures and fittings, tools and equipment 795 812

16 TOTAL PROPERTY, PLANT AND EQUIPmENT 1,564 1,594

17 Investments in associates 23 3 Other investments 1 - 24 Deferred tax assets 75 67

TOTAL FINANCIAL ASSETS 99 70

TOTAL NON-CURRENT ASSETS 6,732 5,914

18 Inventories 60 41

19 Trade receivables 1,088 741 Receivables from associates 21 - Other receivables 246 154 Prepayments 131 102

Receivables 1,486 997

20 Securities 372 145 20 Cash 439 538

TOTAL CURRENT ASSETS 2,357 1,721

TOTAL ASSETS 9,089 7,635




Equity and liabilities

Share capital 46 46 Reserve for treasury shares - (8) Hedging reserve (10) (21) Currency translation reserve (11) (62) Reserve for value adjustments of available-for-sale financial assets 217 37 Retained earnings 1,481 1,354

EQUITY ATTRIBUTABLE TO PARENT COmPANY 1,723 1,346 Non-controlling interests 65 61

21 TOTAL EQUITY 1,788 1,407

22 Pension obligations - 19 23 Other employee obligations 32 36 24 Deferred tax 280 160 25 Provisions for acquisitions of operations and non-controlling interests 388 276 26 Other provisions 34 11 27 Credit institutions 3,159 2,969

TOTAL NON-CURRENT DEBT 3,893 3,471

27 Credit institutions 601 291 25 Provisions for acquisitions of operations and non-controlling interests 69 10 26 Other provisions 20 2 Trade payables 581 400 Income taxes 40 22 28 Other payables 803 814 29 Deferred income 1,294 1,218

TOTAL CURRENT DEBT 3,408 2,757

TOTAL EQUITY AND LIABILITIES 9,089 7,635


Equity statement

Reserve for value adjustment Reserve of available- for Currency for-sale Non- Share treasury Hedging translation financial Retained controlling Total 2010 DKK million capital shares reserve reserve assets earnings Total interests equity

Equity at 1 January 2010 46 (8) (21) (62) 37 1,354 1,346 61 1,407

Equity movements in 2010 Foreign exchange differences 84 84 2 86Value adjustment of currency hedging instruments 13 13 13Value adjustment of interest hedging instruments 2 2 2Value adjustment of available-for-sale securities 180 180 180Actuarial adjustment of pension provisions 2 2 2Tax on other comprehensive income (4) (33) (1) (38) (38)

Other comprehensive income - - 11 51 180 1 243 2 245Profit for the year 444 444 14 458

Total comprehensive income - - 11 51 180 445 687 16 703Reduction in non-controlling interests' ownership share - (2) (2)Increase in non-controlling interests' ownership share - 3 3Losses on divestments and acquisitions of non-controlling interests (32) (32) (32)Adjustment of provision for acquisition of non-controlling interests 5 5 5Acquisitions of treasury shares (6) (6) (6)Disposals of treasury shares 14 16 30 30Buy back of warrants (307) (307) (307)Dividend - (13) (13)

Total equity movements in 2010 - 8 11 51 180 127 377 4 381

EQUITY AT 31 DECEmBER 20010 46 - (10) (11) 217 1,481 1,723 65 1,788

2009 DKK million Equity at 1 January 2009 45 (3) 18 (77) (4) 906 885 23 908

Equity movements in 2009 Foreign exchange differences 60 60 60Value adjustment of currency hedging instruments (25) (25) (25)Value adjustment of interest hedging instruments (27) (27) (27)Value adjustment of available-for-sale securities 41 41 41Actuarial adjustment of pension provisions 10 10 10Tax on other comprehensive income 13 (45) (3) (35) (35)

Other comprehensive income - - (39) 15 41 7 24 - 24Profit for the year 402 402 15 417

Total recognised income and expense - - (39) 15 41 409 426 15 441Reduction in non-controlling interests' ownership share - (1) (1)Increase in non-controlling interests' ownership share - 25 25Capital increase 1 38 39 39Acquisitions of treasury shares (5) (5) (5)Payments received for change of warrant terms 1 1 1Dividend - (1) (1)

Total equity movements in 2009 1 (5) (39) 15 41 448 461 38 499

EQUITY AT 31 DECEmBER 2009 46 (8) (21) (62) 37 1,354 1,346 61 1,407


Cash flow statement for the year ended 31 December


Total revenue 8,437 7,570 Total costs (7,674) (6,868)

Profit/(loss) before financials 763 702 8 Amortisation, depreciation and impairment 307 287

Profit/(loss) before financials and amortisation, depreciation and impairment 1,070 989 Reversal of profit on divestments of non-current assets (52) (10) Change in operating assets (181) (121) Change in intercompany balance with associates (21) - Change in operating payables 89 504 Change in provisions (21) (4)

Cash flow from operating activities before financials and tax 884 1,358 30 Net financials (143) (129) 13 Income taxes paid (195) (166)

CASH FLOW FROm OPERATING ACTIvITIES 546 1,063

31 Investments in subsidiaries, non-controlling interests and operations (648) (119) Cash flows from hedging of net investments (25) 33 32 Divestments of subsidiaries, non-controlling interests and operations 10 13 Investments in/sale of other shares and securities (45) (28) Investments in intangible assets (27) (43) Investments in property, plant and equipment (374) (293) Sale of property, plant and equipment 289 74 Investments in associates (12) -

CASH FLOW FROm INvESTING ACTIvITIES (832) (363)

33 Dividends paid to non-controlling interests (29) (10) 34 Other movements relating to shareholders (283) 35 Interest-bearing debt raised 777 - Repayment of and change in interest-bearing debt (299) (553)

CASH FLOW FROm FINANCING ACTIvITIES 166 (528)

Change in cash (120) 172

Cash at beginning of year 538 356 Foreign exchange differences relating to cash 21 10

CASH AT YEAR-END 439 538


Notes to the Group financial statements

The annual report for the year ended 31 December 2010 includes both the consolidated financial statements of Falck A/S and its subsidiaries (the Group) and the separate financial statements of the parent company.

The annual report of Falck A/S is presented in accordance with International Financial Reporting Standards (IFRS) as adopted by the EU and additional Danish disclosure requirements for annual reports for accounting class C large, cf. the IFRS Order issued pursuant to the Danish Companies Act. The annual report also complies with the International Financial Reporting Standards as issued by the IASB.

The Board of Directors and the Executive Management Board considered and approved the annual report for 2010 of Falck A/S on 15 March 2011. The annual report will be submitted to the shareholders of Falck A/S for adoption at the annual general meeting to be held on 29 April 2011.

The annual report has been prepared under the historical cost convention, except that the following assets and liabilities are measured at fair value: derivative financial instruments and financial instruments at fair value.

The annual report is presented in DKK rounded to the nearest million.

NEW FINANCIAL REPORTING REGULATIONS

The following standards and interpretations have been imple-mented effective for financial years beginning on or after 1 January 2010:•IFRS3BusinessCombinations(revised2008)•IAS27ConsolidatedandSeparateFinancialStatements

(revised 2008)•AmendmentstoIAS32FinancialInstruments:Presentation;

IAS 39 Financial Instruments: Recognition and Measure-ment;IFRIC9ReassessmentofEmbeddedDerivatives:Presentation;andamendmentstoIAS39EligibleHedgedItems, eligable for hedge accounting

•IFRIC17DistributionsofNon-cashAssetstoOwners.•AmendmentstoIFRS2GroupShare-basedPaymentTrans-

actions•ImprovementstoIFRSstandardsApril2009•IFRIC18TransfersofAssetsfromCustomers

For the Falck A/S Group, IFRS 3 (2008) and IAS 27 (2007) will apply to transactions completed on or after 1 January 2010. The standards include a number of new provisions, the most important being:

•Alternativemethodsofrecognitionofgoodwillrelatedtonon-controlling interests’ share of an acquiree. The election is made on a transaction-by-transaction basis.

•Acquisitioncostsandchangesincontingentconsideration(earn-outs) are recognised directly in the income statement.

•Specificationofrequirementsofseparaterecognitionofacquired intangible assets.

•Stepacquisitionsresultinrevaluationtofairvalueintheincome statement of the investment already held.

•Gains/lossesonthedivestmentofinvestmentsresultingina loss of control are recognised in the income statement. At the same time, any retained investment in the operation must be remeasured at fair value through profit or loss.

•Acquisitions/divestmentsofnon-controllinginterestswith-out loss of control are recognised directly in equity.

•Revaluationofobligationstoacquirenon-controllinginter-ests in connection with business combinations are recog-nised in equity.

With the exception of the implementation of IFRS 3 Business Combinations, and IAS 27 Consolidated and Separate Financial Statements, the implementation of these financial reporting standards, improvements and interpretations has not affected recognition and measurement in 2010. The effect of IFRS 3 and IAS 27 was a reduction of profit for the year by DKK 22 million and a reduction of equity and balance sheet (goodwill) by DKK 49 million and diluted earnings per share by DKK 0.2.

The accounting policies set out below have been consistently applied to the financial year and the comparative figures.

BASIS OF CONSOLIDATION

Group and subsidiariesThe Group financial statements consolidate the accounts of the parent company, Falck A/S, and the subsidiaries in which Falck A/S directly or indirectly holds a majority of the votes or in any other way exercises a controlling interest. In assessing control, potential voting rights that are exercisable as of the balance sheet date are taken into account.

The Group financial statements are prepared on the basis of the financial statements of Falck A/S and subsidiaries by add-ing items of a like nature.

The financial statements used for consolidation are prepared in accordance with the Group’s accounting policies.

In the consolidation, investments in subsidiaries, intercom-pany income and expenses, intercompany balances and gains and losses on transactions between Group companies are eliminated.

Note

1 Accounting policies



The line items of the financial statements of subsidiaries are fully consolidated in the consolidated financial statements. Profit for the year and equity attributable to non-controlling interests in subsidiaries that are not fully controlled are included in the consolidated profit and equity and stated as separate line items.

AssociatesEnterprises in which the Falck Group exercises significant influ-ence but not control are classified as associates. Significant influence is generally achieved by directly or indirectly holding or controlling more than 20%, but less than 50%, of the voting rights.

Unrealised gains on transactions with associates are eliminat-ed in proportion to the Group’s share of the enterprise.

BUSINESS COmBINATIONS

Companies acquired or established during the financial year are recognised as from the date of acquisition or inception. Companies divested or discontinued are recognised in the income statement until the date of divestment. The compara-tive figures are not restated to reflect companies acquired, divested or discontinued.

Acquisitions of subsidiaries or associates are accounted for applying the acquisition method. Identifiable assets, liabilities and contingent liabilities of acquirees are stated at their fair value at the date of acquisition. Identifiable intangible assets are recognised if they are separable or derive from a contrac-tual right. Deferred tax on revaluations is recognised.

The acquisition date is the date on which the Group obtains control of the acquiree.

Any positive difference between the consideration and the val-ue of non-controlling interests in the acquiree and the fair val-ue of the previously held interests in the acquiree, on the one hand, and the fair value of the identifiable assets, liabilities and contingent liabilities, on the other hand, is recognised in the balance sheet as goodwill. Goodwill is not amortised, but is tested for impairment at least once a year. On acquisition, goodwill is allocated to the cash-generating units which will subsequently form the basis for future impairment tests. Any goodwill arising and any fair value adjustments made on the acquisition of a foreign company whose functional currency is not the same as the presentation currency used by the Group are treated as assets and liabilities of the foreign company and are translated on initial recognition to the foreign company’s

functional currency at the exchange rate ruling at the transac-tion date. Any negative difference is recognised in the income statement on the date of acquisition.

The consideration in a business combination consists of the fair value of the agreed purchase price. For business com-binations in which the agreement includes a provision on adjustment of the consideration conditional on future events (earn-out), the fair value of this part of the consideration is recognised at the date of acquisition. Any changes in the fair value of the contingent consideration after initial recognition are recognised in the income statement. Put options issued in connection with acquisitions, the value of which is contingent on future events, are recognised as part of the consideration at the date of acquisition. The put options issued are subse-quently measured at fair value. Any changes in the fair value of the issued put options after initial recognition are recognised in equity. Acquisition costs directly attributable to the acquisi-tion are recognised in the income statement.

Adjustments of liabilities in connection with contingent con-sideration and issued put options, the value of which is condi-tional on future events relating to business combinations with an acquisition date prior to 1 January 2010, will continue to be recognised in accordance with IFRS 3 (2004), i.e. adjustments are recognised in goodwill until the conditions have been met or the issued put options are exercised.

If uncertainties regarding the measurement of acquired iden-tifiable assets, liabilities, contingent liabilities or the considera-tion for the business combination exist at the acquisition date, initial recognition takes place on the basis of preliminary fair values. If identifiable assets, liabilities, contingent liabilities and the consideration for the business combination are sub-sequently determined to have had a different fair value at the acquisition date than first assumed, goodwill is adjusted until 12 months after the acquisition date. The effect of the adjust-ments is recognised in the opening equity, and the compara-tive figures are restated accordingly. Goodwill is not adjusted subsequently except in the event of material errors.

Gains or losses on divestment or winding up of subsidiaries and associates are stated as the difference between the sales or disposal amount and the carrying amount of the net assets including goodwill at the time of sale plus sales or winding up costs. In addition, any retained non-controlling interests are measured at fair value. Gains or losses on the divestment or winding up of subsidiaries and associates and the effect of renewed measurement of any non-controlling interests are recognised in the income statement.

Note

1 Accounting policies (continued)



Non-controlling interestsOn initial recognition, non-controlling interests are measured either at fair value (including the fair value of goodwill related to non-controlling interests in the acquiree) or as non-con-trolling interests’ share of the acquiree’s identifiable assets, liabilities and contingent liabilities measured at fair value (excluding the fair value of goodwill related to non-controlling interests’ share of the acquiree). The basis of measurement of non-controlling interests is chosen on a transaction-by-transaction basis.

Acquisition and divestment of non-controlling interestsAny increase and reduction of non-controlling interests is accounted for as transactions with owners in their capacity as owners. As a consequence of this, any differences between the adjustment to the carrying amount of non-controlling interests and the fair value of the consideration received or paid is recognised directly in equity.

When put options are issued as part of the consideration for business combinations, the non-controlling interests receiving put options are considered to have been redeemed on the acquisition date. The non-controlling interests are removed and a liability is recognised at fair value on initial measure-ment. The fair value is determined as the present value of the exercise price of the option. The subsequent measurement is at fair value with recognition in equity of value changes as they arise.

Issued put options related to business combinations with an acquisition date prior to 1 January 2010 will continue to be recognised in accordance with IFRS 3 (2004), i.e. subsequent measurement takes place at amortised cost with recogni-tion of interest expenses in the income statement and value changes in goodwill as they arise. Any subsequent dividend payments to option holders are recognised as a financial expense in the income statement in the cases where the op-tion price is independent of the dividend payment. Dividend payments are included in the determination of the cost of the put options in cases where the option price is adjusted for dividend payments received.

FOREIGN CURRENCY TRANSLATION

A functional currency is determined for each of the reporting entities of the Group. The functional currency is the currency in the primary economic environment in which the reporting entity operates. Transactions in currencies other than the functional currency are transactions in foreign currencies.

On initial recognition, transactions denominated in foreign currencies are translated to the functional currency at the

exchange rates ruling at the transaction date. Exchange dif-ferences arising between the exchange rate ruling at the trans-action date and the exchange rate ruling at the date of actual payment are recognised in the income statement under financial income or financial expenses.

Receivables, payables and other monetary items denominated in foreign currency are translated into the functional currency at the exchange rate ruling at the balance sheet date. The difference between the exchange rate ruling at the balance sheet date and the exchange rate ruling at the date when the receivable or payable arose or the exchange rate applied in the most recent financial statements is recognised in the income statement under financial items.

The income statements of foreign subsidiaries are translated at the exchange rates ruling at the transaction dates, and the balance sheet is translated at the exchange rates ruling at the balance sheet date. An average exchange rate for the month is used as the exchange rate ruling at the transaction date to the extent that this does not significantly change the presentation of the underlying transactions. Exchange differences arising on the translation of the equity of foreign subsidiaries at the beginning of the year to the exchange rates ruling at the bal-ance sheet date and on the translation of income statements from the exchange rate ruling at the transaction date to the exchange rate ruling at the balance sheet date are recognised directly in other comprehensive income and are classified in equity in a separate currency translation reserve. Exchange dif-ferences are allocated between the parent company’s and the non-controlling interests shares of equity.

Foreign exchange adjustments of balances that are consid-ered part of the overall net investment in companies with functional currencies other than DKK are recognised in the consolidated financial statements directly in other compre-hensive income and classified in equity in a separate currency translation reserve. Similarly, exchange gains and losses on the part of loans and derivative financial instruments effectively hedging the net investment in such companies and which ef-fectively hedge against corresponding exchange gains/losses on the net investment in the company are recognised directly in other comprehensive income and are classified in equity in a separate currency translation reserve.

On recognition in the consolidated financial statements of associates with a functional currency other than Danish kroner, the share of results for the year is translated at average exchange rates, and the share of equity including goodwill is translated at the exchange rates ruling at the balance sheet date. Exchange adjustments arising on the translation of the share of the opening equity of foreign associates at exchange

Note




rates ruling at the balance sheet date and on the translation of the share of results for the year from average exchange rates to exchange rates ruling at the balance sheet date are recognised directly in other comprehensive income and are classified in equity in a separate currency translation reserve.

On the divestment of wholly-owned foreign entities, foreign exchange adjustments accumulated in equity via other com-prehensive income and which can be attributed to entities are reclassified from the “Currency translation reserve” to the income statement together with any gain or loss on the divestment.

On the divestment of partially owned foreign subsidiaries, the part of the currency translation reserve that relates to non-controlling interests is not recognised in the income statement.

On partial divestment of foreign subsidiaries without giving up control, a proportionate share of the currency translation reserve is transferred from the parent company shareholders’ to the non-controlling shareholders’ share of equity.

On partial divestment of associates and joint ventures, the proportionate share of the accumulated currency translation reserve is reclassified from equity to the income statement.

Any repayment of intercompany balances that are considered part of the net investment is not considered, in itself, a partial divestment of subsidiaries.

DERIvATIvE FINANCIAL INSTRUmENTSDerivative financial instruments are recognised from the trade date and measured at fair value.

The fair value of derivative financial instruments is recognised as separate assets or liabilities in other receivables or other payables, respectively.

The fair value of derivative financial instruments is determined on the basis of market data and generally accepted pricing models.

Hedges of net investmentDerivative financial instruments entered into in order to effec-tively hedge investments in foreign subsidiaries are recognised in the balance sheet at the time they are entered into and are measured at fair value at the balance sheet date. Exchange gains and losses are recognised directly in equity as a separate hedging reserve.

Fair value hedgesDerivative financial instruments entered into in order to hedge other assets and liabilities denominated in foreign currency are recognised in the balance sheet at the time they are entered into and are stated at fair value at the balance sheet date.

Any market value adjustments of derivative financial instru-ments entered into to hedge other assets and liabilities are recognised in the income statement in the same line items as the transactions hedged.

Cash flow hedgesChanges in the part of the fair value of derivative financial instruments designated as and qualifying for hedging of future cash flows, and which effectively hedge changes in the value of the hedged item, are recognised in equity. When the hedged transaction is realised, any gains or losses regarding such hedging transactions are transferred from equity and recognised in the same financial item as the hedged item. When proceeds from future borrowings are hedged, any gains or losses regarding hedging transactions are, however, trans-ferred from equity over the maturity period of the borrowings.

Forward premiums or forward discounts on forward exchange transactions are recognised in the income statement during their terms.

Other derivative financial instrumentsFor derivative financial instruments which do not meet the criteria for hedge accounting, changes in the fair value are recognised in the income statement under financials.

INCOmE STATEmENT

Revenue represents the value of services and goods delivered and invoiced subscriptions attributable to the financial period, and is recognised in the income statement if delivery and transfer of risk to the buyer have taken place before year-end, and if the income can be reliably measured and is expected to be received.

The value of services rendered is included on the basis of the percentage delivered out of the total service.

Revenue from subscriptions is allocated to the income state-ment on a straight-line basis.

Revenue from sales of goods is recognised when the signifi-cant risks and rewards of ownership have been transferred to the buyer.

Note




Revenue is measured at the fair value of the agreed considera-tion excluding VAT and other taxes collected on behalf of third parties. All discounts granted are recognised in revenue.

Other operating income represents revenue of a secondary nature relative to the Group’s principal activities, such as gains on the sale of assets and rental income.

Cost of sales and external assistance represents costs incurred and external assistance used to generate the year’s revenue.

Other external costs include costs relating to operating and maintaining equipment and property as well as sales and administrative expenses.

Staff costs represent salaries and wages, pension contribu-tions, social security costs and other staff costs.

Goodwill impairment represents impairment of goodwill based on an annually performed impairment test of each cash-generating unit.

Exceptional items represent material items of a non-recurring nature that are not directly attributable to the Group’s ordi-nary activities.

Income from investments in associates in the consolidated financial statements represents the proportionate share of the results after tax in the associates, made up according to the Group’s accounting policies and after elimination of the proportionate share of intra-group profits/losses.

Dividend from Group companies is recognised in the parent company’s income statement in the financial year in which the dividend is declared. An impairment test is made if more than the period’s comprehensive income in subsidiaries and associates is distributed in the period in which the dividend is declared.

Financials represent interest receivable and payable, realised and unrealised capital gains and losses and amortisation related to financial assets and liabilities. Dividends to capital holders who have received put options in connection with business combinations are recognised as a financial expense in the cases where the option price is independent of dividend payments. Financials are recognised at the amounts related to the year. Furthermore, realised and unrealised gains and losses on derivative financial instruments which cannot be classified as hedging arrangements are included.

INCOmE TAXES

Tax on the profit for the year represents corporation tax payable and changes in deferred tax. Tax for the year that is attributable to amounts recognised in other comprehensive income is recognised in other comprehensive income.

Joint taxationThe parent company is taxed jointly with its domestic sub-sidiaries. Corporation tax for the jointly taxed Danish com-panies is allocated according to the taxable income of these companies.

Falck A/S is the management company for the national joint taxation and consequently settles all payments of income taxes with the tax authorities in respect of the jointly taxed companies.

Income taxes payableCorporation tax payable includes corporation tax made up on the basis of estimated taxable income for the financial year and prior-year adjustments.

Deferred taxDeferred tax is calculated according to the balance sheet liabil-ity method and is based on all timing differences between the accounting and tax value of assets and liabilities.

Deferred tax is not recognised on goodwill that is not tax deductible, and deferred tax is not recognised on undistrib-uted profits in subsidiaries and timing differences that arose at the time of recognition in the balance sheet other than for acquisitions if such differences will not affect profit or taxable income.

When alternative tax rules can be applied to determine the tax base, deferred tax is measured based on the manage-ment’s planned use of the asset or settlement of the liability respectively.

Deferred tax assets, including the tax base of tax loss carry-forwards, are recognised under other non-current assets at the expected value of their utilisation, either as a set-off against tax on future income or as a set-off against deferred tax liabilities within the same legal tax entity and jurisdiction.

Deferred tax assets and liabilities are offset within the same legal tax unit or jurisdiction. Deferred tax assets are measured at the value at which they are expected to be realised.

Note




Deferred tax is measured using the tax rate expected to apply when timing differences are reversed. Changes in deferred tax as a result of changes in tax rates are recognised in the income statement.

BALANCE SHEET

NON-CURRENT ASSETS IN GENERALIntangible assets and property, plant and equipment, except for goodwill and other intangible assets with indefinable useful lives, are measured at cost less accumulated straight-line amortisation and depreciation and impairment losses. Goodwill and intangible assets with indefinable useful lives are measured at cost less accumulated impairment losses. Amor-tisation, depreciation and impairment losses are recognised in the income statement.

The basis of depreciation is calculated with due consideration to the asset’s scrap value, reduced by any impairment losses. The scrap value is determined at the date of acquisition and revalued each year. Where the scrap value exceeds the carry-ing amount, the property ceases to be depreciated.

If the amortisation or depreciation period or the scrap value is changed, the effect on amortisation or depreciation going forward is recognised as a change in accounting estimates.

Cost includes direct costs related to the asset and the initial estimate of the costs related to dismantling and removing the item and restoring the site on which it is located, if the costs meet the definition of a liability. Cost further includes borrowing costs from specific and general borrowings directly relating to the acquisition, construction or development of the individual qualifying asset.

Where parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items.

Each year, the assets are reviewed in order to assess whether there are indications of impairment. If such indications exist, the recoverable amount, determined as the higher amount of the fair value of the asset adjusted for expected sales costs and the value in use of the asset, is calculated. The value in use is calculated based on the estimated future cash flows, dis-counted by using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the assets.

If the recoverable amount of an asset or its cash-generating unit is lower than the carrying amount, the asset is impaired. Any impairment loss is recognised in the income statement.

In addition, for goodwill and other intangible assets with in-definable useful lives, impairment tests are performed at each balance sheet date, regardless of whether there are any indica-tions of impairment. For acquisitions, the first impairment test is performed before the end of the year of acquisition.

Impairment losses are reversed if the recoverable amount in-creases. Impairment losses will only be reversed to the extent that the value in use does not exceed the carrying amount of the asset if the impairment had never been made. Impairment losses of goodwill are not reversed.

Intangible assetsGoodwill is recognised in the balance sheet at cost on initial recognition as described under “Business combinations”. Goodwill is subsequently measured at cost less accumulated impairment. Goodwill is not amortised.

Intangible assets acquired on acquisition are measured at cost less accumulated amortisation and impairment. Intangible as-sets acquired on acquisition are amortised over the expected economic life, estimated to be 3 to 10 years.

Other intangible assets are measured at cost including costs which can be directly or indirectly attributed to the assets in question.

Other intangible assets include software, etc.

Software is amortised over the expected economic life, esti-mated to be 3 to 5 years. For major administrative systems, the economic life is estimated to be 8 years.

Property, plant and equipmentLand and buildings are measured at cost less accumulated depreciation and impairment of buildings.

Depreciation of buildings is calculated on a straight-line basis over the expected useful lives of the assets, estimated to be between 25 and 33 years. Certain installations are depreciated over ten years.

Leasehold improvements are depreciated on a straight-line basis over the term of the lease.

Note




Other operating equipment is depreciated on a straight-line ba-sis over the estimated useful lives of the assets. The expected useful lives are as follows:

Years

Vehicles according to category 5-12Fixtures and fittings, tools and equipment 3-10Dispatch centres, radio systems, major administrative systems and networks 8Other IT equipment 3-5Fire extinguishers and similar equipment installed at customer locations 3-5

Assets held under finance leases are recognised under property, plant and equipment and measured at the lower of the fair value and value in use of the future lease payments at the inception of the lease.

Assets held under finance leases are depreciated over the use-ful lives of the assets or, if shorter, over the lease term.

Gains or losses on the disposal or scrapping of property, plant and equipment are determined as the difference between the sales price less dismantling, selling and re-establishing costs and the carrying amount. Any gains or losses are recognised in the income statement as other operating income or external expenses respectively.

Financial assetsInvestments in subsidiaries and associates in the parent com-pany’s financial statements are measured at cost less any impairment losses. Where the carrying amount exceeds the recoverable amount, the investments are written down to this lower value.

Investments in associates in the consolidated financial state-ments are measured using the equity method and recognised at the proportionate share of the equity of the relevant enter-prise, made up according to the Group’s accounting policies, with the addition of values added on acquisition, including goodwill. Investments in associates are tested for impair-ment when there is an indication that the investment may be impaired. Associates with negative equity value are measured at zero value. If the Group has a legal or constructive obliga-tion to cover the associate’s negative balance, such obligation is recognised under liabilities. Receivables from associates are measured at amortised cost. Provision is made for bad debts.

CURRENT ASSETS

InventoriesGoods purchased for resale and assistive aids are measured at cost using the FIFO method.

Where the net realisable value is lower than cost, inventories are written down to this lower value.

ReceivablesReceivables are measured at amortised cost less provision for bad debts. The provision is made individually and on a portfolio level. If there is an objective indication that an indi-vidual receivable may be impaired, a write-down is made on an individual level. In the event there is no objective indication of individual impairment, receivables are tested for objective indications of impairment on a portfolio level.

Impairment losses are calculated as the difference between the carrying amount and the present value of expected future cash flows, including realisable values of any collateral provided.

PrepaymentsPrepayments comprise prepaid costs, which are measured at amortised cost.

SecuritiesListed securities and unlisted securities, which are currently all classified as available for sale, are recognised under current as-sets at fair value, corresponding to the officially quoted price of listed securities and estimated fair values based on current market data and recognised valuation methods for unlisted securities. Unrealised fair value adjustments are recognised directly in equity, except for impairment losses, which are recognised in the income statement under financials. On realisation, the accumulated fair value adjustment recognised in equity is transferred to financials in the income statement.

EQUITY

DividendDividend that has been finally adopted is recognised as a liability. Dividend expected to be paid in respect of the year is recognised as a separate line item under equity.

Note




Hedging reserveHedging transactions that meet the criteria for hedging future cash flows and for which the hedged transaction has yet to be realised are recognised in equity under the hedging reserve.

Foreign exchange adjustments relating to hedging transac-tions used to hedge the Group’s net investments in such enti-ties are recognised in equity under the hedging reserve.

Currency translation reserveForeign exchange adjustments arising on the translation of financial statements for entities which have a functional currency other than Danish kroner and foreign exchange ad-justments relating to financial assets and liabilities represent-ing a part of the Group’s net investment in such entities are recognised in equity under the currency translation reserve.

On full or partial realisation of a net investment, foreign ex-change adjustments are recognised in the income statement.

Reserve for fair value adjustment of available-for-sale financial assetsReserve for fair value adjustment comprises accumulated changes in the fair values of available-for-sale financial assets. The reserve, which forms part of the Group’s free reserves, is dissolved and transferred to the income statement as the investment is sold or written down.

Reserve for treasury sharesReserve for treasury shares comprises the cost of the com-pany’s holding of treasury shares. Dividends in respect of treasury shares are recognised directly in retained earnings under equity.

Gains and losses on the sale of treasury shares are recognised in reserve for treasury shares.

Non-controlling interestsThe proportionate shares of the profits and equity of subsidi-aries attributable to non-controlling interests are recognised as a separate item under equity. On initial recognition, non-controlling interests are stated as described under “Busi-ness combinations” above. Put options issued as part of the consideration for business combinations are recognised as described under “Acquisition and divestment of non-control-ling interests” above.

Warrant programmeWarrants are issued at the market value on the date of grant. Payments received and made in relation to the warrant pro-gramme are recognised in equity.

LIABILITIES

Pension obligationsMost of the Group's pension agreements are defined-contri-bution plans under which payments are made to external pen-sion institutions. Contributions to such plans are recognised in the income statement in the period in which they are earned by the employees, and outstanding payments are included in the balance sheet under other payables.

In certain countries, the Group has pension agreements that are defined-benefit plans. These plans are either externally funded, with the assets of the plans held separately from those of the Group in independently administered funds, or unfunded. The liabilities related to the defined-benefit plans are determined using the projected unit credit method.

An actuarial assessment is made annually to determine the present value of the future benefits to be paid under the defined-benefit plans. The present value is calculated on the basis of assumptions regarding the future developments in the wage/salary level as well as interest, inflation and mortal-ity rates in the countries where such plans exist. The present value is calculated only for benefits to which the employees have already earned the right during their employment with the Group until the present time.

The actuarial calculation of the pension obligation is recog-nised as a liability in the balance sheet. If a pension plan con-stitutes a net asset, the asset is only recognised to the extent that it equals future repayments under the plan, or if it will lead to a reduction in future payments under the plan.

Actuarial gains and losses arise mainly from changes in actuarial assumptions and differences between actuarial as-sumptions and what has actually occurred. Actuarial gains and losses are recognised directly in other comprehensive income.

For defined-benefit plans, costs charged to the income state-ment consist of current service cost, based on actuarial assess-ments and financial forecasts made at the beginning of the year, including expected service cost, interest cost, expected return on plan assets and past service cost. The past service cost for the enhancement of pension benefits is accounted for when such benefits vest or become a constructive obligation.

Interest from pension assets and liabilities is recognised under financials.

Note




Other non-current employee benefits are similarly recognised based on an actuarial calculation. All actuarial gains and losses are recognised immediately in the income statement, how-ever. Other non-current employee obligations include jubilee bonuses and non-current severance schemes.

ProvisionsProvisions are recognised when, as a consequence of an event occurring before or on the balance sheet date, the Group has a legal or constructive obligation and it is probable that an outflow of resources will be required to settle the obligation.

Provisions for restructuring are recognised when a detailed, formal plan for the restructuring has been made before or on the balance sheet date and has been announced to the parties involved. In connection with acquisitions, provisions for restructuring costs are only included in the computation of goodwill if an obligation exists for the entity acquired as of the date of acquisition.

Provisions are made for onerous contracts when the antici-pated benefits to the Group from a contract are outweighed by the unavoidable costs under the contract.

When the Group is under an obligation to dismantle an as-set or re-establish the site where the asset has been used, a provision is made corresponding to the present value of the expected future costs. The provision is determined based on current orders and estimated future costs, discounted to their present value. The discount factor used reflects the general level of interest rates. The present value of the costs is recog-nised in the cost of the item of property, plant and equipment in question and depreciated with these assets. The increase of the present value over time is recognised in the income state-ment under financial expenses.

Financial liabilitiesDebt to credit institutions is recognised at the raising of a loan as the proceeds received less transaction costs. In subsequent periods, financial liabilities are measured at amortised cost.

Residual lease commitments from finance leases are recog-nised at amortised cost.

Other financial liabilities are measured at amortised cost.

Deferred incomeDeferred income primarily represents subscription revenue relating to several financial periods.

LEASING

For financial reporting purposes, lease liabilities are classified as either finance or operating lease liabilities.

Leases are classified as finance leases when substantially all risks and rewards of ownership of the leased asset are trans-ferred. Other leases are classified as operating leases.

The accounting treatment of assets held under finance lease and the related liability is described in the sections on prop-erty, plant and equipment and financial liabilities, respectively.

Assets held under operating leases are not recognised in the balance sheet. Lease liabilities under operating leases are disclosed as contingent liabilities.

Lease payments concerning operating leases are recognised in the income statement on a straight-line basis over the term of the lease.

CASH FLOW STATEmENT

The cash flow statement is presented according to the indirect method and shows the cash flow from operating activities, the cash flow from investing activities, the cash flow from financ-ing activities and cash and securities at the beginning and end of the year.

The cash flow statement includes cash flows from companies acquired as from the date of acquisition, and cash flows from companies divested until the date of divestment.

Cash flow from operating activitiesCash flows from operating activities include revenue less operating expenses adjusted for non-cash operating items and changes in working capital.

Cash flows from operating activities are adjusted for cash flows related to exceptional items and corporation tax.

Cash flow from investing activitiesCash flows from investing activities include cash flows from the acquisition and divestment of companies, non-control-ling interests and operations and the purchase and sale of intangible assets, property, plant and equipment and other non-current assets and the purchase and sale of securities not included in cash and cash equivalents.

Entering into a finance lease is considered a non-cash transac-tion.

Note




Cash flows from financing activitiesCash flows from financing activities include cash flows from changes in share capital and related costs, purchases and sales of treasury shares, cash flows from dividends, cash flows from interest-bearing debt raised and repayment thereof.

Cash flows relating to assets held under finance leases are recognised as payment of interest and repayment of debt.

Cash and cash equivalentsCash and cash equivalents comprise cash and short-term mar-ketable securities with a term of three months or less which are subject to an insignificant risk of changes in value.

Cash flows in currencies other than the functional currency are translated at average exchange rates unless these differ materially from the exchange rate ruling at the transaction day.

SEGmENT REPORTING

The segment information has been prepared in accordance with the Group’s accounting policies and is based on the inter-nal management reporting.

Segment income, expenses and assets comprise items that can be directly attributed to individual segments and items that can be allocated to the individual segments on a reason-able basis. Unallocated items are primarily assets and income and expenses relating to the Group's administrative functions, income taxes and similar items.

Non-current assets in a segment comprise non-current assets used directly in the operation of the segment, including intan-gible assets, property, plant and equipment and investments in associates. Current assets in a segment comprise current assets used directly in the operation of the segment, includ-ing inventories, trade receivables, other receivables, prepaid expenses and cash.

FINANCIAL RATIOS

For definitions of financial ratios, see page 119.

Note




The calculation of the carrying amounts of certain assets and liabilities relies on judgments, estimates and assumptions about future events.

The estimates and assumptions applied are based on historical experience and other factors that Management considers reasonable under the circumstances, but which are inher-ently uncertain and unpredictable. Such assumptions may be incomplete or inaccurate, and unexpected events or circum-stances may occur. In addition, the Group is subject to risks and uncertainties that may cause actual outcomes to deviate from such estimates.

Estimates material to the financial reporting are made in the calculation of, inter alia, depreciation, amortisation and impairment losses, pensions and similar liabilities, provisions, the determination of fair values, share-based compensation as well as contingent liabilities and assets.

Amortisation and depreciation periods and scrap valuesIn the determination of the carrying amount of intangible assets and property, plant and equipment, estimates are required of the estimated economic lives of the assets and of scrap values.

Goodwill impairment testIn the annual goodwill impairment test or in case of any indication of an impairment requirement, an assessment is made of how the parts of the Group (cash-generating units) to which the goodwill relates will be able to generate sufficient cash flows in future to support the value of goodwill and other net assets in the relevant part of the Group.

As a result of the nature of the company’s business, expected cash flows must be estimated over a period of a number of years, which inherently produces some degree of uncertainty. This uncertainty is reflected in the discount rate applied.

The impairment test of goodwill and the associated particu-larly sensitive factors and sensitivity analyses are described in note 15 to the consolidated financial statements.

Provisions for acquisition of non-controlling interestsIn the determination of the fair value of issued put options under which the Group assumes an obligation to buy shares in subsidiaries held by non-controlling shareholders, Man-agement makes certain estimates, including of the future financial performance of the subsidiaries, the probability that the option holders exercise their right to sell and the time of exercise. These factors are of material importance to the determination of the fair value, which is therefore subject to uncertainty.

Purchase price allocation in business combinationsIn connection with the allocation of the purchase price in busi-ness combinations, a determination is made of the fair values of the assets and liabilities acquired. As this determination is based on expected future cash flows related to the assets and liabilities acquired, the realisation of such cash flows as an-ticipated is subject to an inherent uncertainty. In accordance with IFRS 3, the allocation of the purchase price in business combinations may be adjusted for up to 12 months from the date of acquisition.

Note

2 Accounting estimates and judgments



Business areasFalck's reporting segments are its four independent business areas, Assistance, Emergency, Healthcare and Training, which sell various services.

Assistance provides services within the areas car, home/building, travel and healthcare. The services are mostly based on subscriptions and the objective is to give assurance to subscribers. In addition, Falck provides assistance within the field of preventive training and consulting on safety, security and environmental issues.

Emergency mainly consists of ambulance services in most of Europe and, at year end 2010, North and South America, and furthermore provides training of ambulance staff and first-aid training for non-professionals. Moreover, Falck operates fire services and provides consulting on fire technical challenges. Furthermore, Falck offers large industrial businesses to assume responsibility for their fire and emergency services through outsourcing and offers fire services by way of fire and emer-gency services to industrial and public-sector customers.

Healthcare provides interdisciplinary treatment involving ser-vices such as physiotherapy, chiropractics, massage therapy andzonetherapy,psychologicalcrisistherapy;assistanceinconnectionwithsicknessabsence;staffingservicesforthehealthcare sector as well as for medical and health clinics.

Training is the leading provider worldwide of rescue and safety courses as well as other safety services, especially for the offshore industry and the maritime sector. The chemical industry, the aviation industry and the armed forces also use Falck's competencies.

The accounting policies of all business areas are identical to those described in the accounting policy note to the financial statements. The performance of the business areas is evalu-ated on the basis of operating profit before costs and amor-tisation from business combinations and exceptional items. Revenue and other transactions within and between business areas are accounted for as if they had taken place with third parties in accordance with Falck's rules on transfer pricing and internal settlement.

Note

3 Segment information



Note DKK million

3 Segment information (continued)

Elimination and non- allocated Business areas 2010 Assistance Emergency Healthcare Training items Total KEY RATIOS Operating margin (%) 1) 10.9 6.8 6.3 14.8 10.0

INCOmE STATEmENT Revenue 2,470 4,834 1,196 958 (1,091) 8,367Operating profit before amortisation and depreciation 280 508 96 188 (2) 1,070Amortisation and depreciation (22) (204) (26) (55) (307)

Profit before financials 258 304 70 133 (2) 763

Analysed as follows: Operating profit before costs and amortisation from business combinations and exceptional items 269 329 75 142 24 839Amortisation of intangible assets and costs from business combinations (11) (25) (5) (9) - (50)Operating profit before exceptional items 258 304 70 133 24 789Exceptional items - - - - (26) (26)

Profit before financials 258 304 70 133 (2) 763

Financials, etc. (122) (122)

Profit before tax 641 641Income taxes (183) (183)

Profit for the year 458 458

BALANCE SHEET Total assets 2,572 3,875 1,071 1,750 (179) 9,089Net investments in intangible assets, property, plant and equipment 49 33 11 41 (22) 112

1) Operating profit before costs and amortisation from business combinations and exceptional items as a percentage of revenue.



Note DKK million


Elimination and non- allocated Business areas 2009 Assistance Emergency Healthcare Training items Total KEY RATIOS Operating margin (%) 1) 15.0 5.2 4.3 13.5 9.6

INCOmE STATEmENT Revenue 2,183 4,271 1,139 921 (985) 7,529Operating profit before amortisation and depreciation 342 410 74 163 989Amortisation and depreciation (15) (196) (29) (47) (287)

Profit before financials 327 214 45 116 702

Analysed as follows: Operating profit before costs and amortisation from business combinations and exceptional items 327 221 49 124 721Amortisation of intangible assets from acquisitions - (7) (4) (8) (19)Operating profit before exceptional items 327 214 45 116 702Exceptional items - - - - -

Profit before financials 327 214 45 116 702

Financials, etc. (114) (114)

Profit before tax 588 588Income taxes (171) (171)

Profit for the year 417 417

BALANCE SHEET Total assets 2,210 2,700 1,103 1,582 40 7,635Net investments in intangible assets, property, plant and equipment 48 144 19 51 - 262

1) Operating profit before costs and amortisation from business combinations and exceptional items as a percentage of revenue.





Non-current Non-current assets assets excluding excluding deferred deferred Geographic breakdown Revenue tax assets Revenue tax assets Denmark 5,292 4,075 4,928 4,218Nordic region 1,541 773 1,233 571Europe 1,087 596 1,040 524Rest of the world 447 1,213 328 523

Total 8,367 6,657 7,529 5,836

The breakdown of revenue is based on customers' country of residence. No single customer accounts for 10% or more of revenue.

The Nordic region comprises the following countries:Norway, Sweden and Finland.

Europe comprises the following countries:Poland, Slovakia, the Netherlands, United Kingdom, Spain, Germany, Estonia, Romania, Turkey and Belgium.

The rest of the world comprises the following countries: Brazil, Malaysia, Nigeria, Singapore, Thailand, Trinidad & Tobago, Vietnam, the United Arab Emirates, Russia, India and the United States.


4 Revenue

Services 8,318 7,464Products 49 65

Total revenue 8,367 7,529

5 Other operating income

Gain on sales of assets 52 8Other operating income 18 33

Total other operating income 70 41

Other operating income relates mainly to rent from premises.




6 Fees to auditors appointed at the annual general meeting

KPmG Audit (6) (5)Other assurance engagements - (1)Tax advisory services (2) (3)Preparation of a potential IPO (8) -Other services (2) (1)

Total fees (18) (10)

7 Staff costs

Salaries and wages to employees (3,771) (3,544)Ordinary remuneration to the Executive Management Board (10) (8)Remuneration to the Executive Management Board relating to preparation of a potential IPO (7) -Remuneration to the Board of Directors (2) (1)

Total (3,790) (3,553)Of which reinvoiced 3 -

Total salaries and remuneration (3,787) (3,553)

Defined-contribution pension plans (255) (245)Defined-benefit pension plans 18 (9)Other social security costs (330) (282)Other staff costs (301) (273)

Total other staff costs (868) (809)

Total staff costs (4,655) (4,362)

Number of full-time employees 14,352 12,258

Number of part-time employees 4,791 4,199

The rate of increase in remuneration to the Executive Management Board excluding bonus was 2% in 2010 (2009: 0%). Remuneration to the Executive Management Board includes pension contributions of - 1

The service contracts for the members of the Executive Management Board include severance periods which, in the case of resignation by an executive, are 6 months and, in the case of termination by the company, are 12 months.

Warrant programme, Executive management Board Number of warrants at 1 January 4,443,120 4,443,120Buy back in the period. See note 21 (4,443,120) -

Number of warrants at 31 December - 4,443,120

At the extraordinary general meeting held on 25 February 2011, the Board of Directors was authorised to establish a new warrant programme. At the Board meeting held on 15 March 2011, the Board of Directors adopted a resolution to establish a new warrant programme for the Executive Management Board. The new warrant programme comprises 4,443,120 warrants. Each warrant entitles the holder to subscribe for one share with a nominal value of DKK 0.50 on 30 December 2015 at a price of DKK 125 per share. The war-rants issued were acquired at market value, equivalent to DKK 11 million, and there are no conditions attached to the acquisition of the warrants.




8 Amortisation and depreciation

Intangible assets from acquisitions (27) (19)Other intangible assets (28) (27)Land and buildings (36) (30)Leasehold improvements (10) (10)Fixtures and fittings, tools and equipment (206) (201)

Total amortisation and depreciation (307) (287)

9 Amortisation of intangible assets and costs from business combinations

Amortisation of intangible assets from acquisitions (27) (19)Costs from business combinations (23) -

Total amortisation of intangible assets and costs from business combinations (50) (19)

10 Exceptional items

Costs related to preparation of a potential IPO (26) -

Total exceptional items (26) -

11 Financial income

Foreign exchange gains 21 37Interest from cash 6 9Interest from securities 1 3Other financial income 5 3

Total financial income 33 52

12 Financial expenses

Foreign exchange losses (14) (7)Losses on securities - (1)Interest to credit institutions (119) (138)Interest element on discounted liabilities (12) (9)Other financial expenses (10) (10)

Total financial expenses (155) (165)




13 Income taxes

Current tax (184) (195)Change in deferred tax for the year (1) 28Prior-year adjustments 2 (4)

Total income taxes (183) (171)Tax on other comprehensive income (38) (35)

Total tax (221) (206)

Income taxes paid during the year (195) (166)

Breakdown of tax rate: Total income taxes (183) (171)

Tax base for current tax 641 588

Effective tax rate 28.6% 29.0%

Reconciliation of tax rate: Danish tax rate 25.0% 25.0%Differences in foreign tax rates relative to Danish rate 0.4% 0.5%

Group weighted average tax rate 25.4% 25.5%Non-deductible costs/(tax-exempt income) 2.8% 0.5%Current year's non-capitalised tax losses 0.3% 2.0%Utilisation of non-capitalised tax losses (0.4%) (0.5%)Other adjustments including adjustments relating to prior years 0.5% 1.5%


14 Earnings per share

Profit for the year 458 417Profit attributable to non-controlling interests 14 15

Profit attributable to the Falck Group 444 402

Average number of shares 92,786,800 91,522,851Average number of treasury shares 268,079 140,102

Average number of outstanding shares 92,518,721 91,382,749Average dilutive effect of outstanding warrants 3,553,820 1,119,812

Diluted average number of outstanding shares 96,072,541 92,502,561

Earnings per share (EPS) of DKK 0.50 4.8 4.4

Diluted earnings per share (DEPS) of DKK 0,50 4.6 4.3



Note DKK million

15 Intangible assets

Intangible assets Other from intangible 2010 Goodwill acquisitions assets Total Cost at 1 January 2010 4,075 127 169 4,371Foreign exchange differences 91 12 3 106Additions on acquisitions 575 197 1 773Additions - - 27 27Revaluation of put options and earn-outs (30) - - (30)Disposals and reclassification - - (30) (30)

Cost at 31 December 2010 4,711 336 170 5,217

Amortisation and impairment at 1 January 2010 - (46) (75) (121)Foreign exchange differences - (2) (2) (4)Disposals and reclassification - - 32 32Amortisation - (27) (28) (55)

Amortisation and impairment at 31 December 2010 - (75) (73) (148)

Carrying amount at 31 December 2010 4,711 261 97 5,069

Intangible assets Other from intangible 2009 Goodwill acquisitions assets Total Cost at 1 January 2009 3,897 120 126 4,143Foreign exchange differences 44 1 4 49Additions on acquisitions 74 6 - 80Disposals on divestments (1) - - (1)Additions - - 43 43Additions on sale of non-controlling interests 75 - - 75Revaluation of put options and earn-outs (14) - - (14)Disposals and reclassification - - (4) (4)

Cost at 31 December 2009 4,075 127 169 4,371

Amortisation and impairment at 1 January 2009 - (27) (48) (75)Foreign exchange differences - - (3) (3)Disposals and reclassification - - 3 3Amortisation - (19) (27) (46)

Amortisation and impairment at 31 December 2009 - (46) (75) (121)

Carrying amount at 31 December 2009 4,075 81 94 4,250

Intangible assets from acquisitions primarily relate to customer contracts and other customer relations. The acquisitions were primarily made to achive synergies with existing business areas, to further develop existing markets and to establish a presence on new markets. As a result, a large part of the consideration is allocated to goodwill.

Other intangible assets are primarily related to software.Except for goodwill, all intangible assets are deemed to have a limited economic life.



Note DKK million

15 Intangible assets (contiued)

Impairment tests of goodwillGoodwill is tested for impairment at least once a year, and more frequently if there are indications of impairment. In impairment tests, the discounted value of the future net cash flows of each of the cash-generating units (value in use) are compared with their carrying amounts.

2010 2009

Goodwill is related to the following business areas: Assistance 1,948 1,805Emergency 956 480Healthcare 761 781Training 1,046 1,009

Total goodwill 4,711 4,075

In connection with the company's acquisition of the shares in Falck A/S in 2004/05 (merged with the parent company on 1 January 2009), goodwill with a carrying value of DKK 2,630 million was allocated to the respective business areas

For the above mentioned business areas, goodwill is tested for impairment in the relevant cash generating units within the business areas based on the following parameters and assumptions:

The future net cash flows are based on the consolidated budget for 2011 and the Group’s strategic plan for the period until 2015. Moreover, growth during the terminal period has been estimated at 2-3% (2009: 3.0%).

The key parameters for the impairment test are performance in terms of revenue and the operating margin. As capital tied up in net operating assets is generally low in the Group, this parameter does not have any material impact on the impairment test.

The Assistance activities primarily consist of subscriptions and are therefore stable from year to year. The discount rate has been set at 8% (2009: 8%).

The Emergency activities primarily consist of ambulance services, including transportation of patients, and of fire fighting for public customers, and they do not fluctuate materially from year to year. Emergency also includes Fire Services which consist of long-term contracts and training and consulting services for private companies in several countries. The discount rate for Emergency has been set at 8% (2009: 8%).

The Healthcare activities primarily consist of subscriptions and longer term contracts and are therefore stable from year to year. The discount rate has been set at 8% (2009: 8%). Substantial growth is expected in the Healthcare business in the years ahead.

Healthcare also includes staffing business which mainly consists of payments on a case-by-case basis. The discount rate has therefore been set at 9% (2009: 9%).

Training is to an extent affected by the activity level in the oil industry. The discount rate has therefore been set at 9% (2009: 9%). The main assumptions in the strategic plan until 2015 are the expected organic growth and that off-shore exploration activities will pick up pace.

The impairment tests of goodwill did not result in any impairment.



Note DKK million

16 Propertry, plant and equipment

Fixtures, Leasehold fittings, Land and improve- tools and 2010 buildings ments equipment Total Cost at 1 January 2010 844 82 1,100 2,026Foreign exchange differences 16 4 41 61Additions on acquisitions - 2 63 65Additions 152 7 215 374Disposals and reclassification (154) (4) (245) (403)

Cost at 31 December 2010 858 91 1,174 2,123

Depreciation and impairment at 1 January 2010 (118) (26) (288) (432)Foreign exchange differences (4) (1) (30) (35)Disposals and reclassification 12 3 145 160Depreciation (36) (10) (206) (252)

Depreciation and impairment at 31 December 2010 (146) (34) (379) (559)

Carrying amount at 31 December 2010 712 57 795 1,564

of which assets under construction 14 - 18 32of which assets held under finance leases 12 - 12 24

Fixtures, Leasehold fittings, Land and improve- tools and 2009 buildings ments equipment Total Cost at 1 January 2009 816 74 1,014 1,904Foreign exchange differences 23 2 19 44Additions on acquisitions 26 - 13 39Additions 12 10 271 293Disposals and reclassification (33) (4) (217) (254)

Cost at 31 December 2009 844 82 1,100 2,026

Depreciation and impairment at 1 January 2009 (94) (18) (238) (350)Foreign exchange differences (7) (1) (12) (20)Disposals and reclassification 13 3 163 179Depreciation (30) (10) (201) (241)

Depreciation and impairment at 31 December 2009 (118) (26) (288) (432)

Carrying amount at 31 December 2009 726 56 812 1,594

of which assets under construction 51 - 34 85of which assets held under finance leases 11 - 15 26




17 Investments in associates

Cost at 1 January 2 2Additions on acquisitions 20 -

Cost at 31 December 22 2

Share of valuation adjustments at 1 January (5) (4)Share of profit after tax - (1)Disposals and reclassifications 1 -

Impairment and share of valuation adjustments at 31 December (4) (5)

Carrying amount before offset in receivables at 31 December 18 (3)Companies with negative carrying amount offset in receivables 5 6

Carrying amount at 31 December 23 3

See "Legal entities" for a list of companies

Summary financial information about associates (100%): Revenue 19 18Profit for the year 3 (2)Total assets 283 246Total liabilities 275 245

18 Inventories

Finished goods and goods for resale 60 41

Total inventories 60 41

Value of inventories recognised at net realisable value - -Write-downs during the year 3 -Reversal of write-downs during the year - -

19 Trade receivables

Trade receivables 1,012 696Receivables from subscriptions 76 45

Total trade receivables 1,088 741

Write-downs at 1 January 27 23Write-downs during the year 27 17Realised write-downs during the year (25) (13)

Write-downs at 31 December 29 27

Write-downs are recognised under other external costs

Write-downs of receivables are based on individual assessments of customers' ability to pay.

In addition, individual write-downs may be made based on the age distribution of the customer's debt to the Falck Group.

Based on the Group's internal credit-rating procedures, the credit quality of receivables not yet due and not written down is deemed to be high with a low risk of losses due to the typically small subscription receivables from the individual customers and the fact that a significant part of receivables are from public-sector authorities and major companies.




19 Trade receivables (continued)

Breakdown by maturity: Not due 703 474Due within - 1 to 30 days 167 163Due within - 31 to 90 days 97 58Due within - more than 90 days 150 73

1,117 768 Provision for bad debts (29) (27)

Total trade receivables 1,088 741

Fair value of trade receivables 1,088 741

20 Cash and securities

Cash 439 538Securities 372 145

Total cash and securities 811 683

DKK 66 million (2009: DKK 58 million) of the Group’s cash and cash equivalents is held in a Swedish subsidiary which is subject to Swedish insurance regulations and which is therefore subject to solvency requirements.

21 Equity, treasury shares and dividends

Capital structure The Group is generally not subject to any capital requirements other than usual statutory requirements.

The Group monitors and manages its capital structure in order to ensure that it can meet its financial obligations. No changes have been made to the Group's management of capital as compared with 2009.

movements in share capital in the past 7 financial yearsShare capital at 1 January - -Additions on capital increase in 2004 44 44Additions on capital increase in 2006 1 1Additions on capital increase in 2008 0 0Additions on capital increase in 2009 1 1

Share capital at 31 December 46 46

The share capital is divided into 92,786,800 shares (2009: 92,786,800 shares) with a nominal value of DKK 0.50 each. The shares are fully paid up and are not divided into classes.

Number of shares Nominal value (DKK thousand) % of share capital Treasury shares 2010 2009 2010 2009 2010 2009 Treasury shares at 1 January 258,219 79,291 129 40 0.29 0.09Additions 95,238 178,928 48 89 0.10 0.20Disposals (353,457) - (177) - (0.39) -

Treasury shares at 31 December 0 258,219 0 129 0 0.29

All treasury shares were owned by Falck A/S.The purchase price of treasury shares acquired during the financial year was DKK 6 million (2009: DKK 5 million).The sales price of treasury shares sold during the financial year was DKK 30 million (2009: DKK 0 million).




21 Equity, treasury shares and dividends (continued)

WarrantsIn December 2010, the Group acquired the existing warrants from the Executive Management Board through a cash buy back at market value. See note 37. The warrant programme was subsequently cancelled in February 2011.

Warrant programme Number of warrants at 1 January - -Buy back of own warrants 4,443,120 -

Number of warrants at 31 December 4,443,120 -

DividendA dividend of DKK 0 million is proposed (2009: DKK 0 million).

22 Pension obligations

The Group contributes to pension plans which cover employees in various companies of the Group. The pension plans are typically defined-contribution plans. The Group has defined-benefit plans in Norway and the Netherlands.

The defined-benefit plan in Norway was changed to a defined-contribution plan in 2010, to the effect that the defined-benefit plan now only comprises already retired staff. The change of the pension plan resulted in the recognition of income of DKK 20 million in staff costs in the income statement.

The Group has a defined-benefit plan in Sweden which is partially covered by an external pension company. It is not possible for the pen-sion company to make an actuarial calculation of the pension obligation. As a result, the plan is accounted for as a defined-contribution plan.

The defined-benefit plans result in unfunded pension obligations which are not insured in an independent insurance company. The consolidated balance sheet includes unfunded pension obligations based on actuarial calculations. Changes in actuarial gains and losses are recognised fully in equity.

2010 2009

DEFINED-BENEFIT PLANS Costs in current financial year 2 9One-off effects of transition to defined-contribution plan (20) -Interest expenses related to pension obligations 1 3Expected return on plan assets (1) (3)

Recognised pension cost (18) 9

Breakdown of provision for the Group's obligations: Present value of pension obligations 24 75Fair value of plan assets (26) (56)

Total pension provisions (2) 19

Recognised in the balance sheet as follows: Pension assets 2 -Provision for pensions - 19

Total 2 19

The pension assets are included in other receivables.




22 Pension obligations (continued)

Breakdown of change in pension provisions: Pension provision at 1 January 75 72Foreign exchange differences 4 14Cost in respect of current financial year 2 9Changes in actuarial estimates (37) (23)One-off effects of transition to defined-contribution plan (20) -Calculated interest 1 3Paid out during the period (1) -

Pension provisions at 31 December 24 75

Expected contributions for next year - 8

movements in fair value of plan assets Plan assets at 1 January 56 49Foreign exchange differences 3 8Expected return on plan assets 1 3Employer's contributions to plan during the period 2 10Changes in actuarial estimates (35) (13)Paid out during the period (1) (1)

Total plan assets at 31 December 26 56

Actual return on plan assets (1) 1Total actuarial gains recognised in the statement of comprehensive income 2 10Total accumulated actuarial gains recognised in the statement of comprehensive income (7) (9)

Breakdown of plan assets: Shares 4 3Bonds 16 34Property etc. 4 9Other 2 10

Total plan assets 26 56

The defined-contribution plans are paid and recognised as incurred, and the Group has no obligations to the employees thereafter.

The calculation of the obligation is based on the following assumptions:

Norway Salary increases 4.0% 4.3%Expected return on plan assets 5.0% 5.6%Discount rate 3.6% 4.4%

Netherlands Salary increases 3.8% 3.8%Expected return on plan assets 5.5% 5.5%Discount rate 5.5% 5.5%

The return on plan assets has been set on the basis of market expectations of the rate of return.

Breakdown of the Group's pension obligations for the current and the preceding four years:

2010 2009 2008 2007 2006

Actuarial pension obligations (24) (75) (72) (70) (58)Plan assets 26 56 49 53 54

(Under funding)/over funding 2 (19) (23) (17) (4)

Experience-based change to obligations (1) (9) (2) (5) 0Experience-based change to plan assets 0 (3) (3) 0 0




23 Other employee obligations

Employee obligations at 1 January 36 40Adjustment in respect of current financial year 1 2Paid out during the period (5) (6)

Employee obligations at 31 December 32 36

The employee obligations primarily concern a special severance scheme for executives employed before 1991. The scheme is closed to new members.

24 Deferred tax

Deferred tax provisions at 1 January 93 63Foreign exchange differences (1) (7)Additions on acquisitions 73 -Change in deferred tax for the year 39 22Change in deferred tax for prior years 1 15

Deferred tax provisions at 31 December 205 93

Deferred tax assets (75) (67)Deferred tax provision 280 160


Breakdown of deferred tax: Intangible assets 115 44Property, plant and equipment 111 132Current assets 13 (2)Non-current debt and provisions (17) (15)Current debt 12 (4)Tax losses carried forward (36) (35)Equity 7 (27)


Tax losses carried forward and not included in deferred tax assets amount to DKK 35 million (2009: DKK 35 million).

Deferred tax assets are recognised on the basis of expected future earnings.




25 Provisions for acquisitions of operations and non-controlling interests

Provisions for acquisitions of non-controlling interests 311 227Outstanding consideration and earn-outs 146 59

Provisions at 31 December 457 286

Non-current provisions: Provisions for acquisitions of non-controlling interests 311 219Outstanding consideration and earn-outs 77 57

Total 388 276

Current provisions: Provisions for acquisitions of non-controlling interests - 8Outstanding consideration and earn-outs 69 2

Total 69 10

Total provisions 457 286

Provisions for acquisitions of non-controlling interests Provisions at 1 January 227 216Foreign exchange differences 28 7Additions on acquisitions 103 -Additions on divestments of non-controlling interests 41 75Disposals on acqisitions of non-controlling interests (49) (57)Interest element on discounted liabilities 12 9Dividends paid (16) (9)Revaluation recognised in goodwill (30) (14)Revaluation recognised in equity (5) -

Provisions for acquisitions of non-controlling interests at 31 December 311 227

Classification of provisions for acquisitions of non-controlling interests by expected maturity: Within 1 year - 8Between 1 and 3 years 59 64Between 3 and 5 years 97 78More than 5 years 155 77

Provisions for acquisitions of non-controlling interests at 31 December 311 227

Outstanding consideration and earn-outs Provisions at 1 January 59 24Foreign exchange differences - -Additions on acquisitions 134 35Payments during the year (47) -

Outstanding consideration and earn-outs at 31 December 146 59

Classification of outstanding consideration and earn-outs by expected maturity: Within 1 year 69 2Between 1 and 3 years 25 57Between 3 and 5 years 52 -More than 5 years - -

Outstanding consideration and earn-outs at 31 December 146 59

In connection with Falck assuming an obligation to acquire non-controlling interests, a concurrent right was obtained for Falck to acquire the same non-controlling interests in an agreed period. The consideration for obligations and rights to acquire non-controlling interests is determined on the basis of profit before exercise multiplied by an already agreed multiple less net debt in the relevant companies. On recognition in the balance sheet, this value is made up at fair value on the basis of earnings and net debt at the time when the non-con-trolling interests are expected to exercise their right to sell their shares to Falck. The calculated fair value assumes an increase in earnings and a decrease in net debt in the relevant companies as compared with the value recognised in the financial statements.

If the value of Falck's obligation to acquire non-controlling interests is determined on the basis of the profit and net debt recognised in 2010 (2009), the value would be 193 160




26 Other provisions

Provisions at 1 January 13 13Additions on acquisitions 43 -Provisions made during the year - 1Provisions used during the year (2) (1)

Other provisions at 31 December 54 13

Classification of provisions by expected maturity: Within 1 year 20 2Between 1 and 3 years 11 5Between 3 and 5 years 14 -More than 5 years 9 6

Other provisions at 31 December 54 13

Other provisions concern legal court cases, an unprofitable lease contract for premises and the Group's obligation to clean up and demolish facilities on leased land.

27 Credit institutions

Non-current liabilities: Assets held under finance leases 13 17Long-term loans 3,146 2,952

Total 3,159 2,969

Current liabilities: Assets held under finance leases 5 5Short-term loans 596 286

Total 601 291

Total credit institutions 3,760 3,260

Of total long-term loans, mortgage loans represent DKK 385 million (2009: DKK 387 million)

Breakdown by maturity: Due within 1 year 601 291Due between 1 and 3 years 2,543 691Due between 3 and 5 years 226 1,885Due after 5 years 390 393

Total 3,760 3,260

Breakdown by currency: DKK 2,554 1,982EUR 886 999NOK 6 6USD 283 249SEK 18 24BRL 13 -

Total 3,760 3,260

Interest reset periods: Within 3 months 3,375 2,873After 12 months 385 387

Total 3,760 3,260

The statements set out above do not include liabilities relating to interest for subsequent financial periods. See note 36 for a description of the Group's risks and cash resources.



Note DKK million

27 Credit institutions (continued)

The effective interest rate has been determined at 3.4% (2009: 3.8%).

For debt with an interest reset period within 3 months, regular assessments are made of how long the interest period should be. As at the balance sheet date, the interest rate in DKK was fixed for one month and averaged approximately 1.8% (2009: 1.8%).

As at the balance sheet date, the interest rate in EUR was fixed for one month and averaged approximately 1.0% (2009: 0.8%). As at the balance sheet date, the interest rate in USD was fixed for 3 months and averaged approximately 0.7% (2009: 0.6%).

For debt with an interest reset period beyond 12 months (in DKK) the effective interest rate is currently approximately 4.5% (2009: 4.5%).

The market value of debt with an interest reset period within 3 months is approximately DKK 3,378 (2009: DKK 2,785 million), and the market value of debt with an interest reset period beyond 12 months is approximately DKK 411 million (2009: DKK 404 million).

DKK 26 million (2009: DKK 7 million) of capitalised loan costs has been deducted from the carrying amount of debt.

Assets held under finance leasesAssets held under finance leases comprise leased vehicles and buildings. The lease contracts do not include any contingent lease payments.

Breakdown of liabilities concerning assets held under finance leases:

Present value minimum of lease lease 2010 payments Interest payments

Due within 1 year 5 1 6Due between 1 and 5 years 10 1 11Due after 5 years 3 - 3

Total as at 31 December 2010 18 2 20

Present value minimum of lease lease 2009 payments Interest payments

Due within 1 year 5 1 6Due between 1 and 5 years 13 1 14Due after 5 years 4 - 4

Total as at 31 December 2009 22 2 24




28 Other payables

Holiday pay, wages, etc. 552 525Employee income taxes, etc. 62 132VAT 77 60Accrued interest 1 3Other 111 94

Total other payables 803 814

29 Deferred income

Subscription commitments 1,013 991Other deferred income 281 227

Total deferred income 1,294 1,218

30 Net financials

Financial income and expenses (122) (113)Of which unrealised gains and losses (7) (27)Interest element, discounted liabilities 12 9Change in amortised borrowing costs (24) -Change in interest payable (2) 2

Total net financials (143) (129)

31 Investments in subsidiaries, non-controlling interests and operations

Assets Intangible assets (1) -Property, plant and equipment (65) (39)Cash and cash equivalents (96) (11)Other current assets (256) (64)Equity and liabilities Interest-bearing debt 43 -Current debt, provisions, etc. 216 70Non-controlling interests 2 20

Net assets acquired (157) (24)Goodwill and other intangible assets (772) (80)Deferred tax on intangible assets 71 -Value in excess of/below fair value relating to acquisitions of non-controlling interests 5 -Provisions for acquisitions of non-controlling interests, used during the year (49) (57)Provisions for acquisitions of non-controlling interests, additions during the year 103 -

Purchase price (799) (161)Adjustment for cash and cash equivalents acquired 96 11Outstanding consideration 43 31Effect of hedging the consideration denominated in foreign currency 31 -Consideration relating to prior-year acquisitions (19) -

Cash consideration for acquisitions of Group companies (648) (119)

Costs from business combinations, expensed 23 -Costs from business combinations, capitalised 2 7



Note DKK million

31 Investments in subsidiaries, non-controlling interests and operations (continued)

Other than intangible assets with a value of DKK 197 million (2009: DKK 6 million), no assets or liabilities have been identified which were not recognised in the companies acquired on the date of acquisition.

As a result of significant acquisitions made in late 2010, the opening balance sheet is based on preliminary statements as the fair value of certain receivables and liabilities could not be determined before the closing of the accounts.

Acquisitions can be adjusted up to 12 months after the acquisition.Adjustment of goodwill in 2010 related to business combinations closed in 2009 totalled DKK 6 million (2009: DKK 1 million).

The nominal value of other current assets total DKK 358 million (2009: DKK 64 million).

No acquisitions in 2010 accounts for more than 5% of the Group's revenue and they are therefore stated together in the above specifica-tion of net assets acquired.

The following acquisitions were made during the financial year. All acquisitions have been recognised applying the acquisition method:

Percentage of voting main month of Purchase Consideration rights Acquisitions 2010 activity Country acquisition price paid in acquired Resource Protection International Ltd. Emergency UK Mar. 78 Cash 100%S Reg AB Assistance Nordic region Sep. 181 Cash 100%Toesa Service S.A. Emergency Brazil Oct. 170 Cash 60%Care Ambulance Service, Inc. Emergency USA Dec. 322 Cash 100%Falck AVD B.V. Emergency The Netherlands Apr. 20 Cash 20%Other acquisitions 28 Cash

Total acquisitions 2010 799

Profit of acquired companies after date of acquisition 11Full-year revenue including acquisitions 8,966Full-year profit including acquisitions 510

Resource Protection International (RPI) is a UK based consultancy company which specialises in reduction of fire and explosion hazards mainly with focus on large oil and gas companies. The acquisition will add a service of highly specialised industrial safety experience. The acquisition was primarily made to achieve syner-gies with existing business and further to develop both existing and new markets.As a result, a large part of the purchase price has been allocated to goodwill.

The outstanding consideration comprises payments due within the next 9 months and an earn-out payment related to a percentage of earnings generated by the activity related to RPI since acquisition. The earn-out is capped.

S Reg is a Swedish-based provider of safety services, mainly offering the subscriber recovery from theft or loss of items, such as bicycles. The acquisition will add a possibility of cross-selling both S Reg products and Falck products to the subscribers as well as the ability to grow the sales of S Reg products through the Falck brand where applicable. Due to the type of operation, a part of the purchase price has been allocated to the current customer contracts. The remaining value has been allocated to goodwill, comprising the expected value to be derived from cross-selling opportunities and operational synergies.

The acquisition comprises the possibility of contingent payments depending on the fullfilment of certain targets within the separate product area of the company until 2012. No contingent payment is expected due to the current expectations of performance.

Toesa is a Brazilian-based provider of ambulance and health clinic services with activities in several cities across the country. The ambu-lance service is mainly non-emergency services provided for municipal authorities. The acquisition will add additional business areas to the present operation in Brazil and establish a platform for further growth opportunities in the market. A portion of the purchase price has been allocated to customer contracts while the remaining value has been allocated to goodwill, being the expected growth of the company.

Care Ambulance Service is a US-based provider of ambulance services covering 911 emergency and non-emergency transports in areas in Los Angeles and Orange County in California. By the acquisition of Care, Falck will enter the largest ambulance market in the world, in which Care is one of the largest providers in the region with a strong track record. The US market is expected to provide a strong potential for growth based on the changes in demographics. A part of the purchase price has been allocated to customer contracts while the remaining portion has been allocated to goodwill, representing the expected value of future growth opportunities and synergies to be achieved.



Note DKK million

31 Investments in subsidiaries, non-controlling interests and operations (continued)

Percentage of voting main month of Purchase Consideration rights Acquisitions 2009 activity Country acquisition price paid in acquired Falck TravelCare AB Assistance Sweden Feb. 5 Cash 100%Falck OY Assistance Finland Jun. 12 Cash 30%Falck AVD Holding B.V. Emergency The Netherlands Jun. 53 Cash 49%Falck Prime Atlantic Limited Training Nigeria Oct. 25 Cash 51%Pleje & Omsorg Healthcare Denmark Oct. 32 Cash 100%Dansk HjemmePlejeService Healthcare Denmark Dec. 30 Cash 100%Other acquisitions 4


Profit of acquired companies after date of acquisition 0Full-year revenue including acquisitions 7,765Full-year profit including acquisitions 431

Percentage of voting main month of Purchase Consideration rights Acquisitions 2011 activity Country acquisition price paid in acquired

LifeStar Response Emergency USA Jan. 186 Cash 100%Starowka Healtcare Poland Mar. 27 Cash 75%


Full-year revenue in acquired companies 590Full-year profit in acquired companies 17

Falck signed an agreement to acquire 100% of LifeStar Response at 1 January 2011. LifeStar Response is a US-based provider of ambulance services, mainly covering non-emergency transports in areas in several states on the east-coast of the United States. The acquisition of LifeStar Response adds further presence of Falck in the United States, where LifeS-tar Response is one of the largest providers in the region. The US market is expected to provide a strong potential for growth based on the changes in demographics. It is expected that a part of the purchase price will be allocated to customer contracts while the remaining portion will be allocated to goodwill, representing the expected value of future growth opportunities and synergies to be achieved.

According to the preliminary opening balance sheet, net assets acquired total DKK 92 million and goodwill including intangible assets total DKK 94 million.

Falck signed an agreement to acquire 75% of Starowka at 1 march 2011.Starowka operates four healthcare clinics in the Warsaw area in Poland. The clinics provide both public and private healthcare services. The acquisition of Starowka is a geographical expansion of the business area in Poland. It is expected that a part of the purchase price will be allocated to customer contracts while the remaining portion will be allocated to goodwill, representing the expected value of future growth opportunities and synergies to be achieved.

According to the preliminary opening balance sheet, net assets acquired total DKK 0 million and goodwill including intangible assets total DKK 27 million.




32 Divestments of subsidiaries, non-controlling interests and operations

Assets Cash and cash equivalents - 2Other current assets - 2Equity and liabilities Current debt, provisions, etc. - (1)

Net assets divested - 3Disposals of goodwill - 1Provisions for acquisitions of non-controlling interests, additions during the year 41 75Value in excess of/below fair value relating to divestment of non-controlling interests (37) (75)

Consideration received 4 4Adjustment for cash and cash equivalents divested - (2)Consideration receivable (3) (12)Consideration received relating to prior-year divestments 9 -Divestment of investments in Group enterprises - 23

Divestment of Group enterprises 10 13

Divestments in 2010 comprised non-controlling interests in Falck Hjemmepleje A/S in Denmark, Falck Investments N.V. in Belgium, Falck Jobservice A/S in Denmark, Falck Eurasia B.V. in the Netherlands, Falck Nutec (Thailand) Ltd., Care Ambulance Service Inc. in the United States and Falck Yardim Hizmetleri Limited Sirketi in Turkey.

Divestments in 2009 comprised the subsidiaries Tesia AB in Sweden, RISC Fire & Safety Services B.V. in the Netherlands, and non-controlling interests in Falck Emergency AS in Slovakia, MSTS Asia Sdn. Bhd. in Malaysia, Falck Aktiv Arbetsmedicin AB in Sweden and Falck Hjemmepleje A/S in Denmark.

33 Dividends paid to non-controlling interests

Dividend to non-controlling interests recognised in equity (13) (1)Dividend to non-controlling interests recognised in provisions for acquisitions of non-controlling interests (16) (9)

Total dividends paid to non-controlling interests (29) (10)

34 Other movements relating to shareholders

Capital increase - 39Acquisition of treasury shares (6) (5)Disposal of treasury shares 30 -Payment received for change of warrant terms - 1Buy back of warrants (307) -

Total other movements relating to shareholders (283) 35




35 Contingent liabilities, contractual obligations and collateral security

Contingent liabilities Other guarantee commitments 11 15

Total guarantee commitments 11 15

The Falck Group is a party to certain litigation and claims. Management believes that rulings in this respect will not have a material impact on the Group’s financial position.

Falck A/S is jointly and severally liable for the Group’s overall VAT liability together with other jointly registered Danish enterprises.

The Group has issued performance bonds to a certain extent in connection with a number of contracts, including performance bonds for a total of DKK 249 million (2009: DKK 240 million) provided in connection with ambulance contracts in Denmark.

As part of the Group's activities, usual supplier agreements have been entered into, and certain declarations of intent have been issued.

In connection with the divestment of companies and operations, usual representations and warran-ties are made. There are currently no outstanding claims which are not sufficiently recognised in the balance sheet.

Contractual obligations Minimum lease payments for operating lease commitments: Due within 1 year 262 223Due between 1 and 5 years 674 601Due after 5 years 799 721

Operating lease commitments at 31 December 1,735 1,545

Net present value of lease commitments 1,444 1,346

The present value has been calculated on the basis of current market interest rates in the individual countries.

Lease payments recognised in the income statement 275 238

The operating lease commitments concern leases for vehicles and buildings. The lease period for cars is typically between 4 and 9 years.

None of the leases include material contingent lease payments, whereas Falck has a right of first refusal to buy a number of buildings at a preset value.

Collateral securityThe shares in the subsidiary Falck Danmark A/S have been provided as collateral for debt in Falck A/S.

Carrying amount of the Group's properties that have been mortgaged in security of loans 512 552

Bearer mortgages issued and used as collateral for credits 385 388

Unused bearer mortgages 15 16

See the note on liquidity risks for the conditions applicable to mortgaged assets.



Note DKK million

36 Financial instruments

Financial risksAs a consequence of its operations, investments and financing, the Group is exposed to a number of financial risks, including market risk (foreign exchange and interest rate risk), credit risk and liquidity risk.

Group policy is not to speculate actively in financial risks. Accordingly, the Group’s financial management exclusively involves the man-agement and mitigation of financial risks that arise as a direct consequence of the Group’s operations, investments and financing.

There were no changes in the Group's risk exposure or risk management as compared with 2009.

Foreign exchange riskThe Group’s foreign subsidiaries are not severely exposed to exchange rate fluctuations, as both revenue and most costs of the individual subsidiaries are denominated in the same currencies. The main exchange rate exposure faced by the Group relates to the translation of the financial results and equity of foreign subsidiaries into Danish kroner.

The Group regularly assesses its foreign exchange risks in order to determine whether the exposure should be hedged by same-currency loans or forward exchange contracts. The forward exchange contracts stated below were entered into with a view to reducing the Group’s foreign exchange risks in respect of the translation risk for investments in subsidiaries. See the section below regarding hedging.

63% of the Group’s revenue and earnings is denominated in Danish kroner (DKK) (2009: 65%). Other currencies that account for more than 5% of revenue or earnings are Norwegian kroner (NOK), euros (EUR) and Swedish kroner (SEK).

The income statement is affected to a minor extent by changes in exchange rates, as the profit of foreign subsidiaries is translated into Danish kroner using average exchange rates.

Foreign exchange risk 2010 2009

The hypothetical impact on the Probable Hypothetical Probable Hypothetical profit for the year and the Group's change in impact Hypothetical change in impact Hypothetical equity from reasonably probable exchange on profit impact exchange on profit impact changes in exchange rates: rate for the year on equity rate for the year on equity

EUR/DKK 1% 9 9 1% 10 10USD/DKK 10% - - 10% - 25BRL/DKK 10% - 6 - - -NOK/DKK 5% - 3 5% - 3GBP/DKK 5% - 4 5% - 2PLN/DKK 10% - 6 10% - 5SEK/DKK 5% - 14 5% - 6

Assumptions regarding sensitivity information:The sensitivities related to financial instruments have been determined on the basis of the financial instruments recognised at 31 December. The sensitivities stated have been determined on the basis of an assumption that sales, price level and interest rate level are unchanged. The foreign exchange risk stated above thus does not take into account the translation risk on the translation into DKK of the profit and equity of foreign subsidiaries.



Note DKK million

36 Financial instruments (continued)

Interest rate riskThe Group’s interest rate risk is mainly affected by the Group’s overall financing. Based on the current market situation, the Group's Executive Management Board and Board of Directors have resolved that the financing is to be based on short-term interest rates. The Group is therefore sensitive to fluctuations in market interest rates, and a fluctuation by 1% would change the interest expense for the year by DKK 13 million (2009: DKK 10 million) as the market rate for the current year is below the floor of interest rate collars. Without an interest rate collar, a fluctuation by 1% would change the Group's interest expense by DKK 34 million (DKK 29 million).

The Group monitors developments in market interest rates closely so that it can react if the market situation changes.

In order to hedge interest rate risk, the Group has entered into an interest rate collar which hedges a substantial part of the increased interest exposure if market interest rates exceed 5.5%. The interest rate collar also includes a floor rate fixed at 3.25% and thereby result-ing in the hedged amount at all times being subject to interest in the range of 3.25% to 5.5%.

Assumptions regarding sensitivity information:The sensitivity stated has been determined based on the recognised financial assets and liabilities as at 31 December 2010. No adjust-ment has been made for servicing and raising of debt, or the like in 2010. Furthermore, it is assumed that all hedges of floating-rate loans are effective.

Credit riskThe Group’s credit risk primarily concerns primary financial assets. Credit risk related to financial assets equals the values recognised in the balance sheet.

The Group is not exposed to significant risks concerning individual customers or business partners. When entering into significant con-tracts, the Group makes a credit assessment of the customer in order to reduce the potential credit risk. The Group’s credit exposure to large customers is generally considered to be low as the Group’s large customers are typically public authorities.

Subscription sales to private and corporate customers are not deemed to involve material risks to the Group as the amounts are small for the individual subscriptions, and general as well as individual provisions are made for anticipated bad debts. As at 31 December 2010, receivables from such subscrioption sales were in the region of DKK 76 million (2009: DKK 45 million).

Liquidity riskThe Group’s liquidity risk primarily concerns its ability to meet its obligations to pay its employees and creditors and to service its debts.

See note 27 for a breakdown of maturities of liabilities to credit institutions. In addition to its recognised liabilities, the Group also has the option to draw on short-term credits.

The Group continuously monitors its free cash flow in order to assess its liquidity risks.

At year-end 2010, the Group’s unused credit and other facilities were at the level of DKK 720 million (2009: DKK 542 million).

With the addition of available cash and cash equivalents of DKK 745 million (2009: DKK 625 million), total cash resources were at the level of DKK 1,465 million (2009: DKK 1,167 million).

Certain of the Group’s loans, including the debt of Falck A/S, are subject to certain loan covenants, and the Group continuously monitors whether the covenants are observed.

Derivative financial instruments recognised in the balance sheet are stated at a value equivalent to the market value.



Note DKK million


maturity analysis of financial assets and liabilitiesAssumptions applied in the maturity analysis:The maturity analysis is based on all undiscounted cash flows, including estimated interest payments. Interest payments are estimated based on the current market conditions.

The undiscounted cash flows from derivative financial instruments are presented gross, unless the parties have a contractual right/obli-gation to settle net.

Due Due Due Contrac- within between between Due tual Total one 1 and 3 3 and 5 after 5 cash carrying market Contractual cash flows including interest 2010 year years years years flows amount value

Financial assets:Trade receivables 1,088 - - - 1,088 1,088 1,088Receivables from associates 21 - - - 21 21 21Other receivables 246 - - - 246 246 246Cash and cash equivalents 439 - - - 439 439 439

Loans and receivables 1,794 - - - 1,794 1,794 1,794

Securities 372 - - - 372 372 372

Available-for-sale financial assets 372 - - - 372 372 372

Derivative financial instruments to hedge net investments in foreign subsidiaries 5 - - - 5 5 5

Total financial assets 2,171 - - - 2,171 2,171 2,171

Financial liabilities: Credit institutions 687 2,895 35 488 4,105 3,760 3,789Provision for acquisitions of operations and non-controlling interests 71 90 171 191 523 457 457Trade payables 581 - - - 581 581 581Other payables 733 - - - 733 733 733

Financial liabilities measured at amortised cost 2,072 2,985 206 679 5,942 5,531 5,560

Derivative financial instruments to hedge future cash flows 32 25 - - 57 64 64Derivative financial instruments to hedge net investments in foreign subsidiaries 6 - - - 6 6 6

Financial liabilities used as hedging instruments 38 25 - - 63 70 70

Total financial liabilities 2,110 3,010 206 679 6,005 5,601 5,630



Note DKK million



Financial assets: Trade receivables 741 - - - 741 741 741Other receivables 154 - - - 154 154 154Cash and cash equivalents 538 - - - 538 538 538

Loans and receivables 1,433 - - - 1,433 1,433 1,433

Securities 145 - - - 145 145 145

Available-for-sale financial assets 145 - - - 145 145 145

Total financial assets 1,578 - - - 1,578 1,578 1,578

Financial liabilities: Credit institutions 351 794 1,925 509 3,579 3,260 3,189Provision for acquisitions of operations and non-controlling interests 10 121 78 77 286 286 286Trade payables 400 - - - 400 400 400Other payables 814 - - - 814 814 814

Financial liabilities measured at amortised cost 1,575 915 2,003 586 5,079 4,760 4,689

Derivative financial instruments to hedge future cash flows 39 29 - - 68 66 66Derivative financial instruments to hedge net investments in foreign subsidiaries 4 - - - 4 4 4


Total financial liabilities 1,618 944 2,003 586 5,151 4,830 4,759



Note DKK million


Hedging and derivative financial instrumentsThe Group uses forward exchange contracts to hedge its risks related to exchange rates.

The fair value of the effective part of the outstanding foreign exchange contracts as at 31 December used as hedging instruments and qualifying for hedge acdcounting in respect of future transactions is recognised directly in equity until the hedged transactions are recognised in the income statement.

2010 2009

Contract market Contract market Foreign currency sold/(bought) on forward contracts: value value value value

BRL (expires in 2011) (63) 3 - -NOK (expires in 2011) 69 (2) 67 (1)GBP (expires in 2011) 76 2 39 -PLN (expires in 2011) 62 - 47 (2)SEK (expires in 2011) 289 (4) 126 (1)USD (expires in 2011) (239) - - -

Total 194 (1) 279 (4)

Of which recognised in the income statement - -

For future recognition (1) (4)

The market value is recognised in other receivables/other payables.

All contracts expire in 2011, and as they hedge net investments abroad and acquisition of subsidiaries denominated in foreign currency, they do not affect the income statement.

2010 2009

Hedged market Hedged market Interest rate collar: value value value value

DKK collar (floor 3.25% / cap 5.5%) expires in 2013 855 (30) 960 (25)EUR collar (floor 3.25% / cap 5.5%) expires in 2013 855 (34) 960 (41)

Total (64) (66)Of which recognised in income statement - -


The market value is recognised in other payables

Both the DKK collar and the EUR collar expire in 2013 and are recognised through the income statement until expiry. See the maturity analysis of financial assets and liabilities.



Note DKK million


methods and assumptions for the determination of fair valuesThe portfolio of listed securities is valued at officially quoted prices or price quotes.

The fair value of mortgage debt is valued on the basis of the fair value of the underlying bonds.

The fair value of credit institutions is valued by discounting based on market expectations.

Forward exchange contracts and interest rate swaps are valued using generally accepted valuation techniques based on relevant observ-able swap curves and exchange rates.

2010

Quoted Non- market Observable observable Fair value hierarchy for financial instruments prices input input measured at fair value in the balance sheet (Level 1) (Level 2) (Level 3) Total

Finacial assetsSecurities 372 - - 372Derivative financial instruments to hedge net investments in foreign subsidiaries - 5 - 5

Total financial assets 372 5 - 377

Financial liabilitiesDerivative financial instruments to hedge future cash flows - 64 - 64Derivative financial instruments to hedge net investments in foreign subsidiaries - 6 - 6

Total financial liabilities - 70 - 70

2009


Finacial assets Securities 145 - - 145

Total financial assets 145 - - 145

Financial liabilities Derivative financial instruments to hedge future cash flows - 66 - 66Derivative financial instruments to hedge net investments in foreign subsidiaries - 4 - 4





37 Related parties

The Group’s related parties are the members of Falck L.P., LFI A/S, the Board of Directors and the Executive Management Board as well as their family members. Related parties also comprise companies in which the individuals mentioned above have material interests.

The company's shareholders who each hold more than 5% of the shares are:LFI A/S, Hellerup 36.0% -Falck L.P., Jersey 43.9% 71.9%ATP PEP 1 K/S, Copenhagen 6.4% 10.5%Liberatio A/S, Aarhus 5.2% 4.8%

Related parties also comprise Group companies and associates in which the company has a controlling or significant influence, as well as the members of the Boards of Directors, Executive Management Boards and senior management of those companies. Related parties also comprise companies in which the individuals mentioned above have material interests.

The company has only to a limited extent traded with related parties. Transactions with related parties have taken place on market terms.

Transactions with Group companies have comprised the following:Purchase of services from associated companies 38 19Payment received for change of warrant terms, Executive Management Board - 1Costs invoiced to Falck L.P. 6 -Buy back of warrants, Executive Management Board 307 -Capital increase, Board of Directors - 39Purchase of treasury shares - 5Sale of treasury shares, Board of Directors 1 -Sale of treasury shares, Executive Management Board 29 -

Transactions with Group companies have been eliminated in the consolidated financial statements in accordance with the accounting policies.

Buy back of warrants was made at DKK 69.05 per warrant.

No transactions have taken place during the year with members of the Board of Directors, the Executive Management Board, senior management or significant shareholders, other than those mentioned above and the remuneration disclosed in note 7.

38 New financial reporting regulations

The IASB has issued the following new financial reporting standards (IAS and IFRS) and interpretations (IFRIC), which are not mandatory for the Group in the preparation of the annual report for 2010:

IFRS 9, amendment to IFRIC 14, IFRIC 19, revised IAS 24, amendments to IFRS 1, amendment to IFRS 7, amendment to IAS 32, improve-ments to IFRSs (May 2010) and amendments to IAS 12.IFRS 9, amendments to IFRS 1, IFRS 7 and IAS 12 have not yet been adopted by the EU.The standards and intertrepretations adopted with a different effective date in the EU than the corresponding effective dates from the IASB, will be implemented early so that their implementation follows the IASB's effective dates for financial years beginning on or after 1 January 2011. None of the new standards or interpretations are expected to have a material impact on the financial statements of the Group and Falck A/S.

39 Events after the balance sheet date

At the extraordinary general meeting held on 25 February 2011, the Board of Directors was authorised to establish a new warrant programme. At the Board Meeting held on 15 March 2011, the Board of Directors adopted a resolution to establish a new warrant programme for the Executive Management Board. The new warrant programme comprises 4,443,120 warrants. Each warrant entitles the holder to subscribe for one share with a nominal value of DKK 0.50 on 30 December 2015 at a price of DKK 125 per share. The warrants is-sued were acquired at market value, equivalent to DKK 11 million, and there are no conditions attached to the acquisition of the warrants.

At 1 January 2011, Falck signed an agreement to acquire 100% of LifeStar Response Corporation in the United States for DKK 186 million. The company operates ambulance services in 6 states and in Washington D.C. in the eastern part of the United States and operates 440 ambulances and similar vehicles.

Financial statementsIncome statement 98Statement of comprehensive income 99Balance sheet 100Equity statement 102Cash flow statement 103

Notes to the financial statements 1. Accounting policies 104

Notes to the income statement 2. Other operating income 104 3. Fees to auditors appointed

at the annual general meeting 104 4. Staff costs 104 5. Exceptional items 104 6. Financial income 105 7. Financial expenses 105 8. Income taxes 105

Contents of the parent company financial statements

Notes to the balance sheet 9. Investments in subsidiaries 105 10. Share capital and treasury shares 106 11. Deferred tax 106 12. Credit institutions 107 13. Other payables 107

Notes to the cash flow statement 14. Net financials 107 15. Other movements relating to shareholders 108

Supplementary notes 16. Contingent liabilities, contractual obligations

and collateral security 108 17. Financial instruments 108 18. Related parties 111 19. New financial reporting regulations 111 20. Events after the balance sheet date 111

98 Falck Annual Report 2010 | Parent Company


2 Other operating income 7 7

Total revenue 7 7

3 Other external costs (18) (7) 4 Staff costs (13) (9)

Total costs (31) (16)

Analysed as: Operating profit before exceptional items (4) (9) 5 Exceptional items (20) -

PROFIT/(LOSS) BEFORE FINANCIALS (24) (9) Dividend from Group companies 557 250 6 Financial income 14 23 7 Financial expenses (96) (115)

PROFIT BEFORE TAX 451 149 8 Income taxes 20 26

PROFIT FOR THE YEAR 471 175

PROPOSED PROFIT ALLOCATION Proposed dividend - - Retained earnings 471 175

Total 471 175

DIVIDEND PER SHARE Dividend per share - -

Income statement for the year ended 31 December

Parent Company | Falck Annual Report 2010 99


Value adjustment of interest hedging instruments 2 (27) Tax on value adjustment of interest hedging instruments (1) 7

Other comprehensive income 1 (20) Profit for the year 471 175

TOTAL COmPREHENSIVE INCOmE 472 155

Statement of comprehensive income for the year ended 31 December



Assets

9 Investments in subsidiaries 3,249 3,249 Receivables from Group companies 378 172

TOTAL FINANCIAL ASSETS 3,627 3,421

TOTAL NON-CURRENT ASSETS 3,627 3,421

Receivables from Group companies 992 471 Income taxes - 2

Receivables 992 473

Cash 8 1

TOTAL CURRENT ASSETS 1,000 474

TOTAL ASSETS 4,627 3,895




Equity and liabilities

10 Share capital 46 46 10 Reserve for treasury shares - (8) Hedging reserve (48) (49) Retained earnings 1,454 967

TOTAL EQUITY 1,452 956

11 Deferred tax 30 45 12 Credit institutions 2,721 2,522 Payables to Group companies 34 41

TOTAL NON-CURRENT DEBT 2,785 2,608

12 Credit institutions 302 265 Income taxes 24 - 13 Other payables 64 66

TOTAL CURRENT DEBT 390 331

TOTAL EQUITY AND LIABILITIES 4,627 3,895



Equity statement

Reserve for Share treasury Hedging Retained 2010 DKK million capital shares reserve earnings Total

Equity at 1 January 2010 46 (8) (49) 967 956

Equity movements in 2010 Value adjustment of interest hedging instruments 2 2Tax on other comprehensive income (1) (1)

Other comprehensive income - - 1 - 1Profit for the year 471 471

Total comprehensive income - - 1 471 472Acquisitions of treasury shares (6) (6)Disposal of treasuty shares 14 16 30

Total equity movements in 2010 - 8 1 487 496

EQUITY AT 31 DECEmBER 2010 46 - (48) 1,454 1,452

2009 DKK million

Equity at 1 January 2009 45 (3) (29) 753 766

Equity movements in 2009 Value adjustment of interest hedging instruments (27) (27)Tax on other comprehensive income 7 7

Other comprehensive income - (20) - (20)Profit for the year 175 175

Total comprehensive income - (20) 175 155Capital increase 1 38 39Acquisitions of treasury shares (5) (5)Payment received for change of warrant terms 1 1

Total equity movements in 2009 1 (5) (20) 214 190

EQUITY AT 31 DECEmBER 2009 46 (8) (49) 967 956


Cash flow statement for the year ended 31 December


Total revenue 7 7 Total costs (31) (16)

Profit/(loss) before financials (24) (9) Changes in outstanding balances with Group companies 42 42 14 Net financials (82) (92) 8 Income taxes paid 30 31

CASH FLOW FROm OPERATING ACTIVITIES (34) (28)

Dividends received from Group companies 557 250 15 Other movements relating to shareholders 24 35 Changes in interest-bearing outstanding balances with Group companies (776) (6) Interest-bearing debt raised 522 - Repayment of and change in interest-bearing debt (286) (250)

CASH FLOW FROm FINANCING ACTIVITIES 41 29

Change in cash 7 1

Cash at beginning of year 1 -

CASH AT YEAR-END 8 1

Notes to the parent company financial statements



1 Accounting policies

See note 1 to the Group financial statements for a description.

2 Other operating income

Management fees from Group companies 7 7

Total other operating income 7 7

3 Fees to auditors appointed at the annual general meeting

KPmG Audit (1) (1) Preparation of a potential IPO (8) -

Total fees (9) (1)

4 Staff costs

Ordinary remuneration to the Executive Management Board (7) (8) Remuneration to the Executive Management Board relating to preparation of a potential IPO (7) - Remuneration to the Board of Directors (2) (1)

Total (16) (9) Of which reinvoiced 3 -

Total staff costs (13) (9)

Number of full-time employees 2 2

The rate of increase in remuneration to the Executive Management Board excluding bonus was 2% in 2010 (2009: 0%). Remuneration to the Executive Management Board includes pension contributions of - 1

The service contracts for the members of the Executive Management Board include severance periods which, in the case of resignation by an executive, are 6 months and, in the case of termination by the company, are 12 months.

Warrant programme, Executive management Board Number of warrants at 1 January 4,443,120 4,443,120 Buy back in the period. See note 21 to the Group financial statements (4,443,120) -

Warrants at 31 December - 4,443,120

In December 2010, the Group acquired the existing warrants from the Executive Management Board through a cash buy back at market value. See note 37 to the Group financial statements. The warrant programme was subsequently cancelled in February 2011.At the extraordinary general meeting held on 25 February 2011, the Board of Directors was author-ised to establish a new warrant programme. At the Board meeting held on 15 March 2011, the Board of Directors adopted a resolution to establish a new warrant programme for the Executive Manage-ment Board. The new warrant programme comprises 4,443,120 warrants. Each warrant entitles the holder to subscribe for one share with a nominal value of DKK 0.50 on 30 December 2015 at a price of DKK 125 per share. The warrants issued were acquired at market value, equivalent to DKK 11 mil-lion, and there are no conditions attached to the acquisition of the warrants.

5 Exceptional items

Costs related to preparation of a potential IPO (20) -

Total exceptional items (20) -




6 Financial income

Foreign exchange gains - 1 Interest from Group companies 14 22

Total financial income 14 23

7 Financial expenses

Foreign exchange losses (2) - Interest to credit institutions (94) (115)

Total financial expenses (96) (115)

8 Income taxes

Current tax 6 14 Change in deferred tax for the year 15 11 Prior-year adjustments (1) 1

Total income taxes 20 26 Tax on other comprehensive income (1) 7

Total tax 19 33

Income taxes received during the year 30 31

Breakdown of tax rate: Total income taxes 20 26

Profit before tax 451 149 Dividends from Group companies (557) (250)

Tax base for current tax (106) (101)


Reconciliation of tax rate: Danish tax rate 25.0% 25.0% Non-deductible costs/(tax-exempt income) (4.6%) 0.3% Other adjustments including adjustments relating to prior years (1.5%) -


9 Investments in subsidiaries

Cost at 1 January 3,249 3,249

Cost at 31 December 3,249 3,249

Carrying amount at 31 December 3,249 3,249

See "Legal entities" for a list of companies




10 Share capital and treasury shares

movements in share capital in the past 7 financial years Share capital at 1 January - - Additions on capital increase in 2004 44 44 Additions on capital increase in 2006 1 1 Additions on capital increase in 2008 0 0 Additions on capital increase in 2009 1 1

Share capital at 31 December 46 46

The share capital is divided into 92,786,800 shares (2009: 92,786,800 shares) with a nominal value of DKK 0.50 each. The shares are fully paid up and are not divided into classes.

Nominal value Number of shares (DKK thousand) % of share capital

Treasury shares 2010 2009 2010 2009 2010 2009

Treasury shares at 1 January 258,219 79,291 129 40 0.29 0.09Additions 95,238 178,928 48 89 0.10 0.20Disposals (353,457) - (177) - (0.39) -

Treasury shares at 31 December - 258,219 - 129 - 0.29

The purchase price of treasury shares acquired during the financial year was DKK 6 million (2009: DKK 5 million). The sales price of treasury shares sold during the financial year was DKK 30 million (2009: DKK 0 million).


11 Deferred tax

Deferred tax provisions at 1 January 45 53 Change in deferred tax for the year (15) (11) Change in deferred tax for prior years - 3


Deferred tax provision 30 45


Breakdown of deferred tax: Intangible assets 32 42 Current assets 0 4 Non-current debt and provisions (2) (1)





12 Credit institutions

Non-current liability: Long-term loans 2,721 2,522 Current liability: Short-term loans 302 265

Total credit institutions 3,023 2,787

Breakdown by maturity: Due within 1 year 302 265 Due between 1 and 3 years 2,499 640 Due between 3 and 5 years 222 1,882

Total 3,023 2,787

Breakdown by currency: DKK 1,921 1,594 EUR 853 956 USD 249 237

Total 3,023 2,787

Interest reset periods: Within 3 months 3,023 2,787

Total 3,023 2,787

The statements set out above do not include liabilities relating to interest for subsequent finan-cial periods. See note 36 to the Group financial statements for a description of the Group's risks and cash resources.

The effective interest rate has been determined at 3.2% (2009: 3.8%).

For debt with an interest reset period within 3 months, regular assessments are made of how long the interest period should be. As at the balance sheet date, the interest rate in DKK was fixed for one month and averaged approximately 1.8% (2009: 1.8%).

As at the balance sheet date, the interest rate in EUR was fixed for one month and averaged approximately 1.0% (2009: 0.8%). As at the balance sheet date, the interest rate in USD was fixed for 3 months and averaged approximately 0.7% (2009: 0.6%).

The market value of debt with an interest reset period within 3 months is approximately DKK 3,024 million (2009: DKK 2,700 million).

DKK 25 million (2009: DKK 7 million) of capitalised loan costs has been deducted from the carrying amount of debt.

13 Other payables

Fair value of interest rate collar 64 66

Total other payables 64 66

14 Net financials

Financial income and expenses (82) (92)

Total net financials (82) (92)




15 Other movements relating to shareholders

Capital increase - 39 Acquisition of treasury shares (6) (5) Disposal of treasury shares 30 - Payment received for change of warrant terms - 1

Total other movements relating to shareholders 24 35

16 Contingent liabilities, contractual obligations and collateral security

Falck A/S is jointly and severally liable for the Group’s overall VAT liability together with other jointly registered Danish enterprises.

A portion of the company's cash is deposited in bank accounts which are included in a cash pool under which Falck Danmark A/S controls the principal facility account. The companies are jointly and severally liable with the total deposits on the said accounts vis-à-vis the bank in question.

The shares in the subsidiary Falck Danmark A/S have been provided as collateral for debt in Falck A/S

17 Financial instruments

There were no changes in the risk exposure or risk management of Falck A/S as compared with 2009. See also note 36 to the consoli-dated financial statements of the Group.

Foreign exchange risk 2010 2009

The hypothetical impact on the Probable Hypothetical Probable Hypothetical profit for the year and the change in impact Hypothetical change in impact Hypothetical equity from reasonably probable exchange on profit impact exchange on profit impact changes in exchange rates: rate for the year on equity rate for the year on equity

EUR/DKK 1% 9 9 1% 10 10USD/DKK 1% - 25 1% - -

Interest rate riskThe company’s interest rate risk is mainly affected by the company’s overall financing. Based on the current market situation, the Execu-tive Management Board and Board of Directors have resolved that the financing is to be based on short-term interest rates. The company is therefore sensitive to fluctuations in market interest rates, and a fluctuation by 1% would change the interest expense for the year by DKK 13 million (2009: DKK 10 million) as the market rate for the current year is below the floor of interest rate collars. Without an inter-est rate collar, a fluctuation by 1% would change the company's interest expense by DKK 34 million (2009: DKK 28 million.).

The company monitors developments in market interest rates closely so that it can react if the market situation changes.

In order to hedge interest rate risk, the company has entered into an interest rate collar which hedges a substantial part of the increased interest exposure if market interest rates exceed 5.5%. The interest rate collar also includes a floor rate fixed at 3.25% and thereby result-ing in the hedged amount at all times being subject to interest in the range of 3.25% to 5.5%.

Assumptions regarding sensitivity information:The sensitivity stated has been determined based on the recognised financial assets and liabilities as at 31 December 2010. No adjust-ment has been made for servicing and raising of debt or the like in 2010. Furthermore, it is assumed that all hedges of floating-rate loans are effective.



Note DKK million


maturity analysis of financial assets and liabilitiesAssumptions applied in the maturity analysis:The maturity analysis is based on all non-discounted cash flows including estimated interest payments. Interest payments have been estimated based on the current market conditions.

The undiscounted cash flows from derivative financial instruments are presented gross, unless the parties have a contractual right/obli-gation to settle net.


Financial assets: Receivables from Group companies 992 378 - - 1,370 1,370 1,370Cash 8 - - - 8 8 8

Loans and receivables 1,000 378 - - 1,378 1,378 1,378

Total financial assets 1,000 378 - - 1,378 1,378 1,378

Financial liabilities: Credit institutions 368 2,836 - - 3,204 3,023 3,024Payables to Group companies 34 - - - 34 34 34

Financial liabilities measured at amortised cost 402 2,836 - - 3,238 3,057 3,058

Derivative financial instruments to hedge future cash flows 32 25 - - 57 64 64


Total financial liabilities 434 2,861 - - 3,295 3,121 3,122


Financial assets: Cash 1 - - - 1 1 1

Loans and receivables 1 - - - 1 1 1

Total financial assets 1 - - - 1 1 1

Financial liabilities: Credit institutions 302 707 1,889 - 2,898 2,787 2,706

Financial liabilities measured at amortised cost 302 707 1,889 - 2,898 2,787 2,706

Derivative financial instruments to hedge future cash flows 39 29 - - 68 66 66


Total financial liabilities 341 736 1,889 - 2,966 2,853 2,772



Note DKK million


Hedging and derivative financial instruments 2010 2009

Hedged market Hedged market Interest rate collar: value value value value DKK collar (floor 3.25% / cap 5.5%) expires in 2013 855 (30) 960 (25)EUR collar (floor 3.25% / cap 5.5%) expires in 2013 855 (34) 960 (41)

(64) (66)Of which recognised in the income statement - -


The market value is recognised in other payables.

Both the DKK collar and the EUR collar expire in 2013 and are recognised through the income statement towards expiry. See the matu-rity analysis of financial assets and liabilities.

methods and assumptions for the determination of fair valuesInterest rate swaps are valued using generally accepted valuation techniques based on relevant observable swap curves.

2010


Financial assets Derivative financial instruments to hedge future cash flows - - - -

Total financial assets - - - -

Financial liabilities Derivative financial instruments to hedge future cash flows - 64 - 64


2009


Financial assets Derivative financial instruments to hedge future cash flows - - - -

Total financial assets - - - -

Financial liabilities Derivative financial instruments to hedge future cash flows - 66 - 66





18 Related parties

As a parent company, Falck A/S has a controlling interest in the Group.

The Group’s related parties are the members of Falck L.P.,LFI A/S, the Board of Directors and the Executive Management Board as well as their family members. Related parties also com-prise companies in which the individuals mentioned above have material interests.

The company's shareholders who each hold more than 5% of the shares are:

LFI A/S, Hellerup 36.0% - Falck L.P., Jersey 43.9% 71.9% ATP PEP 1 K/S, Copenhagen 6.4% 10.5% Liberatio A/S, Aarhus 5.2% 4.8%

Related parties also comprise Group companies and associates in which the company has a controlling or significant influence, as well as the members of the Boards of Directors, Executive Management Boards and senior management of those companies. Related parties also com-prise companies in which the individuals mentioned above have material interests.

The company has only to a limited extent traded with related parties. Transactions with related parties have taken place on market terms.

Transactions with Group companies have comprised the following: Group contributions, paid 3 3 Group contributions, received 7 7 Costs invoiced to Falck L.P. 6 - Payment received for change of warrant terms, Executive Management Board - 1 Capital increase, Board of Directors - 39 Purchase of treasury shares - 5 Sale of treasury shares, Board of Directors 1 - Sale of treasury shares, Executive Management Board 29 -

No transactions have taken place during the year with members of the Board of Directors, the Executive Management Board, senior management or significant shareholders, other than those mentioned above and the remuneration disclosed in note 7 to the Group financial state-ments.

19 New financial reporting regulations

See note 38 to the Group financial statements for a description.

20 Events after the balance sheet date

At the extraordinary general meeting held on 25 February 2011, the Board of Directors was authorised to establish a new warrant programme. See note 7 to the Group financial state-ments for further information about the warrant programme.

112 Falck Annual Report 2010 | Statements

Management’s statement

The Board of Directors and the Executive Management Board today considered and approved the annual report of Falck A/S 2010.

The annual report has been prepared in accordance with the International Financial Reporting Standards (IFRS) as adopted by the EU and additional Danish disclosure requirements for annual reports. In our opinion, the accounting policies applied are appropriate, and the Group’s and the parent company’s financial statements give a true and fair view of the Group’s and the parent company’s assets, li-abilities and financial position as at 31 December 2010 and of the results of the Group’s and the parent company’s operations and cash flows for the financial year 1 January – 31 December 2010.

Furthermore, in our opinion, the Management review includes a fair review of developments in the Group's and the parent company's activities and finances, the profit for the year and the Group’s and the parent company’s financial position.

We recommend that the annual report be approved by the shareholders at the annual general meeting.

Copenhagen, 15 March 2011

Executive management Board:

Allan Søgaard Larsen Morten R. Pedersen President and CEO Deputy CEO

Board of Directors:

Lars Nørby Johansen Lars Terney Thorleif KrarupChairman Deputy Chairman Deputy Chairman

Steen Hemmingsen Kim Gulstad Johannes Due

Mats Jansson Thorhild Widvey Vagn Flink Møller Pedersen *

Jan Heine Lauvring * Per Aastrup *

* Elected by the employees

Statements | Falck Annual Report 2010 113

Independent auditors' report

To the shareholders of Falck A/SWe have audited the consolidated financial statements and the parent company financial statements of Falck A/S for the financial year 1 January – 31 December 2010, pp. 49-118. The consolidated financial statements and the parent company financial statements comprise income statement, statement of comprehensive income, balance sheet, equity statement, cash flow statement and notes for the Group as well as for the parent company. The consolidated financial statements and the parent company financial statements have been prepared in accordance with International Financial Reporting Standards as adopted by the EU and additional Danish disclosure requirements in the Danish Financial Statements Act.

In addition to our audit, we have read the Management review prepared in accordance with the Danish Financial Statements Act and issued a statement in this regard.

management's responsibilityManagement is responsible for the preparation and fair presentation of the consolidated financial statements and the parent com-pany financial statements in accordance with International Financial Reporting Standards as adopted by the EU and additional Danish disclosure requirements in the Danish Financial Statements Act. This responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and fair presentation of consolidated financial statements and parent company financial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances. Further, it is the responsibility of Management to prepare a Management review that gives a fair review in accordance with the Danish Financial Statements Act.

Auditors' responsibility and basis of opinionOur responsibility is to express an opinion on the consolidated financial statements and the parent company financial statements based on our audit. We conducted our audit in accordance with Danish Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the consolidated financial statements and the parent company financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial state-ments and the parent company financial statements. The procedures selected depend on the auditors' judgement, including the as-sessment of the risks of material misstatement of the consolidated financial statements and the parent company financial statements, whether due to fraud or error. In making those risk assessments, the auditors consider internal control relevant to the Company's prepa-ration and fair presentation of the consolidated financial statements and the parent company financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by Management, as well as evaluating the overall presentation of the consolidated financial statements and the parent company financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Our audit did not result in any qualification.

OpinionIn our opinion, the consolidated financial statements and the parent company financial statements give a true and fair view of the Group's and the parent company's assets, liabilities and financial position at 31 December 2010 and of the results of the Group's and the parent company's operations and cash flows for the financial year 1 January – 31 December 2010 in accordance with International Finan-cial Reporting Standards as adopted by the EU and additional Danish disclosure requirements in the Danish Financial Statements Act.

Statement on the management reviewPursuant to the Danish Financial Statements Act, we have read the Management review. We have not performed any other procedures in addition to the audit of the consolidated financial statements and the parent company financial statements. On this basis, it is our opinion that the information given in the Management review is consistent with the consolidated financial statements and the parent company financial statements.

Copenhagen, 15 March 2011

KPmGStatsautoriseret Revisionspartnerselskab

Flemming Brokhattingen Søren Kok OlsenState Authorized Public Accountant State Authorized Public Accountant

114 Falck Annual Report 2010 | Board of Directors and Executive Management Board

Board of Directors, Executive Management Board and auditors

BOARD OF DIRECTORS OF FALCK A/S

Lars Nørby Johansen, born 1949Chairman

Member of the boards of directors of:•WilliamDemantHoldingA/S(chairman)•GeorgJensenA/S(chairman)•DanmarksVækstråd(chairman)•DONGEnergyA/S(deputychairman)•IndexAwardA/S•Rockwoolfonden(deputychairman)•CodanA/SandCodanForsikringA/S•Arp-HansenHotelGroupA/S•Institutforselskabsledelse

Lars Terney, born 1967 Deputy ChairmanPartner of NC Advisory A/S, adviser to Nordic Capital Fund V

Member of the boards of directors of: •EDBGruppenHoldingA/S(chairman)•EGHoldingA/S(chairman)•EGA/S(chairman)•NCAdvisoryA/S

Thorleif Krarup, born 1952Deputy Chairman

Member of the boards of directors of: •SportOneDanmarkA/S(chairman)•ExiqonA/S(chairman)•ALK-AbellóA/S(deputychairman)•H.LundbeckA/S(deputychairman)•LundbeckfondInvestA/S(deputychairman)•TheLundbeckFoundation

Steen Hemmingsen, born 1945CEO of the Lundbeck Foundation and Lundbeckfond Invest A/S Member of the boards of directors of: •H.J.HansenHoldingA/S(chairman)•H.J.HansenGenvindingsindustriA/S(chairman)•Obel-LFIEjendommeA/S(deputychairman)•Amagerbankenaf2011A/S•DetØstasiatiskeKompagnisAlmennyttigeFond

Kim Gulstad, born 1976 Director of NC Advisory A/S, adviser to Nordic Capital Fund V

Johannes Due, born 1949 CEO of Sygeforsikringen "danmark"

Member of the boards of directors of: •ForsikringsselskabernesDataCentral(chairman)•Administrationsselskabet"danmark"A/S(chairman)•UniversityofSouthernDenmark(chairman)•ThePreventionFund(chairman)•UniversitiesinDenmark(chairman)•BikubenFondenaf1989(deputychairman)•TheDanishInsuranceAssociation•InternationalFederationofHealthPlans

mats Jansson, born 1951Member of the board of directors of: •DanskeBankA/S

Thorhild Widvey, born 1956Member of the boards of directors of: •AkvagroupASA•AlignAS•StreamAS•RXTASA/ReservoirExplorationTechnology•IRISAS(InternationalResearchInstituteofStavanger)•HitecVisionPrivateEquity•ENIAS•SyscoAS•NBTAS•MorpolASA

Vagn Flink møller Pedersen, born 1957Emergency Medical TechnicianElected by the employees

Jan Heine Lauvring, born 1953Emergency Medical TechnicianElected by the employees

Per Aastrup, born 1959Emergency Medical TechnicianElected by the employees

Board of Directors and Executive Management Board | Falck Annual Report 2010 115

EXECUTIVE mANAGEmENT BOARD OF FALCK A/S

Allan Søgaard Larsen, born 1956President and CEO

Member of the boards of directors of: •PensionDanmarkHoldingA/S•TheCentralboardoftheConfederationofDanishIndustry

morten R. Pedersen, born 1968Deputy CEO

AUDITORS APPOINTED BY THE GENERAL mEETING

KPMGBorups Allé 177DK-2000 FrederiksbergDenmarkby/ Flemming Brokhattingen and Søren Kok OlsenState Authorised Public Accountants

COmPANY INFORmATION

Falck A/SPolititorvet1780 Copenhagen VDenmarkTel.: +45 70 33 33 11WWW.FALCK.COMWWW.FALCK.DKCVR no. 28 10 13 76


Legal entities in the Falck Group as at 31 December

Falck A/S Denmark 100%Falck Danmark A/S Denmark 100%

Falck Health Care Holding A/S Denmark 100%Falck Health Care A/S Denmark 100%

ActivCare A/S Denmark 100%ActivCare Privat A/S Denmark 100%

Ulfab Danmark A/S (2) Denmark 100%Vikteam A/S Denmark 80%

Falck JobService A/S Denmark 84.5%Falck Hjemmepleje A/S Denmark 100%

Lone Hovmand Sundhedsafdeling A/S Denmark 100% North Securities A/S (1) Denmark 20%

Falck Norge Holding AS Norway 100%Falck Redning AS Norway 100%Falck Emergency AS Norway 100%

Falck Ambulanse AS Norway 100%Falck Norge Leasing AS Norway 100%

Falck Health Care Norge AS Norway 100%Falck Nutec Holding A/S Denmark 100%

Falck Nutec Esbjerg A/S Denmark 100%Falck Nutec Management A/S Denmark 100%

Falck Global Safety B.V. The Netherlands 100%Falck Nutec AS Norway 100%Falck Nutec Ltd. United Kingdom 100%

Nutec Centre for Safety Ltd. (2) United Kingdom 100%Falck Onsite Limited United Kingdom 100%Onsite Training Services Limited. (2) United Kingdom 100%

Falck Nutec Trinidad and Tobago Limited Trinidad & Tobago 80%Nutec UK Ltd. (2) United Kingdom 100%Nutec Belgium Holding BVBA (2) Belgium 100%

Nutec Belgium BVBA (2) Belgium 100%Falck Nutec B.V. The Netherlands 100%

RISC Fire and Safety Services B.V. The Netherlands 100%Accentus B.V. The Netherlands 100%

Marinesafety International Rotterdam B.V. The Netherlands 100%MSTS Asia Sdn. Bhd. Malaysia 70%

Risktec (M) Sdn. Bhd. Malaysia 100%Falck Bestari Healthcare Sdn Bhd Malaysia 82%MSTS Asia (S'pore) Pte. Ltd. Singapore 100%

Falck Bedrijfshulpverlening BV The Netherlands 100%Falck Prime Atlantic Limited Nigeria 51%

Falck Nutec Brasil Participacoes Ltda Brazil 100% Falck Nutec Brasil Treinamentos em Segurança Marítima Ltda Brazil 100%

Southfield Ltd Thailand 49.5%Falck Nutec (Thailand) Ltd Thailand 65%

Falck Nutec Nigeria Limited Nigeria 100%Falck USA Holdings, Inc USA 100%

Falck Alford Holdings, Inc USA 80%Alford Services, Inc USA 100%Alford Safety Services, Inc USA 100%

Alford Safety & Compliance, L.L.C. USA 100%Haztec Services - West Indies, L.L.C. USA 100%

Haztec Services St. Lucia Ltd St. Lucia 100%Haztec Services Trinidad Limited Trinidad & Tobago 100%

Falck Alford International BV The Netherlands 100% Falck Alford Holding S.A. de C.V. Mexico 100%

Falck Alford Training S.A.I.P. de C.V. Mexico 100%Falck Nutec Vietnam Limited Vietnam 80%

Falck Safety Services LLC United Arab Emirates 49%

Company name Country Equity Interest



Falck Investment Norge AS Norway 100% Falck Followit Norge AS Norway 100% VIFA AB Sweden 100% Falck Sverige Holding AB Sweden 100% Falck Investment Sverige AB Sweden 100% Falck Räddningskär AB Sweden 100% Falck Forsäkrings AB Sweden 100% Falck TravelCare AB Sweden 100% Falck Ambulans AB Sweden 100% Falck Räddningstjänst AB Sweden 100% Falck Services AB Sweden 100% Svensk Sjöambulans AB (1) Sweden 50% Ulfab Sairaankuljetus OY Finland 100% S Reg Holding A/S Denmark 100% S Reg AB Sweden 100% S Reg Service AB Sweden 100% S Reg A/S Denmark 100% S Reg Oy Finland 100% S Reg AS Norway 100% Falck EMS Holdings, Inc. USA 100% Falck EMS Corp. USA 100% FCA Corp. USA 100% Care Ambulance Service, Inc. USA 87% Falck Health Care Sverige Holding AB Sweden 100% Falck AM Health Care AB Sweden 70% Falck Health Care AM A/S Denmark 100% Falck Aktiv Arbetsmedicin AB Sweden 100% Falck Healthcare AB Sweden 100% Falck Investments Finland Oy Ab Finland 100% Falck Finland Oy Finland 100% Falck Oy Finland 100% Falck Autoabi OÜ Estonia 90% Falck Benelux NV Belgium 60% Ambuce Rescue Team BVBA Belgium 100% Ambuce Limburg BVBA Belgium 100% MDV International BVBA Belgium 100% Falck Investments NV Belgium 80% Falck Medical Services LLC United Arab Emirates 49% Falck Eurasia B.V. The Netherlands 95.05% Falck Foundation VZW Belgium 100% Falck Medycyna Sp.z o.o. Poland 100% Falck SK a.s. Slovakia 92.5% Falck Emergency AS Slovakia 50.89% Falck Záchranná a.s. Slovakia 100% Falck Academy s.r.o. Slovakia 100% La Salus, a.s. Slovakia 100% La Salus Phrama s.r.o. Slovakia 100% Falck Fire Services a.s. Slovakia 100% Falck CZ a.s. Czech Republic 92.5% Lainsa Servicios Contra Incendios, S.A. Spain 51% Falck France SAS France 100%




Falck AVD Holding B.V. The Netherlands 100% Falck AVD B.V. The Netherlands 100% Advisebureau van Dijke B.V. The Netherlands 100% AVD-ICT B.V. The Netherlands 100% Safety Center Holding B.V. The Netherlands 100% Safety Center Holland B.V. The Netherlands 100% Safety Center Zuid Holland B.V. The Netherlands 100% Safety Center Colleage c.v. The Netherlands 51% Safety Center Zuid Holland c.v. The Netherlands 52% MIT B.V. The Netherlands 100% Safe Building B.V. The Netherlands 100% Safety Center Team B.V. The Netherlands 100% AVD Consultancy N.V. Belgium 100% Falck Brasil AVD Participações Ltda. Brazil 100% Falck Brasil Plano de Saúde Ltda. Brazil 100% Falck Brasil 747 Participações Ltda. Brazil 100% Toesa Service S.A. Brazil 60% Tefe Tefe Servicos de Saude Ltda Brazil 100% Falck Brasil FF Participações Ltda. Brazil 100% Falck Brasil Fire Fighting Participações Ltda. Brazil 100% Falck Rettungsdienst GmbH Germany 100% Falck Österreich GmbH Austria 100% Falck Yardim Hizmetleri Limited Sirketi Turkey 95% Falck UK Limited United Kingdom 100% Falck EMS UK Limited United Kingdom 100% Resource Protection International Ltd. United Kingdom 100% Falck India Limited United Kingdom 100% Falck Services Limited Mauritius 100% Falck India Pvt. Ltd. (India) India 100% Falck Services Pvt Ltd. (India) India 100% Falck Fire Services S.R.L Romania 100% Falck Treasury A/S Denmark 100% Investeringsselskabet af 17. december 2007 A/S Denmark 100% Falck Asset Management 9 A/S Denmark 100% Falck DRF Luftambulance A/S Denmark 51% A C Trafik A/S Denmark 100% A C Trafik 2 ApS Denmark 100% KPC Ejendomme af 6. juni 2002 A/S (1) Denmark 25% Falck Nederland Holding B.V. The Netherlands 100%


(1) Associated company(2) The company is at present without activity (dormant)


Definitions of ratios

The ratios are basically calculated on the basis of the annual re-port and the Group’s accounting policies. The Falck Group calcu-lates a number of ratios on the basis the financial-highlight figures in “Financial highlights and key ratios” on page 6. The definitions of those ratios are stated below.

Organic growthGrowth in external revenue relative to the preceding year meas-ured in local currency and adjusted for revenue from acquisitions and divestments of subsidiaries, as they are not recognised until after 12 months. Substantial contracts won after the acquisition of small companies are included in organic growth.

EBITA margin Operating profit before costs and amortisation from business combinations and exceptional items (EBITA) as a percentage of revenue.

Effective tax rateTax charged in respect of the financial year as a percentage of profit before tax.

Net capital investmentsInvestments in land and buildings, operating equipment and intangible assets less land and buildings, operating equipment and intangible assets sold.

Equity ratioTotal equity at year-end as a percentage of equity and liabilities at year-end.

Return on equityProfit for the year attributable to Falck as a percentage of average equity excluding minority interests.

Net operating assetsNet operating assets excluding goodwill defined as trade receiva-bles and other current operating assets plus property, plant and equipment and intangible assets (excluding goodwill), less trade payables, other payables and other operating liabilities.

Net interest-bearing debt to EBITDANet interest-bearing debt and purchase consideration payable divided by EBITDA. EBITDA has been normalised for the fully-year effect of acquisitions made during the period.

Free cash flowOperating profit before costs and amortisation from business combinations and exceptional items (EBITA) adjusted for non-cash operating items and change in net operating assets.

Cash conversion rateFree cash flow as a percentage of operating profit before costs and amortisation from business combinations and exceptional items (EBITA). The rate of operating profit before costs and amortisation from business combinations and exceptional items (EBITA) to the free cash flow (cash conversion rate) shows the Group’s ability to generate cash flows from operating activities after investments in intangible assets and property, plant and equipment and cash that must be tied up in working capital in order to generate cash.

Earnings per share (EPS)Earnings attributable to the parent company’s shareholders per average number of outstanding shares.

Diluted earnings per share (DEPS)Diluted earnings attributable to the parent company’s sharehold-ers per diluted average number of outstanding shares.

Normalised profit after taxProfit for the year less costs and amortisation from business com-binations and exceptional items and tax thereon.

120 Falck Annual Report 2010

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