Offer to the shareholders in CARDO AB (publ)...ASSA ABLOY AB, corporate registration no....

Offer to the shareholders inCARDO AB (publ)

ASSA ABLOY AB, corporate registration no. 556059-3575, (“ASSA ABLOY” or the “Offeror”) has made a public cash offer for all the shares in CARDO AB (publ), corporate registration no. 556026-8517, (“Cardo” or the “Company”) on the terms and conditions set out in this offer document (the “Offer”).

NASDAQ OMX Stockholm’s (“NASDAQ OMX”) rules regard-ing public offers on the stock market (the “Takeover Rules”), the Swedish Securities Council’s rulings regarding interpre-tation and application of the Takeover Rules, and, where applicable, the Swedish Securities Council’s former rulings regarding interpretation and application of the Swedish Industry and Commerce Stock Exchange Committee’s rules on public offers, are applicable on the Offer.

In accordance with the Swedish Act on Public Takeovers on the Stock Market (Sw. lag (2006:451) om offentliga uppköpserbjudanden på aktiemarknaden), ASSA ABLOY has on December 10, 2010, undertaken towards NASDAQ OMX to comply with the Takeover Rules, the Swedish Securities Council’s rulings regarding interpretation and application of the Takeover Rules, and, where applicable, the Swedish Securities Council’s former rulings regarding interpretation and application of the Swedish Industry and Commerce Stock Exchange Committee’s rules on public offers, and sub-mit to the sanctions that NASDAQ OMX may decide upon in the event of infringement of the Takeover Rules. ASSA ABLOY informed the Swedish Financial Supervisory Authority (the “SFSA”) about the Offer and the abovementioned undertak-ing on December 12, 2010.

The Offer, including the agreements that are entered into between ASSA ABLOY and the shareholders of Cardo subse-quent to the Offer being made public, shall be governed and construed in accordance with Swedish law. Any dispute relating to, or arising in connection with the Offer or such agreements shall be settled exclusively by Swedish courts applying Swedish law with the District Court of Stockholm as the court of first instance.

A Swedish language version of this offer document has been approved and registered with the SFSA in accordance with the provisions of Chapter 2, Section 3 of the Swedish Act on Public Takeovers on the Stock Market (Sw. lag (2006:451) om offentliga uppköpserbjudanden på aktiemarknaden) and Chap-ter 2 a, Section 9 of the Swedish Financial Instruments Trad-ing Act (Sw. lagen (1991:980) om handel med finansiella instrument). The registration with the SFSA does not imply that the SFSA guarantees that the factual information pro-vided herein is correct or complete. In the event of any dis-crepancy between the English and the Swedish language versions of this offer document, the Swedish language ver-sion shall prevail.

The information in this offer document purports to be accu-rate, although not complete, only as of the date of the announcement of this offer document. No representation is made that it was or will remain accurate on any other date. The information in this offer document is furnished solely for the purpose of the Offer and may not be relied upon for any other purposes.

The information regarding Cardo on pages 8–35 has been based on information made public by Cardo and has been reviewed by the Board of Directors of Cardo. ASSA ABLOY does not represent that the information included herein with respect to Cardo is accurate or complete and does not take responsibility for such information being accurate or complete.

Except for the information referred to in the auditor’s report in relation to the summary of historical financial information on page 40 or where otherwise explicitly stated, no informa-tion in this offer document has been audited or reviewed by the auditors of ASSA ABLOY or Cardo.

SEB Enskilda, Skandinaviska Enskilda Banken AB (”SEB Enskilda ”) is acting as financial advisor to ASSA ABLOY, and no one else, in connection with the Offer. SEB Enskilda will not be responsible to anyone other than ASSA ABLOY for providing advice in relation to the Offer. SEB Enskilda has not assumed any obligation to independently verify, and dis-claims any liability with respect to, the information herein.

The figures reported in this offer document have been rounded as appropriate.

Forward-Looking StatementsThis document contains certain forward-looking statements with respect to certain of the ASSA ABLOY group’s plans and its current goals and expectations relating to its future finan-cial condition and performance. ASSA ABLOY cautions read-ers that no forward-looking statement is a guarantee of future performance and that actual results could differ materially from those contained in the forward-looking statements. These forward-looking statements can be iden-tified by the fact that they do not relate only to historical or current facts. Forward-looking statements sometimes use words such as “may”, “will”, “seek”, “continue”, “aim”, “antici-pate”, “target”, “expect”, “estimate”, “intend”, “plan”, “goal”, “believe” or other words of similar meaning. Examples of for-ward-looking statements include, among others, statements regarding the ASSA ABLOY group’s future financial position, income growth, assets, impairment charges, business strate-gy, leverage, payment of dividends, projected levels of growth, projected costs, estimates of capital expenditures, and plans and objectives for future operations and other statements that are not historical facts. By their nature, forward -looking statements involve risk and uncertainty because they relate to future events and circumstances, including, but not limited to, Swedish domestic and global economic and business conditions, the effects of volatility in credit markets, market related risks such as changes in inter-est rates and exchange rates, effects of changes in valuation of credit market exposures, changes in valuation of issued notes, the policies and actions of governmental and regula-tory authorities, changes in legislation, the further develop-ment of standards and interpretations under International Financial Reporting Standards (IFRS) applicable to past, cur-rent and future periods, evolving practices with regard to the interpretation and application of standards under IFRS, the outcome of pending and future litigations, the success of future acquisitions and other strategic transactions and the impact of competition – a number of such factors being

THIS OFFER DOCUMENT IS IMPORTANT AND REQUIRES IMMEDIATE ATTENTION

beyond the ASSA ABLOY group’s control. As a result, the ASSA ABLOY group’s actual future results may differ materi-ally from the plans, goals, and expectations set forth in the ASSA ABLOY group’s forward-looking statements.

Any forward-looking statements made herein speak only as of the date of the announcement of this offer document. Except as required by the SFSA, NASDAQ OMX or applicable law, ASSA ABLOY expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained in this offer doc-ument to reflect any change in ASSA ABLOY’s expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based.

Important information for shareholders outside Sweden and banks, brokers, dealers and other nominees holding shares for persons resident outside SwedenIn order to be eligible to view this offer document or make an investment decision with respect to the Offer, such per-son may not be a resident in Australia, Canada, Japan, New Zealand or South Africa and must otherwise be able to par-ticipate lawfully in the Offer on the terms and subject to the conditions set out in this offer document.

The Offer pursuant to the terms and conditions presented in this offer document is not being made to persons whose participation in the Offer requires that an additional offer document is prepared or registration effected or that any other measures are taken in addition to those required under Swedish law. The distribution of this offer document in certain jurisdictions may be restricted by law. Persons who come into possession of this offer document are required to inform themselves about, and to observe, any such restric-tions.

THIS OFFER DOCUMENT, THE ACCEPTANCE FORM AND ANY RELATED OFFER DOCUMENTATION ARE NOT BEING DISTRIB-UTED AND MUST NOT BE MAILED OR OTHERWISE DISTRIB-UTED OR SENT IN OR INTO ANY COUNTRY IN WHICH THE DISTRIBUTION OR OFFERING WOULD REQUIRE ANY SUCH ADDITIONAL MEASURES TO BE TAKEN OR WOULD BE IN CONFLICT WITH ANY LAW OR REGULATION IN SUCH COUNTRY . ANY SUCH ACTION WILL NOT BE PERMITTED OR APPROVED BY ASSA ABLOY. ANY PURPORTED ACCEPTANCE OF THE OFFER RESULTING DIRECTLY OR INDIRECTLY FROM A VIOLATION OF THESE RESTRICTIONS AND ANY PURPORTED ACCEPTANCE BY A PERSON LOCATED IN AUSTRALIA, CANADA , JAPAN, NEW ZEALAND OR SOUTH AFRICA OR ANY AGENT, FIDUCIARY OR OTHER INTERMEDIATE ACTING ON A NON-DISCRETIONARY BASIS FOR A PRINCIPAL GIVING INSTRUCTIONS FROM WITHIN AUSTRALIA, CANADA, JAPAN, NEW ZEALAND OR SOUTH AFRICA MAY BE DISREGARDED.

Nothing in this offer document constitutes an offer to buy or the solicitation of an offer to sell securities in Australia, Canada , Japan, New Zealand, South Africa or any other juris-diction in which such offer or solicitation would be unlawful. The Offer is not being made, directly or indirectly, by use of mail or any other means or instrumentality (including, with-out limitation, facsimile transmission, electronic mail, telex, telephone and the Internet) in or into Australia, Canada,

Japan, New Zealand or South Africa, and the Offer cannot be accepted by any such use, means, instrumentality or facility of, or from within Australia, Canada, Japan, New Zealand or South Africa. Accordingly, this offer document, the accept-ance form and any related offer documentation are not being and should not be mailed or otherwise distributed, forwarded or sent in or into Australia, Canada, Japan, New Zealand or South Africa.

ASSA ABLOY will not deliver any consideration from the Offer into Australia, Canada, Japan, New Zealand or South Africa.

This offer document is not being, and must not be, sent to shareholders with registered addresses in Australia, Canada, Japan, New Zealand or South Africa. Banks, brokers, dealers and other nominees holding shares for persons in Australia, Canada, Japan, New Zealand or South Africa must not for-ward this offer document or any other document received in connection with the Offer to such persons.

Notice to shareholders in the United StatesThe Offer is being made for the securities of a Swedish com-pany and is subject to Swedish disclosure requirements, which are different from those of the United States.

Financial statements included in this offer document have been prepared in accordance with foreign accounting stand-ards that may not be comparable to the financial statements of United States companies.

This offer is being made in reliance upon exemptions afford-ed by Rule 14d-1(c) under the US Securities Exchange Act of 1934. Also, the settlement procedure with respect to the Offer will comply with Swedish law, which differs from US domestic tender offer procedures in certain material respects, particularly with regard to the date of payment of consideration.

It may be difficult for investors in the United States to enforce their rights and any claim they may have arising under the federal securities laws, since the issuer is located in a non-US jurisdiction, and some or all of its officers and directors may be residents of non-US jurisdictions. Such US investors may not be able to sue a non-US company or its officers or direc-tors in a non-US court for violations of the US securities laws. It may be difficult to compel a non-US company and its affili-ates to subject themselves to a US court’s judgment.

In accordance with normal Swedish market practice, the Offeror, its nominees or its brokers (acting as agents) may from time to time make certain purchases of, or arrange-ments to purchase, Cardo shares outside the United States, other than pursuant to the Offer, before the Offer commences and through expiration of the offer. These pur-chases may occur either in the open market at prevailing prices or in private transactions at negotiated prices. Any information about such purchases will be disclosed to the extent required by Swedish law or rules or regulations.

The Offer in the United States is being made solely by the Offeror and not by any other person.

Contents

Offer to the shareholders in Cardo ................................................................................................................................... 1

Background and reasons for the Offer............................................................................................................................. 3

Statement from Cardo’s Board of Directors regarding the Offer ........................................................................... 4

Terms, conditions and instructions .................................................................................................................................. 6

Description of Cardo ............................................................................................................................................................. 8

Summary of financial information .................................................................................................................................... 10

Share capital, ownership structure etc ........................................................................................................................... 13

Cardo’s articles of association ............................................................................................................................................ 15

Board of Directors, Management and Auditors of Cardo ......................................................................................... 17

The full year report of Cardo ............................................................................................................................................... 20

Statement by the Board of Directors of Cardo ............................................................................................................. 36

Description of ASSA ABLOY and the financing of the Offer ...................................................................................... 37

Tax issues in Sweden .............................................................................................................................................................. 38

Auditors’ report regarding summary of historical financial information ............................................................ 40

Addresses .................................................................................................................................................................................. 41

THE OFFER IN BRIEF

Price per share: For each share in Cardo, SEK 420 is offered in cash1)

Acceptance period: February 10 – March 11, 2011

Preliminary date of settlement: March 18, 2011

1) The offered price is subject to adjustment should Cardo pay any dividend or make any other value transfer prior to the settlement of the Offer and will accordingly be reduced by the amount per share of any such dividend or value transfer.

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Offer to the shareholders in Cardo

THE OFFEROn December 13, 2010, ASSA ABLOY announced that ASSA ABLOY has entered into agreements with sever-al large shareholders in Cardo, including L E Lund-bergföretagen AB, to acquire in aggregate 17,162,400 shares in Cardo (the “Acquisitions”), representing approximately 63.6 percent of the shares in Cardo, and simultaneously announced a cash offer to the shareholders in Cardo to tender all shares in Cardo to ASSA ABLOY at a price of SEK 420 per share (the “Offer”). The shares in Cardo are listed on NASDAQ OMX, Mid Cap.

ASSA ABLOY offers SEK 420 in cash per share in Cardo.1) No commission will be charged in connec-tion with the Offer.

Compared to Cardo’s volume-weighted average share price on NASDAQ OMX during the last three months up to and including December 10, 2010, of approximately SEK 267, the Offer represents a premi-um of approximately 57 percent. Compared to the closing price of SEK 283 per share on December 10, 2010, the last day of trading on NASDAQ OMX prior to announcement of the Offer, the Offer represents a premium of approximately 48 percent.

The total offer value for all shares in Cardo amounts to approximately SEK 11.3 billion.2) The offer value excluding the Acquisitions amounts to approximately SEK 4.1 billion.3)

The acceptance period for the Offer will commence on February 10, 2011, and will end on March 11, 2011. Settlement is expected to commence on March 18, 2011.

The Acquisitions and the Offer are conditional upon necessary clearances from relevant competition authorities. Necessary clearances are expected to be received around the end of the acceptance period.

ASSA ABLOY’S HOLDINg IN CARDOSeveral large shareholders in Cardo, including L E Lund bergföretagen AB, who in aggregate hold 17,162,400 shares in Cardo, representing approxi-mately 63.6 percent of the capital and votes in Cardo, have entered into agreements with ASSA ABLOY to sell their shares in the Company to ASSA ABLOY. The total consideration for the Acquisitions amounts to approximately SEK 7.2 billion. The Acquisitions and the Offer are conditional upon necessary clearances from relevant competition authorities.

The agreements relating to the Acquisitions include a right for the sellers to receive compensation, should the offer price be increased. Furthermore, the sellers have a right to receive a compensation corresponding to the difference between the offer price and the price per share that ASSA ABLOY would receive, should the acquired shares be sold to a third party within six months after completion of the Acquisi-tions, less ASSA ABLOYs reasonable direct costs relat-ed to the Acquisitions and interest, with an interest rate corresponding to the actual interest cost for the financing of the Acquisitions, on the consideration paid for the shares in Cardo, calculated from the time of payment of the consideration to the sellers up to the time of the resale to a third party.

To the extent that consideration in accordance with the resale provisions is paid to the sellers under the Acquisitions, the consideration for the shares ten-dered in the Offer will be increased accordingly.

ASSA ABLOY has previously not owned or controlled any shares in Cardo, and has not, save for the Acquisi-tions, acquired any shares in the Company during the last six months prior to announcement of the Offer. Following the announcement of the Acquisitions and the Offer, ASSA ABLOY has acquired 1,323,000 shares in Cardo on NASDAQ OMX at a price not exceeding SEK 418.50 per share and at an average price of SEK 418.39 per share, corresponding to 4.9 percent of the shares in Cardo. ASSA ABLOY has not acquired any shares for a consideration that exceeds the offer price. Following completion of the Acquisitions, which is expected to occur as soon as clearances from relevant competition authorities have been received, ASSA ABLOY’s holding in Cardo will amount to approxi-mately 68.5 percent of the capital and votes.

1) The offered price is subject to adjustment should Cardo pay any dividend or make any other value transfer prior to the settlement of the Offer and will accordingly be reduced by the amount per share of any such dividend or value transfer.

2) Based on 27,000,000 outstanding shares, which is the total number of outstanding shares.3) Based on 9,837,600 outstanding shares, which is the total number of outstanding shares excluding the Acquisitions.

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Contents

RECOMMENDATION BY THE BOARD OF DIRECTORS OF CARDOOn December 13, 2010, Cardo’s Board of Directors announced their unanimous recommendation to Cardo’s shareholders to accept the Offer. (See section “Statement by the Board of Directors of Cardo”)1)

FINANCINg OF THE OFFERFinancing of the Offer has been secured and the Offer is not subject to any financing conditions. The bridge financing that was presented in the press release dat-ed December 13, 2010, has been renegotiated into three new credit facilities, two long-term and one short-term. The credit facilities were entered into on December 30, 2010, and are sufficient to fully pay the consideration in the Offer. For further information see section “Description of ASSA ABLOY and the financing of the Offer” on page 37.

STATEMENT FROM THE SwEDISH SECURITIES COUNCIL The Swedish Securities Council has made the follow-ing statements in relation to the Offer: AMN 2010:42 (exemption for ASSA ABLOY to exclude shareholders in Australia, Canada, Japan, New Zealand and South Africa from the Offer); and AMN 2010:44 (exemption for ASSA ABLOY to file the offer document with the SFSA within four weeks from the announcement of the Offer due to competition clearance process). For full statements, please see www.aktiemarknads namnden.se.

COMPLIANCE wITH THE TAkEOvER RULESSwedish law, the Takeover Rules, the Swedish Securities Council’s rulings regarding interpretation and application of the Takeover Rules, and, where applicable, the Swedish Securities Council’s former rulings regarding interpretation and application of the Swedish Industry and Commerce Stock Exchange Committee’s rules on public offers are applicable to the Offer.

In accordance with the Takeover Act (Sw. lag (2006:451) om offentliga uppköpserbjudanden på aktiemarknaden), ASSA ABLOY has on December 10, 2010, undertaken towards NASDAQ OMX to comply with the Takeover Rules, the Swedish Securities Council’s rulings regarding interpretation and application of the Takeover Rules, and, where applicable, the Swed-ish Securities Council’s former rulings regarding inter-pretation and application of the Swedish Industry and Commerce Stock Exchange Committee’s rules on public offers, and submit to the sanctions that NASDAQ OMX may decide upon in the event of infringement of the Takeover Rules.

ASSA ABLOY informed the SFSA about the Offer and the above mentioned undertaking on December 12, 2010.

1) Board members Fredrik Lundberg, Ulf Lundahl and Katarina Martinson have not participated in the Board’s handling of the Offer, due to ASSA ABLOY’s acquisition of L E Lundbergföretagen AB’s shares in the Company.

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ASSA ABLOY continuously seeks opportunities to, in addition to organic growth, grow through acquisitions, and has a history of successfully integrating and further developing its acquisitions. ASSA ABLOY has, for some time, followed Cardo’s division Entrance Solutions, which is a leading supplier of industrial doors, logistic systems, garage doors and services. The acquisition of Cardo Entrance Solutions constitutes a strategically important step in developing ASSA ABLOY’s opera-tions within the Entrance Systems division. In total, this will strengthen ASSA ABLOY’s product offering and create a strong supplier within Entrance Automation with a wide range of products and services.

ASSA ABLOY believes that the acquisition of Cardo will generate significant synergies. These synergies are to a large extent expected to be generated by combining the companies’ respective offerings. This is mainly related to service offerings but also sales of products. Cost synergies through rationalisations and coordination within, for instance, purchasing and production are also expected to contribute with a lesser part of the synergies. The synergies are expected to significantly contribute to the profitability of the combined Entrance Systems operations and are expected to be fully realised within a period of three years. ASSA ABLOY estimates that the largest part of the synergies and the strategic rationale for the acquisition can be obtained even if ASSA ABLOY’s holding in Cardo would remain at the currently acquired share of the Company, amount-ing to approximately 68.5 percent of the shares and votes in Cardo. Integration costs are expect-ed to be limited to SEK 200–300 million.

ASSA ABLOY believes that Cardo’s other operations within wastewater solutions and process equipment for the pulp and paper industry do not fit ASSA ABLOY’s operations in the long-term, and will, following the acquisition of Cardo, in a disciplined manner analyse various alternatives, including other potential owners for these operations.

ASSA ABLOY anticipates limited effects as a result of completion of the Offer, and ASSA ABLOY’s strategic plans, for the management and employees of Cardo and their terms of employment as well as the Company’s operations at locations where Cardo conducts business.

Further reference is made to the information contained in this offer document, which has been prepared by the Board of Directors of ASSA ABLOY for the purpose of the Offer. The description of Cardo on pages 8–35 in this offer document has been reviewed by the Board of Directors of Cardo, in accordance with what is stated on page 36 below. In accordance with what is stated on page 40 below, the auditor of Cardo has reviewed and made a statement regarding the summary of historical financial information presented on pages 10–11. Except as regards the abovementioned information, the Board of Directors of ASSA ABLOY assures that, to the best of the Board of Directors’ knowledge, the information in this offer document in relation to ASSA ABLOY conforms to actual conditions.

Stockholm, Sweden, on February 8, 2011

ASSA ABLOY ABThe Board of Directors

Background and reasons for the Offer

4

Statement from Cardo’s Board of Directors regarding the Offer

PRESS RELEASE DECEMBER 13 2010

Cardo is world-leading supplier of industrial doors and logistics systems, wastewater treatment systems, process equipment for the pulp and paper industry and garage doors. With sales of SEK 9 billion and approximately 5.400 employees worldwide, Cardo delivers solutions that help to solve some of the greatest challenges of our time in the fields of water, transportation and energy. Corporate headquarters are located in Malmö, Sweden.

Cardo AB (publ). Corporate identity no. 556026-8517 Box 486, SE-201 24 Malmö, Sweden, Tel +46 10 4747 000. Fax +46 40 97 64 40. [email protected] | www.cardo.com

Statement by the Board of Directors of Cardo in relation to the public offer by ASSA ABLOY The Board of Directors of Cardo unanimously recommends the shareholders to accept the public offer by ASSA ABLOY1 Background This statement is made by the Board of Directors (the ”Board”) of Cardo AB (publ) (”Cardo” or the ”Company”) pursuant to section II.19 of the rules concerning public takeover offers on the stock market adopted by NASDAQ OMX Stockholm (the ”Takeover Rules”). ASSA ABLOY AB (”ASSA ABLOY”) has today, on 13 December 2010, announced a public offer to the shareholders of Cardo to transfer all of their shares in Cardo to ASSA ABLOY (the ”Offer”). ASSA ABLOY offers SEK 420 in cash per share in Cardo. The Offer values all outstanding shares in Cardo to approximately SEK 11.3 billion. The Offer is conditional only upon all necessary regulatory, governmental or other similar clearances, approvals and decisions to consummate the Offer, including approvals and clearances from competition authorities, being obtained, in each case on terms which, in ASSA ABLOY’s opinion, are acceptable. According to the indicative timetable set out in the press release through which the Offer was announced (the ”Offer Press Release”) the acceptance period is expected to commence on 4 February and end on 25 February 2011. Settlement is expected to commence on 7 March 2011. According to the Offer Press Release, the majority of the major shareholders in Cardo, among others L E Lundbergföretagen AB (publ) (”L E Lundbergföretagen”), together holding 17,162,400 shares in Cardo, corresponding to approximately 63.6 per cent of the shares in the Company, have entered into agreements with ASSA ABLOY to sell their shares in Cardo to ASSA ABLOY for SEK 420 in cash per share. The sales are, like the Offer, conditional upon necessary approvals being obtained from the relevant competition authorities. Due to ASSA ABLOY’s above mentioned agreement with L E Lundbergföretagen, the Chairman of the Board, Fredrik Lundberg, and board members Ulf Lundahl and Katarina Martinson have not participated in the Board’s handling of or resolutions regarding the Offer, since they cannot be considered independent of L E Lundbergföretagen. For further information about the Offer, reference is made to ASSA ABLOY’s press release which was made public earlier today. As a part of the Board’s evaluation of the Offer, the Board has engaged Mannheimer Swartling as legal advisor. The Board’s recommendation The Board’s statement is based on an assessment of a number of factors that the Board has considered relevant to the evaluation of the Offer. These factors include, but are not limited to, the Company’s present position, the expected future development of the Company and thereto related possibilities and risks.

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Statement from Cardo’s Board of Directors regarding the Offer

PRESS RELEASE DECEMBER 13 2010

Cardo is world-leading supplier of industrial doors and logistics systems, wastewater treatment systems, process equipment for the pulp and paper industry and garage doors. With sales of SEK 9 billion and approximately 5.400 employees worldwide, Cardo delivers solutions that help to solve some of the greatest challenges of our time in the fields of water, transportation and energy. Corporate headquarters are located in Malmö, Sweden.

Cardo AB (publ). Corporate identity no. 556026-8517 Box 486, SE-201 24 Malmö, Sweden, Tel +46 10 4747 000. Fax +46 40 97 64 40. [email protected] | www.cardo.com

The Board has noted that the price per share offered by ASSA ABLOY represents a significant premium of approximately 57 per cent compared to Cardo’s volume weighted average share price on NASDAQ OMX Stockholm during the last three months, up to and including 10 December 2010 (i.e. the last trading day prior to the announcement of the Offer), of approximately SEK 267 per share. Compared to the closing price on NASDAQ OMX Stockholm on 10 December 2010 (i.e. the last trading day prior to the announcement of the Offer) of SEK 283 per share in Cardo, the Offer represents a premium of approximately 48 per cent. The price per share of SEK 420 offered by ASSA ABLOY also represents a significant premium compared to the price of the Cardo share during a longer period of time than three months prior to the announcement of the Offer. Under the Takeover Rules, the Board must also set out its views on the impact the completion of the Offer may have on Cardo, especially employment, and its views on ASSA ABLOY’s strategic plans for Cardo and the impact these could be expected to have on employment and on Cardo’s business locations. In this respect, the Board notes that ASSA ABLOY has stated that it anticipates limited effects as a result of completion of the Offer and ASSA ABLOY’s strategic plans for the employees of Cardo and their terms of employment as well as the Company’s operations at locations where Cardo conducts business. The Board assumes that this statement is correct and has in relevant respects no reason to have a different view. On this basis, the Board of Cardo unanimously recommends the shareholders of Cardo to accept the Offer.3 Malmö den 13 December 2010 Cardo AB (publ) The Board of Directors For further information, please contact: Lennart Nilsson, Vice Chairman Cardo AB (publ), tel +46 705 12 32 95 1 Since the Chairman of the Board, Fredrik Lundberg, and board members Ulf Lundahl and Katarina Martinson cannot be considered

independent of L E Lundbergföretagen, they have not participated in the Board’s handling of or resolutions regarding the Offer. 2 Based on 27,000,000 outstanding shares, which is the total number of outstanding shares in Cardo. 3 Please see note 1. Cardo AB discloses the information provided herein pursuant to the Securities Market Act and the Takeover Rules. The information was submitted for publication on 13 December 2010 at 08:00 AM.

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THE OFFERASSA ABLOY offers SEK 420 in cash per share in Cardo. The offered price is subject to adjustment should Cardo pay any dividend or make any other value transfer prior to the settlement of the Offer and will accordingly be reduced by the amount, per share, of any such dividend or value transfer. No commission will be charged in connection with the Offer.

To the extent that consideration in accordance with the resale provisions is paid to the sellers under the Acquisitions, the consideration for the shares ten-dered in the Offer will be increased accordingly. For further information see section “Offer to the shareholders in Cardo” on page 1.

CONDITIONS TO THE OFFERCompletion of the Offer is conditional upon all neces-sary regulatory, governmental or other similar clear-ances, approvals and decisions to consummate the Offer, including approvals and clearances from com-petition authorities, being obtained, in each case on terms which, in ASSA ABLOY’s opinion, are acceptable.

ASSA ABLOY reserves the right to withdraw the Offer in the event that it is clear that the above condition is not satisfied or cannot be satisfied. Such withdrawal will only be made if the non-satisfaction of such con-dition is of material importance to ASSA ABLOY’s acquisition of the shares in Cardo.

ACCEPTANCEShareholders in Cardo whose shares are directly regis-tered with Euroclear Sweden AB (”Euroclear”) who wish to accept the Offer must, during the period from February 10, 2011, up to and including March 11, 2011, at 17.00 (CET), sign and submit a duly completed acceptance form to:

SEB Emissioner R B6106 40 StockholmSweden

The acceptance form must be submitted or sent, in the enclosed self addressed envelope, in ample time before the last day of the acceptance period so that it may be received by SEB Emissioner (“SEB”) no later than 17.00 (CET) on March 11, 2011. The acceptance form may also be delivered to bank offices or to other securities institutions in Sweden to be forwarded or sent by mail to SEB.

The VP-account and the current number of shares held in Cardo are pre-printed on the acceptance form which has been sent out together with this offer docu-ment to shareholders in Cardo who are directly regis-tered. Shareholders should verify that the pre- printed information on the acceptance form is correct.

Please note that acceptance forms which are incom-plete or incorrectly completed may be disregarded.

Additional acceptance forms are supplied by SEB in accordance with the contact details below.

NOMINEE REgISTERED HOLDINgSShareholders in Cardo whose holdings are registered in the name of a nominee, for instance a bank or other nominee, will not receive this offer document or a pre-printed acceptance form. Such shareholders are instead requested to contact their nominee in order to obtain a copy of the offer document. Applications must be made in accordance with instructions received by the nominee.

PLEDgED HOLDINgSIf shares in Cardo are pledged in the Euroclear-system, both the shareholder and the pledgee must sign the acceptance form and confirm that the pledge will be terminated upon completion of the Offer. The pledge on the relevant shares in Cardo must be deregistered in the Euroclear-system at the time of delivery of the shares to ASSA ABLOY.

CONFIRMATION AND TRANSFER OF SHARES IN CARDO TO BLOCkED SECURITIES ACCOUNTSAfter SEB has received and registered an acceptance form which has been duly completed, the shares in Cardo will be transferred to a new blocked securities account (Sw. apportkonto) which has been opened for each shareholder. In connection hereto, Euroclear will send a notice (“VP-notice”) showing the number of shares in Cardo that have been removed from the original securities account and a VP-notice showing the number of shares in Cardo that have been entered in the newly opened blocked securities account.

SETTLEMENTSettlement will be initiated as soon as ASSA ABLOY announces that the terms and conditions for the Offer have been satisfied or ASSA ABLOY otherwise has decided to complete the Offer. Assuming that such announcement takes place around March 15, 2011, at the latest, settlement is expected to be initi-

Terms, conditions and instructions

7

Terms, conditions and instructions

ated around March 18, 2011. Settlement will be effected by distribution of a transaction note to those shareholders who have accepted the Offer. If the holding is registered in the name of a nominee, settle-ment will be provided for by the nominee.

The settlement amount will be paid to the yield account which is connected to the shareholder’s securities account. Shareholders in Cardo who do not have a yield account connected to their securities account or whose yield account is a bank giro or post-al giro account will receive the settlement amount in accordance with the instructions on the transaction note. In connection with the settlement, the shares in Cardo will be removed from the blocked account which will then be terminated. No notice evidencing the removal from the blocked securities account will be sent.

Please note that, even if the shares in Cardo are pledged, payment will be made to the yield account or in accordance with the instructions in the distributed transaction note.

ExTENSION OF THE OFFER ETC.ASSA ABLOY reserves the right to extend the accept-ance period for the Offer, as well as to postpone the date for the settlement. A notice regarding such extension or postponement will be announced by ASSA ABLOY through a press release in accordance with applicable laws and regulations.

RIgHT TO wITHDRAw ACCEPTANCESubmitted acceptances cannot be withdrawn.

COMPULSORY ACQUISITION AND DE-LISTINgShould ASSA ABLOY become holder of more than 90 percent of the shares in Cardo, ASSA ABLOY intends to call for compulsory acquisition of the remaining shares in Cardo in accordance with the Swedish Companies Act (Sw. aktiebolagslagen (2005:551)). In connection thereto, ASSA ABLOY intends to act to have the Cardo-shares delisted from NASDAQ OMX.

QUESTIONS REgARDINg THE OFFERFor questions regarding the Offer, please contact SEB on tel. +46 (0)8 639 27 50. Information and accept-ance forms are also available on SEB’s website, www.seb.se/prospekt, and on ASSA ABLOY’s website, www.assaabloy.com.

8

The information regarding Cardo on pages 8–35 in the offer document is based on Cardo’s 2009 annual report and the full year report for 2010, and Cardo’s website if not otherwise stated.

OvERvIEwMissionCardo meets the global challenges of the future.

visionCardo is a customer-oriented solution provider that helps to solve the global needs for clean water, efficient transportation and reduced energy consumption .

Business idea By means of quality products, extensive applications know-how and a high level of service, offer value- adding solutions to selected customers worldwide.

Financial targets1)

Cardo has set up the following financial targets for the Group:

Organic growth above 6 percent per year over a ●

business cycle, distributed as; – above 5 percent organic growth per year for

Cardo Entrance Solutions; and – above 8 percent organic growth per year for

Cardo Flow SolutionsOperating margin above 10 percent distributed ●

as; – above 10 percent for Cardo Entrance Solutions; – above 12 percent for Cardo Flow Solutions; and – above 12 percent for Lorentzen & Wettre

Return on capital employed above 20 percent ●

Net debt/equity ratio below 1.0 times ●

Dividend policy of at least 50 percent of net earn- ●

ings for the year after tax

Strategies for growthCardo’s process of developing a uniform corporate culture, improving the efficiency of activities and enhancing profitability is constantly under way. The aim is to move the Cardo group and all its parts from focusing on products and individual business trans-actions to solutions and long-term relations. Cardo’s strategy for growth includes a sales agenda with seven strategic points:

moving from product focus to customer benefit ●

focusing on selected customer segments and ●

applicationsoffering value-adding solutions with quality prod- ●

ucts, a high service content and great applications know-howbuilding up a key account organisation for large ●

returning national and international customersusing the international service organisation in a ●

broader and more efficient wayinvesting more in emerging markets ●

making strategic acquisitions that either strength- ●

en the group’s market presence or add products and solutions to selected customer segments

By means of acquisitions, Cardo has had an extensive brand portfolio. In recent years, a determined effort has been made concerning brand strategy, with the focus on further developing a smaller number of global brands.

OperationsCardo is a leading provider of industrial doors and logistic systems, systems for wastewater treatment and process equipment for the pulp and paper industry. Cardo’s operations are pursued in the two divisions :

Cardo Entrance Solutions ●

Cardo Flow Solutions ●

In addition, the Cardo group includes Lorentzen & Wettre, which focuses on advanced equipment for process optimization and quality control for the pulp and paper industry.

Cardo’s business is international and stretches more than 30 countries all over the world, with a significant aftermarket where the clients’ substantial service needs are in focus. The bulk of sales, approximately 90 percent, occurs outside Sweden.

Cardo Entrance SolutionsThe division Cardo Entrance Solutions was estab-lished during 2010 through coordination of the two previous divisions Door & Logistic Solutions and Residential Garage Doors.

1) The financial targets were announced at Cardo’s capital markets day on November 25, 2010, and are available on the Company’s website (www.cardo.com).

Description of Cardo

9

Description of Cardo

Through the brands Crawford and Megadoor, Cardo Entrance Solutions offers complete door, docking and service solutions for service intensive customers within transportation, logistics and trade.

The division also includes standardised and tailor made garage doors for the consumer market. The assortment includes vertical one-piece doors, sectional overhead doors, sliding doors and motor-ised openers for these. The doors are positioned as exclusive with good design, quality and a high degree of safety. The main brands are Crawford and Normstahl.

Cardo Flow SolutionsThe division Cardo Flow Solutions was established during 2010 through coordination of the Wastwater Technology Solutions division and the pump business within the Pulp & Paper Solutions division.

Cardo Flow Solutions offers complete solutions for wastewater handling and treatment applications. The solutions include, among other things, pumps, mix-ers, aerators, control and monitor systems for treat-ment and wastewater handling applications, as well as dewatering pumps for e.g. the construction sector. Main brands are ABS and Pumpex.

The division also offers process pumps and agitators for the pulp and paper industry, pumps for waste-water treatment for the pulp and paper industry and service. Main brand is Scanpump.

Lorentzen & wettreLorentzen & Wettre consists of the measurement instruments business within the previous Pulp & Paper Solutions division. Lorentzen & Wettre offers measuring instruments for quality control of pulp and paper, as well as process optimisation under the brand Lorentzen & Wettre.

10

The information below regarding Cardo is based on the audited annual reports for 2009 and 2008 with comparative figures for 2007 and from the full year report for 2010. The full year report has not been reviewed or audited by the Company’s auditor.

The group’s financial reports with related notes have been prepared in accordance with the International Financial Reporting Standards (IFRS), which have been approved by the EU Commission. Furthermore, RFR 1.2 Additional Accounting Rules for groups and the Annual Accounts Act have been applied.

Audited annual reports for Cardo are available on the Company’s website (www.cardo.com). The full year report for 2010, which is fully recited on pages 20–35, has not been reviewed or audited by the Company’s auditor.

In 2009, Cardo adjusted the allocation of costs between net sales, cost of goods sold and selling and administrative expenses, in order to enhance clarity and thereby better reflect the business. The adjust-ment does not affect the operating profit.

The income statements and balance sheets for 2009 and 2008 below are based on the annual report for 2009 and are consequently based on the new alloca-tion of costs. The income statement and balance sheet for 2007 below are based on the annual report for 2008 and the income statement is consequently not adjusted according to the new allocation of costs.

INCOME STATEMENT IN BRIEF FOR THE gROUPUnaudited Audited

Amounts in SEk M2010

Jan–Dec2009

Jan–Dec2008

Jan–Dec2007

Jan–DecNet sales 7,973 8,825 9,742 9,116Cost of goods sold –5,220 –6,049 –6,675 –6,313gross earnings 2,753 2,776 3,067 2,803

Selling and administrative expenses –1,920 –2,242 –2,129 –2,168Other operating income and operating expenses – net 10 –5 3 –209¹)

Operating earnings 843 529 941 426

Revaluation financial instruments 10 27 –25 –6Financial items – 22 –60 –91 –65Earnings after financial items 831 496 825 355

Tax – 233 –151 –233 –173Net earnings for the period continuing operations 598 345 592 182Earnings discontinuing operation – – –73 –12Net earnings for the period 598 345 519 170

1) Includes write-down of goodwill related to the previous division Residential Garage Doors.

Summary of financial information

11


CONSOLIDATED BALANCE SHEET IN BRIEFUnaudited Audited


31 Dec2009

31 Dec2008

31 Dec2007

31 DecAssetsIntangible assets 867 1,011 1,103 966Plant, property and equipment 719 829 970 965Financial assets 319 320 320 330Inventories 880 938 1,246 1,273Current receivables 1,927 2,054 2,772 2,631Cash and cash equivalents 549 434 370 272Total assets 5,261 5,586 6,781 6,437

Equity and liabilitiesEquity 2,996 3,014 3,042 2,932Non-current interest bearing liabilities and provisions 111 139 146 139Non-current non-interest bearing provisions 130 91 110 82Current interest bearing liabilities 223 481 1,348 1,287Current non-interest bearing liabilities and provisions 1,801 1,861 2,135 1,997Total equity and liabilities 5, 261 5,586 6,781 6,437Contingent liabilities 57 70 75 51

12


kEY FIgURES, gROUPKey figures for the full years 2009 and 2008 in the table below are based on the full year report for 2010. Key figures for the full year 2007 are, as above, based on the annual report for 2008.

Unaudited Unaudited


Jan–Dec2009

Jan–Dec2008

Jan–Dec2007

Jan–DecNet sales 7,9732) 8,825 9,742 9,116Operating earnings 8432) 529 941 426Earnings after financial items 8312) 496 825 355Operating margin, % 10.62) 6.0 9.7 4.7Profit margin, % 10.42) 5.6 8.5 3.9Interest cover, times 26.82) 8.9 10.0 5.6Investments, gross 1522) 127 167 227Cash flow from operating activities after tax 8722) 1,416 1,095 412Degree of self-financing, % 5742) 1,114 656 181Non-current assets 1,9052) 2,160 2,393 2,262Current assets 3,3562) 3,426 4,388 4,175Total assets 5,2612) 5,586 6,781 6,437Equity 2,9962) 3,014 3,042 2,932Interest bearing provisions and liabilities 3342) 620 1,494 1,426Non-interest bearing provisions and liabilities 1,9312) 1,952 2,245 2,079Average capital employed 3,3072) 4,067 4,359 4,327Net interest bearing debt – 2652) 164 1,098 1,134Turnover of capital employed, times 2.412) 2.17 2.23 2.11Return on capital employed, % 26.12) 13.8 21.0 10.0Return on equity, % 21.12) 11.5 18.4 5.7Equity ratio, % 56.92) 54.0 44.9 45.6Debt/equity ratio, times 0.12) 0.2 0.5 0.5Net debt/equity ratio, times –0.12) 0.1 0.4 0.4Average number of employees 5,3702) 5,599 6,011 6,044

Per share dataEarnings after tax, SEK 1) 22.152) 12.78 18.10 5.67Dividend for the financial year, SEK 10.002) 9.00 9.00 9.00Equity (net worth), SEK 110,962) 111.63 112.67 97.75Cash flow from operating activities after tax, SEK 32.302) 52.44 38.15 13.73Average number of shares, thousands 27,0002) 27,000 28,703 30,000

1) Also includes discontinued operations.2) Proposal by the Board of Directors.

13

Cardo’s share is listed on NASDAQ OMX, Mid Cap, with the symbol CARD.

SHARE CAPITALAs of the date of announcement of this offer docu-ment, the share capital amounts to SEK 300,000,000, divided into 27,000,000 shares with a quota value of SEK 11.11 per share. Each share carries one vote and all shares carry equal rights to the Company’s assets and profit.

SHARE PERFORMANCE AND vOLUME TRADINgThe chart below illustrates the share price perform-ance and the volume trading for the Cardo share dur-ing the last five years up to and including January 11, 2011, as well as the performance of the OMX Stock-holm index during the same period.

LARgER SHAREHOLDERS AS OF DECEMBER 31, 20101)

The number of shareholders as of December 31, 2010, amounted to 11,005. The ten largest share-holders in Cardo control 72.9 percent of the votes. The ten largest shareholders as of December 31, 2010, are set out in the below table.

Largest shareholders No. of shares Capital/votes, %L E Lundbergföretagen AB 11,150,000 41.3%If Skadeförsäkring AB 2,700,893 10.0%Lannebo Funds 1,881,986 7.0%ASSA ABLOY AB 1,323,000 4.9%Nordea Funds 603,267 2.2%Government of Norway 550,525 2.0%Orkla ASA 463,141 1.7%Odin Funds 342,433 1.3%DFA Funds (USA) 340,353 1.3%Fourth Swedish National Pension Fund 320,855 1.2%

SHAREHOLDERS’ AgREEMENTSTo the best of the Board of Directors of Cardo’s know-ledge, no shareholders’ agreements exist among the current shareholders.

1) Source: SIS Ägarservice.

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Monthly turnover Cardo OMX Stockholm

2005 20102009200820072006

Share price development

Share capital, ownership structure etc

14

Share capital, ownership structure etc

DIvIDEND POLICYThe Board of Directors’ intention is to apply a divi-dend policy of at least 50 percent of net earnings for the year after tax, after taking into account the group’s earnings trend, financial position and future development potential.

AUTHORISATION TO RESOLvE ON ISSUES, REPURCHASES OR TRANSFER OF OwN SHARESAt Cardo’s Annual General Meeting of 2010, the Board of Directors was authorised to acquire up to so many shares before next annual general meeting that the Company’s holding at no time exceeds 10 percent of all shares in the Company. Acquisition is to be made on NASDAQ OMX at the market value applying on the occasion of acquisition. The purpose of the repurchase authorisation is to give the Board the possibility to adjust the capital structure of the com-pany during the period until the next Annual General Meeting. A similar authorisation was granted at the 2007, 2008 and 2009 Annual General Meetings. The authorisation from the Annual General Meeting 2010 has not been utilised.

ESSENTIAL AgREEMENTS THAT MAY BE TERMINATED UPON A CHANgE OF CONTROL OF THE COMPANYIn the beginning of 2008, Cardo entered into an agreement with a consortium of five banks to raise a 5-year multicurrency loan, equivalent to EUR 200 mil-lion. Each bank in the consortium is entitled to call its share of the loan for redemption at the next due date if the control of the Company passes to any party oth-er than the present principal shareholders by acquisi-tion, merger or similar.

15

Articles of Association for CARDO AB (556026-8517) adopted at the Annual General Meeting of the Share-holders on 6 April 2009.

§ 1The name of the Company is CARDO AB (publ).

§ 2The objects of the Company shall be to, directly or indirectly, pursue industrial and commercial enter-prise, primarily within the building and mechanical industries, and also to own and manage real estate and personal property and to pursue other enterprise consistent with this.

§ 3The Board of Directors of the Company shall have its registered office in Malmö.

§ 4The minimum share capital of the Company shall be SEK two hundred and fifty million (250,000,000) and the maximum share capital of the Company shall be SEK one billion (1,000,000,000).

§ 5The number of shares shall be no less than twenty-five million (25,000,000) and no more than one hundred million (100,000,000).

§ 6Besides such Directors as according to law can be appointed by other than the General Meeting of the Shareholders, the Board of Directors shall consist of no less than five and no more than ten ordinary mem-bers.

The Directors shall be elected at a General Meeting of the Shareholders for the period until the end of the Annual General Meeting that is held after the year in which the member of the Board of Directors was appointed.

§ 7The General Meeting of the Shareholders shall appoint two auditors, and two deputy auditors or a registered public accounting firm.

§ 8The financial year of the Company shall be 1 January – 31 December.

§ 9An Annual General Meeting of the Shareholders shall be held within six months after the expiration of the financial year. The following matters shall be dealt with by the Annual General Meeting of the Shareholders:

1. The General Meeting is opened by the chairman of the Board of Directors or by a person appoint-ed by the Board of Directors.

2. Election of a chairman of the meeting.3. Preparation and approval of the voting list.4. Approval of the agenda.5. Election of two persons to attest to the correct-

ness of the minutes.6. The issue of whether the Annual General Meeting

of the Shareholders has been duly convened.7. Presentation of the annual report and the audit

report and, insofar as the Company constitutes a parent company, the Group accounts and the audit report for the Group.

8. Resolutions in respect of: a) adoption of the income statement and bal-

ance sheet and, insofar as the Company con-stitutes a parent company, the consolidated income statement and consolidated balance sheet;

b) allocation of the Company’s profit or loss in accordance with the adopted balance sheet;

c) discharge of the Directors and the President from personal liability.

9. Determination of the number of Directors and, where applicable, auditors and deputy auditors.

10. Determination of the fees to the Board of Direc-tors and, where applicable, the remuneration to the auditors.

11. Election of the Board of Directors and, where applicable, the auditors and deputy auditors.

12. Other matters to be dealt with at the Annual General Meeting of the Shareholders pursuant to the Companies Act (2005:551) or the Articles of Association of the Company.

§ 10At a General Meeting of the Shareholders, every per-son entitled to vote may vote for the full number of shares owned and represented by him, without limi-tation in the number of votes.

§ 11General Meetings of the Shareholders shall be held in Malmö.

Cardo’s articles of association

16

Cardo’s articles of association

§ 12Notices convening General Meetings of the Share-holders shall be given by announcement in the news-paper Post- och Inrikes Tidningar (The Swedish Offi-cial Gazette) and on the Company’s web site. It shall be announced in Svenska Dagbladet and Sydsvenska Dagbladet that notice of a general meeting has been made.

§ 13Shareholders wishing to attend General Meetings of the Shareholders must (i) be included in a printout or other form of the entire share register as per the date ten weekdays prior to the General Meeting of the Shareholders; (ii) notify the Company of their inten-tion to attend not later than 16.00 (4.00 pm) on the day specified in the notice. The latter day shall not be a Sunday, other public holiday, Saturday, Midsum-mer’s Eve, Christmas Eve or New Year’s Eve and shall not occur earlier than the fifth weekday prior to the meeting.

Shareholders may bring to General Meetings one or two assistants, but only if the shareholder notifies the number of assistants to the Company in the manner as specified in the previous paragraph.

§ 14Shares in the Company shall be registered in a central securities depository register pursuant to the Finan-cial Instruments Act (1998:1479).

17

BOARD MEMBERS

Fredrik LundbergDjursholm, Sweden, b 1951. Chairman. Elected 1998. Honorary Doctor of Economics. Honorary Doctor of Technology. Graduate engineer and graduate busi-ness administrator.

Working at L E Lundbergföretagen AB since 1977, President and CEO since 1981. Chairman of Holmen AB and Hufvudstaden AB. Deputy Chairman of Svenska Handelsbanken AB. Board member of L E Lund bergföretagen AB, AB Industrivärden and Sandvik AB.

Shareholding: 0Shareholding through L E Lundbergföretagen AB: 11,150,000

Johnny AlvarssonStockholm, Sweden, b 1950. Elected 2009.Graduate engineer.

Worked at Ericsson Telecom 1975–1987. President Zeteco AB 1988–2000 and Elektronikgruppen BK AB 2000–2004. Since 2004, President and CEO Indu-trade AB.Deputy Chairman VBG Group AB.

Shareholding: 1,751

Peter AruHelsingborg, Sweden, b 1957, President and CEO, Head of Cardo Flow Solutions. Elected 2006. Graduate engineer in industrial economics.

1982–1992 various posts including head of subsidiary of Munters. 1992–1997 Vice President Marketing Cardo Door AB. 1998–2004 President Besam AB. 2004–2005 President Cardo Pump AB. 2005– Presi-dent and CEO Cardo AB.Board member of Boxon AB and Flügger A/S.

Shareholding: 0

Tuve JohannessonLondon, England, b 1943. Elected 1995. Graduate business administrator and MBA. Honorary Doctor of Economics.

1983–1988 Executive Vice President Tetra Pak Rausing . Worked at Volvo 1988–2004, 1988 CEO VME later Volvo Construction Equipment. 1995 CEO Volvo Car Corporation. 2000 Deputy Chairman Volvo Car Corporation. Chairman of Arctic Island Ltd and Ecolean Interna-tional A/S. Deputy Chairman of Skandinaviska Enskilda Banken AB and board member of Meda AB. Advisor to EQT and JCB Excavators Ltd.

Shareholding: 0

Ulf LundahlLidingö, Sweden, b 1952. Elected 2008.Bachelor of Laws and graduate business administrator.

Has held posts as Executive Vice President Gota Bank, President Nokia Data and President Östgöta Enskilda Bank. Since 2004 Executive Vice President and deputy for the President in L E Lundbergföretagen AB. Board member of Holmen AB, Husqvarna AB, Indutrade AB, Stockholm City Fire Insurance Office and SHB Regionbank Stockholm.

Shareholding: 1,000

Carina Malmgren HeanderSandviken, Sweden, b 1959. Elected 2004. Graduate business administrator.

1989–1998 Project Manager at Adtranz Signal (currently Bombardier). 1998–2003 Vice President Human Resources of ABB AB, 2003–2007 Vice Presi-dent Human Resources of Sandvik AB. Since 2007, Vice President Human Resources of AB Electrolux. Board member of IFL at Stockholm School of Economics .

Shareholding: 300

katarina MartinsonStockholm, Sweden, b 1981. Elected 2010.Graduate business administrator.

Has held posts as analyst at International Strategy & Investment Group, New York, as well as Strategas Research Partners, New York. Since 2009, working with asset management and is Board Member of L E Lund-bergföretagen AB and of AB Lorentzen & Wettre.

Shareholding: 0

Board of Directors, Management and Auditors of Cardo

18


krister MellvéSliema, Malta, b 1949. Elected 2010.Graduate business administrator.

Has during the last 20 years been working in the German company Robert Bosch, holding positions such as CEO in Sweden, Australia and South Korea.

Shareholding: 8,000

Lennart NilssonLund, Sweden, b 1941. Deputy Chairman. Elected 1994. Honorary Doctor of Economics. Graduate engineer.

Worked at Wilh Sonesson AB 1980–1986, 1980 Divisional Manager, 1982 Executive Vice President and 1984 President. 1986–1994 CEO Investment AB Cardo , 1994–1997 CEO Cardo AB. Since 2004 CEO Crafoord Foundation. Chairman of Tactius AB, Canadian Oil Company Sweden AB and Erik Philip-Sörensens Stiftelse. Board member of AB Industrivärden, Albert Påhlssons Stiftelse, Crafoord Foundation, AB Pethle, Fastighets-aktiebolaget Malmö City and Kalmar Läns Pensions-kapitalförvaltning AB.

Shareholding: 20,000

EMPLOYEE REPRESENTATIvES

Thomas Häggström b 1958. Elected 2001. Welder at Cardo Production Nordmaling AB. Member of the local factory union at Cardo Production, Nord-maling.

Shareholding: 0

Bjarne Johanssonb 1966. Elected 2008. Service engineer at Cardo Entrance Solutions Sweden AB. Chairman of the Crawford Sweden branch of the IF Metall union, Västra Frölunda.

Shareholding: 0

Lennart Utbultb 1952. Elected 1994. Construction engineer at Cardo Door Production AB. Chairman of the local branch of Unionen at Cardo Door Production AB, Torslanda.

Shareholding: 0

EMPLOYEE REPRESENTATIvES – DEPUTY MEMBERS

kurt Hellströmb 1957. Elected 2002. Engineer at Crawford Production AB. Chairman of the local branch of Unionen at Crawford Production, Strömstad.

Shareholding: 0

Nils Åke Petterssonb 1959. Elected 2005. Warehouseman at Cardo Production Vadstena AB. Deputy Chairman of the local branch of the Swedish Metal Workers’ Union at Cardo Production, Vadstena.

Shareholding: 0

Dick Cedervångb 1976. Elected 2009. Customer Support Engineer at AB Lorentzen & Wettre . Chairman of the local branch of Unionen at AB Lorentzen & Wettre, Stockholm.

Shareholding: 100

gROUP MANAgEMENT

Peter Arub 1957, President and CEO. Head of Cardo Flow Solutions .

Shareholding: 0

Ulf Liljedahlb 1965. Head of Finance & Treasury, Group IT, Group Purchasing and Deputy President and CFO.

Shareholding: 0

19


Ove Bergkvist1)

b 1968. Head of Cardo Entrance Solutions.

Shareholding: 0Call options2): 30,000

Anita Hebrandb 1953. Head of Human Resources.

Shareholding: 0

Maria Bergvingb 1969. Head of Communications & Investor Relations .

Shareholding: 0

AUDITORAt the Annual General Meeting of 2008, the regis-tered accounting firm, Ernst & Young AB, Torggatan 4, 203 14 Malmö, was re-elected as the Company’s auditor. Auditor in charge is Kerstin Mouchard, Authorised Public Accountant and member of FAR, who was also the auditor in charge before the Annual General Meeting.

1) Ove Berqkvist has during January, 2011, on his own account, resigned from his employment at Cardo, but will stay within the group during a transition period.

2) The call options were issued by L E Lundbergföretagen and expire 2013.

20

The full year report of Cardo

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“The inflow of orders rose by three percent in 2010. Demand increased in the fourth quarter with North America and Asia enjoying a particularly good trend. During the year, we completed our projects to make our business more efficient, further developed our sales strategy and improved the supply chain. We also launched several new products and solutions. The operating margin improved during the year to 10.6 percent compared with 6.0 percent in 2009.”

On December 13 2010, ASSA ABLOY AB announced a public offer to the sharehold-ers of Cardo to transfer all of their shares in Cardo to ASSA ABLOY for a payment of SEK 420 in cash for each share in Cardo.

21


1) Based on moving 12-month totals. 2) There are no dilution effects.

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Fourth quarter 2010 The inflow of orders amounted to SEK 2,027 million (2,001), up 8 % after adjustment for the effects of exchange rate movements. During the fourth quarter, the inflow of orders rose in all markets except the Middle East. The rise was greatest in North America and Asia. Service sales were on a par with the previous year. Net sales amounted to SEK 2,380 million (2,522), unchanged compared with the previous year adjusted for the effects of exchange rate movements. Operating earnings amounted to SEK 433 million (218). Operating earnings were charged with costs of a non-recurring nature of SEK 10 million (169). These costs are allocated as cost of goods sold of SEK 0 million (76) and selling and administra-tive expenses of SEK 10 million (93). Operating earnings for 2010 include a capital gain on the disposal of a piece of real estate in the Cardo Entrance Solutions division amounting to SEK 14 million. Full year 2010 The inflow of orders amounted to SEK 8,113 million (8,424), up 3 % after adjustment for the effects of exchange rate movements. The inflow of orders rose in all markets except for the Middle East. The rise was greatest in Latin America and Asia.

Net sales amounted to SEK 7,973 million (8,825), down 4 % adjusted for the effects of exchange rate movements.

Operating earnings amounted to SEK 843 million (529). Operating earnings were charged with costs of a non-recurring nature of SEK 62 million (235), principally to adapt production activities in the Cardo Flow Solutions division. These costs are allocated as cost of goods sold of SEK 41 million (97) and selling and administrative expenses of SEK 21 million (138). The savings effect amounted to approximately SEK 10 million in 2010, and it is expected that a full annual savings effect of SEK 25-30 million will be achieved from the second quarter of 2011. The restructuring costs fully impact cash flow, whereof SEK 10 million was charged to 2010. Operating earnings for 2010 also include a capital gain of SEK 14 million on the disposal of a piece of real estate in the Cardo Entrance Solutions division.

22


Share of Group net sales 2010 Liquidity and financing At year-end, the Group’s cash and cash equivalents amounted to SEK 549 million (434). In addition, there are unutilized credit facilities of approximately SEK 2.1 billion (approximately 2.6). The Group’s gross investments amounted to SEK 152 million (127).

Net cash and cash equivalents at year-end amounted to SEK 265 million as against SEK -164 million at the beginning of the year.

Equity amounted to SEK 2,996 million (3,014), which is equivalent to SEK 110.96 (111.63) per share. The decrease is principally accounted for by negative translation differences. At year-end the Group’s equity ratio was 56.9 % (54.0). Parent company The parent company’s earnings after financial items amounted to SEK - 23 million (340), gross investments to SEK 0 million (0) and cash and cash equivalents to SEK 0 million (0). The income statement and balance sheet of the parent company are presented in brief on page 16. Personnel The average number of employees in the Group amounted to 5,370 (5,599).

Cardo Entrance Solutions 56% (58)Cardo Flow Solutions 40% (39)Lorentzen & Wettre 4% (3)

Western Europe 71% (74) wherof Sweden 9% (8)Asia-Pacific 8% (7)North America 8% (7)Eastern Europe 5% (5)Latin America 4% (3)Middle East 3% (3)Other 1% (1)

23


Cardo Entrance Solutions is a division in which great changes are taking place. Its focus is on increasing customer benefit by creating complete solutions that include service for customers in, among other sectors, the logistics industry. The division also manufactures and sells garage doors for the consumer market.

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530

595

� �

1) Adjusted for the effects of exchange rate movements.

Significant events during the year � Two-year service agreement in Germany with expected value of SEK 25 million � Order for hangar doors in Sweden worth SEK 8 million � Order for hangar doors in France worth SEK 19 million � Order for hangar doors in Singapore worth SEK 9.5 million Fourth quarter 2010 The inflow of orders amounted to SEK 1,193 million (1,161), up 9 % on the previous year adjusted for the effects of exchange rate movements. During the fourth quarter, the inflow of orders rose in Asia and Europe. Service activities were on a par with the previous year, while the inflow of orders in the consumer-related business fell during the quarter. Net sales amounted to SEK 1,314 million (1,410), down 1 % adjusted for the effects of exchange rate movements. Operating earnings amounted to SEK 233 million (104). Operating earnings for 2009 were charged with costs of a non-recurring nature of SEK 117 million, allocated as cost of goods sold of SEK 67 million and selling and administrative expenses of SEK 50 million. Operating earnings for 2010 also include a capital gain of SEK 14 million on the disposal of a piece of real estate. Full year 2010 The inflow of orders amounted to SEK 4,537 million (4,807), up 1 % on the previous year adjusted for the effects of exchange rate movements. The trend for the inflow of orders was positive in Asia and Europe. In the Airports & Shipyards segment, the inflow of orders rose, while it fell in the consumer-related business compared with the corresponding period the previous year. Net sales amounted to SEK 4,485 million (5,118), down 6 % adjusted for the effects of exchange rate movements. Operating earnings amounted to SEK 528 million (330). Operating earnings for 2009 were charged with costs of a non-recurring nature of SEK 156 million, allocated as cost of goods sold of SEK 85 million and selling and administrative expenses of SEK 71 million. Operating earnings for 2010 also include a capital gain of SEK 14 million on the disposal of a piece of real estate.

24


Cardo Flow Solutions is suited to meeting several of the major global challenges. The division focuses on clean water and sells to the public sector, global companies operating in the field of wastewater treatment, the pulp and paper industry, other industries and local construction companies.

0

100

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400

500

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800

900

1.000

2008 2009 20102.800

2.900

3.000

3.100

3.200

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3.600

3.700

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100

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400

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2008 2009 20100

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Significant events during the year � Several orders for equipment for wastewater treatment plants in the USA,

including two worth SEK 4 and 10 million respectively � Orders from wastewater treatment plants in Spain worth a total of SEK 10

million � Order for equipment for wastewater treatment plant in Argentina worth

SEK 12 million � Order from wastewater treatment plant in Singapore worth SEK 8.5 million � Decision to establish a new production unit in Kina Fourth quarter 2010 The inflow of orders amounted to SEK 751 million (766), up 5 % on the previous year adjusted for the effects of exchange rate movements. During the fourth quarter, the inflow of orders increased in all markets except for Pacific and eastern Europe. The trend in North America and Asia was particularly positive.

Net sales amounted to SEK 948 million (994), up 1 % adjusted for the effects of exchange rate movements.

Operating earnings amounted to SEK 187 million (99). Operating earnings were charged with costs of a non-recurring nature of SEK 10 million (51). These costs are allocated as cost of goods sold of SEK 0 million (9) and selling and administra-tive expenses of SEK 10 million (42).

Full year 2010 The inflow of orders amounted to SEK 3,266 million (3,321), up 4 % on the previous year adjusted for the effects of exchange rate movements. The inflow of orders increased in all markets except Pacific. The trend in Latin America and Asia was particularly positive.

Net sales amounted to SEK 3,181 million (3,414), down 1 % adjusted for the effects of exchange rate movements.

Operating earnings amounted to SEK 328 million (231). Operating earnings were charged with costs of a non-recurring nature of SEK 62 million (78), principally to adapt production activities. These costs are allocated as cost of goods sold of SEK 41 million (12) and selling and administrative expenses of SEK 21 million (66).

The savings effect during 2010 amounted to approximately SEK 10 million, and it is expected that the full annual savings effect of SEK 25-30 million will be achieved from the second quarter of 2011.

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Cardo is a world-leading supplier of industrial doors and logistics systems, wastewater treatment systems, process equipment for the pulp and paper industry and garage doors. With sales of more than SEK 8 billion and approximately 5,400 employees worldwide, Cardo delivers solutions that help to solve some the toughest challenges of our time in the fields of water, transportation and energy. Corporate headquarters are located in Malmö, Sweden.

Other operation consists of Lorentzen & Wettre, which sells measuring instruments to the pulp and paper industry. During the quarter, the inflow of orders amounted to SEK 83 million (74), up 19 % on the previous year adjusted for the effects of exchange rate movements. The inflow of orders increased in all markets except western Europe, where the inflow of orders was lower. Asia-Pacific was on a par with the previous year. The inflow of orders amounted to SEK 310 million (296), up 10 % on the previous year adjusted for the effects of exchange rate movements.

� �


Offer from ASSA ABLOY On December 13 2010, ASSA ABLOY AB announced a public offer to the shareholders of Cardo to transfer all of their shares in Cardo to ASSA ABLOY for a payment of SEK 420 in cash for each share in Cardo. According to the press release whereby the offer was announced, most of the major shareholders in Cardo, including L E Lundbergföretagen AB (publ), together holding the equivalent of approximately 63.6 percent of the shares in Cardo, have entered into agreements with ASSA ABLOY to sell their shares in Cardo to ASSA ABLOY. The transfers are, as is the consummation of the offer, conditional only on the necessary approvals being obtained from the relevant competition authorities. According to the adjusted timetable announced by ASSA ABLOY on February 2 2011, the acceptance period is expected to commence on February 10 and end on March 11 2011. Settlement is expected to commence on March 18 2011. The nomination committee’s proposal for the board of Cardo With regard to the public offer to the shareholders in Cardo that ASSA ABLOY announced on December 13 2010, the nomination committee has let it be known that its proposal for the board of Cardo will be presented on a later occasion, but no later than in connection with the Annual General Meeting 2011. Proposed dividend The Board proposes declaring a dividend to the shareholders of SEK 10.00 (9.00) per share with the record day being April 7 2011. This dividend requires a total of SEK 270,000,000. Should the Annual General Meeting resolve on dividend in accordance with the Board’s proposal, the price of SEK 420 per share that ASSA ABLOY has offered the shareholders in Cardo, within the framework of the public offer that ASSA ABLOY announced on December 13 2010, will be reduced by an equivalent amount per share.

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Risks and uncertainties As an international group, Cardo is exposed to various risks that can affect its potential for achieving its stated aims. These risks include operational risks, such as the risk of not being able to fully pass on price rises for raw materials and other input goods to the customers, the risk of the competitive situation otherwise affecting price levels and sales volumes and the risk of the state of the economy not being stable in the markets in which the Group operates. They also include financial risks, such as currency risks, interest-rate risks, financing risks and credit risks. The above-mentioned risks and how Cardo acts to manage these risks are described in greater detail in the 2009 annual report on pages 46 - 50 and in the report of the Board of Directors on page 55. No significant risks in addition to those described in the annual report are judged to have arisen. Accounting principles This interim report has been drawn up in accordance with IFRS, applying IAS 34 Interim Financial Reporting. A number of changes to IFRS are effective as of January 1 2010. These include IFRS3R Business Combinations and IAS27R Consolidated and Separate Financial Statements, which relate to accounting for acquisitions and changes in participating interest. These changes have no effect on historical figures, but only on any future acquisitions or ownership changes in subsidiaries and in those cases primarily on the size of goodwill reported. None of the other changes in IFRS or statements from IFRIC have any effect on Cardo’s financial reporting. As has been announced previously, Cardo has coordinated its operations in the divisions Cardo Entrance Solutions and Cardo Flow Solutions. Historical comparative information for full years and quarters in respect of 2008 and 2009 is available on Cardo’s website. The format for the cash flow statement has been changed by moving financial items from “Cash flow from operating activities” to “Cash flow from financing activities” in order to achieve conformity with how the cash flow is followed up internally. Seasonal variations Cardo normally has its lowest net sales and operating earnings in the first quarter, while the fourth quarter sees the highest net sales and operating earnings. The reason for this is the customers’ purchasing pattern, where many deliveries occur during the fall and many projects are completed toward the end of the year. Sales of service and spares are more evenly distributed across the year.

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The Annual General Meeting will be held in Malmö, Sweden, on Monday, April 4 2011 at 5.00 p.m.

The annual report for 2010 will be presented during the week beginning March 14 2011, on Cardo’s website at www.cardo.com. Printed annual reports will be sent to those shareholders and others who have specially indicated that they wish to receive this publication by ordinary mail. Malmö, Sweden, February 4 2011 Cardo AB (publ) Peter Aru President This report has not been subjected to special examination by the Company’s auditors.

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Cardo’s President and CEO Peter Aru will comment on the report on operations at a conference today at 10.00 a.m. at Operaterassen in Stockholm. Notification of intention to attend may be made at www.financialhearings.com or via e-mail to [email protected]. It will also be possible to take part and ask questions via telephone number +46 (0)8 5051 3794. The conference may also be followed via a webcast at www.cardo.com or www.financialhearings.com, where you will also be able to listen and see the presentation slides afterwards. The conference will be held in Swedish.

Financial calendar 2011 April 4, Annual General Meeting in Malmö May 5, Interim Report January – March August 16, Interim Report January – June November 3, Interim Report January - September

For further information, please contact: Peter Aru, President and CEO, tel +46 10 4747 401 Ulf Liljedahl, CFO and Executive Vice President, tel +46 10 4747 402 Maria Bergving, SVP Communications and Investor Relations, tel +46 10 4747 405, [email protected] Thomas Niklasson, Head of Investor & Public Relations, tel +46 10 4747 459, [email protected] The annual report, quarterly reports and other information on Cardo may be requested on Cardo’s website at www.cardo.com. This information may also be requested from Cardo AB, Communications & Investor Relations, Box 486, SE-201 24 Malmö, Sweden, or by telephone on +46 10 4747 000, fax +46 40 97 64 40 or e-mail to [email protected] This information is such that Cardo must publish under the Swedish Securities Market Act and/or Financial Instruments Trading Act. The information was submitted for publication on February 4 2011 at 8.30 a.m.

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1. Income statement in brief 2. Statement of comprehensive income 3. Inflow of orders, net sales, operating earnings and operating margin by division 4. Net sales by geographical area 5. Consolidated balance sheet in brief 6. Equity 7. Consolidated statement of cash flows in brief 8. Change in net cash and cash equivalents 9. Group financial summary – multi-year review – full year 10. Parent company income statement in brief 11. Parent company balance sheet in brief

30


1) Operating earnings have been charged with depreciation and

amortization amounting to 43 62 178 219

2) There are no dilution effects on outstanding shares.

3) Relates to earnings from participations in associated companies.

31


2) Made up of the parent company, other central units and Group adjustments.

1) Measuring instruments business, Lorentzen & Wettre.

32


Historic Normal

33


34


2) Also includes discontinued operation.

3) Board of Director's Proposal.

1) In order to achieve comparability, historical data have been adjusted for discontinued operation unless otherwise stated, new allocation of costs and corrected errors.

35


1) Whereof 38 (0) relates to dividend from subsidiaries for Quarter 4 and 259 (581) relates to dividend from subsidiaries for January-December.

36

The information regarding Cardo on pages 8–35 in this offer document has been reviewed by the Board of Directors of Cardo. It is the Board of Director’s view that this brief description provides an accurate and fair, although not complete, picture of Cardo.

Malmö, Sweden, on February 8, 2011

CARDO AB (publ)The Board of Directors

Statement by the Board of Directors of Cardo

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DESCRIPTION OF ASSA ABLOYASSA ABLOY is a leader in door opening solutions, dedicated to satisfying end-user needs for security, safety and convenience.

ASSA ABLOY is a public company with corporate domicile in Stockholm but is represented all over the world, on both mature and emerging markets, with strong positions in much of Europe and North America and in Asia. In the fast-growing electrome-chanical security segment, the Group has a strong position in areas such as access control, identification technology, door automation and hotel security.

Since its founding in 1994, ASSA ABLOY has grown from a regional company to an international group with approximately 37,000 employees.

In 2010, ASSA ABLOY’s turnover amounted to approx-imately SEK 37 billion and the operating profit amounted to approximately SEK 6 billion. ASSA ABLOY has a market capitalisation of approximately SEK 66 billion and is listed on NASDAQ OMX, Large Cap.

THE FINANCINg OF THE OFFERFinancing of the Offer has been secured and the Offer is not subject to any financing conditions. The bridge financing that was presented in the press release dated December 13, 2010 has been renegotiated into three new credit facilities, two long-term and one short-term. The credit facilities were entered into on December 30, 2010 and are sufficient to fully pay the consideration in the Offer.

The conditions for drawdown under the credit facili-ties, which are at the discretion of ASSA ABLOY, are essentially:

(i) that ASSA ABLOY announces the Offer and com-plies with the laws and regulations applicable to the Offer;

(ii) that certain representations given by ASSA ABLOY in relation to facts are correct in all mate-rial respects. The representations includes war-ranties for ASSA ABLOY’s corporate status, the legality and enforceability of the credit facilities and that there is no basis for termination of credit facilities;

(iii) that ASSA ABLOY has not committed a material breach of its obligations under the credit facili-ties or any other material financing agreement; and

(iv) that ASSA ABLOY provides the bank with certain customary formal documents.

Description of ASSA ABLOY and the financing of the Offer

38

gENERAL INFORMATIONShareholders who accept the Offer and sell their shares in Cardo will generally be subject to capital gains taxation.

The capital gain or capital loss is calculated as the dif-ference between the sales proceeds, after deduction for sales expenses, and the acquisition cost for tax purposes.

The acquisition cost is determined according to the “average method”. This means that the acquisition cost for all shares of the same type and class are add-ed together and determined collectively, with respect to changes to the holding. For listed shares, such as the Cardo shares, the acquisition cost may, as an alter-native, be determined as 20 percent. of the net sale revenue under the “standard rule”.

INDIvIDUALSA capital gain on listed shares is generally taxed as income from capital at a rate of 30 percent.

As a general rule, 70 percent. of a capital loss is deductible against any other taxable income from capital. Capital losses on listed shares and listed secu-rities that are taxed in the same manner as shares (except for listed shares in mutual funds containing only Swedish receivables), are, however, fully deducti-ble against taxable capital gains on such assets or on non-listed shares in Swedish limited liability compa-nies and foreign legal entities.

Moreover, only five sixths of capital losses on non- listed shares in Swedish limited liability companies and foreign legal entities are deductible. If capital losses pertain to both listed and non-listed shares, the losses pertaining to the listed shares are deductible prior to the losses on the non-listed shares. 70 per-cent. of any excess amount is deductible according to the general rule or five sixths of 70 percent. is deduct-ible if the capital loss relates to non-listed shares. Capital losses on listed shares in mutual funds con-taining only Swedish receivables are fully deductible in the income from capital category.1)

If a deficit arises in the income from capital category, a reduction of the tax on income from employment and from business operations, as well as the real estate tax and the municipal real estate fee, is allowed. The tax reduction mounts to 30 percent. of any deficit not exceeding SEK 100,000 and 21 per-cent. of any remaining deficit. Deficits may not be carried forward to a later fiscal year.

LEgAL ENTITIESLimited liability companies and other legal entities are normally taxed on all income, including capital gains, as income from business operations at a flat rate of 26.3 percent. For the calculation of capital gains and losses, see section “General information” above.

The following is a summary of certain Swedish tax consequences that may arise from the Offer. The summary is based on Swedish tax legislation as currently in effect and is intended only as general information for shareholders who are resident in Sweden for tax purposes, unless otherwise indicated. The summary does not deal comprehensively with all tax consequences that may occur in this context. For instance, it does not cover the specific rules that, in certain cases apply to shares acquired by virtue of shares in a closelyheld company (Sw. fåmansföretag). Also, it does not deal with the rules that in certain cases apply in the corporate sector with respect to tax exempt capital gains on “shares held for business purposes” (Sw. näringsbetingade andelar). Nor does this description deal with the rules that apply where shares are held by a partnership or held as current assets in a business operation. Special tax consequences that are not described below may also apply for certain categories of taxpayers, including investment companies and mutual funds. Each shareholder is recommended to consult a tax advisor for information with respect to the special tax consequences that may arise from the Offer, including the applicability and effect of foreign tax legislation, provisions in tax treaties and other rules which may be applicable.

1) It could be questioned whether not the same should apply also in relation to mutual funds containing foreign receivables under the provisions in the Treaty on Functioning of the European Union on free movement of capital.

Tax issues in Sweden

39

Tax issues in Sweden

A tax deductible capital loss on shares incurred by a corporate shareholder may be offset only against tax-able gains on shares or other securities that are taxed in the same manner as shares. Such capital losses may however, under certain circumstances, also be offset against capital gains on such securities within the same group of companies, provided the require-ments for group contributions (tax consolidation) are met. Capital losses on shares or other securities that are taxed in the same manner as shares, which have not been deducted from capital gains within a certain year may be carried forward and be offset against such capital gains in future years without any limita-tion in time.

SHAREHOLDERS RESIDINg OUTSIDE OF SwEDENGenerally, shareholders who are not fiscally resident in Sweden and do not carry on business operations from a permanent establishment in Sweden are not subject to Swedish taxation on a sale of shares. These shareholders may, nevertheless, be subject to tax in their country of residence.

However, as far as individuals are concerned, capital gains on the sale of shares may be subject to Swedish tax if the individual has been resident or permanently lived in Sweden at any time during the calendar year of the sale or at any time during any of the ten preced-ing calendar years. This provision is, however, in many cases, limited by tax treaties for the avoidance of dou-ble taxation which Sweden has concluded with other countries.

There is no Swedish withholding tax on capital gains resulting from the Offer.

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To the Board of Directors of CARDO AB (publ)Corporate registration no 556026-8517

We have reviewed the summary of historical financial information for CARDO AB (publ) on pages 10–11 which comprise of the three year period ended on December 31, 2009.

Responsibility of the Board of Directors and the Managing Director for the financial statementsThe Board of Directors and the Managing Director are responsible for the preparation and the fair presentation of the historical financial statements in accordance with the International Financial Reporting Standards IFRS as adopted by the EU and the requirements of the prospectus Directive implementing Regulation EC 2004/809.

The Auditors’ responsibilityOur responsibility is to express an opinion on the summary of historical financial information on the basis of our audit. We have concluded our audit in accordance with FAR’s recommendation RevR 5 Review of Prospectuses.

OpinionIn our opinion, the information presented in the summary of historical financial information for the three year period ended December 31, 2009, has been accurately presented. The annual reports for 2007, 2008 and 2009 have been audited by us. We have provided audit opinions with-out qualification for all these financial years.

Malmö, Sweden, on February 8, 2011

Ernst & Young AB

Kerstin MouchardAuthorised Public Accountant

Auditors’ report regarding summary of historical financial information

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ASSA ABLOY ABBox 70340107 23 StockholmSwedenVisiting address: Klarabergsviadukten 90

CARDO AB (publ)Box 486201 24 MalmöSwedenVisiting address: Roskildevägen 1

Linklaters Advokatbyrå ABBox 7833103 98 StockholmSwedenVisiting address: Regeringsgatan 67

SEB EnskildaCorporate FinanceKungsträdgårdsgatan 8106 40 StockholmSweden

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ASSA ABLOY ABBox 70340107 23 StockholmVisiting address: Klarabergsviadukten 90

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