ANNUAL REPORT 2002
2002
Contents
2002 fiscal year 1
President’s review 2
Business concept,
targets, and strategies 3
Customers 4
Operations 5
Staff and structural capital 9
The Know IT Share 10
Board of Directors 12
Corporate management 13
Directors’ Report 14
Statement of income 16
Balance sheet 18
Cash flow analysis 21
Supplementary information 22 Notes to the
financial statements 23 Proposal for treatment
of accumulated loss 27
Audit report 27
Financial Review 28
Glossary and definitions Addresses
Cover photos:
Lisa Lind and Johan Langgren Canestrini, Stockholm.
Know IT Contents
Our focus on strategic advisory services, systems development, and administration during the year
has proven to be an excellent move. page 2 In systems development projects we can staff all
roles, from design and architecture to testing and
installation. page 5
Case K-rauta: The solution means that the customers get better service and that store employees have more
time for them. page 6
Case Zurich: One important factor for success is that systems development takes place completely
integrated with daily operations. page 8 Systems sciences and engineering are the most
common academic backgrounds found among the
consultants. page 9
Notice of Annual General Meeting Time
The Annual General Meeting will be held on Tuesday March 18, 2003, at 5 pm.
Registration for the Annual General Meeting starts at 4:30 pm.
Venue
Know IT AB’s office, Kungsgatan 72, Stockholm.
Participation
To be entitled to vote at the Annual General Meeting the shareholder must
• be entered in the register of shareholders
• have notified the company
Registration in the register of shareholders
Shareholders must be registered in the register of shareholders maintained by the Swedish Securities Register Centre, VPC, no later than Tuesday, March 4, 2003. Shareholders whose shares are nominee registered must re-register their shares temporarily in their own names with VPC. Shareholders who wish such re-registration must inform the nominee in good time before March 4, 2003.
Notification
Notification of participation must be made to Know IT no later than Friday
March 7, 2003, at 4 pm at the following address:
Know IT AB (publ) Box 3383, 103 68 Stockholm
or by telephone +46 (0)8-700 66 00, e-mail info@knowit.se, or
fax +46 (0)8-700 66 10.
Notice of participation must include the shareholder’s name, address, personal registration number, and number of shares registered.
Nomination Committee
Shareholders who wish to propose board members in prior to the AGM may contact:
Petter Stillström,
petter.stillström@traction.se
or Anders Nordh, anders.nordh@cma.se
1
know it annual report 2002
Know IT 2002 Fiscal Year
SEK M
Sales
0 100 200 300 400 500 600
2001 calendar year
2002 00/01
99/00 98/99 97/98
Operating results before goodwill amortization
-40 -30 -20 -10 0 10 20 30 40 50 SEK M
2001 calendar year
2002 00/01
99/00 98/99 97/98
Cash flow from current operations
-40 -30 -20 -10 0 10 20 30 40 50 60 70 80 SEK M
2001 calendar year
2002 00/01
99/00 98/99 97/98
markus malm kjell lundberg
lisa lind (cover)
• Sales fell 21 percent to SEK 326.3M (411.4) compared with the corresponding period the previous year.
• Operating result before goodwill amortization amounted to SEK 9.4M (–15.3) and after depreciation to SEK –1.5M (–48.3).
• Current operations generated a positive cash flow of SEK 19.7M (–12.9).
• The number of employee decreased by 9 percent to 283 (311).
• A new consulting company, Candeo Gävle AB, was established in Gävle on November 1.
Comparative figures refer to pro forma figures for the twelve-month period of 2001.
johan langgren canestrini (cover)
2
know it annual report 2002
Our focus on strategic advisory services, systems development, and administration during the year has proven to be an excellent move.
Demand for IT consulting services stabilized and during 2002 we’ve seen an increased interest among our customers for IT solutions and practical support. These are demanding tasks - and Know IT is up to the task. Our consultants have an average of twelve years of experience from the IT industry and almost 90 percent have a uni- versity education or some other type of post-high school education.
In line with our strategy to carry out business close to our cus- tomers, we opened a new office in Gävle during the year. Our con- sultants in the new office have extensive experience in the Oracle environment, which strengthens our total skills profile. The Swedish National Land Survey is one of our Gävle-based customers.
With our expertise and experience, we can be at the forefront of technological advances and create solutions that offer great customer benefit. One example is our mobile solution for K-rauta, one of the biggest building supply centers in the Nordic countries. We developed a solution that actually moves the busi- ness system out to the store employees, who can use handheld computers to access all necessary information and update the business system on the spot, as soon as changes are made.
Our strategy is also to maintain lengthy customer relations by administering and improving solutions for our customers.
For Zurich, one of the biggest insurance companies in the world, we’ve gradually developed the insurance system over the years.
All new features and enhancements are fully integrated with the operation, which means that the customer always enjoys the practical benefits of the new technology immediately. You can read more about these projects later on in this report.
We’ve developed our sales concept to keep in line with our cus- tomers’ demands for new solutions. During the year we beat out hard competition to win several major contracts with clients such as the Swedish Defence Materiel Administration, the Swedish National Financial Management Authority, and the Swedish Agency for Public Management. We also signed several new general agreements that form the foundation of our continued successful sales.
The best part about being the CEO of Know IT is the con- tacts with our customers. We can thank our skillful and experi- enced consultants for our fabulous customer relations and satis- fied customers. Despite the difficult market, they have shown a tremendous commitment to innovation and quality in their assignments. Clearly, Know IT has both creative and knowledge- able employees.
Earnings trend
Even though we saw quarterly improvements during 2002, with the exception of seasonal variations, we did not achieve prof- itability after goodwill amortization. Profitability is our foremost target for 2003.
We tailored our offer during 2002 to meet customer demand. For example, we no longer offer services in product development of real time systems or in testing and supervision of testing. We also cut back total expenses even more during the year. These measures enable us to handle the challenges of the continued weak market.
Operating profit before goodwill amortization amounted to SEK 9.4M: a clear improvement compared with SEK –15.3M for calendar year 2001. Our improved performance despite the cau- tious market is mainly attributable to our greater efficiency in internal procedures as well as in sales activities. Our overhead is lower and our charge ratio higher compared with 2001.
Our financial position is good. At yearend we had an equity ratio of 51.6 percent, which is an improvement compared with the previous year. Liquidity also grew stronger during the year up SEK 7.5M now to SEK 39.8M.
Prospects for the future
Almost all business developments require IT and despite the current situation in the market, we see several business oppor- tunities for 2003. The winners will be those companies that offer clear customer benefit in the form of concepts, solutions, and function based on expertise and experience. Know IT’s business concept is to do just this. Therefore I believe in Know IT and our prospects for 2003.
February 2003
Ingrid Engström
President and CEO
Know IT President’s Review
ingrid engström, president and ceo
fredrik popovic ulrika olsson
know it annual report 2002
Know IT Business concept, targets, and strategies
Business Concept
Know IT contributes to its customers’ success by developing and taking long-term responsibility for value-generating IT solutions.
This means that we strengthen our customers’ competitive- ness by applying our technical cutting edge expertise and knowl- edge of our customers’ operations to develop and manage cus- tomized IT solutions. We work mainly with organizations and companies in Sweden which need IT systems that demand high standards of performance, accessibility, and security, and that can be accessed from many different interfaces.
Financial targets
Profit margin
The long-term profit margin, measured as profit after financial items expressed as a percentage of net sales, should on average amount to at least eight percent.
Equity ratio
The equity ratio should exceed thirty percent.
Strategies
Know IT applies the following strategies to achieve its objectives:
• Focus on companies and organizations with the capacity to invest that have IT solutions in complex environments Know IT works mainly with customers who need IT solutions in complex environments regardless of individual industry. Our consulting services are industry-independent. During our long- term customer relationships we develop a greater understand- ing of our customers’ operations, which further strengthens our delivery capacity.
3
stefan nordqvist
• Accept long-term responsibility for our solutions
We specialize in systems development projects. We can give added value to systems development and strengthen our cus- tomer relationships by offering customers long-term administra- tion of the systems we deliver.
• Provide expertise in new fields of technology at an early stage When a new technology that fits our basic areas of expertise makes the transition from pilot to commercial solution, we endeavor to be among the first to offer efficient solutions based on this new technology. In order to succeed we establish part- nerships that strengthen our delivery capacity, but that do not jeopardize our independence.
• To be an independent supplier
Our independent position is crucial in order to offer the best solu- tion for the customer at all times. This means that we never com- mit to being a partner with only one supplier – we always maintain a balance among different partners.
• Continuous development ensures competent staff
Know IT works continuously to improve the skills and proficiency of its employees. For example, we always have certified consultants in those areas in which we are active, such as .Net and RUP.
We want to work flexibly and encourage both skills enhancement and knowledge transfer through efforts such as knowledge net- works that facilitate and increase the exchange of knowledge among the consultants at Know IT.
• Operation close to the customer
We endeavor to pursue our operations geographically close to
our customers. It should be possible to have a local contact and
we constantly look for opportunities to be able to establish our
business in the customers’ local area.
4
know it annual report 2002
Know IT Customers
During the year our customers continued to be cautious about initiating new projects. The investments that customers made were aimed at cutting costs and improving efficiency. We also noted the following trends among our customers:
• Increased interest in practical support
• Greater need for integration services
• Continued interest in Mobile solutions and Content Management solutions
• Increased interest in general agreements
Increased interest in practical support
Know IT sees a clear trend toward an increasing demand for practical support. The underlying driving force is the customers’
continued focus on their core operation together with the increasing need for advanced IT support. Practical support means that we suppliers coordinate one or more functions for the customer, such as administration of a subsystem or operat- ing a development department.
Greater need for integration services
Cost savings, efficiency targets, and increased competition have increased the customers’ needs to integrate various IT systems with one another into standardized, functioning systems. We see that this trend is accelerated by 24-hour public services, partner companies that link their systems and functions, as well as mergers between companies.
Continued interest in Mobile solutions and Content Management solutions
Technology in the mobile area has matured and customers can expect their investments to give quick efficiency gains. Between 2000 and 2002, several mobile solutions were delivered and put into production. Our customers are becoming more interested as they see that their investments are profitable.
We see a growing need for Content Management solutions, which essentially ensure that the right user gets the right informa- tion, especially in the public sector. During the year we noted great interest in web publishing systems as well as an increased interest in using the Content Management solution to handle all information and the distribution of information within the compa- ny in various channels, from paper and fax to the Internet, digital TV, and discussion forum.
Increased interest in general agreements
One trend among buyers of IT consulting services is that they want to reduce the number of suppliers. This reduction is particu- larly common in the public sector, as framework agreements and preferred supplier contracts gain popularity. General agreements are now an essential component in the structural capital that is built up in IT consulting firms. During the year we signed many such agreements.
Customer structure
Know IT’s customer structure is made up of large and medium- sized companies within several market segments, especially in the public sector, as well as telecoms, banking, finance, and insurance.
Together, these segments account for about 77 percent of our sales.
During the fiscal year our five biggest customers accounted for about 30 percent of sales. No individual customer accounted for more than 11 percent of sales. The five biggest customers were AstraZeneca, the National Rail Administration, the National Social Insurance Board’s Data, Sweden’s Travel and Tourism Council, and Telia. Several important agreements were signed during the year, including with AstraZeneca, the Swedish National Financial Man- agement Authority, the Swedish Defence Materiel Administration, the Swedish Agency for Public Management, Sweden’s Travel and Tourism Council, and Tele 2.
Media 2%
Energy 3%
Commerce 3%
Industry 5%
Pharma- ceuticals 10%
Telecom 30%
Banking, finance and insurance 12%
Public sector 35%
Sales by sector
SEK ≤1 M 14%
SEK >1–2 M 11%
SEK >3–5 M 13%
SEK >2–3 M 4%
SEK >5–10 M 15%
SEK >10 M 43%
Invoicing to customers by size Top five customers
Astra Zeneca
National Rail Administration
National Social Insurance Board Data Sweden’s Travel and Tourism Council Telia
During the fiscal year our five biggest customers accounted for about 30 percent of sales. No indi- vidual customer accounted for more than 11 per- cent of sales.
5
know it annual report 2002
Know IT Operations
Know IT strengthens its customers’ competitiveness by develop- ing and managing customized, business-critical IT solutions.
We endeavor to be on the cutting edge of technological develop- ments. Our understanding of how to apply the latest technology to achieve maximum customer benefit enables us to create long- term customer relationships. Through these close, long-term cus- tomer relationships we learn more about the customer’s opera- tions, which ensures greater added value and long-term profitabil- ity for our customers and for ourselves.
Our leading products are:
• Strategic IT counseling, including a specialty in procure- ment.
• Systems development in several areas of technology, both to strengthen skills and in the form of total solutions.
• Application administration and continued development of delivered systems.
Strategic IT consulting
Using high technological expertise as a foundation, Know IT offers strategic IT consulting to corporate management teams.
Our services include:
• Purchasing IT systems in which we develop and negotiate agreements that allow traceability for the entire path from the bid document to following up on deliveries and projects.
• Formulating and following up IT strategies that support the customer’s business concept.
• Technology-driven business development where we help the customers to combine technology with their knowledge of business more efficiently.
• Quality assurance for the customer’s critical projects.
• Technology evaluation where we analyze and assess the consequences of different technical solutions on behalf of the customer.
Systems Development
Systems development dominates Know IT’s operations.
We have extensive expertise within a number of methods and areas of technology, such as:
• IBM/Lotus
• Java
• Microsoft (DNA and .NET)
• SAS Software
• Database management (Oracle and SQL Server)
• Interface design with a focus on usability
• Infrastructure
• IT architecture/data modeling
• Project management
• Integration with several different EAI tools
In systems development projects we can staff all roles, from design and architecture to testing and installation.
kjell-ivar asplund
tarja hiipakka
christer carlsson anette ejebratt
mikael karsikas
Know IT Case K-rauta
DID YOU KNOW THAT:
A total of 1,715,439 customers shopped at the building supply center K-rauta in Sweden during 2002.
K-rauta is one of the biggest building supply chains in the Nordic countries, with ten stores in Sweden and fifty in Finland.
When Otto Beronius took over as new IT manager for the Swedish operation in August 2000, he soon realized that most employees were dissatisfied with the support they received from existing IT systems.
The problem was that store employees did not have access to the information they needed to do their job efficiently, with a high standard of quality. Often the item couldn’t be found in either the store or the warehouse, the pricing was wrong, the balance in the warehouse was unreliable, or the merchandise was not entered in the cash register system. This created dissat- isfied customers who could not get the information about when merchandise would arrive, correct price information, or even had a hard time paying when the cashier could not find the item in the cash register program.
To solve the problem, K-rauta’s management considered a few different options: replacing the existing business system, improving administrative procedures, or investing in a handheld computer solution. Since the first two options would only par- tially solve the problem, management chose the third option.
The handheld computer solution that Know IT developed gave store employees access to the entire existing business sys-
tem where it was needed most – out in the stores. By using existing working methods as a starting point, Know IT designed a system that worked when it was put into practice. It was the employees’ working method that controlled the development of the solution.
The system enabled store employees to check inventory in the warehouse directly, order new merchandise, update pricing, produce product information, and ensure that merchandise is correctly entered in the cash register system – all from their handheld computers. And it did not take long for the effects to be noticeable. In part, the employees have become more involved in their work. And the customers receive correct infor- mation faster. The solution means that the customers get better service, store employees have more time for them, and more often, the goods they want are even in stock.
K-rauta estimates that efficiency has shot up between 30 and
70 percent, depending on the specific work process. And the
procedures for ordering goods, deliveries, and inventory have all
improved in quality. The mobile solution has inspired more
motivated personnel, who now have a tool that gives them bet-
ter control than ever. The new solution has created a win-win sit-
uation for K-rauta and its customers.
peter björklund
7
know it annual report 2002
Content Management
Content Management solutions are information management systems that are adapted based on the customers’ needs. Know IT tailors customized Content Management solutions and inte- grates them with the customers’ existing IT systems. This enables us to help the customers ensure that the right user receives the right information at the right time. Know IT has great experience in developing and implementing Content Man- agement solutions that can be combined with market-leading standard products.
Mobile solutions
In the mobile area we mainly develop solutions that help to digi- tize our customers’ entire business process, which streamlines operations. Our cutting edge expertise in the field includes mobile solutions for managing orders, inventories, invoicing, work order management, and simplifying sales support.
Integration
Integrating existing applications with one another is becoming increasingly important to our customers. The ability to combine and compare information that is currently in different systems provides new opportunities for streamlining processes and a good foundation for decision-making. Know IT analyzes, designs, and implements integration solutions.
Application administration
We are increasingly entrusted with long-term responsibility for the solutions we develop, which shows that we create solutions that are so efficient in terms of administration that our cus- tomers see that it makes good economic sense to hire us for a longer commitment. The scope of our obligations in this seg- ment is growing.
Services that fall within this area include
• continued development of applications
• database administration
• integration administration
• testing and verification
• implementation of new versions and releases
Focus on areas that meet our customers’ needs
Know IT has built up substantial proficiency in a few fields in which our customers’ demands have grown over the past year.
These fields include Content Management solutions, Mobile solutions and Integration solutions.
Know IT Operations (cont)
katarina eriksson
sebastian vidovic
jerker bergström
Know IT Case Zurich
DID YOU KNOW THAT:
Swedish insurance companies reimburse claims for damages from fires annually for almost SEK 4,000,000,000.
Zurich is one of the biggest insurance companies in the world and offers companies services such as customized insurance solutions. As the name suggests, corporate headquarters is located in Switzerland, and the operation is global.
In the Swedish operation, people began thinking about how to improve efficiency as far back as the early 1990s. They realized that modern IT support would improve the quality of service offered by speeding up claim handling and providing a better basis for decision-making. But instead of buying an existing sys- tem, Zurich chose to develop its own work processes and then build the IT system based on these procedures.
Zurich had a system built in the Microsoft environment tailored to support the company’s working methods, and not the reverse.
Know IT was entrusted with the responsibility of further developing and managing the system, much thanks to the high technical profi- ciency of the company’s consultants. When Zurich created a Nordic organization in the late 1990s, the Swedish office was in charge of operations in its neighboring Nordic countries. Know IT enhanced the system so that it could handle the legal requirements, such as regulations and tax laws, of the different countries.
The development of Zurich’s system is a continuous, gradual process in which business and technology developments go hand in hand. One important factor for success is that systems development takes place completely integrated with daily opera- tions, which makes it possible to take optimal advantage of the new opportunities technology offers.
Today Zurich’s Swedish operation has one of the most effi- cient IT support systems in the entire Zurich Group. The system makes it possible for customer representatives to enter informa- tion directly into the system, which gives them control over the entire insurance process. High quality and profitability are both ensured in offers to clients, at the same time that the scope of the organization is optimized. Another advantage is that admin- istration is less expensive and more efficient, which is one of the insurance company’s most important factors for success.
An excellent endorsement for the system and the philosophy
is that the management at Zurich’s headquarters has now asked
the Swedish company to continue developing the system for a
European launch.
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know it annual report 2002
Know IT Employees and structural capital
Know IT’s consultants have extensive technical knowledge and long experience from the IT industry. Our consultants have an average of twelve years of experience that is relevant to the indus- try. Because of our extended customer assignments, Know IT’s consultants have plenty of time to learn about our customers’
operations in-depth. The high level of education (88 percent have university degrees or some other form of post-high school educa- tion), also guarantees a high problem solving ability. The distri- bution between women and men at the end of the fiscal year was 21 percent women and 79 percent men. Know IT endeavors to achieve a more equal distribution between men and women.
During the year Know IT mainly recruited consultants with college degrees and over five years of experience in the industry.
Staff turnover during 2002 amounted to 16 percent and absence for sickness to 1.9 percent.
Know IT is an employer that encourages its employees to pursue constant improvement in order to deliver high quality
services that offer practical customer benefit. Our employees’
skills are constantly enhanced through training and education, work in various customer projects, and by sharing experiences.
To support our employees in their skills enhancement we have created various knowledge transfer systems through efforts such as skills networks, certification training programs, seminars, and sites where they can share their experiences on our Intranet.
Structural capital, which is what makes our operations effi- cient and provides maximum customer benefit, encompasses a number of different methods. Know IT’s project manager usually works with the PEJL project management model, unless the cus- tomer decides otherwise. The actual project can be carried out with the RUP and DSDM developmental methods. Besides these methods, Know IT has its own development model for smaller projects that has been designed for projects carried out by just a few people.
High school level 12%
Other specialist education 16%
Graduate engineer 14%
Master of business admini- stration 3%
System scientist 26%
Other university education 29%
Education levels, consultants
Men Number of employees
<25 26–30 31–35 36–40 41–45 46–50 51–55 55<
Age structure
0 10 20 30 40 50 60 70 80
Women
A total of 88 percent of Know IT’s consultants have a post-high school education and 72 percent have university education. Systems sciences and engineering are the most common academic backgrounds found among the consultants.
A total of 81 percent of Know IT’s employees are over the age of thirty. A total of 79 percent of the employees are men and 21 percent are women. The average age of our male employees is 38 and the corresponding figure for our female employees is 36.
The average age of all employees is 37.
johan sandsten lars cronfalk peter tjernström
Number of employees
OtherConsultants employees
Stockholm/Gothenburg 95 13
Other Swedish locations 156 15
Group functions 4
Total employees 251 32
Know IT has 283 employees, of which 251 are con- sultants. The other employees work in sales, busi- ness, administration, and group-wide functions.
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know it annual report 2002
Know IT The Share
60 120 180 240
2 4 6 8 10 12 14
02J F M A M J J A S O N D J
Affärsvärlden’s 03 IT and Internet consultants
Traded number of shares Share price
SEK
The
share The Affärsvärlden
General Index Traded number of shares,
000 (incl aftermarket) (c) SIX
Price diagram
Ten largest shareholders
Share of
Holder Number of shares capital nd votes
AB Traction 2,726,031 27.3%
Cyber Venture Capital 975,000 9.8%
CMA Europe AB 800,000 8.0%
Stillström, Bengt with family
1)405,600 4.0%
Alecta 307,800 3.1%
Olsson, Sven-Håkan 247,338 2.5%
Sundberg, Carl-Emil with family 129,138 1.3%
Atterkvist, Stellan incl company 88,900 0.9%
Diderholm, Tor 85,600 0.9%
Ejebratt, Anette 79,558 0.8%
Total 10 shareholders 5,844,965 58.6%
Other 4,128,598 41.4%
Total 9,973,563 100%
1)Bengt Stillström with family is the main owner of AB Traction, with a 78.8 percent share of capital and a 90.8 percent share of voting power.
Share capital
As at December 31, 2002, Know IT’s share capital amounted to SEK 49.9M represented by 9,973,563 shares at a par value of SEK 5 each. All shares carry the same number of votes and rights to dividends.
Market listing
Know IT’s share was listed on SBI (Stockholms Börsinforma- tion), currently NGM (Nordic Growth Market), on November 11, 1997. The share has been listed on the O list of the OM Stock- holm Exchange (Stockholmsbörsen) since March 11, 1999. At the end of the fiscal year the market value was SEK 5.50 (10.20) per share, equivalent to a total market value of SEK 54.9M (101.7). The highest price paid during the fiscal year, SEK 12.60, was registered on January 4, 2002; the lowest price, SEK 4.50, was registered on October 11, 2002. During the fiscal year, 1.2 (2.0) million Know IT shares were traded on Stockholmsbörsen, equivalent to 4,800 (12,000) shares per day. The traded number of shares is equivalent to 12 (27) percent of the total number of shares at yearend. During 68 of the year’s 247 market days, there was no trading in Know IT-shares. As at December 31, 2002, the total number of shareholders was 4,176 (4,436).
Stock Option Program
In the stock option program from autumn 2000, 443,900 war- rants were subscribed. The subscription period ended on Octo- ber 31, 2002. The subscription price per share was set at SEK 90.
Since no shares were subscribed for, the program did not result in any dilution.
Dividend policy
At the end of the fiscal year, the balance sheets of the Group and Parent Company, Know IT AB (publ), did not permit any distri- bution of profit. Know IT intends to resume paying dividends when this is possible based on the balance sheets and the Group’s liquid position.
Distribution of holdings
Number of Number of
shareholders % votes %
1– 1,000 3,612 86.5 978,739 10
1,001– 5,000 416 10 996,010 10
5,001– 10,000 68 1.6 516,176 5.2
10,001– 20,000 38 0.9 571,860 5.7
20,001– 50,000 25 0.6 743,223 7.4
50,001– 100,000 7 0.2 482,206 4.8
100,001– 500,000 7
1)0.2 1,184,318 11.9 500,001– 1,000,000 2 <0.1 1,775,000 17.8 1,000,001– 5,000,000 1 <0.1 2,726,031 27.3
Total 4,176 100 9,973,563 100
1)Including two foreign banks that represent nominee-registered shares.
11
know it annual report 2002
Analysts who monitor Know IT
Enskilda Securities:
Lars Sveder, tel +46 (0)8-52 229 500 Handelsbanken:
Peter Trigarszky, tel +46 (0)8-701 10 00 Redeye:
Stefan Nelson, tel +46 (0)8-545 013 36
Development of share capital
Increase in Total Increase in Total
number of number of Par share capital, share capital,
Year Activity shares shares value, SEK SEK Million SEK Million
1990 Formation of company 500 100 0.1
1991 New share issue 3,500 4,000 100 0.3 0.4
1992 Stock dividend 1,000 5,000 100 0.1 0.5
New share issue 1,760 6,760 100 0.2 0.7
1993 New share issue 2,060 8,820 100 0.2 0.9
1994 New share issue 893 9,713 100 0.1 1.0
Stock dividend 2,427 12,140 100 0.2 1.2
1995 New share issue 1,058 13,198 100 0.1 1.3
Stock dividend 6,599 19,797 100 0.7 2.0
1996 New share issue 949 20,746 100 0.1 2.1
1997 New share issue 1,825 22,571 100 0.2 2.3
Stock dividend 22,571 45,142 100 2.2 4.5
Split 857,698 902,840 5 – 4.5
New share issue 1,297,160 2,200,000 5 6.5 11.0
1998 New share issue 490,674 2,690,674 5 2.5 13.5
Stock dividend 2,550,674 5,241,348 5 12.7 26.2
1999 New share issue 50,322 5,291,670 5 0.3 26.5
New share issue 209,375 5,501,045 5 1.0 27.5
2000 New share issue 215,694 5,716,739 5 1.1 28.6
New share issue 17,105 5,733,844 5 0.1 28.7
New share issue 40,000 5,773,844 5 0.2 28.9
2001 New share issue
1)800,000 6,573,844 5 4.0 32.9
New share issue
2)75,198 6,649,042 5 0.4 33.3
New share issue
3)3,324,521 9,973,563 5 16.6 49.9
2002 9,973,563 5 49.9
1) New share issue refers to share issue directed at CMA Europe AB 2) New share issue refers to supplementary purchase price
3) New share issue refers to a share issue with preferential rights for the shareholders
Foreign owners 7.3%
Swedish institutions 31.4%
Swedish private investors, including closely held companies 61.3%
Ownership distribution
As at December 31, 2002, foreign shareholders own 728,909 shares of Know IT, equivalent to 7.3 per- cent of capital and votes. Swedish institutions own 3,127,717 shares, equivalent to 31.4 percent of capi- tal and votes. Swedish private investors including closely held companies own 6,116,937 shares, equivalent to 61.3 percent of capital and votes.
Data per share
1) pro forma May–Dec97/98 98/99 99/00 00/01 2001 2001 2002
Number of shares on closing date, 000 5,101 5,292 5,734 6,574 9,974 9,974 9,974
Average number of shares, 000 3,400 5,274 5,386 6,006 7,044 7,336 9,974
Earnings per share, SEK 3.12 4.86 –11.71 –14.79 –7.48 –6.40 –0.18
Equity per share, SEK 23.76 30.72 29.25 16.31 8.90 8.90 8.72
Adjusted equity per share, SEK 23.76 30.72 29.25 16.31 8.90 8.90 8.72
Cash flow per share, SEK 9.49 8.45 2.32 2.10 ni –2.34 1.03
Dividend, SEK 0.60 1.00 – – – – –
Price per share, SEK 91.50 116.50 127.50 27.00 10.20 10.20 5.50
P/E-ratio 29.3 24.0 – – – – –
1) Adjusted for stock dividend, new issue, and split.
ni No information.
12
know it annual report 2002
Know IT Board of Directors
Mats Olsson, born 1948.
Board member since 1997 and Chairman since 2001.
Professional board member.
Other directorships: AB Traction (chairman), Syrico AB (chairman), Fjällräven AB, Virtus AB, and IAR AB.
Holding in Know IT: 0.
Thomas Ahrens, born 1949.
Board member since 2002.
Chief Executive Officer, Ahrens Rapid Growth AB.
Holding in Know IT: 0.
Håkan Berntsson, born 1972.
Board member since 2002.
Venture Manager AB Traction.
Other directorships: AcadeMedia AB and Gnosjöplast AB.
Holding in Know IT: 10,000 shares.
Peter Dickson, born 1957.
Board member since 2001.
Elected by employees.
Strategic advisory services consult- ant, Know IT Consulting AB.
Holding in Know IT: 7,000 shares.
Sven-Håkan Olsson, born 1956.
Deputy since 2000.
Director of Technology, Know IT.
Board member 1990-2000.
Holding in Know IT: 247,338 shares.
Peder Ramel, born 1955.
Board member since 2000.
President of B2 Broadband AB.
Holding in Know IT: 5,000 shares.
Auditor
Lars-Ola Andersson, born 1954.
Auditor in the company since 1998.
SET Revisionsbyrå AB.
Deputy Auditor
Set Revisionsbyrå AB since 1998.
Klas Alm, born 1959. Deputy auditor in charge since 1998.
The members of the nomination committee are listed on the inside cover.
mats olsson
sven-håkan olsson håkan berntsson peder ramel
peter dickson thomas ahrens
13
know it annual report 2002
Know IT Corporate Management
Ingrid Engström, born 1958.
President and Chief Executive Officer since 2000.
Employed since 2000.
MS in Psychology.
Holding in Know IT: 6,700 shares through family.
Bengt Norvik, born 1955.
Chief Financial Officer since 2002.
Employed since 2002.
University studies in business with focus on external accounting.
Holding in Know IT: 0.
Anders Nilsson, born 1951.
Executive Vice President and Profit Area Manager since 2000.
Employed since 1998.
MS in Engineering.
Holding in Know IT: 20,202 shares with family.
Mats Ohlsson, born 1959.
Executive Vice President and Profit area manager since 2002.
Employed since 1997.
BS in mathematics/computer science.
Holding in Know IT: 14,348 shares with family.
Patrik Syrén, born 1959.
Vice President of Corporate Communications since 2000.
Employed since 2000.
Degree in Art Administration and
UC in Marketing, Advertising and Public Relations.
Holding in Know IT: 400 shares.
bengt norvik
patrik syrén
ingrid engström
anders nilsson
mats ohlsson
14
know it annual report 2002
Know IT Directors’ Report
Operation and structure
Know IT Aktiebolag (publ), corporate identity number
556391-0354, is the parent company of the Group whose activities consist of consulting operations within the information tech- nology sector.
Fiscal year 2002 is the first to follow the calendar year. The figures presented below in parentheses refer to the eight-month period between May and December 2001.
Operations are divided into two profit regions, one of which in principle covers the geographic regions Stockholm and Göte- borg, and the other covers the rest of Sweden. The first profit area is operated through three subsidiaries, whereas the other profit area encompasses eight operating subsidiaries.
At yearend, the legal structure consisted of the Parent Com- pany Know IT AB (publ) and 15 (15) subsidiaries, of which 12 (11) were operating companies and 3 (4) ran no operations.
The parent company manages group-wide issues such as Group management, Group reporting, financial management, information issues, and group-wide employment issues.
Know IT consolidated its business operations during the year and closed its operations in Stockholm for infrastructure, information security, product development of real time systems, and testing and supervision of testing. By taking these measures we can focus on our core areas. These cutbacks will make fifteen employees redundant while reducing Know IT’s cost volume by approximately SEK 10M on an annual basis.
Net sales
Net sales increased by 27 percent to SEK 326.3M (256.2).
Operating result
Operating profit before goodwill amortization amounted to SEK 9.4M (–15.4). Goodwill amortization according to plan amount- ed to SEK 10.9M (8.0). No additional write-down of goodwill was made during the year (SEK 19.4M).
Operating profit amounted to SEK –1.5M (–42.8), with costs of a total of SEK 4.4M charged against it for discontinuing a non-preferred business operation in Stockholm.
Income after financial items
The financial items amounted to SEK –0.5M (–1.1) net. The net result of Know IT’s short-term market-listed investments affect- ed financial net with SEK –0.2M (–0.3).
The result after financial items amounted to SEK –2.0M (–43.9). If non-recurrent expenses are excluded the result after financial items amounted to SEK 2.4M (–15.9).
Liquid funds and financial position
The stock option program that ran from autumn 2000 to Octo- ber 31, 2002 ended without any shares subscribed for and there- fore shareholder’s equity was not affected.
At yearend shareholder’s equity amounted to SEK 87.0M (88.8), which means an equity ratio of 51.6 (45.8) percent. Liquid funds, including short-term investments of SEK 0.7M (3.5), amounted to SEK 39.8M (32.3).
Investments
Investments in tangible assets amounted to SEK 1.7 (5.0). In addition, during the year the subsidiary Candeo Nordkonsult AB acquired additional holdings of two subsidiaries and 56 percent of shares in a startup company. A non-operating company was divested.
Parent company
The parent company’s net sales amounted to SEK 16.9M. The result after financial items amounted to SEK –27M. At yearend, shareholder’s equity amounted to SEK 51.5M. During the quar- ter, Know IT invested SEK 0.5M in equipment.
Impact on the environment
The nature of Know IT’s operation is such that it has little impact
on the environment. The Group has no production or sales of
physical products but exclusively carries out consulting opera-
tions. This means that Know IT has no processes or package han-
dling that have an impact on the environment. Travel by car and
air also have very limited impact on the environment because the
consultants are active in their local market. Know IT carries out no
operations that require a permit from an environmental aspect.
15
know it annual report 2002
Risk exposure and sensitivity analysis
In general, the company’s business risk involves reduced demand, difficulties retaining or recruiting consultants, and risks associated with current assignments. It is unlikely that demand will decrease substantially compared with last year’s low level, nor should there be any significant incidence of un- desired staff reductions.
Fixed price projects account for less than 10 percent of total sales. The company considers the risk associated with these assignments to be low.
Know IT has very little risk involving currency or interest.
The Group does not invest extensively in production plants, so the risk of disrupted production caused by fire or other damage is little. Know IT has the customary insurance coverage for fire, theft, liability, etc.
A sensitivity analysis shows that a changed charge ratio of 1 percentage point would have an effect on pretax earnings of SEK 3–4M at an annualized rate. A price change of 5 percentage points gives an equivalent effect of SEK 10–12M.
Board of Directors’ working method
The Board of Directors consisted of five ordinary members and one deputy at yearend. During the fiscal year the Board con- vened six meetings at which the minutes were recorded. At its ordinary meetings, the Board discussed the fixed items that were on the agenda in compliance with the rules of procedure for the Board such as the business situation, budget, annual accounts, and interim reports. In addition, group-wide issues were discussed related to strategic orientation, structure, and organizational changes, as well as sales of companies and acquisitions.
The Group’s auditor reports his observations from the exam- ination of the Group’s internal control and financial statements at the first board meeting of the year. The Chairman of the Board negotiates the President’s terms of employment, which are set by the Board.
A nomination committee consisting of Petter Stillström and Anders Nordh prepares for the 2003 Annual General Meeting.
Its task, after consultation with the company’s major shareholders,
is to submit proposals for the election of directors and remunera- tion to the Board of Directors at the Annual General Meeting and, when required, gain support for other proposals to the Annual General Meeting. The nomination committee also accepts pro- posals for the election of directors from other shareholders.
Corporate management’s working method
During the year, as a rule corporate management met once a month to discuss issues of both an operational and strategic nature. In the interim, additional meetings were held when necessary in which other senior executives also participated.
Outlook
Know IT feels that the market will continue to be weak with low demand and price pressures throughout the country during the first six months of 2003.
With those measures Know IT took during 2002 related to focusing on the company’s core business, the company is in better condition for 2003.
Treatment of accumulated loss
Proposal for treatment of accumulated loss is on page 27.
16
know it annual report 2002
Know IT Statement of Income
Group Parent Company
pro forma May–Dec May–Dec
SEK Million Note 2002 2001 2001 2002 2001
Net sales 1, 2 326.3 411.4 256.2 16.9 12.8
Total operating income 326.3 411.4 256.2 16.9 12.8
Operating costs
Purchased goods and services –49.0 –62.9 –40.3 –0.8 –0.9
Other external costs 3 –32.5 –46.8 –33.3 –13.1 –14.9
Staff costs 4, 5 –231.6 –309.7 –194.0 –7.6 –8.9
Depreciation and write-downs of
intangible fixed assets 6 –10.9 –33.0 –27.4 – –
tangible assets 7 –3.8 –7.3 –4.0 –1.1 –1.0
Total operating costs –327.8 –459.7 –299.0 –22.6 –25.7
Operating result –1.5 –48.3 –42.8 –5.7 –12.9
Result of financial investments 8
Result of participations in Group companies 0.3 –0.2 –20.9 –19.3
Result of other securities and receivables –0.2 –2.9 –0.3 – –
Other interest income and similar income statement item 1.3 1.6 1.2 0.8 1.0
Interest expenses and similar income statement item –1.6 –1.8 –1.8 –1.2 –2.4
Result after financial items –2.0 –51.1 –43.9 –27.0 –33.6
Appropriations 5.7 –
Tax on the year’s result 9 0.4 0.2 –1.5 2.5 –
Minority interest in result –0.2 –1.8 –1.5
Net result for the year –1.8 –52.7 –46.9 –18.8 –33.6
Average number of shares 9,974 7,044 7,336
Earnings per share, SEK –0.18 –7.48 –6.40
Purchased goods
and services, 15% Staff related costs, 73%
Cost structure
Depreciation of tangible assets, 1%
Administrative costs, 2%
Cost of premises, 5%
Car and travel costs, 1%
IT-operation costs, 2%
Marketing and selling costs, 1%
The diagram shows operating expenses excluding goodwill write-offs.
SEK M
Sales per employee
0.0 0.2 0.4 0.6 0.8 1.0 1.2
Pro forma
2001 May–Dec
2001
00/01 2002
99/00 98/99
Sales per employee in 98/99 were SEK 1.1M. This figure dropped somewhat dur- ing 99/00 and 00/01, and then returned to SEK 1.1M during the past two years.
17
know it annual report 2002
Know IT Comments on the statement of income
In the following comments, the comparison and figures within parentheses refer to the pro forma statement of income for the period between January and December 2001, unless stated otherwise.
Net sales
Net sales fell by 21 percent to SEK 326.3M (411.4). Net sales for the year include all invoicing attributable to sub-consultants.
The drop is mainly the result of weak demand during the year; in other words, volume is down though price levels only fell marginally.
Of net sales for current operations, most of which involve systems development, the operation in Stockholm and Göte- borg accounted for 46 percent.
By nature, the business is seasonally dependent with lower invoicing during the summer. Net sales for current operations were distributed as follows:
January–March 27%
April–June 27%
July–September 20%
October–December 26%
Operating result
The charge ratio varied during the year and amounted to 75 (70) percent. It developed as follows:
January–March 73%
April–June 78%
July–September 73%
October–December 74%
The charge ratio is calculated as charged time in relation to available time according to normal working hours with a deduc- tion for vacation and holidays.
The charge ratio for October–December, which amounted to 74 percent, is based on significantly fewer working hours than September–October, because of holidays and vacations. The number of hours is obviously also influenced by the number of consultants. A number of consultants, whose capacity was mainly unutilized, left the company during the fall as a result of the weak market. This had a positive impact on the charge ratio.
Operating profit was charged with normal amortization of goodwill in the amount of SEK 10.9M (8.0). During fiscal year
2001 a write-down of goodwill of SEK 19.4M was charged to adjust goodwill values to the earnings potential that acquired operations were considered to have. Monthly amortization at the end of the fiscal year amounted to SEK 0.9M.
Operating profit before goodwill amortization was charged with a total of SEK 4.4M for discontinuation of low priority busi- ness operations in Stockholm.
Financial items
Financial income/expense can be divided as follows:
Jan–Dec 02 May–Dec 01
Results on sale of other subsidiaries – –0.2 Results of market quoted investments – –0.3 Interest portion in leasing charges –1.0 –0.9 Interest expense, convertible loan – –0.7 Net interest expense bank loans/liquid funds 0.5 1.0
Total –0.5 –1.1
Taxes
The Group’s tax expense can be itemized as follows:
Jan–Dec 02 May–Dec 01
Current tax –0.9 –1.2
Deferred tax 1.3 –0.3
Total 0.4 –1.5
18
know it annual report 2002
Know IT Balance sheet
Group Parent Company
SEK Million Note Dec 31, 2002 Dec 31, 2001 Dec 31, 2002 Dec 31, 2001
ASSETS FIXED ASSETS
Intangible fixed assets 6
Goodwill 57.7 68.7
Tangible fixed assets 7
Equipment 14.6 18.7 4.4 5.0
Financial fixed assets
Participations in Group Companies 10 53.2 74.7
Other investments held as fixed assets 0.2
Total fixed assets 72.5 87.4 57.6 79.7
CURRENT ASSETS Current receivables
Accounts receivable 42.8 55.4 0.6 0.1
Receivables from Group companies 18.7 15.6
Other receivables 6.1 4.8 0.8 3.3
Prepaid expenses and accrued income 11 7.5 14.1 1.2 3.0
Short-term investments 0.7 3.5 – –
Cash and bank 39.1 28.8 14.5 12.3
Total current assets 96.2 106.6 35.8 34.3
TOTAL ASSETS 168.7 194.0 93.4 114.0
%
Equity Ratio
0 10 20 30 40 50 60
May–Dec 2001
00/01 2002
99/00 98/99
19
know it annual report 2002
Group Parent Company
SEK Million Note Dec 31, 2002 Dec 31, 2001 Dec 31, 2002 Dec 31, 2001
EQUITY AND LIABILITIES
Shareholders’ equity 12
Restricted equity
Share capital (9,973,563 shares at a par value of SEK 5) 49.9 49.9 49.9 49.9
Share premium reserve 11.3 44.9 13.3 46.9
Other restricted reserves 7.0 13.4 0.7 0.7
Total restricted equity 68.2 108.2 63.9 97.5
Non-restricted equity
Profit/loss brought forward 20.6 27.5 6.4 –
Net result for the year –1.8 –46.9 –18.8 –33.6
Total non-restricted equity 18.8 –19.4 –12.4 –33.6
Total equity 87.0 88.8 51.5 63.9
Untaxed reserves 13 – 5.7
Minority interests 0.8 4.0
Provisions
Provisions for taxes 1.1 2.4 – –
Total provisions 1.1 2.4 – –
Long-term liabilities 14, 15
Other liabilities 4.1 6.5 – –
Total long-term liabilities 4.1 6.5 – –
Current liabilities
Accounts payable – trade 9.2 15.3 0.5 1.6
Liabilities to Group companies 36.3 30.9
Other liabilities 23.1 25.6 3.0 7.1
Accrued expenses and prepaid income 11 43.4 51.4 2.1 4.8
Total current liabilities 75.7 92.3 41.9 44.4
TOTAL EQUITY & LIABILITIES 168.7 194.0 93.4 114.0
Memorandum items 15
Pledged assets 4.2 62.2 None 54.0
Contingent liabilities None None None None
20
know it annual report 2002
Know IT Comments on the balance sheet and the cash flow analysis
Comments on the balance sheet
Figures within parentheses refer to the comparison with the end of the previous fiscal year, which was December 31, 2001.
The consolidated balance sheet amounted to SEK 168.7M (194.0) at the end of the fiscal year, equivalent to a reduction of SEK 25.3M or 13 percent.
Depreciation of goodwill according to plan reduced total assets at yearend by SEK 10.9M.
Tangible fixed assets consist mainly of the company car fleet, which decreased by SEK 3.4M to SEK 7.4 (10.8) as a result of staff cutbacks. Office equipment and computer equipment, SEK 7.2M (7.9), increased by SEK 0.7M.
Current assets decreased by SEK 10.4M, which is the net effect related mainly to a decrease in accounts receivable of SEK 12.6M, a decrease in accruals and deferrals amounting to SEK 6.6M, and liquid assets, which were up SEK 7.5M. Liquid assets amounted to SEK 39.8M (32.3) including short-term investments of SEK 0.7M (3.5).
At yearend no bank overdraft facilities or other banking facili- ties were used. Unused credit facilities amounted to SEK 12.5M (12.5).
A final purchase price of SEK 0.6M (2.6) was set in early 2003.
The amount was already reserved in the 2001 financial state- ments. At yearend, shareholder’s equity amounted to SEK 87.0M (88.8). The change is SEK –1.8M, which is the loss for the year.
During the fiscal year the equity ratio improved from 45.8 to 51.6 percent.
The Group has no distributable funds, nor did it have any in the previous year.
Pledged assets, SEK 4.2M (4.2) refer to shares in sub- sidiaries, which have been pledged as security for bank facilities.
Comments on the cash flow analysis
In the following comments, the comparison and figures within parentheses refer to the pro forma cash flow analysis for the period between January and December 2001.
Cash flow from current operations during the year amounted to SEK 19.7M (–12.9). The adjustments that were made for items that were not included in the cash flow mainly referred to depreci- ation and write-downs of tangible and intangible fixed assets, SEK 14.7M (40.3) as well as change in deferred tax SEK 1.3M (–0.3).
Current liabilities, which are included in the working capital, decreased by SEK 16.6M.
The reduction in loans during the year, SEK –7.0M, refers to a reduction of SEK 3.4M related to the leased car fleet which for accounting purposes is entered as fixed assets and current and long-term liabilities, respectively, in the balance sheet. The reduced car fleet reflects the staff cutbacks during the year.
Minority interests decreased by SEK 3.2M.
21
know it annual report 2002
Know IT Cash flow analysis
Group Parent Company
May–Dec May–Dec
SEK Million Note 2002 2001 2002 2001
Current operations
Result after financial items –2.0 –43.9 –27.0 –33.6
Other adjustments for items not included in cash flow 17.9 28.7 30.9 20.2
Cash flow from current operations
before changes in working capital 15.9 –15.2 3.9 –13.4
Change in working capital
Change in operating receivables 20.4 44.7 0.7 64.3
Change in operating liabilities –16.6 –38.0 –2.5 –46.9
Cash flow from current operations 19.7 –8.5 2.1 4.0
Investment operations
Divestment of group companies 16 –2.7 0.5 0.6 5.7
Acquisition/divestment of tangible fixed assets 0.3 –1.6 –0.5 –4.3
Cash flow from investment operations –2.4 –1.1 0.1 1.4
Financial operations
Change in loans –2.4 –37.9 – –34.2
New share issue – 28.5 – 28.5
Change in provisions –4.6 1.8 – –
Cash flow from financial operations –7.0 –7.6 – –5.7
The year’s cash flow 10.3 –17.2 2.2 –0.3
Liquid funds at start of year 28.8 46.0 12.3 12.6
Liquid funds at yearend 39.1 28.8 14.5 12.3
22
know it annual report 2002
Know IT Supplementary information
CONSOLIDATED ACCOUNTS
The consolidated financial statements encompass Know IT AB and the companies in which Know IT AB direct or indirectly owns more than 50 percent of the shares. Companies that have been acquired during the current year are included in the accounts from the date of acquisition. The consolidated financial statements have been prepared in accordance with the acquisition method and in compliance with the Swedish Financial Accounting Standards Council recommendation no 1.
VALUATION PRINCIPLES
Receivables
Receivables are included in the amount that is expected to be paid after individual consideration.
Provisions and liabilities
Unless otherwise stated below, liabilities have been entered at their acquisition values with customary provisions for accrued costs. Provisions have been made for known or anticipated risks after individual examination.
Fixed assets
Tangible and intangible fixed assets are depreciated over their estimated economic life. The following depreciation periods are applied:
Equipment 5 years
Goodwill 10 years
Most of Know IT’s investments in computer equipment that is used in the consulting operation, are expensed directly at the time of acquisition.
Goodwill referring to acquired subsidiaries is amortized according to plan over the estimated economic life. The company has applied ten years’ depreciation on acquired companies, taking into consideration that the purchase price on the date of acquisition has been determined by the fact that the expected profitability will last over a period of more than ten years.
Leasing
In accordance with the Swedish Financial Accounting Standards Council recommendation number 6, leasing is divided into financial and operational leasing. Financial leasing exists when the financial risks and benefits that are associated with owner- ship have essentially been transferred to the lessee. If this is not the case, operational leasing applies. Know IT AB follows the aforementioned recommendation in its consolidated accounts, which means that both owned assets and assets which are uti- lized through financial leasing are included among equipment in the consolidated balance sheet. The value of the leased property has been entered among other liabilities as if this property had been acquired through loan financing. In the statement of income the leasing cost is distributed between depreciation and interest expenses. As it is not possible to report financial leasing agreements in this way in the accounts of an individual compa- ny for taxation reasons, all leased property is reported in the par- ent company as if it had been a question of operational leasing agreements.
Fixed price/current accounts projects
All invoicing is largely based on current account agreements with the customer. The projects are recognized as revenue when the customer approves the delivery.
Taxes
The Group’s total tax consists of current tax and change in deferred tax. Change in deferred tax consists of estimated tax on the year’s changes in untaxed reserves. In the individual compa- nies, change in deferred tax also consists of the tax effect in paid and received Group contributions.
Group contributions
Group contributions and their tax effect are reported direct via
shareholder’s equity.
23
know it annual report 2002
Know IT Notes to the financial statements
Information about individual items, SEK Million.
The values for 2001 refer to the fiscal year May–Dec 2001.
NOTE 1
Net sales by operation
Group Parent Company
2002 2001 2002 2001
Consulting services 294.3 215.7 – 0.1
Program licenses 2.8 1.9 – –
Other 29.2 38.6 16.9 12.7
Total 326.3 256.2 16.9 12.8
Net sales by geographic market
Group Parent Company
2002 2001 2002 2001
Sweden 323.9 255.4 16.9 12.8
Finland 0.8 – – –
Denmark 0.9 – – –
Belgium 0.6 – – –
Other 0.1 0.8 – –
Total 326.3 256.2 16.9 12.8
NOTE 2
Purchases and sales between group companies Parent company
Of the parent company’s sales, 90 (97) percent are attributable to invoic- ing to subsidiaries and 3 (2) percent of the parent company’s costs are attributable to purchasing from subsidiaries.
NOTE 3
Remuneration for external services
Group Parent Company
2002 2001 2002 2001
SET Revisionsbyrå AB
Audit 0.8 0.7 0.5 0.4
Other assignments 0.2 0.3 0.1 0.3
Other public accounting firms in subsidiaries
Audit 0.2 0.1 – –
Other assignments 0.1 0.2 – –
Total 1.3 1.3 0.6 0.7
Other purchased services
Legal expenses and
legal counseling 0.2 0.9 0.1 0.8
Administration 0.2 0.1 0.1 0.1
Other services 0.5 1.9 0.3 1.4
Total 0.9 2.9 0.5 2.3
NOTE 4
Average number of employees
2002 2001
of whom of whom
Employees men Employees men
Parent company
Sweden 6 2 9 4
Total in parent company 6 2 9 4
Subsidiaries
Sweden 291 241 342 277
Total in the Group 291 241 342 277
Total Group 297 243 351 281
NOTE 5
Salaries, other remuneration, and social security expenses
2002 2001
Salaries Social of which Salaries Social of which and remun- ex- pension and remun- ex- pension eration penses expenses eration penses expenses
Parent company 4.4 3.2 1.3 4.9 3.8 1.6
Subsidiaries
in Sweden 135.1 69.5 19.2 108.2 60.4 17.9
Total in subsidiaries 135.1 69.5 19.2 108.2 60.4 17.9
Total Group 139.5 72.7 20.5 113.1 64.2 19.5
Salaries and other remunerations distributed among the Board of Directors, the President, and other employees
2002 2001
Board Of Other Board Of Other
and which em- and which em-
CEO bonus ployees CEO bonus ployees
