ANNUAL REPORT 2003

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ANNUAL REPORT 2003

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2003

Know IT Contents

By combining state-of-the-art technical expertise and knowledge of client operations we can give

a comprehensive view of IT. page 3

Meaningful and long-standing client relationships yield extensive understanding of client operations, setting

the stage for added value and long-term profitability. page 5 Case SJ: With its MobileREDA solution, Know IT won

the Mobile Solutions Challenge in April 2003.

The global competition attracts hundreds of software

developers and their solutions. page 6

In 2003, Know IT developed a system-development and project-management method that everybody in the

company can use to raise the quality of each assignment. page 9

Notice of Annual General Meeting Time

The Annual General Meeting will be held on Thursday, March 25, 2004, at 3:00 p.m. Registration for the Annual General Meeting starts at 2:30 p.m.

Venue

Know IT AB's office, Kungsgatan 72, Stockholm

Participation

To be entitled to vote at the Annual Gene- ral Meeting, shareholders must

• be entered in the register of shareholders; and

• have notified the company.

Registration in the register of sha- reholders

Shareholders must be registered in the register of shareholders maintained by the Swedish Securities Register Center (VPC), no later than Monday, March 15, 2004. Shareholders whose shares are nominee-registered must re-register their shares temporarily in their own names with VPC. Shareholders who want to re- register must inform the nominee in good time prior to March 15, 2004.

Notification

Notification of participation must be made to Know IT no later than Monday, March 22, 2004, at 4:00 p.m. at the following address:

Know IT AB (publ)

Box 3383, 103 68 Stockholm

or by telephone +46 (0)8-700 66 00 or e-mail info@knowit.se.

Notice of participation must include the shareholder's name, address, social secu- rity number and number of shares registered.

Nomination committee

Shareholders who want to propose board members prior to the Annual General Meeting may contact: Petter Stillström, petter.stillstrom@traction.se

or

Anders Nordh, anders.nordh@cma.se

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•

Net sales fell 10 percent to SEK 295.0M (326.3) compared with the corresponding period the previous year.

•

Operating result before goodwill amortization amounted to SEK 13.2M (9.4).

•

Operating result after taxes amounted to SEK 3.5M (-1.8).

•

Earnings per share amounted to SEK 0.35 (-0.18).

•

Current operations generated a positive cash flow of SEK 3.8M (19.7).

•

The number of employees increased by 7 percent to 302 (283).

•

Know IT signed 10 new general agreements during the year giving it more than 40 general agreements with companies and organizations.

•

The Board of Directors recommends that a dividend of SEK 0.75 be paid per share for a total of approximately SEK 7.5M.

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2004

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know it annual report 2003

Know IT Fiscal Year 2003

SEK Million

Sales

0 100 200 300 400 500 600

2001 pro forma

2002 2003 00/01

99/00 98/99

Operating result before goodwill amortization

-40 -30 -20 -10 0 10 20 30 40 50 SEK Million

2001 pro forma

2002 2003 00/01

99/00 98/99

Cash flow from current operations

-40 -30 -20 -10 0 10 20 30 40 50 60 70 80 SEK Million

2001 pro forma

2002 2003 00/01

99/00 98/99

MobilREDA, the mobile solution that Know IT developed for SJ, was designated best European Enterprise solution 2003 at Microsoft's Mobility Developer Conference in Paris on April 1, 2003.

Anders Nilsson succeeded Ingrid Engström on June 1 as new president and CEO.

A new subsidiary was established in Oslo on August 1. The company provides consulting services and solutions based on SAS Institute software.

On September 1, operations with a focus on SAS Institute software were expanded through a local establishment in Gothenburg.

A new subsidiary was established in Västerås on October 1. The main focus of the unit is on industrial IT with assignments in the power, automation and manufacturing industry.

A new subsidiary emphasizing operations development and built-in systems was established in Gothenburg on January 1, 2004.

A new subsidiary specializing in consulting services associated with IT solutions for Human Resource Management was established in Stockholm and Växjö on March 1.

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2

I assumed the role of president and CEO of Know IT on June 1, 2003. It is stimulating to have the opportunity to lead the company I have worked for since 1998. Moreover, it is extra challeng- ing to lead the company in a time when the market situation in this industry is as uncertain as it is.

Positive result

As we close the books for 2003, I am happy to report that for the first time since 1999 we can report a positive result after taxes.

The operating result before goodwill amortization amounted to SEK 13.2M, and the result after taxes amounted to SEK 3.5M. We are continuing our labors to improve profitability and growth, both organically and through acquisitions. We also increased the number of employees during the second half of 2003.

New units close to our clients

In the autumn we opened offices in Västerås and Oslo. We have also strengthened our presence in Gothenburg by establishing two new units there – one with consulting operations based on SAS Software and the other specializing in operations development and built-in systems. Geographic proximity to our clients is important, and we will thus continue to develop our operations in this manner.

Market situation improving

The signals we are picking up from the market indicate that demand will increase somewhat during 2004. We are well posi- tioned, both in terms of expertise and physical location. Our core areas – strategic consultation, system development and system administration – combined with clear offerings in areas where we have expert knowledge, often lead to long-term assignments. We are seeing clients select a handful of suppliers with which they enter into close cooperation, often through general agreements. We have been very successful in obtaining general agreements with large purchasers of consulting services. Know IT currently has close to 40 general agreements, and approximately 60 percent of the company's sales comes through these agreements. They are thus an important part of our structural capital.

Quality a prerequisite for long-term business

Assignments based on general agreements contribute toward long-term involvement. We also have good experience of long- term commitments where we mix consultation, system development and system administration in a way that increases client effectiveness in using IT systems. We are constantly improving

our working methods and processes. In 2003, we finished work on our own system-development method, K-RUP, which we use in every project unless our clients request otherwise. We even use K-RUP in internal project management. By constantly improving our working methods we increase clarity in our commitments. This goes hand in hand with growing requirements from large purchasers of consulting services who, among other things, review how suppliers carry out their work. This is a positive development that increases the quality of purchasing, imple- mentation and usage of IT solutions. Indeed, this development benefits everybody – the purchasing parties, suppliers, and end- users.

Strength through partnerships

To strengthen our client offering, we will continue to establish partnerships to further our knowledge and gain early access to modern tools. We want our partners to consider us the best possible consultant they could collaborate with. In 2003, we entered into or deepened our collaboration with several different suppliers of tools and companies with complementary specializations.

At the same time, however, we have been careful to maintain our independence. We are not obliged to use various standard products, but are free to follow whatever course will lead to the best solution for our clients.

Employee competence is decisive

In conclusion, I want to say that Know IT owes most of its success to its competent employees. General agreements and inter- esting business plans would mean very little without our dedica- ted and knowledgeable consultants. Given our expertise and an improving market situation, the outlook for continuing to develop our business and that of our clients' in 2004 is good.

February 2004

Anders Nilsson President and CEO

Know IT President's Review

anders nilsson, president and ceo.

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Know IT Business concept, targets, and strategies

3 Strategies

To achieve our targets, Know IT has set forth the following strategies.

•

Focus on companies and organizations with the ability to invest and which rely on IT solutions for critical operations in complex environments

A common denominator for Know IT's clients is that they frequently rely on IT solutions for critical operations in complex environments.

•

Assume long-term responsibility for the solutions we develop We offer strategic consultation, participate in developing, and supply tailored-to-fit IT solutions. Our ambition is to assume an administrative responsibility for our clients' IT solutions. By doing so, we gain longer client assignments and greater knowledge of client operations, which makes our client offering more cost-effective.

•

Offer high-level competence in new areas of technology, for example, through partnerships

Partnerships often give us knowledge of, and access to, new technology. When the new technology has a proven track record as a commercial solution, we will offer it to our clients.

•

Be an independent consulting firm

We remain independent of suppliers and strive to maintain balance between several different partners. This enables us to maintain our independent status to the benefit of our clients who can be offered the solution they need most.

•

Make conscious efforts to continuously foster employee expertise To offer our clients the best possible expertise and to create a working environment where employees can grow, Know IT strives to continuously foster employee competence, in part through certification in important areas of expertise.

•

Keep operations close to our clients

We see major advantages in being able to offer local contacts and resources. That's why we establish offices in close proximity to our clients.

daniel svensson

Business concept

Know IT contributes to its clients' success by developing and taking long-term responsibility for value-added IT solutions.

We develop our clients' businesses and make them more com- petitive by offering strategic expertise and creating IT solutions that have been tailored-to-fit critical operations. By means of administrative assignments and functional commitments, we also assume long-term responsibility for the solutions we helped create. Our clients are mainly organizations and companies that have IT systems with stringent requirements for accessibility from several different interfaces and channels. By combining state-of-the-art technical expertise with knowledge of client operations we can offer a comprehensive view of IT.

Financial targets

Profit margin

The long-term profit margin, measured as operating result before goodwill expressed as a percentage of net sales, should on average amount to at least ten percent during the next three years.

Growth

The average growth in sales should reach at least ten percent a year during the next three years. This growth will primarily be achieved by current operations. Isolated acquisitions might also occur.

Equity ratio

The equity ratio should exceed thirty percent.

monika nygren

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4 Know IT Markets and clients

During the year our clients continued to be cautious about in- vesting in new solutions and projects. Most assignments were extensions of previous projects and aimed at improving efficiency or cutting costs in existing solutions. This pattern is more or less the same throughout all of Sweden. Differences in demand from one location to another depend on local competition and client structure. Demand also varies within different levels of expertise. Know IT has met market demands by increasing the number of its consultants, for example, those with experience of SAS Software and of strategic consultation.

Market trends in 2003

The market was characterized by price pressure, in particular, in the area of system development. However, the price pressure has not been as tangible for specialist services in areas such as strategic consultation.

Continuing demand for functional commitments

We see a continuing demand for functional commitments, in part because clients are focusing on their core operations, and in part because they require effective IT support. In addition to system development, long-term functional commitments allow Know IT to assume responsibility for further developing and managing applications, information quality, and integrations. Within the framework for long-term functional commitments, Know IT also provides ongoing consultation regarding design and architecture as well as long-term planning of future IT solutions.

General agreements and preferred supplier status remain important Many clients chose suppliers via general agreements. General agreements and agreements that spell out preferred supplier status remain an important part of IT consulting companies' structural capital. General agreements help clients guarantee stable quality and price. During the year, Know IT signed ten

general agreements with large organizations. All together, Know IT has nearly forty general agreements and preferred supplier agreements.

Growing interest for content management, integration, mobile solutions and strategic consultation

Requirements for 24-hour public services, company mergers, outsourcing, and maturing technologies have created greater interest during the year for those areas in which Know IT operates. The State's investment in 24-hour public services has heightened the importance of functions in CMS and integration. Outsourcing and company mergers mean that systems must be looked over and frequently integrated more effectively than previously. The technology used in mobile solutions has continued to develop, but although many clients are interested, they are still hesitant to invest. In all these areas, strategic consultation plays an important role – preliminary studies, purchasing and project audits are becoming increasingly important as ways of ensuring the effectiveness of client IT projects.

Client structure

Know IT's client structure is made up of large and middle-sized companies and organizations. Emphasis is put on the public sector, telecommunications and bank, finance and insurance.

Together, these segments accounted for 82 percent of Know IT's sales. During the fiscal year, the five biggest clients accounted for about 44 percent of sales. No single client accounted for more than 25 percent of sales. The top five clients were Astra Zeneca, the National Rail Administration, the Defence Materiel Administration, the National Social Insurance Board, and Telia- Sonera. During the year Know IT signed numerous deals and general agreements with, among others, TeliaSonera, the National Land Survey Administration, the Swedish Agency for Public Management, and the Swedish National Financial Management Authority.

Media 1%

Energy 2%

Trade 2%

Industry 5%

Pharma- ceutical 8%

Telecommunications 32%

Bank, finance and insurance 11%

Public sector 39%

Sales per industry

<SEK 1M 18%

≥ SEK 1–2M 9%

≥ SEK 3–5M 14%

≥ SEK 2–3M 9%

≥ SEK 5–10M 8%

>SEK 10M 42%

Invoicing to clients

by size

Top five clients

AstraZeneca Banverket

Försvarets Materielverk Riksförsäkringsverket TeliaSonera

During the fiscal year our five biggest clients accounted for about 44 percent of sales. No single client accounted for more than 25 percent of sales.

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5 Know IT Operations

Know IT expanded in 2003. We recruited new employees, expanded our service offering and increased our geographic presence.

Know IT opened offices in Västerås and Oslo and supplemented our offering in Gothenburg. The Västerås office builds a unit with the operations in Örebro, thereby covering the entire Mälardalen region. The complete focus of the operations in Oslo and the supplementary operations in Gothenburg is on the SAS Software technology platform.

New competence was added to the company through the establishment of Technowledge, established on January 1, 2004 in Gothenburg. In the area of built-in systems, the unit offers to help manufacturing companies to develop their management, quality and methods sides of operations.

Know IT maintains local presence with units or companies in thirteen locations in Sweden and Oslo, Norway.

During the year, we continued to deliver services for tailored-to-fit, client-adapted IT solutions where we contribute toward maximum client benefit through:

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Strategic consultation – our specialty in this area is purchasing.

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Systems development in several areas of technology, both in the role of reinforcing competence and in the form of overall management.

•

Administration and further development of supplied systems.

Our understanding of how new technology can be applied to yield maximum client benefits makes for long-lasting client relationships. Know IT's venture into the area of strategic consultation and application administration facilitates and promotes longer-lasting client assignments, because the assignments can begin before actual system development and end long after the system is complete. Deep, long-term client relationships give insight into client operations, setting the stage for added value and long-term profitability, for our clients and for Know IT.

Strategic consultation

Building on high technical and operational competence, we can offer strategic consultation with a starting point in the interface between IT and the client's core operations. Strategic consultation is often about taking an IT-related view of operations and an operational view of IT solutions. One effect of our venture into this area is that we can come into client IT projects at an earlier stage, thereby increasing the precision of the IT solutions.

In the area of strategic consultation, Know IT offers the following services (among others):

•

Purchasing of IT systems, where we draft and negotiate agreements that accommodate complete traceability, from the request for tenders to follow-up of deliveries and projects.

•

Development and follow-up of IT strategies that support the client's business objectives.

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Technology-driven business development – we help clients to more effectively combine technology and business know-how.

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Quality assurance of clients' critical IT projects.

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Technical assessment – we analyze and determine the consequences to the client of alternative technical solutions.

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Process development – we help clients to analyze the work- flow to create the most effective IT solution imaginable.

Systems development

BSystems development is the heart of Know IT's operations. We have expert competence in several methods and areas of technology and can fill any role from design and architecture to test and installation. During 2003 we witnessed increased interest for systems-development projects based on standard products.

Therefore, it has become even more important for us, as inde-

monica rahmström patrik bergström

tor kamsvåg

vincent wong

hanna thorner

Cont.

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Know IT Case SJ

DID YOU KNOW THAT:

SJ has more than 80,000 train passengers a day?

With more than 80,000 passengers a day, SJ (Swedish National Railroad Administration) must ensure that its trains run on time and its customers receive the information they expect. Today, SJ must face competition from other companies. Therefore, a central factor affecting its survival as a railway operator is its ability to provide service that runs on schedule and fulfills the level of quality customers expect.

To meet these expectations, the company must deal with faults and shortcomings as they occur. Therefore, SJ must have access to the right information. SJ did not previously have ade- quate information regarding vehicle quality, traffic disturbances, ticketing problems and supply levels of goods for onboard sales – important areas for achieving the desired level of quality.

But now, thanks to MobilREDA, a solution that Know IT developed for SJ, employees can use handheld computers to report faults and shortcomings on the train directly to the data collection systems used for planning maintenance and correcti- ve measures.

When employees arrive at work, they connect their handheld computers to the MobilREDA server. They also state which train they will be serving on, after which the handheld computer downloads up-to-date information on the train and travel plan.

Employees who detect faults while at work record them in their handheld computers. Information that should be sent right away is transmitted via SMS to the right reporting system. This is

managed automatically, so employees need not enter the recipi- ent. Other information is reported to the appropriate reporting system when the handheld computer is again connected to the server at the end of the shift.

In the past, all reports were filed using hand-written messa- ges. Personnel are very pleased with the new method. There are fewer sources of faults, and employees report that the handheld computers are easy to use. Thanks to the new system, the number of trouble-free reports has doubled. The maintenance teams are also very positive, because the reports from MobilREDA provide greater quality of information on the causes of damage, priorities and codes. For SJ the solution gives more accurate information on which to base decisions. This in turn means that the right measures can be taken more quickly. Thanks to more effective maintenance, SJ can make more effective use of capaci- ty and offer its customers better products and services.

In April 2003, the MobilREDA solution from Know IT was designated winner of the Mobile Solutions Challenge, a global competition that attracted hundreds of software developers and their solutions. The contributions were evaluated by Microsoft and external judges. The awards ceremony was held at the Microsoft Mobility Developer Conference in Paris, which was attended by more than 1,000 developers, technology decision- makers, and Microsoft's industry partners from more than 30 countries.

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Functional and technical administration

Know IT's understanding of systems administration and of client operations has helped it receive several functional commitments during the year, as administrator of business-critical systems and data warehouses for business information. Clients who engage Know IT to manage their functional and technical administration are free to focus on their core operations.

Mobile solutions

Know IT has actively developed mobile solutions since the mid- 1990s, garnering extensive experience in this area. The main market forces are a need for making the internal processes of companies and organizations more effective, for example, by improving the work flow. Although affected by a few teething problems, mobile technology is now quite reliable and stabile, and 2003 was a year of recognition for mobile solutions.

Content Management

Today, most organizations manage all information digitally and require access to it via web-based tools. In particular, this is seen in the requirements put on 24-hour public services, where municipalities and government agencies are using IT to increase availability. One other trend is for companies to demand the ability to access their operations systems from their intranets.

Here, too, considerable knowledge of content management systems and integration expertise are necessary.

Integration

Integration is currently an important area for creating greater effectiveness and making better use of resources invested in IT systems. The advent of standard products – which differ con- siderably in terms of functionality – has, thanks to our knowledge of standard tools, given a boost to Know IT's strategic consultation services.

Know IT Operations ^(cont.)

thomas sandén

maria ahlfors bg perlström

hans reinikainen

helene bivrin

pendent suppliers, to establish partnerships that strengthen our ability to deliver but which do not adventure our independence.

In the area of systems development we offer competence in the following areas of technology and methods:

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Systems development based on products and tools, such as Notes/Domino, Java, Microsoft (DNA and .NET), SAS Soft- ware and Oracle, WebLogic Server, and Tuxedo

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Database managers, such as Oracle, SQL Server, and Ingres

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Interface design with emphasis on usability

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Infrastructure

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IT architecture and data modeling

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Test management

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Project management

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Integration with different types of tools that support EAI Administration

A good IT solution has built-in flexibility that enables it to be developed continually in accordance with the client's core operations. Know IT considers system administration and further functional and technical development of delivered or existing systems to be an increasingly important part of its business operations. Further development occurs on an ongoing basis, one step at a time, as client operations evolve. This way, the new opportunities that technology has to offer can be transformed into optimum client benefit. Moreover, by assuming the administrative responsibility for the solutions we deliver, we can guarantee our clients a greater degree of operational effectiveness.

Ventures into areas that meet client requirements

During the year Know IT has continued to venture into areas with stable and high demand. In particular, we want to point out functional and technical administration, mobile solutions, content management solutions and integration.

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Know IT Case VINNOVA

VINNOVA, the Swedish Agency for Innovation Systems, is a State- run agency whose task is to promote sustainable growth by developing effective innovation systems in the areas of technology, trans- portation, communications and working life. It does so by starting different kinds of research programs and by funding problem- oriented research in these programs.

VINNOVA's primary assignment is to receive, review, manage, and follow up research projects. VINNOVA has a budget of approximately SEK 1 billion, and receives nearly 3,000 grant applications each year.

As with other government agencies, VINNOVA must develop its operations within the framework of a 24-hour public service.

Among other things, the agency must offer personalized web services to manage requests and provide information without requiring visitors to submit supplementary information from other agencies.

To fulfill the requirements put on a 24-hour public service, VINNOVA assigned Know IT to design a portal for prospective investors. This is the VINNOVA website used by people who want to apply for grants or who have a research project financed by VINNOVA. The portal is designed to accept and redirect electronic grant applications, reports and other documentation to the appropriate official or applicant. The documentation is automatically logged and time- stamped. The document- management system is completely electronic and has been integrated into other internal and external IT systems.

The portal, which is continuously being evolved, is one of VINNOVA's most central and critical IT solutions.

ogether with VINNOVA, Know IT has also developed a system architecture for standardized information exchange. As part of this labor, Know IT also established guidelines for carrying out future system development and system integration.

In addition to achieving VINNOVA's goal of being available to visitors at all times, the new solution has, in accordance with the objectives of a 24-hour public service, created more effective document and request management. By replacing manual administration with electronic administration, VINNOVA estimates that it gains 4,500 working hours a year. This time can be invested in other, more meaningful tasks as monotonous repetitive assignments are reduced. This alone creates a better working environment and makes VINNOVA an even more attractive workplace.

DID YOU KNOW THAT:

VINNOVA's new integrated solutions have made it possible to shorten lead-times by 99 percent?

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Number of employees

Other Consultants employees

Operational units 264 33

Parent company 5

Total employees 264 38

Know IT has 302 employees, of which 264 are consultants. The other employees work in sales, finance, administration and group-wide functions.

9 Know IT Employees, processes and structural capital

For Know IT to continue to be an attractive partner, even in the future, our consultants must continue to grow and develop.

Likewise, we must continually review our processes to guarantee delivery assurance. Through certification and other forms of training, as well as participation in seminars and professional networks, each employee has the opportunity to grow. Our consultants also learn from the assignments we are engaged in, which is another important aspect affecting our ability to continuously delivery practical, high-quality customer benefits and services. Indeed, each assignment allows us to develop our combined expertise and experience.

Know IT's consultants are highly competent and have vast experience of the IT industry and our clients' areas of operations.

On average, our consultants have 13 years' worth of industry experience. Through our assignments, which are often quite long, we gain invaluable knowledge of our clients' operations.

More than 89 percent of Know IT's consultants have completed university programs or other post-upper secondary training.

As with many other IT companies, Know IT has an uneven balance between men and women. At year-end 2003, 79 percent

of our employees were men and 21 percent were women. Know IT is actively striving to maintain a more even balance between the sexes. When recruiting, however, expertise always receives top consideration. During the year, Know IT began recruiting again. The greatest emphasis has been put on finding consultants with a university degree and more than five years' experience in the industry.

Know IT's structural capital makes the operations effective and creates added value for its clients. We work systematically with quality. In 2003, we developed system-development and project-management methods for use in every project provided the client does not request otherwise. Know IT's method, K-RUP, is based on a combination of the Rational Unified Process (RUP) and Pejl. Having a method that can be used by every consultant in the company means that we can raise the quality of every assignment, both in terms of delivery assurance and cost-effectiveness. Apart from this, Know IT applies a relational quality assessment of each finished consultation assignment. At the end of each project, the consultant's contributions are evaluated together with the client, the consultant and Know IT's account manager.

High school level 11%

Other specialist education 15%

Graduate engineer 16%

Master of business administration 3%

Systems scientist 25%

Other university education 30%

Education levels, consultants

Male Number of employees

<26 26–30 31–35 36–40 41–45 46–50 51–55 >55

Age structure

0 10 20 30 40 50 60 70 80

Female

Eighty-nine percent of Know IT's consultants have post-upper secondary education. Seventy-four percent have university education. The most common university programs attended by Know IT consultants are systems science and civil engineering.

More than 86 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; the corresponding figure for female employees is 37. The average age of all employees is 38.

robert wejdestål

nina björklund jonas sedin

ulrika olsson

peter tjernström erik johansson

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10 Know IT The Share

150 300 450 600 750

4 6 8 10 12 14 16 18 20

J

03 F M A M J J A S O N D J

04 Number of shares Share price,

SEK

Affärsvärlden's IT &

Internet consultants The

share Affärsvärlden's

general index Traded number of shares,

000 (incl. aftermarket) (c) SIX

Ten largest shareholders

Number Share of capital

Holder of shares and votes

AB Traction 2 796 966 28.0%

Cyber Venture Capital 975 000 9.8%

CMA Europe AB 800 000 8.0%

Stillström, Bengt with family1) 393 600 4.0%

Alecta 307 800 3.1%

Olsson, Sven-Håkan 247 338 2.5%

LF small companies fund 129 000 1.3%

Diderholm, Tor 85 600 0.9%

Atterkvist, Stellan incl. company 84 900 0.8%

Nilsson, Anders with family, incl. company 70 152 0.7%

Total 10 shareholders 5 890 356 59.1%

Other 4 083 207 40.9%

Total 9 973 563 100%

1)Bengt Stillström with family is the majority owner of AB Traction, with a 78.8 percent share of capital and a 90.9 percent share of voting power

A

hare capital

As of December 31, 2003, 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 Börsinformation), currently NGM (Nordic Growth Market) on November 11, 1997.

The share has been listed on the O-list of the OM Stockholm Exchange (Stockholmsbörsen) since March 11, 1999. At the end of the fiscal year the market value was SEK 13.40 (5.50) per share, equivalent to a total market value of SEK 133.6M (54.9).

The highest price paid during the fiscal year, SEK 16.50, was registered on December 3, 2003; the lowest price, SEK 4.81, was registered on January 9, 2003. During the fiscal year, 2.5 (1.2) million shares were traded on Stockholmsbörsen, equivalent to 9,900 (4,800) shares per day. The traded number of shares is equivalent to 25 (12) percent of the total number of shares at year-end. During 40 of the year's 250 market days, there was no trading in Know IT shares. As of December 31, 2003, the total number of shareholders was 4,093 (4,176).

Dividend policy

Know IT's dividend policy is to distribute the capital that is not needed for planned expansion of the operations.

Distribution of holdings

Number of Number of

shareholders % votes %

1- 1 000 3 523 86,1 988 944 9.9

1 001- 5 000 432 10,6 1 067 865 10.7

5 001- 10 000 65 1,6 498 826 5.0

10 001- 20 000 33 0,8 496 328 5.0

20 001- 50 000 24 0,6 702 490 7.1

50 001- 100 000 7 0,2 510 456 5.,1

100 001- 500 000 6 ¹⁾ 0,1 1 136 688 11.4 500 001- 1 000 000 2 <0,1 1 775 000 17.8 1 000 001- 5 000 000 1 <0,1 2 796 966 28.0

Total 4 093 100 9 973 563 100

1) Including two foreign banks that represent nominee-registered shares.

Price diagram

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11 Analysts who monitor Know IT

Enskilda Securities:

Lars Sveder, tel 08-52 229 500 Handelsbanken:

Peter Trigarszky, tel 08-701 33 65 Redeye:

Stefan Nelson, tel 08-545 013 36

ADevelopment of share capital

Increase in Total share Increase in Total number Par value, share capital capital, Year Activity number of shares of shares 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 issue¹⁾ 800 000 6 573 844 5 4.0 32.9

New share issue²⁾ 75 198 6 649 042 5 0.4 33.3

New share issue³⁾ 3 324 521 9 973 563 5 16.6 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 6.7%

Swedish institutions and companies 32.8%

Swedish private investors, including closely held companies 60.5%

Ownership distribution

As of December 31, 2003, foreign shareholders owned 673,073 shares in Know IT, equivalent to 6.7 percent of capital and votes. Swedish institutions and companies owned 3,269,086 shares, equivalent to 32.8 percent of capital and votes. Swedish private investors, including closely held companies, owned 6,031,404 shares, equivalent to 60.5 percent of capital and votes.

Data per share

¹⁾

98/99 99/00 00/01 2001 2001 2002 2003

proforma 8 mån

Number of shares on closing date, 5 292 5 734 6 574 9 974 9 974 9 974 9 974

Average number of shares, 000 5 274 5 386 6 006 7 044 7 336 9 974 9 974

Earnings per share, SEK 4.86 -11.71 -14.79 -7.48 -6.40 -0.18 0.35

Equity per share, SEK 30.72 29.25 16.31 8.90 8.90 8.72 9.07

Adjusted equity per share, SEK 30.72 29.25 16.31 8.90 8.90 8.72 9.07

Cash flow per share, SEK 8.45 2.32 2.10 iu -2.34 1.03 0.11

Dividend, SEK 1.00 - - - 0.75

Price per share, SEK 116.50 127.50 27.00 10.20 10.20 5.50 13.40

P/E ratio 24.0 - - - 38.3

1)Adjusted for stock dividend, new issue and split ni No information

(14)

12 Know IT Board of Directors

Mats Olsson, born 1948.

Board member since 1997 and Chairman since 2001.

Partner in Arctos M&A AB.

Other directorships:

Polyplank AB (chairman), Syrico AB (chairman), AB Traction, Fenix Outdoor AB, IAR System AB and Open Kerfi Svenska AB.

Holding in Know IT: 0.

Thomas Ahrens, born 1949.

Board member since 2002.

Chief Executive Officer, Ahrens Rapid Growth AB.

TePe Munhygienprodukter AB.

Holding in Know IT: 0

Håkan Berntsson, born 1972.

Venture Manager AB Traction.

AcadeMedia AB, Gnosjöplast AB and Silva Plastic Center AB.

Holding in Know IT: 10,000.

Peter Dickson, born 1957.

Elected by employees.

Strategic advisory services consultant, Know IT Consulting AB.

Holding in Know IT: 7,000.

Anders Nordh, born 1946.

Chief Executive Officer, CMA Europe AB.

Assignment by CMA wholly owned subsidiary and part-owned subsidiary CMA Asset Management ASA.

AUDITOR

Lars Wennberg, born 1957.

Auditor in the company since 2003.

Öhrlings PricewaterhouseCoopers.

The members of the nomination committee are listed on the inside cover.

mats olsson

anders nordh peter dickson

håkan berntsson thomas ahrens

(15)

johan langgren canestrini

13 Know IT Corporate Management

Anders Nilsson, born 1951.

President and Chief Executive Officer since June 1, 2003.

Employed since 1998.

MS in Engineering.

Holding in Know IT: 70,152 shares with family and company.

Johan Langgren Canestrini, born 1961.

Chief Executive Officer, Know IT Software Solutions AB since 1997.

BS in economics and university degree in systems sciences.

Bengt Norvik, born 1955.

Chief Financial Officer since 2002.

University studies in business with focus on external accounting.

Mats Ohlsson, born 1959.

Chief Executive Officer, Know IT Consulting AB since 2001.

BS in mathematics and computer science.

Holding in Know IT: 14,348 with family.

Patrik Syrén, born 1959.

Vice President of Corporate Communications since 2000.

Degree in art administration and UC in marketing, advertising and public relations.

bengt norvik

patrik syrén anders nilsson

mats ohlsson

(16)

14 Know IT Financial Review

May-Dec

SEK Million 98/99 99/00 00/01 2001¹⁾ 2001 2002 2003

Sales and Result

Sales 459.3 547.7 500.6 411.4 256.2 326.3 295.0

Operating result before goodwill amortization 48.0 -36.5 -3.9 -15.3 -15.4 9.4 13.2

Income after financial items 38.4 -61.1 -89.3 -51.1 -43.9 -2.0 3.0

Profit margin, % 8.4 -11.2 -17.8 -12.4 -17.1 -0.6 1.0

Operating margin, % 7.9 -13.3 -13.0 -11.7 -16.7 -0.5 0.8

Sales growth, % 112.8 19.2 -8.6 -26.3 -25.8 -20.7 -9.6

990430 000430 010430 011231 011231 021231 031231

Capital structure

Fixed assets 155.4 239.9 117.7 87.4 87.4 72.5 61.5

Current assets 219.9 223.5 168.8 106.6 106.6 96.2 109.6

Total assets 375.3 463.4 286.5 194.0 194.0 168.7 171.1

Shareholders' equity 162.6 167.7 107.2 88.8 88.8 87.0 90.5

Minority interests - 0.2 2.5 4.0 4.0 0.8 0.4

Provisions 7.5 7.4 2.1 2.4 2.4 1.1 0.1

Long-term liabilities 52.5 90.1 13.4 6.5 6.5 4.1 4.2

Current liabilities r 152.7 198.0 161.3 92.3 92.3 75.7 75.9

Total equity and liabilities 375.3 463.4 286.5 194.0 194.0 168.7 171.1

Equity ratio, % 43.3 36.2 37.4 45.8 45.8 51.6 52.9

Investments in goodwill and other surplus values 74.6 113.6 - - - - 1.2

Investments in machinery and equipment 22.0 15.9 6.0 6.4 5.0 1.7 0.9

Cash flow before investments 75.6 -33.2 -6.0 -10.7 -8.5 19.7 3.8

Net liquid funds 57.5 22.7 1.7 25.8 25.8 35.7 33.2

Capital employed 201.7 209.0 158.6 99.3 99.3 91.9 98.3

Acid test ratio, x 1.4 1.1 1.0 1.2 1.2 1.3 1.4

Net debt ratio, x -0.4 -0.1 0.0 -0.3 -0.3 -0.4 -0.4

Adjusted equity 162.6 167.7 107.2 88.8 88.8 87.0 90.5

May-Dec

98/99 99/00 00/01 2001¹⁾ 2001 2002 2003

Profitability

Return on capital, % 14.6 -13.4 -22.8 -18.7 -17.5 -0.2 2.1

Return on equity, % 18.1 -38.2 -64.6 -50.4 -46.3 -2.0 3.9

Return on capital employed, % 25.8 -27.4 -46.6 -36.9 -32.6 -0.4 3.7

Staff

Average number of employees 420 558 495 369 351 297 285

Sales per employee 1.1 1.0 1.0 1.1 0.7 1.1 1.0

Value added per employee 0.8 0.5 0.5 iu 0.4 0.7 0.7

Result after financial income/expense per employee 0.1 -0.1 -0.2 -0.1 -0.1 0.0 0.0

Number of employees at year-end 511 617 397 311 311 283 302

1)Refers to pro forma figures for calendar year 2001

(17)

15 Know IT Directors' Report

Operation and structure

Know IT AB (publ), corporate identity number 556391-0354, is the parent company of the Group whose activities consist of consulting operations in the information technology (IT) sector. At year-end, the legal structure consisted of the Parent Company, Know IT AB (publ) and 17 (15) subsidiaries, of which 14 (12) were operating companies and 3 (3) ran no operations. The parent company manages group-wide functions such as Group management, Group reporting, financial management, communications, and group-wide human resources. The Group expanded its operations during the year by establishing new subsidiaries in

Gothenburg and Oslo, and by opening a new office in Västerås.

Net sales

Net sales decreased by 10 percent to SEK 295.0M (326.3).

Operating result

Operating profit before goodwill amortization increased by 40 percent and amounted to SEK 13.2M (9.4). Goodwill amortization according to plan amounted to SEK 10.9M (10.9). Operating profit amounted to SEK 2.3M (-1.5).

Income after financial items

The financial items amounted to SEK 0.7M (-0.5). Income was not affected by write-downs of shareholdings this year or the previous year. Income after financial items amounted to SEK 3.0M (-2.0).

Liquid funds and financial position

At year-end shareholders' equity amounted to SEK 90.5M (87), yielding an equity ratio of 52.9 (51.6) percent. Liquid funds, including short-term investments of SEK 0.4M (0.7) amounted to SEK 40.6M (39.8).

Investments

Investments in tangible assets amounted to SEK 0.9M (1.7).

In addition, the subsidiary Know IT Candeo AB acquired additional holdings in Know IT Candeo i Sundsvall AB.

Know IT Software Solutions AB acquired 52 percent of the shares in each of two new subsidiaries in Gothenburg and Oslo.

Parent company

The parent company's net sales amounted to SEK 14.0M (16.9). The result after financial items amounted to SEK

16.3M (-27.0). Shareholders' equity at year-end amounted to SEK 82.5 (51.5). During the year, Know IT invested SEK 0.4M (0.5) in equipment.

Impact on the environment

The nature of Know IT's operations 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 operations. This means that Know IT has no processes or package handling 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 markets. Know IT carries out no operations that require an environmental permit.

Equal opportunity plan

Equal opportunity is a priority issue in Know IT's operations.

Know IT is making efforts to attain a more equal balance between male and female employees. This effort is part of the internal control and is included in the working environment.

The annual budget is expected to reflect measures called for by the equal opportunity plan.

Research and development

Know IT does not develop any of its own products; therefore, it does not conduct any research and development.

Quality plan

Know IT's policy is to market and deliver services, solutions and systems of such quality that they earn complete client satisfaction. Quality considerations should constitute a significant reason for purchases. The quality plan is the basis of the quality system – that is, it ties together company processes.

Cont.

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Contingency plan

Know IT's operations are spread throughout several locations in Sweden and Norway. Most assignments are carried out at client premises, which means that system development and administration of these assignments are covered by client contingency plans. Projects carried out at Know IT's premises as well as the administrative activities needed to run the operations are covered by the contingency plan. The objective is to have advanced preparation for unexpected, serious incidents, and to ensure that all employees know how Know IT will deal with these incidents to minimize damages.

Project policy

Know IT is a dynamic and project-oriented organization whose powerful client offerings and comprehensive approach and commitment permeate the operations. Common deno- minators, routines and guidelines should be established for all projects and client assignments. Unless the client says otherwise, every project activity must comply with the established project-management model.

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 by any significant incidence of undesired staff reductions.

Fixed-price projects account for approximately 10 percent of total sales. Know IT has good experience of these kinds of assignment, and Know IT's routines regulating internal audits and follow-up greatly reduce the associated risks.

Therefore, the company considers the risk from fixed-price projects to be low.

The company 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 damages 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 pre-tax earnings of SEK 3-4M at an annualized rate. A price change of 5 percentage points gives an equivalent effect of SEK 11-14M.

Board of Directors' working method

The Board of Directors consisted at year-end of five ordinary members. During the fiscal year the Board convened six meetings at which the minutes were recorded. At its ordinary meetings, the Board discussed the fixed items 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 relating to strategic orientation, structure, and organizational changes was well as sales of companies and acquisitions.

Each month the Chairman of the Board issues a written report to the other members of the Board describing Group operations, the business situation, results and the employment situation.

At the ordinary meeting convened to discuss the annual accounts and the press release reporting unaudited annual earnings figures, the Group's auditor reports his observa- tions from the examination of the Group's internal control and financial statements. The Chairman of the Board negoti- ates the President's terms of employment, which are set by the Board.

In preparation for the 2004 Annual General Meeting, the Board of Directors has appointed a nomination committee consisting of Petter Stillström and Anders Nordh. The committee collects proposals for the election of directors from shareholders. It also submits proposals for the election of directors and remuneration to the Board of Directors of Know IT AB.

Corporate management's working method

As a rule, the corporate management team 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.

16

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17

17 Transition to IFRS

Beginning 2005, company reports will comply with Interna- tional Financial Reporting Standards (IFRS, formerly IAS).

Therefore, the annual accounts for 2004 will be the last to be reported according to recommendations by the Swedish Financial Accounting Standards Council. The interim report covering the period January-March 2005 and the 2005 Annual Report will contain a reconciliation between our 2004 Balance Sheet and Statement of Income according to IFRS and according to current accounting principles.

The recommendations of the Swedish Financial Accoun- ting Standards Council have gradually shifted toward the IFRS. However, there are still numerous differences between the two. This number continues to increase due to changes currently being made in IFRS. At present, all IFRS recommendations for fiscal year 2005 are not final. We are monitoring developments in order to adapt ourselves to the new regulatory framework. Based on what we know today, the greatest discrepancies between our current accounting principles and those of the IFRS will be as follows:

•

reporting of pensions (this will no longer be a discrepancy, however, after the introduction of RR 29 in 2004).

•

reporting of financial instruments – this means that more instruments will be reported at current value;

likewise, it heightens the requirements put on hedge accounting.

•

goodwill and some intangible assets will no longer follow straight-line depreciation. Instead, the company will determine on a year-by-year basis whether or not there is a need for depreciation. The company's financial reports will also be affected by new requirements for classification and information according to IFRS.

BIn all likelihood, these changes will affect our key figures.

However, the company has not come so far with the introduction of IFRS that it can quantify these discrepancies. At present the company is reviewing its reporting routines to be able to collect the data required for IFRS accounting.

During 2004, the company will also collect information that will be used for comparative figures in interim reports and 2005 annual accounts. In June 2003, the company appointed a steering group to work with these issues under the direction of the CFO. We intend to use the financial

statements for the third quarter 2005 to test the new routines.

Preparatory training has been given to relevant personnel and will continue throughout 2004. During the fourth quarter of 2004 we also intend to inform the stock market and analysts how the introduction of IFRS will affect company accounting.

Outlook

Know IT feels that demand will increase slightly during the year, but also expects the price pressures throughout the country to continue during the first six months of 2004.

Know IT's strategy of offering strategic consultation, system development and system administration leads to long-term assignments. The company is seeing a trend where clients are looking to a handful of suppliers with which to work more closely. Know IT has signed close to forty general agreements and other agreements that designate it a preferred supplier to organizations that purchase consulting services. Therefore, the outlook for Know IT in 2004 is good.

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18 Know IT Statement of Income

Group Parent Company

SEK Million Note 2003 2002 2003 2002

Net sales 1 295.0 326.3 14.0 16.9

Total operating income 295.0 326.3 14.0 16.9

Operating costs

Purchased goods and services -31.6 -49.0 -2.2 -0.8

Other external costs 2 -33.1 -32.5 -12.1 -13.1

Staff costs 3.4 -213.4 -231.6 -6.4 -7.6

Depreciation and write-downs of

intangible fixed assets 5 -10.9 -10.9 - -

Tangible assets 6 -3.7 -3.8 -1.3 -1.1

Total operating costs -292.7 -327.8 -22.0 -22.6

Operating result 2.3 -1.5 -8.0 -5.7

Result of financial investments 7

Result of participations in Group companies 24.9 -20.9

Result of other securities and receivables 0.2 -0.2 - -

Other interest income and similar income statement item 1.1 1.3 0.7 0.8

Interest expenses and similar income statement item -0.6 -1.6 -1.3 -1.2

Result after financial items 3.0 -2.0 16.3 -27.0

Appropriations 8 - 5.7

Tax on the year's result 9 0.8 0.4 4.1 2.5

Minority interest in result -0.3 -0.2

Net result for the year 3.5 -1.8 20.4 -18.8

Average number of shares, 000 9 974 9 974

Earnings per share, SEK 0.35 -0.18

Purchased goods

and services 11% Staff-related costs 76%

Cost structure

Depreciation of tangible assets 1%

Administration 2%

Cost of premises 5%

Car and travel costs 1%

IT operation costs 2%

Marketing and selling costs 1%

External services and costs 1%

The diagram shows operating expenses excluding goodwill write-offs.

SEK Million

Sales per employee

0.0 0.2 0.4 0.6 0.8 1.0 1,2

2002 2001 Pro forma

00/01 2003

99/00 98/99

Sales per employee dropped in 2003 by SEK 0.1M to SEK 1.0M.

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19

19 Know IT Comments on the statement of income

Net sales

Net sales fell by 10 percent to SEK 295.0M (326.3). Net sales for the year include all invoicing attributable to sub-consultants. The fall in net sales is mainly the result of weak demand during the year; in other words, volume is down and price levels fell in 2003.

By nature, the operations are seasonally dependent, with lower invoicing during the summer. Net sales for current operations were distributed as follows:

January–March 26 %

April–June 25 %

July–September 20 %

October–December 29 %

Operating result

The operating result after goodwill amortization amounted to SEK 2.3M (-1.5), which is an increase of SEK 3.8M compared with 2002.

Operating profit was charged with normal amortization of goodwill in the amount of SEK 10.9M (10.9). Monthly amortization at the end of the year amounted to SEK 0.9M.

The charge ratio varied throughout the year and amounted to 76 (75) percent. It developed as follows:

January–March 75 %

April–June 78 %

July–September 73 %

October–December 77 %

The charge ratio is calculated as charged time relative to available time according to normal working hours with a deduction for vacation and holidays.

Financial items

The financial income/expense can be divided as follows:

2003 2002

Results of market-quoted investments 0.2 - Interest portion in leasing charges -0.4 -1.0 Net interest expense bank loans/liquid funds 0.9 0.5

Total 0.7 -0.5

Taxes

The Group's tax expense can be itemized as follows:

2003 2002

Current tax -0.2 -0.9

Deferred tax 1.0 1.3

Total 0.8 0.4

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20 Know IT Balance sheet

Group Parent Company

SEK Million Note Dec 31, 2003 Dec 31, 2002 Dec 31, 2003 Dec 31, 2002

ASSETS FIXED ASSETS

Intangible fixed assets 5

Goodwill 48.0 57.7

Tangible fixed assets 6

Equipment 13.5 14.6 3.5 4.4

Financial fixed assets

Participations in Group companies 10 53.5 53.2

Other investments held as fixed assets 11 0 0.2 0 0

Total fixed assets 61.5 72.5 57.0 57.6

CURRENT ASSETS Current receivables

Accounts receivable 44.8 42.8 0.1 0.6

Receivables from Group companies 27.4 18.7

Other receivables 12.7 6.1 1.2 0.8

Prepaid expenses and accrued income 12 11.5 7.5 1.2 1.2

Short-term investments 0.4 0.7 - -

Cash and bank 40.2 39.1 3.6 14.5

Total current assets 109.6 96.2 33.5 35.8

TOTAL ASSETS 171.1 168.7 90.5 93.4

%

Equity ratio

0 10 20 30 40 50 60

2001

00/01 2002 2003

99/00 98/99

As of December 31, 2003 the equity ratio had improved to 52.9 percent.

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21

Group Parent company

SEK Million Note Dec 31, 2003 Dec 31, 2002 Dec 31, 2003 Dec 31, 2002

EQUITY AND LIABILITIES Shareholders' equity 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 1.6 11.3 1.0 13.3

Other restricted equity 7.2 7.0 0.7 0.7

Total restricted equity 58.7 68.2 51.6 63.9

Non-restricted equity 16

Profit/loss brought forward 28.3 20.6 10.5 6.4

Net result for the year 3.5 -1.8 20.4 -18.8

Total non-restricted equity 31.8 18.8 30.9 -12.4

Total equity 90.5 87.0 82.5 51.5

Minority interests 0.4 0.8

Provisions

Provisions for taxes 0.1 1.1 - -

Total provisions 0.1 1.1 - -

Long-term liabilities 13

Other liabilities 4.2 4.1 - -

Total long-term liabilities 4.2 4.1 - -

Current liabilities

Accounts payable 10.0 9.2 0.7 0.5

Liabilities to Group companies 4.1 36.3

Other liabilities 21.2 23.1 0.5 3.0

Accrued expenses and prepaid income 12 44.7 43.4 2.7 2.1

Total current liabilities 75.9 75.7 8.0 41.9

TOTAL EQUITY AND LIABILITIES 171.1 168.7 90.5 93.4

Memorandum items 14

Pledged assets 4.2 4.2 None None

Contingent liabilities None None None None

ANNUAL REPORT 2003