Annual Report 2007

Annual Report 2007

Not for routine assignments, but when it seems impossible.

Connecta in Brief

 Connecta is a Swedish management and IT consulting practice

 526 employees as of 31 December 2007

 Offices in Stockholm and Öresund

 Five largest clients: Collectum, Ericsson, Fora, ICA and Sony Ericsson

 Client offerings in Change Management, Customer Relationship Management, IT Value and Supply Chain Management

 Strategic partnerships with IBM, Microsoft, Oracle and SAP

 Microsoft Gold Certified Partner

 Connecta’s shares are trading on the Nordic Exchange small-cap list (code CNTA) since 2005.

Highlights of 2007

New Microsoft technology consulting unit:

Connecta started a Microsoft unit, with some 50 consultants, on 1 January 2007. This means that Connecta and Microsoft have developed a strategic partnership and close collaboration.

Extended agreement with Collectum: Connecta ex- tended its assignment with pension administrator Collectum, implying Connecta also developing Col- lectum’s system for managing the new ITP scheme (supplementary pensions for salaried employees).

This assignment ran until October 2007 inclusive, and had an estimated order value of SEK 30 m.

Improved terms for profit-share fund: in 2006, Connecta introduced a profit-share scheme for all employees. In February 2007, the Board chose to improve the terms for employees by raising its con- tribution from SEK 25 per SEK 100 invested in Con- necta shares to SEK 40. The invested funds have a three-year lock-in.

Connecta hires new CFO: Sofia Ericsson Holm was appointed as CFO, and joins Connecta from the First AP Fund (Swedish National Pension Insurance).

Sofia took up her position on 15 August 2007, and is a Senior Executive.

Connecta and Microsoft in new master agreement with Apoteket: Apoteket, the Swedish national phar-

Connecta starts new graduate trainee program:

Connecta has chosen to start its graduate trainee program for the third consecutive year. The program began on 7 January 2008.

New joint venture partner in IT infrastructure:

alongside Deseven Capital, Connecta has started up a new joint venture, Techta AB, with Anita Eriksson Pallinder as its CEO.

Strategic review: Connecta conducted a review of the fundamentals for its success and strategy in the fourth quarter. The review was performed by the cor- porate management and approved by the Board.

Highlights after the End of the Year

Connecta appoints new Executive Vice President:

Per Appelgren became Connecta’s Executive Vice President on 7 February 2008. Per has been working for the company since 2001.

Engagement with Fora concludes: in January 2008, Connecta secured final delivery approval on a large and successful project at pension administrator Fora.

Further expansion of profit-share fund: Connecta’s

Board decided to increase its contribution from SEK

40 to SEK 52.50 for every SEK 100 employees invest

in Connecta shares.

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Contents

Connecta in Brief and Highlights 2

Contents 3

CEO’s statement 4–6

About Connecta 7

Market and Clients 8–9

Offerings 10

Business Development 11

Skills Segments 12–13

Human Resources, Corporate Culture and Values 14–15

Financial Information

Financial Goals 18–19

The Share 20–21

Directors’ Report 22–26

Consolidated Income Statement 27

Consolidated Balance Sheet 28

Statement of Changes in Consolidated Equity 29

Consolidated Cash Flow Statement 30

Parent Company Income Statement 31

Parent Company Balance Sheet 32–33

Statement of Changes in Parent Company Equity 34

Parent Company Cash Flow Statement 35

Notes 36–47

Audit Report 48

Five-year Review, Group 49

Consolidated Quarterly Data and Key Ratios 50

Corporate Governance Report 51–52

Definitions 53

Annual General Meeting 53

Board of Directors and Senior Executives 54

Financial Summary of 2007 55

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CEO’s Statement

In 2003, Connecta’s corporate management gathered in Enköping, Sweden, to discuss our strat- egies ahead of the next five years. The company had just been salvaged after the IT crash of the early 2000s. To gather our strength ahead of the next developmental phase, new goals and a new strategy were needed to make Connecta into a strong and established consulting practice. I was there myself, and remember how we really ‘went for it’, setting ourselves challenging targets. The next five years were not going to be easy—we wanted goals that would spur us all on to do our utmost—the impossible!

At year-end 2006, we realized that we had already achieved our goals. We had delivered on our five-year plan, and a year earlier than scheduled. Moreover, developing the company in a series of new segments was already going full speed ahead. Connecta was doing really well, and we real- ized that everything had gone completely according to plan—just much faster than we thought was possible. This was the position when I took over as CEO of Connecta on 1 January 2007.

Connecta sustained this pace last year. The mission of our office in Malmö, which was started up by a handful of staff in September 2006, was to quickly secure a strong position in the Öresund re- gion. Looking back on an intensive 2007, we see that this unit now has some 20 experienced con- sultants all working to develop existing client relationships, and that have secured engagements from many local clients. By year-end, the office was already yielding profit.

We started a new skills segment in January. Our collaboration with Microsoft had progressed to such an extent that we both saw clear business potential in combining our management and IT consulting expertise with Microsoft’s innovation skills and product development. This segment has also been highly successful. Now, about 70 consultants work exclusively on Microsoft-relat- ed assignments. Several of them are unique on the Swedish market, and in many cases, we are pioneers in the latest Microsoft offerings. Our IT Management offering—a skills segment focusing on our offering to CIOs (Chief Information Officers)—also gained a real boost. This skills segment now employs some 60 consultants on all matters within a CIO’s remit. We secured several strate- gic projects, helping save many of our clients money, while also developing and making their IT activities business orientated.

During the year, we also delivered our three largest project engagements ever—two challenging SAP platform implementations for pension administrators Fora and Collectum, and a complex Microsoft solution for Apoteket, the Swedish national pharmacy corporation. Many observers thought this project was impossible, but thanks to the skills our consultants possess, and the enormous commitment and close collaboration with our client, we succeeded in something that we and our client can be proud of.

Our IT infrastructure initiative is my final example from 2007. Techta, a new consulting practice in which Connecta has a 40% holding, was incorporated in November. This new entity will be a partner that consolidates our total offering by bringing in professional infrastructure technologists when our clients need them. We have put these activities in a separate company because we want to build Connecta as a pure-play consulting practice, and looking ahead, continue to sharpen our management and IT activities.

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Our initiative in the Öresund region, on Microsoft and our new venture Techta are examples of how we are en- hancing Connecta. But they are also three examples of how our business strategy expresses itself day to day.

Connecta works close to its clients and partners, and will be a leader in management and IT consulting. Sticking to this is our formula for success. If we concentrate on the right things and stay focused on our core business—that is what will make us best at implementing problematic change projects successfully that increase our clients’

competitiveness. It is also the main reason that we have been in strong organic growth for over two years now, that our employee headcount passed 500 in 2007, and that we achieved this with rising profit margins.

But we are still not satisfied—a consulting practice like Connecta needs new and challenging goals. That is why one of our key processes in 2007 was to update our strategy from 2003. We needed to take the step into a new phase and create a shared set of objectives for where we are heading. Extensive preparations resulted in all Connecta’s staff gathering at the Hasseludden conference facility in Stockholm on 26 October, to mark the start of our next five years.

We started by looking back, and realized that Connecta has a secure foundation in place. This, largely, is about building an integrated business management and IT consulting practice. This enabled us to focus on developing a pure-play operation and avoid building a group that might generate a diffuse management focus.

We proceed from a client and partnering strategy based on closeness and long collaborations. We are strongly value oriented, a culture that differs from other players that allows our people to flourish. Moreover, we are all con- sultants that contribute to our core business, regardless of whether we are management consultants or account- ants. Consistently, this engenders broad understanding and commitment to the company’s operations, which are cornerstones of the secure foundation on which our business rests. The combination of this foundation and change creates the dynamism and eagerness that interweaves Connecta. This is something we must nurture, in addition to our drive to change, and that many of us have a strong entrepreneurial spirit.

At Hasseludden we stated that our foundation remains in place. It is our platform and what ensures our long-ter- mism and consistent approach. That is why we decided that Connecta will continue to develop as a company, into the sharpest management and IT consulting practice. Finally, we understood that our growth will continue, but it will be securely driven by business ideas and clients. This means our growth will always proceed from our client needs, but this growth will also be about developing ideas within and beyond the company walls. We want to encourage ideas that grow and develop. By combining professionalism and pronounced entrepreneurial drive, we want Connecta to continue to set a new, higher standard for what consultants can achieve.

To make all this possible, we are now embarking on an array of exciting development processes. We have de- cided that Connecta will be best at what we do, and this means challenges for us in everything from how we de- velop our skills to how we drive sales and business development. This is why 2008 will be about ‘polishing the diamond’—making what’s really good even better. I am looking forward to taking this journey and I am convinced that it will result in an increasingly strong Connecta. I am also convinced that progressively, this will take us to- wards the status of being a strong Swedish challenger to the global consulting services providers—positioning that builds on us offering the market’s best consulting services close to the customer.

Connecta currently commands the considerable confidence of several major Swedish corporations and non- profit organizations—many of them world leaders in their sectors. We have the capacity to assist them on strate- gic projects, which often enhance their core business or take them onto new markets. Additionally, work on their business development means we get good opportunities to monitor progress on the markets where our clients are active, in Sweden and around the world. Overall, we have good prospects of being able to secure our position- ing in new offerings and new sectors over the next year. With the current continued positive market conditions,

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About Connecta

Connecta is a Swedish management and IT consulting practice that helps companies implement complex and lasting change. By combining its own and other parties’ skills in strategy, business understanding and IT, Connecta delivers the optimal solution for every client.

Connecta’s consultants possess broad business understanding and in-depth knowledge of one or more spe- cialist segments. Their experience enables extensive change projects to be implemented, delivering solu- tions that maintain market-leading quality—always proceeding from the client’s objectives, organizational resources, market situation and IT structure.

Connecta’s assignments feature close collaboration with clients and partners, often meeting challenges that lie at the interface between business and IT activities.

Connecta endeavors to set a higher standard for what consultants can achieve, and knows that its profession- als are at their best when assignments are not routine, but rather when the change seems as impossible as it is imperative.

Connecta’s operations are based in Sweden, with offices in Stockholm and Öresund.

Business Concept

Connecta’s business concept is to help corporations and non-profit organizations to change and achieve desired results by integrating its own and other parties’ skills in management and IT.

Vision

Connecta’s vision is to create a new, higher standard for what consultants can achieve.

Mission

Connecta’s mission is to make our clients and employees successful.

Business Model

Connecta’s underlying business model is based on its corporate management and consultants identifying companies that need to change to enhance their competitiveness. Often, such companies need consultants that can manage challenging change projects with the aid of the right combination of skills and the capac- ity to achieve lasting results rapidly. Connecta’s consultants can create substantial values for the client on change projects, while simultaneously developing themselves.

To achieve this, Connecta’s objectives and strategies must consider clients, professionals and profitability

equally.

Market and Clients

Closeness to the Customer as a Strategy

Connecta pursues a strategy of being close to its clients, which means that the company always endeavors to involve clients, and where necessary partners, in the teams of various skills-sets created on each new assignment. This is achieved back in the planning stage, where we create a shared business plan for the project together.

By striving consistently for close collaborations, we get the maximum pay-off from Connecta’s, the client’s and partners’ combined skills and experience. Overall, greater impetus for innovation and change is achieved when projects are conducted across these boundaries.

Connecta’s development activities are directed by the client, which means that the company actively endeavors to tailor its services for the needs of key clients, but also that Connecta actively seeks those clients it thinks will derive the most benefit from its services. Connecta wants to cre- ate long-term collaborations with these clients.

Connecta’s profitability is linked to the size of its client base. The objective is for the company’s five largest clients to generate 50% of its sales, and the 20 largest clients to generate 80%.

Connecta’s clients are leaders in the Swedish retail, banking and insurance, service and telecom sec- tors. Connecta’s largest clients in 2007 were Collectum, Ericsson, Fora, ICA and Sony Ericsson. Other major clients include Apoteket, Cision, Hewlett Packard, Länsförsäkringar, Nordea and Vattenfall.

Progress on Connecta’s Market and Client Base

Connecta’s market remained robust throughout 2007. The company advanced its positioning, due largely to key clients extending their undertakings. In several cases, Connecta led the planning and implementation of major change projects in client business operations.

With some of its largest clients, Connecta’s growth is continuing by them applying the company’s serv- ices offering in more segments. This strengthens its positioning with clients and makes Connecta’s business more long term. Overall, progress in 2007 offered clear corroboration that Connecta’s strat- egy of being close to the customer really works.

In 2007, Connecta’s engagements also extended with some of its more recent clients. Its prospects for increasing its engagements with these clients still further has been limited by resource short- ages rather than its capacity to secure new assignments. The banking and energy sectors are ex- amples of growth segments.

An increasing number of Connecta’s clients are realizing the challenge in securing access to the

skills necessary to run change processes in their business operations successfully. This has re-

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In the year, Connecta concluded two of its biggest-ever projects: its SAP implementations for Fora and

Collectum. Connecta’s success in delivering these complex and challenging projects has increased confi- dence in Connecta’s ability to implement problematic change projects. Connecta has also successfully run major change projects in business development and strategy for many of the company’s major clients.

A Stronger Brand

Connecta’s brand-building progressed and strengthened in 2007. Apart from making deliveries to its own cli- ents, Connecta also ran a wide range of PR, advertising and other activities. This resulted in increased aware- ness of Connecta, clearly evident in work on the company’s new business. Connecta also received more unso- licited inquiries from potential clients, due to its stronger brand and increased awareness of the company.

Extended Collaborations with Strategic Partners

In the year, Connecta worked on further enhancing the collaboration with strategic partners—those with IBM, Microsoft, Oracle and SAP being especially significant. Connecta actively endeavors to work closely with these drivers of change on the market. In the SAP segment, Connecta conducted collaborations on sev- eral major projects. In the year, Connecta successfully started a new skills segment (Microsoft), and achieved very secure positioning in services relating to Microsoft products and technology solutions on the market.

Connecta also built on its collaboration with IBM in the year, resulting in Connecta securing strong position- ing as an implementation partner of IBM’s WebSphere product range. These collaborations have resulted in new assignments and close collaborations on delivery projects.

Competitors

Connecta has a broad offering and encounters a range of competitors depending on the type of assign- ment and related skills. At an overall level, the primary competitors are Accenture and Cap Gemini, which have consulting operations with a similar focus to Connecta. The implication of market progress towards increased rates of change in client corporations is more frequent, complex projects that bridge several skills segments. This puts more demands on consulting practices’ breadth of consulting services, and as a result, excessively niche-oriented consultants can encounter problems satisfying customer standards and needs.

Connecta is one of few Swedish players with enough skills breadth and size in the management and IT seg- ments to compete successfully with the major multinational players.

Delivery Quality

In order to realize its long-term objectives, Connecta must be able to satisfy the increasingly extensive stand- ards clients impose, and manage the risks Connecta assumes in its larger engagements. Delivering high quality is a key factor for Connecta, and applies to the implementation of assignments and in managing client relationships. Connecta has a highly developed quality model and the company’s quality resources measure its quality continuously internally and externally to ensure the company’s assignments satisfy the quality standards set by the company.

Connecta measures its performance with its larger clients and on its most critical engagements using a Customer Satisfaction Index, CSI. This instrument measures the client’s perceived quality and creates the right prospects for strategic and operational actions. Connecta’s CSI has been progressively enhanced since Connecta started measuring customer satisfaction.

Sales, 5 Largest Clients

Sales share, 5 largest clients: 60%

Sales share, other clients: 40%

Sales, 20 Largest Clients

Sales share, 20 largest clients: 91%

Sales share, other clients: 9%

60 % 91 %

Offerings

Connecta offers services in four over-arching segments that match the central needs of the company’s cli- ents—Change Management, Customer Relationship Management, IT Value and Supply Chain Management.

Breakfast seminars were arranged for Connecta’s clients in 2007, offering them an opportunity to review best practice in all offerings.

Change Management

“For the management of complex change processes”

Change Management is a structured approach to implementing operational change processes, focusing on the client’s staff and business results. Connecta’s role is the practical implementation of new business strat- egies, working methods and IT systems. Consistently, this is about getting managers and staff to act in ac- cordance with the new situation, and is about getting managers to lead the way and staff to want to change their behavior. Connecta collaborates on a committed basis close to the customer based on its situation and culture. Connecta has concrete tools and processes based on rigorous experience, which bring know-how to the client’s key staff on a structured basis.

Customer Relationship Management

“For marketing sales, services and understanding customers”

Successful marketing, sales and service always build on a company’s overall strategy and objectives com- bined with Connecta’s rigorous knowledge of customer needs, value and positioning in the customer life cycle. Connecta helps its clients generate, analyze and act on business-critical customer information, to be- come successful in differentiating their offerings, operate cost-efficiently and create the right prospects for customer satisfaction and profitable growth. CRM is about emphasizing the customer in all encounters and processes, without losing the long-term business financial perspective.

IT Value

“For effective IS/IT”

Connecta helps companies and non-profit organization to enhance their operational efficiency by adapting their IT resources to overall business objectives. Connecta is active on all points of CIO agendas and chal- lenges, and supports clients in ensuring that their IT operations are run effectively and on a businesslike basis. The activities of these operations should be transparent, quantifiable, have clear goals and strategies, with a sharp focus on the current and future needs of business operations. Connecta’s IT Value offering ex- Connecta’s IT Value offering ex- tends from coordinating IT and business operations to optimizing the control of IT deliveries and the opera- IT and business operations to optimizing the control of IT deliveries and the opera- tional efficiency of IT processes.

Supply Chain Management

“For procurement, logistics, production and planning”

Supply Chain Management is about rationalizing goods, information and payment flows. To achieve these

objectives, operations and IT systems must interact on a day-to-day basis, at the client and its suppliers. If cor-

rectly managed, this helps maintain an overall grasp of procurement, production, logistics and spare parts

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Constant business development is a prerequisite for Connecta satisfying client needs and main-

taining and enhancing competitiveness of its offering. Connecta has a clear business concept, and its operating activities are built on a strategic foundation. This foundation guides Connecta in the development of new business activities within the company, but also clarifies the business oppor- tunities that should not be managed within the company.

Connecta’s business development work is intended to generate, screen and develop business ide- as. The aim is to create the right prospects for new business ideas to contribute to Connecta’s earnings quickly and visibly. These prospects may be of an internal and external nature. Thus, business development work can also lead to businesses outside the company, albeit always with a clear synergy with Connecta. Accordingly, this work is divided between internal and external business development.

Internal business development manages the business ideas that will evolve within Connecta’s organization. This work is about identifying future focuses Connecta wants to develop because they are considered strategic for the company’s market positioning. They are either intended to en- hance skills or integrate skills already encompassed by the company’s various units. These focuses are time-finite and have clearly defined developmental goals. In 2007, Connecta managed focuses in Integration, Agile and Telecom, all spawning several adjacent business activities. Another is the Nova graduate trainee program, which can also be considered internal business development.

Nova is a three-year package, where after completion, participants join a skills segment.

The first Connecta office outside Stockholm, Region Öresund, had its first financial year in 2007.

This is another example of Connecta’s business development. This start-up in the expansive Öresund region has brought Connecta better prospects to develop its work and relationships with those members of its client base active in the region, and to build relations with new clients. At year-end, about 20 consultants worked in the Öresund region, with clients like Astra Zeneca, ICA, Skånetrafiken (regional traffic authority) and SonyEricsson.

External business development resulted in the identification of several business ideas in 2007, which will probably result in start-ups of joint venture partnerships. The start-up of Techta, which offers consulting support in IT infrastructure is an example. Techta is 40% owned by Connecta. Its offering is not covered by Connecta but is something its clients often want. Qube SIA—a part-owned Latvian company providing nearshore application management services—is another example.

“ New business ideas can also create activities out- side the company, but always with a clear synergy with Connecta”

Business Development

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Connecta is organized into a range of skills segments and a single region, but is also active through its offer-

ings, customer teams, project teams, focuses etc. Its skills segments often operate on an integrated basis, and skills segmentation is not the supreme organizational structure. The flexibility of its structure favors Connecta, its clients and staff. Each consultant has his/her base and first-line manager in a skills segment. In 2007, Connecta was structured into six skills segments, of which two were launched in the year—Microsoft and Business Services.

Management

“Offering management support on change projects and strategic issues”

Connecta’s consultants active in Management primarily work alongside client senior business and opera- tional management, assisting the implementation of enhancements and strategies in business operations.

IT Management

“Maximizing the value of client IT investments”

IT Management identifies and realizes client business value from IT by increasing IT departments’ profit- ability and efficiency, supporting decisions and implementing outsourcing and insourcing projects, as well as integrating IT operations into business processes.

Enterprise Applications

“Delivering major ERP systems solutions on the SAP platform”

Connecta has integrated its specialist skills in standard ERP systems within Enterprise Applications. Con- sultants specialize in advanced services and development, mainly on the SAP product portfolio, but also in Siebels.

Development

“Conducting business-driven systems development in complex environments”

The Development skills segment develops offerings focusing on processes and technology. Its consultants are specialists in investigating, planning, leading and implementing complex integration and system devel- opment projects.

Microsoft

“Leading and delivering business-critical solutions based on Microsoft technology”

Consultants in this skills segment are experts on Microsoft products and solutions in enterprise application integration, infrastructure optimization and portals. The skills segment won the .Net Awards 2007 in the Information Worker category.

Business Services

“Connecta’s specialized business support close to operations”

This skills segment was formed in 2007 and consists of the accounting, support, HR and IT units. By work- ing close to client business and proactively, Business Services will set a new and higher standard for what central functions can achieve—internally and externally.

Skills Segments

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The success of any consulting practice is built on its ability to attract, develop and retain the best professionals. To integrate new staff and develop existing people, Connecta conducts regular, sustainable goal-oriented training packages. These packages are conducted through Connecta’s skills enhancement program, which in turn, is based on Connecta’s corporate culture and values.

Skills Enhancement

Skills enhancement is Connecta’s unique way to transform its vision and strategies into practi- cal everyday work. Many of its professionals chose Connecta because they wanted to develop professionally and as individuals. To maintain its focus on being a value-controlled company, Connecta is focusing aggressively on education and training, directed by its vision. This train- ing is always led by Connecta’s managers and senior consultants in combination with external providers.

Connecta’s integrated skills enhancement is based on a few simple principles, such as its view of personal leadership and experience-based skills training. Connecta has conducted leader- ship training since the end of 2002. In these years, basically all staff have taken the company’s consulting and leadership seminars. Apart from leadership training, Connecta conducts inde- pendent training packages for managers and consultants in Connecta’s project management methodology and philosophy, quality, entrepreneurship and business development. Connecta’s training packages rate highly in the employee surveys it regularly conducts. All employees par- ticipate in regular appraisal interviews and have individual development plans. Connecta also uses mentorships as part of developing its professionals and corporate culture.

Finally, employee training should result in greater willingness to take individual responsibility for learning on assignment. Advanced internal and external training packages help sharpen the specialist skills necessary for employees to be able to deliver Connecta’s specialist offerings.

Human Resources, Corporate Culture and Values

Connecta’s values are: ambition, team-spirit, personal

leadership, honesty and integrity, plus health and a

work-life balance.

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Search & Selection

Connecta has continued its successful organic expansion, with many skilled and strategic professionals choosing to join the company in the year, a high share resulting from recommendations from Connecta’s employees. At year-end 2007, Connecta had 526 employees, 26% of whom were women. The average number of employees in 2007 was 502.

Despite stiff competition on the labor market, Connecta receives a substantial number of highly qualified job applications. In 2007, 177 new staff joined Connecta. The company will continue its expansion, mainly organically through broad-based and targeted initiatives, including one to hire more women.

Staff turnover was 18%, which is somewhat high in relation to Connecta’s goal of 10-15%. Connecta thinks that staff turnover is largely due to the current business cycle, with its firm demand for skilled profession- als. The company is still working actively on hiring in retaining staff without altering its flexible cost struc- ture. In exit interviews with employees that chose to leave Connecta, 92% said they could envisage return- ing to Connecta in the future.

Connecta is continuing its Nova graduate trainee program, and work on the third program started in late 2007, with trainees starting in early 2008. The third group will total 35 trainees, of which some 50% are women. The goal is for Nova alumni to be the best consultants with less than five years’ experience.

Employee Age Profile 2007 (2006), No.

Age Men Women

20–29 53 (45) 31 (24)

30–39 242 (194) 73 (72)

40–49 82 (69) 27 (22)

50–59 11 (8) 3 (5)

60–69 1 (0) 3 (1)

Employee Key Ratios

2007 2006

No. employees at year-end 526 440

Ave. no. employees in the year 502 385

Active consultants, % 88 87

Average age 35 35

Average length of service, years 3 3

Staff turnover, % 18 14

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Financial Information

Financial Goals 18–19

The Share 20–21

Directors’ Report 22–26

Consolidated Income Statement 27

Consolidated Balance Sheet 28

Statement of Changes in Consolidated Equity 29

Consolidated Cash Flow Statement 30

Parent Company Income Statement 31

Parent Company Balance Sheet 32–33

Statement of Changes in Parent Company Equity 34

Parent Company Cash Flow Statement 35

Notes 36–47

Audit Report 48

Five-year Review, Group 49

Consolidated Quarterly Data and Key Ratios 50

Corporate Governance Report 51–52

Definitions 53

Annual General Meeting 53

Board of Directors and Senior Executives 54

Financial Summary of 2007 55

Contact Information 56

Financial Goals

Profitability and Growth

Connecta’s prime goal is to deliver good profitability. Over a business cycle, Connecta’s goal is to deliver an operating margin of 10–15% excluding subcontracting consultants. In 2007, the operating margin was 14.9%.

Connecta regards growth as a necessity. Its objective is for the company to achieve annual organic growth of over 10% over a business cycle. Growth can be expressed as an increasing number of consultants and increasing revenue per consultant. Sales growth was 31% in 2007.

Connecta’s consulting and salary models are central and unique. The models combine experience and train- ing levels with responsibility and authority. Connecta’s consultants will be offered competitive salaries, while the company maintains complete control over sales and margins. The consulting model is intimately linked to a consistent salary model based on a fixed basic salary and performance-related variable salary component. Connecta’s model creates strong incentives for individual consultants to improve performance and to continue to develop, as well as a flexible cost structure for the company. On the revenue side, utiliza- tion ratio is the most critical factor. Connecta’s objective is to achieve an average utilization ratio of 75% over a business cycle. In 2007, the utilization ratio was 84.5%.

Connecta’s profitability is also linked to the number of its clients. The objective is for the company’s five largest clients to generate 50% of the company’s sales and the 20 largest to generate 80%. With focused sales efforts and clear delineation of responsibility, the rigorous analysis of key clients and very thorough knowledge of long-term clients and their operations, the company expects to achieve the aforementioned utilization ratio goals and client demographics goals. As a result, Connecta expects this to lead to longer-term assignments, more customer benefit and reduced cost of sales. In 2007, Connecta’s five largest clients generated 60% of sales, and the 20 largest, 91% of sales. Staff turnover in 2007 was 18% (14%), which is somewhat high in relation to Connecta’s goal of 10-15% over a business cycle. For more information, see page 15.

Equity/assets Ratio

Connecta’s target equity/assets ratio is a minimum of 35%. The equity/assets ratio on 31 December 2007 was 42.2%.

Dividend Policy

Connecta’s ambition is to provide shareholders with healthy dividend yields, and accordingly, all distribut- able earnings will be paid to shareholders providing the needs for trading liquidity and business-promoting investments are covered. The Board has decided to propose that the AGM resolves on dividends of SEK 6.59 per share, or a total of SEK 68.4 m, equivalent to 100% of Connecta’s profit after tax.

Currency Policy

Potential exposure to foreign currency should be limited, so that given a 10% change in exchange rates, the

company does not incur a loss exceeding SEK 0.3 m. Currency positions should be hedged to the extent

determined by the above.

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Seasonality

Like other consulting practices, Connecta exhibits earnings variations through the year depending on the number of available working-hours. The summer period adversely affects revenues because the number of available hours reduces significantly coincident with vacations. The consulting sector is dependent on the number of available hours, which also varies between the same months in different years, depending on, for example, when Christmas and Easter holidays fall. The above implies sales and profit seasonality. The following table reveals how the number of available days varies between quarters in 2007 and 2008.

Variable Effect on turnover Effect on operating profit

+/-5 percentage point utilization ratio +/- 6% +/- 19 SEK m

+/-5% revenue per hour (hourly rate) +/- 5% +/- 23 SEK m

+/-1 working day per year +/- 0.4% +/- 1.4 SEK m

+/-5% change in payroll expenses - +/- 21 SEK m

Period Adjusted no. of working days 2007* Adjusted no. of working days 2008*

Q1 63 60

Q2 55 58

Q3 43 43

Q4 60 61

Total 221 222

* Actual number of workdays reduced by vacation based on the assumptions of average vacation of 30 days per employee and vacation split 5,15, 75 and 5% respectively for quarters 1-4.

Sensitivity Analysis

Connecta’s net sales and profit are primarily affected by two factors: utilization ratio and revenues per con- sultant and hour. Revenue per hour depends on consultant skills, price sensitivity in each client and skills segment, and the extent Connecta can recycle know-how and structural capital. Utilization ratio is a func- tion of the capacity to maintain a balance between client demand and supply at any time, which raises demands on continuous skills enhancement and good project management.

The above summary illustrates the annualized sales and operating profit/loss effect given an isolated

change in these variables. The stated estimates are based on year-2007 accounts and should be viewed as

an indication of the effects given an isolated change in each variable for the short term.

The Share

Share Capital

Connecta’s share capital is SEK 5,193,677.50 divided between 10,387,355 shares. The nominal value per share is SEK 0.50. Each share carries the right to one vote, and every shareholder entitled to vote may vote for the full number of shares held and represented at Annual General Meetings. All shares confer equal rights to participation in the company’s assets and profits.

Listing

Connecta’s shares trade on the Nordic Exchange small-cap list. A trading lot consists of 200 shares. As of 28 December 2007, Connecta AB had 2,306 shareholders.

Share Price and Turnover

Between 2 January 2007 and 28 December 2007, Connecta’s share price increased from SEK 68.50 to SEK 69.25 (closing price), an increase of SEK 0.75. The highest price paid in the year was SEK 93.50 on 11 and 26 October (closing price SEK 92 and SEK 90.25 respectively), and the lowest price paid was SEK 64.00, on 28 February (closing price SEK 66.75). In 2007, a total of 8,671,162 shares were traded, equivalent to a value of SEK 662.5 m.

On average, this means 34,824 shares worth some SEK 2.6 m were traded each trading day. To offer sharehold- ers healthy liquidity and efficient pricing, Connecta has appointed Remium Securities as market maker.

Shareholders

The following table illustrates Connecta’s ownership structure based on information from NCSD/VPC (the Swedish Central Security Depository and Clearing Organization) as of 28 December 2007. The ten largest shareholders held 51.4% (43.1%) of the equity. Connecta had a total of 2,306 (2,678) shareholders at the above date. The number of shareholders domiciled in Sweden represented 93.8% (95.0%) of the equity. Swedish legal entities held 61.5% (57.3%) of Connecta’s share capital at year-end.

Highlights after the End of the Year

The ten largest shareholders as of 28 December 2007 No. of shares Proportion of votes and capital, %

Tiktaal Holding AB 2,258,079 21.74

Livförsäkrings AB Skandia 826,900 7.96

Awake Swedish Equity Fund 514,000 4.95

Hagströmer & Qviberg Svea 457,933 4.41

Swedbank Robur Småbolagsfond Sverige 275,800 2.66

Swedbank Robur Småbolagsfond Norden 226,800 2.18

Northern Trust Company, THE, W9 220,000 2.12

Nordea Bank Finland ABP 191,300 1.84

Danske Bank International S.A. 185,000 1.78

Goldman Sachs International LTD, W8IMY 180,001 1.73

Total 5,335,813 51.4

Ten Largest Shareholders

21

The transaction between Tiktaal and Tikk2 was conducted to ensure that going forward, Connecta will still

be led by people with a significant stakeholding in the company. The shares not acquired by Tikk2 were purchased by Swedish institutional investors.

Profit-Share Fund

In February 2006, Connecta started its Profit-Share Fund, which will help make Connecta an even more at- tractive workplace. The fund invests 25% of its assets in Connecta shares. For every SEK 100 invested in Connecta shares, in 2007, Connecta contributed another SEK 40 to the Fund. In February 2008, Connecta’s Board decided to increase its contribution from SEK 40 to SEK 52.50 for every SEK 100 employees invest in Connecta shares. The total cost of this incentive scheme is largely dependent to the extent that employees choose to participate, although the cost is estimated at some SEK 2-3 m per year. The company’s commit- ment to the Fund is made once yearly.

Holding No. of shares Proportion of capital, % No. of shareholders

1–500 238,253 2.29 954

501–1,000 494,319 4.76 610

1,001–2,500 652,358 6.28 388

2,501–5,000 714,509 6.88 194

5,001–10,000 629,605 6.06 79

10,001– 7,658,311 73.73 81

Total 10,387,355 100 2,306

Ownership Structure

The division of Connecta’s shareholdings, based on the share register maintained by NCSD/VPC as of 28 December 2007 follows:

Share price performance and trading volume 2007

120.00

100.00

80.00

60.00

40.00

20.00

0.00

400,000

350,000

300,000

250,000

200,000

150,000

100,000

50,000

TRADING VOLUME OMX SMALL-CAP INDEX

SHARE PRICE CNTA JAN

UARY FEBRUARY

MARC H

APRIL MA

Y JU

NE JULY AU

GUST SEPT EMBER

OCTO BER

NOVE MBER

DECEM BER

SEK VOLUME

Directors’ Report

The Board of Directors and Chief Executive Officer of Connecta AB (publ) corporate identity number 556610-5705 and registered office in Stockholm, Sweden, hereby submit the annual accounts and consolidated accounts for the financial year 1 January 2007–31 December 2007.

Connecta is a management and IT consulting prac- tice that helps corporations and non-profit organiza- tions enhance their competitiveness and achieve desired results by integrating in-depth IT know-how with broad-based management skills.

Market and Clients

Connecta’s market remained strong throughout 2007. The company advanced its positioning, which was largely due to increased engagements with key clients. In several cases, Connecta led the planning and implementation of major change processes in clients’ business operations.

Connecta continued to develop its offerings in Sup- ply Chain Management, Customer Relationship Management, Change Management and IT Value in 2007, which resulted in deeper, and new, client relationships.

In the year, Connecta worked intensively on strength- ening its collaboration with strategic partners.

Connecta’s clients are leaders in the Swedish retail, banking and insurance, service and telecom sec- tors. Connecta’s five largest clients in 2007 were Collectum, Ericsson, Fora, ICA and Sony Ericsson.

Financial Performance

A large-scale subcontracting agreement with one of Connecta’s suppliers concluded in July 2007. This resulted in the subcontracting consultant share of

total sales reducing in the second half-year 2007, compared to the corresponding period of 2006.

Sales growth excluding subcontractors was 40%, compared to the corresponding period of 2006. The share of subcontractors is expected to continue re- ducing in accordance with Connecta’s ambition.

Total revenue for the period January - December 2007 was SEK 721.8 (550.6) m, a 31% increase. The gains are mainly due to an increase in the number of consultants, and somewhat higher hourly rates in the year. The utilization ratio was stable at a high level, 84.5% for the full-year 2007.

Average sales per active consultant on a rolling 12- month basis were SEK 1,568,000 (1,525,000) at year- end 2007, a 3% increase on 2006. This improvement is the consequence of somewhat higher average pricing and a favorable project mix, simultaneous with maintaining a high utilization ratio.

Operating profit for the full year was SEK 96.4 (57.6) m, a 67% increase.

Continued positive profit growth, as illustrated in the following table, is due to the combination of some- what higher hourly rates, a retained high utilization ratio and continued successful organic growth.

Profit increases were also achieved through deliv- ery precision on ongoing projects and economies of scale.

The operating margin for the full year 2007 was 13.4% (10.5%). Operating margin adjusted for sub- contracting consultants and non-recurring costs

was 14.9% (13.0%). The group’s net financial income/

expense was SEK 1.0 (-0.2) m. Profit before tax was SEK 97.4 (57.4) m. Net profit for the period was SEK 68.4 (40.3) m.

2006 2007

Sales and Operating Profit, Rolling 12 Months SEK m

Operating profit (SEK m) Sales

(SEK m)

23

Balance Sheet and Cash Flow

Connecta’s total assets were SEK 357.9 (298.3) m at year-end. Equity was SEK 151.1 (123.0) m. The equity/

assets ratio as of 31 December 2007 was 42.2 (41.2)%, a 1 percentage point improvement. Connecta’s ob- jective is to achieve an equity/assets ratio of 35%.

Non-current Assets

At year-end, the company’s non-current assets were reported at SEK 62.9 (60.5) m, of which intangible assets represented SEK 47.4 (47.3) m.

Current Assets

At year-end, the company’s current assets were SEK 294.9 (237.8) m. At 31 December 2007, current receiva- bles were SEK 205.2 (147.0) m, and were 28.4 (26.7)%

of revenues. Accounts receivable were SEK 167.2 m as of 31 December 2007, a SEK 50.7 m increase since the previous year-end. Prepaid expenses and accrued income were SEK 37.4 m as of 31 December 2007, an increase of SEK 7.3 m since the previous year-end. The increase of accounts receivable, prepaid expenses and accrued income is related to increased sales.

At the same time, cash and cash equivalents were SEK 89.7 (90.8) m. Credit facilities have increased correspondingly with the company’s growth.

Equity and Liabilities

Equity was SEK 151.1 (123.0) m at year-end. Interest- bearing non-current liabilities were SEK 9.1 (7.4) m.

At year-end, current liabilities were SEK 197.7 (167.9) m, with accounts payable representing SEK 14.2 (26.6) m and tax liabilities being SEK 18.8 (18.4) m.

The Share

Connecta’s share capital is SEK 5,193,677.50 divided between 10,387,355 class B shares, with one vote per share and a quotient value of SEK 0.50 per share.

Each share confers the right to one vote, and every shareholder entitled to vote may vote for the full number of shares held and represented at Annual General Meetings. All shares confer equal rights to participation in the company’s assets and profits.

There are no restrictions in terms of dividends or other forms of capital repayment.

Tiktaal Holding AB, which held 21.7% of the shares at year-end 2007, has 49 partners, the majority being management and executive staff of Connecta. An ownership restructuring process was conducted in February 2008. For more information, see page 20.

Cash Flow

Cash flow from operations was SEK 88.6 (50.4) m.

Cash flow from operations was reduced by tax de- posits of SEK 12.3 (9.6) m in the year. Cash flow from the change in working capital was SEK -45.9 (15.3) m, which was reduced by payment of annual perform- ance-related pay and an increase of accounts receiv- able and work in progress, mainly due to increased sales. The working capital share of total sales was the same as on 1 January. Cash flow from operating activities was SEK 42.7 (65.7) m.

Connecta increased its internal rationalization pack- age, “From Assignment to Payment” program. This long-term initiative has already generated positive results.

Cash flow from investment activities for the full year was SEK -0.8 (-2.3) m. Cash flow from financ- ing activities for the full year was SEK -43.0 (-31.7) m, which was mainly attributable to dividends paid of SEK 40.3 (29.0) m. Total cash flow for the full year 2007 was SEK -1.1 (31.7) m. Adjusted for dividends and normal seasonality, Connecta’s cash flow traced gradual positive progress through the year.

1) Non-recurring cost relate to the relocation and settlement with the official receiver for the Edsparken/Adcore Tech group, totaling SEK 2.6 m, reported in the first half-year 2006

800 700 600 500 400 300 200 100 0

120.0 100.0 80.0 60.0 40.0 20.0 0.00

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

2006 2007

Sales and Operating Profit, Rolling 12 Months SEK m

Operating profit (SEK m) Sales

(SEK m)

Sales (SEK m) Operating profit (SEK m)

Human Resources

Connecta’s organic expansion continued success- fully in the year. At year-end 2007, Connecta had 526 (440) employees, of which 26 (28)% were women. The average number of employees in the year was 502 (385). The number of new employees was 177 (151).

Personnel turnover was 18 (14)% in 2007.

Parent Company

Connecta’s operating activities are integrated in the parent company. Revenues for the full year 2007 were SEK 721.8 (550.6) m. Profit after financial items for the full year 2007 was SEK 92.0 (50.7) m.

As of 31 December 2007, parent company equity was SEK 116.2 (93.5) m of which non-restricted equity was SEK 89.3 (66.6) m. Investments in equipment in the year were SEK 0.8 (2.3) m. Cash and cash equivalents were SEK 89.6 (90.7) m as of 31 December 2007.

Financial Risks

Financial instruments and risk management are reviewed in Note 26 on page 46.

Board Activities

A special review of Board activities is stated in the Corporate Governance Report on page 51.

Guidelines for Remunerating Senior Executives The AGM 2007 approved the following guidelines for remunerating senior executives.

Connecta’s management will receive remunera- tion pursuant to the same salary model as other Connecta employees, i.e. that employees (and thus the management) share the risks and successes of the company. This means that outcomes in cyclical upturns may be perceived as positive, while em- ployees participate and take responsibility for the challenges and potential utilization problems that arise in cyclical downturns. The salary model has two parts: basic salary dependent on employees’

roles and responsibilities, and a performance- related portion controlled by employee performance.

The salary model is intended to give employees a long-term incentive to grow and take new roles and responsibilities, while simultaneously, short-term performance is also rewarded. The performance components that determines performance-related pay are individually determined; but all share a clear link to the company’s success and relate to quality, customer relationships, extra sales, long-termism, progress, invoicing or performance versus budget, etc. The objective is for all employees to have 50%

fixed salary and 50% performance-related pay as a maximum.

The performance-related pay of members of the SM (Strategic Management) is linked to a performance- related pay system. The total outcome of this per- formance-related pay system is linked to Connecta’s profit growth and the individual share of the out- come is linked to the satisfaction of individual goals (see above) and responsibilities within the company.

The Chief Executive Officer has a notice period of six months and severance pay of another six months co- incident with termination initiated by the company.

The pension premium of the Chief Executive Officer is a maximum of 27% of basic salary.

The proposed guidelines for remunerating senior executives will be submitted to the AGM on 18 March 2008 and are unchanged from those submit- ted to the AGM 2007. For more information on remu- neration to the corporate management, see Note 8 on page 41.

Directors’ Report, cont.

25

Proposed Appropriation of Profits

The following funds in the parent company are at the disposal of the Annual General Meeting

Retained profits SEK 26,281,604

Net profit SEK 63

005,121

Total 89

286

725

The Board of Directors and Chief Executive Officer propose that these funds are appropriated as fol- lows:

Dividend to shareholders

(SEK 6.59 per share) SEK 68

452

669 Carried forward SEK 20

834

056

Total 89

286

725

The Balance Sheets and Income Statements of the group and parent company will be submitted at the AGM on 18 March 2008.

The dividend is calculated on the number of outstand- ing shares as of 31 December 2007, i.e. 10,387,355.

Board of Directors’ Statement Regarding Proposed Dividend Statement

Motivation

Consolidated equity has been calculated pursuant to IFRS as endorsed by the EU and their IFRIC inter- pretations, and pursuant to Swedish law through application of RR 30 (Supplementary Accounting Rules for Groups). Parent company equity has been calculated pursuant to Swedish law and by applying RR 32 (Accounting for Legal Entities).

The Board of Directors considers that the company’s restricted equity after the proposed dividend is fully covered. The Board of Directors also considers that the proposed dividend to shareholders is justifiable considering the evaluation criteria stated in chap. 17

§ 3 para. 2-3 of the Swedish Companies Act. In this

context, the Board of Directors would like to make the following statement:

Nature, Scope And Risks of Operating Activities The Board of Directors considers that the company’s and group’s equity after the proposed dividend will be sufficient in relation to the nature, scope and risks of operating activities. In this context, the Board of Directors considers factors including the company’s and group’s equity/assets ratio, historical progress, budgeted progress, investment plans and business cycle phase.

Need to Strengthen Balance Sheet, Liquidity and Position Generally

The Board of Directors conducted a general evalua- tion of the company’s and group’s accounting posi- tion and its prospect of satisfying its commitments.

The proposed dividend comprises 59% of the com- pany’s equity and 45% of consolidated equity. The Board of Directors considers that the earnings capac- ity in the first three months of the year will imply its equity/assets ratio reaching its 35% goal after the dividend has been paid. Against this background, the Board of Directors considers that the company and the group have good prospects of exploiting future business opportunities while also withstand- ing potential losses. Planned investments have been considered when determining the proposed divi- dend. The dividend would not adversely affect the company’s or the group’s capacity to make further investments based on business activities according to its adopted plans.

Liquidity

The proposed dividend is not considered to affect the

company’s or group’s capacity to fulfill their payment

commitments at the appropriate time. The company

and the group have ready access to liquidity reserves

in short and long-term credit facilities.

Attestation

The Board of Directors and Chief Executive Officer hereby offer their assurances that this Annual Report has been prepared pursuant to the Swedish Annual Accounts Act and RR 32 and provides a true and fair view of the company’s financial position and profits, and that the Directors’ Report provides a true and fair view of the progress of the company’s operations, financial position and profits, and states the significant risks and uncertainty factors facing the company. The Board of Directors and Chief Executive Officer hereby offer their assurances that the Consolidated Accounts have been prepared pursuant to IFRS (International Financial Reporting Standards) as endorsed by the EU, and provide a true and fair view of the group’s financial position and profits and that the Directors’ Report of the group provides a true and fair view of the progress of the group’s operations, financial position and profits, and states the significant risks and uncertainty factors facing the companies included in the group.

As stated above, the annual accounts and consolidated accounts were approved for issuance by the Board of Directors on 4 March 2008. The Consolidated Income Statement and Balance Sheet will be subject to adoption at the Annual General Meeting on 18 March 2008.

Stockholm, Sweden, 4 March 2008

Johan Wieslander Börje Fors Lars Grönberg Gunnel Linnertz Göran Westling Per Agélii

Chairman of the Board Chief Executive

Officer Our Audit Report was submitted on 4 March 2008

Svante Forsberg

Authorized Public Accountant Deloitte AB

Directors’ Report, cont.

27

Consolidated Income Statement

SEK 000 Note 2007 2006

Operating income

Revenue 4 721,816 550,610

Total revenue 721,816 550,610

Operating expenses

Other external expenses 5, 6 -39,682 -52,872

Personnel costs 7, 8 -519,758 -360,315

Costs for subcontracting consultants -62,528 -77,202

Depreciation, amortization and impairment of tangible and intangible assets 9 -3,409 -2,581

Total operating expenses -625,377 -492,970

Operating profit/loss 96,439 57,640

Interest income 30 2,440 1,025

Interest expenses 30 -1,102 -972

Other financial income and expenses -321 -267

Profit/loss after financial items 97,456 57,426

Tax 10 -29,043 -17,169

Net profit/loss for the period 68,413 40,257

Attributable to:

Shareholders of parent company 68,413 40,257

Minority interests - -

Per share data

Basic earnings per share, SEK 28 6.59 3.88

Diluted earnings per share, SEK 28 6.59 3.88

Equity per share, SEK 14.54 11.84

Equity per share, diluted, SEK 14.54 11.84

Cash and cash equivalents per share, SEK 8.63 8.74

No. of shares at year-end 10,387,355 10,387,355

No. of shares, diluted 10,387,355 10,387,355

27

Consolidated Balance Sheet

Assets, SEK 000 Note 31 Dec. 2007 31 Dec. 2006

Non-current assets

Goodwill 11 46,600 46,600

Other intangible assets 12 814 662

Tangible non-current assets 13 14,275 11,721

Deferred tax claims 10 617 865

Other long-term receivables 23 628 628

Participations in associated companies 23 11 11

Total non-current assets 62,945 60,487

Current assets

Accounts receivable 32, 33 167,217 116,523

Other receivables 630 365

Prepaid expenses and accrued income 14 37,376 30,101

Cash and cash equivalents 29 89,692 90,813

Total current assets 294,914 237,802

Total assets 357,860 298,289

Equity and liabilities, SEK 000

Equity 15, 31

Share capital ß5,194 5,194

Other paid-up capital 61,714 61,714

Retained profits including net profit for the period 84,175 56,064

Equity attributable to parent company’s owners 151,083 122,972

Minority interest - -

Total equity 151,083 122,972

Non-current liabilities

Liabilities for finance leases 16 9,108 7,397

Total non-current liabilities 9,108 7,397

Current liabilities

Accounts payable 14,169 26,617

Tax liabilities 18,773 18,433

Other liabilities 17 29,216 23,029

Accrued expenses and prepaid income 18 135,511 99,841

Total current liabilities 197,669 167,920

29

Statement of Changes in Consolidated Equity

SEK 000 Share

capital Other paid-up

capital Profit brought forward

Total equity attri- butable to parent

company’s owners Total equity

Opening balance as at 1 January 2006 5,194 61,714 44,788 111,696 111,696

Dividend paid -28,981 -28,981 -28,981

Profit/loss for the period - - 40,257 40,257 40,257

Closing balance as at 31 December 2006 5,194 61,174 56,064 122,972 122,972

Opening balance as at 1 January 2007 5,194 61,714 56,064 122,972 122,972

Dividend paid -40,302 -40,302 -40,302

Profit/loss for the period - - 68,413 68,413 68,413

Closing balance as at 31 December 2007 5,194 61,714 84,175 151,083 151,083

Consolidated Cash Flow Statement

Cash Flow Statement, SEK 000 Note 2007 2006

Operating activities

Operating profit/loss 96,439 57,640

Adjustment for non-cash items 20 3,409 2,581

99,848 60,221

Interest received 2,440 1,025

Interest paid -1,424 -1,239

Income tax paid -12,298 -9,584

Cash flow from operating activities before changes in working capital 88,566 50,423

Changes in working capital

Accounts receivable (increase) -50,694 - 3,700

Current receivables (increase) -7,538 -14,604

Current liabilities (increase) 12,324 33,615

Cash flow from operating activities 42,658 65,734

Investment activities

Acquisitions of associated companies 23 - -11

Acquisitions of intangible assets -377 -194

Acquisitions of tangible non-current assets -389 -2,091

Sales of tangible non-current assets - -

Cash flow from investment activities -766 -2,296

Financing activities

Change of lease liability - 2,710 -2,078

Change in non-current receivables, interest-bearing - -628

Dividend paid -40,303 -28,981

Cash flow from financing activities -43,013 -31,687

Cash flow for the year -1,121 31,751

Cash and cash equivalents, opening balance 90,813 59,062

Cash and cash equivalents, closing balance 29 89,692 90,813

31

Parent Company Income Statement

Income Statement, SEK 000 Note 2007 2006

Operating income

Net sales 4 721,816 550,610

Total revenue 721,816 550,610

Operating expenses

Other external expenses 5, 6 -42,993 -55,262

Personnel costs 7, 8 -519,758 -360,315

Costs for subcontracting consultants -62,528 -77,202

Depreciation, amortization and impairment of tangible and intangible non-current assets 9 -6,106 -7,262

Total operating expenses -631,385 -500,041

Operating profit/loss 90,431 50,569

Interest income 30 2,440 1,025

Interest expenses 30 -502 -660

Other financial income and expenses -321 -267

Profit/loss after financial items 92,048 50,667

Appropriations

Tax 10 -29,043 -17,169

Net profit/loss for the period 63,005 33,498

31

Parent Company Balance Sheet

Assets, SEK 000 Note 31 Dec. 2007 31 Dec. 2006

Non-current assets

Goodwill 11 6,294 11,701

Other intangible assets 12 814 662

Participations in associated companies 23 11 11

7,119 12,374

Tangible non-current assets

Equipment 13 1,741 1,826

1,741 1,826

Financial non-current assets

Participations in group companies 21 5,600 5,600

Deferred tax claims 10 617 865

Other long-term receivables 628 628

Total non-current assets 15,705 21,293

Current assets

Accounts receivable 32, 33 167,217 116,523

Other receivables 630 366

Prepaid expenses and accrued income 14 37,376 30,101

205,223 146,990

Cash and bank balances 29 89,610 90,731

Total current assets 294,833 237,721

Total assets 310,538 259, 014

There are no references to Notes 34 and 35 on the book value of each class of financial instrument and maturity analysis for contracted finance lease payments in the Balance Sheet.

33

Parent Company Balance Sheet, cont.

Equity and liabilities, SEK 000 Note 31 Dec. 2007 31 Dec. 2006

Equity 15, 31

Restricted equity

Share capital 5,194 5,194

Statutory reserve 21,714 21,714

26,908 26,908

Non-restricted equity

Retained profits 26,282 33 086

Net profit for the period 63,005 33,498

89,287 66,584

Total equity 116,195 93,492

Current liabilities

Accounts payable 14,169 26,617

Current tax liabilities 18,773 18,433

Other liabilities 17 25,790 20,531

Liabilities to group companies 104 104

Accrued expenses and prepaid income 18 135,507 99,837

Total current liabilities 194,343 165,522

Total equity and liabilities 310,538 259,014

Liabilities 194,342 165,522

of which interest bearing - -

of which non-interest bearing 194,342 165,522

Memorandum items

Pledged assets - -

Contingent liabilities 19

Statement of Changes in Parent Company’s Equity

Connecta AB, SEK 000 Share capital Statutory reserve

Profit brought

forward Total

Opening balance as at 1 January 2006 5,194 21,714 62,067 88,975

Dividend paid - - -28,981 -28,981

Profit/loss for the period - - 33,498 33,498

Closing balance as at 31 December 2006 5,194 21,714 66,584 93,492

Opening balance as at 1 January 2007 5,194 21,714 66,584 93,492

Dividend paid - - -40,302 -40,302

Profit/loss for the period - - 63,005 63,005

Closing balance as at 31 December 2007 5,194 21,714 89,287 116,195