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EUIOR

ANNUALREP~I987

(2)
(3)

INATOR1987

• Acquisition of InControl.

• Acquisition of Epitec (30 °/o ).

• Joint venture with Malmö Municipality/Malmator.

• Acquisition of C-Squared in England.

• Enator became wholly owned subsidiary of Pronator.

• Enator Quality (EQ), a comprehensive quality- improvement program, is introduced.

• Rolf Thorsen becomes new president.

CONIINIS

Page

The President of Enator's comments on 1987 . . . . . . . 2

Board of Directors' report . . . . . . • . . . . 3

Income statements . . . . . . . 5

Balance sheets . . . . . . . . . . 6

statement of changes in financial position . . . . 8

Accounting principles and Notes to the financial statements . . . . . . . . . . . 9

Auditors' report . . . • • . . • . . . 12

Key financial ratios . . . . . . 12

The president looks ahead . . . . . . . . . . . 13

A matter of trust . . . . . . . . . . . . 14

Enator's Board ofDirectors ......... 16

Enator's executives ................ 16

Directory . . . . . . . . . . . . . . . . . 17

- l -

(4)

••• ABOUT 1987

Enator's President comments on 1987

Operations

The Enator Group's 1987 income before appropriations amounted to SEK 25.2 million, a decline of SEK 12 M campared with the preeecting year. Group sales totaled SEK 269 M, a 12-percent increase campared with 1986.

The difference in income is attributable primarily to our international campanies not meeting established goals.

Lower order bookings during the first half of 1987 in Great Britain and West Germany, combined with estab- lishment costs in Finland and Switzerland, resulted in loss ofincome which could not be offset on a full-year basis. We also carried out a total restructuring of our subsidiary in Norway, which adversely affected the in- come trend.

International operations as a whole reporteda budgetary difference of approximately SEK 15 M and a operating loss. We initiated a comprehensive action program during the y ear to remedy the situation. The se measures, earobined with increased efforts by the Parent Company and a review and change of our international strategies, will result in improved profitability in the future.

Operations in Sweden showeda favorable trend during the year.

The profit margin was 15 percent and growth exceeded the average for the market.

Joint ventures

Our joint-venture campanies reporteda favorable trend during the year.

Increase in income was 40 percent, campared with 1986.

Scanator signed important agreements with Braathens SAFE in Norway, Maersk Air in Denmark and other companies, gaining a leading position as a supplier of systems to airlin e s in the N ordic countries. United Parce l Service, one of the largest shipping campanies in the United States, signed an order for a major systems package - which will serve as a good reference in the U. S. market.

Senator reached comprehensive agreements with Lloyds Bank and Östgöta Enskilda Bank covering deli- very of computer software for bank terminal networks.

Enator Qualily (EQ)

Substantial efforts were made to raise the level ofknow- ledge and quality in the Company. Our expertise in proj- ect management, one of Enator's principal competitive tools, was refined through the EQ Program. This entai- led costs of SEK 3.5 M.

Knowledge-based systems

We took the first step in to the field ofknowledge-based systems during the year. This is a future market which we now can exploit and influence. We acquired a 30- percent interest in Epitec AB.

Acquisition of C Squared Systems and lnControl AB

One ofEnator's strategies is to develop spearhead com- petence in certain market segments. Through the acqui- sition of C Squared Systems Ltd in London, we now have access to specialized expertise in the telecommu- nications field.

InControl AB in Vasterås, Sweden, joined Enator and will strengthen our efforts in the process and manillac- turing industries.

Malmator AB

Cooperation began between the Municipality of Malmö and Enator during the year.

Malmator, ajointly owned company, markets and earn- missions computer systems developed by the muni- cipality in a similar form of cooperation as in use in Scanator (SAS/Enator) and Senator (Skandinaviska Enskilda Banken/Enator).

To summarize, 1987 was an eventful year for Enator.

Attractive company acquisitions, many important or- ders and purposeful investments in quality provide a solid base for the future.

(5)

ADMINISTRATION REPORT

The Board ofDirectors and the President of Enator AB hereby submit their Annual Report and consolidated financial statements for fiscal year 1987.

The Company is a subsidiary ofPronator AB. During the spring of 1987, Pronatar made an offer to Enator's share- holders to purchase their shares. For each five Enator shares, shareholders received four Pronator shares and a cash payment of SEK 125. This offer was very favorably received by Enator shareholders and resulted in Pro- nator holding nearly 100 percent of Enator shares and voting rights.

Business concept and principal strategy

Enator's business concept is to "combine management and data processing know-how and thereby high-quality consu1ting services to decision-makers in medium-sized and large campanies and organizations."

With its qualified project management, Enator accepts total responsibility for implementing development proj- ects from concept to a finished technical or administra- tive system.

Operations during 1987

Operations are conducted through employees of subsidi- aries in Sweden and other countries, primarily in the following business areas.

- Banking, finance, insurance - lndustryl)

- Tourism, traveland transport - Other

Percentage of volume by business area

14%

51%

14%

21%

The tumover of the Group increased by 16 percent to SEK 269 M. The profit of the Group declined by 32 percent to SEK 25 M and the margin fell from 16 percent to 9 percent

Enator AB, the Parent Company, reporteda loss of SEK 3.6 M (1986: profit ofSEK 0.4 M) and a turnover of26 M (SEK 35.3 M). Sales to Group campanies accounted for 69 percent of total sales. Of operating costs, 22 percent pertained to procurement of services from Group com- panies.

The decline in profit for the year is attributable to a nurnber of circumstances. International operations did not attain established income targets. Reorganization and acquisitions (in Norway and Great Britain) and the establishment of two new campanies (in Finland and Switzerland) were factors cantributing to substantial reduction of Group income. Campared with the pre- eecting year the outcome from the international opera- tions declined SEK 5.3 M resulting in a loss of SEK L 4 M excluding related management and development costs.

1) Electronics 18 %; Other industries 26 %; Troding 7%.

At year-end, extensive measures were taken to support international operations. A substantial increase in in- come is expected during 1988.

Operations in Sweden attained Enator's long-term pro- titability goals - a 15-percent profit on sales - despite excessive restraints on the recruitment of cansultants during the latter part of the summer. Income from operations in Sweden totaled SEK 28.2 M.

T wo acquisitions were made in Sweden during the year:

InControl AB in Våsterås, representing an investment in the Swedish process industry, primarily the steel industry, and a 30-percent interest in Epitec AB, which is Enator's first step toward knowledge-based systems.

Enator also started a joint ven ture, Malmator, with the Municipality ofMalmö- pattemed after Scanator (SAS) and Senator (Skandinaviska Enskilda Banken). Malrn- ator markets hospital-administration and other types of municipal systems.

Notable major customers handled by Enator during the year involved SAS Cargo, Siemens/ AMS, EIS, Philips, the Swedish Telecommunications Administra- tion, Linjeflyg and IDM (docurnentation). In all, these assignments accounted for invoicing totating SEK 120M, out of a total of SEK 269M. A number ofthese projects will continue during 1988.

Employees

Substantial investments were made in 1987 covering trai- ning in project management, the so-called EQ Program.

Measures to stimulate employees byimproving working conditions and strengthening motivation are in progress, using both intemal and externa! resources. The Com- pany invested a total of slightly more than SEK 15 M in employee development and motivation.

The nurnber of employees, and wages, salarles and social costs were as follows:

The number of employees of Enator at the beginning of the year was 478 and 492 at year-end.

The average number of employees during the year was 482 (426).

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(6)

Distribution of

permanent Group employees

by work site Wages, salaries and other remuneration

Perent Company Group Perent Company Group

1987 1986 1987 1986 (SEK millions) 1987 1986 1987 1986

Stockholm 14 27 304 271 Boards of Diredors

Malmö 31 27 and Presidents 0.8 1.0 11.6 8.7

Gothenburg 13 2 Other employees in:

Västerås 8 Sweden 3.8 5.2 61.8 51.7

Total in Sweden 356 300 Great Britain 5.9 3.1

West Germany 12.3 8.7

Great Britain 29 16 Norway 4.5 11.6

West Germany 43 33 Denmark 9.6 6.3

Norway 18 53 Finland 1.1

Denmark 32 24

Total 4.6 6.2 106.8 90.1

Finland 4

Total outside Sweden 126 126 Social costs 2.6 3.7 40.4 33.9

Total Enator Groue 482 426

Proposeli distribution of earnings

Punds at the disposal of the Annual General Meeting The Board ofDirectors and the President propose:

consists of:

Retained earnings N et profit for the year Total disposable funds

SEK 18,347,000 that the amount be carried forward SEK 5,870,000 Total

SEK 24,217,000

SEK 24,217,000 SEK 24,217,000

As reported in the Consolidated Balance Sheet, unrestricted equity amounts to SEK24,727, 000. Itis proposed that SEK 819,000 be transferred to restricted reserves.

Jan Carlzon

UlfRubendick

RolfThorsell President

Stockholm, March 10, 1988

Lars Ekman

Christer Jacobsson

Jan Engström

Ulf Linander Employee Representative and Project Manager

Hans G Wahlberg

Benita Gadd

Employeer Representative and Consult

Jan Rudberg

Our audit report concerning this annual report and

consolidated financial statements was submitted on March 10, 1988.

PerBergman Kerstin Stenberg

Authorized Public Accountant Authori~ed Public Accountant

(7)

INCOME STATEMENT

Group Parent Company

(SEK OOOs) 1987 1986 1987 1986

Operating revenues 269,152 232,611 25,992 35,329

Operating expenses -245237 -196218 -35J89 -36,299

OPERATING PROFIT/LOSS

BEFORE DEPRECIATION 23,615 36,093 -9,297 -970

Depreciation accorcling

to plan Note l -41_75 -4,055 -109 -987

OPERATING PROFIT/LOSS

AFTER DEPRECIATION 18,8Ml 32,038 -9,406 -1,957

Financial income and expenses

Share dividends 53 1,082 574

Interest income 12,475 12,967 12,404 11,854

Interest expenses -5,231 -7,606 -7,106 -10,242

Realized gain on sele

of seeurities 198 198

Other Financial item s -913 6,331 -530 5,082 -558 5,822 -23 2;362

PROm/LOSS AFTER FINANCIAL

INCOME AND EXPENSES 25,171 37,120 -3,584 405

Extraordinary income

and expenses Note 2 -753 8,010 -746 8~17

PROFIT /LOSS BEFORE APPRO-

PRIATIONS AND TAXES 24,418 45,130 -4,330 8,922

Less minority interests -66 -637

PROFII/LOSS BIFORE

APPROPRIATIONS AND TAX,

EXCL. MINORITY INTERESTS 24,352 44,493 -4,330 8,922

Appropriations

Group contributions received 12,000 30,150

Group contributions paid -1,150

Change in reserve for work

in progress Note 3 -12,136 Change in Profit

equalization reserve -2,988 -2,216 327 119

Excess depreciation Note4 -300 29,945 -68 30,489

Change in general

investment reserve -35720 -35,720

Change in renewal reserve 2,920 2,920

Change in pension fund (Norway) 777

Change in consolidotion reserve

(Norway)

-

-15,424 -205 -4499 12J59 26J!08

PROFIT BIFORI TAX 8,928 39,994 7,929 35730

laxes NoteS -5,219 -17,646 -2,059 -14,679

NET PROFIT FOR THE YEAR 3l_09 22;348 5,870 21,051

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(8)

BALANCE SHEETS

(SEK OOOs)

Group

Dec. 31, 1987 Dec. 31, 1986

Paront Co~npany

Dec. 31, 1987 Dec. 31,1986

ASSETS

Current assets

Liquid assets 18,266 25,270 3,590 16133

Other seeurities 2,294 2,294

Receivables, Perent Company 547 2,663 458 2,663

Receivables, Group campanies 4,387 66,450 54,419 119,225

Accounts receivable « .346 42,515 1,007 1,449

Prepaid expenses

ond accrued income 11,458 13,062 5,114 7,077

Other receivables 22,367 7,064 17,803 4,598

Work in progress Note 3 17,391 118162 159,318 82,391 154,039

Blocked account with the Central Bank of Sweden

For investment reserve 30,945 3,750 30,540 3150

Fixed assets

Shares in subsidiories Nate 6 22,841 2,873

Shares in associated

company Note6 4,660 60 l ,()60 60

Deposits 1,246 1,089 18 18

Long-term receivobles,

Perent Company 40,000 40,000 40,000 40,000

Other 6,981 4,016 2,637 2,637

Goodwill Note 7 2,385 254

Office premises Note8 1,666 1,688

Machinery and equipment Note 9 14,951 12,554 562 344

Buildings Note9 290 72,179 290 59,951 290 67~08 ~ 46!222

Total assets 221!886 223,019 180,339 204pll

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Group Parent Co•pany

(SEK OOOs} Dec. 31,1987 Dec. 31, 1986 Dec. 31, 1987 Dec. 31,1986

LIABILIIIES AND

SHAREHOLDERS' EQUIIY Current liabilities

Payobles to Parent Company 202 86

Payables to Group campanies 2-4 587 23,967 17148

Accounts payable 8_176 8,977 728 2,202

Tax licbility -4,521 15,002 1,576 13,952

Accrued expenses ond

deferred income 18;300 12196 1,265 2,139

Utilized bank credits -4,868 2,895

Other current liebiiities 12,196 25,989 439 12,391

Advances from customers 3,1-43 51,430 947 67,193 28,061 48,432

Long-term liabilitles Poyables to Perent Company

Poyoble to Group

Note lO 5,554 5,554

campanies Note 11 21,000 20,000

Debenture loans 20,000 20,000 20,000 20,000

Morfgage loan l ,.480 914

Convertible debenture loans Nate l O 5,544 11,508 5,544 11,508

Deferred tax licbility 350 55

Other long-term liebiiities 7,908 40.836 3,475 35,952 1,375 53,473 1,582 53,090

Minority interest Nate 12 367 511

Untaxecl reserves Nate 13 Reserve for work

in progress Nate 3 12,136

Profit equalization reserve 13,858 l 0,870 920 1,247

Accumulated excess depreciotion

Office premises Not e 8 14

Machinery and equipment Not e 9 2,566 2,237 142 74

General investment reserve 40120 40120 40]2{) 40720

Consolidatian reserve

(Norway} l 197 70,.477 U75 55,016 41182 42,041

SHAREHOLDERS'

E Q U ITY Note 14

Resfrieted equity

Shore copital(2, 187.040 shares,

par value SEK 12.50) 27,338 27,338 27,338 27,338

Resfrieted reserves 6lll 34,()49 3,493 30,831 5,468 32,806 2~21 29,859

Non resfrieled equity

Non restricted reserves 21,018 11,168 18,347 9,538

Profit for the yeor 3l09 24l27 22,348 33,516 5,870 24,217 21.051 30~89

Total liabilities ancl

shareholclers' equity 221,886 223,019 180,339 204,011

Assets pledged Non Non Non Non

Contingentliabilitles Note 15 4,658 1,425 18,107 9,743

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(10)

STATEMENTS OF CHANGES IN FINANCIAL POSITION

Group Parent Company

(SEK OOOs) 1987 1986 1987 1986

FUNDS PROVIDED FROM INTERNAL SOURCES

Profit before appropriations and tax 24,.417 45,129 -4,330 8,921

Depreciation charged to above profit 4175 4,055 109 987

Capital gains on sole of fixed assets -12,267 -12,267

Minority share ofincome for the year -66 -637

Consolidatian difference 52 -327

T oxes -5,219 -17,646 -2,059 -14,679

Deposit to (-)/Withdrowols from(+) blocked account -271195 97 -26l 90 -32:50

Total lunds provided from internal sources -3,236 18,404 -33,070 -20788

FUNDS PROVIDED FROM EXTERNAL SOURCES

Sale of share in associated campanies 3,500 3,500

Sale of buildings 94,370 94,370

Sale of equipment 20,213 20,213

lncrease in long-term liebiiities 4,884 383

lncrease in minority interests 435

Group contributtons received 121000 29,000

Totallunds provided from external sources 4,884 118,518 12,383 147,083

Totallunds provlded 1,648 1361922 -20,687 126,295

APPLICATIONS OF FUNDS

Net investment in sheres in subsidiaries 19,968 734

Net investments in sheres in associated campanies 4,600 1,000

Net investment in fixed assets 7,150 28,065 327 17782

lncrease in goodwill 2,131

lncrease in long-term receivobles 3,122 2,286 355

Reduction in long-term liebiiities 18,920 18,012

Reduction in minority interests 143

Dividends to shoreholders 91295 6Z80 91295 6780

Total application of lunds 26,441 561051 30290 431663 Changes in working capital -242:93 801871 -511277 821632

SPECIFICATION OF CHANGES IN WORKING CAPITAL

lncreose (+)/Decreose H in work in progress 17,391

lncrease (+)/Decrease H in current receivables -48,649 91,501 -56,211 90,478

lncrease (-)/Decrease (+) in current liebiiities 15763 -16,191 20,371 -13,726

lncrease (+)/Decrease H in seeurities -2,294 -2,059 -2,294 -2,059

lncreose (+)/Decrease (-)in liquid funds -7,004 71620 -13,143 7,939

Total changes -242:93 80,871 -511277 82,632

(11)

. ACCOUNTING PRINCIPLES

Consolidated accounts

The consolidated accounts indude the Parent Company and all campa nies, in which the Perent Company h eld m are than 50 percent of the voting rights either directly or in- directly at year-end.

The Consolidated accounts have been p repared in accord- ance with the purchose method, whereby shareholders' equity, including untaxed reserves, in the subsidiaries at acquisition has been eliminated.

In cases where acquisition book-value has exceeded Group participation in shareholders' equity at acquisition, the difference has been reported as goodwill.

Currency conversions - foreign subsidiaries

In transiating the year-end financialstatements of subsidi- arias outside Sweden, the prevailing rate on the account- ing date is opplied under the current rate method.

Elimination of acquired equity has been carried out with the originally determined amount and charged primarily against the subsidiary's restricted equity, while the ramain- der has been charged againstthe subsidiary's unrestricted equity.

Translotion differences in shareholders' equity, including untaxed reserves, are not reported in the income state- ment but have been apportioned between untaxed reserves, restricted reserves and unrestricted reserves.

The effect of the year's translotion differences on these balancesheet itemsis reported under "Notesw below.

This accounting principle has been opplied as of 1987.

Balance Sheet itemsin the 1986 accounts have been ad- justed for comparison.

Fixed assets

Depreciation according to plan has been charged against operating profit in the lncome Statement. Depreciation according to plan has been opplied using the following percentages:

- Office premises 20

- Machinery and equipment 20

Assets are reported after deductions for accumulated depreciation according to plan on the assets side of the balance sheet. The difference between accumulated book depreciation and accumulated de preciatian according to plan is reported as an untaxed reserve on the licbility side of the balance sheet.

In confirmity with the Perent Company' s accounting policy, Group goodwill is not amortized.

Receivables and liabilities in foreign currencies

Receivables and liebiiities in foreign currencies have been translatad at the rate prevailing on the acquisition date.

As a result, exchange gains and losses occur in the indivi- dual campanies only in the year they are realized.

In the consolidated financial statements, these gains and losses on receivables and liebiiities of Group campanies are realized during the current year.

NOTES

Note 1. Depreciation accorcling to plan Perent Company Group

(SEK OOOs) 1987 1986 1987 1986

Goodwill 106

Office premises 22 241 136

Mochinery ond equipment 109 965 4,534 3,813

Total 109 987 4,775 4,055

Note 2. Ex:traorclinary income and expenses Perent Company Group

(SEK OOOs) 1987 1987

Reolized goin on sale of

sheres in subsidiaries 260 253

Reolized loss on sale of

sheres in ossocioted -1,007 -1,007

Total -746 -753

Note 3. Work in progress

Enator's revenues consists mainly of services which are invoiced on current occount. Under applicable Swedish tax regulations, only invoices submitted during the tax year should be reported os revenue.

However, work that was completed but not invoiced at year- end and work in progress must be taken into account to describe the octuol income trend.

The portion not reported os revenue for tax purposes is shown under HAppropriations,w and the total reserve is shown under HUntoxed reserves." The balance-sheet item "Work in progress"

under nCurrent ossetsw indudes work in progress on current accounts in the omount of SEK 12,136,000 and work in progress at fixed prices in the a mount of SEK 5,255,000.

Note 4. Excess depreciation

(SEK OOOs) Office premises

Mochinery ond equipment Buildings

Total

Perent Company 1987 1986

68 -5,334 - -25,155

68 -30,489 Note 5. l'ax cost (Amounts in SEK OOOs)

Group 1987 1986

-14 -9

314 -4,781 - -25,155

300 -29,945

Total tax cost includes profit-shering tax of O for the Parant Company ond 331 for the Group.

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(12)

Note 6. Group holdings of shares and other seeurities

PARENT COMPANY HOLDINGS Subsidiaries:

Enator Sverige AB Enator A/S A/SEnator Enator GmbH Enator ltd Enator AG Enator OY Senator AB Total

Associated companies:

Seanater AB

Enator Columbus AG Total

ENATOR SVERIGE AB's HOLDINGS Associated companies:

Malmator AB Epitec AB Total

Note 7. Goodwill (Amounts in SEK OOOs)

Share Number of Par value

%

100 100 90 75,1 100 100 60 100

50 50

50 30

sh a res SEK OOOs

150,000 15,000

1,000 NOK 100

2,700 DKK 270

DEM 375,5

25,000 GBP 25

500 CHF 50

1,500 FIM 150

1,000 100

500 50

2,500 CHF 250

1,000 100

310 31

Note 9. Machinery and equipment, including buildings

Book value SEK OOOs

20,450 l 04 228 l ,281 265 200 213 l 00 22,841

60 1,000 1,060

100 3,500 3,600

No amortization or write-down is opplied to acquired Group

goodwill. Machinery and equipment

(SEKOOOs) Perent Company Group

Total goodwill is analyzed annually in consultation with the auditors. In cases deemed appropriate, amortization or non- recurrent write-downs are made.

Goodwill is distributed by company acquisition in the Group as follows:

Company Enator Sverige AB Enator Affärssystem AB Dynator AB

Enator Syd AB

Informationsstrategerna AB Educotor AB

lnControl AB

Selin Ur och Optik AB C Square ltd

Total

Note 8. OHice premises

(SEK OOOs) Acquisition value

Accumuloted depreciation acc:ording to plan Residua! value Acc:umulated excess

Goodwill 400 20 207 27 237 220

o

304 970 2,385

Group 1987 1986 2,106 1,886 -440 -198 1,666 1,688

Acquisition volue

Accumulated depreciation according to plan

Residua! volue Accumulated excess de preciatian Net book value

Buildings (SEK OOOs) Acquisition value

Accumulated depreciation according to plan Net book value

1987 1986 687 359 -125 -15 562 344 -142 -74 420 270

290 290

290 290

Tax assessment volues, real estate

Buildings 120 120

Land 40 40

1987 23,325 -8,374 14,951 -2,566 12,385

290

290

120 40

1986 17,609 -5,055 12,554 -2,237 l 0,317

290

290

120 40

(13)

Note 10. Convertible debenture loans

In November 1982, the Perent Company issued o convertible loan of SEK 5,043,000 with prefarentiol subscription rights to Praktikertjänst AB.

Praktikertjänst hos the right to exercise conversion as of Novem- ber l, 1987. The loon rnatures on November l, 1992 to the extent that conversion has not taken place prior to that date. The interest is lO percent, with poyment due on November l annu- olly. On conversion of debenturesin to new shares, on e restricted shore, at par value of SEK 12.50 eoch, is received for each full amount of SEK 24.06.

In december 1984 and May 1985, respectively, the Parent Company issued convertible debenture loans of SEK 4,001,000 ond SEK 2,054,000, respectively. The holders of debentures are entitled to exercise conversion rights as of Jonuary 4, 1988.

The loans rnature on December 20, 1990 to the extent that conversion hos not taken place prior to that date. Interest is equal to the Central Bank of Sweden's official discount rate plus 3.5 percent, with payment due on December 20 annually.

On conversion of nates into new shares, one restricted share, at par volue SEK 12.50 each, is received for each full amount of SEK 140.00 and one restricted share, at por volue SEK 12.50 eoch, for eoch fullamount of SEK 115.00, respectively.

Pronotor AB ossumed SEK 5,554,000 of the two lotter loans during 1987 and the remaining SEK 500,000 in eorly 1988.

Note 13. Untaxed reserves

(SEK OOOs)

Reserve for work in progress Profit equalizotion reserve Accumulated excess depreciation General investment reserve Consolidatian reserve {Norway) Total

Note 14. Cha.._e In shareholders' equity

Group Share Resfrieted Non-restricted

(SEK OOOs) capita l reservers reservers Januari l, 1987 27,338 3,493 33,516 lncrease in restricted

reserves 3,148 -3,148

Translotion difference 70 -55

Dividend -9,295

December 31, 1987 27,338 6,711 21,018 Share Legal Profit Perent Company capita l reserve brought

(SEK OOOs) forway

Jonuary l, 1987 27,338 2,521 30,589 lncrease in legal reserve 2,947 -2,947

Dividend -9,295

December 31, 1987 27,338 5,468 18,347

Note Il. Other long-term liabilities, Group companies

(SEK OOOs)

Debenture loan, Mikrotell AB Promissory note loan, Enator AG Total

Note 12. Minority interests (SEK OOOs)

Untoxed reserves Sho~eholders' equity Total

Bolonce Chonge

Jan. l, for the

1987 y ear

12,136

10,870 2,988

2,251 300

40,720 1,175

55,016 15,424

Exchange difference for the year

15 22 37

Note 15. Confingent Ilablities (SEK OOOs)

Perent Company 1987 1986 Guarantees

- subsidiaries 13,449 8,318

- externa! 4,658 1,425

Total 18,107 9,743

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20,000 1,000 21,000

Group 1987 1986

367 511 367 511

Bolance Dec. 31, 19B7 12,136 13,858 2,566 40,720 1,197 70,477

Group 1987 1986

4,658 1,425 4,658 l ,425

(14)

AUDITORS' REPORT

We have inspected the Annual Report, the Accounts and all documents pertaining to the management exercised by the Board and Managing Director for the 1987 financial year pursuant to customary accounting practice.

THE PARENT COMPANY

The Annual Report has been prepared in accordance with the provisions of the Campanies Act.

We recommend:

that the Income Statement and Balance Sheet be adopted;

that the profits be appropriated as proposed in the administration report; and

that Members of the Board and the Managing Director be discharged from Hability in respect of the period covered by the Annual Report.

THEGROUP

The Annual Report for the Group has been prepared in accordance with the provisions of the Campanies Act.

We recommend:

that the Consolidated Income statement and the Con- solidated Balance Sheet be adopted.

Stockholm, Sweden, 10 March 1988 PerBergman

Authorized Public Accountant

Kerstin Stenberg Authorized Public Accountant

KEYRATIOS

Access to income statements and balance sheets is ess- ential for an accurate estimate of a consulting company' s capacity. There are also other statistics which facilitate a doser analysis. For this purpose, Enator has developed

a numberofkey analysis figuresthat provide information about employees, projects and clients. Combined with the fmancial ratios, these key figures offer a more comp- lete picture of Enator.

AGE BUCKITS OF

ENATOR EMPLOBIS IDUCATION

AlllONMINT YOLUMIS MIASURID BY FIIS PIR YlAR

SIZI OF CLIINTS (BASED ON ANNUAL SALIS)

College ond un•vers•iy (63 'MI)

SEK 100,000 to 500,000 (34 '!'o)

CONSULTING ASSIGNMINTS BY BUSINISS ARES

Transport/

tour.sm (14 %)

Trod•ng (7 %)

Elektrames (18 %)

Other 1ndustr.es (26%)

PubliC

odm•mstral1on (13 %)

CONSULTING AlllONMINT BYCATIGORY

Management/

ProJecl monogement (8%

ADP/Inforrnol1on strategJas (11 %)

Prelimmary srud•e• (16 %)

Spec. of system re'l l3 %]

System deSJgn/

progromnung (29 %)

(15)

THE PRESIDENT LOOKS AHEAD

The markel

The market in which Enator is operating is expanding at a rate of 20 percent a year. In certain segments, the rate of growth is much higher. It is not correct that o ur market is saturated. On the other hand, the demands of the market have changed considerably, which has affected traditional data processing consultandes adver- sely. I believe that such concepts as commercial viabill ty, project responsibility, professionalism, total approaches and management viewpoints characterize the coopera- tian we have with customers today.

The market is there, and our capacity to offer services with the right kind of personnel is the only factor that will deterrnine how successful we can be. There is great potential in all markets in which we are active, especially outside Sweden.

Concentration, a structural change that is creating fewer and larger consultancies, is occurring in the market. I believe that we should participate in, and influence, this structural change and I am convinced that our philo- sophy of establishing separate corporate units is well suited for this.

We have, traditionally, held strong positions in such fields as Tourism/Transportation/Travel, Data process- mg and electronics. In recent years we have also deve- loped strong operations for the Engineering and Process- ing industries. Our customers are in these areas, as well as in Banking, Finance and the Public Sector, and this is where we will concentrate our efforts.

Competition is increasing within commerce and indus- try. Deregulation in such fields as aviation, telecommu- nications and the bankingand finance sector is exposing a growing number of businesses to competition. The ability to compete can be strengthened by using infor- mation handling as a strategic tool.

Our business concept

"ro off'rr the ma1ket eonsu/ung scn·zce.1 tn whzch data proceHmg

e.v:perfl~e zs combmed wah ~t,ategtc knowledgem the aua of co,ro-

raff management"

IS an asset for thefuture Cnato1'1 pnnc1pa/ :,emce, "the conduct of plo]ects on a t t mc and .::ost ba ~zs, • often combmed 1r1th total respon- sibtllty, 1s gam mg gtound.

Growth in expertise

It is important for Enator to be in the front line of devel- opments. But it is not enough to be in the right areas and to offer the right services. We are working in a knowledge-intensive sector that is characterized by a high rate of technological innovation. Knowledge is managed and developed by people. Accordingly, we are in vesting to increase the value of our assets - our emp- loyees - in terms of knowledge and motivation.

Cooperation with customers

Demand for our services arises throughout the market.

The same is true of quality. O ur customers are the ones who determine "proper" quality: the level of ambition they want to achieve and the price they are prepared to pay. Long-term cooperation with customers based on mutual trust, which is what we strive for, requires that our customers feel that the level of our quality is high.

We want to be known as a consulting flrm that offers high quality and firm customer relationships.

Joint ventures

Campanies today are investing heavily in information handling systems. There is also a "secondary market"

for these systems, outside the campanies themselves, that managers do not consicter or recognize. Through our joint venture concept, o ur customers have recovered a major portion oftheir data investrnents. We have joint ventures with SAS, S-:&Banken and the Municipality of Malmö. The joint venture concept is successful and will result in new cooperative programs with campanies in all the markets in which we are active.

lnternationalb:ation

One ofEnator's objectives is to be an international con- sulting company. There is a credibility factor involved in being present in a number of countries since most of our competitors also have international operations. In addition, being able to exchange experience among employees in various countries is highly valuable.

As we all know, a strong position in one's h om e market is required to be truly regarded as an international com- pany. This will be our first priority. It is interesting to note that we are now established in the European Community market, which can facilitate project work across national boundaries in the new "open Europe"

ofthe 1990s.

Cooperation

The Pronator Group operates in a knowledge-intensive industry. Together with other service companies, Enator constitutes a unique and effective consulting organiza- tion. New demands arise continuously in our market and we shall be in the front line to meet them. Along with o ur sister companies, we have a special opportunity to "enhance" our product. For example, the addition of creative financing approaches to our development proj- ects is a form of cooperation I would like to see applied more often.

The establishment of joint operations with other Pronatar campanies will also be important in our inter- national activities as a means of becoming well-known and strong in each country.

ROLFTHORSELL, PRFSIDENT ENATOR AB

-13-

(16)

The Enator Qua/ity Formula is a way of expressing the Company's total business concept in a concrete and differentiated man ner. In the practical cooperation between Enator and its clients, thisformu/a creates the condi- tians for achieving the ultima te objective in each Enator data process i ng project, which is:

The implementation of projects that optimize the client's competitive capacity in his market.

Most campanies and organizations often purchase consulting services.

Despite this, clients often have seldom developed the same skills in this area as they demorutrate in procuring tangible products. This applies in particular to the purchase of data processing consulting ser- vices.

The reason is obvious. What the client is buying is a promise from the vendor, based on the buyer's representations, to deliver in the future a data processing system that will strengthen the client's competi- tiveness and reduce his costs. The product is not visible until it is deli- vered. The gains to be realized from it lie ahead. The buyer is uncertain about the final results that will be delivered and about the return on the costs he has incurred.

There is a distinct difference bet- weena "data processing system" and a "computerized business system."

While both may be referred to as

"data processing systems," the first is a system that has been developed

on the basis of data processing tech- nology and the seeond is one that has been developed based on a business concept.

The difference lies in the perform- ance. A data processing system must be developed through interaction between the consultant and the client. Thisrequiresgoodcommuni- cations and solid, well-established long-term relations between buyer and seller-before, during and after delivery of the system. Enator has developed a quality formu1a for pro- ject management that creates a base

for success in concrete projectopera- tions.

Enator proiect management

Enator's experience in providing actvice on information technology and in developing data processing systems cover a period of more thail ten years. We work world-wide.

Based on this experience, and on Enator's objective for each assign- ment, which is that:

" ... regardless of the assignment, we should always serve the customer's interests, (and) analyze the purpose of our services and how our work can support the customer's business concept,"

Enator has developed a practical project-management mod el desig- ned to:

- eliminate the client's uncertainties at the time of purchase by making Enator's product "tangible" and understandable,

- attack the right problem, in terms of the client's business concept and data processing strategy, - assume responsibility for results.

Financial strength, commercial success

Enator's financial strength, the size of the company, and its commercial successes eliminate some funda- mental uncertainties on the part of clients.

Enator's financial base quarantees that the company can stand behind its commitments. As a result of the breadth of its professional specializ- ation and knowledge, and the num-

References

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