Annual Report 2009 Cybercom Group

Årsredovisning 2009 / Avsnittsrubrik

Annual report 2009

Content

Business review Cybercom in brief 3 2009 in brief 4 CEO’s report 2009 6 Goals and strategies 8 Cybercom’s areas of focus 11 Corporate responsibility and good citizenship 13

Directors’ report Directors’ report 14 Summary 2009 14 Operations and organisation 15 Market and market developments 16 Sales and earnings 18 Cash flow and financial position 20 Employees 22 Remuneration guidelines for senior executives 24 Board authorisation for issue of shares 24 Risk and risk management 25 Additional information 26 Share development and ownership structure 26 Outlook 28 Important events after year-end 28 Parent company 28

Financial statements Consolidated income statement 29 Consolidated statement of changes in equity 29 Consolidated balance sheet 30 Consolidated cash flow statement 31 Income statement – parent company 32 Statement of changes in equity – parent company 32 Balance sheet – parent company 33 Cash flow statement – parent company 34 Five-year overview 35 Definitions 36 Notes 37 Proposed allocation of profit 66 Assurance 66 Audit report 67

Corporate governance Corporate governance report 68 Board report on internal control 70 Board of directors 71 Executive management 72 Auditors 72

Information Annual General Meeting 2010 73 Upcoming dates and investor relations 73

Annual report 2009 / Business review

Cybercom in brief

The Cybercom Group is a consultancy focused on advanced IT Cybercom collaborates closely with its customers and and telecom solutions. By delivering cost-effective solutions of simultaneously offers global delivery capacity. The company has the highest quality, Cybercom creates business value for its a strong platform in the Nordics and operations in eastern customers. Through global delivery capacity, local presence, Europe, Asia, and the US. With 28 offices in 11 countries, and close co-operation with customers, Cybercom strengthens Cybercom accepts assignments worldwide. A growth company, its customers’ operations using turnkey solutions that merge Cybercom grew from approximately SEK 535 million in sales in technology and reality. 2006 to over SEK 1,750 million in 2009. By leveraging the extensive industry and operations experience of its over 1,800 employees, Cybercom has become an established partner A strong platform in the Nordics for solutions in internet services, mobile services, security, and operations in eastern Europe, embedded systems, and telecom management. At 58 per cent, telecom accounts for the largest percentage of Cybercom’s Asia, and the US. sales, followed by the public sector, industry, media, retail, and banking and financial services. The company was founded in

1995 and has been quoted on the NASDAQ OMX Nordic exchange since 1999.

Sales by industry Internet services Cybercom administers and develops portals for several inter- Telecom, 58% national enterprises. Drawing on its years of experience, Public sector, 14% Cybercom helps customers create new digital services and Industry, 12% value propositions for online and mobile applications. Media, 4% Mobile services Banking, 3% Cybercom provides turnkey mobile service solutions that help its Retail, 3% customers succeed in their mobile businesses. Security Other, 6% Cybercom is Sweden’s leading player in information and IT security consulting. It offers a full range of services, from Sales by segment strategic consulting and analysis to full responsibility for implementation and change processes. Embedded systems Cybercom offers expertise that spans the entire field of Nordic, 90% embedded systems. It provides customers with innovative Other Europe, 2% solutions that incorporate tomorrow’s mobile and wireless Asia, 8% technologies. Telecom management Cybercom offers expertise, consulting, and services in telecom management and networks. Cybercom consultants work on

Number of employees by segment projects worldwide, helping customers exploit new technologies and grow their businesses.

Nordic, 78% Other Europe, 8% Asia, 14%

Annual report 2009 / Business review

2009 in brief

Key Figures Operating profit/loss and operating margin, EBITDA

2009 2008 SEK m % Sales, SEK m 1,751.6 1,781.1 250 12 EBITDA, earnings, SEK m 144.1 193.8 10 EBITDA operating margin,% 8.2 10.9 200 EBITDA earnings, underlying operations, SEK m 177.9 199.4 8 150 EBITDA margin, underlying operations,% 10.2 11.2 6 Operating profit, EBIT, SEK m –177.7 156.0 100 4 EBIT margin,% –10.1 8.8 EBIT underlying operations, SEK m 136.1 161.6 50 2 EBIT margin, underlying operations,% 7.8 9.1 0 0 Profit/loss after tax, SEK m –209.5 134.0 2005 2006 2007 2008 2009 Earnings per share, EPS, SEK –6.23 4.92

Sales Stock price trend, 2009

SEK m 2 000

1 500

1 000

500

0 2005 2006 2007 2008 2009

Sales in line with 2008 Cybercom's sales in 2009 amounted to SEK 1,751.6 million, Goodwill write-down which is in line with the previous year (1,781.1), despite a During Q1, Cybercom posted a write-down on goodwill of weaker market for IT consultants. The EBITDA margin was SEK 280 million, with SEK 80 million attributable to Sweden and 8.2 per cent (10.9). Excluding costs related to the completed SEK 200 million to Finland. The impairment loss was primarily a restructuring programme, the EBITDA margin was 9.8 per cent. consequence of the cutbacks that Cybercom implemented in the action programme, which mainly affected acquired operations, Larger share of public sector assignments as well as the company's belief that the flagging global economy Cybercom’s public sector undertakings increased during the would continue to influence the Nordic market for IT consultancy year through several new frame agreements in the Nordics, services in 2009. including the Tax Agency and Elsparefonden (Denmark); Yle and Ittela (Finland); and CSN, the Board of Agriculture, the Wider geographic presence National Government Employee Pensions Board, Posten, the During the year, Cybercom opened new sales offices in New Armed Forces, the Civil Aviation Administration, the National Delhi, India, and San Jose, CA, USA, as well as new customer- Board of Health and Welfare, the Social Insurance Agency, driven delivery offices in Bangalore, India, and Katowice, and the Tax Agency (Sweden). Poland. In December 2009, Cybercom had an established presence in 11 countries with 28 offices. Action programme Cybercom initiated an action programme in Q1 to adapt the Partnership with Qt Software Nokia company to the current market situation. Costs related to the Cybercom and Qt Software, which is owned by Nokia, entered a restructuring programme amounted to SEK 28.2 million, which partnership deal during the year. Qt Software authors a frame- had an impact on Q1 profits and are therefore included in this work for user interfaces and application development that allows year’s earnings. applications to be deployed across desktop, mobile, and embedded operating systems without the need to rewrite any

Annual report 2009 / Business review

source code. Cybercom has worked in the Qt environment on rapidly accelerating and creating strong demand for Cybercom’s many customer projects in the telecom and automotive service offerings. industries. Qt competence is in great demand, particularly for development of mobile services and embedded systems. During SEK 100 million new share issue the year, Cybercom won Qt development assignments from As authorised by the annual general meeting on 28 April, the customers in the US as well as from LG Nortel in Korea and board of directors implemented a preferential rights issue Sunniwell in China. in Q2. The oversubscribed share issue generated about SEK 100 million for the company before issue expenses. Im- Expanded global sourcing operations plementation of the issue was based on Cybercom’s estimate Cybercom won several new assignments in Global Sourcing that the global economic downturn would have a clearer impact during the year from customers in the Nordics and the US. on the Nordic market for IT consultancy services in 2009. Issue Polish operations recorded a profit with two global sourcing proceeds were used to fortify the company’s financial position: assignments in telecom. At the start of 2009, 11 Sony Ericsson an extra amortisation of SEK 50 million was made to adapt the employees began working in Cybercom’s Stockholm office company’s capital structure; the remaining SEK 50 million was following cutbacks in Sony Ericsson’s operations in Kista. As a used to strengthen liquidity. result, the relationship with Sony Ericsson grew and business increased during the year. The assignment involves application Offset issue management and development of Sony Ericsson’s portal. For The board of directors decided to implement an offset issue in the past few years, the task of Cybercom’s operations in Mumbai Q3 that deviated from shareholders’ preferential rights, to help and Stockholm has been to secure efficient high-quality delivery settle final additional purchase prices of EUR 2,504,515 to the with 24/7 service. sellers of NSD Consulting Oy and Comprog Oy. Through the offset issue 1,669,123 new shares were issued at an issue price of SEK 16.60 per share. Following the issue, Cybercom’s share Growth of networks and mobile capital totalled SEK 36,087,899, corresponding to services in emerging markets is 36,087,899 shares.

rapidly. Development assignment for China Mobile Wireless Music Growth of 61 per cent and In December 2009, China Mobile selected Cybercom as its breakthrough with major operators in Asia partner in a key music services development project. The parties signed an agreement through the end of 2010. Nearly 30 local Cybercom has strengthened its telecom management brand on consultants are now involved in the growing assignment in the international market. In 2009, Cybercom became a preferred Chengdu, Sichuan, where the research and development centre partner to the largest operators in Asia: Bharti Airtel in India, for China Mobile Wireless Music is located. China Mobile is the Telkomsel in Indonesia, VMS/MobiFone in Vietnam, CamGSM in world’s largest mobile phone operator with more than 500 million Cambodia, and Etisalat in the United Arab Emirates. All are new subscribers. customers and new assignments with great potential for 2010.

Growth of networks and mobile services in emerging markets is

Annual report 2009 / Business review

CEO’s report 2009

Patrik Boman President and CEO

Strong measures and clear results Strong local presence and global delivery capacity 2009 was a challenging year. Cybercom acted decisively, im- Cybercom has advanced its market position over the past few plementing both forward-looking investments and corrective years. With a strong platform in the Nordics and international measures in parts of the company to achieve long-term growth. operations in eastern Europe, the US, the Middle East, and Asia, Cybercom is now stronger than it was one year ago. Cybercom can attractively and cost-effectively offer worldleading players global delivery capacity. Cybercom’s international structure also enables us to accompany our customers in their Cybercom is stronger today strategic development and expansion initiatives around the than it was one year ago. world. Our global sourcing delivery model strengthens Cybercom’s position with many customers. As competition for our customers During a year with challenging market conditions, we became grows, so too do their demands on their suppliers. Global more cost efficient, while achieving a sound equity/assets ratio sourcing's broad knowledge base allows Cybercom to offer and satisfactory cash flow from operating activities. In the fourth superior quality, cost-effective solutions, and fast deliveries. quarter, financial performance improved over 2008. While our strategy of the Nordics as our important home The global economic slowdown clearly affected the Nordic IT market remains unchanged, we recognize that future growth will services market in 2009. In response, we reduced operations in largely occur outside the Nordics. Over half of Cybercom’s locations that were particularly vulnerable to the recession. We customers in the Nordics are in the telecom industry; a sub- also recorded a goodwill impairment charge and carried out a stantial share of these customers have international operations new share issue. Our proactive measures in 2009 strengthened with good experience of in-house global delivery capacity. They Cybercom’s financial position, improved the company’s capital find it advantageous that we as providers share the same structure, and created conditions to carry out several forward- strategy; we follow our customers, and they establish closer looking initiatives in line with our strategy, through sales and partner relationships with us. Consequently, Cybercom partici- branding activities. In 2009 we broadened our customer base on pates in important research and development projects, while existing and new markets in Asia through deals with companies establishing closer ties to our customers’ operations. We often such as China Mobile, LG Nortel, and Bharti Airtel. accept full responsibility in significant assignments, and such External response to our action programme has been undertakings account for over 50 per cent of our sales. positive. Last summer's new issue was oversubscribed, and with that and our offset issue, several new owners joined the list of Internationally broadened 10 largest owners and several owners expanded their com- customer base and growth in Asia mitment. In 2009, Cybercom rose 107 per cent, which out- Strengthening Cybercom’s financial position early in the year performed the Stockholm Stock Exchange Index (+40 per cent) enabled us to invest in long-term initiatives and continue our and the comparable IT index (+60 per cent). These are strategy of focusing on growth markets. At the same time, we indications that we had the right priorities during a difficult year. expanded our operations in more segments and new locations. Cybercom broadened its presence in India by opening a sales

Annual report 2009 / Business review

office in New Delhi in order to enter the Indian operator market. In Southeast Asia, we used our Singapore operation as a base Cybercom is a fast-paced, flexible, to carry out successful marketing campaigns. These and successful company. two initiatives produced results. I can proudly note that Cybercom has added the largest operators in Asia and the Middle East to its customer list. Cybercom’s sales in Asia grew Our frequent customer surveys indicate a substantial improve- by 61 per cent in 2009. ment in Cybercom's positioning on its active markets, both in the During the year, Cybercom also expanded its presence in the Nordics and internationally, thanks to Cybercom’s employees. US with a new sales office. A sales presence on the west coast As a direct result of their hard work and commitment in 2009, we of the US allows us to be close to many global leaders in internet showed that Cybercom is a fast-paced, flexible, and successful and mobile services, including innovative social media players company – a company with potential for advancement, where such as Facebook, Twitter, and Google. employees experience passion, curiosity, and job satisfaction. I am thrilled to have had the opportunity to lead Cybercom; it is +1 and strengthened brand incredibly stimulating, and I am constantly impressed by what I The +1 concept is a distinctive element of Cybercom’s corporate see during my work day. soul and the foundation of our success in achieving our goals. +1 means that all Cybercom employees always strive to exceed Moving forward with a clear focus on profitability the expectations of customers, colleagues, and partners. Looking ahead, I strongly believe that Cybercom will further Cybercom employees have extensive technical expertise and secure its position in 2010. Considering our market position, operational knowledge. They are accustomed to handling com- stable financial platform, and broad geographic scope, prospects plete solutions. Our expertise can be divided into mobile are good for Cybercom to continue to grow and achieve its services, IT security, embedded systems, and telecom manage- stated goals. Our focus in 2010 continues to be improved ment. Many of our employees are sought-after experts in their profitability. fields in public contexts, strengthening the Cybercom brand. In While the current market still poses many major challenges, 2009 we intensified our marketing initiatives and held several it also offers opportunities. Cybercom is an international com- seminars and conferences within Cybercom’s areas of expertise, pany with a strong Nordic base. Globalisation plays an important which have been well-attended events. role moving forward, and we are continuing to grow the company We conclude that the Cybercom brand is becoming increas- in line with our strategy – to build an international Cybercom, ingly established. This is reflected by our inclusion in an geographically structured for long-term profitable business. exclusive, limited group of select providers to leading players in the Nordics as well as in Asia, the Middle East, and adjacent Stockholm, March 2010 regions. We note international acknowledgment of our expertise in IT security, telecom management, and mobile services, where our references in the Nordics are strong and inquiries from Patrik Boman customers in Asia are now growing. President and CEO

Annual report 2009 / Business review

Goals and strategies

Cybercom's goal is to create shareholder value through robust Become a well-known brand among customers, em- growth and high profitability, which are achieved by customers ployees, and job seekers viewing Cybercom as an attractive provider of high-quality, Strengthen the company’s presence in existing markets cost-effective services performed by qualified and motivated and continue to expand beyond the Nordics employees. Broaden the customer base so that no single customer Business concept represents more than 15 per cent of sales Through world-leading global delivery capacity and local Expand global sourcing services so that they comprise a presence, Cybercom strengthens its customers’ operations larger part of sales using end-to-end solutions that merge technology and reality. Financial targets Vision Cybercom's financial targets are: Cybercom will successfully dominate its chosen markets in a Earnings before interest and taxes (EBIT) –13 per cent in leading position for customers, employees, and owners. the long term

Operational objectives Organic growth –15 per cent on average per year over a Cybercom's long-term operational objectives are to: business cycle

Operating margin, EBIT Largest customer’s percentage of total sales

% % 40 15 35 10 30 5 25 0 20 15 -5 10 -10 5 -15 0 2005 2006 2007 2008 2009 2005 2006 2007 2008 2009

Target: A 13 per cent operating margin (EBIT). Target: Largest customer's share of sales not to exceed 15 per cent. Fulfilment: In 2009, the operating margin was -10.1 per cent. The substantial Fulfilment: Cybercom's dependence on individual customers has gradually goodwill impairment in Q1 and action programme costs in Sweden and Finland are lessened over the years. In 2009, its largest customer accounted for 20 per cent of the main reasons for the deterioration. The EBITDA margin for the underlying sales, however, which was a 3 per cent increase over 2008. operation was 10.2 per cent. Percentage of employees outside Nordic countries Organic growth % % 60 16 14 50 12 40 10 8 30 6 20 4 2 10 0 0 -2 2005 2006 2007 2008 2009 2005 2006 2007 2008 2009 Target: 50 per cent of Cybercom employees to be stationed outside of the Nordics. Target: Organic growth of 15 per cent on average per year over a business cycle. Fulfilment: Cybercom is expanding geographically into new markets. In 2009, Fulfilment: In 2009, organic growth was –1 per cent. 22 per cent of employees worked outside of the Nordics and 43 per cent outside of Sweden.

Annual report 2009 / Business review

Strategy Business development Cybercom’s customers place high demands on quality and Development of new product solutions usually takes between commercially functional solutions. Close collaboration with 6 and 18 months from concept to a finished, ready-to-use solu- customers is essential to achieve high customer satisfaction. tion. Cybercom consultants always develop assignments in The quality of Cybercom’s value proposition largely depends close cooperation with customers. Cybercom's close relation- on how customers are treated, which places high demands on ships with its customers have grown gradually and are often a employees – that their knowledge, values, attitudes, and be- business-critical part of customers’ development initiatives. haviour generate success. Cybercom constantly works on Assignments are customer-specific, although sometimes a developing its organisation in order to be an attractive partner. general product solution is created that is suitable for many One important element in this effort is +1, which clearly reflects customers. Cybercom’s values, corporate culture, and soul. Briefly, +1 entails the constant endeavour to exceed existing Sales and customer relations expectations. Each customer has special needs and requests, so each sale Cybercom’s strategy, on which the development of the is unique. The sales process is long and often begins with a organisation is based, focuses on growth and profitability, as frame agreement procurement, followed by discussions on well as on building a strong brand. usage areas for the intended solution and the drafting of a The key strategies governing Cybercom's operations are to: requirements specification for Cybercom. Concentrate on profitability and growth, with a focus on The entire sales process – from initial consultation to order customers for whom information technology (IT) is – usually takes 3 to 6 months for local assignments and 6 to strategically important for business. 12 months for large outsourcing assignments or global sourcing. Be fast-paced and concentrate on strong growth markets. Frame agreements with customers are business critical, as Expand within its five core offerings: internet services, they are to the sector as a whole, due to the trend for mobile services, security, embedded systems, and telecom customers to procure increasingly large volumes from fewer management. suppliers. Cybercom now has frame agreements with all major customers. Reinforce its reputation and attraction among customers, At Cybercom, account managers work with their key employees, and labour market participants via brand- customers in all geographic markets in which the customers boosting activities. operate. Form a decentralised organisation with short decision paths and global delivery capacity. Delivery Once the customer approves the requirements specification, Create lasting value for customers through long-term Cybercom begins to realise the defined service or assignment. partnerships by only recruiting the best employees with the Realisation consists of several phases, which the nature of the right attitude and by being a service-oriented organisation. project and the chosen method define. Main project phases cover analysis and planning, execution, delivery, wrap-up, and Business processes follow-up. Time from acceptance to completed delivery varies Cybercom operations comprise three main processes: depending on project scope and type of delivery commitment. Business development – development of Cybercom’s services and solutions. Application management (AM) Sales – planning, sales, and customer relations. and project services Developing and managing IT projects takes much time and Delivery – production, delivery, and management of money. Since the late 1990s, many Nordic companies have services and solutions through competence and projects to become international corporations, and a few have become the customer, plus follow-up and evaluation with the global players in rapidly growing markets. At the same time, customer. several new economies have grown rapidly, and new markets Several support functions, such as PR, marketing, HR, IT, and have emerged, such as in China and India. These countries accounting, supplement the main processes. also offer low-cost skilled labour. The main processes and support functions were developed Another important driving force behind this growth is new to enable Cybercom to retain and use the knowledge and technology, which makes it easier to share resources across experience that the company continually acquires. Results of national boundaries – through efforts such as improved development efforts are documented on an ongoing basis. communication infrastructure, security architecture, and control Clear, user-friendly business processes boost the quality of systems. analysis and decision-making and facilitates knowledge IT has made a large part of the gains in a globalised transfer among Cybercom’s employees. Cybercom's structure economy possible. To meet customer demand and keep costs capital is growing and is continually managed by constantly competitive, Cybercom has rapidly expanded its capacity and safeguarding important experiences and knowledge. expertise in global sourcing and offers system management – a service that guarantees high quality and service levels at a fixed price.

Annual report 2009 / Business review

Cybercom also maintains and develops IT systems that are including established commercial tools and customdeveloped already operational, whether developed in-house or by a third tools. party. Its concept clarifies responsibilities, activities, and costs Cybercom has years of experience with recognized related to support, development, and operation of the system methods and offers certified consultants in each method: or an application. Agile Extreme programming Better overview and follow-up RUP Cybercom’s system management concept focuses on key PPS business processes that are needed for maximum benefit from PROPS an application – from business development and management to technical support. The model is soundly structured and Global sourcing enables contracted service levels and accurate cost Cybercom offers global sourcing – a method for optimising forecasting. outsourcing and for selecting the best onshore, nearshore, or One or more service-level agreements drive each service. offshore option. In global sourcing, Cybercom’s project Cybercom’s management team, together with customer and management works locally – close to customers – and creates supplier representatives, follow up these regularly to ensure and manages teams that develop, implement, test, or manage customer satisfaction. operations at the location that is best for the customer. For projects that demand daily flexibility, it is natural and most Tools and methods often cost-efficient to be geographically close to customers. In Access to the latest technologies enables Cybercom to help projects that have reached maturity and perhaps apply customers benefit from new business opportunities. standardised processes, geographic presence isn’t as The ability to balance technology’s cutting edge and important, and implementation can be moved to another commercial feasibility requires a combination of technical country – if advantages outweigh disadvantages. know-how and a thorough understanding of customers’ Depending on customer needs, Cybercom takes on various business operations. Expertise in supporting technologies global sourcing roles. Central aspects of global sourcing forms the foundation for selecting, implementing, and include 24/7 availability, increased productivity, high quality, developing the best solutions for each customer. With a solid and cost savings – with a focus on core operations and understanding of customer operations, Cybercom can business development. Cybercom runs sourcing projects for contribute its expertise and function as a discussion partner. mature standardised processes for the entire chain – from development and testing to administration and support. Faster development Cybercom offers project management in China, Estonia, Today, product development has more technical content and a India, Poland, and Romania. In Cybercom's experience, once shorter life cycle, while customers place stringent demands on companies start using these services, outsourcing expands to productivity, security, and quality. Cybercom uses modern cover larger, more complex aspects of the operation. tools and methods for system development, project management, and testing – to assure that all requirements are met,

Annual report 2009 / Business review

Cybercom’s areas of focus

Cybercom develops services, applications, systems, products, solution with more accurate services and greater customer and software on behalf of its customers worldwide. Assignments loyalty. are either turnkey projects, in the form of service management, or as specialists in consulting, testing, and development, using Mobile services leading technologies. Cybercom provides turnkey mobile service solutions to help its Cybercom can deliver services globally – onshore, near- customers succeed in their mobile operations. In an increasingly shore, or offshore. Operations are divided into the following five mobile world, new business opportunities open up for companies areas: internet services, mobile services, security, embedded willing to embrace the technology. Cybercom has been develop- systems, and telecom management. ing mobile services since 1998 and is now one of the leading players in mobile solutions. Its value proposition covers the complete product life-cycle – from strategies, concept studies, and development to operation and management: Consulting Mobile portals Mobile clients Mobile payment solutions Bluetooth applications Design services Hosting

Security Cybercom is Sweden’s leading player in information and IT security consulting services. The company offers a full range of services, from strategic consulting and analysis to full responsibility for implementation and change processes. Cybercom has experts in a broad range of areas – from system architecture to cryptology, from online security to legal affairs and security management, from business issues to project management, from legislation and regulations to technological solutions. Cybercom is successful in IT forensics, in which the company analyzes and investigates IT incidents and

testifies in digital crime cases. These skills enable Cybercom to

secure customers’ business-critical systems, in which information and knowledge must not only be protected, but must Internet services also be productively and cost-effectively managed. Cybercom Cybercom provides internet-related services. The company has changes the way its customers do business – they become run and developed portals for several international enterprises safer, more secure, and more effective. for many years. Drawing on its years of experience, Cybercom helps customers create new digital services and value Embedded systems propositions for online or mobile applications. Cybercom offers expertise that covers the entire embedded The portal concept has numerous definitions. At Cybercom, systems area, and the company provides its customers with portals refer to web sites, extranets, intranets, communities, and innovative solutions that contain tomorrow’s mobile and wireless mobile solutions, which provide access in a single location to technologies. Telecom and product companies in any industry vast quantities of information and functions. The role of portals experience increasing product complexity and escalating market has become increasingly important as trading venues and as requirements regarding technical innovation, shortened develop- meeting places for enterprises that want to build customer ment cycles, and reduced cost. Cybercom, an independent R&D relationships. Cybercom helps its customers with everything partner, improves its customers’ abilities to meet these from business analysis to portal solution management. Such challenges. projects may involve establishing clear objectives, defining and Its expertise covers the entire spectrum – from development evaluating the customer’s services, and developing and imple- of analogue electronic products to interaction, design, and menting the solution. Through its extensive experience, Cyber- usability. Cybercom has developed embedded systems since com has acquired a wealth of knowledge that is tough to beat the 1980s and now has ongoing projects with customers around when it comes to capturing and converting users’ needs into new the globe. digital services. Integrating users in the process results in a

Annual report 2009 / Business review

Cybercom’s customers include automotive OEMs and system and content providers to grow their businesses by exploiting new suppliers, consumer electronics vendors, mobile phone technologies. Cybercom maintains strong customer relationships manufacturers, telecom operators, medical device by delivering the highest quality consulting services, expertise on manufacturers, and stakeholders in defence and security various telecom technologies, and in-depth knowledge of current industries. and future trends. Cybercom has years of experience of large- scale development and introduction of mobile networks in Telecom management emerging markets, and helps operators worldwide to analyse Cybercom offers expertise, consulting, and services in telecom and improve the quality of existing networks. management, billing, and networks. Cybercom’s consultants have customers worldwide – they work with telecom, service,

Cybercom’s 10 largest customers, 2009 Sales by type of assignment, 2009

Turnkey assignments, such as outsourcing, Cybercom's 10 largest customers, 57% service management and application Other customers, 43% management, 51% Consulting services, 49%

Sales by industry, 2009 Sales by type of agreement, 2009

Telecom, 58% Public sector, 14% Industry, 12% Frame agreement, 62% Media, 4% No frame agreement, 38% Banking, 3% Retail, 3% Other, 6%

Annual report 2009 / Business review

Corporate responsibility and good citizenship

Cybercom strives to behave responsibly in all countries and in such travel and to influence its employees’ choice of transport- all contexts in which the Group is active. Cybercom’s social ation mode. accountability initiatives – and its view of humankind, working To reduce travel, employees are encouraged to hold tele- conditions, and the environment – are based on its values and phone and videoconferences whenever possible. Video- the UN Global Compact. Global Compact is a programme for conferences are currently possible in the offices in Stockholm, companies and organisations that want to contribute to the Ostersund, Tampere, and Helsinki. Ultimately all of the larger international work with 10 global principles on human rights, offices will be equipped with video conferencing capability. labour law, environmental problems, and anticorruption. These investments are also important financially because Cybercom has supported this work since 2004. By becoming personal travel is a considerable expense to the company. involved in these issues and supporting the UN’s efforts, the Employees are encouraged to travel by train or bus rather company has agreed to protect and support human rights, while than by plane. When choosing a company car, they’re working against corruption, discrimination, and all forms of encouraged to select a green vehicle. Most of Cybercom’s forced labour. offices are centrally located close to train and bus connections Cybercom’s board adopted the first edition of its Code of for convenient public transportation. Conduct in 2004. This code is updated regularly and contains Besides reducing the environmental impact of personal trans- rules for business behaviour and for its responsibility in relation portation, Cybercom is working on raising employee awareness to colleagues, customers, vendors, shareholders, regulatory of environmental issues, which are accounted for in all Cyber- authorities, and the world at large. The code applies to the entire com operations. The company requires that (i) its suppliers of group and all employees can access it on the Cybercom office materials and computers comply with TCO 95 and intranet. TCO 99, environmental standards, and (ii) all material can be At Cybercom, quality means that its services meet or exceed recycled. customer expectations, its production is carried out under Cybercom also continuously takes a variety of measures, acceptable conditions, and its customers are satisfied with large and small, to reduce environmental impact: Cybercom as a company. Accepting responsibility for the impact Energy-saving efforts, such as timers to turn out lights after of the company’s operations on people and the environment is office hours. also essential for Cybercom – to be able to grow with continued Proper disposal of old IT equipment; equipment is sold for good profitability. reuse whenever possible, otherwise equipment goes to partners for recycling. Supporting SOS Children's Villages Sorting of paper and other waste for recycling. Cybercom signed a long-term partnership agreement with SOS Purchase of products, consumables, and services that meet Children's Villages in 2009, and will finance a major part of the high environmental standards whenever possible. activities at a primary school for 200 children in Gikongoro, Rwanda. Cybercom runs customer projects worldwide, including Because climate issues have grown increasingly urgent, the in Rwanda, where Cybercom constructs mobile networks and green IT concept has become commonly accepted. But more optimizes their performance. Cybercom is a knowledge company ecofriendly, power-saving computers are only a small part of in international growth and Cybercom's employees are highly green IT. Using IT to reduce environmental impact in totally engaged in supporting SOS Children's Villages and thus different areas is much more important. Customers often engage contributing to knowledge advancement in a country where the Cybercom to work on projects that directly or indirectly aim to company has ongoing projects. Education is the basis for a reduce environmental impact, such as more effective power child's development and, most importantly, provides the child steering in vehicles, or electronic commerce, where even the with opportunities to escape poverty. goods are electronic, such as downloading of mobile phone applications. Environment Cybercom’s operations have a relatively limited direct impact on the environment, but the company strives to minimise such effects as far as possible. Parts of its operations are environ- mentally certified in compliance with the international standard ISO 14001. Cybercom has launched a long-term initiative to have all of its operations certified. As a global supplier of IT services, personal transportation is the single most pressing environmental issue that also has the greatest impact on the climate. Providing consulting services involves a substantial amount of travel by car, air, rail, and public transportation. In general, Cybercom tries to reduce the scope of

Annual Report 2009 / Directors’ Report

Directors’ Report

The board and CEO of Cybercom Group Europe AB (publ), Numbers enclosed in parentheses refer to 2008. Words such as corporate ID 556544–6522, hereby submit their annual report for “Cybercom”, “the company”, “the Group”, and similar the 1 January 2009–31 December 2009 period. All amounts are expressions refer in all cases to the parent company, Cybercom recognised in SEK thousands, unless otherwise specified. Group Europe AB, and its subsidiaries.

Summary 2009

Despite market conditions, Cybercom’s sales declined only Excluding restructuring programme costs, the operating marginally in 2009 compared with 2008, to SEK 1,751.6 mil- margin (EBITDA) was 9.8 per cent. lion (1,781.1). In 2009 a goodwill impairment loss of SEK 280 million was Operating margin (EBITDA) weakened to 8.2 per cent recognised, which had an adverse effect on operating (10.9). margin of 16 per cent. Including this effect, operating margin (EBIT) was –10.1 per cent (8.8). Cybercom won a number of new strategic customers and projects during the year, including Etisalat, Middle East’s Cybercom carried out a new share issue of SEK 100 million leading mobile operator, China Mobile, the world’s largest during Q2 to strengthen its balance sheet and ensure mobile operator, and Bharti Airtel, India’s largest mobile financial flexibility during a period when international operator. financial markets were functioning poorly.

Cybercom entered into a partnership with Qt Software During Q3, Cybercom implemented an offset issue for Nokia. SEK 27.7 million to pay the outstanding additional purchase prices of two acquisitions in Finland (made in 2007 before During the year the company opened new sales offices in Cybercom acquired the Finnish operation). India and the US, as well as new customer-driven delivery offices in India and Poland. Cash flow from operating activities, SEK 128.4 million (198.8), continued to be satisfactory, and the company has a Sales to existing major customers showed good growth. stable financial position. An restruction programme to adapt to current market

conditions was implemented in Q1 and is expected to reduce annual costs by SEK 60 million. Total programme cost was SEK 28.2 million.

Annual Report 2009 / Directors’ Report

Operations and organisation

Cybercom is a leading Nordic supplier of advanced IT consult- The company’s strategy also includes a focus on complete ancy services, with global operations in selected market solutions, where Cybercom accepts full responsibility for segments such as telecom and security solutions. With projects rather than merely providing customers with extra 1,818 employees in 11 countries at the end of 2009, Cybercom staffing. Complete solutions currently account for 51 per cent is extremely well positioned to be able to offer international of operations, and the objective is to further increase that enterprises advanced, cost-effective services that help percentage. customers to improve their value proposition and operations. In 2009 Cybercom conducted business in three geographic Cybercom’s value proposition focuses on five main areas: segments: the Nordics, Other Europe, and Asia. The delivery internet services, mobile services, security, embedded model is based on combining local presence and sensitivity to systems, and telecom management. The company’s deep and customer needs with cost-effective delivery capacity, both broad expertise is the common denominator for all of these locally and from the company’s operations in India, China, areas, andas a result, the company has long been a major Romania, Poland, and Estonia. supplier to leading international companies such as Ericsson, Cybercom was founded in 1995 and has been quoted on Nokia, Millicom, Sony Ericsson, Alma Media, Kone, Nokia the NASDAQ OMX Nordic exchange since 1999. Siemens Networks, Volvo and TeliaSonera.

Cybercom conducted business in three geographic segments: the Nordics, Other Europe, and Asia.

Annual Report 2009 / Directors’ Report

Market and market developments

The recession left a deep mark on 2009 – also on the IT Internet services consulting industry, including Cybercom. Demand for IT Demand for internet services continued to be relatively good. consultancy services weakened throughout the Nordics, forcing Many companies continue to invest in portal solutions and e- many IT consultancies to adapt their delivery capacity. commerce services, in part because of lower transaction costs. Demand within the telecom industry was relatively stable The internet is also continuing to evolve from being a shop during the year, despite significant cost-containment initiatives window to becoming a complete market place. This trend drives among several major telecom companies. Customers demand for increasingly complex internet services. The price increasingly source services from low-cost countries. This trend scenario became differentiated during the year; prices benefits Cybercom, which offers cost-effective solutions as part experienced downward pressure in segments with a large supply of its global delivery offering. Nevertheless, competition for of expertise, while prices rose in other areas where access to assignments continues to intensify; many local players are being skilled developers is still limited. forced to cut prices just to stay in the running, while major Important customers in internet services include the Swedish international players are becoming increasingly competitive as Public Employment Service, H&M, ASSA ABLOY, the Swedish assignments become more global. Municipal Workers’ Union, and Sony Ericsson. Demand in the manufacturing export industry, especially in Finland, was weak during the year. The international recession Mobile services had a severe impact on many major manufacturers in the Demand for mobile services was relatively good during the year. Nordics, which in turn resulted in austerity measures, including Cybercom has benefitted to some extent from the challenges within IT. These customers are also more interested in low-cost that many telecom companies currently face, where one im- deliveries, though so far to a lesser extent than the telecom portant response is to develop new services and products. Some industry. parts of the telecom industry, such as mobile phone manu- Continued strong demand in the public sector benefits Cyber- facturers, are undergoing restructuring. This general trend is com, especially in the Stockholm region and in Denmark. Effects expected to continue, which could potentially result in reduced of the recession were somewhat milder in Denmark than in the demand for Cybercom’s services. Cybercom is preparing for this other Nordics. possibility by broadening its customer base and reducing Demand for qualified consultancy services involving deploy- dependence on individual customers. One important measure is ment of new mobile telephony services in the developing world to increase sales to international telecom operators for whom continued to be solid during the year. Cybercom conducts much interesting application development.

Annual Report 2009 / Directors’ Report

Prices for staffing assignments in customer projects are under been in demand despite the adverse effects of the recession. constant pressure, in part due to increased internationalisation, However, downward pressure on prices has been significant. which entails increased competition from major international The company deals with this trend by offering advanced consultancies. Cybercom is approaching this challenge by expertise from the telecom industry to automotive manufacturers working as much as possible with complete solutions that and the defence industry. Cybercom has developed a concept generate potential for improved profitability and by offering cost- for “intelligent” vehicles, AutoAppStore, which has attracted effective delivery capacity from its operations in China, India, strong interest from a number of non-Nordic automotive Romania, Poland, and Estonia. manufacturers. Major customers in the field of mobile services include Nokia, Major customers in the field of embedded systems include Ericsson, NokiaSiemens Networks, Sony Ericsson, and Telia- Ericsson, Volvo AB, Saab, and Kapsch TrafficCom. Sonera. New customers include China Mobile and Scalado. Telecom management Security Demand has been strong in telecom management during 2009. Demand for security services was solid in 2009. Security issues Cybercom provides services for telecom operators associated are growing in importance in all IT segments and Cybercom’s with their initiatives to plan, build, test, and run networks. Cyber- value proposition is extremely competitive, which is reflected by com is mainly active in Africa, the Middle East, Asia, and South its rapidly growing customer base of major companies in fields America, where there is a strong need to expand network capa- such as financial services. The price scenario for Cybercom’s city, which comprises the basis of the solid demand for the services is good, with no downward pressure on prices. company’s services. Cybercom’s operations in this segment are Important customers in security include SOS Alarm, SL, and based in Singapore, with sales offices in Dubai and New Delhi, Bankgirocentralen. Due to the business-critical and sensitive India. The operation is run based on a limited number of highly nature of many of these assignments, it is common not to qualified Cybercom employees who are backed up by a large mention the names of customers in this segment. number of subcontractors. Profitability continues to be good, with an assortment of new customers added during the year, includ- Embedded systems ing Etisalat, Bharti Airtel, and VMS MobiFone (Vietnam). These Demand for embedded systems was relatively stable, albeit at a operators are all market leaders in their respective regions. lower level than in 2008. Cybercom’s expertise in development of communications solutions for the automotive industry has

Annual Report 2009 / Directors’ Report

Sales and earnings

After rapid expansion in 2007 and 2008, in 2009 the company Financial position focused mainly on streamlining operations and strengthening SEK m 2009 2008 Change, % and developing its customer offerings. Integration of acquired Sales 1,751.6 1,781.1 –1.7 operations continued, in part to take advantage of synergistic Staff costs –1,079.3 –1,098.5 –1.7 opportunities involving the expertise in the various operations Other direct expenses –281.4 –265.4 6.0 within the Group and in part to improve operating and financial Gross profit 391.0 417.3 –6.3 management and follow-up. The recession and associated Other external expenses –246.9 –223.4 10.5 flagging demand for IT services accelerated initiatives aimed at Operating profit, EBITDA 144.1 193.8 –25.7 reducing non-personnel-related expenses and increasing Depreciation and amortisation –41.8 –37.8 10.5 delivery efficiency. Write-down, goodwill –280.0 – In response to weaker demand in certain industries, Operating profit/loss, EBIT –177.7 156.0 –213.9 operations in Sweden and Finland were adapted in Q1, which Financial items –27.3 –39.4 resulted in staff cuts of 110 persons. The action programme Profit/loss before tax –205.0 116.6 –275.8 Tax –4.1 –30.0 soon had a beneficial effect on efficiency and utilisation, and full Profit/loss from continuing impact on the company’s costs is expected in 2010. operations –209.1 86.6 –341.5 During the year Cybercom placed a sales coordinator in San Discontinued operations –0.4 47.4 Jose, CA USA, to work with existing Cybercom customers who Profit/loss for the year –209.5 134.0 –256.3 want to base more of their decision-making at their development operations in the US. Cybercom’s ability to deliver what the Direct expenses remained essentially unchanged compared with customer wants, at the right price, from the most suitable unit in 2008. Direct expenses other than salary expenses – primarily for the world enables the company to continue to be a successful subcontractors – rose 6 per cent, mainly due to an increase in supplier to these customers. volume. At year-end the Group had 1,818 employees (1,982). Meanwhile, salary expenses as a percentage of total costs decreased in 2009. Staff costs per employee amounted to Sales SEK 593,000 (570,000), a 4.1 per cent increase. SEK m 2009 2008 Changes, % The restructuring programme initiated during Q1 affected Sales 1,751.6 1,781.1 –1.7 110 employees – 39 employed in Sweden and 71 in Finland – Sales (2008 exchange rate) 1,802.5 1,781.1 1.2 who had to leave the company. The total cost of the programme Difference 2.9% was SEK 28.2 million. The programme reduces the company’s annual costs by SEK 60 million, including SEK 15 million that Group sales fell 1.7 per cent. Currency effects had a negative had an impact on 2009. impact on sales. Based on the average exchange rate in 2008, The effect of the action programme on earnings is less than sales in 2009 were 1.2 per cent higher than in 2008. Fewer the reduction in costs. This is due to lower revenues,as well as company consultants and a somewhat lower utilisation rate for lower costs since many of the employees who were laid off had these were offset in part by higher sales from more sub- some, albeit inadequate, capacity utilisation. The programme contractors in, amongst others, Singapore. had a significant positive impact on capacity utilisation in the Number of billable employees (full-time equivalents) declined involved units. to 1,544 (1,612), primarily because of the restructuring As an integral component of development and governance of programme mentioned above. its operations, Cybercom continually monitors its cost base to Net sales per employee amounted to SEK 995,000 increase efficiency and strengthen competitiveness. (972,000). The one-off costs related to this action programme had a Average price per sold hour in the Group showed a weak negative impact of SEK 28.2 million on operating profit. negative trend. While the growing percentage of production in Damages from a dispute with a former supplier of telephony low-cost countries contributed to a reduction of the average services had a negative impact of SEK 5.6 million on earnings in price, this trend was offset by a larger percentage of complete 2009. These costs are included in other external expenses in the solutions, which often command a higher hourly rate because table above. Excluding these expenses, EBITDA was Cybercom undertakes full responsibility for such projects. SEK 177.9 million (199.4) – equivalent to an EBITDA margin of When customers seek to supplement staffing on their own 10.2 per cent (11.2). EBIT excluding these expenses is projects, the focus of many Nordic customers continues to be on SEK 136.1 million (161.6), or an EBIT margin of 7.8 per cent lower prices. In some areas, this pressure on prices resulted in (9.1). This decrease compared to the previous year is mainly price cuts. This price pressing, however, subsided during the attributable to a somewhat lower utilisation rate in the wake of latter part of the year. the international recession. Net financial items stood at SEK –27.3 million (–39.4); this figure includes interest expenses of SEK –17.5 million (–39.6) for loans taken to acquire auSystems (2007) and Plenware

Annual Report 2009 / Directors’ Report

(2008). A loss before tax of SEK 205.0 million (profit: 116.6), Cybercom Finland equivalent to a net margin –11.7 per cent (6.5), was significantly Cybercom’s operation in Finland primarily focuses on telecom, impacted by the goodwill write-down of SEK 280 million. industry, and media. Its assignments comprise development of In 2009 a rights issue was carried out to strengthen the mobile solutions, intelligent machines, and service management. balance sheet by making an amortisation payment of The company also performs several hosting assignments; about SEK 50 million on existing loans, which had a positive effect on 5 per cent of Finland’s total internet traffic passes through interest expenses. Plenware’s hosting services. During the period the Group’s effective tax rate was 2.0 per Major customers include Alma Media, Kone, Nokia Siemens cent (–25.7). Tax expense is calculated based on the current tax Networks, Nokia Terminals, and Sandvik. The number of rate for the parent company and each subsidiary. Temporary employees at year-end was 352 (419). The action programme differences and existing loss carry-forwards are taken into during Q1 2009 reduced the number of employees by 71. account. The positive tax rate is due to factors such as the goodwill impairment charge, which is not tax deductible. Cybercom Denmark The Denmark operation provides advanced system develop- Nordic ment, including services relating to Oracle’s database products. 2009 BEC, the National Labour Market Authority, Nordea, and PFA SEK m Nordics Sweden Finland Denmark Pension are among Cybercom Denmark’s major customers. Revenue from external customers 1,622.1 1,215.3 358.4 48.4 The company had 38 (34) employees at year-end. Revenue from other segments 20.8 10.2 2.4 11.0 Other Europe EBITDA 161.8 111.8 37.0 13.0 SEK m 2009 2008 Number of employees 1,402 1,012 352 38 Revenue from external customers 10.2 16.9 Revenue from other segments 32.7 29.9 2008 EBITDA –2.6 –7.1 SEK m Nordics Sweden Finland Denmark Number of employees 148 154 Revenue from external customers 1,694.3 1,273.1 376.1 45.1 Revenue from other segments 12.3 11.2 0.9 13.1 Cybercom Poland EBITDA 216.4 153.5 55.7 13.0 Cybercom has three offices in Poland: Warsaw, Katowice, and Number of employees 1,560 1,107 419 34 Łodz. The Katowice office opened during the year to run a project for a major Nordic telecom customer. Cybercom Poland mainly provides qualified services to Cybercom Sweden and its Cybercom Sweden customers, though its local operation is also growing. The operation in western Sweden primarily focuses on services Important customers include ST Ericsson, Nokia Siemens in embedded systems and wireless communications solutions, Networks, Teleca, and Sony Ericsson. including Bluetooth technology. Cybercom is the development The company had 61 (81) employees at year-end. Some partner of several leading Swedish and foreign companies adjustment of delivery capacity occurred in 2009 to adapt the thanks to the company’s acknowledged expertise in wireless operation to somewhat slower-than-expected growth in local communication and user interfaces. operations. In southern Sweden, Cybercom mainly works with mobile services and portal solutions projects for telecom customers. Cybercom Romania In central and northern Sweden, Cybercom mainly works in Cybercom Romania conducts qualified development and testing telecom, industry, and the public sector and has a highly services with a focus on the telecom industry. The company is a competitive offering, particularly in security solutions. During the subcontractor to Cybercom’s Nordic company. year the Stockholm operation and Group headquarters moved to Major end customers include Nokia, Itella, and Metso. new, more appropriate and cost-effective premises. The company had 53 (34) employees at year-end. Major Cybercom Sweden customers include the National Labour Market Board, ASSA ABLOY, Ericsson, Nokia, SAAB, Cybercom Estonia Stockholm County Council, Stockholm Transport, Sony The Estonia office mainly provides cost-effective delivery Ericsson, Tele2, TeliaSonera, and Volvo. support to the Finnish operation. The number of employees at year-end was 1,012 (1,107). Major end customers include Nokia and Savox. The action programme during Q1 2009 reduced the number of The company had 34 (39) employees at year-end. employees by 39. In addition, some adjustments to delivery capacity were done continuously throughout 2009.

Annual Report 2009 / Directors’ Report

Asia a subcontractor to Cybercom’s Nordic operations, but local sales SEK m 2009 2008 are also rapidly growing. Revenue from external customers 118.4 69.6 Major customers include Ericsson, Nokia, and China Mobile. Revenue from other segments 23.8 18.9 The company had 138 (167) employees at year-end. Some EBITDA 11.9 0.0 adjustment of delivery capacity occurred in 2009 to adapt the Number of employees 248 254 operation to demand. Late in the year, some recruiting activities began.

Cybercom India (JV) Cybercom Singapore India offers advanced development, testing, and maintenance Cybercom’s Singapore operation offers strategic consulting and services to the Cybercom companies, primarily Sweden, and outsourcing services (”Managed Services”) for construction and strengthens Cybercom’s global sourcing proposition. The operation of telecom networks in nearby regions such as company is a joint venture with the Indian company Datamatics, southeast Asia, the Middle East, and Africa. A salesperson was which enables flexible, efficient staffing. placed in New Delhi during the year to address the Indian Major customers include Sony Ericsson, ASSA ABLOY, and market. HSB. Major customers include Millicom, Etisalat, and CAMGSM The company had 162 (110) employees at year-end, half of (Cambodia). whom are considered Cybercom’s employees. The company had 28 (32) employees at year-end. The operation had also engaged a large number of subcontractors Cybercom China during the year, equivalent to about 80 FTEs. Cybercom China provides qualified development and testing services with a focus on the telecom industry. The company is

Cash flow and financial position

Consolidated cash flow (abbreviated) for the year and non-cash items – was lower in 2009 than in SEK m 2009 2008 2008. Operating income and non-cash items 117.4 128.9 Change in working capital 11.0 69.9 Cash flow from investing activities Cash flow from operating activities 128.4 198.8 Cash flow from investing activities was SEK –26.5 million Cash flow from investing activities –26.5 –283.4 (–283.4) in 2009. In addition to investments in property, plant, Cash flow from financing activities –85.6 118.5 and equipment and intangible assets, the additional purchase Year’s cash flow from continuing operations 16.4 33.8 price related to previous acquisitions of companies in Finland Year’s cash flow from discontinued operation –0.5 52.4 (before Cybercom acquired the Finnish operation) and Nexus Cash flow for the year 15.9 86.2 are also included in cash flow from investing activities.

Net investments in property, plant, and equipment totalled Cash generation 119% 154% SEK 7.4 million (10.4) in 2009. Net investments in intangible

assets totalled SEK 7.8 million (3.4). Together these investments Cash flow from operating activities account for 0.9 per cent (0.8) of sales in 2009. During the period cash flow from operating activities was SEK 128.4 million (198.8). Cash flow from financing activities Despite a general trend towards longer collection periods Cash flow from financing activities was SEK –85.6 million among many customers, especially large international com- (118.5) in 2009. In 2009 Cybercom repaid about SEK 170 million panies, operating capital has developed favourably due to on existing loans and reduced its leasing commitments. A new substantial efforts by the company to manage accounts share issue carried out in Q2 of 2009 raised SEK 100 million. receivable and accounts payable more efficiently. Efforts to streamline management of operating capital continue in order to tie up as little capital as possible, given the conditions inthe markets where Cybercom is active. Working capital continued to develop positively in 2009, though not to as great an extent as in 2008. In 2008 an increasing sale of accounts receivable had a substantial impact on working capital, which is also the reason that cash generation – cash flow from operating activities divided by operating profit

Annual Report 2009 / Directors’ Report

Consolidated balance sheet (abbreviated) SEK 10.15, and the exchange ratio was 2:5, which means that SEK m 31 Dec 2009 31 Dec 2008 Cybercom shareholders received one subscription right for each share held in the company, and five subscription rights entitled ASSETS the holder to subscribe for two new shares. An amortisation Non-current assets 1,193.1 1,485.1 payment of SEK 50 million was made in conjunction with the Working capital balance (assets ) 356.8 366.9 issue. The remaining SEK 42.5 million after issue expenses Other assets 2.0 6.7 strengthened liquidity. Cash and cash equivalents 183.5 169.7 It is the company’s assessment that existing liquidity will Total assets 1,735.4 2,028.4 cover the company’s needs for the foreseeable future.

EQUITY AND LIABILITIES Debt profile Equity 906.9 998.1 The company has loans denominated in SEK and in EUR. On Working capital balance (liabilities) 358.3 353.3 Interest-bearing liabilities 403.1 590.0 31 December 2009 the company’s outstanding liability was Other liabilities 67.1 87.0 SEK 120 million and EUR 19.8 million. The loans are amortised Total equity and liabilities 1,735.4 2,028.4 quarterly until January 2013. Working capital balance (assets) = Non-interest-bearing current receivables adjusted Achievement of certain key figures, called covenants, is a for tax assets. prerequisite for loan financing. The key figures are based on Working capital balance (liabilities) = Non-interest-bearing current liabilities adjusted factors such as Cybercom’s profit/loss, net financial items, cash for tax liabilities. flow, and debt/equity ratio. Cybercom continually analyses these Non-current assets key figures. Property, plant, and equipment accounted for 4.0 per cent (4.6) and intangible assets for 90.7 per cent (90.0) of total non-current Equity assets as at 31 December 2009. Equity on 31 December 2009 stood at SEK 906.9 million (998.1), which corresponded to a 52.3 per cent equity/assets ratio (49.2). GOODWILL IMPAIRMENT Equity per share was SEK 25.13 (40.60). During Q1 of 2009, Cybercom recorded a goodwill impairment charge of SEK 280 million, which is the main reason for the OFFSET ISSUE reduction in non-current assets between the periods. The During Q3, Cybercom implemented an offset issue for impairment charge was taken due to higher uncertainty about SEK 27.7 million to pay the outstanding additional purchase future cash flows from the company’s operations in Finland, prices of two acquisitions in Finland (made in 2007 before Stockholm, and Ostersund, which dipped mainly as a result of Cybercom acquired the Finnish operation). The issue price was the recession. SEK 16.60 and the dilutive effect was 4.8 per cent. After the issues, Cybercom’s share capital was Working capital SEK 36,087,899 – made up of 36,087,899 shares. The change in number of shares and equity/assets ratio in conjunction with Tied-up working capital was SEK –1.5 million (13.6) as of the new issues and the goodwill impairment loss carried out in 31 December 2009. Although the reduction compared with 2008 2009 are illustrated in the following table: was to some extent affected by lower sales, it is mainly due to steady effort to improve the efficiency of working capital. 31 Dec 31 March 30 June 30 Sept 31 Dec 2008 20091 20092 20093 2009 Liquidity Number of On 31 December 2009, Group cash and cash equivalents stood shares 24,584,840 24,584,840 34,418,776 36,087,899 36,087,899 Equity/as- at SEK 183.5 million, compared with SEK 169.7 million on sets ratio 49.2% 41.5% 45.8% 51.2% 52.3% 31 December 2008. ¹ After goodwill write-down ² After rights issue NEW SHARE ISSUE ³ After offset share issue The rights issue conducted in Q2 strengthened liquidity (gross) by raising SEK 100 million. The subscription price was

Annual Report 2009 / Directors’ Report

Employees

2009 employee data Professional training and development Average number of employees: 1,760 (1,832) Professional training and development constitute one of the most critical factors for ensuring Cybercom’s future competitive- Total number of employees on 31 December: 1,818 (1,982) ness. Staff skills are enhanced in external and internal courses, Gender distribution: 18 per cent women, 82 per cent men skills groups, and customer projects. Alongside clear-cut skills (19/81) development, seminars are held throughout the Group that high- light the corporate culture, new technology, methods, project Education level: 88 per cent have academic credentials (87) management, and even health and wellness programmes. External training expense: SEK 6,746,000 (14,339,000) Professional training and development enhance and revitalise Cybercom’s knowledge base. Results of such training Consultants’ average age: 35 (34) and development include more employees certified in high- Consultants’ average number of years in sector: 9 years (10) priority areas and improved competitiveness, which could ultimately increase capacity utilisation and hourly rates. Employee turnover rate (excluding restructuring): 14 per Cybercom runs several programmes that offer a structured cent (20) approach to skills development for managers and employees. Professional training and development focus on the areas in Productivity and capacity utilisation which the company has strong value propositions. Cybercom In light of the deep recession during the year, capacity utilisation defines measurable competence requirements; fulfilment of held up relatively well in many of the Group’s operations due to a these requirements forms the foundation for setting salary and combination of successful sales campaigns and constant benefits. monitoring of company expenses. However, capacity utilisation Cybercom conducts regular employee surveys to measure did fall somewhat compared with 2008. leadership, communication, employeeship, job conditions, and professional training and development. Results from the 2009 survey improved in most of these areas compared with 2008.

Years of employment Gender distribution

<1 year, 9% 1–3 years, 45% Women, 18% 4–5 years, 17% Men, 82% 6–7 years, 5% >7 years, 24%

Level of education Years of industry experience

PhD, 1% <1 year, 1% Engineering degree, 42% 1–5 years, 33% System analysts, 12% 6–10 years, 26% Other technical (higher education), 22% 11–15 years, 21% College/university, 11% 16–20 years, 8% Other post-secondary, 8% >20 years, 11% Upper secondary, 4%

Annual Report 2009 / Directors’ Report

Recruitment detailed recruitment process based on these criteria. Employees Recruitment is one of the most critical factors to ensure must also have good social skills, work effectively with quality, Cybercom’s continued profitability and growth. Cybercom and be in the habit of sharing their knowledge with each other. concentrates on systematically identifying future knowledge needs to secure access to skilled staff. In 2009, Cybercom Age distribution primarily grew outside the Nordics. Cybercom conducted major recruitment campaigns in India and Romania with good results. A large number of new subcontractors were engaged in Singapore. Keeping key employees and attracting new ones is a <25 years, 8% strategic issue for Cybercom. The company works continually 26–30 years, 24% with working conditions, leadership, and professional skills 31–35 years, 24% development to ensure that it is an attractive employer for its 36–40 years, 17% employees. 41–45 years, 12% Cybercom has a broad recruitment base that covers all >45 years, 13% industries. The purpose of the company’s recruitment process is to ensure that Cybercom staff has the experience and expertise that customers demand – experience and expertise that are consistent with Cybercom’s offering. The company has a

Annual Report 2009 / Directors’ Report

Remuneration guidelines for senior executives

Proposal for remuneration guidelines to All executives, including the CEO, may terminate their employ- senior executives 2010 ment by giving 6 months’ notice. If Cybercom terminates the The Board of Directors proposes that the AGM resolves on employment contract, a 6-month period of notice applies for the these remuneration guidelines for senior executives. The board’s CEO, while a 6–18-month period applies for other executives. In proposal follows the remuneration guidelines for senior such cases the CEO and certain other executives have the right executives that were adopted by the 2009 AGM, and are based to 6 months’ severance pay, besides salary, during the period of on existing contracts between the company and the individual notice. Other benefits must be of limited value in relation to total executives. The term “senior executives” refers to the CEO and remuneration, and equivalent to normal market terms and other people in Group management as presented on conditions. Cybercom's website. The board may make exceptions to these guidelines if, in an individual case, there is reason to do so, though this did not FIXED SALARY AND VARIABLE COMPENSATION occur in 2009. The company will offer a market-based total compensation package to enable recruitment and retention of senior Remuneration in the event of ownership change executives. Remuneration to senior executives consists of a Certain senior executives may also terminate their employment fixed salary, variable compensation, pension, and other benefits and receive remuneration from the company in the event of a such as a car. The variable portion is based on achieved change in ownership or major organisational changes. Such operational objectives, of which the absolute majority relate to remuneration may not exceed 15 months’ salary. financial targets. Variable pay for the CEO has a ceiling of 30% of fixed salary, SEK 792,000, while variable pay may not exceed Incentive programme two months’ salary, SEK 952,000, for other senior executives. In 2008 Cybercom issued 390,000 warrants, which were offered to and in part were acquired by senior executives and other key PENSION AND OTHER BENEFITS individuals. These warrants expire in June 2010. After the Retirement age for senior executives is 65. Cybercom will preferential rights issue carried out in 2009, the subscription annually allocate an amount equivalent to 30 per cent of the price is SEK 42.82. The warrants relate to 440,700 shares; CEO’s annual salary for his pension and insurance benefits, 267,534 warrants are in the company’s custody. SEK 792,000. Other senior executives receive pension benefits as per the Group’s premium plan, based on age and salary, of SEK 622,000.

Board authorisation for issue of shares

Cybercom’s 2009 AGM authorised the board to decide – on one In 2009, Cybercom carried out a preferential rights issue of or more occasions before the next AGM – on new share issues. SEK 100 million based on the first board authorisation and an The board was given the authority to (i) decide to increase the offset issue based on the second. Due to these two issues, the company’s share capital through a preferential rights issue to number of shares increased by a total of 11,503,059. generate issue proceeds of no more than SEK 100 million, and to (ii) decide on a Cybercom share-capital increase without shareholders’ rights that may occur via one or more share issues for a total of the highest number of shares equivalent to (at most) 10 per cent of the total number of shares that the company had issued at the time of the authorisation. The purpose of the latter authorisation and reasons for any deviation from shareholder preferential rights was to finance company and operation acquisitions when needed.

Annual Report 2009 / Directors’ Report

Risk and risk management

Cybercom is exposed to a number of risks that could affect the Cybercom’s lenders may also terminate financing agreements Group’s results. Cybercom continually evaluates, identifies, and with the company if certain major changes of ownership occur, manages these risks. The risks deemed most significant to the including public takeover bids. company are classified below as operational, market, or financial Some senior executives have a change in ownership clause risks. in their contract, which allows them to consider themselves as having received notice of dismissal, which also entails additional Operational risks remuneration. CUSTOMER FOCUS Cybercom’s 10 largest customers account for 57 per cent of its Market risks sales. Cybercom has long-term working relationships with its STRUCTURAL CHANGES customers – several have been on the customer list for many Many of Cybercom’s customers comprise large international years. Although a small number of customers account for a large groups that, in turn, want to work with few, yet large, inter- proportion of Cybercom’s sales, Cybercom has distributed risk national suppliers. Cybercom has risen to this challenge by among the various companies – within the Group and at the actively working toward greater internationalisation, which has customer. mainly been achieved through strategic acquisitions.

FRAME AGREEMENTS Financial risks Frame agreements have become more significant in recent Cybercom has identified four financial risks that could affect years. Many customers now choose to cooperate with a small results: number of suppliers, but in return, they select these suppliers with great care. Besides quality and sophisticated technical LIQUIDITY AND FINANCING RISK expertise, a robust financial position is crucial for ranking among The Group's goal is to fulfil its financial commitments, the companies that customers choose as their frame agreement irrespective of market situation and at a reasonable cost while suppliers. Cybercom now has frame agreements with all of its maintaining its strong brand. Group policy is to minimise the major customers. To reduce risks of non-continuation of these need for borrowings by using excess liquidity within the Group agreements, the key is to deliver quality and results and wherever possible. Liquidity risks to the Group are managed maintain fruitful dialogue with the customer. centrally in the parent company. There is a risk of a major Cybercom customer being EMPLOYEES negatively affected by market trends and substantially reducing Cybercom is a service company and thus depends on the its consulting service purchases, which may lead to a short-term motivation and skills of its employees. Qualified consultants are drop in Cybercom’s capacity utilisation. Cybercom aims to a requirement for successfully implementing customer projects achieve a good balance of customers from various industries and satisfying customers. A high staff turnover or loss of key and geographic areas to avoid excessive reliance on one indi- people could thus adversely affect the company, so Cybercom vidual customer. The aim is for no customer to represent more actively works to ensure employees’ job satisfaction through than 15 per cent of Group revenue over time. ongoing skills development, social activities, and competitive Cybercom has consultant liability insurance cover, which remuneration models. In addition, resources are earmarked for pays compensation in the event that Cybercom becomes liable training and recruitment activities, such as participation in to pay damages to a customer as a result of work performed by conferences, seminars, and courses. Cybercom. Loan financing depends on compliance with key figures ASSIGNMENTS AND PROJECTS called covenants. Non-compliance entails a risk that Cybercom In certain circumstances, a customer may end a project at short may be forced to renegotiate its financing. The company notice. This may entail a capacity utilisation risk for Cybercom, constantly monitors these key figures and takes the action because the consultants affected cannot be immediately deemed necessary to achieve them. transferred to other assignments. Fixed-price projects involve risks for the company if they cannot be completed within given INTEREST RATE RISK cost frameworks. The company continually improves its Interest rate risk can lead to changed fair values and changed procedures to assess and control fixed-price assignments. cash flows. The fixed-interest term is a significant factor that affects interest rate risk. Cybercom’s debt financing has three- CHANGES IN OWNERSHIP month interest periods, but in 2009 it was continually hedged In major changes in ownership or a public takeover bid, some using interest rate swaps; these aim to ensure high predictability customers may end their agreements with Cybercom, which of the Group's interest expense. could adversely affect the business.

Annual Report 2009 / Directors’ Report

CURRENCY RISK CUSTOMER CREDIT RISK Cybercom is exposed to various currency risks. In certain In some markets and projects, primarily in developing countries, projects the subsidiaries are exposed to currency risks, which – Cybercom is exposed to risks concerning accounts receivable. when deemed advantageous – are hedged using suitable These risks are managed through a combination of checking the financial instruments, such as currency forward contracts. The creditworthiness of its customers before the start of a project, largest currency exposure in 2009 was to the euro. The and well-defined internal routines for managing accounts accounts use hedge accounting where the requirements are receivable. fulfilled. Note 25 contain more details about financial risk manage- The parent company is mainly exposed to currency risk when ment. translating assets and liabilities of foreign subsidiaries. It is also exposed to currency risks regarding payment flows for loans in foreign currency.

Additional information

Disputes There are no disputes deemed able to have a material effect on the company.

Acquisitions and disposals In March 2009 Cybercom took over some operations from Finnish telecom provider Teleste in a net assets deal. Under the agreement, Cybercom will manage parts of Teleste’s development activities. As a result of the partnership, 23 Teleste employees joined Cybercom. The purchase price was SEK 4 million. Cybercom paid for the acquisition with future discounts and leasing of premises to other Teleste employees amounting to SEK 3.4 million and by assuming debt amounting to SEK 1.6 million. The remaining SEK 0.6 million was paid in cash during Q2.

Research and development Cybercom’s expertise in development of communications solutions for the automotive industry has been in demand. In Sweden, Cybercom has developed a concept for “intelligent” vehicles, the AutoAppStore, which has attracted strong interest from a number of automotive manufacturers outside the Nordics.

Share development and ownership structure

Cybercom's share increase of 107.67 per cent. When adjusted for the issues On 1 December 1999, Cybercom stock was quoted on the implemented during the year, this was significantly better than Stockholm stock exchange (now NASDAQ OMX Nordic). the Stockholm OMX IT Services index (which includes Cybercom's ticker symbol is CYBE. Cybercom’s share). The index rose 60.28 per cent in the same A preferential rights issue and an offset issue were imple- period. OMX Stockholm All-Share (the exchange’s general mented in 2009. At year-end 2009, Cybercom closed at index) rose 39.95 per cent in 2009. SEK 26.00, compared to its closing price of SEK 10.90 in 2008 (restated for implemented share issues). This represented an

Annual Report 2009 / Directors’ Report

At year-end 2009, Cybercom had a market value of The largest shareholders at 31 December 2009, by holdings SEK 938 million (314). In 2009, 24,336,965 Cybercom shares Name No. of shares Holdings, % (9,620,917) were traded, which is equivalent to a value of JCE Group AB 12,965,290 35.93 SEK 548 million (334). The share’s highest closing price during LivförsäkringsAB Skandia 4,379,851 12.14 the year was SEK 29.70 on 2 November, and its lowest closing Swedbank Robur Fonder 2,159,040 5.98 price was SEK 11.97 on 2 January 2009. On average, Didner & Gerge Aktiefond 1,674,779 4.64 96,960 shares (38,178) were traded each day, which translates Skarpebo Invest AB 945,232 2.62 to SEK 2.2 million (1.3) per trading day. In 2009, 22,542 Cyber- Accendo Capital 846,265 2.35 com share transactions (10,457) were completed on the Stock- Andra AP-fonden 808,703 2.24 holm exchange, which is an average of 90 transactions per Handelsbanken svenska småbolagsfond 700,000 1.94 trading day. The average share price was SEK 19.02 (35.67), JP Morgan Bank 696,880 1.93 and the annual turnover rate was 67 per cent (40). Share Wigon Thuresson¹ 444,360 1.23 transactions were completed on 100 per cent of trading days. Länsförsäkringar småbolagsfond 400,840 1.11 Försäkringsaktiebolaget Avanza Pension 354,716 0.98 The Royal Swedish Academy of Sciences 294,000 0.81 Share capital Nordnet Pensionsförsäkring AB 264,340 0.73 Due to the share issues mentioned above, Cybercom’s share Morgan Stanley 255,000 0.71 capital rose to SEK 36.1 million (24.6) on 31 December 2009, Total 27,189,296 75.34 distributed over 36,087,899 outstanding shares (24,584,840). All Others 8,898,603 24.66 shareholders have equal right to a share in the company’s Total shares 36,087,899 100.00 assets and profits. The share’s quotient value is 1. ¹ Board chairman in Cybercom There were 390,000 issued warrants at the beginning of 2009. Of these, 267,534 are warrants in the company’s custody Ownership structure and there were 122,466 (122,466) outstanding warrants at the No. of Market end of 2009. share- No. of Holdings, value, SEK holders shares % thousand 1–500 2,291 413,203 1.14 10,743 Shareholders 501–1,000 694 545,681 1.51 14,188 Of Cybercom’s 4,157 shareholders, the 10 largest owned 71 per 1,001–5,000 885 1,986,088 5.5051,638 cent of the equity and votes. 5,001–10,000 133 969,340 2.6925,203 Swedish institutional shareholders held 76.9 per cent (77.3), 10,001–15,000 41 520,615 1.4413,536 and Swedish private shareholders held 11.6 per cent (11.6). 15,001–20,000 27 497,037 1.3812,923 Foreign shareholders owned 11.5 per cent (11.1). Senior 20,001–, 86 31,155,935 86.33 810,054 executive shareholders owned 1.5 per cent (4.3). Total 4,157 36,087,899 100.00 938,285 On 19 August, Swedbank Robur Fonder AB and Banco Fonder AB issued a statement that they had increased their Stock price trend, 2009 holdings in Cybercom to over 5 per cent. To the company's knowledge, no agreements exist between shareholders that restrict their right to transfer their shares.

Dividend policy The board proposes to the AGM that no dividend be issued for the 2009 fiscal year (2008 dividend SEK 0).

Stock price trend, 2005–2009

Annual Report 2009 / Directors’ Report

Outlook

Cybercom has a strong platform in the Nordics, where the New types of business models with a focus on cost efficiency company is a leading player. Thanks to its presence in China, are increasingly in demand. Cybercom’s customers are very Eastern Europe, India, and Singapore, Cybercom is well positive towards the company’s strategy of providing customers positioned as an attractive partner for new and existing with high-quality, competitively priced services from several customers. different geographic regions, substantially contributing to the Within certain regions and industries, a beginning recovery in company’s competitiveness. This trend is expected to prevail in demand is visible following the severe international recession in 2010 and the company intends to continue to strengthen its 2008-2009, while other customer segments have shown no such offshore capacity. signs yet. So it is probably too early to consider the recession a The company also continually acts to adapt operations locally thing of the past. Consequently, a challenging market situation to current market conditions with respect to the mix of skills, will characterise 2010. The company steadily reviews and service offering, and delivery capacity. adapts its cost base to retain competitiveness and profitability. Cybercom does not make any forecasts.

Important events after year-end

In January, Cybercom announced redundancies affecting 80 employees in southern Sweden due to changes in the local market in the Lund and Malmoe region. The estimated cost of SEK 28 million will impact the Q1 2010 results.

Partnership with Telia to develop M2M solutions.

Parent company

The parent company primarily manages group-wide functions The parent company administers and is responsible for the such as legal, finance, PR and marketing communications, Group’s financial transactions. The overall goal is to minimise administration, and internal systems. At the end of the period the adverse impact on the Group’s performance. The parent parent company had 14 (14) employees. The average number of company also handles the Group’s various financial risks, employees during the period was 14 (13). especially liquidity and financing, interest rate, and currency risks. Sales totalled SEK 33.4 million (41.2). See the “Directors’ report” section for the Group for more information about the parent company’s operations, financial Operating loss totalled SEK –29.7 million (24.3). position, and performance. Loss after net financial items totalled SEK –65.3 million (2.7).

The parent company’s liquidity at 31 December 2009 was SEK 119.3 million (122.2).

Investments in property, plant, and equipment and intangible non-current assets totalled SEK 2.0 million (0.9).

Annual report 2009 / Financial statements

Consolidated income statement

NOTE 2009 2008 Net sales 2 1,714,426 1,748,244 Other operating income 2, 5 37,179 32,859 Employee benefits 3 -1,079,258 -1,100,142 Other external expenses 4, 26 -516,983 -482,154 Other operating expenses 5 -11,276 -5,001 Depreciation, amortisation, and impairment losses 11, 12, 13 -321,779 -37,805 Operating profit/loss -177,691 156,001 Finance income 6 6,966 12,895 Finance costs 6 -34,233 -52,325 Profit/loss before tax -204,958 116,571 Tax 8 -4,106 -29,970 Year's profit/loss from continuing operations -209,064 86,601 Year's profit/loss from discontinued operation 9 -450 47,401 Year's profit/loss -209,514 134,002

Earnings per share 10 Basic, SEK Earnings per share, total operations -6.23 4.92 Earnings per share, continuing operations -6.22 3.18 Diluted, SEK Earnings per share, total operations -6.23 4.92 Earnings per share, continuing operations -6.22 3.18

Statement of comprehensive income Year's profit/loss -209,514 134,002 Translation differences in translating data in foreign operations -11,244 59,946 Translation differences in translating data in foreign operations, re- classified to income statement –-165 Currency risk hedging in foreign operations 9,857 -27,794 Tax effect on currency risk hedging in foreign operations -2,592 7,782 Year's other comprehensive income -3,979 39,769 Year's comprehensive income -213,493 173,771

Consolidated statement of changes in equity

Other capital Share contri- Translation Retained capital butions reserve earnings Total equity Opening balance, 1 January 2008 22,384 631,159 935 53,969 708,447 Year's comprehensive income – – 39,769 134,002 173,771 New share issues 2,201 112,524 – – 114,725 Warrants – 1,123 – – 1,123 Closing balance, 31 December 2008 24,585 744,806 40,704 187,971 998,066 Year's comprehensive income – – -3,979 -209,514 -213,493 New share issues 11,503 110,820 – – 122,323 Closing balance, 31 December 2009 36,088 855,626 36,725 -21,543 906,896

Annual report 2009 / Financial statements

Consolidated balance sheet

NOTE 2009 2008 ASSETS Non-current assets Goodwill 11 950,662 1,225,827 Other intangible non-current assets 12 131,742 140,467 Property, plant, and equipment 13 48,284 67,754 Non-current financial assets 14, 15 995 919 Deferred tax assets 20 61,444 50,101 Total non-current assets 1,193,127 1,485,068 Current assets Accounts receivable 16, 25 274,002 241,780 Tax assets 1,972 6,768 Other receivables 17 52,850 90,937 Prepaid expenses 18 30,000 34,186 Cash and cash equivalents 30 183,500 169,687 Total current assets 542,324 543,358 Total assets 1,735,451 2,028,426 EQUITY AND LIABILITIES Equity 19 Share capital 36,088 24,585 Other capital contributions 855,626 744,806 Translation reserve 36,725 40,704 Retained earnings including profit/loss for the year -21,543 187,971 Total equity 906,896 998,066 Non-current liabilities Deferred tax liability 20 51,089 53,033 Other non-current liabilities 21 276,682 446,795 Total non-current liabilities 327,771 499,828 Current liabilities Advances from customers 22 37,770 58,551 Restructuring provision 22 6,583 – Accounts payable 87,188 78,562 Tax liabilities 9,459 9,288 Other current liabilities 22 176,636 218,401 Accrued expenses and deferred income 23 183,148 165,730 Total current liabilities 500,784 530,532 Total equity and liabilities 1,735,451 2,028,426

Pledged assets and contingent liabilities 27

Annual report 2009 / Financial statements

Consolidated cash flow statement

30, 31 2009 2008 Operating activities Profit/loss before tax -204,958 116,571 Adjustments for items not included in cash flow 335,216 26,139 Cash flow from operations 130,258 142,710 Income tax paid -12,813 -13,838 Cash flow from operating activities before change in working capital 117,445 128,872 Increase/decrease accounts receivable -34,925 123,984 Increase/decrease other current receivables 39,848 -64,100 Increase/decrease accounts payable 9,062 -6,269 Increase/decrease other current liabilities -2,983 16,274 Cash flow from operating activities 128,447 198,761 Investing activities Investments in intangible non-current assets -7,823 -3,382 Investments in property, plant, and equipment -7,402 -10,388 Investments in financial non-current assets – -97 Acquisition of subsidiaries/net assets, net effect on cash and cash equivalents -11,302 -269,592 Cash flow from investing activities -26,527 -283,459 Financing activities New share issue 92,524 705 Borrowings – 632,516 Amortisation of debt -178,086 -514,691 Cash flow from financing activities -85,562 118,530 Year's cash flow from continuing operations 16,358 33,832 Cash flow from discontinued operation’s investing activities -450 52,377 Year's cash flow from discontinued operations -450 52,377 Year's cash flow 15,908 86,209 Cash and cash equivalents at year's start 169,687 82,035 Exchange difference in cash and cash equivalents -2,095 1,443 Cash and cash equivalents at year's end 183,500 169,687

Annual report 2009 / Financial statements

Income statement – parent company

NOTE 2009 2008 Net sales 33,269 41,039 Other operating income 5 167 181 Operating income 33,436 41,220 Other external expenses 4 -28,251 -39,043 Employee benefit expense 3 -27,365 -22,869 Depreciation and amortisation 11, 12, 13 -7,225 -3,485 Other operating expenses 5 -293 -154 Operating expenses -63,134 -65,551 Operating loss -29,698 -24,331 Profit/loss from interests in Group companies 6 -42,981 59,661 Interest income and similar income items 6 17,248 10,214 Interest expense and similar expense items 6 -9,815 -48,214 Profit/loss from financial items -35,548 21,661 Loss after financial items -65,246 -2,670 Appropriations 7 -3,346 988 Tax on year's profit/loss 8 5,029 14,606 Year's profit/loss -63,563 12,924

Statement of changes in equity – parent company

Share Statutory premium Retained Share capital reserve reserve earnings Total equity Opening balance, 1 January 2008 22,384 178,962 354,475 50,695 606,516 Group contributions received/paid – – – 48,997 48,997 Tax effect on Group contributions received/paid – – – -13,719 -13,719 Merger effect – – – 23,968 23,968 Year's profit – – – 12,924 12,924 New share issues 2,201 – 113,648 – 115,849 Closing balance, 31 December 2008 24,585 178,962 468,123 122,865 794,535 Group contributions received/paid – – – 43,122 43,122 Tax effect on Group contributions received/paid – – – -11,341 -11,341 Year's loss – – – -63,563 -63,563 New share issues 11,503 – 110,820 – 122,323 Closing balance, 31 December 2009 36,088 178,962 578,943 91,083 885,076

Annual report 2009 / Financial statements

Balance sheet – parent company

NOTE 2009 2008 ASSETS Intangible non-current assets 11, 12 56,812 62,306 Property, plant, and equipment 13 993 761 Non-current financial assets 14 614,937 435,999 Deferred tax asset 20 707 1,728 Total non-current assets 673,449 500,794 Accounts receivable 16 – 763 Tax assets 1,676 – Receivables from Group companies 294,644 567,009 Other receivables 17 2,284 3,018 Prepaid expenses 18 7,701 7,042 Cash and bank balances 30 119,328 122,239 Total current assets 425,633 700,071 Total assets 1,099,082 1,200,865 EQUITY AND LIABILITIES Share capital 36,088 24,585 Statutory reserve 178,962 178,962 Total restricted equity 215,050 203,547 Share premium reserve 578,943 468,123 Retained earnings 154,646 109,941 Year's profit/loss -63,563 12,924 Total non-restricted equity 670,026 590,988 Total equity 885,076 794,535 Untaxed reserves 29 17,667 14,321 Non-current liabilities 21 114,335 164,484 Total non-current liabilities 114,335 164,484 Accounts payable 3,558 4,958 Liabilities to Group companies 30,720 172,452 Tax liabilities – 694 Other current liabilities 22 41,930 44,225 Accrued expenses and deferred income 23 5,796 5,196 Total current liabilities 82,004 227,525 Total equity and liabilities 1,099,082 1,200,865

Pledged assets 27 550,120 374,932 Contingent liabilities 27 – –

Annual report 2009 / Financial statements

Cash flow statement – parent company

30, 31 2009 2008 Operating activities Loss after financial items -65,246 -2,670 Adjustments for items not included in cash flow 49,769 -6,080 Cash flow from operations -15,477 -8,750 Income tax paid -5,568 -8,690 Cash flow from operating activities before change in working capital -21,045 -17,440 Increase/decrease accounts receivable 763 1,079 Increase/decrease other current receivables 315,585 -26,513 Increase/decrease accounts payable -1,400 -3,164 Increase/decrease other current operating liabilities -140,559 98,713 Cash flow from operating activities 153,344 52,675 Investing activities Investments in intangible non-current assets -1,498 -666 Sale of intangible non-current assets – 2,506 Investments in property, plant, and equipment -464 -272 Acquisition of subsidiaries -203,744 -260,169 Disposal of subsidiaries -450 53,353 Cash flow from investing activities -206,156 -205,248 Financing activities New share issue 92,524 705 Borrowings – 208,417 Amortisation of debt -42,623 -28,441 Cash flow from financing activities 49,901 180,681 Change in cash and cash equivalents -2,911 28,108 Cash and cash equivalents at year's start 122,239 65,159 Merger of subsidiaries, net effect on cash and cash equivalents – 28,972

Cash and cash equivalents at year's end 119,328 122,239

Annual report 2009 / Financial statements

Five-year overview

Income statement, SEK million 2009 2008 2007 2006 2005 Operating income 1,751.6 1,781.1 1,099.5 535.8 466.4 Operating expenses –1,607.5 –1587.3 –982.9 –478.8 –425.6 Operating profit before depreciation, amortisation, and impairment losses 144.1 193.8 116.6 57.0 40.8 Depreciation, amortisation, and impairment losses –321.8 –37.8 –12.5 –6.2 –6.1 Operating profit/loss –177.7 156.0 104.1 50.9 34.7 Finance income 7.0 12.9 6.0 4.4 6.5 Finance costs –34.3 –52.3 –28.1 –5.1 –2.1 Profit/loss before tax –205.0 116.6 82.0 50.1 39.0 Tax –4.1 –30.0 –21.1 –14.4 –11.7 Year’s profit/loss from continuing operations –209.1 86.6 60.9 35.7 27.3 Year’s profit/loss from discontinued operations –0.4 47.4 6.1 –0.4 –2.8 Year’s profit/loss –209.5 134.0 67.0 35.3 24.5

Balance sheet, SEK million 2009 2008 2007 2006 2005 Intangible non-current assets 1,082.4 1,366.3 815.9 135.7 135.8 Property, plant, and equipment 48.3 67.8 20.7 10.9 12.2 Non-current financial assets 1.0 0.9 0.7 0.7 0.4 Deferred tax assets 61.4 50.1 63.3 1.8 5.2 Current assets, excl. cash and cash equivalents 358.9 373.6 405.8 170.7 142.6 Cash and cash equivalents 183.5 169.7 82.0 88.9 55.5 Total assets 1,735.5 2,028.4 1,388.4 408.7 351.7 Equity 906.9 998.1 708.4 272.4 238.2 Non-current liabilities 327.8 499.8 323.9 8.3 10.6 Current liabilities 500.8 530.5 356.1 128.0 102.9 Total equity and liabilities 1,735.5 2,028.4 1,388.4 408.7 351.7

Cash flow statement, SEK million 2009 2008 2007 2006 2005 Cash flow from operating activities 128.4 198.8 60.1 34.4 26.5 Cash flow from investing activities –26.5 –283.5 –600.6 0.5 –16.9 Cash flow from financing activities –85.6 118.5 531.7 – – Cash flow from continuing operations 16.4 33.8 –8.8 34.8 9.6 Cash flow from discontinued operations –0.5 52.4 2.3 –0.7 –3.0 Cash and cash equivalents at year’s start 169.7 82.0 88.9 55.5 47.7 Exchange difference in cash and cash equivalents –2.1 1.5 –0.4 –0. 7 1.1 Cash and cash equivalents at year’s end 183.5 169.7 82.0 88.9 55.5

Key data and ratios 2009 2008 2007 2006 2005 Return on total capital, % –9.1 9.9 12.3 14.5 13.2 Return on capital employed, % –11.3 12.9 18.0 21.2 19.4 Return on equity, % –22.0 15.7 13.7 13.8 11.7 Operating margin, % –10.1 8.8 9.5 9.5 7.4 Net margin, % –11.7 6.5 7.9 9.4 8.4 Equity/assets ratio, % 52.3 49.2 51.0 66.6 67.7 Debt/equity ratio, times 0.6 0.6 0.5 0 0 Interest coverage ratio, times –5.0 3.2 3.9 10.8 19.6

Annual report 2009 / Financial statements

Five-year overview, cont.

Employees 2009 2008 2007 2006 2005 Number of employees, average 1,760 1,832 911 414 352 Number of employees at year’s end 1,818 1,982 1,262 481 414 Number of consultants, average 1,544 1,612 793 357 298 Sales per employee, SEK thousand 995 972 1,207 1,294 1,325 Sales per consultant, SEK thousand 1,134 1,105 1,387 1,501 1,565 Value added per employee, SEK thousand 560 717 753 851 864

Share data 2009 2008 2007 2006 2005 Number of shares at year’s end 36,087,899 24,584,840 22,384,362 12,321,757 12,321,757 Number of shares at year’s end, after dilution 36,087,899 24,584,840 22,384,362 12,436,757 12,521,757 Equity per share, SEK 25.13 40.60 31.65 22.11 19.33 Equity per share after dilution, SEK 25.13 40.60 31.65 21.90 19.02 Average number of shares 33,633,275 27,251,721 15,033,438 12,321,757 11,759,056 Diluted average number of shares 33,633,275 27,251,721 15,038,164 12,478,757 11,859,056 Earnings per share, SEK –6.23 4.92 4.46 2.86 2.08 Diluted earnings per share, SEK –6.23 4.92 4.46 2.83 2.07 Cash flow per share after dilution, SEK 3.82 7.29 4.00 2.75 2.23 Dividend per share 0 0 0 0 0

Except for balance sheet items, comparative figures for 2007 were recalculated for discontinued operations.

Definitions

Average number of shares Net margin A weighted average number of outstanding shares for the year. Profit/loss before taxes as a percentage of sales.

Debt/equity ratio Operating margin Interest-bearing liabilities divided by shareholders’ equity. Operating profit/loss as a percentage of sales.

Diluted average number of shares Return on capital employed A weighted average of outstanding shares and potential shares. Profit/loss plus financial income as a percentage of average capital employed.¹ Diluted cash flow per share Cash flow from operating activities divided by the average Return on equity number of shares after dilution. Year’s profit/loss expressed as a percentage of average shareholders’ equity.¹ Diluted earnings per share Year’s profit/loss divided by the average number of shares after Return on total capital dilution. Profit/loss plus financial income as a percentage of the average balance sheet total.¹ EBIT Earnings before interest and taxes (operating income). Value added per employee Operating profit/loss plus labour costs divided by the average EBITDA number of employees. Labour costs are salary expenses and Earnings before interest, taxes, depreciation, and amortisation. reimbursements plus a standard 35 per cent for social security contributions. Equity/assets ratio ¹ The OB+CB/2 method is applied when calculating average values for return on Shareholders’ equity as a percentage of the balance sheet total. equity, return on capital employed, and return on total capital.

Interest coverage ratio Profit/loss plus financial income divided by financial costs.

Annual Report 2009 / Financial statements

Notes

Note 1. Accounting policies Percentage of completion method Cybercom applies the percentage of completion method when Compliance with standards and laws reporting fixed-price agreements. This means that revenue is The consolidated accounts were prepared per International recognised concurrently as the assignment is completed. The Financial Reporting Standards (IFRS) published by the Inter- expected number of hours required for total completion of the national Accounting Standards Board (IASB) and interpretive project is used to calculate a project’s degree of completion. This statements from the International Financial Reporting Inter- estimate is updated monthly, and revenue is reported pretations Committee (IFRIC) that were approved for application accordingly. within the EU. The Swedish Financial Reporting Board’s recommendation RFR 1.2 Supplementary Accounting Rules for Loss carry-forwards Groups was also applied. The carrying amount of deferred tax assets for loss carry- The parent company applies the same policies as the Group, forwards was assessed at year-end, and use of the loss carry- except where otherwise stated below in the Parent company forwards against surpluses in future taxation was deemed accounting policies section. probable.

Valuation methods used in Amended accounting policies preparing the financial statements The next section describes the amended accounting policies that Assets and liabilities are recognised at historical cost,apart from result from new or amended IFRS that the Group has applied financial assets and liabilities that are derivatives; these are since 1 January 2009. Other IFRS amendments effective as of recognised at fair value. 2009 had no material impact on the consolidated accounts.

Functional currency and reporting currency Presentation of financial statements The parent company’s functional currency is Swedish kronor The Group has applied the amended IAS 1 Presentation of (SEK), which is also the reporting currency for the parent financial statements (2007) since 1 January 2009. As a result of company and the Group. The financial statements are therefore the amendment, income and expenses previously recognised presented in Swedish kronor – rounded off to the nearest directly in equity are now recognised in other comprehensive thousand, unless otherwise specified. income, which is presented in a separate Statement of comprehensive income; this follows the income statement. Judgements and estimates in Comparative periods were changed throughout the annual the financial statements report to comply with the new presentation. The amendments Preparation of the financial statements using IFRS requires that only affect presentation, so no amounts were changed – neither company management make judgements, estimates, and earnings per share nor other items in the financial statements. assumptions that affect application of the accounting policies and the recognised amounts of assets, liabilities, income, and Disclosures about segments expenses. The actual outcome may differ from these estimates The Group has applied the new IFRS 8 Operating segments, and judgements. which replaces IAS 14 Segment reporting, since 1 January Cybercom regularly reviews estimates and assumptions. 2009. IFRS 8 introduces a management approach to division Changes to estimates are recognised in the period when the into and presentation of operating segments. The new account- change is made – if the change only affected that period. If the ing policies are described further down in this note among change affects current and future periods, it is recognised in the accounting principles . The Group applied the transitional provi- period when the change is made and in future periods. sions for the standard by adapting comparative year data to IFRS 8 requirements. Key sources of uncertainties in estimates Sources of uncertainties in estimates stated below refer to those Disclosures about financial instruments that involve a significant risk for major adjustment to the value of Amendments to IFRS 7 Financial instruments: Disclosures assets or liabilities in the coming financial year. effective from 1 January 2009 affect Cybercom’s financial reporting beginning with the 2009 annual accounts. The Goodwill impairment testing amendment primarily entails new disclosure requirements for Several assumptions about future conditions and estimates of financial instruments measured at fair value in the report on the parameters were made when calculating the recoverable company’s financial position. Division into hierarchies amount of cash-generating units for goodwill impairment testing; determines how and which disclosures will be given on see Note 11 for a description. As stated in Note 11, changes to instruments. Level 3 instruments have the lowest quality of input conditions for these assumptions and estimates could have a data and require more disclosure than the other levels. These material effect on the value of goodwill. disclosure requirements primarily affected note 24. IFRS 7 has also been amended for liquidity risk disclosures.

Annual Report 2009 / Financial statements

According to the transitional provisions in IFRS 7, no through an acquisition analysis in conjunction with the acquisi- comparative figures are needed during the first application year tion. The analysis establishes: for the disclosures required by the standard. The acquisition cost of the participating interests or business. New and amended IFRS The fair value, on the acquisition date, of acquired and interpretations not yet applied identifiable assets and assumed liabilities and contingent Some new or amended standards and interpretations will not be liabilities. effective until coming financial years and were thus not applied The acquisition cost for the subsidiary’s shares and operations in preparing these financial statements. Cybercom is not comprises the sum of fair values at the acquisition date for: planning early application of new standards or amendments Paid assets. effective for financial years after 2009. If new or amended standards and interpretations are not described below, Incurred or assumed liabilities. Cybercom has assessed that they do not impact the financial Issued equity instruments submitted as payment in reporting. exchange for the acquired net assets. The revised IFRS 3 Business combinations and amended IAS 27 Consolidated and separate financial statements entail Transaction costs directly attributable to the acquisition. changes to the consolidated accounts and recognition of In business combinations in which the acquisition cost exceeds acquisitions. The impact of the revision includes amending the the fair value of acquired assets and assumed liabilities and definition of business combinations, expensing transaction costs contingent liabilities recognised separately, the difference is in business combinations, establishing contingent considerations recognised as goodwill. Any negative difference is recognised at fair value on the acquisition date, and recognising effects of directly in profit for the year. revaluation of liabilities related to contingent considerations as Subsidiaries’ financial statements are included in the con- income or expense in profit for the year. Cybercom has applied solidated accounts from the acquisition date until the date on the revised standards since 1 January 2010; the amendments which the controlling influence ceases. will only have an impact prospectively. Joint ventures Classifications In accounting terms, a joint venture is a company in which the Non-current assets and non-current liabilities essentially Group, through partnership agreements with one or more comprise amounts expected to be recovered or paid more than parties, has joint controlling influence on operational and 12 months after the reporting date. Current assets and current financial governance. Holdings in joint ventures are consolidated liabilities essentially comprise amounts expected to be in the Group accounts using the proportional method; con- recovered or paid within 12 months after the reporting date. sequently, Group ownership of a joint venture’s income, expenses, assets, and liabilities, is recognised in the con- Operating segment solidated income statements and balance sheets. This is An operating segment is a part of the Group that runs operations performed by combining the joint owner’s proportion of assets, from which the Group may generate income and incur expenses liabilities, income, and expenses in a joint venture company – and for which financial data are available. The company’s most item by item – with equivalent items in the joint owner’s con- senior decision-making executive follows up the results of an solidated accounts. Only equity earned after the acquisition is operating segment in order to evaluate them and allocate recognised in the Group’s equity. The proportional method is resources to the operating segment. See Note 2 for an additional applied from the date when joint controlling influence is received description of the division into and presentation of operating and until the date it ceases. segments. Transactions eliminated in consolidation Consolidation policies Internal (intra-Group) receivables and liabilities, income or Subsidiaries expenses, and unrealised gains or losses that arise from internal Subsidiaries are companies over which Cybercom Group transactions between Group companies are entirely eliminated Europe AB has a controlling influence. Controlling influence in preparation of the consolidated accounts. Unrealised gains means, directly or indirectly, the right to draw up a company’s arising from transactions with joint ventures are eliminated to the financial and operational strategies with the aim of receiving degree that corresponds to the Group’s holding in the company. economic benefits. When judging whether the Group has Unrealised losses are eliminated in the same way as unrealised controlling influence, potential shares with voting rights are gains, but only to the extent that there are no impairment losses. accounted for, i.e., shares that can be used immediately or converted without delay. Foreign currency Subsidiaries are recognised using the acquisition method. Transactions in foreign currency With this method, acquisition of a subsidiary is regarded as a Transactions in foreign currencies are translated into the transaction whereby the Group indirectly acquires the sub- functional currency at the exchange rate that applied on the sidiary’s assets and assumes its liabilities and contingent transaction date. The functional currency is the currency used in liabilities. The acquisition cost on consolidation is established the primary economic environments in which the companies run their operations. Monetary assets and liabilities denominated in

Annual Report 2009 / Financial statements

foreign currencies are translated into the functional currency at the main source of Group revenue and accounted for 97 per the exchange rate on the reporting date. Exchange differences cent of sales. Other revenue made up 3 per cent of Group sales. arising in the translations are recognised in the income state- Revenue comprises the fair value of services sold, excluding ment. Non-monetary assets and liabilities recognised at value-added tax and discounts and after elimination of intra- historical cost are translated at the exchange rate that applied on Group sales. Revenue is recognised as: the transaction date. Non-monetary assets and liabilities recognised at fair value are translated into the functional Service assignments on running accounts currency at the exchange rate that applied on the date they were Running account assignments are recognised as profit or loss as valued at fair value. the services are rendered, i.e., revenues and expenses are recognised in the period in which they were earned or incurred. Financial statements of foreign operations Earned – but not invoiced – fees on the reporting date are Assets and liabilities in foreign operations, including goodwill and recognised as Time worked but not invoiced under the Other other Group surpluses and deficits, are translated from the receivables heading. functional currency of the foreign operation to the Group’s reporting currency, Swedish kronor, at the exchange rate Fixed-price services applicable on the reporting date. Income and expenses in If a fixed-price service assignment outcome can be reliably foreign operations are translated into Swedish kronor at an estimated, the assignment’s income and expenditure are average rate that is an approximation of the exchange rates that recognised as revenue and expenses, respectively, relative to applied on each transaction date. Translation differences arising the assignment’s degree of completion on the reporting date (the in currency translation regarding foreign operations are percentage of completion method). The number of utilised hours recognised in other comprehensive income and are accumulated at the reporting date, in relation to the assignment’s estimated in the translation reserve in equity. In disposal of a foreign total hours, mainly determines the percentage of completion. operation, the cumulative translation differences attributable to If estimation of a service assignment’s outcome is difficult the operation from the translation reserve are realised in profit (e.g., a project is in an early phase), but it is likely that the for the year. customer will cover accrued expenses, then revenue is Since 1 January 2004 – the transition date to IFRS – recognised at the reporting date at an amount corresponding to translation differences have been recognised in the translation the assignment’s accrued expenses, so no profit is recognised. reserve included in equity. If a service assignment’s outcome cannot be reliably estimated, then only anticipated customer-defrayed expenses Hedging net investments in a foreign operation are reported as revenue. No revenue is recognised and accrued On the consolidated balance sheet, investments in foreign expenditure is reported as expenses if it likely that the customer operations are represented by recognised net assets in sub- will not cover the expenses. An anticipated loss is booked sidiaries – including monetary items that are part of the net immediately as an expense, in as much as it can be estimated. investments in the companies. To some extent, measures were Invoiced fees in fixed-price assignments for services not yet taken to reduce currency risks associated with these invest- rendered are recognised as Advances from customers. ments. This was done by raising loans in the same currency as the net investments. On the reporting date, these loans are Leasing recognised after translation at the closing day rate. The effective Operating leases part of the period’s exchange rate changes – regarding hedging Costs pertaining to operating leases are recognised in the instruments – is recognised in other comprehensive income and income statement on a straight-line basis over the lease term. is accumulated in the translation reserve in equity, to meet and Incentives received in conjunction with signing a lease agree- partly match the translation differences recognised for net assets ment are reported in the income statement as a reduction of the in the foreign operations that were hedged. The translation leasing payments on a straight-line basis over the lease term. differences from net investment and hedging instruments are Variable charges are expensed in the periods when they arise. reversed and recognised in profit for the year upon disposal of the foreign operation. When the hedging is ineffective, the Finance leases ineffective part is recognised directly in profit for the year. Minimum lease payments are allocated between interest expense and amortisation payment of the outstanding liability. Revenue Interest expense is allocated over the lease term so that an Rendering of service assignments amount corresponding to a fixed interest rate for the liability Revenue from service assignments is recognised in profit for the recognised during each period is charged to each period. year based on degree of completion on the reporting date. Variable charges are expensed in the periods when they arise. Degree of completion is established by assessing work done on the basis of inspections made. Revenue is not recognised if it is Finance income and finance costs probable that the economic benefits will not flow to the Group. If Finance income comprises interest income on cash and cash there are considerable uncertainties about payment, appurtenant equivalents and current investments, dividend income, gains on expenses, or guarantees, and if the seller remains involved in changes in value of financial assets at fair value through profit or the day-to-day management normally associated with owner- loss, and gains on hedging instruments recognised in profit or ship, then no revenue recognition occurs. Consulting revenue is loss for the year.

Annual Report 2009 / Financial statements

Interest income on financial instruments is recognised using the provisions of the instrument. Accounts receivable are entered on effective interest rate method. Dividend income is recognised the balance sheet when an invoice is sent. A liability is entered when the right to receive dividend has been established. when the counterparty has rendered a service or supplied a Finance costs comprises interest expenses on loans, losses product and there is a contractual obligation to pay, even if an on changes in value of financial assets at fair value through invoice has not yet been received. Accounts payable are profit or loss, and losses on hedging instruments recognised recognised when an invoice is received. in profit or loss for the year. Borrowing costs are recognised in A financial asset is removed from the balance sheet when the profit or loss using the effective interest rate method. rights in the agreement are realised, expire, or the company The effective interest is the interest that discounts the loses control of them. The same applies to part of a financial estimated future payments to be received and made during a asset. A financial liability is removed from the balance sheet financial instrument’s expected term to maturity, to the reported when the obligation in the agreement is fulfilled or otherwise net value of the financial asset or liability. The calculation expires. The same applies to a portion of a financial liability. includes all fees that are paid or received by the parties to the A financial asset and a financial liability are offset and contract and that form part of the effective interest, transaction reported at the net amount on the balance sheet only when there costs, and all surplus and deficit values. is a legal offset right for the amounts and the intention is to (i) settle the items at a net amount or (ii) realise the asset and settle Taxes the liability simultaneously. Income taxes comprise current and deferred tax. Income taxes are reported in profit or loss for the year, except when the Classification and valuation underlying transaction is recognised in other comprehensive Financial instruments that are not derivatives are initially income or in equity, in which case the related tax effect is recognised at acquisition cost corresponding to the fair value of recognised in other comprehensive income or in equity. the instrument, plus transaction costs for all financial instruments Current tax is payable or receivable for the current year, apart from those in the category of financial assets at fair value according to the tax rates enacted or substantially enacted at the through profit or loss; these are recognised at fair value reporting date. Current tax also includes adjustment of current excluding transaction costs. A financial instrument is classified tax attributable to earlier periods. on initial recognition based on, among other things, the purpose Deferred tax is calculated using the balance sheet method, for which it was acquired. The classification determines how the based on temporary differences between the carrying amounts financial instrument is valued subsequent to initial recognition. and tax bases of assets and liabilities. Temporary differences Derivatives are initially recognised at fair value, so are not considered for differences that (i) arose in initial transaction costs have an impact on profit or loss for the period. recognition of goodwill, (ii) arose in initial recognition of assets Subsequent to initial recognition, derivatives are recognised as and liabilities that are not business combinations and which, at follows. If derivatives are used for hedge accounting, and to the the time of the transaction, affect neither accounting nor taxable extent that the latter is effective, changes in value of derivatives profit or loss, or (iii) are attributable to interests in subsidiaries are recognised on the same line in profit for the year as the that are not expected to reverse within the foreseeable future. hedged item. Even if hedge accounting is not applied, increases Valuation of deferred tax is based on how underlying assets or and decreases in the value of derivatives are recognised as liabilities are expected to be realised or settled. Deferred tax is income and expenses, respectively, in operating profit, or among calculated using the tax rates and rules enacted or substantially financial items, based on the purpose of the derivative’s use and enacted at the reporting date. whether this use relates to an operating item or a financial item. Deferred tax assets regarding deductible temporary In hedge accounting, the ineffective portion is recognised in the differences and loss carry-forwards are only recognised where it same way as changes in the value of derivatives that are not is deemed probable that they can be used. The value of deferred used for hedge accounting. If hedge accounting is not applied in tax assets is reduced when their use is no longer deemed use of interest rate swaps, the interest coupon is recognised as probable. interest and any other change in value of the interest rate swap Any additional income tax that arises in conjunction with is recognised as other finance income or other finance costs. dividend is recognised when the dividend is recognised as a Cash and cash equivalents comprise cash in hand, deposits liability. held at call at banks and comparable institutions, and short-term liquid investments that have maturities of less than three months Financial instruments from the acquisition date and that are subject to insignificant risk Financial instruments recognised on the balance sheet include of changes in value. (i) among assets: cash and cash equivalents, loan receivables, accrued interest income, derivatives, and accounts receivable Financial assets at fair value through profit or loss and (ii) among liabilities: accounts payable, accrued interest This category comprises financial assets held for trading. expense, derivatives, and borrowings. Financial instruments in this category are continually measured at fair value, with changes in value recognised in profit or loss for Recognition on and derecognition from the balance the year. The category includes derivatives with a positive fair sheet value, except for derivatives that are an identified and effective A financial asset or financial liability is recognised on the balance hedging instrument. sheet when the company becomes a party to the contractual

Annual Report 2009 / Financial statements

Loan receivables and accounts receivable Cybercom only applies hedge accounting to hedging of net Loan receivables and accounts receivable are non-derivative investments in foreign subsidiaries. financial assets that have fixed or determinable payments and are not quoted on an active market. These assets are valued at Receivables and liabilities in foreign currency amortised cost, which is determined using the effective interest Foreign exchange forward contracts are used to hedge rate calculated on the acquisition date. Accounts receivable are receivables or liabilities against exchange rate risk. Hedge recognised at the amounts expected to be received, that is, less accounting is not applied as protection against currency risk, bad debts. because an economic hedge is reflected in the accounts by the underlying receivable or liability and the hedging instrument Available-for-sale financial assets being recognised at the exchange rate on the reporting date and Available-for-sale financial assets are assets that were either the exchange rate changes being recognised over profit for the initially designated in this category or not classified in any of the year. Exchange rate changes regarding operating receivables other categories. Shareholdings and interests not reported as and liabilities are recognised in operating profit, while exchange subsidiaries, associates or joint ventures are reported in this rate changes regarding financial receivables and liabilities are category. Financial assets in this category are continually recognised among financial items. measured at fair value, with the period’s changes in value recognised in other comprehensive income and the accumulated Hedging exchange rate risk in foreign net investments changes in value recognised in a separate item in equity, aside Investments in foreign subsidiaries (net assets including from impairment losses, interest income, dividend income, and goodwill) were partially hedged by raising currency loans that exchange differences on monetary items, which are recognised were translated at the closing day rate on the reporting date. in profit or loss for the year. On disposal of the asset, the Translation differences on financial instruments used as hedging accumulated profit or loss is recognised in profit or loss for the instruments when hedging net investment in a Group company year. are recognised – to the extent that the hedge is effective – in other comprehensive income and are accumulated in the tran- Financial liabilities at fair value through profit or loss slation reserve in equity. This neutralises the translation This category comprises financial liabilities held for trading. The differences that affect equity in consolidation of the Group category includes the Group’s derivatives with a negative fair companies. value, except for derivatives that are an identified and effective In disposal of a subsidiary, the cumulative change in value hedging instrument. Changes in fair value are recognised in regarding the operation disposed of is transferred from equity to profit or loss for the year. profit for the year.

Other liabilities Property, plant, and equipment This category contains loans and other financial liabilities, such Owned assets as accounts payable and accrued interest expense; the liabilities Property, plant, and equipment are recognised in the con- are valued at amortised cost. solidated accounts at cost, less accumulated depreciation and The Group’s financial assets and liabilities were allocated to any impairment losses. Cost includes the purchase price and the categories as described in Note 25 Risk exposure and risk costs directly attributable to the asset to put it in place and in the management. Recognition of finance income and costs is also right condition for the use for which it was acquired. Accounting described in the above accounting policy for recognition of policies for impairment are stated below. finance income and costs. The carrying amount of an item of property, plant, or equipment is derecognised from the balance sheet upon retirement or Derivatives and hedge accounting disposal of the asset or when no future economic benefits are The Group’s derivatives were acquired as economic hedges for expected from the asset’s use, retirement, or disposal. Gains or the risks of interest rate and foreign exchange exposure faced losses that arise from an asset’s disposal or retirement comprise by the Group. Derivatives are initially recognised at fair value, so the difference between the selling price and the carrying amount, transaction costs have an impact on profit or loss for the period. less direct selling expenses. Subsequent to initial recognition, derivatives are measured at fair value, and changes in value are stated as follows. Leased assets An unequivocal connection to the hedged item is required to Leases are classified as finance leases or operating leases. meet the criteria for hedge accounting stated in IAS 39. The Finance leases are when the economic risks and rewards of hedge must also effectively protect the hedged item, hedging ownership have been substantially transferred to the lessee. All documentation must be drawn up, and efficacy must be other leases are classified as operating leases. measurable. Gains and losses on hedges are recognised in Assets leased under finance leases are recognised as non- profit for the year at the same time as gains and losses are current assets on the balance sheet and are initially measured at recognised for the hedged items. the lower of the leased item’s fair value and the present value of the minimum lease payments at inception of the lease. The obligation to pay future lease charges is stated as non-current and current liabilities. The leased assets are depreciated over

Annual Report 2009 / Financial statements

their individual useful lives, while lease payments are recognised Additional charges as interest payments and liability repayments. Additional charges for capitalised intangible assets are only Assets leased under operating leases are not recognised as stated as an asset on the balance sheet if they increase the an asset on the balance sheet. Operating leases do not give rise future economic benefits for the specific asset to which the to a liability. charges refer. All other charges are expensed when incurred.

Additional charges Amortisation policies Such charges are only added to the cost if it is probable that Amortisation is recognised in the income statement on a Cybercom will receive the future economic benefits associated straight-line basis over the estimated useful lives of intangible with the asset and that the cost can be reliably calculated. All assets, unless such useful lives cannot be determined. The other additional charges are recognised as an expense in the useful lives are reassessed at least once a year. Goodwill is period in which they arise. tested for impairment annually and as soon as indications arise that the value of the asset has decreased. Intangible assets with Depreciation policies determinable useful lives are amortised from the date on which Depreciation occurs on a straight-line basis over the estimated they become available for use. Estimated useful lives: useful life of the asset. Leased assets are also depreciated over – Licence rights ...... 4–5 years their estimated useful life or – if shorter – over the contractually – Acquired customer relationships ...... 10 years agreed lease term. Estimated useful lives: – Acquired trademarks ...... 10 years – Computers ...... 3–5 years – Patents ...... 5 years – Equipment...... 3–5 years – Capitalised development costs ...... 3 years

The depreciation methods used, residual values, and useful lives The useful lives are reassessed annually. are reassessed at each year-end. Impairment Intangible assets The Group’s recognised assets are assessed on every reporting Goodwill date to determine whether indications of impairment exist. Goodwill is carried at cost, less any accumulated impairment losses. Goodwill is allocated to cash-generating units and is Impairment of property, plant, equipment, tested at least once a year for impairment (see “Impairment”). intangible assets, and interests in joint ventures The recoverable amount of the asset is calculated (see below) if R&D there is indication of impairment. The recoverable amount for Expenditure for research aiming to obtain new scientific or goodwill is also calculated annually. If substantially independent technical knowledge is recognised as a cost when it arises. cash flows to an individual asset cannot be established, and if Development expenditure, where research findings or other the asset’s fair value less selling expenses cannot be used, then knowledge are applied to create new or improved products or assets are grouped in impairment testing to the lowest level at processes, is recognised as an asset on the balance sheet, if the which substantially independent cash flows can be identified – product or process is technically and commercially usable and this grouping is called a cash-generating unit (CGU). Cybercom has sufficient resources to complete development An impairment charge is recognised when the carrying and then use or sell the intangible asset. The carrying amount amount of an asset or CGU exceeds the recoverable amount. includes all directly attributable expenditure, such as material Impairment loss is recognised in the income statement as an and services, employee benefits, registration of a legal right, expense. When impairment has been identified for a CGU, the amortisation of patents, and licences. Other development impairment loss is first allocated to goodwill. Then, a pro rata expenditure is recognised in profit or loss for the year as a cost impairment loss is recognised for the other assets included in when it arises. the unit. Development expenditure recognised on the balance sheet is The recoverable amount is the higher of fair value less selling stated at cost, less accumulated amortisation and any expenses and value in use. When calculating value in use, impairment losses. future cash flows are discounted using a discount rate that accounts for risk-free interest and the risk associated with the Other intangible assets specific asset. Other Group-acquired intangible assets comprise patents, licence rights, acquired customer relationships, and acquired Impairment of financial assets trademarks. They are recognised at cost, less accumulated On each reporting date, Cybercom tests whether there is amortisation and impairment losses (see “Impairment”). objective evidence that a financial asset is impaired. Objective An acquired trademark judged to be an intangible asset with evidence comprises observable past events that adversely affect a useful life that cannot be determined is excluded from the the possibility of recovering the acquisition cost. above. The basis of this judgement is that the trademark is well One observable event is a past due receivable. Cybercom established and known in the market. The trademark belongs to has set rules for bad debt management; impairment losses a cash-generating unit and is tested at least once a year for regarding past due accounts receivable are recognised after impairment (see “Impairment”). individual assessment.

Annual Report 2009 / Financial statements

Reversal of impairment losses A provision is reported for the expected cost of bonus payments Impairment losses on assets included in the application area for when the Group has an applicable legal or informal obligation to IAS 36 are reversed if there is (i) an indication that impairment make such payments due to services being rendered by has ceased and (ii) a change in the assumptions that formed the employees and the commitment can be reliably calculated. basis of calculating the recoverable amount. Impairment losses on goodwill are never reversed. A reversal only occurs to the Provisions extent that the asset’s carrying amount (after reversal) does not A provision differs from other liabilities because of prevailing exceed the carrying amount that would have been stated (less uncertainty about payment date or the amount required to settle depreciation or amortisation, where applicable), had no impair- the provision. A provision is reported on the balance sheet when ment loss been recognised. there is an existing legal or informal obligation due to a past Impairment losses on loan receivables and accounts event, it is probable that economic-resources outflow will be receivable recognised at amortised cost are reversed if a later require to settle the obligation, and the amount can be reliably increase in the recoverable amount can be objectively attributed estimated. to an event that occurred after impairment loss was recognised. The amount allocated to a provision is the best estimate of what is required to settle the existing obligation on the reporting Earnings per share date. When the payment date has a material impact, provisions Calculation of earnings per share (EPS) is based on Group profit are calculated through discounting the expected future cash flow for the year attributable to the parent company’s shareholders at an interest rate before tax that reflects current market and the weighted average number of shares outstanding during estimates of the time value of money and, where applicable, the the year. In calculating diluted EPS, the profit and the average risks associated with the liability. number of shares are adjusted to account for effects of the diluting potential ordinary shares, which derive from warrants Guarantees that employees subscribed for during the periods reported. A provision for guarantees is recognised when the underlying Dilution from warrants affects the number of shares. It only services are sold. The provision is based on historical data on occurs when the exercise price is below market price and it guarantees and a total appraisal of conceivable outcomes in increases as the difference between the exercise price and relation to the probabilities to which the outcomes are linked. market price increases. Restructuring Employee benefits A provision for restructuring is reported when an established, Defined contribution pension plans detailed, and formal restructuring plan exists and the All pension solutions in the Group are classified as defined restructuring has either started or been publicly announced. No contribution plans. Consequently, Cybercom’s obligation is provision is made for future operating expenses. limited to the contributions that it has committed itself to pay. In such cases the size of the employee’s pension depends on (i) Onerous contracts the contributions that the company pays to the plan or to an A provision for onerous contracts is recognised when the insurance company and (ii) the contributions’ return on capital. benefits that the Group expects to receive from a contract are The employee thus bears the actuarial risk (that the remunera- lower than the unavoidable costs of fulfilling the contractual tion will be lower than expected) and the investment risk (that obligations. the invested assets will not suffice to pay out the expected remuneration). Cybercom’s commitments regarding payments to Contingent liabilities defined contribution plans are recognised as an expense in the A contingent liability is recognised when a possible obligation income statement as they are earned over time by the employee due to past events exists and (i) only one or more uncertain rendering services for the company. future events confirm occurrence of the obligation or (ii) there is an obligation that is not recognised as a liability or provision Termination benefits because it is not probable that an outflow of resources will be An expense for remuneration paid on termination of employment required. is only recognised if the company is demonstrably committed – without realistic option of withdrawal – to a detailed formal plan Parent company accounting policies to terminate an employment contract before the normal end The parent company prepared its annual accounts per the date. If benefits are offered to encourage voluntary redundancy, Swedish Annual Accounts Act and the Swedish Financial an expense is recognised if it is probable that the offer will be Reporting Board’s recommendation RFR 2.2 Accounting for accepted and that the number of employees who will accept the legal entities. This board’s statements for listed enterprises were offer can be reliably estimated. also applied. RFR 2.2 means that, in the annual report for the legal entity, the parent company must apply all EU-approved Short-term employee benefits IFRS and interpretations as far as possible within the framework Short-term employee benefits are calculated without discounting of the Annual Accounts Act and the law on safeguarding pension and are recognised as a cost when the related services are commitments, and with regard to the connection between rendered. accounting and taxation. The recommendation states which exceptions from and additions to IFRS must be applied.

Annual Report 2009 / Financial statements

Amended accounting policies Forward contracts that are used to hedge exchange rate Amendments to IFRS 1 First-time adoption of international changes on receivables and liabilities in foreign currency are financial reporting standards and IAS 27 Consolidated and measured at the spot rate on the date when the forward contract separate financial statements regarding cost of an investment in is made for measurement of the underlying receivable or liability. a subsidiary, jointly-controlled entity or associate have been The difference between the forward rate and the current rate applicable since 1 January 2009. As a result of this amendment, when the contract is entered into (forward premium) is the parent company now always recognises dividends from distributed over the period of the forward contract. The distri- subsidiaries entirely as income in profit or loss for the year. buted forward premium is recognised as interest income and Previously, dividends that exceeded profits generated following interest expense, respectively. acquisition of the subsidiary reduced the carrying amount of the Interest rate swaps, which effectively hedge cash flow risk in interests in the subsidiary. The amendment had no impact on interest payments on liabilities, are measured at the net of the the parent company’s financial statements for 2009. accrued receivable on variable interest and accrued liability regarding fixed interest. The difference is recognised as interest Differences between the accounting policies expense and interest income, respectively. The hedge is of the Group and parent company effective if the economic significance of the hedge and the These differences are stated below. The parent company’s liability are the same, as if the liability had instead been stated at policies described below were applied consistently to all periods a fixed market interest rate when the hedging relationship reported in the parent company’s financial statements. commenced. Any premium paid for the swap contract is distributed as interest over the period of the contract. Classification and presentation The parent company’s income statement and balance sheet are Anticipated dividends presented per the Annual Accounts Act. The main difference to Anticipated dividends from subsidiaries are recognised where IAS 1 Presentation of financial statements – applied in prepara- the parent company has the exclusive right to determine the tion of the Group’s financial statements – is recognition of dividend amount and has decided on this amount before finance income, finance costs, and equity. publishing the financial statements for the parent company.

Subsidiaries and joint ventures Intangible non-current assets Interests in subsidiaries and joint ventures are recognised in the Goodwill parent company using the cost method. Goodwill that has an indeterminable useful life and is not subject to amortisation in the Group is amortised in the parent company Revenue per the Annual Accounts Act. Amortisation occurs over 10 years Rendering of service assignments in the parent company. In the parent company’s results, service assignments are recognised upon completion of the service. Until completed, Taxes service assignments in progress for another party are In the parent company, untaxed reserves are reported on the recognised at the lower of the cost and net realisable value on balance sheet without separate allocations to equity and the reporting date. deferred tax liability, unlike in the Group. Similarly, the parent company’s income statement does not include allocation of a Financial guarantees proportion of appropriations to deferred tax expense. The parent company’s financial guarantee agreements comprise surety. Financial guarantees mean that the company is obliged Group contributions and shareholders’ to compensate a debt instrument holder for losses incurred to contributions for legal entities the holder due to non-payment by a given debtor on the con- The company reports Group contributions and shareholders’ tractually agreed due date. When recognising financial contributions per the Swedish Financial Reporting Board’s guarantee agreements, the parent company applies a Swedish UFR 2 statement. Shareholders’ contributions are recognised Financial Reporting Board rule that allows certain exceptions directly in the equity of the recipient and are capitalised in shares from the requirements stated in IAS 39. This rule applies to and interests of the issuer, to the extent impairment is not financial guarantee agreements issued to benefit subsidiaries, applicable. Group contributions are recognised according to their associates, and joint ventures. The parent company recognises economic significance. At Cybercom, Group contributions are financial guarantee agreements as provisions on the balance made with the aim of minimising the Group’s total tax, so the sheet when the company has an obligation that probably contribution is recognised directly in retained earnings less its requires payment in order to be settled. current tax effect.

Financial instruments and hedge accounting Mergers Due to the connection between accounting and taxation, Cyber- Mergers are recognised per the Swedish Accounting Standards com does not apply the IAS 39 rules for financial instruments Board (BFNAR 1999:1), so the company conducting the and hedge accounting in the parent company as a legal entity. takeover assumes assets and liabilities at values based on the In the parent company, non-current financial assets are acquisition analysis drawn up for the acquisition of the target measured at cost, less any impairment losses. company. The difference arising from the merger is taken directly to equity in the company conducting the takeover. Any internal profit is recognised in equity.

Annual Report 2009 / Financial statements

Note 2. Operating segments The management approach is used to divide Group-wide Group operations into operating segments Other and based on the parts of the operations that 2009 SEK million Nordics Sweden Finland Denmark Europe Asia Elimination Group Group management follows up. The Group's operations are organised in such a way that Revenue from external Group management follows up the profit customers 1,622.1 1,215.3 358.4 48.4 10.2 118.4 0.9 1,751.6 before depreciation, amortisation, and impair- Revenue from other ment losses generated by the Group's geo- segments 20.8 10.2 2.4 11.0 32.7 23.8 –80.1 – graphic areas. Each operating segment has a Segments' EBITDA 161.8 111.8 37.0 13.0 –2.6 11.9 –27.0 144.1 manager who is in charge of day-to-day operations and who regularly reports the Impairment losses –280.0 –80.0 –200.0 – – – – –280.0 outcome of the operating segment's per- Depreciation and formance to Group management. Because amortisation –41.8 Group management follows up the results of operations based on geographic areas, these Financial items –27.1 comprise the Group's operating segments. Loss before tax and discontinued opera- The Group's internal reporting is therefore tions –204.8 structured in a way that enables Group Non-current assets 1,074.2 694.5 357.8 21.9 10.8 41.8 3.9 1,130.7 management to monitor the performance and profit of all geographic areas. This internal Number of employees 1,402 1,012 352 38 148 248 20 1,818 reporting was used as the basis for identifying the Group's segments; the different parts Group-wide includes costs of SEK 22.5 million for the parent company. underwent a process that aims to combine similar segments. This means that segments Group-wide with similar financial characteristics, services, Other and and modes of distribution were combined. 2008 SEK million Nordics Sweden Finland Denmark Euorpe Asia Elimination Group Segment revenue consists largely of con- Revenue from external sulting assignments. customers 1,694.3 1,273.1 376.1 45.1 16.9 69.6 0.3 1,781.1 These operating segments were identified: Revenue from other – Nordics segments 12.3 11.2 0.9 13.1 29.9 18.9 –74.0 – – Other Europe Segments' EBITDA 216.4 153.5 55.7 13.0 –7.1 0.0 –15.5 193.8 – Asia Impairment losses – –– – –– – – The operating segments' profit/loss before Depreciation and depreciation, amortisation, and impairment amortisation –37.8 losses includes directly attributable items as Financial items –39.4 well as items that can be allocated to the segments in a reasonable and reliable way. Profit before tax and The items recognised in the operating seg- discontinued operations 116.6 ments' profit/loss before depreciation, amortisation, and impairment losses are measured Non-current assets 1,376.4 779.8 574.2 22.4 12.0 43.6 2.0 1,434.0 in accordance with profit/loss before deprecia- Number of employees 1,560 1,107 419 34 154 254 14 1,982 tion, amortisation, and impairment losses followed up by Group management. Group

management does not follow up assets and Group-wide includes costs of SEK 20.8 million for the parent company. liabilities on operating segments level.

Market prices determine Group transfer pricing between the Group's operating segments.

Revenue from external customers was allocated to the country from which the sales occurred. In 2009 revenue was generated from two major customers totalling SEK 343.2 million and SEK 226.4 million, which is recognised in the Nordics operating segment.

Annual Report 2009 / Financial statements

Note 3. Employees, staff costs, and remuneration to senior executives

Group employee remuneration costs 2009 2008 Salaries and other remuneration 769,137 769,036 Pension costs 92,118 89,072 Other social security costs 182,302 188,709 Total 1,043,557 1,046,817

Salaries and other remuneration distributed among senior executives and other employees, and social security costs Parent company 2009 2008

Senior Senior executives executives (4 + the Other (4 + the Other board) employees Total board) employees Total Salaries and other remuneration 10,865 7,672 18,537 8,519 6,269 14,788 (of which bonus) (2,132) – (2,132) ––– Pension costs 1,206 1,022 2,228 1,035 962 1,997 Other social security costs 3,706 2,787 6,493 3,085 2,146 5,231

Salaries, other remuneration, and pension costs for senior Group executives Group Senior executives (14 + the board) Senior executives (14 + the board) Salaries and other remuneration 23,890 23,346 (of which bonus) (2,631) (1,462) Pension costs 2,579 2,970 Total 26,469 26,316

2009 2008 Of whom Of whom Average no. of employees No. men¹ No. men¹ Sweden 977 81% 1,057 81% Denmark 35 89% 37 85% Estonia 36 82% 43 85% Finland 359 89% 375 79% India 64 83% 47 80% China 145 73% 127 77% Poland 67 89% 85 90% Romania 45 77% 34 74% Singapore 31 82% 27 81% US 1 100% – – Group 1,760 82% 1,832 81% of whom in parent company (Sweden) 14 57% 13 57% ¹ Percentage of men at year-end

Annual Report 2009 / Financial statements

2009 2008 Remuneration Gender distribution, senior No. on Of whom No. on Of whom CEO executives reporting date men reporting date men Under the guidelines established for 2009, the CEO, who is also Group president, was Group entitled to base salary, variable pay, and other Board members 5 100% 5 100% benefits as shown in the table. In 2009 a Other senior executives 14 93% 14 93% decision has been made on variable pay for 2008 totalling SEK 360 thousand; this affects Parent company profit for 2009. Variable pay has a set limit, Board members 5 100% 5 100% 30 per cent of base salary, and is not pensionable. The CEO has a premium-based Other senior executives 4 75% 4 75% pension agreement, in which the premium is 30 per cent of his annual fixed salary. A mutual six-month period of notice applies to Parent company termination of the CEO's employment Sick leave 2009 2008 contract. If the company terminates the contract, the CEO is entitled to six months' Total sick leave 0.6% 1.8% severance pay. This is in addition to salary – long-term sick leave – 1.4% received during the period of notice. In 2008 as part of the warrant programme, the CEO – sick leave, men 0.5% 0.3% subscribed for 22,699 warrants at market – sick leave, women 0.8% 3.3% price. Subscription for shares at an exercise price of SEK 42.82 can take place in June – employees up to age 29 – – 2010. – employees aged 30–49 0.6% 1.8% – employees aged 50+ – – Other senior executives Other senior executives were entitled to base Salaries and other remuneration to senior parent company executives salary, variable pay, and other benefits as shown in the table. Variable pay is based on Base salary, operational targets achieved, and in 2009 a 2009 board fee Variable pay Pension costs Total decision was made on variable pay for 2008 Patrik Boman, CEO 2,448 1,080 734 4,262 totalling SEK 228 thousand for the COO and SEK 123 thousand for another executive; this Peter Keller-Andreasen, COO 2,794 684 – 3,478 affects profit for 2009. These executives Other senior executives (2 people) 2,291 368 472 3,131 receive premium-based pension benefits. The parent company's vice president receives no Wigon Thuresson, board chairman 400 – – 400 pension benefits. A longer period of notice, Hampus Ericsson, board member 200 – – 200 18 months, applies if the company terminates the employment of certain senior executives; Ulf Körner, board member 200 – – 200 this does not apply if the executives resign. Thomas Landberg, board member 200 – – 200 Some senior executives are entitled to Lars Persson, board member 200 – – 200 six months' severance pay if the company terminates their contracts. The CEO and Total 8,733 2,132 1,206 12,071 some of the other senior executives are entitled to a free car as a benefit. The CEO and all other senior executives are entitled to Base salary, a medical insurance benefit. In 2008 as part 2008 board fee Variable pay Pension costs Total of the warrant programme, the COO Patrik Boman, CEO 2,437 – 718 3,155 subscribed for 10,764 warrants and another senior executive subscribed for 2,000 at Peter Keller-Andreasen, COO 2,803 – – 2,803 market price. Subscription for shares at an Other senior executives (2 people) 2,034 – 317 2,351 exercise price of SEK 42.82 can take place in June 2010. Wigon Thuresson, board chairman 400 – – 400 Per Edlund, board member 200 – – 200 Board of directors Eva Gidlöf, board member 33 – – 33 The annual general meeting sets the Ulf Körner, board member 200 – – 200 remuneration to the board members it elects. The table shows the fees paid in 2009. No Thomas Landberg, board member 200 – – 200 fees are payable to remuneration committee Per Norén, board member 12 – – 12 members or to board members employed in the Group. Lars Persson, board member 200 – – 200 Total 8,519 – 1,035 9,554 Per Norén and Eva Gidlöf, board members, resigned on 1 January 2008 and 2 July 2008, respectively.

Annual Report 2009 / Financial statements

Note 4. Fees for auditing and consulting

Group Parent company Auditing assignments refers to auditing the annual report, the accounting, and the Fees for auditing and consulting 2009 2008 2009 2008 administration performed by the board and KPMG CEO; other tasks that are the duty of the company's auditors; and consulting or other Auditing 2,013 2,773 577 493 assistance required due to observations made Other assignments 2,427 762 2,131 85 in such auditing or performance of such other tasks. Everything else comes under Other Öhrlings PricewaterhouseCoopers assignments. Auditing – 278 – 126 A major portion of the 2009 fee for Other Other assignments – 81 – 45 assignments relates to work with the new Other auditors share issue prospect. Auditing assignments 318 136 5 – Other assignments 16 479 – – Total 4,774 4,509 2,713 749

Note 5. Other operating income and operating expenses

Group Parent company The exchange differences refer to operating receivables and operating liabilities, 2009 2008 2009 2008 respectively. Foreign exchange gains 10,938 6,399 167 132 Foreign exchange losses –11,276 –4,992 –293 –146 Total –338 1,407 –126 –14

Note 6. Financial items

Group 2009 2008 Interest income 1,921 5,826 Foreign exchange gains 5,045 7,069 Finance income 6,966 12,895

Interest expense –24,676 –48,708 Fair value loss derivative –2,123 – Foreign exchange losses –7,434 –3,617 Finance costs –34,233 –52,325 Net financial items –27,267 –39,430

Parent company 2009 2008 Net exchange rate fluctuation 12,405 –27,808 Interest income, Group companies 3,459 6,901 Other interest income 637 3,310 Other interest expense –7,518 –19,136 Other finance income/costs, net –1,550 –1,267 Total 7,433 –38,000

Profit/loss from interests in Group companies 2009 2008 Dividend 9,982 15,259 Capital gain/loss from sale of subsidiaries –450 48,637 Liquidation of subsidiaries – –81 Net assets acquisition – 5,197 Impairment loss –52,513 –9,351 Total –42,981 59,661

Annual Report 2009 / Financial statements

Note 7. Appropriations

Parent company 2009 2008 Change in excess depreciation/amortisation 186 662 Change in tax allocation reserve –3,532 326 Total –3,346 988

Note 8. Taxes

Group Parent company 2009 2008 2009 2008 Current tax –15,643 –7,458 6,054 13,718 Tax attributable to prior years –2,911 –412 –4 –9 Deferred tax regarding temporary differences 13,953 –11,861 74 –89 Deferred tax regarding loss carry-forwards 495 –10,239 –1,095 986 Total –4,106 –29,970 5,029 14,606

Group Parent company Tax regarding items recognised in other comprehensive income or directly in equity 2009 2008 2009 2008 Tax effect of hedging currency risk in foreign operations in other comprehensive income 2,592 –7,782 – – Tax effect of issue expenses in equity 2,093 117 2,093 – Tax effect of Group contributions in equity – – 11,341 13,719 Total 4,685 –7,665 13,434 13,719

Group Parent company Tax rate Difference between tax in income statement and The parent company's applicable tax rate is tax based on the parent company’s tax rate 2009 2008 2009 2008 26.3 per cent (28.0).

Profit/loss before tax –204,958 116,571 –68,592 –1,682 The Group's effective tax rate is –2.0 per cent Tax as per applicable rate 53,904 –32,640 18,040 471 (25.7). Tax attributable to prior years –2,911 –108 –4 –59 Tax effect of non-deductible costs –54,149 –1,231 –15,588 –3,504 Tax effect of tax-exempt revenue 43 50 2,652 17,807 Tax on standard interest, tax allocation reserves –153 –231 –70 –108 Tax effect of issue expenses in equity – – – 117 Effect of foreign tax rates –840 2,019 – – Effect of changed tax rate – 2,171 – –118 Tax on year's earnings as per income statement –4,106 –29,970 5,029 14,606

Note 9. Discontinued operations

Group In Q4 2008, 100 per cent of the shares in Cybercom Group UK Ltd, a subsidiary with Discontinued operation 2009 2008 37 employees, were sold to Digital Marketing Operating income – 63,555 Group plc., a British company. The purchase price was SEK 73.9 million, which gave Operating expenses – –53,933 capital gain of SEK 41.5 million. The final Depreciation, amortisation, and impairment – –1,361 consolidation date was 30 September 2008. During 2009, additional expenses of Operating profit – 8,261 SEK 0.5 million were recognised. Financial items – 232 Current tax – –2,590 Profit from operation – 5,903 Capital gain/loss –450 41,498 Profit/loss from discontinued operation –450 47,401 Earnings per share from discontinued operation, SEK –0.01 1.74

Annual Report 2009 / Financial statements

Note 10. Earnings per share

Group The warrants are not considered dilutive because the loss was recognised for the 2009 2008 financial year 2009, and the exercise price, Share data, basic SEK 42.82, was higher than the average market price during the time the warrants EPS from total operations, SEK –6.23 4.92 were outstanding. EPS from continuing operations, SEK –6.22 3.18 The average number of shares for 2008 has Shareholders' equity per share, SEK 25.13 40.60 been recalculated as an effect of the new Number of shares at year's start 24,584,840 22,384,362 share issue 2009. New share issue 11,503,059 2,200,478 Number of shares at year's end 36,087,899 24,584,840 Average number of shares 33,633,275 27,251,721

Share data, diluted EPS from total operations, SEK –6.23 4.92 EPS from continuing operations, SEK –6.22 3.18 Shareholders' equity per share, SEK 25.13 40.60 Average number of shares, basic 33,633,275 27,251,721 Average number of dilutive warrants – – Average number of shares, diluted 33,633,275 27,251,721

Year's profit/loss for total operations –209,514 134,002 Year's profit/loss for continuing operations –209,064 86,601

Annual Report 2009 / Financial statements

Note 11. Goodwill

Impairment test Group Parent company Group goodwill is tested for impairment once Goodwill 2009 2008 2009 2008 a year or whenever there are signs of a Opening cost of acquisition 1,225,827 758,044 63,051 4,930 decline in value. This occurs by calculating the recoverable amount of cash-generating Through merger of subsidiaries – – – 63,051 units (CGUs), to which goodwill is allocated, Through acquisition of subsidiaries 14,012 405,738 – – by calculating the value in use. Future cash flows are discounted when calculating the Sales – – – –4,930 recoverable amount. The next section Translation differences –9,177 62,045 – – describes the assumptions and judgements made in conjunction with impairment testing in Accumulated value at year's end 1,230,662 1,225,827 63,051 63,051 2009. All assumptions and parameters in the Opening amortisation/impairment loss – – –2,627 –2,383 impairment tests apply to all the CGUs.

Year's amortisation – – –6,304 –2,668 The cash flow forecast is made for the next Year’s impairment loss –280,000 – – – five years, based on outcomes for the current year. Growth for the next five years was Sales – – – 2,424 estimated at 0 percent, considering the Closing accumulated amortisation/impairment prevailing uncertainty in market trend. The loss –280,000 – –8,931 –2,627 number of forecast periods was assumed to Carrying amount 950,662 1,225,827 54,120 60,424 be infinite, and annual growth rates in cash flows that occur after five years were estimated at 3 percent. As an effect of the global economic downturn, a goodwill impairment loss of SEK 280 million was recognised, of which SEK 80 million referred to Cybercom Sweden East and SEK 200 million referred to Cybercom Finland. Several basic variables were used in Both units are accounted for in the Nordic segment. calculating future developments. The next section describes variables deemed critical for The recoverable amount of all the following CGUs exceed their carrying amount. Company management judges future operations and how they were that a reasonable and possible change to the critical variables would not have such an impact that they would estimated. individually reduce the recoverable amount to less than the carrying amount. Hourly rates, capacity utilisation, number of consultants, and staff costs The estimated hourly rate trend is based on Group Cybercom's position and development in the market and considers Cybercom's own Goodwill distribution by CGU 2009 2008 offering. Cybercom's globalised offering Cybercom Sweden East 287,373 222,501 enables the company to maintain – and in the long term, increase – its operating margin. Cybercom Sweden North – 141,111 Estimates of capacity utilisation are based on Cybercom Sweden West 122,200 122,200 experience and the current situation. Volume Cybercom Sweden South 238,289 238,289 growth in number of employees is based on the company's analyses of market trends and Cybercom Singapore 38,283 38,283 Cybercom's growth opportunities. Due to the Cybercom Denmark 19,303 19,567 increase in number of employees in low-cost countries, Cybercom foresees a future cut in Cybercom Romania 9,315 9,321 average staff costs, which will have an Cybercom Finland 235,899 434,555 equivalent effect on the average price to customers. Total 950,662 1,225,827 Since the operation's cash flows are forecast without accounting for financial items, the interest rate applied to calculate the discounting of cash flows must reflect a weighted capital cost for shareholders' equity and loan financing, i.e., the Weighted Average Cost of Capital (WACC). To determine the WACC, these factors must be estimated: – Debt/equity ratio (financing mix)) – The required return on equity – Cost of long-term loan financing

The WACC totals 9.5 per cent (9.5) after tax, which was the discount rate used in the estimates.

Annual Report 2009 / Financial statements

Note 12. Other intangible non-current assets

Group Parent company Licence rights 2009 2008 2009 2008 Opening cost of acquisition 19,765 4,579 3,417 2,751 Purchases 4,232 3,179 1,498 666 Through acquisition of subsidiaries/net assets 1,152 12,451 – – Sales –106 –2,370 – – Re-classification 1,476 – – – Translation differences 868 1,926 – – Accumulated value at year-end 27,387 19,765 4,915 3,417 Opening amortisation –9,348 –2,557 –1,535 –915 Year's amortisation –5,477 –3,957 –688 –620 Through acquisition of subsidiaries – –4,333 – – Sales 106 2,370 – – Re-classification –1,156 – – – Translation differences –80 –871 – – Closing accumulated amortisation –15,795 –9,348 –2,223 –1,535 Carrying amount 11,592 10,417 2,692 1,882

Group Customer relationships 2009 2008 Opening cost of acquisition 131,902 56,060 Through acquisition of subsidiaries/net assets 3,819 65,442 Translation differences –4,170 10,400 Accumulated value at year-end 131,551 131,902 Opening amortisation –36,860 –3,737 Year's amortisation –11,065 –10,543 Through acquisition of subsidiaries – –15,369 Translation differences 3,250 –7,211 Closing accumulated amortisation –44,675 –36,860 Carrying amount 86,876 95,042

Group Trademarks 2009 2008 Opening cost of acquisition 35,977 4,000 Through acquisition of subsidiaries – 28,300 Translation differences –927 3,677 Accumulated value at year-end 35,050 35,977 Opening amortisation –1,467 –1,067 Year's amortisation –400 –400 Closing accumulated amortisation –1,867 –1,467 Carrying amount 33,183 34,510

As one trademark has an indefinite useful life, it is tested for impairment using the same process as for goodwill. No impairment loss was recognised. See Note 1 for further information about impairment test.

Annual Report 2009 / Financial statements

Group Patents 2009 2008 Opening cost of acquisition 2,810 2,628 Purchases – 203 Sales – –9 Re-classification –1,476 – Translation differences – –12 Accumulated value at year-end 1,334 2,810 Opening amortisation –2,312 –2,092 Year's amortisation –87 –232 Sales – 3 Re-classification –1,156 – Translation differences – 9 Closing accumulated amortisation –1,243 –2,312 Carrying amount 91 498

Note 13. Property, plant, and equipment

Group Parent company The table includes non-current assets of SEK 20.9 million (29.0) classified as finance Equipment 2009 2008 2009 2008 leases. Opening cost of acquisition 141,465 58,931 2,106 1,857 See Note 26 Leasing. Purchases 11,484 19,633 464 272 Sales and retirement of assets –32,633 –4,600 – –23 Through acquisitions of subsidiaries/net assets 448 59,647 – – Through disposal of subsidiaries – –3,151 – – Re-classification 351 – – – Translation differences –4,742 11,005 – – Accumulated value at year-end 116,380 141,465 2,570 2,106 Opening depreciation –73,711 –38,206 –1,345 –1,162 Year's depreciation –23,302 –22,669 –232 –197 Sales and retirement of assets 26,811 4,185 – 14 Through acquisitions of subsidiaries – –13,925 – – Through disposal of subsidiaries – 2,064 – – Re-classification –62 – – – Translation differences 2,168 –5,160 – – Closing accumulated depreciation –68,096 –73,711 –1,577 –1,345 Carrying amount 48,284 67,754 993 761

Note 14. Non-current financial assets

Group 2009 2008 Opening cost of acquisition 919 700 Through acquisition of subsidiaries – 198 Sales/Payment in instalments – –10 Translation differences 76 31 Accumulated value at year-end 995 919 Opening impairment loss – – Closing accumulated impairment loss – – Carrying amount 995 919

Annual Report 2009 / Financial statements

Parent company 2009 2008 Interests in Group companies Opening cost of acquisition 619,470 318,073 Acquisition of subsidiaries – 374,812 Disposal of subsidiaries – –5,840 Shareholder contribution 231,451 500 Merger of subsidiaries – –68,075 Accumulated value at year-end 850,921 619,470 Opening impairment loss –185,783 –176,432 Year's impairment loss –52,513 –9,351 Closing accumulated impairment loss –238,296 –185,783 Carrying amount of interests in Group companies 612,625 433,687 Carrying amount of interests in joint venture 2,312 2,312 Carrying amount 614,937 435,999

As the carrying amount for shares in Cybercom Finland was higher than the value in use, an impairment loss of SEK 52,513 thousand was recognised 2009.

% of capital and votes Carrying amount Parent company's direct holdings in subsidiaries Corporate ID Site 2009 2008 2009-12-31 2008-12-31 Cybercom Stockholm IT AB 556497–0787 Stockholm 100 100 200,120 120 Cybercom IS/IT Services AB 556544–6225 Stockholm 100 100 120 120 Cybercom Group Stockholm AB 556551–4493 Stockholm 100 100 120 120 Cybercom Nord AB 556554–8673 Stockholm 100 100 120 120 Cyber Com Consulting A/S 25795938 Denmark 100 100 14,806 14,806 Cybercom Sweden South AB 556591–8421 Stockholm 100 100 4,551 801 Cybercom Netcom Consultants AB 556359–1097 Stockholm 100 100 42,787 42,787 Cybercom Plenware Oy 1516651–3 Finland 100 100 350,000 374,812 Total 612,625 433,687

% of capital and votes Other Group companies Corporate ID Site 2009 2008 Cybercom Sweden East AB 556254–0673 Stockholm 100 100 Cybercom Security Solutions AB¹ 556418–6681 Stockholm – 100 Cybercom 663 AB¹ 556219–4471 Malmoe – 100 Cybercom Sweden North AB¹ 556556–9463 Ostersund – 100 Pronyx AB¹ 556452–6225 Nykoping – 100 Cybercom Sweden West AB 556262–4691 Gothenburg 100 100 Cybercom Romania Holding AB 556788–5909 Stockholm 100 – Cybercom China Holding AB 556788–6006 Stockholm 100 – Cybercom Poland Sp. Z o.o 0000036076 Poland 100 100 Cybercom Singapore PTE Ltd 199707629N Singapore 100 100 Plenware IT Resources Oy² 1994747–2 Finland 100 100 Plenware Rauma Oy¹ 1542832–5 Finland – 100 NSD Consulting Oy 1654716–6 Finland 100 100 Plenware Eesti OÜ 11174631 Estonia 100 100 Cybercom Romania S.R.L 19217664 Romania 100 100 Plenware IT Services China Ltd 66215339–9 China 100 100 ¹ Companies that were merged in 2009. ² Companies that will be merged in 2010.

Annual Report 2009 / Financial statements

Note 15. Interests in joint ventures

Group 2009 2008 The Group has a 50 per cent holding in a joint venture in India called Cybercom Datamatics Assets Information Solutions Ltd, corporate ID Non-current assets 688 884 U72900MH2000PTC123469, based in Mumbai. The following amounts are included Current assets 15,884 8,858 in the consolidated income statement and 16,572 9,742 balance sheet and constitute the Group's 50 per cent share in the assets, liabilities, Liabilities income, and costs of this joint venture. Non-current liabilities – – No contingent liabilities arise from the Group's Current liabilities 2,938 1,390 interest in this joint venture and the joint 2,938 1,390 venture has no contingent liabilities. Net assets 13,634 8,352 Income 14,367 10,604 Expenses –8,513 –6,213 Year's profit 5,854 4,391

Note 16. Accounts receivable

Group Parent company 2009 2008 2009 2008 Accounts receivable 279,525 244,691 – 763 Bad debts Opening balance –2,911 –1,264 – – Reversal of previously recognised impairment losses 662 1,922 – – Year's impairment loss –3,274 –3,569 – – Accounts receivable, net 274,002 241,780 – 763

Note 17. Other receivables

Group Parent company 2009 2008 2009 2008 Time worked but not invoiced 40,396 71,184 – – Other items 12,454 19,753 2,284 3,018 Total 52,850 90,937 2,284 3,018

Note 18. Prepayments

Group Parent company 2009 2008 2009 2008 Prepaid rents 5,471 6,068 – 191 Prepaid leasing fees 1,831 911 1,201 352 Prepaid insurance premiums 3,942 6,634 808 848 Prepaid services and fees 9,446 11,328 4,662 4,377 Prepaid licence fees 5,918 3,237 664 317 Prepaid data communication 196 382 67 560 Other items 3,196 5,626 299 397 Total 30,000 34,186 7,701 7,042

Annual Report 2009 / Financial statements

Note 19. Equity

Group On 31 December 2009 registered share capital stood at 36,087,899 shares Translation differences in equity 2009 2008 (24,584,840). The shares' quotient value is Opening balance 40,704 935 1 (1). All shares are fully paid up.

Hedging currency risk in foreign operations 9,857 –27,794 On 22 April 2008 Cybercom's annual general Tax effect of hedging currency risk in foreign meeting of shareholders decided on a warrant operations –2,592 7,782 programme for senior executives and other key people at Cybercom. The programme Year's change in translation reserve –11,244 59,781 comprised 390,000 warrants. All warrants Closing balance 36,725 40,704 acquired were issued at market price. The programme consists of two series, which were issued in June and October 2008. Group A total of 108,795 warrants were subscribed Warrants 2009 2008 for in the first series and 13,671 in the No. of issued warrants at year's start 390,000 – second, totalling 122,466 warrants. Together New issue of warrants – 390,000 they create a 0.5 per cent dilution effect. The exercise price in both series is SEK 42.82. Warrants in the company's custody –267,534 –267,534 The warrants issued in 2008 are valid for just No. of outstanding warrants at year-end 122,466 122,466 under two years, and shares can be subscribed for in June 2010.

The warrants in the company’s custody are valued to SEK 0 (0).

Note 20. Deferred tax

Group Parent company Temporary differences exist in those cases where the carrying amounts and tax bases Deferred tax assets 2009 2008 2009 2008 differ for assets or liabilities. Temporary Non-deductible depreciation of equipment 6,640 41 – 35 differences regarding the items above resulted in deferred tax liabilities and deferred Endowment insurance and employer's contribution 707 707 707 707 tax assets. Reserves 1,790 1,665 – – Deferred tax assets and tax liabilities are Goodwill from net assets acquisition 36,300 33,422 – – offset when (i) there is a legal offset right for Loss carry-forwards 14,956 14,234 – 986 current tax assets and tax liabilities and (ii) deferred taxes refer to the same tax authority. Other 1,051 33 – – After offsetting, the adjacent amounts were Total deferred tax assets 61,444 50,101 707 1,728 derived and recognised on the balance sheet.

Deferred tax liabilities Accumulated excess depreciation/amortisation –4,453 –5,901 – – Tax allocation reserve –7,876 –7,366 – – Amortisation of goodwill from net assets acquisition –5,390 –5,935 – – Trademark –12,551 –8,980 – – Customer relationships –20,819 –24,851 – – Total deferred tax liabilities –51,089 –53,033 – – Deferred tax, net 10,355 –2,932 707 1,728

Group Parent company Amounts on the balance sheet include: 2009 2008 2009 2008 A deferred tax asset used after 12 months 44,499 29,259 707 650 A deferred tax liability payable after 12 months –44,605 –47,611 – –

Group Parent company Change in deferred tax assets 2009 2008 2009 2008 Deferred tax asset at year's start 50,101 63,355 1,728 808 Through acquisition of subsidiaries – 1,367 – – Merged operation – – – 23 Change in income statement 11,116 –15,730 –1,021 897 Translation difference 227 1,109 – – Carrying amount 61,444 50,101 707 1,728

Annual Report 2009 / Financial statements

Group Change in deferred tax liability 2009 2008 Deferred tax liability at year's start 53,033 26,094 Through acquisition of subsidiaries – 25,203 Change in income statement –740 –1,512 Translation difference –1,204 3,248 Carrying amount 51,089 53,033

Note 21. Other non-current liabilities

Group Parent company The bank loans mature up until 2013 and are subject to three months interest. 2009 2008 2009 2008 Special employer's contribution on endowment insurance 452 452 452 452 Bank loans 244,007 406,333 113,883 164,032 Finance leases 7,650 17,429 – – Liability to former shareholders of auSystems 21,954 21,954 – – Other 2,619 627 – – Total 276,682 446,795 114,335 164,484

Note 22. Other current liabilities

Group Parent company The portion of the bank loan that matures within 12 months is subject to three months 2009 2008 2009 2008 interest. VAT, tax at source 31,241 34,527 18 483 The Group has made provisions for Bank loan 107,977 127,239 41,412 43,742 restructuring costs. The provision total Finance leases 13,262 11,528 – – SEK 6,583 thousand (760).

Other current liabilities 68,509 45,107 500 – Because the restructuring work is expected to Total 220,989 218,401 41,930 44,225 be completed in 2010, the provision is recognised among Other current liabilities.

Note 23. Accruals and deferred income

Group Parent company 2009 2008 2009 2008 Accrued salaries 37,369 31,410 2,014 430 Accrued holiday pay 66,032 70,186 447 411 Accrued social security costs 51,948 39,774 1,125 644 Accrued interest expense 3,036 4,998 1,381 1,919 Accrued external services 15,042 12,976 829 1,792 Other items 9,721 6,386 – – Total 183,148 165,730 5,796 5,196

Annual Report 2009 / Financial statements

Note 24. Financial assets and liabilities

Financial assets and liabilities per valuation category

Financial assets Measurement categories and liabilities The fair value of financial instruments is Loan receivables measured at fair Total carrying and accounts Financial assets value through amount and determined on the basis of three categories. Group 2009 receivable Other liabilities available for sale profit and loss fair value Shareholdings and interests 125 125 Level 1: Prices quoted in an active market for the same instruments. Non-current assets 204 204 Accounts receivable 279,525 279,525 Level 2: Directly or indirectly observable Other receivables 40,396 40,396 market data not included in level 1. Derivative, valuation category level 2 50 50 Level 3: Unobservable market data (inputs). Current investments 3,590 3,590 Cash and cash equivalents 179,910 179,910 Establishing fair value Total 503,625 125 50 503,800 The next section summaries the main methods and assumptions used to establish Non-current interest-bearing liabilities 251,657 251,657 the fair value of the financial instruments Current interest-bearing liabilities 121,239 121,239 recognised. Accounts payable 87,188 87,188 Shares and interests Derivative, valuation category level 2 2,123 2,123 Available-for sale financial assets are Other liabilities 3,037 3,037 measured at historical cost, since they cannot Total 463,121 2,123 465,244 be reliably measured at fair (market) value. Non-current receivables Financial assets The fair value of unlisted financial assets is and liabilities established by computing the future Loan receivables measured at fair Total carrying and accounts Financial assets value through amount and discounted cash flows. The measurement Group 2008 receivable Other liabilities available for sale profit and loss fair value assessment takes account of the value in the Shareholdings and interests 132 132 event of any completed transactions.

Non-current assets 120 120 Derivatives Accounts receivable 244,691 244,691 The fair value of foreign exchange contracts is Other receivables 71,184 71,184 determined using quoted rates. The fair value of interest rate swaps is based on the Current investments 4,753 4,753 measurement made by the brokering credit Cash and cash equivalents 164,934 164,934 institution. Total 485,562 132 – 485,814 Interest-bearing liabilities Non-current interest-bearing liabilities 423,762 423,762 The fair value of financial liabilities that are Current interest-bearing liabilities 138,767 138,767 not derivatives is computed using future cash Accounts payable 78,562 78,562 flows of capital amounts and interest discounted at the actual market interest rate Other liabilities 4,998 4,998 on the reporting date. Total 646,089 – 646,089 Financial leasing liabilities The fair value is based on the present value of future cash flows discounted to the market interest rate for similar leases. Accounts receivable and accounts payable For accounts receivable and accounts payable, the carrying amount is considered to reflect the fair value.

Annual Report 2009 / Financial statements

Note 25. Risk exposure and risk management

Cybercom is exposed to various kinds of financial risk through its operations.

Financial risks mean fluctuations in the company's profit/loss and cash flow due to changes in exchange rates, interest rates, refinancing risks, and credit risks. The board drew up the Group's finance policy for managing financial risks. The policy forms a framework of guidelines and rules. Responsibility for the Group's financial transactions is managed centrally in the parent company. The overall goal is to minimise adverse impact on the Group's results.

Liquidity and financing risk Liquidity risk is the risk of the Group having problems fulfilling its obligations that are linked to financial liabilities. The Group has rolling 14-week liquidity planning that covers all Group units. This planning is updated monthly. Liquidity planning is used to manage the liquidity risk and the cost of financing the Group. The aim is that the Group will be able to fulfil its financial commitments in economic high and low periods, without significant unforeseeable costs and without risking the Group's reputation. Group policy is to minimise the need for borrowing by using excess liquidity within the Group through cash pools. Liquidity risks to the Group are managed centrally in the parent company.

In 2008 Cybercom signed an agreement enabling the company to sell accounts receivable for certain major customers to Nordea. This increases Cybercom's ability to control its liquidity.

Cybercom had financial liabilities of SEK 372.9 (562.5) million at year-end. The table shows the maturity structure of loan liabilities. Future amortisation and interest payments are calculated on the basis of exchange and interest rates on the reporting date.

Group 2009 2008 Original currency Total 0–1 year 1–3 year 3–5 year Total 0–1 year 1–3 year 3–5 year Bank loan EUR 230,001 63,484 148,134 18,383 331,539 76,902 154,531 100,106 Bank loan SEK 136,736 52,814 83,922 – 268,141 78,256 156,146 33,739 Accounts payable SEK 87,188 87,188 – – 78,562 78,562 – – Finance lease liabilities EUR 21,207 8,718 12,405 84 22,312 9,711 12,601 – Total 475,132 212,204 244,461 18,467 700,554 243,431 323,278 133,845

Achievement of certain key figures, called covenants, is a prerequisite for loan financing. The key figures are based on Cybercom's profit/loss, net financial items, cash flow, and debt/equity ratio. Cybercom continually analyses these key figures. The company meets the requirements of the covenants during 2009.

Market risk Market risk is the risk that the fair value of, or future cash flows from, a financial instrument will vary due to changes in the market price. IFRS defines three types of market risks: currency risk, interest rate risk, and other price risks. Interest rate and currency risks are the market risks that affect the Group most.

Interest rate risk Interest rate risk is the risk of the value of financial instruments varying due to changed market interest rates. Interest rate risk can lead to changed fair values and changed cash flows. The fixed-interest term is a significant factor that affects interest rate risk. Three months interest applies to Cybercom's debt financing. A 100 basispoint change in interest on the reporting date would have an SEK 3.7 million (2.7) impact on the Group’s future profit/loss and equity, based on the above table. The sensitivity analysis assumes that all other factors (such as exchange rates) remain unchanged. To hedge the uncertainty of highly probable predicted interest rate flows regarding borrowing at variable rates of interest, Cybercom uses interest rate swaps for which it receives interest at variable rates and pays fixed-rate interest.

Currency risk The risk of fair values and cash flows of financial instruments fluctuating when the value of foreign currencies changes is called currency risk. Cybercom is exposed to various currency risks. Main exposure occurs in the Group's sales and purchases in foreign currencies. These currency risks comprise (i) risk of fluctuations in the value of accounts receivable and accounts payable, and (ii) the currency risk of expected and contracted payment flows. These risks are called transaction exposure. Cybercom did not actively hedge its transaction exposure in 2009. But the company does aim to match income and costs in the same currency as much as possible.

Translation of assets and liabilities of foreign subsidiaries to the parent company's functional currency also involves currency risks, known as translation exposure. Cybercom is also exposed to currency risks regarding payment flows for loans in foreign currency. Hedge accounting is used in the accounts when the prerequisites for this have been fulfilled. The Group's income statement includes exchange losses of SEK 0.3 million (1.4 gain) in operating profit/loss and exchange losses of SEK 2.4 million (3.5 gain) in net financial items.

Annual Report 2009 / Financial statements

Transaction exposure Cybercom's transaction exposure was distributed among these currencies on the reporting date, amounts in SEK thousand, revaluated to the exchange rate on the reporting date.

2009 2008 Accounts Other Accounts Other Accounts Other Accounts Other Currency receivable receivable payable liabilities Total receivable receivable payable liabilities Total SEK 199,654 12,460 –69,594 –174,825 –32,305 163,190 31,990 –64,706 –301,045 –170,571 AED 2,177 1,197 – – 3,374 ––––– CHF 1,006 – – – 1,006 1,204 – –4 – 1,200 DKK 15,452 –47 –4,997 –149 10,259 18,853 135 –4,817 –536 13,635 EEK – – –112 – –112 – – –75 – – EUR 29,790 21,836 –5,591 –220,702 –174,667 39,107 37,115 –8,209 –294,531 –226,518 GBP 18 – – – 18 369 87 –160 – 296 INR – 143 –48 – 95 ––––– NOK 2,987 – 15 – 3,002 2,761 – – – 2,761 PLN 344 – –1,175 – –831 1,583 665 –422 – 1,826 RON – – –90 – –90 – – –22 – –22 SGD – – –2 – –2 306 258 –10 – 554 USD 22,574 4,806 –682 –56 26,642 14,407 934 –137 –1,503 13,701 Total 274,002 40,395 –82,276 –395,732 –163,611 241,780 71,184 –78,562 –597,615 –363,138

Translation exposure Foreign net assets in the Group are distributed among these currencies.

2009 2008 Original Net Hedged net Net Net Hedged net Net currency investment investment exposure investment investment exposure EUR 296,437 –155,295 141,142 397,947 –207,775 190,172 PLN 4,683 – 4,683 –5,179 – –5,179 SGD 17,880 – 17,880 8,165 – 8,165 DKK 25,639 – 25,639 28,368 – 28,368 Total 344,639 –155,295 189,344 429,301 –207,775 221,526

Cybercom hedges parts of its net investment in EUR through loans in EUR. The carrying amount of the loan on 31 December 2009 was SEK 155.3 million (207.8). An SEK 7.3 million exchange gain after tax (–20.0) was recognised in equity in conjunction with translation of the loan into SEK. See Note 1, Accounting policies, for information about hedge accounting.

Credit risk The risk of Cybercom's customers not fulfilling their obligations, i.e., Cybercom not receiving payment from customers, is a customer credit risk. Historically, Cybercom has had very low losses. The majority of the Group’s customers are well-reputed companies, authorities, and government agencies with high credit ratings. Cyber- com's policy is to check the creditworthiness of its customers by obtaining data on customers' financial position from a credit rating agency. But Cybercom does not produce credit classifications from this data. Cybercom has set rules for bad debt management; impairment of past due accounts receivable takes place after individual assessment.

Cybercom's total credit risk exposure is calculated on the basis of cash and cash equivalents, worked but not invoiced hours, accounts receivable, and advances from customers. On 31 December 2009 Cybercom's total credit risk exposure stood at SEK 463.6 million (424.1).

Ageing analysis, past due but not impaired receivables 2009 2008 Carrying Carrying amount amount Accounts receivable, not past due 237,782 173,408 Past due 1–30 days 30,565 49,428 Past due 31–90 days 6,245 11,718 Past due >90 days 4,933 10,137 Total 279,525 244,691 Cybercom has no collateral at its disposal for past due accounts receivable.

Annual Report 2009 / Financial statements

Note 26. Leasing

Group Parent company The nominal value of future minimum lease payments under non-cancellable operating Operating leases 2009 2008 2009 2008 leases is distributed per this table. Payable within 1 year 52,377 51,300 326 1,022 Rental contracts that expire during the period Payable within 1–5 years 121,312 130,074 564 460 were estimated using similar conditions. Payable after 5 years 33,854 30,236 40 – Leasing contracts mainly comprise rental contracts and a few office machines. Total 207,543 211,610 930 1,482

Group Parent company Operating leases 2009 2008 2009 2008 Lease expenses 65,773 61,498 1,178 1,097 Lease income from sub-leased items 1,834 5,931 – –

Group 2009 2008 Non-cancellable finance leases are payable per this table. Minimum Minimum Finance lease lease payment Interest Principal lease payment Payable within 1 year 8,718 1,283 9,510 9,711 Payable within 1–5 years 12,489 1,732 12,951 12,601 Payable after 5 years – – – – Total 21,207 3,015 22,461 22,312

Group Finance leases 2009 2008 Variable charges included in the period's results 1,652 1,552

Note 27. Pledged collateral and contingent liabilities

Group Parent company The shares in Plenware and auSystems were pledged when loans were raised for Pledged collateral 2009–12–31 2008–12–31 2009–12–31 2008–12–31 acquisition of these companies. As In the form of pledged collateral for own liabilities contractually agreed, the lenders are entitled and provisions to realise the pledge if grounds for cancellation arise (event of default) and no agreement Floating charges 34,960 36,960 2,300 – can be reached. The pledge can only be Shares 628,200 1,063,400 550,120 374,932 realised if a cancellation reason is still applicable, i.e., exists when realisation takes Total pledged collateral 663,160 1,100,360 552,420 374,932 place. The Group value of the pledge on 31 December 2009 was SEK 628.2 million (1,063.4). Utilised floating charges of SEK 35.0 million (37.0) were also pledged.

Note 28. Related party transactions

Purchase and sales between Group companies was SEK 118.3 million (61.8) and mainly comprised services. Purchases and sales between Group companies and the joint venture totalled SEK 13.7 million (10.3). JCE Group is Cybercom's largest shareholder with a 35.9 per cent (37.7) shareholding. Sales totalling SEK 0 million (0.7) took place to Consafe Logistics, companies in JCE Group.

Note 3 lists remuneration to senior executives.

Annual Report 2009 / Financial statements

Note 29. Untaxed reserves

Parent company 2009 2008 Tax allocation reserve, taxation 2004 – 515 Tax allocation reserve, taxation 2006 1,026 1,026 Tax allocation reserve, taxation 2007 5,190 5,190 Tax allocation reserve, taxation 2008 5,798 5,798 Tax allocation reserve, taxation 2010 4,048 – Accumulated excess depreciation/amortisation 1,605 1,792 Total 17,667 14,321

Note 30. Cash flow statement

Group Parent company Cash and cash equivalents 2009 2008 2009 2008 Current investments 3,590 4,753 – – Cash and bank 179,910 164,934 119,328 122,239 Cash and cash equivalents 183,500 169,687 119,328 122,239

Group Parent company Interest 2009 2008 2009 2008 Interest received 1,921 5,826 4,844 10,211 Interest paid –28,760 –48,273 –10,353 –17,217 Interest, net –26,839 –42,447 –5,509 –7,006

Group Parent company Adjustments for items not included in cash flow 2009 2008 2009 2008 Depreciation/amortisation/impairment loss 321,779 27,194 7,225 3,485 Unrealised exchange differences 3,519 1,143 –9,880 27,794 Loss from disposal of non-current assets – 112 – 9 Fair value derivative 5,828 – – – Write-down of shares in subsidiaries – – 52,513 9,351 Capital loss – – 449 –48,638 Interest not paid/received –1,961 434 –538 1,919 Provisions 6,051 –2,744 – – Total 335,216 26,139 49,769 –6,080

Liabilities for additional purchase prices of SEK 24,450 thousand for the previous acquisitions of NSD Consulting and Comprog Oy were included in the acquisition balance sheet for Plenware Oy. These were adjusted during 2009 and increased by SEK 10,158 thousand because of the acquired entities’ strong growth. SEK 6,901 thousand was paid in cash and the remaining SEK 3,257 thousand and the acquired liability of SEK 24,450 thousand were settled through the offset issue that took place in Q3.

Annual Report 2009 / Financial statements

Note 31. Acquisition of subsidiaries/net assets

Cybercom Plenware signed an agreement to acquire net assets from Teleste that inclued 23 employees. The deal took effect on 1 April 2009, and the purchase price was SEK 3,858 thousand. The purchase price will be paid in discounts and concession of premises to other Teleste employees, which is estimated at SEK 3,311 thousand. The remaining SEK 547 thousand was paid in cash.

The tables show the total value of acquired assets and liabilities, purchase prices, and effect on the Group’s cash and cash equivalents regarding Teleste.

Carrying Acquired net assets amount Fair value

Customer relationships – 3,819 Other intangible non-current assets 1,157 1,157 Property, plant, and equipment 448 448 Current liabilities –1,566 –1,566 Acquired net asset 39 3,858

Purchase price 2009

Cash settled purchase price 547 Future discounts, as liabilities 3,311 Total purchase price 3,858 Fair value for acquired net assets –3,858 Goodwill 0

Investing activities 2009

Cash settled purchase price 547 Cash and cash equivalents, acquired – Effect on Group’s cash and cash equivalents from acquisition 547

Purchase price 2009

Additional purchase price, cash paid 6,901 Additional purchase price, offset 3,257 Total additional purchase price 10,158 Fair value for acquired net assets – Goodwill 10,158

Investing activities 2009

Cash settled purchase price 6,901 Cash and cash equivalents in acquired companies – Effect on Group’s cash and cash equivalents from acquisition 6,901

Cybercom Group Europe AB acquired 100% of the share capital in Plenware Oy on 23 January 2008. Plenware is a Finnish IT group with about 550 employees in Finland, Estonia, Romania, and China. The original purchase price was SEK 362,994 thousand, which was paid with SEK 206,236 thousand in cash and 1,923,347 newly issued Cybercom shares at a price of SEK 53.72 per share. The agreement included settlement of existing liabilities amounting to SEK 28,176 thousand on the takeover date. An additional purchase price of SEK 23,480 thousand, based on results for 2007, was payable. This was paid through SEK 11,740 thousand in cash and 277,131 newly issued Cybercom shares at a price of SEK 42.65 per share. No additional purchase price was payable for 2008.

Goodwill arose in the acquisition and amounted to SEK 382,831 thousand; it was mainly attributable to the expertise and extended geographic coverage that Plenware contributed to Cybercom.

Annual Report 2009 / Financial statements

On 10 April 2008 Cybercom Sweden East AB acquired 100 per cent of the share capital in Technology Nexus Security AB, an information and security company with 43 employees in Sweden. Cybercom paid SEK 30,000 thousand in cash. No additional purchase price was payable during 2008. Nexus Consulting was consolidated on 1 April 2008. Goodwill arose in the acquisition and totalled SEK 24,298 thousand; it is mainly due to Cybercom's reinforced position in the field of information and security. In 2009, an agreement was reached on an additional purchase price of SEK 3,854 thousand. The additional purchase price is performance-based and is the last.

The table shows the total value of acquired assets and liabilities, purchase prices, and effect on the Group's cash and cash equivalents regarding Plenware and Nexus.

Plenware Nexus Carrying Carrying Acquired net assets amount Fair value amount Fair value Goodwill 97,615 – – – Customer relationships 31,158 50,073 – – Trademark 5,164 28,300 – – Other intangible non-current assets 6,875 8,118 – – Property, plant, and equipment 44,838 45,722 37 37 Non-current financial assets 198 198 – – Deferred tax asset 1,264 1,264 103 103 Current assets 70,229 68,634 14,529 14,529 Deferred tax liability –13,736 –25,203 – – Non-current liabilities –49,020 –49,020 – – Current liabilities –136,105 –136,105 –8,621 –8,621 Acquired net assets 58,481 –8,019 6,048 6,048

Purchase price Plenware 2008 News 2009 Nexus 2008 Original purchase price 206,236 – 30,000 Settlement purchase price for liabilities 28,176 – – Expenses directly linked to the acquisition 13,520 – 346 Additional purchase price 11,740 3,854 – Newly issued Cybercom shares 115,140 – – Total purchase price 374,812 3,854 30,346 Fair value for acquired net assets 8,019 – –6,048 Goodwill 382,831 3,854 24,298

Investing activities Plenware Nexus 2009 Nexus 2008 Cash settled purchase price 259,672 3,854 30,346 Cash and cash equivalents in the acquired subsidiary –18,010 – –2,413 Effect on Group’s cash and cash equivalents from acquisitions 241,662 3,854 27,933

The next table shows net sales, net profit/loss for the year, and earnings per share for 2008 as is the Nexus acquisition took place on 1 January 2008.

Nexus Cybercom Totalt Sales 12,188 1,781,103 1,793,291 Year's profit/loss –293 134,002 133,709 Earnings per share, SEK –0.01 4.92 4.91

Acquired companies' contribution to the Group's sales and profit in 2008.

Plenware Nexus Sales 376,908 28,918 Year's profit 8,329 1,600

Annual Report 2009 / Financial statements

Note 32. Mergers

Income statements and balance sheets in the subsidiaries on the merger date.

Cybercom Cybercom The subsidiaries Cybercom CGSIT AB Mobility CGSIT GCS (556518–3455), Global Communication Solu- 2008 2008–07–23 2008–07–23 2008–07–23 tions Nordic AB (556566–0445), and Cyber- com Mobility Stockholm AB (556578–2694) Net sales – – – were merged with the parent company in Operating profit/loss –4 140 5,195 2008.

Non-current assets – 801 – Current assets 110 34,993 5,919 Untaxed reserves –3 – – Liabilities –9 –6,227 –481

Annual Report 2009 / Financial statements

Proposed allocation of Assurance profit The board and CEO assure that the annual accounts were prepared per generally accepted principles in Sweden, and the These amounts are at the AGM’s disposal: consolidated accounts were prepared per international accounting standards described in Regulation (EC) No. Share premium reserve 578,943,265 SEK 1606/2002 of the European Parliament and of the Council of Retained earnings 154,644,876 SEK 19 July 2002 on the application of international accounting Profit/loss for the year –63,563,027 SEK standards. The annual accounts and consolidated accounts give Total 670,025,114 SEK a fair view of the parent company and Group’s financial results and position. The directors’ report for the parent company and The board proposes that this profit be carried forward: Group (i) gives a fair view of the changes in the parent company SEK 670,025,114. and Group’s business, position, and earnings and (ii) describes significant risks and uncertainties faced by the parent company and Group companies.

Stockholm, 26 March 2010

Wigon Thuresson

Board chairman

Hampus Ericsson Ulf Körner

Board member Board member

Thomas Landberg Lars Persson

Board member Board member

Robin Hammarstedt Alexandra Trpkoska

Employee representative Employee representative

Patrik Boman

President and CEO

Annual Report 2009 / Financial statements

Audit report

To the annual meeting of the shareholders of Cybercom circumstances of the company in order to be able to determine Group Europe AB (publ) the liability, if any, to the company of any board member or the Corporate identity number 556544-6522 President. We also examined whether any board member or the We have audited the annual accounts, the consolidated President has, in any other way, acted in contravention of the accounts, the accounting records and the administration of the Companies Act, the Annual Accounts Act or the Articles of Board of Directors and the President of Cybercom Group Europe Association. We believe that our audit provides a reasonable AB (publ) for the year 2009. The company’s annual accounts are basis for our opinion set out below. included in the printed version of this document on pages 14–66. The annual accounts have been prepared in accordance with The Board of Directors and the President are responsible for the Annual Accounts Act and give a true and fair view of the these accounts and the administration of the company as well as company’s financial position and results of operations in for the application of the Annual Accounts Act when preparing accordance with generally accepted accounting principles in the annual accounts and the application of International Sweden. The consolidated accounts have been prepared in Financial Reporting Standards IFRS as adopted by the EU and accordance with International Financial Reporting Standards the Annual Accounts Act when preparing the consolidated IFRS as adopted by the EU and the Annual Accounts Act and accounts. Our responsibility is to express an opinion on the give a true and fair view of the Group’s financial position and annual accounts, the consolidated accounts and the results of operations. The statutory directors’ report is consistent administration based on our audit. with the other parts of the annual accounts and the consolidated We conducted our audit in accordance with generally accounts. accepted auditing standards in Sweden. Those standards We recommend to the Annual Meeting of Shareholders that require that we plan and perform the audit to obtain high but not the income statements and balance sheets of the Parent Com- absolute assurance that the annual accounts and the con- pany and the Group be adopted, that the profit of the Parent solidated accounts are free of material misstatement. An audit Company be dealt with in accordance with the proposal in the includes examining, on a test basis, evidence supporting the directors’ report and that the members of the Board of Directors amounts and disclosures in the accounts. An audit also includes and the President be discharged from liability for the financial assessing the accounting principles used and their application year. by the Board of Directors and the President and significant estimates made by the Board of Directors and the President Stockholm, 26 March 2010 when preparing the annual accounts and the consolidated accounts as well as evaluating the overall presentation of KPMG AB information in the annual accounts and the consolidated accounts. As a basis for our opinion concerning discharge from Anders Malmeby liability, we examined significant decisions, actions taken and Authorised Public Accountant

Annual report 2009 / Corporate governance

Corporate governance report

Cybercom Group Europe AB (publ) (hereinafter "Cybercom") is a nomination committee has held three minutes meetings and had publicly traded Swedish company listed on NASDAQ OMX contact in the interims. Nordic. Cybercom applies the Swedish Code of Corporate The nomination committee's proposal, its reasoned opinion Governance. Corporate governance at Cybercom is regulated by about the proposed board, and additional information about the Swedish legislation, primarily the Swedish Companies Act, proposed board members will be published in conjunction with NASDAQ OMX Nordic’s “Rule Book for Issuers”, and other the AGM notification and presented together with an explanation relevant rules and recommendations. This report describes how of the nomination committee’s work at the 2010 AGM. Cybercom administered its corporate governance during fiscal year 2009. Cybercom's auditors have not examined this report. Board of directors The 2009 AGM re-elected Wigon Thuresson, Thomas Landberg, 2009 annual general meeting Lars Persson, and Ulf Körner as board members. Per Edlund, Cybercom held its annual general meeting (AGM) on 28 April who declined re-election, was replaced by Hampus Ericsson, 2009 at corporate headquarters in Liljeholmen, Stockholm, who was elected as a new board member. In addition, Wigon Sweden. Twentyone shareholders, representing more than Thuresson was elected to chair the board in accordance with the 63 per cent of votes, attended the AGM personally or through a nomination committee’s recommendation. representative. Cybercom's board, executive management, and company auditor were present at the AGM. The 2010 AGM will BOARD INDEPENDENCE be held on 21 April 2010 at corporate headquarters, Lindhagens- The table on the next page sets forth the independence of the gatan 126. At Cybercom's general meetings, one share equals board members in relation to the company, management, and one vote. All shareholders who are recorded in the share the shareholders as per the nomination committee’s assess- register as of the record date and have given notice of their ment, which is shared by the board. Accordingly, Cybercom attendance in due time have the right to attend the AGM and fulfils the applicable requirements that board members be vote their total holding of shares. The 2009 AGM appointed independent of the company, management, and the company's Hampus Ericsson, now board member, to check the minutes. At larger shareholders. the time of his appointment, he was not a board member. Board work Nomination committee Besides board members, Patrik Boman (Group president and The AGM determines how to appoint the nomination committee. CEO), Peter Keller-Andreasen (Group vice president), Odd Bolin Cybercom’s 2009 AGM elected a nomination committee (CFO), and Kristina Cato (board secretary and the Group's consisting of Hampus Ericsson and Erik Sjöström, as repre- communications and IR manager) participate in board meetings. sentatives of the two largest shareholders JCE Group AB and Other Group employees participate in board meetings to present Skandia Liv, and John Örtengren, as representative for small specific issues as needed. shareholders through the Swedish Shareholders’ Association. The board's work is based on the requirements of the Furthermore, Wigon Thuresson, board chairperson, was Swedish Companies Act, the Swedish Code of Corporate appointed as convener and member of the committee. Governance, other rules and regulations applicable to Cyber- Thuresson does not have voting rights. It was also resolved that com, and the working procedures established by the board. if, during the nomination committee’s term of office, a share- Instructions define the delegation of responsibilities between the holder who is represented in the nomination committee is no board and the president, the policies for financial reporting, and longer one of the two largest shareholders (block of votes), then the president's duties and authority. The Board also adopts an the member who represents such a shareholder must relinquish information policy that regulates Cybercom’s disclosure. Further- his or her position, and the shareholder who enters the rank of more, the Board establishes rules of procedure for the audit the two largest shareholders appoints a new member. committee and remuneration committee. The Board’s rules of Shareholders who appoint nomination committee members have procedure, special instructions, and information policy are the right to discharge members and appoint new members. reviewed annually. Other instructions and principles are Cybercom’s 2009 AGM resolved that the nomination reviewed as needed. committee will develop and present proposals to the 2010 AGM According to the rules of procedure, at least six ordinary for an AGM chairperson, board members, board chairperson, meetings must be held per year, besides the statutory meeting board remuneration (i.e. for the chairperson, board members, after the AGM. Each regular meeting deals with operational and any committee work), auditing fees, and a proposal for the follow-up; finances; and acquisitions, divestments, and mergers. nomination committee for the 2010 AGM. One board meeting is dedicated to strategy and one to the The nomination committee prepares requirements specifica- business plan and budget. tion and ensures that Cybercom's board members have The chairperson leads board work and monitors operations expertise relevant to its operation, taking into account industry via a dialogue with the CEO. The chairperson is responsible for experience, skills, and international know-how. Board size and providing other board members with information and documenta- composition are also considered. Since the 2009 AGM, the tion necessary for high quality in discussion and decisions. The

Annual report 2009 / Corporate governance

chairperson also participates in the evaluation and development Committee work of the Group's senior executives. The chairperson represents AUDIT COMMITTEE the company in shareholder issues. The board as a whole has completed the tasks required of an In 2009, the board held nine meetings (one by corre- audit committee as per the Swedish Code of Corporate Gover- spondence) besides the statutory meeting following the AGM. nance. The board addressed these issues mainly in conjunction The board's activities in 2009 focused on managing Cybercom’s with the publication of interim and year-end reports. The board’s profitability, organisational structure, strategic positioning, and obligations in this role are to ensure (i) compliance with future prospects. During the year, managing directors of sub- established principles for financial reporting and internal controls sidiaries and other senior executives presented and discussed and (ii) maintenance of appropriate relations with the company's their duties with the board. auditor according to the instructions adopted by the board in this The board did not meet the auditor without the CEO or other matter. The board also has the task of evaluating the audit executive manager being present in 2009. Thus the company process. deviated from the code which stipulates that the board must meet the auditor without the presence of the CEO or another REMUNERATION COMMITTEE member of executive management at least once annually. The The board of directors appoints Cybercom's remuneration board had contact with the auditor on several occasions in 2009, committee, which prepares principles for salary levels and and due to the satisfactory exchange of information at these employment terms and conditions for Cybercom's CEO, vice meetings, the board chose to not arrange an exclusive meeting president, and other Group executives. The remuneration between the board and auditor without the presence of the CEO committee strives to create the best possible conditions so that and another member of executive management. benefit issues are treated conscientiously and comprehensively. The board and CEO’s work in 2009 was externally evaluated The committee includes Wigon Thuresson, Thomas Landberg, using a systematic and structured process, one purpose of and Hampus Ericsson. The remuneration committee held three which is to obtain a sound foundation for the board's own meetings in 2009. development work. The board also convened a special board meeting to evaluate the CEO's work. No company executive was COMMITTEE FOR FIXED PRICE ASSIGNMENTS present at this meeting. The nomination committee will be The role of this committee is to oversee and approve quotations informed about the results of the board evaluation. for large fixed-price assignments. The committee includes Thomas Landberg and Lars Persson. The committee meets Board member attendance in 2009 when necessary. The committee did not meet in 2009. Board Remuneration Name Independent meetings committee CEO and Group management Wigon Thuresson Yes 100% 100% The CEO leads Group management and takes decisions in Thomas Landberg Yes 100% 100% consultation with the rest of Group management. In addition to Lars Persson Yes 80% the CEO, this consists of the company's vice president, its CFO, Ulf Körner Yes 80% and its communications and IR manager. Group management Hampus Ericsson¹ No 100% 100% participates in regular operational briefings led by the CEO. Per Edlund² No 100% Robin Hammarstedt, Employee representative No 100% Auditors Alexandra Trpkoska, At the 2008 AGM, the accounting firm KPMG AB was elected as Employee representative No 100% auditor for a term of four years. Anders Malmeby is the head

¹ Board member as of April 2009. Not independent of the company's major auditor. shareholders. ² Board member through April 2009. Not independent of the company's major shareholders.

Annual report 2009 / Corporate governance

Board report on internal control

The board of directors is responsible for internal control as Risk assessment regulated in the Swedish Companies Act and the Swedish Code Cybercom's risk assessment for financial reporting aims to of Corporate Governance, which contains requirements for identify and evaluate the most significant risks that affect internal annual external disclosure of how internal control over financial control over financial reporting in the Group's companies. Risk reporting is organised. assessment produces an overview of the risks that may affect Internal financial reporting control is part of the overall the Group's ability to meet the basic requirements for external internal control in Cybercom and part of Cybercom's corporate financial reporting. Risk assessment occurs annually. governance. This description was prepared in accordance with the Swedish Code of Corporate Governance, section 10.5, and Control structures is thereby limited to internal control over financial reporting. The The company's business processes include financial controls of following description does not constitute part of the formal the approval and accounting of business transactions. For each annual report and has not been reviewed by company auditors. subsidiary and for the Group, the financial closing and reporting Internal control over financial reporting aims to provide process has controls for recognition, measurement, and reasonable assurance of the reliability of external financial disclosure, including the application of critical accounting policies reporting in year-end, interim, and annual reports. Internal and estimates. All legal entities in Cybercom have their own control also aims to ensure that external financial reporting is controller functions that participate in the planning and prepared in accordance with legislation, applicable accounting evaluation of each unit's performance. Together with analysis standards, and other requirements for listed companies. performed at Group level, this important element ensures that the financial reports do not contain material errors. Control environment The board bears the overall responsibility for internal control Information and communication over financial reporting. The control environment for financial The company’s information and communication channels reporting is based on (i) a clear division of roles and support completeness and accuracy of financial reporting by responsibilities in the organisation, (ii) defined and making internal instructions and policies regarding accounting communicated decision channels, and (iii) guidelines on powers and financial reporting accessible to all employees concerned and responsibilities. These are documented and communicated via Cybercom’s intranet. Two conferences for corporate in the form of policies, guidelines, and accounting and reporting controllers were also held in 2009. Their primary focus was to policies. The board has adopted written rules of procedure that provide information about Cybercom's instructions and policies clearly define the board's responsibilities and regulate the regarding accounting and financial reporting. division of labour between the board and its committees. The Specific policies for disclosure of financial reports ensure that board as a whole comprises the audit committee and is therefore the company lives up to the requirements for accurate obligated to ensure (i) compliance with established principles for information. financial reporting and internal controls and (ii) maintenance of appropriate relations with the company's auditors. The Board has also established instructions for the CEO. Monitoring Internal control instruments for financial reporting are mainly The board, the CEO, executive management, and Group the Group's accounting principles; the Group’s definitions of companies regularly monitor the company’s financial reporting to accounts, which indicates how the Group's classification of safeguard the effectiveness of its internal controls. Monitoring accounts is to be used; and the Group’s reporting instructions, includes the follow-up of every legal entity’s financial reports in which define the Group's reporting rules. Together, these relation to budget and targets, as well as via examination by the documents are the basis for accurate and consistent financial external auditor. Conclusions and recommendations of external reporting. auditors are reported to the board of directors, Group manage- Control of accurate reporting is first performed locally and ment, the Group finance manager, the internal auditor, and when then at Group level. Control is primarily done through ongoing applicable, the local controller. The board and Group manage- analysis of monthly financial statements. Since Cybercom is a ment follow up on recommendations by the external auditor. The listed company, the auditors also review the third quarter, thus board evaluates the company's financial reporting process helping to ensure the quality of financial reporting well in annually. advance of preparation of the annual accounts. Cybercom’s internal auditor works to develop and improve Stockholm, 26 March 2010 internal controls. Work in 2009 has proactively concentrated on The Board of Cybercom the internal control environment. In coming years, the internal audit function will become more investigative.

Annual report 2009 / Corporate governance

Board of directors

Wigon Thuresson (b. 1942) Board chairman since 2007 Education: Economist (Master of Political Science) Previous assignments: President and CEO of Sweco AB; CEO of Hexagon, Fabege, Sandbolm & Stohne Expertise: Consultancy operations, company acquisitions, and growth initiatives Share holdings: 444,360 Warrants: 0

Hampus Ericsson (b. 1972) Thomas Landberg (b. 1950) Board member since 2009 Board member since 2007 CEO of the JCE Group AB Senior Adviser Education: Master of Science, Gothenburg School of Education: Computer and electrical engineer. Management Economics, B.A. in International Business at Johnson & training from CEDEP/INSEAD and Duke University Wales University (USA) Other assignments: Board member of Smarteq AB (publ) Other assignments: Board member of Consafe Invest AB, Previous assignments: CEO of Unisys AB, NCR Sweden, JCE Group AB, and Green Circle Bioenergy Inc. AT&T Nordic AB, Pricer AB (publ), Ericsson Business Previous assignments: JCE Group AB, Consafe Offshore AB, Consulting AB; VP of Ericsson Inc., Ericsson Ltd. and Enskilda Securities Previous board positions: Unisys AB, Pricer AB (publ), AT&T Expertise: Funding, M&A, and business development Nordic AB, Intactix Inc., CTIA WIC, Edgecom Inc., Ericsson Share holdings: 0 (Indirect, via a legal entity: Services Ltd. 13,910,522 shares) Expertise: International strategy & business development Warrants: 0 for IT and telecom Share holdings: 0 Warrants: 0

Ulf Körner (b. 1946) Lars Persson (b. 1956) Board member since 2005 Board member since 1998 Professor at Lund University Faculty of Engineering. CEO of Swedish Space Corporation AB. Education: Ph.D. in communications systems Education: Industrial economics at the Linköping Institute Other assignments: Board member of Cale Access AB, of Technology and M&A program at INSEAD EAB (Equality of Access Board), TeliaSonera, and partner in Other assignments: Board member of ECAPS AB, Tevi Konsult Handelsbolag NanoSpace AB, Universal Space Network Inc., Turn to Previous assignments: Board member of Post och Törn AB, and SpacePort Sweden AB. Chairman of SSC Telestyrelsen, Swedish National Telecommunications Telecom Holding AB, NEAT AB, SSC International AB, and Council, Doro AB, ConsafeIT AB, Consafe Infotech AB, OS2 Orbital Satellite Services International AB Cale Group AB, and Labs2 AB. Chairman of Upgrade Previous assignments: CEO of Marratech AB, Telenor in Communication AB Sweden, France Telecom in Sweden, and responsible for Expertise: Telecom industry Telia Mobile Share holdings: 5,600 Expertise: Telecom industry Warrants: 0 Share holdings: 0 Warrants: 0

Employee representatives

Robin Hammarstedt (b. 1970) Alexandra Trpkoska (b. 1976) Employee representative since 2008 Employee representative since 2007 Consultant at Cybercom Sweden East AB Business unit manager at Cybercom Sweden East AB Education: PTK's corporate board training, economics Education: Electrical engineering at the Swedish Royal at university level Institute of Technology Previous assignments: Employee representative Other assignments: Board member of Exo Data AB in Teleca Networks AB Share holdings: 0 Share holdings: 0 Warrants: 0 Warrants: 0

Annual report 2009 / Corporate governance

Executive management

Patrik Boman (b. 1964) Peter Keller-Andreasen (b. 1956) President and CEO Vice president and COO Employed since: 2007 Employed since: 2001 Education: Master of Science in Business and Education: Electrical engineer, Technical University Economics, Stockholm University of Denmark Previous positions: HiQ, AT&T-Unisource, Previous positions: TietoEnator A/S, Digital A/S Telia Finans AB, Telia AB Cybercom holdings: 15,540 shares Cybercom holdings: 42,000 shares

Odd Bolin (b. 1963) Kristina Cato (b. 1968) CFO Communications director and IR manager Employed since: 2009 Employed since: 1999 Education: Master of Engineering and Ph.D., the Education: M.A. from Uppsala University Swedish Royal Institute of Technology Previous positions: Linköping University Hospital Previous positions: Financial advisor, Ceres Corporate Cybercom holdings: 5,698 shares, 2,000 warrants Advisors. Market analyst, Hagströmer & Qviberg Fondkommission Cybercom holdings: 10,000 shares

Auditors

AGM participants appoint auditors every fourth year. The most Audit report recent occasion was in 2008. The auditors’ task is to audit Each year, the auditors prepare a report that describes Cybercom’s annual accounts, the accounting records, and the Cybercom's organisation so that bookkeeping, asset manage- administration by the board and CEO. The auditors report to ment, and Cybercom's general financial situation can be the board on an ongoing basis. audited satisfactorily. Auditing occurs continuously throughout KPMG AB, with Anders Malmeby as principal auditor, was the year. In 2009 auditor Anders Malmeby participated in chosen to serve as auditor starting in 2008. The audit meetings as specified above, and presented the audit of committee, which consists of the entire board, has met with the Cybercom's bookkeeping and financial situation on behalf of auditors during the year to ensure that the company’s internal KPMG. and external accounts fulfil the requirements placed on market- listed companies, and to discuss the scope and focus of the Auditor fees auditing work. Besides customary auditing, auditing services include all necessary consultations, work related to observations made in the audit or other tasks that are the duty of the auditor. Auditing fees

Group Parent company Auditing and consulting fees 2009 2008 2009 2008 KPMG Auditing 2,013 2,773 577 493 Other assignments 2,427 762 2,131 85 Öhrlings PricewaterhouseCoopers Auditing - 278 - 126 Other assignments - 81 - 45 Other auditors Auditing 318 136 5 - Other assignments 16 479 - - Total 4,774 4,509 2,713 749

Annual report 2009 / Information

Annual General Meeting 2010

Cybercom will hold its regular annual general meeting of share- Notification of attendance can be made by: holders (AGM) at 3 PM on 21 April 2010 in its new offices at Telephone: +46 8 578 646 00 Lindhagensgatan 126, Stockholm, Sweden. Website: www.cybercom.com

Notice of the AGM Postal mail (write AGM registration on the envelope): An AGM notification is published at least four weeks before this Cybercom Group Europe AB date in Post- och Inrikes Tidningar, in Dagens Industri, and on Box 7574 Cybercom’s website. 103 93 Stockholm, Sweden

In all cases, specify the shareholder’s name, address, telephone Participation in the AGM number, civil registration number or corporate ID, number of Shareholders that wish to participate in the AGM must: assistants, and number of shares. Be registered in the Euroclear Sweden AB (previously VPC AB) share database by 15 April 2010 Welcome! Notify Cybercom's head office of their participation and number of participating assistants by 4 PM on 16 April 2010.

Registration By 15 April at the latest, shareholders that have their shares registered in names of nominees (through banks’ notaries or other administrators) must apply for temporary registration of the shares in their own names at Euroclear Sweden AB if they want to participate in the AGM; nominees should be well informed before this date.

Upcoming dates and investor relations

Financial reporting events Contact information Communications director and IR manager Q1 interim report, January–March 2010 21 April 2010, 7.30 AM Kristina Cato Annual General Meeting 2010 21 April 2010, 3.00 PM Telephone: +46 708 64 47 02 Q2 interim report, January–June 2010 16 July 2010, 7.30 AM Email: [email protected] Q3 interim report, January–September 2010 20 October 2010, 7.30 AM Year-end report 8 February 2011, 7.30 AM Cybercom Group Europe AB (publ) Box 7574 Analysts who cover the Cybercom Group S–103 93 Stockholm, Sweden Visiting address: Lindhagensgatan 126, 112 51 Stockholm Name Company City Phone: +46 8 578 646 00 Johanna Ahlqvist Enskilda Securities Stockholm Fax: +46 8 578 646 10 Karl Berglund ABG Sundal Collier Stockholm Email: [email protected] Daniel Djurberg Nordea Bank AB Stockholm www.cybercom.com David Jacobsson E Öhman J:or Fondkommission Stockholm Andreas Joelsson Enskilda Securities Stockholm Mikael Laséen Ålandsbanken Stockholm Christian Lee Redeye AB Stockholm Peter Trigarszky Danske Bank, Danske Equities Stockholm Charlotte Widmark D. Carnegie & Co Stockholm Stefan Wård Handelsbanken Capital Markets Stockholm