ANNUAL REPORT 2014 - Acando.com CRM and AX in both Sweden and Norway. ... by ever larger projects with rising requirements for ... 4 ACANDO ANNUAL REPORT 2014 CEO’S REPORT

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ANNUAL REPORT 2014

ANNUAL GENERAL MEETINGThe Annual General Meeting (AGM) will be held on Monday, May 4, 2015, at 4:00 p.m. at Scandic Sergel Plaza, Brunkebergstorg 9, Stockholm, Sweden.

Shareholders wishing to attend the AGM must be listed in the shareholder register kept by Euroclear Sweden AB not later than Monday, April 27, 2015. Shareholders whose shares are held in trust must ensure in good time that their shares are temporarily re-registered with Euroclear in their own names on the day in question. Notice of attendance must be given to Acando not later than 12:00 noon on Monday, April 27, 2015. Please state name, personal identification number or corporate registration number, address and telephone number on the notice.

Notice may be given by post to Acando AB, Box 16061, SE-103 22 Stockholm, Sweden, by telephone on +46 (0)8 699 70 00 or directly via the company website at www.acando.com. Share-holders represented by proxy must submit a power of attorney prior to the meeting.

REPORTING DATESInterim report January–March 2015 May 4, 2015Interim report January–June 2015 July 21, 2015Interim report January–September 2015 November 11, 2015Year-end report 2015 February 12, 2016

DISTRIBUTION POLICY FOR ANNUAL REPORTAcando’s Annual Report is available as a document in PDF format on the website at www.acando.com. The document has been designed to be readable online and as a printout.

CONTENTS 2014 in brief 2

CEO’s report 4

This is Acando 6

Merger with Connecta 8

New graphic identity 8

Geographic presence 9

Consultants and partners 10

Sustainability 14

Acando as an investment 15

2014 Corporate Governance Report 16

Corporate governance 16

The Board of Directors 19

Group management 24

Remuneration 25

Internal control and financial reporting 26

Financial reporting 26

Departures from the Swedish Corporate Governance Code 27

Directors’ Report 30

Business activities 30

Net sales and earnings 2014 31

Financial position, cash flow, tax and investments 32

The share 34

Employees and the environment 35

Parent Company 35

Guidelines for remuneration to senior executives 35


Significant events after the end of the fiscal year 35

Outlook and financial targets 35

Proposed appropriation of profit 36

The Board’s statement regarding the proposed dividend 36

Risks and opportunities 36

Multi-year overview 39

Consolidated income statement 40

Consolidated statement of comprehensive income 40

Consolidated balance sheet 41

Consolidated cash-flow statement 42

Consolidated statement of changes in equity 43

Parent Company income statement 44

Parent Company balance sheet 45

Parent Company cash-flow statement 46

Parent Company statement of changes in equity 47

Notes 49

Approval of Annual Report 70

Auditors’ report 71

Definitions 72

2 ACANDO ANNUAL REPORT 2014 2014 IN BRIEF

2014 IN BRIEF

When we closed the books on 2014, we had completed a high-paced business integration and faced, probably, one of the most exciting years in Acando’s history. We grew at many of our important and large customers in Sweden through expansion of existing assignments and new, challenging projects, often because of our collective, broader offering and delivery capacity. In parallel, our clear positioning and size in the market creates new possibilities with, both major global customers and smaller rapidly growing companies.

NET SALES BY GEOGRAPHIC MARKET, %

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Sweden, 60% Germany, 16% Norway, 16% Other countries, 8%

2014 IN BRIEF ACANDO ANNUAL REPORT 2014 3

FIRST QUARTER JANUARY–MARCH

The year started with a market recovery, particularly in the Nordic markets where projects were now being initiated and previously postponed investments reactivated. Acando signed several new agreements for the implementation of business support systems for various types of customers based on Microsoft Dynamics CRM and AX in both Sweden and Norway. A framework agreement was signed with a global industrial group for management consulting ser-vices. The agreement initially runs for a period of three years with an option to extend. Acando entered into a partnership agreement regarding BizView system support to supplement the analytics offering.

SECOND QUARTER APRIL–JUNE

In a press release on June 9, 2014, Acando announced a recommended public takeover bid for the shares in Connecta AB (publ). The operations in Sweden and Germany improved in terms of results and the markets in these countries remained unchanged, though with some uncertainty with respect to major investments. In Norway, final integration was completed of E-vita AS, which was acquired at the end of 2013, and restructuring costs negatively impacted earnings in Norway but are expected to generate cost savings moving forward. The market for Acando’s services is characterized by ever larger projects with rising requirements for both operational and technological insight thus raising requirements for us to drive changes jointly with our customers. Acando will become Orkla Shared Services’ imple-mentation partner in the roll-out of SAP at several of the Orkla Group’s divisions. The implementation will be conducted in close collaboration with Orkla’s internal SAP organization. In Norway, Acando signed an agreement to deliver intranet for the auditing company BDO, which has more than 1,000 employees and a large office net-work in Norway.

THIRD QUARTER JULY–SEPTEMBER

After the end of the acceptance period on July 10, Acando decided to proceed with the Offer since it had received acceptances representing more than 90 per-cent of the shares. Connecta was consolidated into the Acando Group from August 1, 2014.

The quarter was one of the most exciting in Acando’s history with intensive efforts to integrate Connecta and Acando. The merger received a positive response from our shared customers and succeeded in creat-ing new customer dialogs that resulted in winning projects that neither Connecta nor Acando could have won alone. Work on updating Acando’s brand profile, which is expected to lead to clearer positioning vis-à-vis competitors and increased attractiveness for employees.

Acando signed a framework agreement with Moelven Industrier regarding Microsoft Dynamics implementa-tion and administration services for the Moelven group companies, the project will be implemented using local resources in Sweden and Norway.

FOURTH QUARTER OCTOBER–DECEMBER

Integration of Connecta and Acando was completed and the new merged unit now has a clear position as the leading consulting company in the Nordic region with operations in Sweden, Norway and Finland as well as favorable expansion opportunities in Germany.

Long-term demand is expected to remain favorable across Acando’s markets, driven by accelerating digi-tal transformation and completely new application areas for technology in business processes.

During the quarter, Acando assisted a telecoms operator with defining a strategic position and an initial implementation for e-health.

Several projects went live, including a large retail solution based on MS Dynamics AX and a global SAP solution for the paper industry and, at the same time, Acando was leading one of the largest e-commerce projects in Sweden.

4 ACANDO ANNUAL REPORT 2014 CEO’S REPORT

Clear positioning in a market of possibilitiesThe reality our customers meet has never been more challenging, nor has it ever created greater possibilities. Digitization is driving radical change in our everyday lives and in the world around us. Markets are becoming global in parallel with sustainability issues growing ever more central. To continue being relevant for our custom-ers, we need to link strategic perspectives to existing conditions. We must be able to combine clear implemen-tation strength with extensive expertise.

The merger has given Acando clear leadership in the Swedish market in the areas of Management Consulting, Business Systems, both SAP and Microsoft Dynamics, as well as a completely unique ability to assume respon-sibility for customers’ digital transformation, from strat-egy to solution development.

The merger will also result in further depth within several sectors and solution areas, as well as access to expertise in several new technical platforms, such as Google and Oracle, which will generate new expansion opportunities. We will also be able to deliver from the Baltic region and India, as well as have access to infra-structure-based services.

All in all, we will become a more full-service provider, with additional depth and cutting-edge expertise in our core offering and, accordingly, become a more relevant partner for increasingly large customers.

Innovation in our assignmentsWe are both proud and humbled by the trust shown in us by our customers. We often run our projects closely with customers and, increasingly, there is often a clear innovation agenda. Our assignments span from global roll-outs of business system solutions to strategies for the positioning of new operations. Our focus is always on sustainable results that provide a balance between today’s reality and tomorrow’s possibilities.

During the year, we have supported numerous member- based organizations with identifying new ways of creating more value for their members; we have harmonized and streamlined flows at one of the Nordic region’s largest suppliers to the fast moving consumer goods (FMCG) sector; in partnership with one of Sweden’s largest online retail chains, we have created the possibility of real-time price optimization through decision support; together with a telecoms operator, we defined a strategic position and an initial implementation for e-health; we went live with a large retail solution based on MS Dynamics AX;

we created solutions for managing data from automated electricity-meter reading; we are participating in a major modernization program in the bank sector; we were entrusted with rolling out a global AX solution for a tele-com equipment supplier; we are accelerating growth at a small tech start-up; we went live with a global SAP solution for the paper industry and we are leading one of the largest e-commerce projects in Sweden.

We constantly strive to strengthen our industry exper-tise in prioritized areas. One example is the acquisition of the Norwegian firm E-vita, which delivers solutions for business portals and case management. Another example is our aim to capture a clearer position in the public sector, as evinced during the year when we won the framework agreement with the Norwegian Tax Adminis-tration and several new public sector assignments in Sweden.

Acceleration at Heart, Strategy in MindFollowing the merger, we decided to drive a three-staged integration process at a high pace. The start and the end had the same thing in common, our greatest assets, our employees and our customers.

We integrated the organizations immediately in Sweden to obtain an immediate feeling of many new competent employees. In the first three months as one company, all our energies were focused being at customers and, where possible, ensure shared delivery at a new, higher level. In addition, we have managed to integrate our administra-tion in record time and exceeded expected cost synergies.

We note with pride that we have succeeded in winning customers’ belief in our combined capacity. Increasing assignments at some of our largest customers, more projects with clearer result responsibility and several new customers for whom our size was decisive.

We have also launched a new brand platform through which we express higher ambition levels. We have bound together our customer promise: “Acceleration at Heart – Strategy in Mind” with our three core values ”Modern Pioneer”, ”Grounded Achiever” and ”Passionate Trans-former.” We have, thereby, also created the preconditions for all employees to be involved in creating our custom-ers’ image of Acando as part of every assignment. We are all Acando.

Without customers’ trust and challenges, we are nothing and without our highly energized, fantastic con-sultants who apply a modern approach in rising to meet each challenge and invest substantial commitment to

2014 was one of the most intense and exciting years in Acando’s history. Through the merger of Connecta and Acando, we have laid the foundation to continue building Sweden’s and northern Europe’s most modern consulting company. We believe in making a difference, creating lasting development and challenging existing structures. We are able to understand tomorrow’s drivers and adapt them to existing conditions. We help our customers to accelerate their development and success. We know that evolution and flexibility are essential. Technology creates possibilities. We combine structure with vision, experience and innovation. We generate results that provide a balance between today’s reality and tomorrow’s possibilities. Our journey together under a new flag has only just started.

A MODERN ACANDO

CEO’S REPORT ACANDO ANNUAL REPORT 2014 5

realize results, we have nothing to offer. We owe substan-tial thanks to all of you, customers and employees, for the possibilities you create together.

Positive result trend with scope for moreDuring the year, in parallel with the strategically import-ant merger with Connecta, we implemented cost effi-ciencies in both Norway and Finland. Operations in the UK were divested, which reflects Acando’s strategy of operating in countries where we can realize delivery and customer synergies. The measures had a positive impact and we posted an operating margin of 6.4 percent com-pared with 4.6 percent the preceding year, which means that the operating EBIT increased from SEK 66 m to SEK 118 m and organic growth of 4 percent was recorded.

During the year, we also clarified our financial targets by setting an explicit operating margin of 10 percent and a growth target linked to outperforming the market.

We have more to show, and we are continuing to drive our change efforts to accelerate our journey toward improved profitability. In brief, this means ensuring that cost syner-gies are realized, increasing the structural utilization rate through a higher share of large assignments and admin-istration assignments, improving the cost mix through an increased proportion of offshore and junior consul-tants, as well as higher prices through more extensive expertise, packaging and solution-based sales.

Given a healthy financial position, a positive view on Acando’s development and market conditions, the Board of Directors proposes a dividend of SEK 1.00 per share, corresponding to SEK 103 m, to our shareholders.

Last but not least, we believe strongly in our ability, but at the same time, we are humble in the face of an operat-ing environment undergoing rapid change. My sincerest thanks to Acando’s shareholders, long-standing and new, for the confidence they show.

Carl-Magnus MånssonPresident and CEO

6 ACANDO ANNUAL REPORT 2014 THIS IS ACANDO

THIS IS ACANDO

Our customers come from every sector and include a mix of major global organizations as well as medium-sized regional companies. We operate in a broad market with offices in Sweden, Finland, Norway, Germany, Latvia and India.

Our deliveries are focused on actual results and value for the customer. This value is achieved through a com-bination of our skills, our proximity and our long-term relationship with the customer. Well-established meth-ods and tools are in place to be able to deliver Acando’s high level of quality in each phase of the project.

The Nordic market is mainly built on numerous small to medium-sized local IT and management consulting companies as well as a few major global suppliers with a focus on outsourcing. Today, through the merger with Connecta, Acando is one of few Swedish companies with a sufficiently broad skills base and size in business systems, management and IT to be able to successfully compete with the major international companies.

Management ConsultingStrategic consulting services, company-wide changes and transformation programs. End to end, the complete package.

Management Consulting assists companies and orga-nizations in achieving sustainable business value. We develop new aims, strategies and decision data, design efficient working practices and ensure that the desired change is realized.

We define and realize our customers’ goals by identi-fying possible enhancements and creating lasting im-provements.

We achieve operational improvements through being close. We work with solutions that can be adapted to our customers’ needs and we can, if needed, identify IT solu-tions that enable operational changes. We see the big pic-ture and understand the link between operations and IT.

IT Management ConsultingEnsure that our customers’ IT operations generate max-imum value and benefit for the business.

IT Management Consulting combines knowledge and experience from both business and technology. We help our customers to develop IT operations and change the information landscape to meet the changing requirements and business models of the operation.

We assist companies and organizations with strategic and tactical challenges regarding how IT is used to max-imize business value and business advantage. We define strategy, improve control, organization and processes that span across business activities and IT. We drive change programs and procurements as well as ensure optimal management of services and suppliers.

Enterprise Consulting & SolutionsThe leading Swedish supplier of business-system-related services on selected platforms.

Through the merger with Connecta, Acando has become the largest local supplier of business-system-related services on the chosen platforms; Microsoft Dynamics AX and SAP.

Together with our customers, we ensure that maximum value is created from business-system investments.

Achieving this requires excellent understanding of the business and reliable project methodology combined with functional and technical expertise, which Acando has.

The services portfolio includes everything from procure-ment support to administration and further development of solutions. Acando has long experience of delivering administration services.

Digital Consulting & Solutions Help our customers utilize the possibilities of digitiza-tion and avoid its pitfalls.

In Digital Consulting & Solutions, we aid our custom-ers in digitizing their business. We are entering a new era, when work processes are partially replaced with digital solutions, which mean that IT is no longer just business support, but also functions as an expansion or integrated part of our customers’ processes and business.

By combining business expertise, in-depth technical competence and understanding of current and future digital possibilities, we offer solutions and services to realize the digital value chain of the business.

We always start with business advantage. We know the possibilities and challenges the new technology means for supporting the customer’s business. Under-standing the organization’s goals and requirements, and the application of technology to support these requires consultants that combine extensive technical ability with long experience of methods and business understanding. You will find these consultants at Acando.

IT Infrastructure Consulting & SolutionsOffers IT infrastructure consulting services comprising networks, servers, separate work units and identity and information security. The services offered also include technical project management and advice on IT archi-tecture and are adapted to service-producing medium- sized companies. In addition to offering services as part of resource or function assignments, IT Infrastructure Consulting & Solutions (ITICS) is also responsible for entire functions of customers through outsourcing assignments.

Acando is a consulting company whose business concept is, in partnership with its customers, to create business value by enhancing and streamlining processes, organiza-tions and digital solutions. We stand out due to our ability to combine skills in strategy and business operations with sound technical expertise and deep understanding of how organizations function. The Group has approximately 1,800 employees allocated over four countries in Europe and delivery centers in India and Latvia.

THIS IS ACANDO ACANDO ANNUAL REPORT 2014 7

SWEDEN GERMANY NORWAY FINLAND UK1)

MANAGEMENT CONSULTING

STRATEGY

SALES & MARKETING

SUPPLY CHAIN MANAGEMENT

FINANCE & PERFORMANCE MANAGEMENT

OPERATIONAL EXCELLENCE

IT MANAGEMENT CONSULTING

STRATEGY & BUSINESS TECHNOLOGY

GOVERNANCE & ORGANIZATION

SOURCING & SUPPLIER MANAGEMENT

TRANSFORMATION & CHANGE

ENTERPRISE CONSULTING AND SOLUTIONS

SAP

MICROSOFT DYNAMICS

DIGITAL CONSULTING AND SOLUTIONS

DIGITAL STRATEGY AND TRANSFORMATION

CLOUD TRANSFORMATION

ANALYTICS

CUSTOMER RELATIONSHIP MANAGEMENT

CUSTOMER EXPERIENCE AND COMMERCE

DIGITAL WORKPLACE & COLLABORATION

INTEGRATION

PROJECT SERVICES

APPLICATION MANAGEMENT

INFRASTRUCTURE CONSULTING AND SOLUTIONS

1) Operations divested at the start of 2015.

SERVICE PORTFOLIO GEOGRAPHICAL COVERAGE

Application ManagementOffers application management, development, test, integration, and support via bestshore delivery. Best-shore means delivering a service to customers compris-ing an optimal combination of work on-site at the cus-tomer and at offshore delivery centers. The delivery centers are located in Sweden (Stockholm, Skellefteå and Malmö) and offshore (Riga, Latvia and Bangalore, India).

8 ACANDO ANNUAL REPORT 2014 MERGER WITH CONNECTA / NEW GRAPHIC IDENTITY

MERGER WITH CONNECTAThe combination of Acando and Connecta makes the new organization the leading consulting company in Sweden, with a unique position in terms of experience, size and full-service offering.

In a press release on June 9, 2014, Acando announced a recommended public takeover bid for the shares in Connecta. On July 10, Acando decided to proceed with the offer since it had received acceptances representing more than 90 percent of the shares. On July 11, the merger of Acando and Connecta was announced. Con-necta was consolidated into the Acando Group from August 1, 2014.

The consolidation with Connecta will make us the leading management and IT consulting company in Northern Europe. The merged company will have a key position in the Swedish market. We will gain clear lead-ership in the areas of management consulting, IT man-agement consulting, business systems, both SAP and Microsoft Dynamics, as well as a completely new capac-ity to assume responsibility for customers’ digital trans-formation, from strategy to solution development.

The merger will also result in further depth in terms of skills within several sectors and solution areas, as well as access to expertise in several new technical plat-forms, such as Google and Oracle, which will generate new expansion opportunities. We will also be able to deliver from the Baltic region and India, as well as hav-ing access to infrastructure-based services. All in all, we will become a more full-service provider, with additional breadth, depth and cutting-edge expertise in our busi-ness areas.

Integration is progressing according to plan, with primary focus on shared CRM and coordination of the service offering, as well as the realization of other synergies. In addition, we have completed our planned

streamlining and structural measures and also identi-fied further potential for enhancing efficiency and will continue efforts to realize these. We have now estab-lished the foundations for the next step in our aim to become the largest consulting company in Northern Europe.

The objective with the acquisition of Connecta is to create added value for customers, employees and shareholders. There are multiple success factors: The merger releases significant market potential. The possibility of an increased share of project deliveries and larger projects at increasingly large customers, assignments that neither company would have been able to undertake alone. A leading position has been reached in management consulting, IT management consulting, SAP and Micro-soft Dynamics as well as a clear leading position in several solution areas in digital solutions. Complementary Customer Base. Connecta’s strong positions in branches, such as, the public sector, retail and TIME are an excellent complement to Acando’s strength in areas, such as service producing companies and the manufacturing and automotive industries. The merger is expected to create more interesting proj-ect opportunities for consultants, additional possibili-ties for career development and greater market recog-nition, which will itself, create a stronger brand, both with customers and future employees. The merger means cost synergies, which will positively impact the operating margin. The new Group is expected to have a strong equity/assets ratio and balance sheet.

NEW GRAPHIC IDENTITYThe merger with Connecta made it increasingly clear that Acando needed a new visual identity. The new visual identity summarizes guidelines for how Acando presents itself to its operating environment through its use of logotypes, colors, fonts and images. It provides a con-sistent and uniform appearance for everything including the website, printed matter, presentations, templates, etc. Consistent application of the graphical elements and the rules for their use will pave the way to distinguishing us from the competition and being perceived as credible and competent.

Externally, the new visual identity gives an image of confidence-inspiring professionalism and an overall impression of organization. Internally, it creates a new “we” feeling that gives every employee greater opportu-nity to identify with the business, which is particularly important following the merger of Acando and Connecta.

Our corporate identity is highly dependent on the new visual presentation. The new visual style conveys an image of how we wish to be perceived, our corporate identity. To further highlight this, as part of this process, we have prepared a new logotype and a new tag line.

The new logotype has been created to emphasize Acando’s personality and positioning. The soft organic form expresses warmth and personality, the script design conveys progress and acceleration. The blue color projects ambition and innovation.

We have changed tag line from Passion for Improve-ments to Acceleration at Heart – Strategy in Mind. The new tag line is our soul and identity expressed in words and, accordingly, it is also our customer promise. The tag line should clarify and amplify our business environment’s image of our brand, and also forms the core of all our communication.

GEOGRAPHIC PRESENCEAcando is a consulting company that in partnership with its customers identifies and imple-ments sustainable business enhancements through information technology. Acando pro-vides a balance between high customer value, short project times and low total cost. Acando creates measurable improvements through the development of processes, organizations and IT systems, ensuring that these support the client’s business operations. It is Acando’s task to acquire an overall view of the client’s business and to ensure that each assignment yields a rapid impact and measurable results. The Group has approximately 1,800 employ-ees allocated over four countries in Europe and delivery centers in India and Latvia.

GEOGRAPHIC PRESENCE ACANDO ANNUAL REPORT 2014 9

RESPONSIBLE OFFERING KEY PERFORMANCE INDICATORS SHARE OF GROUP SALES

SW

ED

EN Managing Director

Christer Norrmanwww.acando.se

Management Consulting IT Management Consulting Enterprise Consulting and Solutions Digital Consulting and Solutions Application Management Infrastructure Consulting and Solutions

Sweden 2014 2013 2012

Net sales, SEK m 1,142 774 844

Operating profit, SEK m 94 49 74

Operating margin, % 8.2 6.3 8.8

Av. No. FTEs, year-end 1,303 566 628

NO

RW

AY Managing Director

Sven Ivar Mørchwww.acando.no


Norway 2014 2013 2012

Net sales, SEK m 295 224 221



Av. No. FTEs, year-end 176 161 105

GE

RM

AN

Y Managing Director Guido Ahlewww.acando.de


Germany 2014 2013 2012





OT

HE

R C

OU

NT

RIE

S Finland: Managing Director Ferhat Kayawww.acando.fi

UK1): Managing Director Ben Waleswww.acando.co.uk

IT Management Consulting Enterprise Consulting and Solutions Digital Consulting and Solutions Application Management

Other countries 2014 2013 2012





1) Operations divested at the start of 2015.

60%

16%

16%

8%

10 ACANDO ANNUAL REPORT 2014 CONSULTANTS AND PARTNERS

Acando as an employerWorking at Acando is about developing our customers’ businesses and operations. Strict requirements apply for consultants regarding their result orientation, driving work forward and adaptability. At Acando, all employees are expected to actively contribute to the company’s de-velopment. We offer employees work in interesting and challenging projects that provide variation and develop-ment. Acando is an organization that encourages and challenges employees at the same time as being intuitive and prioritizing every individual’s well-being.

Acando AcademyAcando Academy is the recurring training program we conduct at Acando to ensure continuous advancement of expertise. The academies are open to new employees and existing staff, and are conducted in all of Acando’s areas of operation. The Acando Academy has close to sixty different courses that the consultants can apply for.

Acando AccelerationAcando Acceleration is a program to develop employees with ambitions and talents for future management posi-tions. Good leadership is key to retaining and developing our personnel. Accordingly, it is important that we iden-tify excellent employees in our organization and provide selected individuals with development support to ensure the provision of senior executives.

Acando NovaAcando has one of Sweden’s most popular trainee pro-grams, with 1,300 applicants for 15 places in 2014. The program is a natural takeoff point for new graduates with consulting ambitions, irrespective of which of Acando’s core offerings they wish to pursue. The three-year program combines training in parallel with cutting-edge customer assignments. The vision of the trainee program is to pro-mote trainee consultants’ professional and personal development and, thus, develop the market’s best con-sultants with less than five years’ experience.

The first year is devoted to tools and methods that develop and sharpen consulting skills and which are di-rectly applicable in customer assignments. Focus in the second year is on development in project management. In the third year, techniques are taught for gaining in-sightful understanding and professional behavior. Each year of training aims to provide skills that are directly applicable to assignments.

At the beginning, each participant is assigned a mentor to support and coach them through the program as well as give valuable advice during their personal develop-ment process. As extra support, each trainee is assigned a sponsor from the preceding year’s trainee program. And an instructor is part of each customer assignment.

DiversityThe diversity of our consultants is important since we believe this provides us with a competitive advantage over our competitors. We believe that a diversified, equal opportunities company will find it easier to recruit the best consultants, win assignments and deliver the best solutions for our customers.

Acando has initiated a number of different projects to strengthen gender equality efforts and moving more women into management positions.

The Acando Diversity Challenge was started during the year. This is a business development initiative aimed at making Acando Sweden’s best consulting company in terms of equal opportunity by 2020. This includes a target of reaching a 50/50 proportion between the genders at all levels in our organization. Between 2015 and 2020, a number of different internal and external initiatives will be driven to ensure reaching our target.

Womentor is a mentor program run by IT och Telekom-företagen (association for the Swedish IT and telecoms industry) to support companies in the industry that wish to work systematically to increase the proportion of female managers. This leader development program is aimed at female leaders that the company considers to have favorable career possibilities. Acando has both men-tors and adepts participating in this program with aim of increasing gender equality and diversity at the company.

The Amazing Leadership Program is another leadership program for women that Acando is participating in. The program has its roots in the Golden Rules of Leadership initiative that was started by Hillary Clinton with global aims for increasing the number of women in leading positions.

OUR CONSULTANTS AND STRATEGIC PARTNERSOur employees are crucial to Acando’s success and development. Accordingly, recruiting and retaining excellent employees comprises a key competitive factor for Acando. Our personnel policy is aimed at leading to Acando being the most attractive employer in the industry. Personnel policy is built round various components in the form of core, ethical and moral values, corporate culture, salary and benefits. It is also important that every employee is given the opportunity to develop as an individual and professionally.

Consulting assignment

Professionalism

Project management

Consulting skills

Year 1 Year 2 Year 3

CONSULTANTS AND PARTNERS ACANDO ANNUAL REPORT 2014 11

Sweden Germany NorwayOther

countries Total

First quarter 1,240 269 173 90 1,772

Second quarter 1,252 271 175 89 1,787

Third quarter 1,308 271 174 83 1,836

Fourth quarter 1,303 273 176 74 1,826

NUMBER OF EMPLOYEES IN 2014


countries Total

Women 369 47 43 17 476

Men 934 226 133 57 1,350

Total 1,303 273 176 74 1,826

GENDER DISTRIBUTION, GROUP


countries Total

0–2 505 120 92 42 759

3–5 370 53 42 16 481

6–10 284 66 24 12 386

11–20 118 34 18 4 174

20+ 26 - - - 26

Total 1,303 273 176 74 1,826

LENGTH OF SERVICE, GROUP


countries Total

Up to 25 68 15 7 3 93

26–29 185 50 18 6 259

30–39 479 92 70 23 664

40–49 399 73 60 27 559

50–59 152 35 19 12 218

60+ 20 8 2 3 33

Total 1,303 273 176 74 1,826

AGE DISTRIBUTION

Sweden, 71 % Germany, 15 % Norway, 10 % Other countries, 4 %

Up to 25, 5 % 26–29, 14 % 30–39, 36 % 40–49, 31 % 50–59, 12 % 60 and above, 2 %

0–2 years, 42 % 3–5 years, 26 % 6–10 years, 21 % 11–20 years, 10 % 20 years and more, 1 %

Women, 26 % Men, 74 %

12 ACANDO ANNUAL REPORT 2014 CONSULTANTS AND PARTNERS

Our partnersTechnical development is moving rapidly and is largely driven by the major software suppliers’ production of new solutions. A key element of Acando’s strategy is maintaining close collaboration with these leading tech-nology companies. Acando is a partner of several of the foremost software suppliers, of which Microsoft and SAP are the two most important.

Acando and MicrosoftDuring the year, Microsoft operations at Acando took some substantial strides forward. The acquisition of Connecta means that we now have one of Sweden’s foremost oper-ations for Dynamics AX, CRM, Office 365, Azure and Microsoft’s other infrastructure areas. Our capacity in Microsoft’s infrastructure areas has increased signifi-cantly through the subsidiary Techta. We were already a leading supplier for Microsoft business intelligence, integration and collaboration solutions, and grew in all of these areas during the year.

In 2014, Acando was chosen to be a VIP partner in the areas: Cloud Productivity & Enterprise Social, and Busi-ness Insight & Mission Critical, which gives Acando an extra close relationship and seal of quality in these areas.

We have gold partnerships in the following areas: Data Analysis, ERP, Integration, CRM, Application Devel-opment and Collaboration & Content, and silver partner-ships in Cloud Platform and Application Integration.

Microsoft named Acando as Dynamics AX Partner of the Year, an award we view as evidence of our success during the year.

Generally, interest has increased with customers for complete solutions based on Microsoft’s products and cloud services. Examples of this include, for example, Office 365, where Acando has the Acando Collaboration Platform and Acando Insidan solutions (for the public

sector). Looking forward, we have also identified con-siderable growth in Microsoft’s cloud platform Azure, advanced solutions in Big Data/Analytics and the pos-sibility to run business critical solutions in the cloud.

Acando and SAPThe partnership with SAP is central for Acando’s opera-tions, in part to maintain the strong position Acando has at many SAP customers, but also to keep pace with SAP’s own innovation agenda.

In recent years, Acando has made a considerable investment in the new product areas launched by SAP: Mobility, HANA/Big Data Technology, User Experience, Analytics, etc.

Acando has the following partner status with SAP: SAP Service partner – Partner for SAP projects and consulting services SAP Channel partner – Retailer of SAP’s products (licenses) SAP PCoE (Partner Center of Expertise) – Certified SAP administration/support organization

Acando and OracleThe merger between Acando and Connecta strength-ened collective Oracle skills in several areas.

Acando was named Middleware Partner of the Year in both Sweden and Norway.

Connecta has previously received the award in 2012, 2013 and 2014, while Acando Norway, (formerly E-vita) received the award in 2011 and 2013.

Acando is a Platinum Partner for Oracle and special-ized in Oracle SOA Suite 11g, Oracle WebLogic Server 12c, Oracle Database 11g, Oracle AIA 11g, Oracle Enterprise Manager 12c, Oracle Linux 6, Oracle Data Integration 11g, and Siebel CRM and CRM OnDemand.

14 ACANDO ANNUAL REPORT 2014 SUSTAINABILITY

SUSTAINABILITY

TravelThe greatest environmental gain is achieved by replacing travel with telephone and video conferences. Where travel is required, an eco-friendly means of transport is prioritized. Our objective is to continuously reduce our environmental impact from travel through measures such as requiring company cars to be Green cars.

EquipmentAll IT equipment at Acando is disposed of in an eco- friendly manner. In so far as it is possible, Acando attempts to divest equipment for reuse and where this is not pos-sible, the equipment is given to a business partner for dismantling and recycling.

Environmental planAcando’s environmental plan is revised ahead of each fiscal year and reconciled regularly by the company’s management. Acando will: integrate environmental issues in operations so that the company exceeds the requirements of government agencies and customers. ensure that Acando is perceived as a company commit-ted to environmental issues. show respect for natural resources through sparing use of raw materials and a high degree of recycling. use energy in a responsible and frugal manner. ensure that when purchasing products and services, these meet the highest applicable environmental re-quirements.

Business ethicsAcando works to combat all forms of corruption including extortion, bribes and subornation, which is expressed in the company’s code of conduct and anti-bribery policy. Acando follows the Code of Business Conduct prepared by the Swedish Anti-Corruption Institute.

Code of ConductAcando’s Code of Conduct supports social and sustain-able enterprise. The code particularly emphasizes human rights, working-environment and labor-law issues, envi-ronmental management and anti-corruption. During the

year, the code has been updated in line with the UN’s Global Compact, the UN Guiding Principles on Business and Human Rights and one section on reporting breaches.

All employees and other parties, such as partners and customers are encouraged to report all behavior that they perceive, in good faith, as breaches of laws or Acando’s Code of Conduct to their manager or another senior executive. If these reporting channels are not available or appropriate, and if the suspected breach was committed by Group management, pertains to corruption, questionable accounting or auditing methods, or other-wise impacts the Group’s interests or personal health and safety, the breach can be reported via the whistle-blower process which is detailed in full in the Code of Conduct.

Corporate Social Responsibility There is not just a shortage of young people applying for IT education programs, there are also far too few female applicants. In Sweden, a minority of those employed in the IT sector are women. High schools and universities find it difficult to recruit female students to their tech-nology programs, which results in an imbalance between the genders in the IT and technology sectors. This leads to an industry that needs to attract more women to obtain a more even gender balance. At Acando, we are convinced it would benefit the industry if more women chose a career in the IT sector. We view the gender im-balance as a challenge and, accordingly, we have actively chosen to help young girls to get interested in IT and technology.

In 2014, Acando ran the DigiFun for Girls program for the second time. It aims to inspire and interest junior high school girls in the opportunities provided by tech-nology. The program gives participants opportunities to learn more about IT and technology through participat-ing actively in practical workshops. Among other activi-ties, participants created their own podcast, created a website and learned to program their own games. The program was carried out during the holiday period at Acando’s offices. Through our commitment to DigiFun, we can provide young girls with an insight into IT and technology and create an interest in further studies.

We strive to be a responsible company in the areas in which we operate. It is crucial that Acando’s brand is always associated with respect for people, the highest level of business integrity, and favorable terms of employment and environmental standards. All employees are obliged to maintain confidence in Acando and our brand. Acando does not carry out any operations requiring an environmental permit, but still endeavors to ensure its operations have a minimal harmful impact on the environment. We believe that sustainability efforts strengthen the brand and increase our attractiveness as an employer and, in addition, Acando’s customers have increasing expectations of the company’s commitment to these issues.

ACANDO AS AN INVESTMENT ACANDO ANNUAL REPORT 2014 15

ACANDO AS AN INVESTMENTAcando has robust operations with favorable preconditions for growth and potential for continued improvement in margins.

High dividend yieldA strengthened cash flow together with a sound financial position enable sustainably healthy dividend payments.

Acando’s dividend policy is as follows: not less than half of profit after tax is to be distributed to shareholders by way of dividends, share buy-backs or other corresponding measures. Over the past five years, 93 percent of profits were distributed to shareholders and the dividend yield for the past two years was 7.5 percent. Acando has an equity/assets ratio of 59 percent and a healthy cash flow based on growth and a low investment need. In addition, cash flow is positively impacted by historic loss carry- forwards from acquired operations that can be offset against future profits thus enabling taxes to be reduced.

Financial targetsAcando’s financial targets are divided into four parts: Growth target: in the markets in which it operates, Acando will outgrow the market for management and IT consulting services, primarily through organic growth complemented by strategic acquisitions. Margin target: to reach a sustainable operating margin in excess of 10 percent, measured as operating profit before amortization of intangible assets (EBITA) as a percentage of net sales. Earnings per share target: with the principal financial target of increasing earnings per share (EPS) by at least 10 percent per year. Debt/EBITDA ratio target: net debt as a percentage of EBITDA should maintain a value of less than 1.5.

Good geographical coverage and a wide customer baseAs a company, Acando gains advantage from its geo-graphical spread over several countries in combination with a well-established customer base that is favorably allocated in terms of sectors and size of companies. No single customer accounts for more than 5 percent of the Group’s total sales. This provides Acando with favorable possibilities for creating long-term stable growth and with the ability to manage differences in economic con-ditions between customer segments and the different geographic markets.

Our personnel – our most important resourceAcando’s operations build on a high level of competence among all employees. Acando’s highest priority is to be sufficiently attractive as an employer to create enhanced prerequisites for retaining and recruiting the best con-sultants. As part of retaining and rewarding personnel in key positions, a long-term incentive program was cre-ated. The program recurs on a yearly basis and is based on the personnel’s own investment in Acando shares as well as their fulfillment of certain performance criteria. The performance criteria are directly linked to the EPS trend measured over a three-year period, which provides good incentive for the personnel since the incentive is fully consistent with Acando’s long-term financial tar-gets and with the interests of other owners.

16 ACANDO ANNUAL REPORT 2014 CORPORATE GOVERNANCE REPORT

2014 CORPORATE GOVERNANCE REPORT

Corporate governanceAnnual General MeetingGeneralShareholders in Acando exercise their influence at the Annual General Meeting (AGM), which is the company’s highest decision-making body. Each Series A share rep-resents ten votes and each Series B share represents one vote at the AGM. Acando’s holding of treasury shares has no voting entitlement. The company’s Articles of Association contain no limitations on the number of votes each shareholder can cast at a general meeting of shareholders.

The 2014 AGM took place on May 5, 2014 in Stockholm. The date of the AGM was published in conjunction with the interim report for the third quarter. Registered share-holders representing 51 percent of the shares and 67 per-cent of the votes participated in the AGM. All Board Members elected by the AGM, the President and the company’s auditors participated in the Meeting.

ResolutionsThe minutes from the AGM are available at www.acando.com. Some of the main resolutions passed at the 2014 AGM are listed below: Resolution to pay a dividend of SEK 1.00 per share for the 2013 fiscal year in accordance with the proposal of the Board. Re-election of the Board members Magnus Groth, Birgitta Klasén, Susanne Lithander, Mats O Paulsson, Anders Skarin and Alf Svedulf. Re-election of Chairman of the Board Ulf J Johansson. Authorization of the Board, subject to specific condi-tions, to decide on the issue of new shares and the buyback and transfer of treasury shares. Guidelines for remuneration to senior executives. Resolution in respect of a new share-savings program 2014/17 for senior executives and other key personnel.

AuthorizationsThe 2014 AGM resolved to pass the following authoriza-tions for the Board of Directors.

Acando is a Swedish public limited company listed on Nasdaq Stockholm, Small Cap. In addition to the applicable laws and regulations, Acando implements the Swedish Corporate Governance Code and hereby submits the 2014 Corporate Governance Report. Departures from the Swedish Corporate Governance Code are presented in a separate section below.

CORPORATE GOVERNANCE STRUCTURE

SHAREHOLDERS

ANNUAL GENERAL MEETING

BOARD OF DIRECTORS

PRESIDENT/CEO

GROUP MANAGEMENT

Sweden

Nomination Committee

Audit Committee

Remuneration Committee

Germany Norway Other countries CFO CTO

Rules and regulations applicable to Acando’s corporate governance

The Swedish Companies Act The Swedish Annual Accounts Act, the Swedish Financial Reporting Board and IFRS Nasdaq Stockholm’s rulebook and the Swedish Financial Supervisory Authority’s regulations The Swedish Corporate Gover-nance Code

Governance documents Articles of Association Rules of Procedure for the Board of Directors and President’s instruction Internal policies and governance documents Listing agreement

Internal Control

Compliance

CORPORATE GOVERNANCE REPORT ACANDO ANNUAL REPORT 2014 17

Resolution on issues of new sharesThe 2014 AGM authorized the Board of Directors to decide on a new issue of Series B shares to the extent such an issue could be performed without requiring an amendment to the Articles of Association. Furthermore, the total in-crease in share capital is not permitted to exceed 10 per-cent of the registered share capital at the time the Board, as applicable, exercises the authority for the first time. Payment for the new issue of shares should be possible with a non-cash consideration or through offsetting.

Accordingly, the authorization does not include the right for the Board to decide to issue new shares against a cash consideration. New share issues must be possible to perform with a waiver of the shareholders’ preferential rights. The authorization may be utilized on one or several occasions up until the next AGM.

The issue price must correspond to the share’s assessed market value. The reason for the waiver of shareholders’ preferential rights is to enable the company to issue shares in conjunction with the acquisition of a company or a business.

Resolution on buyback and transfer of treasury sharesAcando’s 2014 AGM authorized the Board to buy back the company’s shares to hold as treasury shares to an amount corresponding to a maximum of 10 percent of the shares outstanding in the company to thereby enable the company to adapt its capital structure to the com-pany’s capital requirements and to create the opportuni-ty for the company to pay for any acquisitions of compa-nies or businesses, wholly or partly, with these treasury shares. The authorization is valid until the 2015 AGM.

Extraordinary General Meeting (EGM)An EGM took place on July 2, 2014 in Stockholm. The date of the EGM was released in conjunction with a press re-lease on June 9, when Acando announced a recommended public takeover bid for the shares in Connecta. Registered shareholders representing 49 percent of the shares and 65 percent of the votes participated in the EGM. Four elected Board members and the President participated.

ResolutionsThe minutes from the EGM are available at www.acando.com. Some of the main resolutions passed at the EGM on July 2, 2014 are listed below:

Authorization to resolve upon a new issue of shares in connection with the public offering for Connecta ABThe Meeting authorized the Board to, on one or several occasions up to the 2015 AGM and within the scope of the Articles of Association, resolve upon an issue of new Series B shares to constitute consideration when acquiring shares or other share-related instruments in Connecta AB. The authorization is limited to the issue of shares in exchange for a non-cash consideration consisting of shares or other share-related instruments in Connecta AB. The authorization to issue new Series B shares given by the AGM to the Board on May 5, 2014 is not affected by the resolution and therefore remains unchanged.

Share-savings program II, 2014The Meeting resolved to adopt the share-savings program II, 2014 (the ”Program”), for a total of no more than 30 senior executives and other key personnel, which after the acquisition of Connecta AB will be a part of the Acando Group.

The Board’s principal aims with the Program are to increase the possibility of retaining key employees in the Connecta Group, in conjunction with the acquisition of Connecta AB, and to offer these key employees a new incentive program that creates a personal long-term ownership commitment from Program participants. This is expected to stimulate increased interest in the business and its performance, to raise motivation and to increase the feeling of affinity with Acando.

Nomination CommitteeThe main task of the Nomination Committee is to prepare the election and remuneration of Board members and auditors for resolution at the AGM. The Articles of Asso-ciation contain no separate provisions pertaining to the appointment and dismissal of Board members.

In accordance with a resolution at the 2014 AGM, the Nomination Committee comprises the Chairman of the Board plus at least two representatives of the largest shareholders. In October, the Chairman of the Board in consultation with the largest shareholders in the com-pany appoints at least two members of the Nomination Committee. The task of the Nomination Committee pri-or to the next AGM is to prepare proposals for a Chairman of the AGM, the number of Board members and, where applicable, the number of auditors or registered public accounting firms, the election of Board members, the election of Chairman of the Board, fees to Board mem-

Shares and ownership structure On December 31, 2014, the number of shares in Acando amounted to 104,407,419 shares, of which 1,542,000 Series B shares were treasury shares. None of these treasury shares are reserved for future allocation in on-going share-savings programs, since none of the ongo-ing programs are expected to result in the allocation of shares.

At the end of 2014, the number of shareholders amounted to approximately 22,000. The 10 largest shareholders represented approximately 64 percent of the votes and approximately 53 percent of equity. Approximately 9 percent of the shares have foreign owners. The following table shows those shareholders with a holding corresponding to at least 5 percent of the total number of votes in the company:

Name Series A shares Series B shares Total No. of shares Equity, % Votes, %

Svedulf family with companies 1,500,000 16,599,713 18,099,713 17.3 23.0

Ulf J Johansson with companies 1,639,990 1,300,500 2,940,490 2.8 12.9

Svolder AB 500,000 10,321,814 10,821,814 10.4 11.2

The Articles of Association include a pre-emption clause that stipulates that a Series A share that is transferred from one shareholder to another existing shareholder in the company or to an individual that is not already a

shareholder in the company is subject to a pre-emption clause that requires the share to be offered to the other existing holders of Series A shares through written sub-mission to the company’s Board.


1

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7

2

5

8

3

6

9


bers and auditors and, where applicable, proposals for the election of auditors.

The selection criteria are that elected Board members possess the relevant knowledge and experience to under-stand and follow Acando’s operations and contribute with insights on strategic issues. Prior to the nomination work, the Nomination Committee was informed of Acando’s strategic situation through information includ-ing presentations by the Chairman of the Board and the company’s President. The Nomination Committee has also studied the evaluation of the Board.

The Nomination Committee appointed for 2014 in-cludes the following persons: Ulf J Johansson, Chairman of the Board of Acando, Börje Bengtsson (proposed by Alf Svedulf including family and companies) and Ulf Hedlundh (proposed by Svolder AB). Börje Bengtsson was appointed Chairman of the Nomination Committee. All members of the Nomination Committee are indepen-dent in relation to the company and its management. Börje Bengtsson is independent in relation to the com-pany’s three largest shareholders in terms of votes. Information about the Nomination Committee has been published via a press release and on Acando’s website, through which it is possible for shareholders to submit proposals to Acando’s Nomination Committee.

Board of DirectorsAreas of responsibilityThe Board constitutes the highest decision-making body during the period between general meetings. The Board’s assignments are regulated in the Swedish Com-panies Act and the Articles of Association. Each year, the Board adopts written rules of procedure for the Board of Directors that govern its work. Furthermore, the Board produces written instructions stating the allocation of work between the Board and the President as well as the other bodies instituted by the Board, such as the Audit Committee and Remuneration Committee.

Board assignments include making decisions on issues relating to: strategies, business plans and budget, annual reports, interim reports and year-end reports, significant changes in the organization and operations of the company, internal control and risk management, major investments, acquisitions and other changes in the Group structure, loans and other financing issues of a significant nature, and appointing, evaluating and if required discharging the President.

In addition, the Board monitors that Acando’s opera-tions comply with the applicable rules and regulations and the Swedish Corporate Governance Code.

Members of the BoardAccording to Acando’s Articles of Association, the Board must comprise a minimum of five and a maximum of eight members. The members are elected by the AGM.

The 2014 AGM decided that the Board should consist of seven members. In addition to these members, two are appointed by the employees. The AGM resolved to re-elect Ulf J Johansson, Magnus Groth, Birgitta Klasén, Susanne Lithander, Mats O Paulsson, Anders Skarin and Alf Svedulf. Mija Jelonek and Lennart Karlsson were appointed as employee representatives.

Board of Directors

1. Chairman of the Board Ulf J Johansson Born: 1945. Chairman of the Board of Acando AB since 2000.Other assignments: Chairman of Eurostep Group AB and Trimble Navigation Ltd. Board member of Telefon AB LM Ericsson (Ericsson) and the European Institute of Innovation and Technology. Education: Doctor of Engineering.Shareholding: 1,639,990 Series A shares, 1,300,500 Series B shares, all via companies.

2. Board member Magnus GrothBorn: 1963. Board member of Acando AB since 2009.Other assignments: President and CEO of SCA. Education: Master of Science in Engineering and Master of Science in Business and Economics. Shareholding: 3,500 Series B shares.

3. Board member Mats O PaulssonBorn: 1958. Board member of Acando AB since 2012.Other assignments: Chairman of Hjortkvarn Timber AB. Board member of Bösarps Grus & Torrbruk AB, GDL Transport AB, Ramirent Plc and WinGroup AG. Education: Master of Science in Engineering. Shareholding: 581 Series B shares.

4. Board member Birgitta KlasénBorn: 1949. Board member of Acando AB since 2008.Other assignments: Board member of Assa Abloy, Avanza AB and IFS. Senior IT Advisor. Education: Master of Science in Engineering. Shareholding: 100,000 Series B shares (incl. family).

5. Board member Susanne LithanderBorn: 1961. Board member of Acando AB since 2010.Other assignments: Chief Financial Officer BillerudKorsnäs AB. Board member of Eltel Group and SEK, Svensk Export-kredit. Education: Master of Science in Business and Econo-mics. Shareholding: 0

6. Board member Anders SkarinBorn: 1948. Board member of Acando AB since 2003. Other assignments: Chairman of Enea, PocketMobile Com-munications, Multisoft Consulting, JVAB and Infobric. Board member of Mercur Solutions. Education: Bachelor of Arts. Shareholding: 100,000 Series B shares (via companies).

7. Board member Alf SvedulfBorn: 1939. Board member of Acando AB since 2006.Education: Construction engineer. Shareholding: 1,500,000 Series A shares, 16,599,713 Series B shares (incl. family and company).

8. Employee representative Mija JelonekBorn: 1964. Employee representative since 2005. Consultant at Acando. Education: ADP. Shareholding: 0

9. Employee representative Lennart KarlssonBorn: 1951. Employee representative since 2010. Yield Manager at Acando. Education: Master of Science in Engineering. Shareholding: 0

Information in respect of the number of shares regards holdings at December 31, 2014.


Chairman of the BoardThe Chairman of the Board ensures that the Board per-forms its assignment in accordance with the provisions of the Articles of Association, the Companies Act and other regulations and ordinances, as well as the Board’s rules of procedure. At the 2014 AGM, Ulf J Johansson was re-elected Chairman of the Board.

The Chairman maintains continuous contact with the President to monitor the company’s operations and is responsible for ensuring the other Board members receive the requisite information and documentation to fulfill their assignment on the Board. The Chairman is respon-sible for evaluating the work of the Board, and also par-ticipates in the evaluation of the Group management, and represents the company in owner issues.

The Board’s workDuring the 2014 fiscal year, the Board held sixteen Board meetings and one statutory meeting after the AGM on May 5, 2014. At these meetings, in accordance with the adopted rules of procedure, the Board addressed the regular items scheduled to be brought up at each meeting, such as the budget, annual reports, interim reports and business conditions, among other items. In addition, the Board dealt with issues relating to strategic aims, acqui-sitions, share buybacks, the capital structure, project risk management and an employee incentive program. An overview of the Board’s work cycle is presented below.

Each year, the Board performs a formal evaluation

of its work and implements improvements as required. A closed session is held at each Board meeting, where the Board holds discussions without the presence of any company employees such as the President or CFO.

The company’s auditors participate in a minimum of one Board meeting each year, at which they present their observations from the audit of internal control, financial reporting and the annual report. In 2014, the company’s auditors were present at one Board meeting in conjunc-tion with the audit of the year-end report. On at least one occasion per year, the Board meets with the company’s auditors without the presence of the President or any other member of the company management.

Attendance of Board meetings in 2014:

Name FunctionIndepen-

dent1)

Atten-dance, %

Ulf J Johansson Chairman No 100

Alf Svedulf Member No 100

Anders Skarin Member Yes 100

Birgitta Klasén Member Yes 100

Magnus Groth Member Yes 88

Mats O Paulsson Member Yes 88

Susanne Lithander Member Yes 71

Mija Jelonek Employee representative - 100

Lennart Karlsson Employee representative - 100

1) Independent is defined as independent of the company management and its largest shareholders.

THE BOARD’S WORK IN 2014

Year-end report 2013 Auditors’ report Incentive programs

Approval of 2013 Annual Report Notification of Annual General Meeting

Strategy, business planning and acquisition discussions Interim report Q1 2014 Statutory meeting

Acquisition of Connecta Interim report Q2 2014

Strategy and business planning

Interim report Q3 2014

Budget and financial goals 2015 Corporate governance

Evaluation of the Board’s work Review of internal policies and governance documents

BOARD MEETINGS – ANNUAL CYCLE

JUNE

MAY

AP

RIL

Q2

JANUARY

FEBRUARY

MA

RC

H

Q1

O

CT

OB

ER

NO

VEM

BER

DECEMBER

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AUGUST

JULY

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Board members’ independenceThe Board’s assessment, which is shared by the Nomi-nation Committee, is that the Board members’ indepen-dence in relation to the company and shareholders fulfills the requirements of the Swedish Corporate Gov-ernance Code. This means that the majority of the mem-bers elected by the AGM are independent in relation to the company and the company management, and that at least two of them are also independent of the compa-ny’s largest shareholders.

All Acando Board members are independent of the company and its management. Five of the Board mem-bers are entirely independent of major shareholders. No agreements exist between the company and the members.

Audit CommitteeThe Board has appointed an Audit Committee in accor-dance with Chapter 8, Section 49a of the Companies Act. According to the Swedish Corporate Governance Code, the Audit Committee should comprise a minimum of three members. The Audit Committee comprises Susanne Lithander, Anders Skarin and Mats O Paulsson. All members are independent of the company manage-ment and the largest shareholders.

The Audit Committee prepares items for decision by the Board. The Committee works according to an agenda established for the year and is tasked with monitoring the company’s financial reporting and the effectiveness of the company’s internal control and risk management. The Audit Committee keeps itself informed as regards the audit of the Annual Report and consolidated financial statements. Furthermore, the Committee reviews and monitors the independence and impartiality of the auditor

and, in particular, follows up if the auditor supplies services other than audit services. The Committee assists through the provision of proposals in respect of the election of auditors by the AGM.

The Audit Committee also maintains ongoing contact with the CFO and auditors. The meetings of the Audit Committee are minuted and the minutes are submitted to the Board together with a verbal report, in conjunction with the Board’s decision making.

The meetings of the Audit Committee are also attended by the company’s auditors, Öhrlings Pricewaterhouse-Coopers through the Auditor in Charge, Magnus Bränd-ström. The company is usually represented by the CFO and the Head of Group Accounting.

In the 2014 fiscal year, the Audit Committee held four minuted meetings and discussed the following principal areas: interim reports, the year-end report and the Annual Report, internal control and risk management, primarily for project management/project reporting, the corporate governance report, capital structure, tax issues, Group internal restructuring issues, feedback from the auditor’s review and subsequent plan of remedial measures, and monitoring and decisions relating to which assign-ments, in addition to the audit, are carried out by the company’s auditors in accordance with the Commit-tee’s adopted policy.

Susanne Lithander, Anders Skarin and Mats O Paulsson attended all meetings.

THE BOARD’S STRUCTURE FOR CORPORATE GOVERNANCE

SHAREHOLDERS


BOARD OF DIRECTORS

PRESIDENT/CEO

GROUP MANAGEMENT

Sweden


Audit Committee Monitors financial reporting

Monitors internal control

Risk management

Remuneration Committee Proposals for remuneration of Group management

Evaluate variable remuneration

Guidelines for remuneration in the company


Internal Control

Compliance


Remuneration CommitteeThe Board has appointed a Remuneration Committee from among its own ranks to prepare items for decision by the Board. However, share-based incentive programs for company management are decided by the company’s AGM. The task of the Remuneration Committee is to pre-pare proposals for the remuneration and other terms of employment of the executive management and to monitor and evaluate on an ongoing basis the company’s various programs for variable remuneration. In addition, ongoing evaluation is performed of the company’s guidelines, structures and levels for remuneration in the company.

All meetings of the Remuneration Committee are minuted and the minutes are submitted to the Board together with a verbal report, in conjunction with the Board’s decision-making. The Remuneration Committee comprises the Chairman of the Board Ulf J Johansson and Birgitta Klasén. Ulf J Johansson is one of the com-pany’s largest shareholders, but is independent of the management. Birgitta Klasén is independent both of the company management and its largest shareholders.

The Remuneration Committee held eight minuted meetings in 2014. The Remuneration Committee’s meet-ings are also attended by the President (who leaves the room when issues relating to the President are dealt with). Both Ulf J Johansson and Birgitta Klasén attended all meetings of the Remuneration Committee.

In 2014, the work has mainly focused on the following issues: goals for variable remuneration in 2014 and 2015, share-savings program – follow-up, new share-savings program 2014/2017– nomination of participants, new share-savings program II 2014/2017– nomination of participants,

employment contracts for managing directors of foreign subsidiaries, review of remuneration of senior executives, payment of variable remuneration, and review of terms and conditions for senior executives through market comparison.

PresidentThe Board appoints a President to lead and develop day-to-day operations and take responsibility for the company’s day-to-day administration. At the statutory Board meeting on May 5, 2014, the Board adopted the current President’s instruction, which includes the fol-lowing main areas: preparing a business plan, monitoring compliance with the goals, policies and strategic plans adopted by the Board, ensuring the financial reporting reflects the Group’s total financial position and performance, and all other significant circumstances, and ensuring the management group has the requisite competence to lead the business in the direction de-cided by the Board.

President and CEOCarl-Magnus MånssonJoined in 2009Born: 1966Education: University studies in Technical Physics

GROUP MANAGEMENT’S STRUCTURE FOR CORPORATE GOVERNANCE

SHAREHOLDERS


BOARD OF DIRECTORS

PRESIDENT/CEO

GROUP MANAGEMENT

Sweden


Audit Committee

Remuneration Committee


Internal Control

Compliance


Group management

1. Carl-Magnus Månsson, President and CEOBorn: 1966Education: University studies in Technical PhysicsJoined in 2009Number of shares: 98,000 Series B shares

2. Anneli Lindblom, Chief Financial OfficerBorn: 1967Education: B.Sc. in EconomicsJoined in 2012No. of shares: 39,000 Series B shares

3. Christer Norrman, Managing Director SwedenBorn: 1959Education: M.Sc. Information TechnologyJoined in 2007No. of shares: 112,277 Series B shares

4. Guido Ahle, Managing Director GermanyBorn: 1967Education: Business graduateJoined in 2000No. of shares: 25,000 Series B shares

5. Sven Ivar Mørch, Managing Director NorwayBorn: 1967Education: B.A. and M.Sc. in Project ManagementJoined in 2005No. of shares: 0

6. Ferhat Kaya, Managing Director FinlandBorn: 1968Education: B.Sc. in Business AdministrationJoined in 2000No. of shares: 2,083 Series B shares

7. Ben Wales, Managing Director UKBorn: 1975Education: M.Sc. in Aeronautics and AstronauticsJoined in 2011No. of shares: 0

8. John Karnblad, Chief Technology OfficerBorn: 1964Education: University studies in Systems ScienceJoined in 1987No. of shares: 37,500 Series B shares

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3

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Information in respect of the number of shares regards holdings at December 31, 2014.

In 2014, the Group management comprised Carl-Magnus Månsson, Anneli Lindblom, Christer Norrman, Guido Ahle, Ferhat Kaya, Sven Ivar Mørch, John Karnblad and Ben Wales.


Group managementAcando conducts operations in four countries. For efficiency, Acando has a flat organization that favors integration between delivery areas and countries. The key words for the structure are local presence and collaboration.

The President, who is also the CEO, has appointed a Group management comprising Country managers and the heads of Group-wide functions.

The President leads the work of the Group manage-ment and makes decisions in consultation with manage-ment. The Group management meets each month and maintains continuous contact on operative issues.

In 2014, the following focus areas were discussed: monthly follow-up of performance, financial status and operative key performance indicators, operational efficiency and enhanced profitability, recruitment, cross-border customer projects, development of new offerings and services, and strategy.

External auditorsAt the 2014 AGM, the accounting firm of Öhrlings PricewaterhouseCoopers AB, was elected auditors. Magnus Brändström is Auditor in Charge. Magnus Brändström is also the auditor for companies including OKQ8, Scandic and Dometic. The mandate period for the company’s auditors expires at the 2015 AGM.

AuditorsMagnus BrändströmAcando’s auditor since 2008Born: 1962Authorized Public AccountantÖhrlings PricewaterhouseCoopers AB

RemunerationRemuneration of the Board of Directors 2014Directors’ fees for the Board of Directors are resolved by the AGM based on proposals from the Nomination Committee.

Name Function Directors’ feesAudit

CommitteeRemuneration

Committee Total

Ulf J Johansson1) Chairman 500,000 - 62,500 562,500

Alf Svedulf Member 200,000 - - 200,000

Anders Skarin1) Member 200,000 62,500 - 262,500

Birgitta Klasén1) Member 200,000 - 62,500 262,500

Magnus Groth Member 200,000 - - 200,000

Mats O Paulsson1) Member 200,000 62,500 - 262,500

Susanne Lithander Member 200,000 80,000 - 280,000

Mija Jelonek Employee representative - - - 0

Lennart Karlsson Employee representative - - - 0

Total 1,700,000 205,000 125,000 2,030,000

1) Those Board members that meet certain requirements can invoice for the amount payable as Directors’ and committee fees. These Board members may then add a sum that corresponds to social security contributions to the amount invoiced. The social security contributions thus included in the amount invoiced are no higher than those otherwise payable by the company. The entire fee, that is, the cash payment of Directors’ fees and committee fees, including social security contributions, comprises the invoiced Directors’ fees.

Directors’ fees to the Board’s non-executive directors amount to SEK 2,030,000 divided as follows: to the Chairman of the Board, SEK 500,000 and to the other directors, SEK 200,000 each with an additional SEK 330,000 at the Board’s disposal to be allocated between the members of the Board’s committees. The employee representatives receive no Directors’ fees.

Remuneration of senior executives, 2014The Remuneration Committee submits proposals for remuneration of senior executives for decision by the Board. The assignment of the Remuneration Committee is to prepare proposals for the remuneration and other terms of employment for the executive management.

The company offers competitive terms at market rates thus enabling the company to attract and retain senior executives. Remuneration comprises salary, long-term incentive programs and pension provisions. Salary con-sists of a fixed salary and a variable salary. The aim is for the fixed salary together with 40 percent of the maxi-mum possible variable salary to comprise a competitive

salary which is received when the Group’s quantitative performance targets, as set by the Board, are achieved.

At Acando, remuneration of the President and other senior executives comprises fixed salary, variable salary, other benefits and pensions. Fixed salary is reviewed annually. Variable salary, which is reviewed annually, is linked to the Group’s performance and limited to a maximum of 100 percent of fixed salary. Opportunity to participate in the long-term incentive program is provided in accordance with resolutions taken at the company’s AGMs. Pensions must be defined-contribution based to pro-vide predictability. For the President, premiums amount to 35 percent of fixed salary and for the other members of Group management, a maximum of 30 percent. The retirement age is generally 65 years of age. On termination by the Company, the severance payment and termination pay for senior executives can together, at most, amount to 18 months’ salary with offsetting for any income from any other employment or business


activity during the last 12 months. The President has a notice period of six months. If Acando terminates the President’s employment, a notice period of six months applies and a severance payment of 12 months’ salary is payable with offsetting for any income from other employment or business activity during the last 12 months. The President is entitled to give notice and receive the same terms as if the company itself had given notice if any individual shareholder or a group of share-holders in formal partnership obtain a holding in excess of 50 percent of the voting rights in the company.

These guidelines apply to employment contracts agreed after the 2014 AGM and for any changes to existing terms and conditions. Departure from the above guidelines is possible if the Board, in individual cases, deems that special reasons apply. No departures from the above guidelines were made in 2014. For further information, refer to Note 9.

Long-term incentive programsAt year-end 2014, the Acando Group had four out-standing share-savings programs. After a qualification period of about three years and with the prerequisite of the employee’s own investment in Acando shares, par-ticipants in the program will be afforded the opportunity to acquire, free of charge, additional shares in Acando. The numbers of shares awarded is dependent on the number of Acando shares participants have through their own investment and on meeting specific performance criteria connected to Acando’s earnings per share (EPS).

The principal objective of the programs is to increase the possibility of retaining and recruiting key employees and, through personal long-term ownership commitment from program participants, to stimulate increased interest in the business and its performance, to raise motivation and to increase the feeling of affinity with the company.

At present, some 50 Acando Group employees are included in these programs. For further information, refer to Note 9.

Auditors’ remuneration for 2014Auditors’ remuneration comprises fees paid for auditing, consulting and other reviews in conjunction with the audit. Remuneration has also been paid for other con-sulting, of which the majority relates to audit-related consultations on accounting and tax issues. All assign-ments were in accordance with the policy adopted by the Audit Committee relating to other assignments to the company’s auditors. The table below details total remuneration paid in 2014. A detailed description speci-fied for each auditing firm is available in Note 8.

SEK (thousand) 2014 2013

Audit fees 1,501 1,058

Audit related fees 771 356

Tax consultancy fees 100 176

Other services 173 170

Total 2,545 1,760

Internal control and financial reportingAssignment of responsibilityThe Board’s responsibility for internal control and gover-nance is regulated by the Swedish Companies Act, the Swedish Annual Accounts Act and the Swedish Corpo-rate Governance Code.

Acando endeavors to operate its business in as efficient a manner as possible. Financial reporting must be reli-able, accurately reflect the company’s operations and be prepared in accordance with applicable legislation and ordinances. The Acando Group’s procedures are based on the framework for internal control issued by the Com-mittee of the Sponsoring Organizations of the Treadway Commission (COSO), which describes internal control relating to financial reporting with five different compo-nents: control environment, risk assessment, control ac-tivities, information and communication, and follow-up.

The Board has overriding responsibility for financial reporting. Each year, the Board adopts written rules of procedure for its work and states the division of work between the Board, the President and the other bodies instituted by the Board, such as the Audit Committee and Remuneration Committee.

The Audit Committee, as appointed by the Board, is tasked with preparing issues for decision by the Board. The Audit Committee works according to an agenda established each year and is tasked with monitoring and assuring the quality of the company’s financial report-ing. This comprises areas including the effectiveness of the Group’s internal controls and assessments of esti-mates and reported amounts that affect the quality of the financial reporting. The Audit Committee keeps itself informed as regards the audit of the Annual Report and consolidated financial statements through the presence of the auditor at the Committee’s scheduled meetings. Acando’s CFO and the Head of Group Accounting are also present at Committee meetings and, in addition, the members of the Committee have ongoing contact with these executives.

Financial reportingFinancial reporting to the BoardThe Board’s rules of procedure state in detail the financial information that the President is responsible for provid-ing to the Board in conjunction with monthly and quar-terly accounts. In addition, the rules of procedure state what financial information is to be dealt with at which Board meeting in the meeting cycle.

Information must include presentation and analysis of performance trends and the financial position. In addi-tion, key performance indicators must be included in the reports; these include billing ratios, hourly rates and personnel statistics. Budgets and forecasts must be presented at the appropriate Board meeting and their continuous follow-up included in the ongoing reporting of financial performance.

External financial reportingThe quality of external financial reporting is assured through the performance of a number of measures. The President is responsible for the accuracy and high quality of all financial information presented to external stake-holders. The company auditor’s assignment includes re-viewing the financial reporting and providing an account of their observations to the Audit Committee and Board. In addition to the year-end financial statement the audi-tors also review the interim report for the third quarter.

Information regarding the company’s operations and financial position is published continuously on Acando’s website (www.acando.com). This is to comply with the agreement with Nasdaq Stockholm and to provide exist-ing and potential shareholders with the opportunity to follow the progress of the company.


Risk managementThe Board and Group management follow, on an ongo-ing basis, the risks that can significantly affect financial reporting. When changes occur in risk assessments, in-ternal controls are suitably adapted.

The risk of significant errors in the financial reporting is evaluated on the basis of the significance and com-plexity of the various items. In addition, accounting rules for various balance sheet and income statement items are continuously evaluated. Those balance-sheet and income-statement items where material risk may occur are assessed as comprising the following: income recognition, variable remuneration to employees, valuation of goodwill, valuation of work-in-progress, valuation of accounts receivable, and taxes.

To minimize these risks, Group-wide policies and a frame-work for financial reporting have been established.

Every fiscal year, detailed time schedules are set for the production and reporting of financial information from subsidiaries to the President, CFO and Group accounting function. These have been supplemented with instruc-tions for accounting and reporting, financial policies, di-rectives and instructions in respect of decision structures as well as job descriptions including the assignment of responsibilities and authorities. The aim of the guide-lines is to provide a foundation for effective internal control and to ensure that reporting is correct and con-sistent. The guidelines are followed up and updated when necessary to ensure compliance with applicable laws and regulations and any organizational changes. Updates are communicated to the employees concerned.

Control activities and follow-upTo ensure that operations are conducted efficiently and that the financial reporting provides a true and fair view,

control activities exist for managing the Group’s risks. The control activities involve all levels of the organization, from the Board and Group management to other employ-ees, and are aimed at preventing, identifying and correct-ing any errors and discrepancies. Examples of control activities within Acando’s operations include the approval and control of different types of accounting transactions, analysis of key performance indicators and relationships and other analytical follow-up of financial information. The analytical follow-up is carried out continuously by the company’s controllers, business area managers, country managers and the Group management.

Internal control 2014The Board, the Audit Committee and the Group man-agement discuss on an ongoing basis which areas in internal control and financial reporting should be the object of investigation or change. In 2014, internal con-trol initiatives primarily focused on the following: financial reporting from and follow-up of subsidiaries to the President and CFO – financial key performance indicators, forecasts, sales and project information and other business-critical key performance indicators, processes for risk assessment and follow up of project performance, and a more stringent system for managing authorizations and powers.

Departures from the Swedish Corporate Governance CodeThe company follows the Swedish Corporate Governance Code with the following exceptions: The company does not have any dedicated internal audit function. Each year, the Board assesses the need of such a function and deems the ongoing internal work with internal control, principally performed by the Group management, as sufficient as regards an audit function after taking into consideration the company’s operations and size.

AUDITOR’S STATEMENT ON THE CORPORATE GOVERNANCE REPORT

To the Annual General Meeting of the shareholders of Acando AB (publ.), Corporate Registration Number 556272-5092

It is the Board of Directors who is responsible for the Corporate Governance Report for 2014 on pages 16–27 and that it has been prepared in accordance with the Annual Accounts Act.

We have read the Corporate Governance Report and, based on that reading and our knowledge of the company and the Group, we believe that we have a sufficient basis for our opinions. This means that our statutory examination of the Corporate Governance Report is different and substantially less in scope than an audit conducted in accordance with International Standards on Auditing and

generally accepted auditing standards in Sweden.

In our opinion, the Corporate Governance Report has been prepared and its statutory content is consistent with the annual accounts and the consolidated financial statements.

Stockholm, March 20, 2015

Öhrlings PricewaterhouseCoopers AB

Magnus BrändströmAuthorized Public Accountant

Directors’ Report 30

Business activities 30

Net sales and earnings 2014 31

Financial position, cash flow, tax and investments 32

The share 34

Employees and the environment 35

Parent Company 35

Guidelines for remuneration to senior executives 35


Significant events after the end of the fiscal year 35

Outlook and financial targets 35

Proposed appropriation of profit 36

The Board’s statement regarding the proposed dividend 36

Risks and opportunities 36

Multi-year overview 39

Consolidated income statement 40

Consolidated statement of comprehensive income 40

Consolidated balance sheet 41

Consolidated cash-flow statement 42

Consolidated statement of changes in equity 43

Parent Company income statement 44

Parent Company balance sheet 45

Parent Company cash-flow statement 46

Parent Company statement of changes in equity 47

Notes 49

Note 1 General information 49

Note 2 Summary of important accounting policies 49

Note 3 Financial risk management 53

Note 4 Important estimates and assessments in the application of the company’s accounting policies 54

Note 5 Segment information 55

Note 6 Other operating income 56

Note 7 Commitments and major lease commitments 56

Note 8 Audit fees 56

Note 9 Employees and personnel expenses 57

Note 10 Pension liabilities 58

Note 11 Amortization/depreciation and impairment of intangible and tangible assets 59

Note 12 Financial income and financial expenses 59

Note 13 Tax 60

Note 14 Calculation of earnings per share, based on earnings 60

Note 15 Goodwill 61

Note 16 Other intangible assets 61

Note 17 Tangible assets 61

Note 18 Deferred tax assets and deferred tax liabilities 62

Note 19 Participations in Group companies 63

Note 20 Other non-current financial assets/ other long-term receivables 64

Note 21 Accounts receivable 64

Note 22 Prepaid expenses and accrued income 64

Note 23 Cash and cash equivalents 64

Note 24 Financial instruments per category in the Group 64

Note 25 Share capital 66

Note 26 Reserves 66

Note 27 Provisions 67

Note 28 Other liabilities 67

Note 29 Accrued expenses and deferred income 67

Note 30 Pledged assets 67

Note 31 Contingent liabilities 67

Note 32 Interest received and paid 67

Note 33 Adjustments for non-cash items 67

Note 34 Acquisition of subsidiaries 68

Note 35 Significant events after the end of the fiscal year 69

Approval of Annual Report 70

Auditors’ report 71

Definitions 72

CONTENTS

30 ACANDO ANNUAL REPORT 2014 DIRECTORS’ REPORT

DIRECTORS’ REPORT

Business ActivitiesBackgroundAcando AB (publ.) has been listed on Nasdaq Stockholm, since 1995.

In partnership with its customers, Acando identifies and implements sustainable business enhancements through information technology. Acando provides a bal-ance between high customer value, short project times and low total cost. Acando creates measurable improve-ments through the development of processes, organiza-tions and IT systems, ensuring that these support the client’s operations. It is Acando’s task to acquire an over-all view of the client’s business and to ensure that each assignment yields a rapid impact and measurable results.

The company was formed in 1986 under the name Frontec AB (publ.). A merger with Acando AB in 2003 formed AcandoFrontec AB (publ.). A number of acquisi-tions were made in Sweden and Norway including the listed consulting firm Resco AB (publ.). At the end of 2013, the Norwegian company E-vita AS was acquired and in summer 2014, Acando made a public offer for Connecta AB (publ). This was accepted on July 21 by owners representing 93 percent of the shares and on August 1, Connecta was consolidated into the Acando Group.

The merger of Acando and Connecta has unlocked substantial market potential and created a key force in the Nordic consulting market in parallel with creating attractive values for customers, employees and share-holders. Acando has approximately 1,800 employees allocated over four countries in Europe and delivery centers in India and Latvia.

Market developmentDemand was generally moderate at the start of 2014, much in line with the end of 2013. Continued uncertainty regarding global macro events impacted decision making on new investments and created some deferments of major projects. However, the increased significance of the digitization of society, technical innovation and a stable growth forecast for the Nordic countries contributed positively to the market trend for consulting services.

Demand grew in the second half of 2014 which, to-gether with Connecta’s rapid integration during the same period, gave the combined entity a clear leading position in Sweden. Current market demand opens the door to more and more project-based deliveries and increasingly complex solutions are in demand to meet demands for

efficiency, innovation and new business models. Being able to offer a complete range of skills through integrated deliveries between the focus areas where Acando is active, including management consulting, enterprise solutions and, increasingly, digital solutions, comprises a clear competitive advantage in today’s market.

Customers and offeringIn the Nordic region, major buyers of IT and management consulting services are found in the telecom sector, pub-lic sector, manufacturing industry and the banking sector. The telecom sector has long been the most dominant customer sector but has declined against the other sectors in pace with IT-based communication solutions taking a larger role in all companies’ operations.

In recent years, the public sector has increased its purchasing of consulting services in line with increasing use of internet by government agencies and departments to inform and communicate with the public.

Offshoring is now an established delivery model and several large customers have a clear strategy for locating parts of development in low cost-countries. Acando has delivery centers in India and Latvia for when customers require the inclusion of partial offshore delivery, Acando also collaborates with international companies providing corresponding services for specific areas in its offering.

Customers expect geographical proximity, a certain size and a mix of expertise, which favors suppliers such as Acando. Market development is driven primarily by the following factors: an increased need for information and knowledge about operations, a greater need for integration and a shorter repayment time for investments relating to new solutions, and a need to extend the lifespan of existing solutions.

Acando’s consultants are specialists in business integra-tion and creating operational enhancements through developing processes, organizations and IT. The approach is characterized by a strong focus on results and taking responsibility for ensuring that customers quickly obtain the expected improvement from their investment.

Acando’s core offering is divided into three main cate-gories: Business Development, Business Systems and IT Solutions, which work together to create measurable results in each customer assignment. During the year, Acando signed new agreements with organizations including:

The Board of Directors and the President of Acando AB (publ.), corporate registration number 556272-5092 and registered in Stockholm, hereby submit the Annual Report for the 2014 fiscal year. Figures in parenthesis refer to the preceding year.

DIRECTORS’ REPORT ACANDO ANNUAL REPORT 2014 31

A framework agreement with a global industrial group for management consulting services. The agreement initially runs for a period of three years with an option to extend. The Norwegian Society of HVAC Engineers (NORVAC) for a new membership system based on Microsoft Dynamics CRM in combination with Office 365. ACAM AS for a cloud-based solution and with Lundeby & Co, who will be implementing Microsoft Dynamics CRM Online to support sales efforts. One of Sweden’s largest trade unions with correspond-ing unemployment insurance fund for a business sup-port system for member management and notification. The agreement pertains to Acando’s Medlem 2020 solution, which includes Sharepoint, Microsoft Dynam-ics CRM and AX. Orkla Shared Services with whom Acando will be the implementation partner in the roll-out of SAP at several of the Orkla Group’s divisions. The implementation will be conducted in close collaboration with Orkla’s inter-nal SAP organization. The auditing company BDO, to link together the com-pany’s some 1,000 employees and large office network in Norway through an intranet. A framework agreement with Moelven Industrier regarding Microsoft Dynamics implementation and administration services for the Moelven group compa-nies. Acando received the assignment due to its high level of skills in enterprise resource planning (ERP) assignments, strong focus on processes and its ability to support Moelven with local resources in both Swe-den and Norway.

In the second half of 2014, the merger of Acando and Connecta was carried out. The integration process was driven from a “merger of equals” perspective, whereby the leading roles will filled through a joint selection pro-cess in both companies. The management of the merged Swedish operations now comprises representatives from both companies. Integration efforts focused on three dimensions: Increasing customer value and sales synergies, The best consultants and the best employer, and Cost synergies through one market listing and within administration.

Integration has concentrated on the clear position of “creating Sweden’s leading consulting firm with Nordic ambitions.” The integration was completed at a high pace through the operating units with a focus on business-driven success. The objective expressed at the time of the public offer, namely that the combination of Acando and Connecta would make the new merged organization the leading consulting company in Sweden, with a unique position in terms of experience, size and full-service offering, has now been reached.

Net sales and earnings 2014GroupConsolidated net sales for 2014 amounted to SEK 1,856 m (1,438), corresponding to year-on-year growth of 29 per-cent. Connecta’s figures are included for five of the twelve months in the above figures, since its operations were consolidated into the Acando Group from August 1. For Acando’s previous operations, growth adjusted for currency effects was 3.8 percent for the full year.

Operating profit was SEK 118 m (66), representing an operating margin of 6.4 percent (4.6) before nonrecurring items and goodwill impairment of the UK operations. Nonrecurring items included costs totaling SEK 63.5 m connected to the acquisition of Connecta, as well as re-structuring costs of SEK 4.4 m in Norway. The measures are expected to generate annualized savings of about SEK 52 m in Sweden and, in Norway, the annualized sav-ings are estimated at about SEK 8 m.

Group net financial items comprised primarily net interest income on cash and cash equivalents and over-drafts, interest expenses attributable to pension liabili-ties, and exchange-rate gains and losses.

Consolidated profit after tax totaled SEK 30 m (50). Earnings per share after dilution amounted to SEK 0.35 (0.71).

NET SALES AND OPERATING PROFIT

The following graph shows net sales and quarterly earnings for the past four years. In terms of work, the fourth quarter is the most work intensive with the highest number of working days, the third quarter is always lower due to the holiday period.

Q4Q3Q2Q1 Q4Q3Q2Q1 Q4Q3Q2Q1 Q4Q3Q2Q1

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Q4Q3Q2Q1 Q4Q3Q2Q1 Q4Q3Q2Q1 Q4Q3Q2Q1

2010 2011 2012 2013

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Performance by geographic marketNet sales and operating profit by geographic market are shown in the table below:

Net salesOperating

profit1

Operating margin, %

SEK m 2014 2013 2014 2013 2014 2013

Sweden 1,142 774 94 48 8.2 6.3

Germany 295 291 24 12 8.1 4.0

Norway 295 224 22 12 7.3 5.2

Other countries 158 159 4 11 2.4 6.9

Group adjustment -34 -10 -25 -17 - -

Total for operations 1,856 1,438 118 66 6.4 4.6

Nonrecurring items - - -68 - - -

Total 1,856 1,438 51 66 2.7 4.6

1) Excluding goodwill impairment

During the full-year 2014, sales in Sweden totaled SEK 1,142 m (774), up SEK 368 m compared with 2013. Operating profit was SEK 94 m (48) and the margin was 8.2 percent (6.3).

For the full-year 2014, Germany reported net sales of SEK 295 m (291), up SEK 4 m year-on-year. Operating profit for 2014 totaled SEK 24 m (12) and, accordingly, the operating margin was 8.1 percent (4.0).

In Norway, net sales totaled SEK 295 m (224) in 2014, up SEK 71 m year-on-year. Operating profit for the full year was SEK 22 m (12) and the operating margin was 7.3 percent (5.2).

Finland and the UK are reported together under Other countries. In Other countries, sales were SEK 158 m (159) for the full-year 2014, down SEK 1 m year-on-year. Operating profit was SEK 4 m (11) and the margin was 2.4 percent (6.9).

Financial position, cash flow, tax and investmentsFinancial positionAcando has a continued strong financial position with an equity/assets ratio of 59 percent (66). Consolidated cash and cash equivalents amounted to SEK 76 m (99) at December 31, 2014. In addition, the Group has unuti-lized overdraft facilities of SEK 164 m (84), most of which are in SEK. Of the short-term credit facilities, SEK 73 m had been utilized as of December 31, 2014.

SEK mDec 31,

2014Dec 31,

2013 Change

Cash and cash equivalents 76 99 -23

Interest-bearing long-term debt1) -36 -42 6

Net cash 40 57 -17

Unutilized overdraft facilities 91 67 24

Equity/assets ratio, % 59 66 -7

1) Interest-bearing liabilities pertain to pension liabilities of SEK 26 m and the long-term portion of acquisition financing of SEK 10 m.

Cash flowTotal cash flow in 2014 was a negative SEK 32 m (neg: 12), which comprise cash flow from operations of SEK 97 m (65) and a negative change in working capital of SEK 13 m (pos: 5).

SEK m 2014

Profit after financial items 43

Depreciation, amortization and impairment 21

Provisions 9

Restructuring costs, non-cash items 40

Income tax paid -16

Cash flow from operations before changes in working capital 97

Change in current operating receivables -64

Change in current operating liabilities 91

Liabilities related to restructuring -40

Cash flow from operations after changes in working capital 84

Acquisition of Cloudstep Investment -3

Investment in non-current assets Investment -13

Issue costs Financing -12

Net change in liabilities Financing -17

Dividend paid Financing -71

Total cash flow -32

Cash flow from investment activities amounted to a negative SEK 16 m (neg: 39), of which an expense of SEK 3 m pertained to the acquisition of Cloudstep AS in Norway that was completed in January and the remain-der under the item Investments pertained mainly to cus-tomary IT and office equipment. In the corresponding period in 2013, E-vita AS in Norway was acquired, which negatively impacted cash flow by SEK 31 m.

Cash flow from financing activities amounted to a negative SEK 100 m (neg: 43), of which a negative SEK 71 m (neg: 71) pertained to dividends and a negative SEK 13 m comprised amortization of acquisition financing as well as a negative change in short-term credit facilities of SEK 4 m and issue costs of SEK 12 m. The comparative period in 2013 included liquidity totaling SEK 7 m for the buyback of the company’s shares.

TaxAt the start of 2014, the Group had unutilized loss carry- forwards totaling approximately SEK 202 m. It is expected that it will be possible to utilize the loss carry-forwards attributable to operations in Sweden, SEK 179 m, in the next few years. For this reason, a deferred tax asset of SEK 39 m was recognized in the balance sheet at the start of the year.

During 2014, SEK 30 m (41) of the loss carry-forwards in Sweden was utilized in the operation in Sweden in parallel with the addition of SEK 71 m in loss carry-for-wards from the acquisition of Connecta. Accordingly, the unutilized loss carry-forwards for Sweden amounted to SEK 220 m (202) at the end of the period.

InvestmentsThe Group’s net investment in assets in 2014 was SEK 468 m (58). At the start of the year, Cloudstep AS in Norway was acquired for a purchase consideration of SEK 6 m and, in July 2014, Connecta AB was acquired for a purchase consideration of SEK 448 m. The acquisi-tion of Connecta was financed through the issue of shares in Acando AB and, accordingly, does not impact liquidity. Other investments pertained mainly to invest-ments in customary IT and office equipment.


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CHANGE IN CASH AND CASH EQUIVALENTS NEG. SEK 23 m

-13-13 -3

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OWNERSHIP STRUCTUREAt the end of 2014, Acando had a broad shareholder base, with about 22,000 shareholders. Approximately 9 percent of the shares have foreign owners.

Name No. of A shares No. of B shares Holding Holding, % Votes, %

Svedulf family with companies 1,500,000 16,599,713 18,099,713 17.3 23.0

Ulf J Johansson with companies 1,639,990 1,300,500 2,940,490 2.8 12.9

Svolder AB 500,000 10,321,814 10,821,814 10.4 11.2

The Fourth Swedish National Pension Fund (AP4) 0 6,660,155 6,660,155 6.4 4.9

Livförsäkringsbolaget Skandia ÖMS 0 3,341,323 3,341,323 3.2 2.4

Tibia Konsult AB 0 2,960,553 2,960,553 2.8 2.2

DnB – Carlson funds 0 2,942,626 2,942,626 2.8 2.2

Försäkringsaktiebolaget, Avanza Pension 0 2,936,100 2,936,100 2.8 2.1

Nordea Investment Funds 0 2,711,689 2,711,689 2.6 2.0

Skandia funds 0 2,172,771 2,172,771 2.1 1.6

Handelsbanken Fonder AB RE JPMEL 0 2,047,025 2,047,025 2.0 1.5

PSG SMALL CAP 0 1,700,466 1,700,466 1.6 1.2

Svenska Lärarfonder 0 1,337,836 1,337,836 1.3 1.0

Resultatandelsstiftelsen Connecta (profit-sharing plan) 0 1,178,286 1,178,286 1.1 0.9

Humle Kapitalförvaltning AB 0 950,000 950,000 0.9 0.7

Asarnoj, Tobias 0 890,000 890,000 0.9 0.7

CBNY-DFA-INT SML CAP V 0 809,358 809,358 0.8 0.6

Nordnet Pensionsförsäkring AB 0 732,301 732,301 0.7 0.5

The Knowledge Foundation (KK stiftelsen) 0 571,800 571,800 0.6 0.4

Case Asset Management AB 0 500,000 500,000 0.5 0.4

Other 0 36,561,113 36,561,113 35.0 26.7

Acando treasury shares 0 1,542,000 1,542,000 1.5 1.1

Total number of shares 3,639,990 100,767,429 104,407,419 100 100 The 20 largest shareholders excluding Acando represent:Holding, percent: 64Voting rights, percent: 72


The shareShares and share capitalPursuant to Acando AB’s applicable Articles of Associa-tion, the share capital is to be a minimum of SEK 50 m and a maximum of SEK 200 m. The share capital amounted to SEK 144,002,616.45 allocated over 104,407,419 shares, of which 3,639,990 comprised Series A shares and 100,767,429 Series B shares. Each Series A share represents ten votes and each Series B share represents one vote at the AGM. Acando’s holding of treasury shares has no voting entitlement. The company’s shares have a quotient value of SEK 1.3792. Under the compa-ny’s Articles of Association, the Series A shares are cov-ered by a pre-emption clause

On December 31, 2014, the number of shares in Acando amounted to 104,407,419 shares, of which 1,542,000 Series B shares were treasury shares. Of these treasury shares, no shares are assessed as available for future allotment in ongoing share-savings programs.

The Articles of Association include a pre-emption clause that stipulates that a Series A share that is trans-ferred from one shareholder to another existing share-holder in the company or to an individual that is not already a shareholder in the company is subject to a pre-emption clause that requires the share to be offered to the other existing holders of Series A shares through written submission to the company’s Board.

New share issuesAcando’s 2014 AGM authorized the Board of Directors to decide on a new issue of Series B shares to the extent such an issue could be performed without requiring an amendment to the Articles of Association. Furthermore, the total increase in share capital was not permitted to

exceed 10 percent of the registered share capital. The authorization was not utilized.

The Extraordinary General Meeting on July 2 resolved to issue not more than 34,624,516 new Series B shares in Acando as payment in the Offering to shareholders in Connecta. Of these, 27,616,250 and 4,609,740 shares were issued in July to shareholders in Connecta before the acceptance date expired. The number of Acando shares totaled 104,407,419 on December 31, 2014, of which 1,542,000 Series B shares were treasury shares.

Buyback of sharesThe Board was authorized by Acando’s 2014 AGM to buy back the company’s shares to the extent that the company’s total holding does not exceed 10 percent of all shares in the company with the aim of adjusting the capital structure to suit the company’s capital require-ments and to create the opportunity for the company to pay for any acquisitions of companies and businesses, wholly or partly, with these treasury shares. The autho-rization is valid until the 2015 AGM. The authorization was not utilized.

Incentive programsIn April 2014, the 2011/2014 share-savings program concluded. There was no prospect of any shares being allocated at the end of the program.

The 2014 AGM resolved to implement a new share- savings program for a maximum of 50 senior executives and other key personnel employed by the Acando Group. The 2014/2017 share-savings program is structured similarly to the share-savings programs that were adopted by the 2012 and 2013 AGMs. Based on the fulfillment of specific performance criteria related to

SHARE PRICE TREND 2010–2014

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Acando’s earnings per share after tax and after dilution for the 2014–2016 fiscal years, participants will have the option of receiving, without compensation, additional Acando shares, the number of which depends on the number of Acando shares in their own investment and on the fulfillment of certain performance requirements.

An Extraordinary General Meeting on July 2, 2014, resolved to implement an additional share-savings pro-gram for a maximum of 30 senior executives and other key personnel employed by the Acando Group. This was primarily directed at employees of Connecta with hold-ings in Connecta AB’s previous share-savings program. The 2014/2017 share-savings program II is structured similarly to Acando’s share-savings program that was adopted by the 2014 AGM. Based on the fulfillment of specific performance criteria related to Acando’s earn-ings per share after tax and after dilution for the 2014–2016 fiscal years, participants will have the option of receiving, without compensation, additional Acando shares, the number of which depends on the number of Acando shares in their own investment and on the ful-fillment of certain performance requirements.

At year-end 2014, the Acando Group had four share-savings programs outstanding: Share-savings program 2012/2015 adopted at the 2012 AGM Share-savings program 2013/2016 adopted at the 2013 AGM Share-savings program 2014/2017 adopted at the 2014 AGM Share-savings program II 2014/2017 adopted at the 2014 AGM

Share price trendAt the end of 2014, Acando’s share price was SEK 13.30 and at the end of 2013, the share price was SEK 13.25.

DividendThe Board of Directors proposes that the AGM resolve on a dividend of SEK 1.00 per share, corresponding to a total of approximately SEK 103 m. No dividend accrues to the Series B shares in Acando’s holding of treasury shares. Acando’s dividend policy is as follows: not less than half of profit after tax is to be distributed to share-holders by way of dividends, share buy-backs or other corresponding measures.

Employees and the environmentEmployeesThe number of employees was 1,826 (1,087) at the end of 2014. Of these, 1,303 (566) were in Sweden, 273 (273) in Germany, 176 (161) in Norway and 74 (87) in Other countries. The average number of employees during the fourth quarter of 2014 was 1,831 (1,061). The acquisition of Connecta resulted in an increase in the number of employees of 720. For more information, refer to our Employee section on page 10.The environmentAcando does not carry out any operations requiring an environmental permit. However, Acando still endeavors to ensure its operations have a minimal harmful impact on the environment. The greatest environmental gain is achieved by replacing travel with telephone and video conferences. Acando is also working to make its em-

ployees more environmentally aware and to create a working environment that is naturally environmentally friendly, for example, through better sorting of waste and by prioritizing environmentally friendly suppliers and materials. For more information, refer to our Sus-tainability section on page 14.

Parent CompanyThe Parent Company provides certain Group-wide func-tions to other companies in the Group. Essentially, the risks faced by the Parent Company consist of operations conducted in the subsidiaries (see the description below for the Group).

The Parent Company’s financial position is detailed on pages 44–47.

Guidelines for remuneration to senior executives.At the AGM in 2014, decisions were made regarding guidelines for remuneration of senior executives. These guidelines are shown in Note 9.

Corporate governanceAs of July 1, 2008, Acando adopted the Swedish Corpo-rate Governance Code; see the Corporate Governance Report on pages 16–27.

Significant events after the end of the fiscal year On February 1, 2015, Acando launched its updated brand profile, which is expected to lead to clearer positioning vis-à-vis competitors and increased attractiveness for employees.

At the end of January 2015, Acando divested its operations in the UK with the new owners taking over on February 1. In the fourth quarter, the surplus value of SEK 7.3 m was written off through goodwill impairment, since the purchase consideration is expected to corre-spond to the net assets of the business. The operations are not of significant importance to the Group and the divestment increases possibilities for focusing on the geographic markets with favorable conditions for deliv-ering Acando’s entire offering.

On February 5, Acando received the Partner of the Year Award for Middleware, which is presented at an annual event for Oracle’s partners in Sweden. Acando Norway received the corresponding award. Connecta has received the Fusion Middleware Partner of the Year award, for three consecutive years, while Acando Norway, (formerly E-vita) received the award in 2011 and 2013.

Outlook and financial targets OutlookAcando will continue to develop as a company in pace with its customers and their demands. The company is expected to capture a clear position in Sweden and, from that position, increase growth in Sweden and in relevant geographies outside of Sweden. The objective of the acquisition is to create the leading consulting company based in the Nordic region. The merger of Connecta and Acando is estimated to unlock substan-tial market potential and create a key force in the Nordic consulting market in parallel with creating attractive values for both companies’ customers, employees and shareholders.

Acando does not provide earnings or sales forecasts.


Financial targetsAcando’s financial targets are divided into four parts: Growth In the markets in which it operates, Acando will out-grow the market for management and IT consulting services, primarily through organic growth comple-mented by strategic acquisitions. Margin Acando’s margin target is to reach a sustainable oper-ating margin in excess of 10 percent, measured as op-erating profit before amortization of intangible assets (EBITA) as a percentage of net sales. Earnings per share Acando’s principal financial target is to increase earn-ings per share (EPS) by at least 10 percent per year. Debt/EBITDA ratio Net debt as a percentage of EBITDA should maintain a value of less than 1.5.

Proposed appropriation of profit

The following profits are at the disposal of the AGM: SEK

Share premium reserve 632,443,432

Retained earnings 299,813,197

Net profit for the year 73,772,493

Total profit available for distribution 1,006,029,122

The Board proposes the AGM resolve on a dividend of SEK 1.00 per share. No dividend accrues to the Series B shares in Acando’s holding of treasury shares. Calculated on the number of shares outstanding on December 31, 2014, and Acando’s holding of 1,542,000 treasury shares, this corresponds to a total dividend of SEK 102,865,419. May 6, 2015 is proposed as the record date for the divi-dend. The Board’s statement regarding the proposed dividendIn the long-term, dividend levels should amount to a minimum of half of the Group’s reported after-tax profit attributable to shareholders in the Parent Company. This means that the proposed dividend reflects the Board’s assessment of the company’s strong cash flow and liquidity.

After the proposed dividend, the Parent Company’s equity/assets ratio amounts to 86 percent and the Group’s equity/assets ratio to 59 percent. The equity/assets ratio and liquidity are satisfactory in view of the continued profitability of the company’s and the Group’s operations. It is the Board’s opinion that the proposed dividend does not hinder the Parent Company or the other Group companies from discharging their obligations in the short and long-term, nor from fulfilling their required investments. The proposed dividend can thus be justified with consideration to what is stated in Chapter 17, Sec-tion 3, paragraphs 2 and 3 (the prudence rule) of the Swedish Companies Act.

Regarding the company’s profits and position in other respects, refer to the following income statements and balance sheets with associated notes. The balance sheets and income statements are to be submitted for adoption at the AGM.

Risks and opportunitiesRisks Acando is exposed to a number of risks, which can impact the Group’s earnings. The company identifies and manages risks on an ongoing basis. A number of risk factors that affect Acando are described below. The description makes no claims to be exhaustive and the impact factors are not detailed in order of precedence.

Opportunities in the form of efficiency measuresAcando works continuously with efficiency measures within its organization and administration. This is per-formed by continuously evaluating each consulting unit, by merging consulting units that are too small, by enhancing the efficiency of management and sales work and by constantly monitoring opportunities for further efficiency savings in joint administrative functions. The cost of joint functions in Acando tends to decline in relation to net sales. Efficient administration makes the company, relatively speaking, less vulnerable in an eco-nomic slow-down.

Shared tools and processes are being implemented to strengthen internal efficiency and to create opportu-nities for cross-border marketing activities and deliver-ies to customers.

RISK AREA COMMENT ASSESSMENT

Demand Demand for Acando’s services is closely linked to the positivity of customers’ outlooks and, accordingly, their willing-ness to invest. Weaker economic condi-tions could affect future prospects for Acando at short notice.

Acando assesses current demand levels in the markets in which it operates as being satisfactory.

Price levels and customer assign-ments

Price levels have a significant impact on the company’s profits.

In 2014, average price levels were maintained for the project assignments that were carried out, however, price pressure was present with regard to individual resource assignments.

Any changes in price levels applicable for the portion of sales tied to customers through frame-work agreements are dependent on renegotiations of these framework agreements, which are general-ly entered into for a period of one to two years.



Agreements In conjunction with signing assignment agreements, companies within the Acando Group assume responsibility for conducting an assignment defined according to specific conditions and prerequisites. In the event that Acando is unable to fulfill such an assignment, or if Acando or its employees grossly disregard the regulatory frameworks set in an agreement, the company may be subject to considerable, and in extreme cases, unlimited claims for damages.

Methods utilized by Acando to reduce this risk include continuous follow-up of projects at all levels in the company, continuous follow-up of operations by the management (including monitor-ing and evaluation of the technical and financial risks pertaining to the project) and through report-ing to the Audit Committee and Board as well as through separate authorization instructions and liability insurance.

Fixed price assign-ments and similar undertakings toward customers

Assignments of this type constitute a limited percentage of sales, but the trend is for this percentage of sales to increase.

Acando carries out active follow-up and control of all fixed price assignments entered into and has continued to strengthen previously implemented controls to further limit risk.

Market consolidation

The trend towards industry consolida-tion continues. While this provides opportunities for growth, it also entails increased competition. Customers are choosing fewer suppliers, which to date has led to high demand volumes for the suppliers selected, but also to pressure on prices. Customers are increasingly choosing to expose all assignments to competition, even in those cases where long-term relationships with consulting companies are already established.

Offshoring Offshoring is now an established deliv-ery model and several large customers have a clear strategy of locating parts of development in low cost-countries.

In major system development and implementation projects, customers sometimes stipulate requirements for an element of offshore delivery.

Acando’s assignments are often aimed at achieving high levels of business value in short periods of time and thus require a high degree of interaction with customers. This means that major portions of the business activities are not exposed to direct competition from offshore suppliers.

Through its acquisition of Connecta, Acando has acquired delivery centers in India and Latvia. Acando collaborates with international companies to be able to provide corresponding services for certain areas in its offering.

Competitors Acando competes with large interna-tional IT and management consultancy companies and with regional compa-nies who view the Nordic region or Sweden as their home market.

In particular, international competi-tors work with the very largest custom-ers and when they do, it is in conjunc-tion with major IT projects.

The major accounting firms are re-building their consultancy operations and are becoming increasingly active in the market. Regional and local compet-itors are most active in relation to other customers within the private and public sectors.

Changes in the behavior of competitors can impact Acando’s future prospects both negatively and positively.



Changed customer requirements

In general, customers have become more professional in the procurement of consultancy services, which has resulted in a longer sales process and requires qualified sales work. Both specialist expertise and breadth of competence, which offer the opportu-nity to take full responsibility, are in increasing demand.

Acando is working toward becoming the regional company that can best meet these customer requirements. As a step in this direction, Acando provides support to its customers in both an advi-sory and a supplying role.

Customer base Too narrow a customer base and a disproportionately high dependence on individual customers increases business risk.

Through widening its customer base over the year Acando has thereby spread sales over a larger num-ber of customers and, thus, reduced risk exposure.

None of Acando’s ten largest customers had sales that exceeded 5 percent of the Group’s sales.

Employees and personnel expenses

Acando’s most important asset is its employees. In order to continue grow-ing, Acando is dependent on being able to recruit new employees.

An active strategy is pursued to retain qualified employees, which includes providing interesting and challenging assignments, an attractive employee offering as regards remuneration and benefits and through the provision of opportunities for ongoing development

For a major proportion of Group employees, sala-ries are divided into two portions, a fixed salary and a variable salary. The variable salary is linked to the company’s financial performance, which in turn means that personnel expenses follow in line with the company’s earnings.

Financial position Consultancy operations neither require any major capital investments nor tie up capital. However, when customers are given longer credit periods, tied-up capital increases.

Acando has a strong financial position with an equity/assets ratio of 59 percent (66) and a healthy operating cash flow. Consolidated cash and cash equivalents amounted to SEK 76 m (99) at Decem-ber 31, 2014. In addition, the Group has unutilized overdraft facilities of SEK 164 m.

Financial risks The nature of consultancy operations means that the financial risks are limit-ed. The financial risks are also described under Note 3 Financial risk manage-ment.

Acando’s ever increasing internationalization en-tails a currency risk, which is deemed to be limited, since the company endeavors to match income and expenses as well as assets and liabilities in the same currency to thereby reduce currency exposure.

Acando’s customers mainly comprise large or medium-sized companies, organizations and public authorities with a high credit rating, and accordingly, the credit risk is deemed to be low.

Acando closely follows both its customers’ abili-ty to pay and any risks noted in the general devel-opment of the credit market.

Group liquidity is invested in accordance with the policy adopted by the Board in bank deposit ac-counts or interest-bearing securities with high credit ratings. The Acando Group does not have any external bank loans.

The nature and scope of the financial risks are also described under Note 3 Financial risk management.

MULTI-YEAR OVERVIEW ACANDO ANNUAL REPORT 2014 39

MULTI-YEAR OVERVIEW

2014 2013 2012 2011 2010 2009 20081) 20071) 20061)

Consolidated income statement, SEK m

Net sales 1,856 1,438 1,547 1,524 1,462 1,436 1,611 1,344 1,049

Operating profit (EBIT) 43 66 114 106 89 66 152 102 73

Profit after financial items 44 66 114 107 88 62 156 106 75

Net profit for the year 30 50 78 69 62 62 168 106 75

Operating margin, % 2.3 4.6 7.4 6.9 6.1 4.6 9.4 7.6 7.0

Profit margin, % 2.3 4.6 7.4 7.0 6.0 4.3 10.4 7.9 7.1

Cash flow, SEK m

Cash flow from operating activities 84 70 102 110 80 52 192 97 39

Cash flow from investing activities -16 -39 -9 -11 -15 -75 -10 -70 -12

Cash flow from financing activities -100 -43 -90 -101 -45 -55 -68 -93 24

Cash flow for the year -33 -12 2 -2 20 -78 115 -66 50

Return

Return on equity, % 3 7 11 9 8 8 22 16 17

Return on capital employed, % 5 9 15 14 11 8 22 16 16

Financial indicators at year-end, SEK m

Interest-coverage ratio, multiple 18 46 84 78 46 15 26 34 55

Equity/assets ratio, % 59 66 70 69 71 69 64 60 69

Equity at year-end 1,063 697 734 754 784 783 738 658 641

Total assets 1,790 1,053 1,058 1,099 1,100 1,130 1,159 1,096 925

Share information per share, SEK

Earnings per share after dilution3) 0.35 0.71 1.09 0.92 0.80 0.80 1.99 1.33 0.99

Cash flow from operating activities per share 0.99 0.99 1.42 1.47 1.04 0.68 2.46 1.22 0.51

Cash flow per share -0.39 -0.17 0.03 -0.03 0.26 -1.03 1.49 -0.80 0.68

Dividend per share 1.002) 1.00 1.00 1.00 0.50 0.50 0.50 0.50 4)

Equity per share 10.33 9.87 10.30 10.38 10.14 10.20 9.57 8.09 8.04

Share price at year-end 13.30 13.25 15.40 14.55 12.55 13.75 10.35 14.20 13.89


Total number of issued shares 104,407 72,181 74,411 79,644 79,644 79,486 78,565 78,565 76,644

Treasury shares at year-end 1,542 1,542 3,299 7,452 3,331 3,518 3,518 1,000 15

No. of shares outstanding before dilution at year-end 102,865 70,639 71,112 72,192 76,313 75,968 75,047 77,565 76,629

No. of shares outstanding after dilution at year-end 102,865 70,639 71,281 72,639 77,337 76,764 77,169 80,294 79,679

Average number of shares before dilution 84,148 70,751 71,710 74,564 76,311 75,517 76,130 77,542 71,199

Average number of shares after dilution 84,148 70,751 71,770 74,825 76,916 76,974 78,322 79,797 75,539

Personnel

Average number of employees 1,377 1,070 1,065 1,040 1,075 1,120 1,123 1,012 727

Sales per employee, SEK (thousand) 1,344 1,344 1,452 1,465 1,360 1,282 1,435 1,328 1,443

1) Excluding the AS WMG operation sold in January 2008.2) The Board’s proposal to the AGM.3) No tax expenses were charged to operating profit in the period 2006–2009.4) A mandatory redemption procedure in June 2007 caused the payment of SEK 1.30 per share to the company’s shareholders.

40 ACANDO ANNUAL REPORT 2014 CONSOLIDATED INCOME STATEMENT / CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

CONSOLIDATED INCOME STATEMENT

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME


Net profit for the year 29,834 49,979

Other comprehensive income for the year

Items that will not be reclassified subsequently to profit or loss

Pension liabilities, actuarial gains on liabilities -4,576 3,467

Income tax pertaining to items in other comprehensive income 975 -713

Total items that will not be reclassified subsequently to profit or loss -3,601 2,754

Items that may be reclassified subsequently to profit or loss

Change in accumulated translation differences 6,238 -9,353

Total items that may be reclassified subsequently to profit or loss 6,238 -9,353

Other comprehensive income for the year, net after tax 2,637 -6,599

Comprehensive income for the year 32,471 43,380

Attributable to:

Parent Company shareholders 32,400 43,380

Non-controlling interests 71 -

SEK (thousand) Note 2014 2013

Net sales 5 1,856,180 1,437,759

Other operating income 6 3,390 3,931

Total income 1,859,570 1,441,690

Operating expenses

Other external expenses 7, 8 -527,893 -454,215

Personnel expenses 9, 10 -1,200,473 -909,291

Nonrecurring items 34 -67,897 -

Amortization/depreciation and impairment of intangible and tangible assets 11 -20,604 -12,507

Operating profit 5 42,703 65,677

Profit/loss from financial items

Financial income 12 4,158 1,933

Financial expenses 12 -3,318 -1,701

Profit after financial items 43,543 65,909

Taxes on profit for the year 13 -13,709 -15,930


Attributable to:

Parent Company shareholders 29,780 49,979


Earnings per share 14

Average number of shares before dilution 84,147,858 70,750,758

Average number of shares after dilution 84,147,858 70,750,758

Number of shares outstanding at close of period before dilution 102,865,419 70,639,429

Earnings per share before dilution, SEK 0.35 0.71

Earnings per share after dilution, SEK 0.35 0.71

Proposed dividend per share, SEK 1.00 1.00

CONSOLIDATED BALANCE SHEET ACANDO ANNUAL REPORT 2014 41

CONSOLIDATED BALANCE SHEET

SEK (thousand) Note Dec 31, 2014 Dec 31, 2013

NON-CURRENT ASSETS

Intangible assets

Other intangible assets 16 4,451 3,044

Goodwill 15 939,795 499,759

Tangible assets

Tangible assets 17 16,680 13,334

Financial assets

Deferred tax assets 18 51,892 41,727

Other non-current financial assets 20 6,121 4,047

TOTAL NON-CURRENT ASSETS 1,018,939 561,911

CURRENT ASSETS

Accounts receivable 21 553,891 348,575

Current tax assets 15,916 2,702

Other receivables 9,251 3,888

Prepaid expenses and accrued income 22 116,487 36,779

Cash and cash equivalents 23 75,671 99,057

TOTAL CURRENT ASSETS 771,216 491,001

TOTAL ASSETS 1,790,155 1,052,912


EQUITY 26

Share capital 144,002 99,555

Other capital contributions 738,758 367,495

Reserves -25,258 -31,496

Retained earnings including profit for the year 205,430 261,588

Total equity attributable to Parent Company shareholders 1,062,932 697,142


TOTAL EQUITY 1,063,003 697,142

LONG-TERM LIABILITIES

Deferred tax liabilities 18 2,406 1,178

Provisions 27 27,453 268

Pension liabilities 10 25,446 20,175

Other long-term liabilities 24 11,211 24,934

Total long-term liabilities 66,516 46,555

CURRENT LIABILITIES

Provisions 27 22,445 -

Current financial liabilities, external 85,189 12,666

Accounts payable 24 117,279 73,607

Current tax liabilities 6,793 5,676

Other liabilities 28 82,192 50,036

Accrued expenses and deferred income 29 346,738 167,230

Total current liabilities 660,636 309,215

TOTAL LIABILITIES 727,152 355,770

TOTAL EQUITY AND LIABILITIES 1,790,155 1,052,912

For contingent liabilities and pledged assets, refer to notes 30 and 31 respectively.

42 ACANDO ANNUAL REPORT 2014 CONSOLIDATED CASH-FLOW STATEMENT

CONSOLIDATED CASH-FLOW STATEMENT


Operating activities

Profit after financial items 32 43,542 65,909

Adjustments for non-cash items 33 69,240 10,330

Income tax paid -15,880 -10,855

Cash flow from operating activities before changes in working capital 96,902 65,384

Cash flow from changes in working capital

Increase (-)/decrease (+) in current operating receivables -64,398 29,083

Increase (+)/decrease (-) in current operating liabilities 51,003 -24,692

Cash flow from operating activities 83,507 69,775

Investing activities

Acquisition of subsidiaries 34 -2,981 -30,847

Acquisition of intangible assets 16 -3,390 -2,106

Acquisition of tangible assets 17 -9,853 -5,712

Cash flow from investing activities -16,224 -38,665

Financing activities

Issue costs -11,698 -

Buyback of treasury shares - -7,126

Change in overdraft facility/factoring -5,113 -

Borrowings - 34,835

Repayments of borrowings -12,660 -

Dividend paid -70,639 -70,854

Cash flow from financing activities -100,110 -43,145

Cash flow for the year -32,827 -12,035

Cash and cash equivalents at beginning of the year 99,057 115,049

Translation difference in cash and cash equivalents 9,442 -3,957

CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR 75,671 99,057

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY ACANDO ANNUAL REPORT 2014 43

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

Equity attributable to Parent Company shareholders

SEK (thousand)Share

capitalOther capital contributions

Reserves(Note 26)

Retained earnings

Non- controlling

interestsTotal

equity

Opening balance at January 1, 2013 99,555 367,495 -22,143 289,348 - 734,255

Profit for the year - - - 49,979 - 49,979

Other comprehensive income for the year - - -9,353 2,754 - -6,599

Comprehensive income for the year - - -9,353 52,733 - 43,380

Transactions with shareholders

Incentive programs - - - -2,513 - -2,513

Buyback of treasury shares - - - -7,126 - -7,126

Dividend paid to Parent Company shareholders - - - -70,854 - -70,854

Total transactions with shareholders - - - -80,493 - -80,493

Opening balance at January 1, 2014 99,555 367,495 -31,496 261,588 - 697,142

Profit for the year - - - 29,780 54 29,834

Other comprehensive income for the year - - 6,238 -3,601 17 2,654

Comprehensive income for the year - - 6,238 26,179 71 32,488


Dividend paid to Parent Company shareholders - - - -70,639 - -70,639

Non-cash issue 44,447 371,263 - - - 415,710

Issue costs - - - -11,698 - -11,698

Total transactions with shareholders 44,447 371,263 - -82,337 - 333,373

Closing balance at December 31, 2014 144,002 738,758 -25,258 205,430 71 1,063,003

44 ACANDO ANNUAL REPORT 2014 PARENT COMPANY INCOME STATEMENT

PARENT COMPANY INCOME STATEMENT


Net sales 53,259 44,760

Total income 53,259 44,760

Operating expenses

Other external expenses 7, 8 -30,587 -21,954

Personnel expenses 9 -15,266 -7,935

Amortization of intangible assets and depreciation of tangible assets 11 -6,738 -7,903

Operating profit 668 6,968

Profit from financial items

Profit from participations in Group companies 12 71,000 129,056

Other interest income and similar items 12 4,751 1,459

Interest expenses and similar items 12 -1,899 -1,051


Taxes on profit for the year 13 -748 -1,729

Profit for the year and comprehensive income for the year 73,772 134,703

PARENT COMPANY BALANCE SHEET ACANDO ANNUAL REPORT 2014 45

PARENT COMPANY BALANCE SHEET


NON-CURRENT ASSETS

Intangible assets

Other intangible assets 16 4,270 3,061

Tangible assets

Tangible assets 17 9,586 6,845

Financial assets

Participations in Group companies 19 1,373,438 917,593

Deferred tax assets 18 5,720 6,468

Other long-term receivables 20 1 1

TOTAL NON-CURRENT ASSETS 1,393,015 933,968

CURRENT ASSETS

Receivables from Group companies 60,999 64,462

Current tax assets - -

Other receivables 52 108

Prepaid expenses and accrued income 22 2,797 1,858

Cash and cash equivalents 23 16,197 10,019

TOTAL CURRENT ASSETS 80,045 76,447

TOTAL ASSETS 1,473,060 1,010,415


EQUITY

Share capital (104,407,419 shares at SEK 1.38) 25 144,002 99,555

Statutory reserve 109,687 109,687

Total restricted equity, Parent Company 253,689 209,242

Share premium reserve 632,443 261,180

Retained earnings 299,814 247,448

Profit for the year 73,772 134,703

Total non-restricted equity, Parent Company 1,006,029 643,331

TOTAL EQUITY 1,259,718 852,573

LONG-TERM LIABILITIES

Other long-term liabilities 9,507 22,169

Total long-term liabilities 9,507 22,169

CURRENT LIABILITIES

Provisions 27 9,803 -

Current financial liabilities, external 28,684 12,666

Accounts payable 13,971 4,283

Liabilities to Group companies 109,791 112,969

Current tax liabilities 115 72

Other liabilities 28 1,800 1,338

Accrued expenses and deferred income 29 39,671 4,345

Total current liabilities 203,835 135,673

TOTAL LIABILITIES 203,835 135,673

TOTAL EQUITY AND LIABILITIES 1,473,060 1,010,415

Memorandum items

PLEDGED ASSETS None None

CONTINGENT LIABILITIES 31 - 5,375

46 ACANDO ANNUAL REPORT 2014 PARENT COMPANY CASH-FLOW STATEMENT

PARENT COMPANY CASH-FLOW STATEMENT


Operating activities

Profit after financial items 32 74,520 136,432

Adjustments for non-cash items 33 6,738 7,468

Cash flow from operating activities before changes in working capital 81,258 143,900

Cash flow from changes in working capital

Increase (–)/decrease (+) in current operating receivables 2,623 -56,137

Increase (+)/decrease (–) in current operating liabilities 11,966 -47,134

Cash flow from operating activities 95,847 40,629

Investing activities

Acquisition of intangible assets 16 -3,114 -1,447

Acquisition of tangible assets 17 -7,574 -2,536

Cash flow from investing activities -10,688 -3,983

Financing activities

Issue costs -11,698 -

Buyback of treasury shares - -7,126

Change in overdraft facility/factoring 16,022 -

Borrowings - 34,835

Repayments of borrowings -12,666 -

Dividend paid -70,639 -70,854

Cash flow from financing activities -55,585 -43,145

Cash flow for the year 6,178 -6,499

Cash and cash equivalents at beginning of the year 10,019 16,518

CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR 16,197 10,019

PARENT COMPANY STATEMENT OF CHANGES IN EQUITY ACANDO ANNUAL REPORT 2014 47

PARENT COMPANY STATEMENT OF CHANGES IN EQUITY

Restricted equity Non-restricted equity

SEK (thousand)Share

capitalStatutory

reserve

Share premium

reserveRetained earnings

Total equity

Opening balance at January 1, 2013 99,555 109,687 261,180 327,941 798,363

Profit for the year - - - 134,703 134,703

Total comprehensive income - - - 134,703 134,703


Incentive programs - - - -2,513 -2,513

Buyback of treasury shares - - - -7,126 -7,126

Dividend paid to Parent Company shareholders - - - -70,854 -70,854

Opening balance at January 1, 2014 99,555 109,687 261,180 382,151 852,573

Profit for the year - - - 73,772 73,772

Total comprehensive income - - - 73,772 73,772


Dividend paid to Parent Company shareholders - - - -70,639 -70,639

Non-cash issue 44,447 - 371,263 - 415,710

Issue costs - - - -11,698 -11,698

Closing balance at December 31, 2014 144,002 109,687 632,443 373,586 1,259,718

NOTES ACANDO ANNUAL REPORT 2014 49

NOTES

NOTE 1 GENERAL INFORMATION

The Parent Company, Acando AB (publ.), and its subsidiaries comprise an international IT and Management Consultancy Group. The Parent Company is a limited company registered in Stockholm, Sweden. The address of the company’s head office is Malmskillnads-gatan 32, Box 16061, SE-103 22 Stockholm, Sweden. The company is listed on Nasdaq Stockholm, Small Cap.

The consolidated financial statements were approved for publica-tion by the company’s Board on March 20, 2015. The balance sheets and income statements will be submitted to the Annual General Meeting (AGM) on May 4, 2015. The Annual Report may be changed by the company’s owners after the Board has approved it.

The Group’s Annual Report is presented in thousands of Swedish kronor (SEK thousand) and covers the period January 1 through December 31 for items related to profit or loss, and as at December 31 for items related to the balance sheet. Unless otherwise specified, all items are stated in thousands of Swedish kronor (SEK thousand) and, accordingly, rounding differences can occur.

NOTE 2 SUMMARY OF IMPORTANT ACCOUNTING POLICIES

The most important accounting policies applied at the time these consolidated financial statements were prepared are set out below. Unless otherwise stated, these policies have been applied consis-tently for all years presented.

Basis of preparation of the statements Acando’s consolidated financial statements were prepared in accor-dance with the Swedish Annual Accounts Act, RFR 1 Supplementary Accounting Rules for Groups, the International Financial Reporting Standards (IFRS) as adopted by the EU, as well as the interpretation statements issued by the International Financial Reporting Inter-pretations Committee (IFRIC). The consolidated financial statements were prepared in accordance with the cost method, apart from certain financial assets and liabilities, which have been measured at fair value.

The preparation of reports in accordance with IFRS requires the use of a number of important accounting-related estimates. It also requires that management make certain assessments when apply-ing the Group’s accounting policies. The areas that comprise a high degree of assessment, that are complex, or areas where assumptions and estimates are significant for the Group’s consolidated financial statements, are set out in Note 4.

Standards, amendments and interpretations that came into effect in 2014The IASB (International Accounting Standards Board) has issued new and revised standards and interpretations.

The following standards have been adopted by the Group for the first time for fiscal years beginning on or after January 1, 2014 and have a material impact on the consolidated financial statements:

IFRS 10, “Consolidated Financial Statements,” is based on preex-isting policies, whereby it identifies control as the decisive factor in determining whether a company is to be included in the consolidated financial statements. The standard provides further guidance to assist in the determination of control when it is difficult to determine.

Other standards, amendments and interpretations that enter force for the first time for fiscal years beginning on or after January 1, 2014 and have no material impact on the consolidated financial statements.

New standards and interpretations that have not yet entered force: A number of new standards and interpretations are effective for fiscal years beginning after January 1, 2014, and have not been applied in the preparation of these consolidated financial statements. None of these is expected to have a significant effect on the consolidated financial statements, except the following set out below:

IFRS 9, “Financial instruments,” addresses the classification, measurement and recognition of financial assets and liabilities. The complete version of IFRS 9 was issued in July 2014, and replaces the parts of IAS 39 relating to the classification and measurement of financial instruments. IFRS 9 retains a mixed measurement approach but simplifies this approach in certain respects. There will be three measurement categories for financial assets: amortized cost, fair value through other comprehensive income (FVTOCI) and fair value through profit or loss (FVTPL). How an instrument is classified depends on the business model and the nature of the instrument. Investments in equity instruments must be recognized at FVTPL, however, an option exists to recognize the instrument at FVTOCI on initial recognition. No reclassification to profit or loss will be car-ried out on the divestment of the instrument.

IFRS 9 also introduces a new approach for calculating provisions for credit losses, which is based on expected credit losses. The classi-fication and measurement of financial liabilities is not changed unless the liability is recognized at FVTPL based on the fair value option. In this case, value changes attributable to own credit risk are presented in other comprehensive income. The standard is to be applied to fiscal years beginning on or after January 1, 2018. Early adoption is permitted. The Group has yet to evaluate the impacts of imple-menting the standard.

IFRS 15, “Revenue from Contracts with Customers,” governs how revenue is recognized. The principles on which IFRS 15 is based aim to provide users of financial reports with more informative, relevant disclosures about the company’s revenue. The expanded disclosure requirements mean that information about the nature, timing and uncertainty of revenue and cash flows arising from the company’s contracts with customers must be provided. Under IFRS 15, revenue should be recognized when customers gain control of the sold prod-uct or service and are able to use or receive benefits from the prod-uct or service.

IFRS 15 replaces IAS 18, “Revenues,” and IAS 11, “Construction Contracts,” as well as the SICs and IFRICs relating thereto. IFRS 15 enters force on January 1, 2017. Early adoption is permitted. The Group has yet to evaluate the impacts of implementing the stan-dard.

None of the other IFRS or IFRIC interpretations that have not yet come into effect are expected to have any significant impact on the Group.

Consolidated financial statementsSubsidiariesSubsidiaries are all entities (including structured entities) over which the Group has control. The Group controls an entity when the Group is exposed to, or has rights to, variable returns from its holding in the entity and has the ability to affect those returns through its controlling influence over the entity. Subsidiaries are included in the consolidated financial statements as of the date on which the con-trolling influence is transferred to the Group. They are deconsoli-dated from the consolidated financial statements as of the date the controlling influence ceases.

The consolidated financial statements have been prepared in accordance with the acquisition method. The cost of an acquisition consists of the fair value of assets paid in consideration, equity instruments issued and liabilities arising or assumed as of the day of transfer. Identifiable acquired assets, liabilities assumed and

50 ACANDO ANNUAL REPORT 2014 NOTES

contingent liabilities in a business combination are initially mea-sured at fair value on the acquisition date, irrespective of the scope of any minority interest. The surplus which consists of the differ-ence between the cost and the fair value of the Group’s share of identifiable acquired assets, liabilities and contingent liabilities is recognized as goodwill. If the cost is less than the fair value of the acquired subsidiary’s assets, liabilities and contingent liabilities, the difference is recognized in profit or loss. The acquired equity of subsidiaries is determined as being the difference between the fair value of identifiable assets, liabilities taken over and contingent liabilities based on a market valuation performed on the acquisition date. The equity of acquired subsidiaries is entirely eliminated, which means that the Group’s equity only contains that part of the sub-sidiary’s equity that arises after the acquisition. Acquisition related costs are expensed as incurred. Every contingent purchase consid-eration that is to be transferred by the Group is recognized at fair value at the acquisition date. The subsequent change of fair value of a contingent purchase consideration that has been classified as an asset or liability is recognized in accordance with IAS 39, either in profit or loss or in other comprehensive income.

The pricing of deliveries between Group companies is conducted on commercial principles. Inter-Group transactions and balance- sheet items as well as unrealized profits on transactions between Group companies are eliminated. Unrealized losses are also elimi-nated, although potential losses are perceived as an indication that an impairment requirement exists for the transferred asset. Account-ing policies for subsidiaries have been amended when necessary in order to ensure consistent application of the Group’s policies.

Shares in associated companiesAssociated companies are those companies in which the Parent Company has significant but not controlling influence, which gen-erally means the Parent Company holding between 20 and 50 per-cent of the voting rights of the company. Holdings in associated companies are recognized in accordance with the equity method and are valued initially at cost. The Group does not currently have any associated companies.

Segment reportingOperating segments are recognized in a manner that corresponds to the internal reporting submitted to the Chief Operating Decision Maker (CODM). The CODM is the function that is responsible for allocating resources and assessing the performance of the operat-ing segments. In the Group, this function is identified as the Group management who make strategic decisions. The Group carries out consultancy operations in several geographic markets, and the reporting coincides with the actual geographic areas. The results for each segment include operating income and operating expenses considered to be attributable to the operating activities. The oper-ating expenses include amortization and depreciation of intangible and tangible assets considered to be attributable to each segment. The assets included in each segment include intangible and tangible assets attributable to the segment, and all current assets apart from current tax assets. When income has been distributed geo-graphically, this has been done on the basis of the country in which the invoicing has been carried out. Net financial items are not distrib-uted by segment in the internal reporting, and therefore this informa-tion has not been provided. Internal purchases and sales of services are concluded at market prices.

Translation of foreign currenciesFunctional currency and reporting currencyItems included in the financial statements for the various units in the Group have been recognized in the currency used in the financial environment in which each company mainly operates (functional currency). The consolidated financial statements use the Swedish krona (SEK), which is the Parent Company’s functional currency and reporting currency.

Transactions and balance-sheet itemsTransactions in foreign currencies are translated to the functional currency at the rate of exchange prevailing on the transaction date. Exchange-rate gains and losses that arise upon the payment of such items and on the translation of monetary assets and liabilities expressed in foreign currencies at the closing-day rate are recog-nized in profit or loss. Exchange-rate differences on lending and borrowing are recognized in net financial items, while other ex-change-rate differences are included in operating profit.

The exchange rates used are presented in the table below.

Year-end rate Average rate

Dec 31, 2014

Dec 31, 2013

Dec 31, 2014

Dec 31, 2013

EUR 9.52 8.94 9.10 8.65

GBP 12.14 10.73 11.29 10.19

NOK 1.05 1.06 1.09 1.11

DKK 1.28 1.20 1.22 1.16

INR 0.12 0.10 0.11 0.11

Group companiesThe results and financial position of all Group companies (none of which have a high-inflation currency as their functional currency) that use a functional currency other than the reporting currency are translated to the Group’s reporting currency as follows:

a. Assets and liabilities for each of the balance sheets are translated at the closing-day rate.

b. Income and expenses for each of the income statements are translated at the average rate of exchange.

c. All exchange-rate differences that arise are recognized in other comprehensive income as a separate item under equity.

Upon consolidation, exchange-rate differences that arise as a result of translation of net investments in foreign operations are entered in other comprehensive income. In conjunction with entire or partial divestment of foreign operations, the exchange-rate differences recognized in equity are transferred to profit or loss and recognized as part of the capital gain or loss.

Goodwill and fair value adjustments arising from the acquisition of foreign operations are treated as assets and liabilities of the entity in question and translated at the closing-day rate.

Cash-flow statementThe cash-flow statement is prepared in accordance with the indirect method. The cash flow recognizes only transactions that entail pay-ments in or out. Cash and cash equivalents in the cash-flow state-ment correspond to the definition of cash and cash equivalents in the balance sheet.

Intangible assetsAcando’s intangible assets consist of goodwill and capitalized software development costs.

Goodwill is the value by which the acquisition price exceeds the fair value of the net assets that the Group obtains in conjunction with a business combination. Goodwill, which is recognized sepa-rately, is tested annually in order to identify any impairment require-ment, and is recognized at cost less accumulated impairment. Impair-ments of goodwill are not reversed.

Development costs directly associated with identifiable and unique software products, which are controlled by the Group and which have probable financial benefits of more than one year, are recognized as intangible assets. Intangible assets include any em-ployee costs arising from the development of software products, plus a reasonable proportion of indirect costs. Other costs related to the development or maintenance of software are recognized as an expense when they arise.


Intangible assets other than goodwill are amortized on a straight-line basis over their estimated useful lives. For capitalized develop-ment costs, this means that the product is amortized at 20 to 50 percent annually from the date the product is completed.

Tangible assetsTangible assets are recognized if it is likely that future economic benefits attributable to the asset will accrue to the Group and the cost can be reliably estimated. Tangible assets are recognized at cost after deduction of accumulated depreciation. The cost includes expenditure that is directly attributable to the acquisition of the asset. Expenditure to improve an asset’s performance over and above its original level raises the asset’s carrying amount. Expendi-ture for repairs and maintenance is recognized as a cost. Tangible assets are depreciated systematically over their estimated useful lives. Residual value is considered negligible. Straight-line depreci-ation is used for all types of tangible assets.

Land is not depreciated. Depreciation of other assets takes place on a straight-line basis as follows:

Computers, servers and networks, % 33.3

Equipment, % 20.0

Capitalized leasehold improvements are depreciated over the term of the lease.

The residual value and useful lives of the assets are tested at each year-end and adjusted as necessary.

Capital gains and losses are determined by comparing the sales price and the carrying amount. Capital gains and losses are recog-nized in profit or loss.

Impairment of non-financial assetsAssets that have an indefinite useful life, such as goodwill and cap-italized development costs that have not yet been taken into use, are not amortized/depreciated, but are instead tested annually for any impairment need. For assets that are depreciated, an assess-ment is made of the asset’s carrying amount at any time when there may be an indication that the carrying amount exceeds its recoverable amount. Impairment is made at the amount that the carrying amount exceeds its recoverable amount. The recoverable amount is the higher of the asset’s fair value less sales costs, and its value in use. For the purpose of impairment testing, assets are grouped on the basis of the lowest level at which separate identifi-able cash flows (cash-generating units) exist. Assets, other than financial assets and goodwill for which impairment losses were previously recognized, are tested for whether any reversal should be made at each balance-sheet date.

Financial assetsThe Group classifies its financial assets into the following catego-ries: loan receivables and accounts receivable, and financial assets that are measured at fair value in profit or loss. The classification depends on the purpose for which the financial asset was acquired. Management establishes the classification when an asset is first recognized.

Calculation of fair valueFair values of listed financial instruments are based on actual market prices on the balance-sheet date. For unlisted financial instruments, or if the market for a certain financial asset is not active, the value is determined by applying valuation techniques according to which the Group makes assumptions based on market conditions prevailing on the balance-sheet date. Market interest rates form the basis for the calculation of the fair value of long-term loans. For other finan-cial instruments for which the market value is not specified, the fair value is deemed to correspond to the carrying amount.

Loan receivables and accounts receivableLoan receivables and accounts receivable are financial assets which are not derivatives, which have fixed or fixable payments and which are not listed on an active market. They are part of current assets, with the exception of items with due dates more than 12 months after the balance-sheet date, in which case, they are classified as non-current assets.

Financial assets measured at fair valueThis category contains financial investments. Assets in this category are measured at fair value on an ongoing basis and any gains or losses are recognized in profit or loss. Hedge accounting is not applied. These assets are included in non-current assets if the management does not intend to divest the asset within 12 months of the balance- sheet date.

The purchase and sale of financial assets are recognized on the transaction date, which is the date the Group commits itself to pur-chasing or selling the asset. Financial assets are initially measured at fair value plus transaction costs. Transaction costs attributable to financial assets measured at fair value through profit or loss are recognized in profit or loss. Financial assets are removed from the balance sheet when the right to receive cash flows from the instru-ment ceases or is transferred and the Group has transferred, essen-tially, all risks and benefits associated with ownership.

Accounts receivable Accounts receivable are amounts to be paid by customers for services carried out as part of day-to-day operating activities. If payment is expected within a year or sooner, they are classified as current assets. If not, they are recognized as non-current assets.

Accounts receivable are measured initially at fair value plus transaction costs and thereafter at amortized cost using the effec-tive interest method, less provisions for depreciation. A provision for depreciation is made when there is objective evidence that the Group will not be able to receive all the amounts due in accordance with the original terms and conditions of the receivable. Provisions are measured as the difference between the asset’s carrying amount and the present value of future cash flows, discounted at the original effective interest rate. The amount of the provision is recognized in profit or loss under other external expenses.

Cash and cash equivalentsIn addition to cash and bank balances, short-term financial invest-ments are classified as cash and cash equivalents, since they are exposed only to an insignificant risk of value fluctuations and are also traded on an open market at known amounts, or have a remain-ing term of less than three months from the acquisition date. Surplus liquidity is invested in bank deposits or interest-bearing treasury bills with high credit ratings.

EquityEquity in the Group is divided into share capital, other capital con-tributions, reserves and retained earnings.

The holding of treasury shares, which were acquired within the framework resolved by the AGM, is recognized in the consolidated financial statements as a reduction of retained earnings. In the Parent Company, the reduction is reported against retained earn-ings or, when applicable, against the fund to be used in accordance with the resolution of the AGM. Costs, over and above the purchase consideration, that are related to the acquisition of treasury shares are charged to retained earnings. The holding is not included in the number of shares outstanding in the calculation of key performance indicators per share.

Accounts payableAccounts payable are undertakings to pay for goods or services acquired in day-to-day operations from suppliers. Accounts pay-


able are classified as current liabilities if they are payable within one year or sooner. If not, they are recognized as long-term liabilities.

Accounts payable are initially measured at fair value plus transac-tion costs and subsequently at amortized cost using the effective interest method.

Borrowings Borrowings are initially recognized at the amount received after deduction for transaction costs. Should the initial carrying amount differ from the amount to be repaid on the due date, the difference will be allocated over the term of the loan, using the effective interest method. All transactions are recognized as at the settlement date.

Borrowings are classified as current liabilities unless the Group has an unconditional right to defer the payment of the liability for at least 12 months after the balance-sheet date.

Hedge accountingOperations are primarily conducted at a local level, meaning that income and costs arise in the same currency. Because of the com-pany’s limited currency exposure, Acando does not currently utilize any derivative instruments to cover risks related to currency fluctu-ations.

Income taxes Recognized income tax includes tax to be paid or received in the current year, adjustments relating to current tax for preceding years and changes to deferred tax. All tax liabilities and tax assets are valued at nominal amounts and are recognized in accordance with the tax rules and tax rates that have been decided or announced and that are likely to be adopted. For items recognized in profit or loss, the corresponding tax is also recognized in profit or loss. The tax effects of items recognized directly against equity are recognized against equity.

Deferred tax is calculated according to the balance sheet method on all temporary differences that arise between carrying amounts and tax values of assets and liabilities. Deferred tax assets pertain-ing to loss carry-forwards or other future fiscal deductions are recog-nized to the extent that the loss is likely to be offset against future profits. Tax regulations in Sweden and certain other countries allow tax deductions for allocations to special reserves. In the consoli-dated financial statements, untaxed reserves are divided into an equity portion and a deferred tax liability. Deferred tax is calculated based on the applicable tax rate in each respective country.

Employee remuneration PensionsThe Group has both defined-contribution and defined-benefit pen-sion plans. A defined-contribution plan is a pension plan in which the Group pays defined premiums to a separate legal entity. The Group has no legal or informal obligations to pay further premiums. Payments for defined-contribution plans are expensed during the period in which employees render the services to which the contri-bution relates. In defined-benefit pension plans, remuneration is paid to employees and previous employees based on both the em-ployee’s salary on the date the employee enters retirement and the number of years of service of the employee. The Group bears the risk for the determined remuneration being paid. Payments made relating to defined-benefit pension plans fall within the framework of the ITP plan (Swedish supplementary pension for salaried work-ers), which is financed through insurance with Alecta (a Swedish occupational pensions company). With regard to defined-benefit plans, the pension cost and pension liabilities are calculated pursu-ant to IAS 19R. The key actuarial assumptions applied in the calcu-lation for 2014 are stated in Note 10. The assumptions are evaluated each year by independent actuaries.

Alecta has not been able to provide sufficient information to report the Group’s proportional share of its defined-benefit com-mitments and of the plan assets and expenses associated with

the plan. Alecta therefore cannot provide information on the Group’s share of any surplus or deficit in the plan.

According to a statement of the Swedish Financial Reporting Board (UFR 3), a pension plan within the framework of the ITP plan financed through insurance with Alecta should be classified as if it were a defined-contribution plan.

The pension liability in the balance sheet pertains to the value of the future pensions provided for as a liability in the balance sheet. The calculation and payment of pensions in Norway is administered by Storebrand AS and in Sweden this is administered by PRI Pensions-tjänst AB and secured by Pensionsgaranti/FPG, where Acando applies IAS 19R. The discount rate in Norway is based on mortgage bonds (OMF, covered bonds issued under Norwegian rules) with a maturity corresponding to the commitment and in Sweden it is based on mortgage bonds with a maturity corresponding to the commitment.

Share-savings programAt year-end 2014, the Acando Group maintained four outstanding share-savings programs. The principal objective of the programs is to increase the possibility of retaining and recruiting key employees, as well as to improve the long-term commitment to both the oper-ation and results, and to raise the motivation of employees and their feeling of affinity with the company.

The Group’s costs for the share-savings programs are recognized in accordance with IFRS 2 Share-Based Payment. Costs are esti-mated based on the allocation shares’ theoretical value, adjusted for restrictions applying to the right of disposal and employee turn-over, and are accrued over the term of the program. For countries where the employee options may result in costs in the form of social security contributions, the Group makes an ongoing provision for social security expenses corresponding with share price trends during the term of the programs.

Provisions Provisions comprise liabilities that are uncertain as to the amount in which or the point in time at which they will be paid. Provisions are recognized when the Group has or could be considered to have a commitment as a result of events that have occurred and where it is probable that payment will be required to fulfill the commitment. Provisions also require that a reliable estimate can be made of the amount that will be paid.

Provisions for restructuring measures are made when a detailed, formal plan of action is in place and well-founded expectations have been created among those who will be affected by the ac-tions.

Earnings per shareThe calculation of earnings per share is based on the net profit for the year (in total, from continuing operations) in the Group that is attributable to the Parent Company’s shareholders and on the weighted average number of shares outstanding during the period. When calculating earnings per share after dilution the profit and the average number of shares are adjusted to take into account the effects of potential diluting ordinary shares, which in reported peri-ods comprise convertible bonds, warrants and allocation shares (Matching Shares and Performance Shares respectively) as well as treasury shares. Dilution from warrants only arises when the exer-cise price is lower than the shares’ market value and is greater the more substantial the difference between the exercise price and the market value. Convertible bonds and warrants/allocation shares are not considered to be diluting if they contribute to the earnings per share from continuing operations being improved (lower loss) after dilution than before dilution.

Income recognition Net sales relates primarily to consultancy and operating services. Services in progress that have been performed but not yet invoiced


are recognized as net sales in the period in which the work was per-formed.

In accordance with the percentage of completion method, in-come and costs from current services performed at a fixed price are recognized in relation to each project’s degree of completion on the balance-sheet date. A project’s degree of completion is determined by comparing the costs incurred as at the balance-sheet date with estimated total costs. When the outcome of a service assignment cannot be reliably estimated, income is only recognized to the extent that it corresponds to costs that are likely to be compensated for by the customer. Anticipated project losses are expensed immediately.

License income, support and maintenance income for software, and income from the sale of application programs developed by Acando or a third party constitute a marginal part of net sales.

For licenses/software, income is recognized when the product has been delivered and, as a rule, an invoice has been sent and pay-ment is expected within twelve months of delivery. Income from support and maintenance is recognized and accrued in accordance with the applicable agreements.

Interest incomeInterest income is recognized allocated over the term of the receiv-able using the effective interest method. When the value of a receiv-able has declined, the Group reduces the carrying amount to the recoverable amount, which comprises the estimated future cash flow discounted by the original effective interest for the instrument, and continues to redeem the discounting effect as interest income. Interest income from written-down loans is recognized at the origi-nal effective interest.

Dividend incomeDividend income is recognized when the right to receive payment has been granted.

Leasing Acando does not have any assets that are rented through financial leasing contracts, such as those in which all risks and benefits regard-ing the leased asset and associated with ownership have been trans-ferred to the Group. Leasing agreements where all significant risks and benefit associated with ownership fall on the lessor are classi-fied as operating leases. All leasing agreements are defined and recognized as operating leases. This means that the leasing fee is recognized as a cost in profit or loss, and allocated over the term, starting from initial utilization, which may differ from what has ac-tually been paid in the form of leasing fee during the year. Acando’s leasing contracts pertain primarily to the leasing of premises, the leasing of motor vehicles and mechanical equipment.

Accounting policies for the Parent CompanyThe Parent Company’s Annual Report was prepared in accordance with the Swedish Annual Accounts Act and RFR 2 Accounting for Legal Entities. RFR 2 means that the Parent Company, in the annual report for the legal entity, must apply all of the IFRS standards and statements as approved by the EU as far as is possible within the framework of the Swedish Annual Accounts Act and with regard to the relation between accounting and taxation. The recommendation describes the exceptions that may be made from and additions that may be made to IFRS. Differences between the Group’s and the Parent Company’s accounting policies are described below.

SubsidiariesParticipations in subsidiaries are recognized in the Parent Company in accordance with the cost method. The recognition of transaction costs directly attributable to the acquisition of subsidiaries deviates from the Group’s recognition of this item. The Parent Company’s cost includes costs that are directly attributable to the acquisition. As income, only dividends received are recognized on condition that they have been earned after the acquisition. Dividends that

exceed such earned profits are considered as a repayment of the investment, and reduce the participation’s carrying amount.

Group contributions and shareholders’ contributionsGroup contributions are recognized in accordance with RFR 2 [IAS 27] paragraph 2 and RFR 2 [IAS 18] paragraph 3.

Dividends to Parent Company shareholdersDividends to shareholders in the Parent Company are recognized as a liability in the consolidated financial statements for the period in which the dividend was approved by the shareholders.

Tangible assetsTangible assets in the Parent Company are recognized at cost less accumulated depreciation and any impairment loss in the same way as for the Group, but with the addition of any write-up in value.

Financial instrumentsNon-current financial assets are valued at cost less any impairment loss and current financial assets in accordance with the principle of lowest value.

Format of the income statement and balance sheetThe Parent Company follows the format of the Swedish Annual Accounts Act with regard to its income statement and balance sheet which, among other things, entails a different format for equity and that provisions are reported under a separate heading in the balance sheet.

Untaxed reserves and deferred taxesThe recognition of untaxed reserves in the balance sheet means that the recognition of deferred taxes deviates from the Group’s accounting policies. Generally accepted accounting policies and tax legislation in Sweden require companies to recognize certain differences between the basis for taxes and the carrying amount for tax as an untaxed reserve in the balance sheet in the financial statements for individual companies. Changes in these reserves are recognized in profit or loss as a provision for or an exercise of untaxed reserves.

NOTE 3 FINANCIAL RISK MANAGEMENT

A business operation can be exposed to various financial risks: market risk (currency risk, interest risk and price risk), credit risk and liquidity risk. The Group’s policy for managing these risks is to endeavor to minimize potential unfavorable risks for the Group’s financial results. Risk management is performed both centrally and decentralized in the operating subsidiaries, in accordance with established policies and guidelines as set by the Board and the company’s management.

Market risk Currency risk In 2014, in addition to its Swedish operations, Acando had opera-tions in Germany, Norway, Finland and the UK as well as delivery centers in India and Latvia. The most important currency exposure relates to the EUR and the NOK. The currency risk can be divided into translation risk and transaction risk. Translation risk refers to the risk that the value when measured in SEK of net investments in foreign currencies fluctuates due to changes in exchange rates. Transaction risk refers to the effect on net results and cash flow as a result of changes in the value of operative flows in foreign curren-cies corresponding to changes in exchange rates. The currency exposure that arises from net assets in the Group’s operations abroad is not hedged.

Operations are carried out primarily at a local level, meaning that


income and costs arise in the same currency. Because of the com-pany’s limited currency exposure, Acando does not currently utilize any derivative instruments to cover risks related to currency fluctu-ations.

Price risk The Group is not exposed to any price risk.

Interest risk relating to cash flow and fair values The Group’s cash and cash equivalents comprise interest-bearing assets. Changes in the general market interest rates can therefore influence the Group’s interest income. Interest-bearing assets are invested with major commercial banks with high credit ratings.

Credit risk The credit risk is the risk that a party to a transaction with a financial instrument cannot fulfill its obligation. Credit risks arise through cash and cash equivalents, other deposits with banks and financial institutions and credit exposure in relation to the Group’s customers.

The overwhelming majority of Acando’s assignments are invoiced on an ongoing basis, meaning that time spent is invoiced each month. A credit rating is performed for all new customers, based on information from a credit-rating agency. The size of each customer’s credit risk is appraised individually. Historically, customer losses have been low. The ten largest customers represent approximately 24 percent (33) of the Group’s net sales and consist of large and sound companies. The maximum exposure to credit risks regarding financial assets corresponds to the carrying amount of each cate-gory, refer to Note 24. Aging analysis of outstanding accounts receivable is detailed in Note 21.

Liquidity risk Cash-flow forecasts are produced by the Group’s operating com-panies and are aggregated by the joint Group function. The fore-casts are followed up on an ongoing basis to ensure the Group has sufficient cash and cash equivalents to meet its operational needs. In order to facilitate liquidity planning and liquidity management, the Group has credit facilities (bank overdraft facilities) and a cash pool.

Surplus liquidity in the Group’s operating companies, exceeding the amount needed to manage the need for working capital, is con-tinuously assessed by the joint Group function as to whether and how this surplus liquidity should be invested. The surplus is invested in accordance with the investment policy adopted by the Board, meaning that surplus liquidity is invested in interest-bearing secu-rities, such as treasury bills, or similar instruments with limited credit risk. All cash and cash equivalents are invested with major commercial banks with high credit ratings.

For an analysis of Group financial liabilities divided on the balance- sheet date according to the time remaining before the agreed maturity date, refer to Note 24.

Capital structure The Group’s objective regarding the capital structure, which com-prises the Group’s equity, is to safeguard the Group’s ability to con-tinue its business operations so as to continue generating a return on investment for shareholders and benefits for other stakeholders.

To maintain or adjust the capital structure, Acando may change the dividend paid to shareholders, repay capital to shareholders, issue new shares, buy back shares or divest assets to reduce debt.

NOTE 4 IMPORTANT ESTIMATES AND ASSESSMENTS IN THE APPLICATION OF THE COMPANY’S ACCOUNTING POLICIES

To prepare the financial statements according to generally accepted accounting policies, the company’s management and Board of Directors must make assessments and assumptions that affect recognized income and cost items as well as asset and liability items and other disclosures. Estimates and assessments are evaluated on an ongoing basis, based on historical experience and other factors, including expectations of future events that are considered reason-able under prevailing circumstances. The actual outcomes may differ from the assessments made. The areas in which estimates and assumptions could entail a significant risk of adjustments in the carrying amount of assets and liabilities in future fiscal years are primarily as follows:

Review of impairment need for goodwill Group management regularly tests the need for impairment for goodwill according to the accounting policies described under “Impairment of non-financial assets”. The recoverable amounts of cash-generating units have been established by calculating their value in use. The assumptions and assessments that are made with respect to anticipated cash flows and discount rates in the form of the weighted average cost of capital, as well as a sensitivity analy-sis, are described in Note 15. Forecast cash flows are based on the best possible estimates regarding future income and operating expenses. The recoverable amount of the additional goodwill aris-ing out of the acquisition of Connecta was established through assessment of the market value.

Valuation of deferred tax assetsDeferred tax assets related to loss carry-forwards or other future fiscal deductions are recognized to the extent it is considered prob-able that the deduction may be offset against future taxation.

Carrying amounts of deferred tax assets for each balance-sheet date are set out in Note 18.

Accounts receivableAccounts receivable are reported net after provision for bad debts. The net value reflects the amounts that are expected to be received based on circumstances known on the balance-sheet date. Changes in such circumstances, for example an increase in the number of pay-ments not being made or changes arising in an important custom-er’s financial position, may lead to divergences from the valuation.

Income recognition of fixed-price projects The Group’s income is derived from various forms of consultancy and operating services as well as from the sale of licenses. Income is recognized in the period in which it is earned. Income attributable to fixed-price projects is recognized in line with the degree of com-pletion in accordance with the percentage of completion method. Accordingly, income, costs and profit are recognized in the period in which the work is performed. The calculation of the proportion that will be recognized is based on the time spent on the work in relation to the estimated total time.

DisputesAs part of normal business activities, Acando may be involved in disputes. Disputes can become costly and time consuming, and can disrupt normal business activities. There are no disputes currently considered to be of material significance.


NOTE 5 SEGMENT INFORMATION

Segment information is based on how Acando’s operation is man-aged and how information is presented to the company’s CODM as a basis for strategic decisions. The Group carries out consultancy operations in several geographic markets, and the reporting coin-cides with the geographic areas Sweden, Germany, Norway and Other countries. The delivery centers in India and Latvia comprise integrated parts of the Sweden segment.

The results for each segment include operating income and operating expenses considered to be attributable to the operating activities. The operating expenses include amortization and depre-ciation of intangible and tangible assets considered to be attribut-

able to each segment. The assets included in each segment include intangible and tangible assets attributable to the segment, and all current assets apart from current tax assets. When income has been distributed geographically, this has been done on the basis of the country in which the invoicing has been carried out. Net financial items are not distributed by segment in the internal reporting, and therefore this information has not been provided. Internal purchases and sales of services are concluded at market prices. The allocation between external and internal income is not shown since the income per segment is not significant.

Sweden Germany Norway Other countriesOther and

Group items Total

SEK (thousand) 2014 2013 2014 2013 2014 2013 2014 2013 2014 2013 2014 2013

Net sales 1,141,778 774,044 294,715 290,642 295,539 223,988 158,401 159,313 -34,253 -10,229 1,856,180 1,437,759

Operating profit/ loss by segment 93,607 48,480 23,770 11,551 21,493 11,748 3,858 11,046 -24,832 -17,149 49,999 65,677

Nonrecurring items -67,897 -

Financial income 4,158 1,933

Financial expenses -3,318 -1,701


Taxes on profit for the year -13,709 -15,930


Assets 1,215,852 487,524 222,561 208,091 205,595 224,141 72,218 84,680 - - 1,716,225 1,004,436

Non-current assets1) 696,957 249,818 116,411 116,658 129,391 124,843 18,167 24,818 - - 960,926 516,137

of which, goodwill (Note 15) 681,183 239,896 114,100 114,100 127,957 122,929 16,555 22,834 - - 939,795 499,759

Liabilities 392,412 156,835 50,568 44,974 78,786 65,135 26,149 26,569 - - 547,915 293,513

Investment in non-current assets 10,999 4,491 1,057 608 749 1,805 438 914 - - 13,243 7,818

of which intangible assets 3,114 1,955 266 45 - 106 10 - - - 3,390 2,106

of which tangible assets 7,885 2,536 791 563 749 1,699 428 914 - - 9,853 5,712

Amortization and depreciation -9,754 -8,255 -1,364 -1,583 -1,264 -1,844 -926 -825 - - -13,308 -12,507

Impairment of assets - - - - - - -7,296 - - - -7,296 -

Average number of employees 850 589 271 286 172 110 85 85 - - 1,377 1,070

1) Financial assets are not allocated by segment. See table below.


Apart from net sales to other segments, Group adjustments attrib-utable to net sales consist of some operating inter-Group income within each segment. Internal purchases and sales of services are concluded at market prices.

Group adjustments attributable to operating profit consist of costs that have not been charged to the segments’ operating profit. Apart from inter-Group transactions, Group adjustments attribut-able to assets consist of some Group adjustments, among them capitalization of deferred tax assets. Investments in non-current assets relate to goodwill, other intangible assets and tangible assets.

The assets of the segments in the above table are allocated according to the respective geographic segment’s assets including associated consolidated goodwill.

Segment assets for reportable segments are reconciled against total assets as follows:


Segment assets for reportable segments, as shown above 1,716,225 1,004,436

Unallocated:

Deferred tax 51,892 41,727

Other non-current financial assets 6,121 4,047

Current tax 15,916 2,702

Other undistributed assets - -

Total assets per the balance sheet 1,790,155 1,052,912

Segment liabilities for reportable segments are reconciled against total liabilities as follows:


Segment liabilities for reportable segments, as shown above 547,915 293,513

Unallocated:

Deferred tax liabilities 2,406 1,178

Current tax liabilities 6,793 5,676

Current borrowings and pension liabilities 120,140 55,010

Provisions 49,898 268

Other undistributed liabilities - 125

Total liabilities per the balance sheet 727,152 355,770

Parent Company The Parent Company’s net sales amounted to TSEK 53,259 (44,760). The Parent Company’s income from subsidiaries amounted to 100 percent (100). The Parent Company’s costs from subsidiaries amounted to 6 percent (7).

NOTE 6 OTHER OPERATING INCOME

Income arising from activities outside of normal business activities is recognized under other operating income. This includes items of a recurring nature such as rental income, and items of a more occa-sional nature such as sales of non-current assets.

Group


Rental income 1,015 30

Profit on sale of non-current assets 304 19

Reversal of discounts 218 268

Reversal of commissions - 2,948

Other items 1,853 666

TOTAL 3,390 3,931

NOTE 7 COMMITMENTS AND MAJOR LEASE COMMITMENTS

Future payment commitments for the Group in respect of non-can-celable operating leases are distributed as follows:

Group Parent Company

SEK (thousand) 2014 2013 2014 2013

Within 1 year 40,880 39,595 1,255 1,135

Between 2 and 5 years 71,296 54,463 3,530 2,609

Over 5 years 27,400 - - -

Total payment commitments 139,576 94,058 4,785 3,744

Acando has operating leases. The Group’s leasing costs pertain primarily to the rental of premises. It is principally the Parent Com-pany that enters into the leasing agreements used by the majority of Group companies, and in turn invoices these costs to the Group companies involved.


SEK (thousand) 2014 2013 2014 2013

Expense for the year relating to operating leases of assets amounted to: 48,863 34,914 2,824 87

Of which rent for premises 37,075 25,445 2,740 -

NOTE 8 AUDIT FEES


SEK (thousand) 2014 2013 2014 2013

PricewaterhouseCoopers

Audit fees 1,242 923 394 481

Audit related fees 702 297 250 229

Tax consultancy fees 100 176 - 50

Other services 173 170 50 53

Total, PricewaterhouseCoopers 2,217 1,566 694 813

Others

Audit fees 259 135 - -

Audit related fees 69 59 - -

Total others 328 194 - -

TOTAL 2,545 1,760 694 813

During the period, in addition to its auditing assignments, PwC performed certain audit-related assignments, tax-related and other consulting services for the company. The audit-related assignments that were conducted during the period included reviewing interim reports. Tax consulting services included general tax issues. Other consulting services included advisory services pertaining to auditing and assessments of internal control.

Auditing fees to other auditors primarily pertain to legal audits for small companies.


NOTE 9 EMPLOYEES AND PERSONNEL EXPENSES

Average number of employees

2014 2013

TotalOf whom,

women TotalOf whom,

women

Parent Company 1 - 1 -

Group company

Sweden 849 240 588 172

Germany 271 46 286 50

Norway 172 42 110 21

Other countries 85 20 85 21

GROUP TOTAL 1,377 348 1,070 264

On the balance-sheet date, the Group had a total of 1,826 (1,087) full-year employees.

Salaries, other benefits and social security expenses

2014 2013

SEK (thousand)

Salaries and other

benefits

Social security

expenses (of which pension)

Salaries and other

benefits

Social security

expenses (of which pension)

Parent Company1) 5,201 2,320(1,067) 5,002

2,122(1,046)

Group company

Sweden 521,078 224,588(57,908)

344,119 159,740(41,745)

Germany 161,671 28,356(1,920)

159,842 28,473(1,963)

Norway 148,300 27,566(4,533)

99,952 20,627(4,539)

Other countries 60,311 11,373(6,414)

52,456 9,862(5,552)

GROUP TOTAL896,560 294,203

(71,842)661,370 220,824

(54,846)

1) Salaries and benefits include Directors’ fees that are classified as other external expenses in profit or loss.

Remuneration to senior executivesThe fees received by the Chairman and other members of the Board are resolved by the Annual General Meeting of shareholders. Fees are paid for committee work.

Remuneration paid to the President and other senior executives comprises fixed salary, variable salary and pension.

Remuneration paid to the President is determined by the Board of Directors, upon consideration of recommendations of the Remuner-ation Committee, whose work is described in the 2014 Corporate Governance Report.

In 2014, the Group management comprised Carl-Magnus Månsson, Anneli Lindblom, Christer Norrman, Guido Ahle, Sven Ivar Mørch, Ferhat Kaya, Ben Wales and John Karnblad. The composition of Group management for 2014, is shown on page 24.

Variable remuneration for the President is maximized to 100 percent of fixed salary and is performance-related. For other senior executives, variable remuneration is maximized at 50–100 percent of fixed salary and is calculated according to the same principles as for the President.

PensionsThe President’s pension premium less a deduction for healthcare insurance corresponds to 35 percent of pension-related fixed salary.

The President can elect to exchange variable remuneration for pension insurance. Other senior executives have a pension premi-um less a deduction for healthcare insurance amounting to a maxi-mum of 30 percent of pensionable fixed salary. The Group’s retire-ment age is generally 65 years of age.

Severance payShould the President resign or be given notice of termination, a notice period of six months applies.

If Acando terminates the President’s employment, a severance payment of 12-months’ salary with deduction for any income from other employment is payable.

Other senior executives have a notice period of 8–12 months should employment be terminated by the company, and of 5–12 months should they resign.

Other senior executives are not entitled to receive any severance payment.

Guidelines for remuneration to senior executivesThe Group offers competitive terms at market rates thus enabling the company to attract and retain senior executives. Remuneration comprises salary, long-term incentive program and pension provi-sions. Salary consists of a fixed salary and a variable salary. The aim is for the fixed salary together with 40 percent of the maximum possible variable salary to comprise a competitive salary which is received when the Group’s quantitative performance targets, as set by the Board, are achieved.

The following guidelines for remuneration to senior executives were adopted by the AGM on May 5, 2014: Fixed salary is reviewed annually. Variable salary, which is reviewed annually, is linked to the Group’s performance and limited to a maximum of 100 percent of fixed salary. Opportunity to participate in the long-term incentive program is provided in accordance with resolutions taken at the company’s AGMs. Pensions must be defined-contribution based to provide predict-ability. For the President, premiums amount to 35 percent of fixed salary and for the other members of Group management, a maxi-mum of 30 percent. The retirement age is generally 65 years of age. On termination by the Company, the severance payment and termi-nation pay for senior executives can together, at most, amount to 18 months’ salary with offsetting for any income from any other employment or business activity during the last 12 months. The President has a notice period of six months. If Acando terminates the President’s employment, a notice period of six months applies and a severance payment of 12-months’ salary is payable with off-setting for any income from other employment or business activi-ty during the last 12 months. The President is entitled to give no-tice and receive the same terms as if the company itself had given notice if any individual shareholder or a group of sharehold-ers in formal partnership obtain a holding in excess of 50 percent of the voting rights in the company.

These guidelines apply to employment contracts agreed after the 2014 AGM and for any changes to existing terms and conditions. Departure from the above guidelines is possible if the Board, in individual cases, deems that special reasons apply. No departures from the above guidelines were made in 2014.

No significant related party connections have been identified in the Group.


Remuneration to the Parent Company’s Board members, President and other senior executivesRemuneration and other benefits 2014

SEK (thousand)Directors’ fees/

fixed salaryVariable

remuneration Other benefits Pension costsFinancial

instruments1) Total

Ulf J Johansson, Chairman of the Board2) 563 563

Anders Skarin, Board member2) 263 263

Alf Svedulf, Board member 200 200

Birgitta Klasén, Board member2) 263 263

Mats O Paulsson, Board member2) 263 263

Magnus Groth, Board member 200 200

Susanne Lithander, Board member 280 280

Carl-Magnus Månsson, President 3,090 3,090 80 1,067 - 7,327

Other senior executives (7 persons) 11,022 5,710 173 1,625 - 18,530

TOTAL 16,142 8,800 253 2,692 - 27,888

1) Regards the cost of share-based remuneration and is recognized in accordance with IFRS 2, see Note 2. In 2014, a reversal was performed, see Note 33. 2) Excluding an amount that corresponds to the statutory social security contributions for the portion of the fee that was invoiced through a limited liability company.

Remuneration and other benefits 2013

SEK (thousand)Directors’ fees/

fixed salaryVariable

remuneration Other benefits Pension costsFinancial

instruments1) Total

Ulf J Johansson, Chairman of the Board2) 563 563

Anders Skarin, Board member2) 263 263

Alf Svedulf, Board member 200 200

Birgitta Klasén, Board member2) 263 263

Mats O Paulsson, Board member2) 263 263

Magnus Groth, Board member 200 200

Susanne Lithander, Board member 280 280

Carl-Magnus Månsson, President 2,886 - 85 1,046 - 4,017

Other senior executives (7 persons) 10,460 336 131 1,610 - 12,537

TOTAL 15,376 336 216 2,656 - 18,584

1) Regards the cost of share-based remuneration and is recognized in accordance with IFRS 2, see Note 2. In 2013, a reversal was performed, see Note 33.2) Excluding an amount that corresponds to the statutory social security contributions for the portion of the fee that was invoiced through a limited liability company.

The Board comprises five (five) men and two (two) women. The two employee representatives do not receive any fees. In 2014, senior executives comprised seven men (seven) and one woman (one).

Those Board members that meet certain requirements can invoice for the amount payable as Directors’ and committee fees. These Board members may then add a sum that corresponds to social security contributions to the amount invoiced. The social security contributions thus included in the amount invoiced are no higher than those otherwise payable by the company. The entire fee, that is, the cash payment of Directors’ fees and committee fees, including social security contributions, comprises the invoiced Directors’ fees.

NOTE 10 PENSION LIABILITIES

The commitments for retirement and family pensions for salaried employees in Sweden are secured through insurance with Alecta (a Swedish occupational pensions company). According to a state-ment from the Swedish Financial Reporting Board’s Emerging Issues Task Force (UFR 3), this is a multi-employer defined-benefit plan, but in view of the fact that a consistent and reliable method is not available to distribute these commitments, etc. among the par-ticipants, the pension plan is recognized as a defined-contribution plan in accordance with ITP.

The year’s charges for pension insurance subscribed with Alecta amounted to TSEK 1,733 (2,042). At the end of 2014, Alecta’s sur-plus in the form of its collective consolidation ratio was 144 (148) percent. Alecta’s surplus may be distributed to the company and/ or the insured parties.

FPG/PRIInstead of paying premiums for retirement pension insurance (ITP) to Alecta, the company may establish provisions for the value of future pensions as a liability in the balance sheet. This alternative is known as FPG/PRI and was used in previous years within the for-mer Resco Group. This implies that the calculation and payment of pensions is performed by PRI Pensionstjänst AB and is secured by Pensionsgaranti/FPG in order to safeguard employees’ pensions. Acando no longer uses the FPG/PRI method for newly earned ITP, but instead pays ITP premiums directly to Alecta. However, the pension liability regarding earned ITP from previous years remains in the consolidated statement of financial position, and is recalcu-


lated each year in view of the fact that the ITP plan is a defined- benefit and not a defined-contribution plan.

A summary of the pension cost and pension liability of TSEK 25,446 (20,175) relating to the FPG/PRI alternative is set out below. The discount rate in Norway is based on mortgage bonds (OMF, covered bonds issued under Norwegian rules) with a matu-rity corresponding to the commitment and in Sweden it is based on mortgage bonds with a maturity corresponding to the commit-ment.


Pension costs

Service costs in current year -1,109 720

Interest expense (Note 12) 760 770

Total pension costs for the year -348 1,490

Pension liabilities

Present value of liabilities 27,483 28,480

Fair value of plan assets -2,038 -8,305

Surplus (minus) or deficit (plus) 25,446 20,175

Pension liabilities to recognize in the balance sheet 25,446 20,175

Present value of liabilities

Present value of liabilities at January 1 28,480 32,693

Service costs in current year 239 550

Interest expense 982 1,101

Past service costs – curtailment/plan amendment -1,465 -

Settlement and loss on settlement -3,480 -

Benefits paid -282 -292

Actuarial losses (plus) and gains (minus) on the liability 3,058 -4,739

Translation difference, Norway -49 -833

Present value of liabilities at December 31 27,483 28,480

Population at beginning of the year

Active 9 11

Pensioners 13 13

Policyholders 161 162

Total 183 186

Change in pension liabilities recognized in the balance sheet

Pension liabilities at beginning of year 20,175 23,413

Pension costs (plus)/ pension income (minus) -1,041 673

Interest expense 730 784

The year’s actuarial gains/losses on the liability to other comprehensive income 4,576 -3,467

Benefits paid -282 -292

Payments from the employer -1,080 -930

Premium funds 2,348 -

Translation difference, Norway 20 -6

Pension liabilities at year-end 25,446 20,175

Actuarial assumptions at beginning of year

2014 Sweden

2014Norway

2013 Sweden

2013Norway

Discount rate 2.70% 3.00% 4.10% 4.10%

Expected return on plan assets n/a n/a

Rate of salary increases n/a 3.25% n/a 3.75%

Change in income basic amount n/a 3.00% n/a 3.50%

Inflation 1.50% 0.10% 2.00% 0.60%

Life expectancy FFFS 2007:31 FFFS 2007:31

Employee turnover n/a n/a

Additional disclosures actuarial gains/losses 2014 2013

Experience-based adjustments 514 681

Effect of changed demographic and financial assumptions -5,090 2,786

Total actuarial gain (loss) -4,576 3,467

NOTE 11 AMORTIZATION/DEPRECIATION AND IMPAIRMENT OF INTANGIBLE AND TANGIBLE ASSETS


SEK (thousand) 2014 2013 2014 2013

Amortization of intangible assets (Note 16) -4,733 -3,123 -1,905 -2,160

Depreciation of tangible assets (Note 17) -8,575 -9,384 -4,833 -5,743

Impairment of intangible assets1) (Notes 15 and 16) -7,296 - - -

Total amortization, depre-ciation and impairment -20,604 -12,507 -6,738 -7,903

1) Pertains to Acando UK.

NOTE 12 FINANCIAL INCOME AND FINANCIAL EXPENSES


SEK (thousand) 2014 2013 2014 2013

Profit from participations in Group companies

Dividend from subsidiaries - - 71,000 131,134

Impairment of loan receivables in subsidiaries1) - - - -2,078

Total profit from participa-tions in Group companies - - 71,000 129,056

Other interest income and similar items

Interest income and similar items 1,074 728 200 303

Interest income from Group companies - - 1,462 839

Other items 5 152 - 152

Exchange-rate differences 3,079 1,053 3,089 165

Total financial income 4,158 1,933 4,751 1,459

Interest expenses and similar items

Interest expenses -1,835 -702 -1,052 -433

Interest expense on PRI liability (Note 10) -760 -770 - -

Exchange-rate differences -506 -229 -212 -28

Other items -217 - - -

Interest expenses from Group companies - - -635 -590

Total financial expenses -3,318 -1,701 -1,899 -1,051

Net financial items 840 232 73,852 129,464

1) Pertains to the discontinued operation in Denmark.


NOTE 13 TAX


SEK (thousand) 2014 2013 2014 2013

Current tax

Current tax expense -10,290 -6,949 - -

Current tax attributable to previous years 1,142 -35 - -

Total current tax expense -9,148 -6,984 - -

Deferred tax

Attributable to deferred tax assets (Note 18) -2,205 -9,962 -748 -1,729

Attributable to deferred tax liabilities (Note 18) -1,228 281 - -

Income tax pertaining to items in other compre-hensive income -975 713 - -

Translation difference -153 22 - -

Total deferred tax -4,561 -8,946 -748 -1,729

Total tax expense -13,709 -15,930 -748 -1,729

The Group’s tax expense for the year amounted to TSEK 13,709 (15,930) or 31 percent (24) of profit after financial items.

The Parent Company’s tax expense for the year amounted to TSEK 748 (1,729) or 1 percent (1) of profit after financial items.

Reconciliation of actual taxReconciliation of the Group’s weighted average tax, based on the respective countries’ tax rates, and the Group’s actual tax.


SEK (thousand) 2014 2013 2014 2013

Profit before tax 43,543 65,909 74,520 136,432

Income tax rate in Sweden (22%) -9,579 -14,500 -16,394 -30,015

Tax effects of:

Non-deductible expenses/non-taxable income -1,701 2 15,646 28,286

Current tax attributable to preceding years 1,142 -35 - -

Differences between Sweden’s tax rate (22%) and other countries’ tax rates -3,004 -1,328 - -

Reversed tax allocation reserve - -69 - -

Other items -566 - - -

Total recognized actual tax -13,709 -15,930 -748 -1,729

The Group has unutilized loss carry-forwards of SEK 243 m (202), of which SEK 23 m stem from the Danish operations and are not capitalized. The majority of these are assessed as being usable in the forthcoming years. The Group recognized a deferred tax asset attributable to loss carry-forwards of SEK 48 m (39), which was recognized in the balance sheet as a financial asset. This asset will decline in pace with the utilization of loss carry-forwards. See Note 18.

NOTE 14CALCULATION OF EARNINGS PER SHARE, BASED ON EARNINGS

Change in number of shares

2014 2013

No. of shares outstanding at beginning of period 72,181,429 74,411,429

Cancellation of shares - -2,230,000

Non-cash issue 32,225,990 -

No. of shares outstanding at end of period 104,407,419 72,181,429

of which, treasury shares 1,542,000 1,542,000

Earnings per share before dilution Earnings per share before dilution is calculated by dividing the profit for the year from continuing operations by a weighted average num-ber of shares outstanding during the period. Treasury shares are excluded.

2014 2013

Profit for the year attributable to the shareholders in Acando AB, SEK (thousand) 29,834 49,979

No. of shares outstanding 84,147,858 70,750,758

Earnings per share, SEK 0.35 0.71

Earnings per share after dilution Earnings per share after dilution is calculated by dividing the profit for the year from continuing operations by the weighted average number of shares outstanding for the period after dilution by out-standing warrants, share-savings programs and convertibles. Treasury shares are excluded.

2014 2013

Profit for the year attributable to the shareholders in Acando AB, SEK (thousand) 29,834 49,979

Average number of shares after dilution 84,147,858 70,750,758

Earnings per share, SEK 0.35 0.71


NOTE 15GOODWILL

Group


Opening balance 499,759 461,250

Investments1) 447,012 46,173

Translation differences for the year 321 -7,664

Closing balance 947,091 499,759

Impairments for the year2) -7,296 -

Closing impairments -7,296 -

Net carrying amount 939,795 499,759

1) Acquisition of E-vita AS in Q4, 2013, Cloudstep in Q1 2014 and Connecta in Q3 2014 (Note 34).

2) Pertains to the UK (Note 35).

Impairment testing of goodwillAccording to IFRS 3 Business Combinations, the carrying amount of goodwill should be tested for impairment every year. If a decline in value is indicated, it is tested for impairment in accordance with IAS 36. Each year, in the fourth quarter, the Group tests for an im-pairment need in respect of goodwill.

Goodwill is allocated over the Group’s cash-generating units (CGUs), which correspond in principle with the Group’s operating segments, that is to say the geographic areas in which the Group operates: Sweden, Germany, Norway, Finland and the UK as well as the delivery centers in India and Latvia.

A table of the allocation of goodwill per geographic area is shown below.


Sweden 681,183 239,896

Germany 114,100 114,100

Norway 127,957 122,929

Finland 16,555 16,383

United Kingdom 0 6,451

Total goodwill 939,795 499,759

The recoverable amount for CGUs is determined based on calcula-tions of values in use. These calculations are based on estimated future pre-tax cash flows based on the budget year 2015 and fore-casts for the period 2016 through 2018 produced by Group man-agement.

The production of forecasts is based on a number of assump-tions regarding growth and operating margin per geographic unit. The assessment of future cash flows, first and foremost, includes assumptions about the following financial parameters: sales growth, the operating margin trend (based on hourly rates, the billing ratios and operating overheads in relation to sales), and the operating capital trend and investment needs.

Cash flows for the period 2016–2018 are extrapolated with the assistance of estimated growth per geographic market based on industry reports and historic growth. The growth rates applied were in line with those used in preceding years’ forecasts. Beyond the forecast periods, an average inflation rate was used to estimate growth, which corresponded to 1.5 percent for all units.

The weighted average cost of capital (WACC) used has been cal-culated with the help of the capital asset pricing model (CAPM) and is calculated before tax. The WACC reflects specific risks applicable in the various countries and the size of the respective CGU. The WACC used in calculations in 2014 lay in the interval 10.1 percent (12.2) for Sweden, 9.7 percent (11.6) for Germany and 10.6 percent (12.6) for Norway. The change compared with preceding years was attrib-utable to an adjusted risk scenario and the market’s risk premium.

The additional goodwill from the acquisition of Connecta was tested separately due to its recency. The assessment of the recov-erable amount was based on the market value on the transaction date.

Sensitivity analysisA number of sensitivity analyses have been conducted, and lower levels have been used for revenue and operating profit, for example. No indication of an impairment need was seen when these assessments were used either. At year-end 2014, the company’s market capitaliza-tion was well in excess of the operation’s net assets in the company.

NOTE 16OTHER INTANGIBLE ASSETS


SEK (thousand) 2014 2013 2014 2013

Opening balance 21,687 20,007 12,004 10,557

Investments 3,390 2,106 3,114 1,447

Sale/disposal -67 -430 - -

Acquisition of Connecta (Note 34) 2,754 - - -

Translation differences for the year 397 4 - -

Closing balance 28,161 21,687 15,118 12,004

Accumulated amortization, opening balance -18,643 -15,494 -8,943 -6,783

Amortization for the year (Note 11) -4,733 -3,123 -1,905 -2,160

Sale/disposal 57 - - -

Translation differences for the year -391 -26 - -

Accumulated amortization, closing balance -23,710 -18,643 -10,848 -8,943

Net carrying amount 4,451 3,044 4,270 3,061

NOTE 17TANGIBLE ASSETS

Total tangible assets


SEK (thousand) 2014 2013 2014 2013

Equipment, computers, servers and networks 16,170 12,824 9,586 6,845

Land 510 510 - -


Equipment, computers, servers and networks


SEK (thousand) 2014 2013 2014 2013

Opening balance 58,916 59,450 39,547 37,024

Investments 9,853 5,712 7,574 2,536

Sale/disposal -3,108 -5,897 - -13

Acquisition of Connecta (Note 34) 2,323 - - -

Translation differences for the year 1,040 -349 - -

Closing balance, cost 69,024 58,916 47,121 39,547

Accumulated depreciation, opening balance -46,092 -42,859 -32,702 -26,965

Depreciation for the year (Note 11) -8,575 -9,384 -4,833 -5,743

Sale/disposal 2,628 5,779 - 6

Translation differences for the year -815 372 - -

Accumulated depreciation, closing balance -52,854 -46,092 -37,535 -32,702


Land

Group


Opening balance 510 510

Closing balance 510 510

Net carrying amount 510 510


NOTE 18DEFERRED TAX ASSETS AND DEFERRED TAX LIABILITIES

Deferred tax assets – Group

SEK (thousand)Assets at fair value

Temporary differences,

liabilitiesIncentive

programs

Tax loss carry-

forwards Total

Opening balance at January 1, 2013 1,090 1,781 96 48,723 51,690

Recognized in profit or loss for the year (Note 13) -115 -440 -96 -9,311 -9,962

Translation difference - - - -1 -1

Opening balance at January 1, 2014 975 1,341 0 39,411 41,727

Acquisition of Connecta (Note 34) - - - 12,369 12,369

Recognized in profit or loss for the year (Note 13) -135 1,332 - -3,402 -2,205

Translation difference - - - - -

Closing balance at December 31, 2014 840 2,673 0 48,378 51,892

Deferred tax liabilities – Group

SEK (thousand)

Temporary differences, receivables

Untaxed reserves

Other intangible

assets Total

Opening balance at January 1, 2013 1,008 73 379 1,459

Recognized in profit or loss for the year (Note 13) -176 -73 -32 -281

Translation difference - - -

Opening balance at January 1, 2014 832 0 347 1,178

Recognized in profit or loss for the year (Note 13) 57 - 1,171 1,228

Translation difference - - -

Closing balance at December 31, 2014 889 - 1,518 2,406

Deferred tax assets – Parent CompanyAll tax assets pertain to tax loss carry-forwards.


NOTE 19PARTICIPATIONS IN GROUP COMPANIES

Parent Company


At beginning of year 1,076,108 1,078,230

Increase through the acquisition of Connecta (Note 34) 455,845 -

Change in capital - -2,122

Total cost 1,531,953 1,076,108

Impairments

At beginning of year -158,515 -158,515

Accumulated impairment -158,515 -158,515

Carrying amount at year-end 1,373,438 917,593

Specification of the Parent Company’s participations in Group companies

Group companyNo. of

shares Share in %Carrying amount Equity

Net profit for the year

Acando Consulting AB, 556563-0554, Stockholm, Sweden 1,558,884 100 208,954 65,353 16,476

Acando Sverige AB, 556605-9274, Stockholm, Sweden 50,000 100 364,115 35,311 4,657

Frontec Business Solutions AB, 556308-2378, Stockholm, Sweden 1,000 100 7,838 4,242 -40

IDK Fastigheter KB, 916445-3640, Stockholm, Sweden - 100 203 88 0

e-motion technology consulting AB, 556065-9871, Stockholm, Sweden 1,000,000 100 1,733 2,932 4

Profitmodeler Solutions in Sweden AB, 556771-2178, Stockholm, Sweden 1,000 100 1,166 437 148

Acando Europe AB (publ.), 556220-8511, Stockholm, Sweden 36,544,903 100 221,689 146,107 12,811

Indirectly held

Acando Scandinavia AB, 556526-2788, Stockholm, Sweden 100

Acando GmbH, HRB 76048, Germany 100

Acando Finland Oy, 373.787, Finland 100

Indirectly held

Bitec Oy, 2233594-4, Finland 100

Acando Denmark Holding A/S, CVR 30275748, Glostrup, Denmark 500,000 100 0 -122 -40

Indirectly held

Acando Denmark A/S, CVR 26086736, Glostrup, Denmark 100

Acando Ltd, 2926318, Cheshire, UK 155 100 11,071 10,235 -973

Acando AS, 979191138, Trondheim, Norway 2,842,847 100 100,824 35,986 8,394

Indirectly held

Cloudstep AS, 997023536, Ålesund, Norway 100

E-vita AS, 980549593, Oslo, Norway 100

Indirectly held

iKnowBase AS, 982486521, Oslo, Norway 100

Connecta AB,556610-5705, Stockholm, Sweden 9,667,797 93.7 455,845 13,025 30,264

Indirectly held

Adcore AB, 556624-3209, Stockholm, Sweden 100

Connecta Partner Investment AB, 556669-0789, Stockholm, Sweden 100

Indirectly held

Techta AB, 556742-2919, Stockholm, Sweden 100

Titan IT AB, 556895-0314, Stockholm, Sweden 88

Tarento AB, 556762-8101, Stockholm, Sweden 100

Indirectly held

Qb Best On and Off Shore Sweden AB, 556756-0114, Stockholm, Sweden 100

Indirectly held

Qube SIA, 40003819948, Riga, Latvia 100

Tarento Technology Private Limited, U7200KA0210PTC055176, Bangalore, India 96.4

Total Group companies 1,373,438


NOTE 20OTHER NON-CURRENT FINANCIAL ASSETS/ OTHER LONG-TERM RECEIVABLES


SEK (thousand) 2014 2013 2014 2013

At beginning of year 4,047 4,013 1 25

Additional receivables 744 537 - -

Receivables paid 1,617 -122 - -24

Change in value -286 -381 - -

TOTAL 6,121 4,047 1 1

The items principally comprise financial investments.

NOTE 21ACCOUNTS RECEIVABLE


Accounts receivable 566,001 353,007

Provision for doubtful receivables -5,201 -4,433

Accounts receivable - Net 553,891 348,575

Changes in provisions for doubtful receivables 2014 2013

Opening balance -4,433 -1,351

Provisions -4,176 -4,970

Confirmed losses 3,195 1,161

Reversals of unutilized amounts for the period 410 736

Translation differences -197 -9

Closing balance -5,201 -4,433

Age distributionDec 31, 2014

Accounts receivable Gross Provision Net

Not yet due 491,724 - 491,724

Due between 1 and 30 days 45,253 - 45,253


Due between 61 and 90 days 4,315 -934 3,381

Due later than 90 days 6,622 -4,267 2,355

Closing balance 559,092 -5,201 553,891

Dec 31, 2013

Accounts receivable Gross Provision Net

Not yet due 305,587 - 305,587




Due later than 90 days 7,565 -4,433 3,132

Closing balance 353,007 -4,433 348,575

NOTE 22PREPAID EXPENSES AND ACCRUED INCOME


SEK (thousand) 2014 2013 2014 2013

Prepaid rent/leasing 6,569 5,592 230 162

Prepaid insurance 6,969 5,163 35 41

Accrued income 79,452 11,288 9 -

Other items 23,497 14,736 2,523 1,655

TOTAL 116,487 36,779 2,797 1,858

Accrued income includes work completed but, as yet, uninvoiced income attributable to ongoing projects.

NOTE 23CASH AND CASH EQUIVALENTS

Cash and cash equivalents in the balance sheet and cash-flow statement includes the following:


SEK (thousand) 2014 2013 2014 2013

Cash and cash equivalents 75,671 99,057 16,197 10,019

TOTAL 75,671 99,057 16,197 10,019

The Group’s unutilized overdraft facility amounted to SEK 91 m (67) at the end of the year.

NOTE 24FINANCIAL INSTRUMENTS PER CATEGORY IN THE GROUP

Dec 31, 2014

Assets as per balance sheet

Loans and accounts

receivableAssets

at FVTPL Total

Accounts receivable and other receivables excluding pre-payments1) 563,142 - 563,142

Other non-current financial assets - 2,948 2,948

Cash and cash equivalents 75,671 - 75,671

Total 638,813 2,948 641,761

Liabilities as per balance sheetOther financial

liabilities Total

Other long-term liabilities2) 11,211 11,211

Accounts payable and other payables excluding non-financial liabilities3) 199,471 199,471

Total 210,682 210,682

1) Prepayments are excluded from accounts receivable and other receivables since the analysis is only required for financial instruments.

2) The carrying amounts correspond with fair value.3) Financial liabilities, such as accrued social security expenses, are excluded

since this analysis is only required for financial instruments.


Dec 31, 2013

Assets as per balance sheet

Loans and accounts

receivableAssets

at FVTPL Total

Accounts receivable and other receivables excluding prepayments1) 352,463 - 352,463

Other non-current financial assets - 3,420 3,420

Cash and cash equivalents 99,057 - 99,057

Total 451,520 3,420 454,940

Liabilities as per balance sheetOther financial

liabilities Total

Other long-term liabilities2) 24,934 24,934

Accounts payable and other payables excluding non-financial liabilities3) 123,643 123,643

148,577 148,577

Total

1) Prepayments are excluded from accounts receivable and other receivables since the analysis is only required for financial instruments.

2) The carrying amounts correspond with fair value.3) Financial liabilities, such as accrued social security expenses, are excluded

since this analysis is only required for financial instruments.

The following table shows the Group’s assets measured at fair value as per December 31, 2014.

Assets Level 1 Level 2 Level 3 Total

Financial assets measured at fair value

– Financial investments 2,948 - - 2,948

Total 2,948 - - 2,948

The following table shows the Group’s assets measured at fair value as per December 31, 2013.

Assets Level 1 Level 2 Level 3 Total

Financial assets measured at fair value

– Financial investments 3,420 - - 3,420

Total 3,420 - - 3,420

The fair value of financial instruments is obtained from an active market based on market prices quoted on the balance-sheet date. A market is deemed active if prices from an exchange, broker, industry group, pricing service or supervisory body are easily and regularly available and if these prices represent actual and regular arm’s length market transactions. These instruments are found under Level 1. Those investments found under Level 1 primarily comprise equity-related holdings.

The table below provides an analysis of the Group’s financial lia-bilities divided over the time remaining on the balance-sheet date to the contractual due date. The amounts shown in the table are the contractual, undiscounted cash flows. Amounts due within 12 months correspond to carrying amounts, as the discounting effect is insignificant.

Dec 31, 2014

Liabilities as per balance sheet

Within 1 year

2–5 years

Over 5 years Total

Accounts payable and other payables excluding non-financial liabilities 199,471 - - 199,471

Other long-term liabilities - 11,211 - 11,211

TOTAL 199,471 11,211 - 210,682

Dec 31, 2013

Liabilities as per balance sheet

Within 1 year

2–5 years

Over 5 years Total

Accounts payable and other payables excluding non-financial liabilities 123,643 - - 123,643

Other long-term liabilities - 24,934 - 24,934

TOTAL 123,643 24,934 - 148,577


NOTE 25SHARE CAPITAL

The Parent Company’s share capital comprises 104,407,419 (72,181,429) shares with a quotient value of SEK 1.38. Of the Parent Company’s shares, 3,639,990 (3,639,990) are Series A shares with ten votes per share, 100,767,429 (68,541,439) are Series B shares with one vote per share.

Year Event Number of shares Share capital in SEK

1986 Company formation 5,000 50,000

1986 New share issue 75,000 750,000

1986 New share issue 100,000 1,000,000

1990 Bonus issue 300,000 3,000,000

1993 New share issue 329,480 3,294,800

1994 New share issue 331,460 3,314,600

1995 Bonus issue 331,460 13,258,400

1995 Split 8:1 2,651,680 13,258,400

1995 New share issue 3,651,680 18,258,400

1995 Exercise of warrants 4,609,280 23,046,400


1996 New share issue 5,627,136 28,135,680

1996 Split 4:1 22,508,544 28,135,680


1998 New share issue 22,631,445 28,289,306

1998 New share issue 24,026,088 30,032,610

1998 New share issue 25,609,035 32,011,294




2001 Conversion to shares 31,405,110 39,256,387


2003 New share issue 55,658,810 69,573,512

2006 New share issue 72,780,825 90,976,031




2007 Split 2:1 155,129,536 96,955,961

2007 Redemption program 77,564,768 48,477,981

2007 Bonus issue 77,564,768 96,955,961

2007 New issue, Series C shares 78,564,768 98,205,961

2008 Conversion of Series C shares to Series B shares 78,564,768 98,205,961



2012 Cancellation of shares 74,411,429 93,014,287

2012 Bonus issue 74,411,429 99,555,326

2013 Cancellation of shares 72,181,429 96,571,801

2013 Bonus issue 72,181,429 99,555,326

2014 Non-cash issue 104,407,419 144,002,616

– of which treasury shares 1,542,000 2,126,783

In 2014, a non-cash issue was completed in conjunction with the acquisition of Connecta AB, which increased the number of Series B shares and votes in the company by 32,225,990.

Dividends paid in 2014 and 2013 totaled SEK 70.6 m (SEK 1.00 per share), and SEK 70.9 m (SEK 1.00 per share), respectively. A dividend of SEK 1.00 per share, or SEK 102.9 m in total, for the 2014 fiscal year will be proposed to the Annual General Meeting of Sharehold-ers on May 4, 2015. The holding of 1.5 million treasury shares is not included in this calculation. The proposed dividend was not recog-nized as a liability in these financial statements.


NOTE 26RESERVES

The item “Reserves” in Group equity relates in its entirety to trans-lation differences.

NOTE 27PROVISIONS


SEK (thousand) 2014 2013 2014 2013

Additional purchase considerations at January 1 268 3,513 - -

Recognized in the balance sheet: - -

– future additional considerations (+) 3,156 - - -

– reversed, undisbursed additional considerations - -3,048 - -

– restructurings 46,457 - 9,803 -

– translation differences 17 -197 - -

Total at December 31 49,898 268 9,803 -

Analysis of total provisions:

Current 22,445 - 9,803 -

Non-current 27,453 268 - -

In 2009, March IT A/S was acquired, for which a provision was made for a performance-based additional purchase consideration of TSEK 26,639 based on performance in the period 2010–2012. Based on actual and forecast performance assumptions SEK 21 m was recovered in 2010 and SEK 2 m in 2012. In 2013, the full remain-ing additional purchase consideration of about SEK 2 m was recov-ered.

At the start of 2012, 100 percent of the shares outstanding in the consulting firm Bitec Oy in Finland was acquired and a performance- based additional purchase consideration of SEK 1.9 m reserved as a provision for performance in the period 2012 through 2013. Based on actual and forecast performance assumptions SEK 1.7 m was recovered in 2013 and the remaining additional purchase consider-ation to be paid totals about SEK 0.2 m.

At the start of 2014, 100 percent of the shares outstanding in the consulting firm Cloudstep AS in Norway was acquired and a perfor-mance-based additional purchase consideration of SEK 3 m reserved as a provision for performance in the period 2014 through 2015.

Remaining provisions pertaining to restructuring total SEK 46 m as of DEC 31, 2014, whereby the majority arose in conjunction with the acquisition of Connecta, see Note 34 for more information.

NOTE 28OTHER LIABILITIES


SEK (thousand) 2014 2013 2014 2013

Value-added tax 51,142 25,225 1,606 1,139

Employee withholding taxes 28,555 18,844 194 199

Other liabilities 2,495 5,967 - -

TOTAL 82,192 50,036 1,800 1,338

NOTE 29ACCRUED EXPENSES AND DEFERRED INCOME


SEK (thousand) 2014 2013 2014 2013

Accrued vacation pay liability 79,358 65,483 1,334 953

Accrued social security expenses 25,075 13,484 117 114

Accrued salary 79,938 30,229 5,247 -

Deferred income 109,098 20,491 - -

Accrued pension costs 5,534 2,674 - -

Other accrued expenses 47,735 34,869 32,973 3,278

TOTAL 346,738 167,230 39,671 4,345

Deferred income includes work invoiced but not yet earned in ongoing projects.

NOTE 30PLEDGED ASSETS

Group


Chattel mortgages 64,900 64,900

TOTAL 64,900 64,900

NOTE 31CONTINGENT LIABILITIES


SEK (thousand) 2014 2013 2014 2013

Other contingent liabilities 1,788 5,375 - 5,375

PRI liability 317 304 - -

TOTAL 2,105 5,679 - 5,375

NOTE 32INTEREST RECEIVED AND PAID

The following amounts for interest received and paid are included in profit after financial items.


SEK (thousand) 2014 2013 2014 2013

Interest received 1,074 728 200 303

Interest paid -1,835 -702 -1,052 -433

TOTAL -761 26 -852 -130

NOTE 33ADJUSTMENTS FOR NON-CASH ITEMS


SEK (thousand) 2014 2013 2014 2013

Depreciation/amortization of non-current assets 13,308 12,507 6,738 7,903

Impairment of non-current assets 7,296 - - -

Option cost according to IFRS 2 - -2,513 - -2,513

Impairment of Group receivables - - - 2,078

Provision for restructuring cost 45,351 - - -

Other items 3,285 336 - -

TOTAL 69,240 10,330 6,738 7,468


NOTE 34ACQUISITION OF SUBSIDIARIES

2014ConnectaOn July 10, Acando acquired 90.3 percent of the shares in Connecta AB and on July 23, a further 2.8 percent was acquired. The objec-tive of the acquisition is to create the leading consulting company based in the Nordic region. The merger of Connecta and Acando is estimated to unlock substantial market potential and create a key force in the Nordic consulting market in parallel with creating attractive values for both companies’ customers, employees and shareholders.

The merged units are expected to assume a defined position in Sweden and, from that position, be able to increase growth in Sweden and in the geographies outside Sweden where Acando already operates. In the third quarter, work started on integrating the operations and has now been completed. As part of restructur-ing the new unified Group, an expense of SEK 64 m was recognized in 2014, the management estimate that this will generate annual savings totaling about SEK 52 m each year. The restructuring costs pertain primarily to termination costs for former management and administrative personnel at Connecta as well as costs for co-locat-ing operations.

The estimated value of the non-cash consideration corresponds to a subscription price of SEK 13.00 per Series B share in Acando, which corresponds to the volume-weighted average price for the Acando share over the last 20 trading days immediately preceding the announcement of the acquisition on July 10 and a subscription price of SEK 12.30 per Series B share in Acando before July 23, 2014 respectively using the same method. In this estimate, the last shares outstanding in Connecta, which are subject to compulsory redemp-tion, have been valued at SEK 13.50 per Series B share. Even if the acquisition date is set as July 10, when the first 90.3 percent were acquired, Connecta has been consolidated as part of the Acando Group as if the acquisition took place on July 31, 2014. Acando applies the exception under IFRS 3 and consolidates as if the acqui-sition took place on August 1. Accordingly, adjustment for transac-tions that occurred after the acquisition date has impacted carrying amounts. As a result of the ongoing compulsory redemption pro-cess for the 6.9 percent of shares outstanding, the consolidated financial statements have been prepared as if 100 percent had been acquired.

All assets and liabilities were measured at market value in the acquisition. The fair value of the acquired but unappropriated in-tangible assets was SEK 441 m. This is a preliminary figure and it cannot be ruled out that certain valuations do not fully reflect the fair value since the measurement of goodwill attributable to items including future profit generating ability based on employees’ skills and access to new markets, project assignments, customer contracts and the effect of further synergies require extensive analysis, which is ongoing. Accordingly, the acquisition balance sheet was adjusted by SEK 9 m in the fourth quarter and may be subject to further adjustment in future quarters. Therefore, the acquisition balance sheet is deemed preliminary.

Acquisition value

SEK (thousand)

Purchase consideration 448,091

Fair value of net assets acquired 448,091

Assets acquired and liabilities taken overCarrying amount

Fair value

Unappropriated identified intangible assets - 441,287

Goodwill 70,345 -

Non-current assets 5,677 5,677

Current assets 258,881 249,865

Cash and cash equivalents - -

Total assets acquired 334,903 696,828

Current liabilities 280,076 248,737

Total liabilities acquired 280,076 248,737

Total identifiable net assets 54,827 448,091

Total purchase consideration 448,091

Cash and cash equivalents in acquired operations -

Total cash flow attributable to investment in the subsidiary -

In the August to December period, the acquired operations contrib-uted SEK 345 m to sales and SEK 39 m to operating profit before restructuring costs of SEK 48 m. For the full 2014 fiscal year, the Connecta Group posted sales of SEK 743 m and negative earnings of SEK 16 m.

CloudstepAt the start of the year, 100 percent of the shares outstanding in the consulting firm Cloudstep AS in Norway were acquired. The purchase consideration paid was SEK 6 m, of which SEK 3 m was paid in cash. The remaining SEK 3 m comprises a liability for a per-formance-based additional purchase consideration based on expected performance in the fiscal years 2014 and 2015, for which a provision was made in the first quarter of 2014.

The goodwill that arose from the acquisition was attributable to Cloudstep’s know-how and market presence. Goodwill is recog-nized as an intangible asset and comprises the amount by which the cost exceeds the fair value of the identifiable net assets at the date of acquisition.


2013On October 1, 2013, the Group acquired 100 percent of the shares in E-vita AS. The total values of acquired assets and liabilities, the purchase consideration and the effects of the acquisition on the Group’s cash and cash equivalents are detailed in the following table. The carrying amounts correspond with fair value.

Acquisition value

SEK (thousand)

Purchase consideration 50,189

Fair value of net assets acquired 3,754

Goodwill 46,435

Acquired holding, % 100

Total holding after acquisition, % 100

Assets acquired and liabilities taken overCarrying amount

Fair value

Financial assets 692 692

Other current assets 12,520 12,520

Cash and cash equivalents 19,341 19,341

Total assets acquired 32,553 32,553

Current liabilities 28,799 28,799

Total liabilities acquired 28,799 28,799

Total identifiable net assets 3,754 3,754

Goodwill 46,435

Total purchase consideration 50,189

Cash and cash equivalents in acquired operations 19,341

Total cash flow attributable to investment in the subsidiary 30,847

Goodwill is attributable to the estimated future profit generating ability based on employees’ skills and access to new markets. Acquisition-related costs of SEK 1 m were included in administrative costs in the consolidated income statement for the 2013 fiscal year.

The purchase consideration paid for the acquisition was SEK 54 m, of which SEK 3 m was paid ahead of the day of taking possession in the form of salary-related remuneration.

The revenue from E-vita AS included in the consolidated income statement from October 1, 2013 amounted to SEK 21 m. E-vita AS also contributed an operating profit of SEK 3 m for the same period. If the acquisition of E-vita AS had taken place on January 1, 2013, the acquisition would have contributed SEK 80 m to Group revenue and SEK 5 m to operating profit.

NOTE 35SIGNIFICANT EVENTS AFTER THE END OF THE FISCAL YEAR

At the end of January 2015, Acando divested its operations in the UK with the new owners taking over on February 1. In the fourth quarter, the surplus value of SEK 7.3 m was written off through goodwill impairment, since the purchase consideration is expected to correspond to the net assets of the business. The operations are not significant for the Group and, accordingly, the disclosure requirements under IFRS 5 have been disapplied. The divesture in-creases possibilities for focusing on the geographic markets with favorable conditions for delivering Acando’s entire offering.

On February 1, 2015, Acando launched its updated brand profile, which is expected to lead to clearer positioning vis-à-vis competi-tors and increased attractiveness for employees.

On February 5, Acando received the Partner of the Year Award for Middleware, which is presented at an annual event for Oracle’s partners in Sweden. Acando was awarded the distinction with the following commendation: “This partner has been part of numerous major transactions during the year. Successful projects were brought to fruition through solid competence and continued in-vestment in Oracle MW.” Acando Norway received the correspond-ing award with the commendation: “Acando is a Norwegian power-house in Middleware and service-oriented architecture (SOA) and the initiative has now become Nordic. During the year, major break-throughs have been made into the energy market.” The merger between Acando and Connecta in autumn 2014, doubled the size of operations and, accordingly, the collective Oracle skills were strengthened in several areas. Connecta has received the Fusion Middleware Partner of the Year award, for three consecutive years, while Acando Norway, (formerly E-vita) received the award in 2011 and 2013.

70 ACANDO ANNUAL REPORT 2014 APPROVAL OF ANNUAL REPORT

APPROVAL OF ANNUAL REPORT

The Board of Directors and the President hereby affirm that the Annual Report has been prepared in accordance with generally accepted accounting policies in Sweden and that the consolidated financial statements have been prepared in accordance with international accounting standards as adopted by the European Parliament and Council Regulation (EC) No 1606/2002 of July 19, 2002 in respect of the appli-cation of international accounting standards. The Annual Report and the consolidated financial statements provide a true and fair view of the Parent Company’s and the Group’s

financial position and earnings. The Directors’ report for the Parent Company and the Group provides a true and fair over-view of the operations, financial position and results of the Parent Company and the Group and describes material risks and uncertainties facing the Parent Company and the com-panies that are part of the Group.

The Group’s income and financial statements will be sub-mitted to the Annual General Meeting on May 4, 2015 for adoption.

Stockholm, March 20, 2015

Ulf J Johansson Magnus Groth Birgitta Klasén Chairman Board member Board member

Susanne Lithander Mats O Paulsson Anders Skarin Alf Svedulf Board member Board member Board member Board member

Carl-Magnus Månsson President

Mija Jelonek Lennart Karlsson Employee representative Employee representative

Our audit report was submitted on March 20, 2015 Öhrlings PricewaterhouseCoopers AB

Magnus Brändström Authorized Public Accountant

AUDITORS’ REPORT ACANDO ANNUAL REPORT 2014 71

Report on the annual accounts and consolidated financial statementsWe have audited the annual accounts and the consolidated financial statements of Acando AB (publ.) for the year 2014. The company’s annual accounts and consolidated financial statements are included in the printed version of this docu-ment on pages 30–70.

Responsibilities of the Board of Directors and the President for the annual accounts and consolidated financial statementsThe Board of Directors and the President are responsible for the preparation and fair presentation of these annual accounts in accordance with the Annual Accounts Act and of the consolidated financial statements in accordance with International Financial Reporting Standards, as adopted by the EU, and the Annual Accounts Act, and for such internal control as the Board of Directors and the President determine is necessary to enable the preparation of annual accounts and consolidated financial statements that are free from material misstatement, whether due to fraud or error.

Auditors’ responsibilityOur responsibility is to express an opinion on these annual accounts and consolidated financial statements based on our audit. We conducted our audit in accordance with Inter-national Standards on Auditing and generally accepted auditing standards in Sweden. These standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance that the annual accounts and consolidated financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the annual accounts and consolidated financial statements. The auditor chooses such procedures based on such assessments as the risk of material misstatement in the annual accounts and consolidated financial statements, whether such misstate-ment is due to fraud or error. In making these risk assess-ments, the auditor considers internal control measures rele-vant to the company’s preparation and fair presentation of the annual accounts and consolidated financial statements in order to design audit procedures that are appropriate tak-ing the circumstances into account, but not for the purpose of expressing an opinion on the effectiveness of the company’s internal control. An audit also includes evaluating the appro-priateness of accounting policies used and the reasonableness of accounting estimates made by the Board of Directors and the President, as well as evaluating the overall presentation of the annual accounts and consolidated financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

OpinionsIn our opinion, the annual accounts have been prepared in accordance with the Annual Accounts Act and present fairly, in all material respects, the financial position of the Parent Company as of December 31, 2014 and of its financial per-formance and its cash flows for the year then ended in accor-dance with the Annual Accounts Act. The consolidated financial statements have been prepared in accordance with the Annual Accounts Act and present fairly, in all material

respects, the financial position of the Group as of December 31, 2014 and its financial performance and cash flows in accordance with International Financial Reporting Standards, as adopted by the EU, and the Annual Accounts Act. The Directors’ Report and Corporate Governance Report are consistent with the other parts of the annual accounts and consolidated financial statements.

We therefore recommend that the Annual General Meeting of Shareholders adopt the income statement and balance sheet for the Parent Company and the Group.

Report on other legal and regulatory requirementsIn addition to our audit of the annual accounts and consoli-dated financial statements, we have audited the proposed appropriations of the company’s profit or loss and the administration of the Board of Directors and the President of Acando AB (publ.) for the year 2014.

Responsibilities of the Board of Directors and the PresidentThe Board of Directors is responsible for the proposal con-cerning the appropriation of the company’s profit or loss, and the Board of Directors and the President are responsible for administration under the Companies Act.

Auditors’ responsibilityOur responsibility is to express an opinion with reasonable assurance on the proposed appropriations of the company’s profit or loss and on the administration based on our audit. We conducted the audit in accordance with generally accepted auditing standards in Sweden.

As a basis for our opinion on the Board of Directors’ pro-posed appropriations of the company’s profit or loss, we examined the Board of Directors’ reasoned statement and a selection of supporting evidence in order to be able to assess whether the proposal complies with the Companies Act.

As a basis for our opinion concerning discharge from liabil-ity, in addition to our audit of the annual accounts and con-solidated financial statements, we examined significant decisions, actions taken and circumstances of the company in order to determine whether any member of the Board of Directors or the President is liable to the company. We also examined whether any member of the Board of Directors or the President has, in any other way, acted in contravention of the Companies Act, the Annual Accounts Act or the Articles of Association.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

OpinionsWe recommend to the Annual General Meeting of Share-holders that the profit be appropriated in accordance with the proposal in the Directors’ Report and that the members of the Board of Directors and the President be discharged from liability for the fiscal year.

Stockholm, March 20, 2015Öhrlings PricewaterhouseCoopers AB

Magnus BrändströmAuthorized Public Accountant

AUDITORS’ REPORTTO THE ANNUAL GENERAL MEETING OF THE SHAREHOLDERS OF ACANDO AB (PUBL.), CORPORATE REGISTRATION NUMBER 556272-5092

72 ACANDO ANNUAL REPORT 2014 DEFINITIONS

DEFINITIONS

Capital employedEquity plus interest-bearing liabilities. Average capital employed has been calculated as opening plus closing capital employed divided by two.

Cash flow per shareCash flow for the year divided by the weighted average num-ber of shares during the period after dilution with outstand-ing warrants, share-savings programs and convertible rights. Treasury shares are excluded.

Debt/EBITDA ratioInterest-bearing net debt divided by EBITDA calculated as rolling 12-months’ earnings before amortization, depreciation and impairment. Earnings are corrected for nonrecurring costs.

Earnings per shareNet profit for the period for continuing operations divided by the weighted average number of shares during the period after dilution with outstanding warrants, share-savings pro-grams and convertible rights. Treasury shares are excluded.

Equity/assets ratioEquity on the closing date divided by total assets.

Equity per shareEquity on the balance-sheet date divided by the number of shares at year-end after dilution with outstanding warrants, share-savings programs and convertible rights. Treasury shares are excluded.

Interest-coverage ratioProfit after financial items plus interest costs divided by interest expenses.

Operating marginOperating profit divided by net sales.

Profit marginProfit before tax divided by net sales.

Return on capital employedProfit after financial items with reversal of interest expenses, divided by average capital employed.

Return on equityProfit after tax divided by average equity. Average equity is calculated as the sum of equity on the opening and closing dates, divided by two.

Rounding off has been carried out in some cases, which means that tables and estimates do not always add up exactly.

PRODUCTION: ACANDO AB. GRAPHIC DESIGN: ELLI PRODUCTION AB. PHOTOGRAPHERS: DAVID BICHO, JEANETTE HÄGGLUND.

PRINTING: SIB-TRYCK HOLDING AB. TRANSLATION: THE BUGLI COMPANY AB

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Swedenwww.acando.se

StockholmMalmskillnadsgatan 32Box 16061 SE-103 22 StockholmTel: +46 (0)8 699 70 00

GothenburgS:t Eriksgatan 5Box 6090SE-400 60 GöteborgTel: +46 (0)31 345 30 0

MalmöNordenskiöldsgatan 8SE-211 19 Malmö Tel: +46 (0)40 670 28 00

VästeråsKopparbergsvägen 6SE-722 13 VästeråsTel: +46 (0)21 81 48 00

LudvikaEngelbrektsgatan 18–20 SE-771 30 LudvikaTel: +46 (0)240 59 48 90

FalunSlaggatan 21SE-791 70 FalunTel: +46 (0)23 78 69 00

Germanywww.acando.de

HamburgMillerntorplatz 1DE-20359 HamburgTel: +49 (0)40 822259-0

DüsseldorfKaiserswerther Straße 115DE-40880 RatingenTel: +49 (0)2102 560310

Frankfurt am Main Lyoner Straße 12DE-60528 Frankfurt am MainTel: +49 (0)69 6696967-0

MunichFraunhoferstr. 7DE-85737 Ismaning Tel: +49 (0)89 7879791-3

StuttgartLeitzstraße 45DE-70469 StuttgartTel: +49 (0)711 49066210

BraunschweigFrankfurter Straße 3b38122 BraunschweigTel: +49 (0)40 822259-0

Norwaywww.acando.no

OsloTordenskioldsgt. 8–10NO-0160 OsloTel: +47 (0)93 00 10 00

TrondheimBeddingen 10NO-7014 TrondheimTel: +47 (0)93 00 10 00

ÅlesundLerstadvegen 542NO-6018 ÅlesundTel: +47 (0)93 00 10 00

KristiansandAndøyfaret 33 NO-4623 Kristiansand STel: +47 (0)93 00 10 00

Finlandwww.acando.fi

VantaaGate8 Business ParkÄyritie 12 BFI-01510 VantaaTel: +358 (0)424 7231

PoriIsolinnankatu 21EFI-28100 Pori

Documents

ANNUAL REPORT 2014 - Acando.com CRM and AX in both Sweden and Norway. ... by ever larger projects with rising requirements for ... 4 ACANDO ANNUAL REPORT 2014 CEO’S REPORT