Zalaris

Quarterly Report • Oct 30, 2014

Service Excellence. Quality-Focused Processes and Employees - Our Key Asset

Interim Report July-September 2014

KEY FIGURES Q3 AND YTD 2014

	2014	2013	2014	2013	2013
All figures in NOK 1 000	Jul-Sep	Jul-Sep	Jan-Sep	Jan-Sep	Jan-Dec
Revenue	83 640	71809	228 827	190 007	262 216
Growth $(y-o-v)$	16.5%	30.0%	20.4%	13.6 %	15,8%
Operating profit	(3)	6676	7969	14 5 15	24 616
Operating profit margin	$0.0 \%$	$9.3\%$	3.5%	7.6%	9.4%
Operating profit excl. IPO related costs*	8 2 9 0	6676	19 917	14 5 15	24 616
Operating profit margin excl. IPO related costs	9.9%	$9.3\%$	8.7%	7.6 %	9.4%
Ordinary Profit before tax	(625)	6 3 0 7	6 5 1 1	12 546	23 5 34
Profit for the period	(456)	4 604	4753	9 1 5 9	17 089
Earnings per share	(0, 02)	1,38	0.22	2.42	4,68
Net cash from operating activities	24 999	15 639	21 782	18737	21939
Headcount end of the period	442	378	442	378	391

HIGHLIGHTS Q3 2014

• Revenue grew 16,5%, in line with expectations, compared to Q3 2013 increasing to NOK 83.6 million and year-to-date NOK of 228,8 million, equivalent to year-over-year growth of 20,4% compared to the first nine months of 2013.
• Operating profit (EBIT), before IPO-related costs of 9,9%, increased 24,2%, compared to Q3 last $\bullet$ . year. Year-to-date EBIT of 8.7% was also in line with expectations.
• New business included five-year agreements for the provision of transactional HR services to Borregaard in Norway and Dong Energy in Poland.
• The company's new business pipeline remains strong.
• $\ddot{\phantom{a}}$ Services to Statoil successfully transitioned and stable since August, further reflecting our market leadership position.
• . The strong stable institutional investor base includes high-quality international and Nordic longonly funds.

$2014 - \text{Advancing}$ Customer Satisfaction and Profitable Growth

"We delivered solid overall performance in line with targets for the third quarter of 2014. Zalaris has a bright future in the markets we serve, considering our strong position in HR outsourcing, where many large blue-chip companies see major cost-saving opportunity."

Hans-Petter Mellerud, CEO

Insights from the CEO

Zalaris continued its market momentum in the third quarter of 2014, concluding the period that ended September 30 with strong overall results in line with expectations. In addition to staying on course to meet our fiscal-year objectives, we grew year-over-year quarterly revenue 16,5% while advancing profitability 24,2% compared to Q3 2013.

Results included revenue of NOK 83.6 million and an EBIT (before one-off IPO related costs) of NOK 8.3 million for the quarter.

Recurring revenue increased significantly from Q2 2014 as we successfully commenced production in August of our agreement with oil and gas industry leader Statoil, which operates in 36 countries across the world. Key actions associated with the multi-year pact included opening a new service center in Stavanger, transferring designated Statoil staff to Zalaris to support our delivery of outsourced payroll and HR services to the North Sea oil industry.

Consulting and project revenue was lower compared to Q2 of this year, as anticipated, due to the majority of consultants taking annual summer holidays during July and August. Revenue and EBIT for the first nine months of the year reached NOK 228,8 million and NOK 19.9 million.

Strengthening Efficiency and Bottom-Line Value

Zalaris' Services operations continued to lead the company's sharp focus on further strengthening the quality and range of services everywhere we operate. Related initiatives include optimizing cost levels and planning for future expansion. The company continues to pursue strategies to reduce costs and drive new efficiencies. The efficiencies will come from a mix of operational improvements as well as near- and offshoring strategies that include growing our presence in India.

Climate for Growth in All Market Conditions

Many favorable factors contribute to our solid current performance and encouraging long-term outlook. For example, companies increasingly look to outsource payroll and HR solutions, regardless of economic conditions. The reason is simple - these functions are not their core competencies. Zalaris delivers such services more cost effectively as well as more reliably because of the extensive experience and focus we have on them. Borregaard, a new Zalaris customer operating one of the world's most advanced and sustainable biorefineries is one example. We also signed a five year agreement with new customer Dong Energy for the provision of services in Poland.

Boundless Opportunity, More Ways to Capitalize

Our business pipeline remains strong with many large opportunities, and we will continue to methodically convert them and appropriately manage our growth. While larger-scale deals and ramp-up processes take considerable time, we see further upside with current customers as well - to diversify and expand our services with them. We are therefore expanding our sales force and streamline selling processes as much as possible.

After listing on the Oslo Stock Exchange on June 20, Zalaris' shares increased from the offering price of NOK 23.0 to NOK 30.2, up 31%, as of September 30. Our shareholder base remained stable, led by very strong institutional investors with high-quality international and Nordic long-only funds.

Hans-Petter Mellerud, CEO

www.zalaris.com

Revenue and Profit/Loss

Revenue

Total revenue amounted to NOK 83,6 million in Q3 2014, an increase of 16.5% compared to the same period in 2013. The total revenue increased by NOK 12.6 million compared to Q2 2014 due to higher revenue in the HR outsourcing unit and also revenue in the cloud services unit, delivering new functionalities to outsourcing customers.

Zalaris' revenue related to the HR Outsourcing business increased 23% compared to Q3 2013. Q3 2014 revenues were 12% higher compared to Q2 2014, reflecting the go live of service delivery to new customers. Revenues for variable services, including change orders, also increased compared to Q2 2014 revenues. Consulting revenue amounted to 2,1 million NOK in Q3 2014. This represents a 12% increase in revenue compared to Q2 2014.

Zalaris sees a large upsell potential by offering new functionalities and products - cloud services - to our existing customer base. These products give our customers a great opportunity to offer best practice solutions within HR for their employees.

To strengthen the focus on this area, we organized all activities related to cloud service as a separate business unit headed by a newly appointed vice president of Cloud Services. In Q3 2014, the revenue mainly consists of yearly license fees for cloud services.

Profit/loss

Group operating profit before extraordinary IPO related costs amounted to NOK 8,3 million in the third quarter, equivalent to an operating margin of 9.9%. This is an increase of NOK 1,6 million compared to the same period last year. Operating profit and operating margin were both negated due to IPO-related costs amounting to NOK 8.3 million during the period. The costs related to our IPO process and mainly include legal and accounting services, listing fee and management fee to advisors. Total IPO related costs year to date are NOK 11.9 million. We do not expect any further costs related to the IPO.

Net financial items for the third quarter amounted to NOK -0.6 million. The result for Q3 2014 after tax is NOK -0.5 million. Equivalent figures for the third quarter of 2013 were net financial NOK -0.4 million and profit after tax NOK 4.6 million.

TNOK Total Revenue HR Outsourcing 85 000 80 000 75 000 70 000 ■Total Revenue HR 65 000 Outsourcing 60 000 55,000 $3/13$ $4/13$ $1/14$ $2/14$ $3/14$

Revenue per region

Business unit - HR Outsourcing

In the third quarter of 2014, 92% of the total revenue was generated in the Group's HR Outsourcing business unit. This represents a 5 percent increase compared to the same period in 2013.

In Q3 2014, 99% of Zalaris' outsourcing revenues came from the Nordic region distributed as follows: Norway 48%, Sweden 19%, Denmark 18% and Finland 14%.

Compared to Q2 2014, Q3 revenue increased 26% in Norway primarily resulting from starting of services delivery to a new customer.

A slight increase in revenue occurred in Sweden and Denmark as a consequence of higher revenue levels from additional invoicing and change orders in Q3 2014 compared to Q2 2014.

In general, Zalaris has focused on improving service delivery processes in the HR Outsourcing unit, with efforts centered on quality assurance and process automation. These initiatives involve extensive consulting capacity and thus results in more moderate external consulting revenue. The priority of using the consulting capacity for improvement projects reduced operating margins in Q3, but will in the long run ensure higher efficency and subsequently higher margins. We expect that these activities to a certain extent will continue in Q4 2014.

Business unit - Consulting

Consulting revenue in Q3 2014 improved 12% compared to Q2 of this fiscal year. The change is mainly due to a general increased utilization level of our consulting resources on customer-related activities.

The contribution to total external revenue from the Consulting business unit was 3% in the third quarter of 2014, amounting to NOK 2.1 million. This is a decrease from the same period last year in which the contribution to total external revenue amounted to NOK 3.8 million. The Norwegian Consulting unit contributes with 77% of all consulting revenue in Q3 and continues to be the main contributor of consulting revenue in Zalaris Group.

The consulting revenue in Q3 2014 decreased in all the Nordic countries, except Sweden, compared to Q3 2013. In 2013, the Norwegian Consulting unit used external consultants to deliver services, generating external consulting revenue. Compared to Q2 2014, Q3 this year had a 16% and 33% revenue increase, respectively, in Norway and Sweden, and that is also due to an increased utilization of hours on consulting customer activities.

Business unit - Cloud Services

The contribution to total external revenue from Cloud services unit was $5%$

HR Outsourcing revenue per country Q3 2014

Employees

The Group had a headcount of 442 (of which 30 were employed by Zalaris' provider of offshore services), equivalent to an increase of 17% from 378 (of which 30 were employed by Zalaris' provider of offshore services) at the end of Q3 2013. The number of FTEs (Full Time Equivalents) at the end of Q3 2014 was 410,36, compared to 355 FTEs at the end of Q3 2013

The increase in the number of resources in the HR Outsourcing business unit in Q3 2014, compared to Q2 2014, is mainly caused by the transfer of employees from our new customer Statoil ASA.

In Q3 2014, we organized Cloud Services as a separate Business Unit under Ismet Muratspahic as newly appointed Vice President of Cloud Services, responsible for sales and product management.

Headcount including offshore resources

Cash flow and investments

Cash flow from operating activities amounted to NOK 25,0 million (NOK 15.6 million 2013) for the third quarter. Included in this number are the costs of activities related to customer implementation projects from new outsourcing contracts amounting to NOK -9,6 million (NOK -7,0 million $2013$ ).

An advance payment related to a transition project of outsourcing service deliveries for the next two years positively affected net cash flow from operating activities in Q3 2014.

Cash and cash equivalents amounted to NOK 68,8 million (NOK 15,3 million 2013) at the end of the quarter. The Group has an unused credit facility of NOK 15 million.

The Group made investments of NOK 1,7 million during the quarter. The investments relate to IT functionality for improved efficiency in service delivery and, to a lesser extent, office equipment purchases for new service center locations.

Equity

Equity at the end of the third quarter was NOK 89.2 million, which corresponds to an equity ratio of 43,7%. The equity by the end of Q3 2013 was NOK 33,9 million, equivalent to 27.5%.

Outlook

We reiterate our position of being well-positioned to maintain the growth rate achieved over the last several years. We experience increasing interest in our services from large blue-chip organizations looking for innovative ways to deliver cost-effective services and, at the same time, serving their employees with efficient processes.

We are shortlisted in a handful procurement processes with large potential customers that supports our growth ambition with expected closure in the near future. We have strengthened and are continuing to strengthen our sales and business development capability – i.e. adding additional business developers - to address the opportunities in our pipeline.

However, the key to our success to date has been to look at customer relationships and building our business with a long term view. Thus we will continue to invest in process and service improvement as well as personnel development initiatives, with the intent of living our values of Service excellence, Quality focused processes and Employees our key asset.

Oslo, October 29, 2014 Board of Directors

Lars Laier Henriksen (chairman)

Liselotte Hägertz Engstam

Jan M. Koivurinta

This interim report was not reviewed by the Company's auditors

Nafve Reiten

Interim consolidated condensed financial statements

Consolidated statement of profit or loss

		2014	2013	2014	2013	2013
(NOK 1000)	Notes	Jul-Sep	Jul-Sep	Jan-Sep	Jan-Sep	Jan-Dec
		unaudited	unaudited	unaudited	unaudited
Revenue	$\overline{2}$	83 640	71809	228 827	190 007	262 216
Operating expenses
License costs		5 3 2 9	5 1 2 8	10 474	9915	12 881
Personell expenses	3	46 904	37 138	130 675	101 958	139 178
Other operating expenses		16 624	15 274	50 455	42 635	60 601
Depreciations		197	191	565	567	811
Amortisation intangible assets	$\overline{4}$	1706	1636	4 7 7 5	5 6 3 5	7 148
Amortisation implementation costs customer projects	5	4 5 9 0	5765	11 966	14 782	16 981
IPO related costs		8 2 9 3		11 948	0
Total operating expenses		83 643	65 132	220 858	175 492	237 600
Operating profit		$\cdot$ 3	6676	7969	14 515	24 616
Financial items
Financial income		97	156	390	721	3708
Financial expense		$-719$	$-525$	$-1847$	$-2690$	-4 790
Net financial items		$-622$	$-369$	$-1458$	-1 969	$-1083$
Ordinary profit before tax		$-625$	6 3 0 7	6 5 1 1	12 546	23 5 34
Income tax expense
Tax expense on ordinary profit		$-169$	1703	1758	3 3 8 7	6 4 4 5
Total tax expense		$-169$	1703	1758	3 3 8 7	6 4 4 5
Profit for the period		-456	4 6 0 4	4753	9 1 5 9	17 089
Profit attributable to:
- Owners of the parent		$-378$	4648	3 9 2 4	8 1 5 7	15 776
- Non-controlling interests		$-78$	$-44$	829	634	1 3 1 3
Earnings per share: - Basic and diluted - NOK		0.00% $-0.02$	0.14% 1.38	0.02% 0.22	0.24% 242	0,47% 468

Consolidated statement of comprehensive income

		2014	2013	2014	2013	2013
(NOK 1000)	Notes	Jul-Sep	Jul-Sep	Jan-Sep	Jan-Sep	Jan-Dec
		unaudited	unaudited	unaudited	unaudited
Profit for the period		-456	4 6 0 4	4753	9 1 5 9	17 089
Other comprehensive income
Items that will be reclassified to profit and loss in subsequent periods
Currency translation differences		$-499$	$-485$	$-1699$	$-1036$	$-1188$
Total other comprehensive income		-499	-485	$-1699$	$-1036$	$-1188$
Total comprehensive income		$-955$	4 1 1 9	3 0 5 5	8 1 2 3	15 901
Total comprehensive income attributable to:
- Owners of the parent		$-877$	4 1 6 2	1869	6812	14 588
- Non-controlling interests		$-78$	$-44$	1 1 8 5	1311	1 3 1 3

Consolidated statement of financial position

Notes (NOK 1000) 30. Sep 30. Sep unaudited unaudited ASSETS Non-current assets Intangible assets Deferred tax asset 3575 7875 5 5 1 3 Other intangible assets 4 23 019 23 164 22 685 26 594 31 039 Fixed assets 188 424 380 1993 1784 Total fixed assets 2 181 2 2 0 8 Total non-current assets 28775 33 247 Current assets 56 442 Trade accounts receivable 71 674 5 14 074 25 688 Other short-term receivables 4 3 5 3 9 2 0 6 Cash and cash equivalents 15 257 68 827 89 451 Total current assets 175 396 90 126 TOTAL ASSETS 204 172 123 374 EQUITY AND LIABILITIES Paid-in capital 379 Share capital 1912 Own shares - nominal value 1 $-6$ 18 44 1 Share premium 67 085 Total paid-in capital 68 991 18821 11 620 Retained earnings 16 847 Equity attributable to equity holders of the 36 896 85 839 30 441 parent 3 4 7 0 3 4 2 1 3 3 4 3 89 182 Total equity 33 911 Non-current liabilities Deferred tax 3774 1 200 1723 793 Employee defined benefit liabilities 758 178 2 170 6 2 5 5 Total long-term debt Current liabilities 8756 Trade accounts payable 11 248 Interest-bearing loan from shareholders 8800 0 2 2 8 0 3 2 7 4 19 662 30 926 Other short-term debt 43709 67 372 Total short-term debt 112 819 83 207 75 013 Total liabilities 114 990 89 462		2014	2013	2013
				31. Dec
Office equipment Property, plant and equipment Customer projects Equity Non-controlling interests Interest-bearing loans and borrowings Income tax payable Public duties payable				28 198
				1788
				2 1 6 8
				30 366
				54 934
				18 836
				4 8 8 0
				10 802
				119 817
				339 $-6$ 18 442
				18 774
				18 122
				40 317
				1 3 0 6
				3 1 3 6
				44
				4 4 8 6
				11 932
				$\bf{0}$
				3 2 7 4
				18 8 8 4
				40 924
				79 500

TOTAL EQUITY AND LIABILITIES

204 172

123 374

119 817

Consolidated statement of cash flows

		2014	2013	2014	2013	2013
(NOK 1000)	Notes	Jul-Sep	Jul-Sep	Jan-Sep	Jan-Sep	Jan-Dec
		unaudited	unaudited	unaudited	unaudited
Operating profit		$\cdot$ 3	6676	7969	14 5 15	24 616
Depreciation		196	193	565	572	811
Amortisation intangible assets		1706	1639	4 7 7 6	5745	7 148
Amortisation implementation costs customer projects		4 5 9 0	5765	11 966	14 782	16 981
Customer projects		$-956$	$-7034$	$-18446$	$-16276$	$-23237$
Taxes paid		1854	$-1703$	180	$-3640$	$-3341$
Changes in accounts receivable and accounts payable		$-14824$	2 2 3 5	$-17424$	$-15967$	$-11283$
Changes in other short term debt and disposals		32 437	7867	32 197	19 007	10 244
Net cash flow from operating activities		24 999	15 639	21 782	18737	21 939
Cash flows from investing activities Purchase of fixed and intangible assets Net cash flow from investing activities		$-1713$ $-1713$	$-1981$ $-1981$	$-5765$ $-5765$	$-7106$ $-7106$	$-8965$ $-8965$
Cash flows from financing activities Net financial items Purchase of own shares		$-622$ $\blacksquare$	$-369$ ٠	$-1458$	$-1969$	$-1083$ $-6$
Proceeds from issue of new borrowings		$\overline{\phantom{a}}$	٠			1493
Repayments of borrowings		$-254$	$-677$	$-2344$	$-2495$	$-9306$
Changes in factoring debt					$-113$	$-113$
Dividend payments to non-controlling interest			٠			$-1362$
Proceeds from issue of new shares		$\overline{\phantom{a}}$	٠	49 274
IPO Costs of equity		$-1122$		$-3464$	۰
Net cash flow from financing activities		$-1998$	$-1047$	42 008	-4 578	$-10377$
Net changes in cash and cash equivalents		21 288	12611	58 026	7 0 5 3	2 5 9 8
Cash and cash equivalents at the beginning of the period		47 540	2646	10 802	8 2 0 4	8 2 0 4
Cash and cash equivalents at the end of the period		68 828	15 257	68 828	15 257	10 802

Consolidated statement of changes in equity

	Share capital	Own shares	premium		Share Total paid- Cumulative in equity translation differences	Other	Non- equity controlling interests	Total equity
(in NOK 1000)
Equity at 30.06.2014	49 613	-6	18 442	68 048	$-1615$	20 498	4 3 2 8	91 260
Profit of the year						$-378$	$-78$	-456
Other comprehensive income					$-499$			-499
Other changes
Transaction costs related to IPO						$-1122$		$-1122$
Issue of new shares
Purchase/sale of own shares (net)
Dividend
Equity at 30.09.2014 (unaudited)	49 613	$-6$	18 442	68 048	$-2115$	18 999	4 2 5 0	89 182
Equity at 30.06.2013	339	۰	18 441	18781	224	6 2 6 9	4515	29 789
Profit of the period						4648	-44	4604
Other comprehensive income					$-482$			$-482$
Other changes
Purchase/sale of own shares (net)
Dividend
Equity at 30.09. 2013 (unaudited)	339	۰	18 441	18781	$-258$	10917	4 4 7 2	33 911

Notes to the interim consolidated condensed financial statements

Note 1 - General information and basis for preparation

General information

Zalaris ASA is a public limited company incorporated in Norway. The Group's main office is located in Hovfaret 4, Oslo. Norway. The Group delivers full-service outsourced personnel and payroll services.

Zalaris' interim financial statements for the third quarter of 2014 were authorised for issue by the board of directors on 29.10.2014

Basis for preparation

These interim consolidated condensed financial statements are prepared in accordance with International Accounting Standard 34 Interim Financial Reporting as issued by the International Accounting Standards Board (IASB) and as adopted by the European Union (EU). The condensed interim financial statements do not include all of the information and disclosures required by International Financial Reporting Standards (IFRS) for a complete set of financial statements, and these condensed interim financial statements should be read in conjunction with the annual financial statements. The interim condensed consolidated financial statements for the nine months ended 30 September have not been audited or reviewed by the auditors.

A description of the significant accounting policies is included in the Zalaris' annual financial statements for 2013, and applies to these interim consolidated condensed financial statements. New and amended standards applicable for the period starting 1 January 2014 did not have any effect for the company.

Going concern

With reference to the Norwegian Accounting Act § 3-3, the Board confirms its belief that conditions exist for continuing operations and that these interim consolidated condensed financial statements have been prepared in accordance with the going concern principle.

Note 2 - Segment information

The company has three operating segments, which are HR Outsourcing, Cloudservices and Consulting.

HR Outsourcing offers a full range of payroll and HR outsourcing services including payroll, time and attendance and travel expenses. Cloudservices provides hosted HR-related solutions with flexible licensing. Consulting delivers turnkey projects based on Zalaris template or implementation of customer- specific functionality. They also assist customers with cost-effective maintenance and support of customers own on-premise solution.

Information is organised by business area and geography. The reporting format is based on the Group's management and internal reporting structure. Items that are not allocated are mainly intercompany sales, interest-bearing loans and other associated expenses and assets related to administration of the Group. The Group key management is the chief decision maker in the Group. The investing activities comprise total expenses in the period for the acquisition of assets that have an expected useful life of more than one year.

Jan-Sep 2014

(NOK 1.000)	HR Outsourcing	Cloudservices	Consulting	Unallocated	Total
Revenue	21/94/	4 4 6 0	6420		228 827
Operating expenses	198 713	3483	6 7 1 4		208 910
Operating profit	19 2 34	976	$-293$		19 917
Net financial items				$-1458$	$-1458$
IPO related costs				$-11948$	$-11948$
Income tax				$-1758$	$-1758$
Segment profit	19 234	976	$-293$	$-15163$	4 7 5 4
Cash flow from investing activities				$-5765$	$-5765$

Jan-Sep 2013

(NOK 1.000)	HR Outsourcing	Cloudservices	Consulting	Unallocated	Total
Revenue	174 339	4 0 3 9	11 629		190 007
Operating expenses	161933	3 1 6 8	10 391		175 492
Operating profit	12 4 0 6	871	1 2 3 7		14 515
Net financial items				$-1969$	$-1969$
Income tax				$-3387$	-3 387
Segment profit	12 40 6	871	1 2 3 7	-5 3 5 7	9 1 5 8
Cash flow from investing activities				$-7106$	$-7106$

2013

(NOK 1.000)	HR Outsourcing	Cloudservices	Consulting	Unallocated	Total
Revenue	242 624	4 0 3 9	15 5 5 4		262 216
Operating expenses	221 715	3 1 6 8	12718		237 600
Operating profit	20 910	871	2836		24 617
Net financial items				$-1083$	$-1083$
Income tax				$-6445$	$-6445$
Segment profit	20 910	871	2836	$-7,527$	17 089
Cash flow from investing activities	$\overline{\phantom{a}}$			$-8965$	$-8965$

Geographic information

The Group's operations are carried in several countries, and information regarding revenue based on geography is provided below.

Information is based on location of the entity generating the revenue, which to a large extent correspond to the geographical location of the customers.

Information about geographical allocation of revenue

revenue nome external customers attributable to.
		2014		2013		2013
	as % of total	Jul-Sep	as % of total	Jul-Sep	as % of total	Jan-Dec
(NOK 1000)
Norway	52 %	43 237	49 %	35 514	47 %	122 648
Sweden	18%	15 0 28	21%	15 066	22 %	58 949
Denmark	16 %	13 6 34	17%	12 502	17%	44 508
Finland	13%	10826	11%	8 1 1 8	13%	34 4 15
Other	1 %	916	1 %	609	1%	697
Total	100 %	83 640	100%	71 809	100 %	262 217

Information about major customers

		2014		2013	2013
	as % of total	Jul-Sep	as % of total	Jul-Sep	as % of total	Jan-Dec
(NOK 1000)
5 largest customer	46 %	38 302	44 %	31795	42 %	110 733
10 largest customer	63 %	52755	64 %	46 204	60 %	158 140
20 largest customer	78 %	65 460	82 %	58 896	76 %	199 551

Note 3 - Personell expenses

	2014	2013	2013
(NOK 1000)	Jan-Sep	Jan-Sep	Jan-Dec
Salary	122 968	94 106	132 459
Bonus	4684	4 140	4 3 6 4
Social security tax	16 669	12 558	17 452
Pension costs	11 355	8988	12899
Other expenses	4 1 3 7	4 3 1 3	6532
Capitalised development expenses	$-2897$	$-2180$	$-3066$
Capitalised implementation costs customer projects	$-26240$	$-19968$	$-31461$
Total salary expenses	130 675	101 958	139 178
Average number of employees:	381	304	328
Average number of FTEs	354	263	298

Note 4 - Other intangible assets

(NOK 1000)	Licenses and software	Internally developed software	Internally developed software under construction	Total
Book value 01.01.2013	8 0 0 4	11 498	2 7 1 4	22 216
Additions of the period	1898	2 2 8 8	5642	9828
Disposals and currency effects in the period	403	$-325$	$-2288$	$-2210$
This periods ordinary amortisation	$-2452$	$-4696$		$-7148$
Book value 31.12.2013	7852	8765	6 0 68	22 686
Book value 01 01 2014	7852	8765	6 0 68	22 686
Additions of the period	1 1 4 0	6749	3 9 8 2	11871
Disposals and currency effects in the period	$-9$	$-4$	$-6749$	$-6761$
This periods ordinary amortisation	$-1975$	$-2801$		$-4776$
Book value 30.09.2014	7 008	12710	3 3 0 1	23 019
Book value 01 01 2013	8 0 0 4	11 498	2 7 1 4	22 216
Additions of the period	1888	2 2 3 9	4578	8704
Disposals and currency effects in the period	504	$-278$	$-2239$	$-2012$
This periods ordinary amortisation	$-1867$	$-3877$		$-5745$
Book value 30.09.2013	8 5 2 8	9582	5 0 5 4	23 164
Useful life	5-10 years	5 years
Depreciation method	linear	linear

Note 5 - Customer projects

(NOK 1000)	2014 Sep	2013 Sep	2013 Dec
Deferred revenue related to customer projects	$-40,701$	$-29006$	$-34749$
Net customer implementation costs	25 688	14 0 74	18836

Costs related to delivering outsourcing contracts are recognized as they are incurred. However, a portion of costs incurred in the initial phase of outsourcing contracts (transition and/or transformation costs) may be deferred when they are specific to a given contract, relate to future activity on the contract and/ or will generate future economic benefits, and are recoverable. These costs are allocated to work-in-progress (customer projects) and any prepaid revenues by the client is recorded as a deduction from the costs incurred in the balance for customer projects. The deferred costs are expensed evenly over the period the outsourcing services are provided and included in the line item "Amortization implementation cost customer projects".

Note 6 - Transactions with related parties

There have been no material transactions with related parties during the reporting period 1st of July to 30th of September. Please refer to the annual financial statements for further information.

Note 7 - Events after the balance sheet date

There have been no events after the balance sheet date significantly affecting the Group's financial position.

The quarter in pictures

Borregaard signs a five-year agreement with Zalaris for the provision of transactional HRservices in Norway.

Arne Mellerud, the father of Zalaris' CEO Hans-Petter Mellerud, completed the world's largest marathon mountain bike race, Birkebeinerrittet, at the age of 80!

Zalaris opens offices in Stavanger and Porsgrunn to support Statoil and other prospective Zalaris clients operating in the North Sea.

For questions, please contact

Nina Stemshaug

CFO nina.stemshaug@zalaris.com +47 982 60 394

Hans-Petter Mellerud CEO hans-petter.mellerud@zalaris.com +47 928 97 276

Zalaris ASA Hovfaret 4B 0275 Oslo Norway

Financial information

Interim report October - December February 26, 2015

All financial information is published at Zalaris' website www.zalaris.com investor relations.

Financial reports can also be ordered from Zalaris ASA PO Box1053 Hoff 0218 Oslo Norway

or by e-mail: ir@zalaris.com