itera

→ ANNUAL REPORT

2009

→ CONTENT

Itera

Annual Report 2009

1: 2009 in brief
2: About Itera
4: Message from the CEO
8: Seamless Nearshoring
10: Pan-Nordic Operations
12: Superior User Experience
14: Software-As-A-Service

16: Board of Directors' Report
22: Financial Key Figures
24: Consolidated Financial Statements
29: Notes to the Consolidated Financial Statements
46: Parent Company Financial Statements
52: Notes to the Parent Company Financial Statements
57: Directors' Responsibility Statement
58: Auditors' Report
60: Shares and Shareholders
63: Corporate Governance
68: Itera Offices

→ 2009 IN BRIEF

Itera

Annual Report 2009

Arne Mjøs

CEO

The 2009 recession led to customers in the Nordic IT services market pressing prices, reducing their number of suppliers, and postponing closing deals. While Itera was not immune to the effects of the financial crisis, 2009 was also a year of significant accomplishments of our strategic plan towards a focused company.

Q1	Q2	Q3	Q4
Financial crisis is temporarily postponing our expansive plans.	Seamless nearshoring implemented to ensure future competitiveness.	Creating a strong Pan-Nordic hosting company branded as Itera Networks.	Positioning the Itera-brand in all countries we operate.

KEY FIGURES

Profit and loss		2009	2008
Operating revenue	NOK million	412	449
Revenue growth (organic)	%	-8.3%	6.8%
EBITDA	NOK million	40	57
EBITDA margin	%	9.6%	12.6%
EBIT	NOK million	27	44
EBIT margin	%	6.4%	9.8%
Profit for the year	NOK million	21	34
Net Cash Flow from operations	NOK million	52	57

Earning per share	NOK	0.25	0.40
Dividend per share (proposed)	NOK	0.20	0.20
Dividend ratio	%	80%	50%
Share price as of 31 Dec.	NOK	4.70	1.96
Market value as of 31 Dec.	NOK million	401	167
Number of shares as of 31 Dec.	million	85.3	85.3

Equity

Shareholder's equity	NOK million	84	87
Equity ratio	%	49%	49%

Employees

Number of employees as of 31 Dec.	Headcounts	370	391

OPERATING REVENUE

412 mnok

REVENUE BY INDUSTRY

Bank and insurance	27%
Public	21%
Telecom, media, high tech	19%
Healthcare	5%
Other	28%

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ABOUT ITERA

Itera

Annual Report 2009

Breaking new ground in next generation

Itera is consulting, developing and managing next generation digital solutions for web-centric businesses and knowledge workers.

→ Pan-Nordic footprint
→ World-class seamless nearshoring
→ Superior User Experience
→ Full life cycle delivery

Itera is a leading provider of next generation digital solutions for web-centric businesses and knowledge workers. Centered in the Nordic region with a world-class seamless nearshoring capability, we work with innovative businesses of all sizes across many industries including banking and insurance, telecom, professional services and the public sector.

By consulting, developing and managing next generation digital solutions, we enable our customers to improve their products and services, serve their customers better, enhance the value of business intelligence and optimize collaboration across boundaries. We offer a wide range of engagements models, from distinct service offerings to full life cycle deliverables including Software-as-a-Service (SaaS).

Leveraging our knowledge on superior user experience across any device, and smart usage of digital technology, we partner with our customers to help them rapidly attack new business opportunities. Our unique skill in understanding the interactive requirements of the user enable superior design and development of user experiences that are intuitive, efficient, and engaging.

Driven by the customer's specific business needs Itera uses its proven and effective delivery framework to create strong business and IT partnerships and bring real-world solutions to the customer's demanding challenges. We also ensure that the core brand values and corporate messages are clearly conveyed to the relevant target audiences, with an increasing number of users beyond company border.

GROUP STRUCTURE

Founded in 1999, Itera consists of about 370 employees across offices in Oslo (HQ), Stavanger, Stockholm, Copenhagen and Kiev. The company is listed on the Oslo Stock Exchange (ticker ITE).

To drive growth and to enable us to bring services and solutions that help our customers rapidly attack new opportunities, we balance and leverage the strengths of four business disciplines: Communication, Consulting, Operations and Software-as-a-Service.

The basic building blocks of group structure are the independent and self-sufficient group companies with complete profit/loss responsibility. Each group company encourages uniqueness, but also proactively mobilizes the capabilities of the group and of our strategic partners.

GOAL

THE FOCUSED ONE BILLION COMPANY

POSITION

Next Generation Digital Solutions
for web-centric Businesses and Knowledge Workers

STRATEGY

Execution Excellence
Seamless Nearshoring
Cross-business Growth

CAPABILITIES

Digital business consulting	Portals & collaboration	Application management
IT consulting & management	Business intelligence	Infrastructure consulting
Global sourcing	Software-as-a-Service solutions	Managed services
Digital communication	Application development	SaaS incubation center

itera

COMMUNICATION

itera
GAZETTE

CONSULTING

itera
CONSULTING

OPERATIONS

itera
NETWORKS

SOFTWARE-AS-A-SERVICE

COMPENDIA
SAAS INCUBATION CENTRE
CICERO CONSULTING

→MESSAGE FROM THE CEC

Towards a focused company

2009 was a year of immense challenge and change. By leveraging our near-shore integrated operating model, Itera is tapping into the global talent pool for new opportunities of cost advantages, innovation and efficiency. We also took important steps to positioning the Itera brand in all countries we operate.

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Itera
Annual Report 2009

Delivering in challenging times

2009 was a year of immense challenge and change. Virtually every company and industry was affected. While Itera was not immune to the effects of the financial crisis, we managed to deliver NOK 27 million in profitability and NOK 52 million in operating cash flow in 2009.

Throughout the year, we stayed close to our customers, adapting to their changing needs to lower cost, increase efficiency and conserve cash. We also continued to help customers with next generation digital solutions for their web-centric businesses and knowledge workers, which are right in our sweet spot. You will find stories demonstrating our commitments to helping our customers in this Annual report.

We also fulfilled our commitment to return cash to shareholders through dividends and share repurchases, paying our fourth annual cash dividend and repurchasing 1.1 million Itera shares. More recently, the board of directors proposed the fifth annual cash dividend, of NOK 0.20 per share. Our balance sheet remained strong, with a cash position of NOK 72 million and an equity ratio of 49 percent. Going forward we shall continue to develop our business and ensure that Itera is a well-managed company, striving to do better than our peers, no matter what the market climate brings.

2009 was a year of significant accomplishments of our strategic plan towards a focused company. First, we built a truly seamless integrated offshoring capability to ensure future competitiveness by tapping into the global talent pool. Second, we consolidated our hosting units into a strong Pan-Nordic unit. Third, we created a brand architecture to position the Itera brand in all countries we operate. Let me elaborate on these three accomplishments.

Tapping into the global talent pool

We took a major step forward last year in the development of our nearshoring capability. Global sourcing – geographically distributed IT service delivery – has become an integral part of Itera's everyday activities. All in all, Itera offers a flexible delivery model through our world class seamless nearshoring capability. We offer specialist expertise for projects on the customer's site, in our own facilities and via our development center in Ukraine.

By leveraging our nearshore integrated operating model, Itera is tapping into the global talent pool for new opportunities of cost advantages, innovation and efficiency. Our nearshore management team comprises a careful balance of best practices, skills and capabilities to optimize sales and deliverables.

We will continue to scale our talent in our global delivery model with the long term aim of having a substantial share of our resources in nearshore regions with favorable cost structures to build an even stronger and more successful Itera.

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MESSAGE FROM THE CEO

Sustainable, profitable growth is not an option – it is the core of our business.

Pan-Nordic scalability

Itera is essentially a Nordic consultancy company working with businesses primarily in the Nordic region, where we are well-established. However, we also help international customers to establish here and accompany our Nordic customers globally.

To increase our Pan-Nordic scalability, our next generation hosting companies in Norway and Sweden were transformed into a Nordic brand - Itera Networks. Through Itera Networks, we are taking a significantly stronger market position that will allow for faster growth and increased efficiency and quality. After this rebranding, Itera Networks will be in position to grow into new locations and countries.

As the number of alternative delivery models increases, i.e. Software-as-a-Service, how the value of a service is created is not so important. Moving from traditional life cycle ownership to access to (business) functionality for a fee, will increase the scalability of Itera.

Positioning the Itera brand

During this past year we took important steps to positioning the Itera brand in all countries we operate. We created a Itera brand architecture, in which the brands within the group are related to, and differentiated from, one another. The primary goal is to increase total customer value for the group, creating longer sustainable relationships with key customers.

In addition to cultivating Itera Networks as the leading brand for our Pan-Nordic hosting activity, our next generation communication company Gazette was branded as Itera Gazette. After the end of the period, the cutting edge company Objectware was transformed into a full service company – Itera Consulting. The company will focus on larger deliverables to the enterprise market segment, with full life cycle scope and seamless integrated nearshoring. Objectware will continue as a cutting edge technology brand for agile system development of next generation solutions to ensure attractiveness to the best technology people in Norway.

The new brand strategy is supported by a new visual identity, creating a conform visual profile for our websites and stationary. The common look and feel across business disciplines and group companies is to be launched during first half-year 2010. This rebranding is welcomed by our customers, employees and other stakeholders to realize the full potential of The Little Big Company, mobilizing the capabilities of the group in large complex deliverables.

Investing in our people

Itera is a business that runs on the ideas, knowledge and

know-how of the people who work here. And in a people-focused business, our ability to deliver next generation solutions to customers rests directly on recruiting, training and retaining the very best people in the industry. To ensure that our people have the necessary skills to serve customers at the highest professional level, we invest significantly in their training and professional development.

What makes Itera special is that we are an entrepreneurial group of companies that lives on, with and for rapid change in the flat world. Itera is only working in areas in which our skills are really focused. Customers want to buy the 'best of breed' or 'best for need' and reject the notion that one provider can be good at all things. Scale and scope are not requirements to compete, but differentiation and focus surely are.

Our customers continually tell us that they choose our companies because our people are the best in the industry. We consider ourselves to be an organization of motivated people doing extraordinary work, with an aspiration to develop the best employees in our industry. This is Itera at its best.

Looking ahead

We have a strong momentum going into 2010 and we will continue to take steps to make Itera an even stronger company for tomorrow. Our ambitions are humble. We should someday become a ONE BILLION company, and always be one of the most profitable players.

Itera gives priority to quality, profits and growth in that order. Sustainable, profitable growth is not an option – it is the core of our business. As we move further into 2010, the economy is recovering, and we remain intently focused on our customers to ensure that we are well-positioned to take advantage of growth opportunities.

I want to thank our Board of Directors and all our employees for their hard work and dedication throughout 2009, which enabled us to navigate in a challenging environment. Together, we also managed to position Itera for the future as a focused company with a strong brand in all countries we operate. I am excited about the opportunities that lie ahead.

Arne Mjøs
Chief Executive Officer

NEXT
GENERATION
DIGITAL
SOLUTIONS
→

→ SEAMLESS NEARSHORING

Itera

Annual Report 2009

The full service IT provider

Intense competition, strong cost focus and increased effectiveness have been prominent trends for Nordic businesses in recent years. Itera Consulting meets the trends – as the full service provider of next generation solutions.

Anders H. Lier

CEO

Itera Consulting

Globalization is quickly becoming the norm – meaning new and ruthless competition.

Itera Consulting's customers use new IT as a strategic tool to win and grow their position in the market. Globalization is quickly becoming the norm – meaning new and ruthless competition. Through 2008 and 2009, Nordic companies have focused on reducing their operational expenses. Reduced costs have in turn given more room for investments in innovative solutions.
We help customers to realize their business objectives by quickly developing IT solutions based on next generation technologies. We help our customers with top line growth, innovation and reduced time-to-market, says Anders H. Lier, CEO in Itera Consulting.

A full service provider

For the past 15 years Objectware has maintained a strong position as Norway's leading player at the forefront of the information technology. Objectware is now an integral part of Itera Consulting as the full service provider of next generation solutions. Itera Consulting creates value for its customers through service offerings such as consulting, portals, business intelligence, application development and application management.

Itera Consulting takes a holistic responsibility to customers - something a growing number of customers expect in an ever increasing complex IT environment. Our nearshoring delivery model is fully integrated providing our customers with increased capacity at attractive blended prices. We also contribute to the growing industrialization through implementation of best practices, processes and methodology. Itera Consulting is applying agile methodology in distributed deliverables, confirming our leading position in our industry, says Lier.

Bringing the group together

Itera Consulting is acting as the aggregator for cross-business growth in Itera. The majority of all nearshore projects will be delivered by Itera Consulting. Itera is currently in a dynamic process of change where the focus of a more unified group is strong. This change is implemented in line with our customer needs and the trends in our industry.

Itera Consulting focuses on strengthening the cooperation across group companies. By mobilizing the capabilities within the group in deliverables of large next generation solutions, we will stay ahead of our competition. This is Itera at its best – The Little Big Company. For instance, Promis has unique competence in project management, Itera Gazette is the expert in digital communication, and in deliverables where hosting and maintenance is included, it is important to have synergies with Itera Networks, says Lier.

A leading player

Itera Consulting is unique as we offer a full range of services that cover the customers' needs through their IT life cycle. We differentiate through delivering next generation solutions for web-centric businesses and knowledge workers. We are a dynamic player helping our customers to innovate and increase their market share. This means we have to work closely with our customers to acquire deep understanding about how we really could add value. We will not make any compromise on our commitments of high quality deliveries, high customer satisfaction and realizing business values for our customers, concludes Lier.

CASE

KLP

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Client: Kommunal Landspensjoskasse (KLP)
Project: Innovation driven finance solutions
Kommunal Landspensjonskasse (KLP) teamed up with Itera Consulting (previously Objectware) in 2009 as one of three primary partners within system development and related services. KLP has been a strategic customer for Itera Consulting, where the partnership is evolved to include innovation driven concept development. Several of these exciting concepts will be rolled out in 2010.

CASE

Parks & Resorts
SCANDINAVIA

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Client: Parks & Resorts
Project: Next generation budgeting and controlling
Parks & Resorts Scandinavia chose end of 2009 to cooperate with Itera Consulting to build a new system for budgeting and controlling of all business activities. The new system will be based on IBM Cognos TM1, and will, when implemented, support Parks & Resorts in all corporate performance measurement (CPM) phases. Parks & Resorts is one of Scandinavia's leading players in the recreation industry and runs some of Sweden's most popular parks.

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PAN-NORDIC OPERATIONS

Itera

Annual Report 2009

Integration with cloud services

While global IT players such as Microsoft, HP, IBM and Google produces services for the mass market in the cloud, Itera Networks focuses on service integration, customer intimacy and pan-Nordic business delivery model.

Jon Erik Høgberg

CEO

Itera Networks

Itera Networks offers service integration for all businesses regardless of size or segment.

The popular cloud is expected to affect the IT industry and the use of IT to a large extent in the future. The cloud gives many businesses a promising combination of effectiveness and standardization of individual services. While big players such as Microsoft and HP produce computing power and services delivered via the Internet similar to what Google has done for several years, Itera Networks has found its role by helping customers with service integration and management between the various services – something that cannot be bought from the cloud.

Seamless service integration

A key factor for us in the future is service integration and the continuous management of services - it will be much more important than both data hosting and mass production of standard services. Our job is to ensure that the various services work together. Moreover, the user shall experience a seamless delivery, whether they are delivered on a customer-specific platform or from the cloud, says Jon Erik Hogberg, CEO in Itera Networks.

Itera Networks delivers services within CRM, collaboration solutions, document management, BI solutions and data warehousing. Furthermore, the company delivers the integration across the infrastructure and applications such as terminal servers, application deployment and virtualization. Solutions for identity and access services, which ensure both user friendliness and high level security, are important areas of competency. When the diversity and range of applications extend, businesses will request integration expertise accordingly.

We shall be at the customer side helping them in the process. Not by competing with giants such as Microsoft, Google and HP, but by being the preferred IT provider for customer

friendly and customer-specific integration in the Nordic, says Hogberg.

A lot for a few, less for the masses

Itera Networks is genuinely concerned with customers' demands and needs in the long run. The company does not deliver mass production, but focus on being the customers' IT consultant and IT operations partner. Itera Networks delivers next generation managed services to customers, increasingly in combination with other service offerings within Itera in a full life cycle manner.

We aim to be a lot for a few, rather than less for the masses. As such our customers will be certain that their total IT infrastructure works. A provider that focuses on customer intimacy rather than mass production has the best conditions to do just that.

Pan-Nordic business

Last year Itera Networks consolidated its operations in Norway and Sweden into a Pan-Nordic business. It is strategically beneficiary to have offices in Norway and Sweden when customers in both countries increasingly operate beyond country borders. At the same time, a common Pan-Nordic operation provides the best conditions for knowledge sharing, efficiency and scalability.

We plan to move on to Denmark later to leverage on the same business philosophy as in Sweden and Norway. It is a very exciting journey ahead both for our existing and new customers, as well as all employees, concludes Hogberg.

CASE

SIMONSEN ADVOKATFIRMA

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Client: Simonsen Law

Project: Law Practice by IT

Itera Networks provides IT hosting and consultancy to Simonsen Law. The attorneys have equal access to the computer system whether they are in their offices in Norway, at home or traveling. Simonsen has high demands regarding Security Solutions, and requires encryption of information on portable computers, and the ability for remote deletion of mobile phones.

Case

BanQsoft

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Client: Banqsoft

Project: Innovative solutions for the financial market

The Swedish company Banqsoft invited last fall Itera Networks as its new outsourcing supplier of its entire internal IT system. Itera Networks is responsible for central IT operations, WAN communication to four countries, support, system management and upgrading of software. Growing rapidly Banqsoft needed a next generation supplier that could adapt to their changing technical needs, operating with a scalable business model over time.

→ SUPERIOR USER EXPERIENCE

Itera

Annual Report 2009

Reinforcing a digital commitment

In February 2010 Gazette changed its name to Itera Gazette. The name change reinforces the company's digital investment, and underlines the close cooperation with the rest of the Itera corporation.

Kristian Enger

CEO

Itera Gazette

Social media such as

Facebook, YouTube, MySpace and Twitter represent new opportunities for communication.

Kristian Enger, CEO in Itera Gazette, is concerned with the growth in digital business solutions and social networks to create new digital communication solutions. This, however, requires that Itera Gazette strengthen its digital focus.

Offline and online

We will work with all interactive channels, both online and offline. We are not looking to replace offline with online solutions, but rather to explore the possibility of complementation and integration. Moreover we are working increasingly across the Itera companies in order to share knowledge and optimize solutions. As part of a large corporation, we have a free flow of ideas and expertise in virtually all technological areas. For our customers this is a guarantee for top quality delivery, regardless of size or complexity, says Enger.

Industry overlap

The communication industry is dominated by an increasing overlap where advertising agencies and PR agencies are pitching for the same assignments. Specialists are becoming generalists, media agencies establish production facilities, and new digital production agencies deliver strategic consulting. We also see that customers change their behavior and form new relationships, underlines Enger. He believes the industry overlap will continue.
The creativity that for a long time has dominated the advertising industry will increasingly become important for technology companies as well. I believe creativity is essential to stand out in the future, adds Enger. Itera Gazette operates at the intersection between technology and communication, and is passionate about combining this in an optimal manner. This is the foundation for the

next generation communications solutions, claims Enger.

The social media – new opportunities

Social media such as Facebook, YouTube, MySpace and Twitter represent new opportunities for communication. Itera Gazette is experiencing a great demand for expertise and advice in these areas, both from private and public entities.

More and more people see the need to increase their presence in the open and social environment, and we will help them, explains Enger. He is convinced that the growth of social media will continue, as it allows for dialogue, involvement and sharing; helping to create and develop relationships in a new way.
The important question ahead is how to build relevant and valuable relationships with customers. However, it is important to realize ones role and ones limitations in such relationships. In social media you must, regardless of industry or position, act as a host. We shall invite to the party and ensure that guests enjoy themselves, but we should not force anyone to dance together, adds Enger.

Good development

2009 was a tough year for the communications industry. Advertisers spent less money on advertising and communication, and media houses and advertising agencies reported red figures and declining curves.
It is good to register a positive development in Itera Gazette, says Enger, knowing that the industry will remain under pressure. - Which is why it is good to know that the interaction between the sister companies and Itera Gazette equips us extra well to deliver good results in the future market.

CASE

FREE

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Client: Q-Free

Project: New communications platform

Q-Free, one of Norway's most innovative and successful technology companies, chose Itera Gazette as a strategic communications partner in 2009. The cooperation includes the development of a new communications platform, upgrade of the visual profile and re-branding of Q-Free globally. Itera Gazette has also developed new print and digital communication tools, annual report and an interactive and innovative exhibition stand to use at trade shows and events.

CASE

NORSK TIPPING

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Client: Norsk Tipping

Project: Lotto

Itera Gazette won the prestigious contract regarding Lotto's digital branding autumn 2009. Norsk Tipping is an important player in the Norwegian society that has the ability to think in new ways. This characterizes the work of the innovative solutions that are now being developed online, mobile and in the social media.

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SOFTWARE- AS- A- SERVICE

Itera

Annual Report 2009

New patterns of customer behavior in banking

In today's bank and financial market customers are demanding solutions in a multichannel architecture. Software-as-a-service (SaaS) is an emerging delivery model providing consistent financial advice in all channels.

Iren Tranvåg
CEO
Cicero Consulting

> Cicero's innovation lab is a forum where changes in customer behavior leads to development of new applications.

As the experts within the Nordic banking and finance market, the Itera company Cicero Consulting assists their customers to differentiate their product and services by constantly improving their customer dialogue. In 2002, Cicero Consulting recognized its customers' need for consistent financial advising in all channels. The company started the development of a multichannel financial advisor concept together with DnB NOR. DnB NOR is one of the Nordic leaders within multichannel solutions in today's retail banking market.

Short time-to-market

Customers need excellent, updated, scalable and secured financial solutions, which is exactly what we provide. We analyze the market continuously and make changes to the financial models as well as regulatory and compliance issues, making our solutions always reliable, says Iren Tranvåg, CEO in Cicero Consulting.

A next generation offering – Cicero Financial Solution (CFS) – meets increasingly tougher demands for time-to-market. The solution enables customers to run and administrative their online banking and financial solutions consistently in all channels. Delivered as a Software-as-a-Service in the cloud, the solution can be implemented much faster than a fully customized solution.

Social media

Falling product margins, increased demand for documentation, and changes in customer behavior are drivers of major changes in the industry. Different players are moving towards combining their various channels in order to achieve greater cost savings and automated processes. Emerging technology provides an opportunity to innovate a new generation of solutions for effective customer communication and consultancy in banking. The use of social media provides an opportunity for exciting dialogue as well as sales opportunities for the banks. Banks are actively using social media to learn, show strength and presence in the market as well as communicate directly with their customer base.

Engaging collaboration

Cicero focuses on integrating these new patterns of customer behavior in their solutions. This could be something as simple as knowledge sharing or inviting a friend. Cicero Financial Solution is well suited for this type of development, and the company is currently working on new concepts which will keep their customers in the forefront of the market.

Our customers will increasingly invite their customers into their product development processes, using the new channels to prelaunch new products to get feedback and suggestions for improvements before the full scale launch, says Tranvåg.

Innovation Lab

Increasing competitiveness, rapid changes in the marketplace and technological development creates a demand for partners with in-depth industry knowledge. Cicero's strength lies in their ability to combine market and industry knowledge with business know-how, creativity and technological insight.

Our cross functional teams provide our customers with unique insight into the market, and by working together we develop competitive strategies for new products and services. In our innovation lab changes in customer behavior leads to development of new applications, from iPhone applications to new multichannel customer service concepts and advanced customized consulting solutions, concludes Tranvåg.

CASE

DnB NOR

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Client: DnB NOR

Project: Cicero Financial Solution and Market Intelligence

Cicero Financial Solution is DnB NOR's basis for most advisor solutions in the corporation; simple calculators for open websites, investment assistance in internet banking, and complete advisor applications for advisors in the bank. In addition, Cicero delivers positioning analyses that support strategic decision processes in DnB NOR.

CASE

Swedbank

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Client: Swedbank

Project: Cicero Market Intelligence

Swedbank is the leading bank in Sweden, Estonia, Latvia and Lithuania. By being at the frontier of product and service development Swedbank turned to Cicero Consulting to deliver a Nordic market intelligence concept. The concept includes strategic information on the Nordic market and a selection of products/segments, which make it useful for both upper management and market/product teams.

→
BOARD OF DIRECTORS' REPORT

Board of directors' report

While Itera was not immune to the effects of the financial crisis, the group managed to deliver NOK 27 million in profitability and NOK 52 million in operating cash flow in 2009. The group's commitment to return cash to shareholders through dividends and share repurchase was also fulfilled.

Market conditions

The financial crisis in 2008-2009 witnessed the most severe economic recession in generations, and the IT industry suffered an even greater decline than it did during 2001, following the dot-com bubble. At the end of third quarter statistics were confirming the recovery of the overall economy. Though, there are still weaknesses ahead in some markets, especially in Denmark, the economy is recovering.

The 2009 recession prompted customers in the Nordic IT services market to press prices, reducing the number of suppliers, and postponing closing deals. We carried out numerous activities during the year adapting the group to the

prevailing economic situation, temporarily postponing our expansive plans. In general, the economic slowdown spurred a shift to the growth dynamics from private industry to government. The Itera Consulting Group increased its focus on the public sector during the past year.

Despite the recession, what is constant is that technology is a key component to an organization's success. Customers' investments in the second Internet generation (web 2.0) such as social networking to improve business processes and workforce effectiveness opened new business opportunities.

In 2009, price pressure was hard, labour market settled down, the attrition rate lowered and the salary level flattened. Customers showed a clear tendency to search for partners who can support their business through offshoring. This benefits Itera Consulting Group because the group's world class global sourcing capability provides cost-effective deliveries with healthy profitability.

Business operation

Itera consists of the parent company, Itera Consulting Group ASA, and ten subsidiaries, each with full profit and loss responsibility, six of which are in Norway, two in Sweden, one in Denmark and one in the Ukraine. The group operates from offices in Oslo (head office), Stavanger, Stockholm, Copenhagen and Kiev.

Itera

Annual Report 2009

In 2009, the group implemented a seamless integrated nearshoring capability to ensure future competitiveness.

During a year of tough market conditions, the group has taken bold steps towards a focused company. The group intensified the sales activities, experiencing breakthroughs with new customers. An integrated offshoring model was implemented for future competitiveness and improved the effectiveness. The group consolidated its two hosting units into a strong Pan-Nordic unit branded as Itera Networks. The group continued the transformation of its communication company to become a leader in digital communication branded as Itera Gazette.

After the end of the period the group fostered the Itera brand architecture with the Itera Consulting as the aggregator for large full life cycle deliverables of next generation digital solutions. Objectware in Norway has been transformed into a division within Itera Consulting and will continue as the cutting edge technology brand for agile system development of next generation solutions. All in all, the Itera brand is strengthened in all countries we operate.

Group profit

Consolidated operating revenue for 2009 amounted to NOK 411.5 million, compared to NOK 448.9 in 2008. This represents a decrease in revenue of 8%. Gross profit for 2009 amounted to NOK 344.4 million compared to NOK 373.9 million in 2008. This represents also a decrease of 8%.

Personnel expenses for the year amounted to NOK 268.3 million, a decrease of 2%. A lag from salary adjustments in 2008 increases personnel costs, however, fewer employees, reduced variable wages as well as an increasing number of employees in low cost region are reducing the personnel expenses. Other operating expenses for the year amounted to NOK 36.5 million, a decrease of 16%. The decrease is a result of the cost reduction program initiated in the fourth quarter 2008.

The operating profit before depreciation (EBITDA) amounted to NOK 39.6 million, compared to NOK 56.5 million in 2008, which results in a profit margin before depreciation of 9.7%, compared to 12.6% in 2008. The group's total depreciation for the period amounted to NOK 13.1 million compared to NOK 12.3 million in 2008. The operating profit was NOK 26.5 million, compared to NOK 44.2 million in 2008, which represents a profit margin of 6.4%, compared to 9.8% the previous year.

Net financial items amounted to NOK 2.8 million, compared to NOK 2.2 million in 2008 and pre-tax profit amounted to NOK 29.3 million, compared to NOK 46.4 million in 2008.

Tax for the year amounted to NOK 8.7 million, compared to NOK 12.3 million in 2008. Payable tax amounted to NOK 0 million, compared to NOK 1.6 million the year before. The Itera Consulting Group has NOK 15.7 million in total deferred tax assets, of which NOK 11.7 million is recognized in the balance sheet. Based on these deferred tax assets, the Itera Consulting Group will not generate corporate tax until late 2010.

→ BOARD OF DIRECTORS' REPORT

Itera
Annual Report 2009

Gunnar Gjörtz
Brita Eilertsen
Mimi K. Berdal
John M. Lervik

The profit for the year was NOK 20.7 million, compared to NOK 34.1 million in 2008.

In the Board of Directors' opinion the financial statements present an adequate description of the group's operations in 2009 and the financial position at year end.

Research and development

Investments in concepts that are related to subscription based fixed revenue amounted to NOK 7.8 million. This amount was capitalized, since the requirements relating to capitalization are considered to have been satisfied. In 2008 the investments was amounted to NOK 8.5 million.

Cash flow and financial position

Cash flow from operations for the Itera Consulting Group amounted to NOK 52.0 million, compared to NOK 57.3 million in 2008. Dividends amounting to NOK 17.1 million were paid out to shareholders during 2009. Furthermore, purchases of own shares were made in the amount of NOK 3.4 million. Cash deposits for the Itera Consulting Group amounted to NOK 71.7 million at the end of the period, compared to NOK 60.3 million in 2008.

In addition to research and development, investments in hardware, equipment and software amounting to NOK 8.4 million have been made, compared to MNOK 14.0 in 2008.

The Itera Consulting Group held own shares corresponding to a market value of NOK 12.3 million at the year-end, compared to NOK 6.4 million in 2008.

The equity at the end of the year amounted to NOK 84.0 million, compared to NOK 87.2 million in 2008. This corresponds to an equity ratio of 48.9%.

Financial risk

The Itera Consulting Group is exposed to the following risks from its use of financial instruments: credit risk, liquidity risk and market risk.

All income and expenses of the group are recorded in local currency in Norway, Sweden and Denmark where the service is initiated or performed. The group's profits will therefore be affected by changes in the exchange rates that apply to the Swedish and Danish kroner. However, the currency risks are limited as associated expenses are in the same currencies. Establishment of the offshoring company in the Ukraine has resulted in the group's exposure in USD and Euro. At this point the exposure in the Ukrainian outfit is negligible, however, with the growth of the services, exposure will be proportionately larger.

The Board considers that the group's liquidity is solid. There is no need to initiate actions to change the group's liquidity risk.

The credit risk is considered low as the group's bad debt losses have historically been low. Based on the fact of increase in the collection ratio, it is allocated more resources for following up overdue accounts receivable.

Organisation

The number of employees at the end of the year was 370 compared to 391 in 2008. Average number of employees for the full year amounted to 381 (381). The main part of the group's operations is located in Norway, where the company has 251 (274) employees. The Swedish operations have 60 (70), the Danish operation 32 (36) and the Ukrainian operation 27 (11) employees.

Absence due to sickness in 2009 amounted to 3.2% (2.7%), which is considered to be satisfactory by the Board. No injuries or accidents occurred during the year. The Board considers the group's working environment to be good and regular evaluation surveys are carried out with respect to this environment.

The Board would like to express its gratitude towards all employees of the group for their contribution in 2009.

Equality and diversity

The Itera Consulting Group seeks to ensure that both its male and female employees have the opportunity to combine their work and private commitments and supports this policy through by leave programmes, home office solutions and part-time jobs.

The total share of female employees is

→
BOARD OF DIRECTORS' REPORT

29% (27%). The group's senior management consists of two men, while the Board is made up of two women and two men.

There are major differences between the group companies with respect to the percentage of women employees. There are fewer women employed by those companies where the focus is on technology, while other companies that provide communications and content services have a level of female employment of around 50%. Management positions are unevenly divided between men and women, and one of the group's targets is to improve the gender balance within its various management groups. However, the need for having the right expertise will always take precedence.

Itera Consulting Group actively seeks to ensure diversity in the group, and will recruit, develop and retain the best employees regardless of gender, ethnicity or disability. The group has ethical guidelines to promote equality and prevent discrimination.

External environment

Pollution of the external environment as a result of activities engaged in the Itera Consulting Group is minimal. The group's environmental initiatives are directed towards utilisation of organised recycling schemes for scrapped equipment, reduced travel by means of an increase in the use of video meetings as well as a responsible disposal of waste.

Shares and shareholders

Itera Consulting Group ASA's share capital stands at NOK 25 602 103, through 85 340 346 shares with a face value of NOK 0.30 per share.

Key employees in the Itera Consulting Group were issued with 378 000 stock options. At the end of the year the group owned 2 682 884 (1 588 884) of its own shares, amounting to 3.1% (1.8%).

At the end of 2009, Itera Consulting Group ASA had 2 311 shareholders. The 20 largest shareholders owned 47.0 million shares, equivalent to 55.1% of the group's share capital.

Dividends amounting to NOK 17.1 million were paid out during 2009, the equivalent of NOK 0.20 per share.

See the information about shares and shareholders provided later in this report.

Corporate governance

The Itera Consulting Group complies with Norwegian recommendations on corporate governance. A separate statement is described later in this report.

The parent company

Internal processes and solutions are organised as Shared Services in the parent company, Itera Consulting Group ASA, in areas where considerable economies of scale and synergies can be realized. Shared Services is developed in line with the companies' needs and now covers segments such as accounting/finances, purchasing, HR, internal IT and knowledge management, communication and legal services.

The parent company's main income is group contributions from the subsidiaries. In 2009, the parent company has received NOK 39.8 million in group contributions. After the investment in Ukraine and group contributions, the book value of the investments is equal to NOK 107.6 million.

The number of employees at the end of the year was 15 (11), of which 9 are women. Absence due to sickness in 2009 amounted to 1.6% (1.3%), which is considered to be satisfactory by the Board. No injuries or accidents occurred during the year. The Board considers the working environment to be good.

In the Board of Directors' opinion the financial statements present an adequate description of the parent company's operations in 2009 and the financial position at year end.

Going concern

Pursuant to section 3-3a of the Norwegian accounting act, the Board confirms that the 2009 financial statements have been prepared based on the assumption that Itera Consulting Group is a going concern.

This assessment is based on the company's projected earnings for 2010 and

Itera
Annual Report 2009

We help our customers strike the balance between today's challenges and tomorrow's opportunities.

the group's strong equity and liquidity situation.

Allocation of profit

The Board proposes that Itera Consulting Group ASA's 2009 profit of NOK 26 821 000 should be allocated as follows:

NOK 17 068 000 to dividend
NOK 9 753 000 to other equity

The Board's proposal for dividend amounts to NOK 0.20 per share. Further, the Board proposes that group contributions of NOK 6.0 million, NOK 2.3 million and NOK 0.3 million be given to the subsidiaries Itera Networks AS, Cicero Consulting AS and Compendia, respectively. In the parent company's financial statements, this group contribution has been recognized against investments rather than carried over to expenses on the profit and loss account.

The parent company's equity is NOK 125.0 million, of which distributable equity amounts to NOK 92.5 million after allocations for proposed dividend.

In addition, we will continue to grow our nearshoring footprint to ensure future competitiveness.

Quality, profits and growth will be prioritized in that order.

Outlook for 2010

According to several IT research companies such as Gartner a normalized macroeconomic environment in 2010 should support a return to modest growth in IT spending. Because we anticipate a better market in 2010, the Group is resuming recruitment in Norway and Sweden at full speed, but is awaiting improved market conditions in Denmark.

Oslo, 7 April 2010
The Board of Directors of Itera Consulting Group ASA

Gunnar Gjörtz
Chairman

Mimi K. Berdal
Vice chairman

Brita Eilertsen
Board member

John M. Lervik
Board member

Arne Mjøs
CEO

ACCOUNTS

FINANCIAL KEY FIGURES

Profit and loss	2009	2008
Operating revenue	411 456	448 850
EBITDA	39 615	56 483
EBIT	20 500	44 163
Profit before taxes	29 338	46 397
Profit for the year	20 650	34 090

Financial position

Total fixed assets		45 619	52 461
Total bank deposits		71 655	60 267
Total current assets		126 347	126 466
Total assets		171 965	178 928
Shareholder's equity		84 027	87 244
Total current liabilities		87 938	91 684
Equity ratio	1	49%	49%
Current ratio	2	1.44	1.38

Share information

Number of shares		85 340 346	85 340 346
Average number of outstanding shares		83 395 215	84 531 038
Equity per share	3	1.01	1.03
EBITDA per share	4	0.48	0.66
Earnings per share	5	0.25	0.40
Dividend per share	7	0.20	0.50

Employees

Number of employees at year end	370	391
Average number of employees	381	381

Definitions

Total equity divided by total assets
Most liquid assets and current receivables divided by current liabilities
Equity divided by number of outstanding shares
Profit/loss before tax plus depreciation divided by average number of outstanding shares
Net profit/loss for the year divided by average number of outstanding shares
Net cash flow divided by average number of outstanding shares
Dividend divided by average number of outstanding shares

OPERATING REVENUE

412 mnok

EBIT

27 mnok

TOTAL BANK DEPOSITS

72 mnok

REVENUE BY COUNTRY

→ Norway	78%
→ Sweden	15%
→ Denmark	7%

REVENUE BY INDUSTRY

→ Bank and insurance	27%
→ Public	21%
→ Telecom, media, high tech	19%
→ Healthcare	5%
→ Other	28%

→ STATEMENT

OF COMPREHENSIVE INCOME

GROUP

Itera

Annual Report 2009

Amounts in NOK 1 000	Note	2009	2008
Operating revenue
Sales revenue		411 456	447 850
Other operating revenue		0	1 000
Total operating revenue	1	411 456	448 850
Operating expenses
Cost of sales		67 019	74 942
Payroll and personell expenses	6, 7, 8, 9	268 311	273 936
Depreciation	12	13 115	12 320
Other operating expenses		36 513	43 489
Total operating expenses		384 957	404 687
Operating profit		26 500	44 163
Financial items
Other financial income	10	3 405	2 778
Other financial expenses	10	-566	-544
Net financial items		2 839	2 234
Profit before taxes		29 338	46 397
Income taxes	14	8 688	12 307
Profit for the year		20 650	34 090
Of which:
Shareholders in the parent company		20 650	34 090
Earnings per share	3	0.25	0.40
Diluted earnings per share	3	0.25	0.40
Profit for the year		20 650	34 090
Currency translation differences		-2 100	2 455
Unrealized net loss on investment in foreign subsidiaries		-1 661	-1 776
Total comprehensive income for the year		16 889	34 769
Attributable to:
Shareholders of the parent company		16 889	34 769

→ STATEMENT OF FINANCIAL POSITION GROUP

Itera

Annual Report 2009

Assets

Amounts in NOK 1 000	Note	2009	2008
Fixed assets
Intangible assets
Deferred tax assets	14	11 721	20 445
Other intangible assets	12	15 908	12 099
Total intangible assets		27 629	32 544
Tangible fixed assets
Machinery, equipment, fixtures	12	17 990	19 917
Total tangible assets		17 990	19 917
Total fixed assets		45 619	52 461
Current assets
Work in progress	2	2 651	4 892
Receivables
Accounts receivable	11	42 758	52 449
Other receivables		9 282	8 858
Total receivables		54 691	66 199
Bank deposits	16	71 655	60 267
Total current assets		126 346	126 466
Total assets		171 965	178 928

→ STATEMENT OF FINANCIAL POSITION GROUP

Itera

Annual Report 2009

Equity and liabilities

Amounts in NOK 1 000	Note	2009	2008
Equity
Paid-in capital
Share capital		25 602	25 601
Own shares		-802	-466
Total paid-in capital		24 800	25 135
Retained earnings		59 227	62 109
Total retained earnings		59 227	62 109
Total equity		84 027	87 244
Liabilities
Current liabilities
Accounts payable		14 301	13 478
Tax payable	14	0	0
Public duties payable		28 660	34 998
Other current liabilities	4	44 977	43 208
Total current liabilities		87 938	91 684
Total liabilities		87 938	91 684
Total equity and liabilities		171 965	178 928

Oslo, 7 April 2010

The Board of Directors of Itera Consulting Group ASA

Gunnar Gjörtz

Chairman

Mimi K. Berdal

Vice chairman

Brita Eilertsen

Board member

John M. Lervik

Board member

Arne Mjøs

CEO

The Board of Directors' Report and the financial statements including notes will be approved by the AGM in the Norwegian language.

This translation to English has been prepared for information purposes only.

→ STATEMENT OF CASH FLOW GROUP

Itera

Annual Report 2009

Amounts in NOK 1 000	Note	2009	2008
Cash flow from operating activities
Profit before taxes		29 338	46 397
Taxes paid	14	0	-1 562
Depreciation	12	13 115	12 320
Change in work in progress	2	2 241	686
Change in accounts receivable	11	9 691	2 049
Change in accounts payable		823	-2 482
Change in other items		-3 762	-657
Share-based payments		67	590
Net cash flow from operating activities		51 513	57 341
Cash flow from investment activities
Investment in fixed assets	12	-8 376	-13 992
Investment in intangible fixed assets	12	-7 818	-8 851
Net cash flow from investment activities		-16 194	-22 843
Cash flow from financial activities
Purchase of own shares		-3 422	-12 439
Sale of own shares		0	4 573
Dividend		-16 748	-42 287
Net cash flow from financial activities		-20 170	-50 153
Currency effect on cash		-3 761	679
Net change in bank deposits		11 388	-14 976
Bank deposits as of 1 January		60 267	75 243
Bank deposits as of 31 December		71 655	60 267

→ STATEMENT OF EQUITY GROUP

Itera

Annual Report 2009

Amounts in NOK 1 000	Share capital	Own shares	Translation differences	Other equity	Total equity
Shareholders' equity as of 31 December 2007	26 802	-1 156	-1 119	77 511	102 038
Comprehensive income for the year	0	0	679	34 090	34 769
Share based payments	0	0	0	590	590
Sale of own shares	0	356	0	4 219	4 575
Purchase of own shares	0	-865	0	-11 574	-12 439
Reduction of the share premium reserve	-1 200	1 200	0	0	0
Share capital pay back	0	0	0	-42 287	-42 287
Shareholders' equity as of 31 December 2008	25 602	-464	1 336	60 773	87 247
Comprehensive income for the year	0	0	-3 761	20 650	16 889
Share based payments	0	0	0	67	67
Purchase of own shares	0	-337	0	-3 091	-3 428
Dividend	0	0	0	-16 748	-16 748
Shareholders' equity as of 31 December 2009	25 601	-802	-2 425	61 651	84 027

→ NOTES GROUP

Itera

Annual Report 2009

REPORTING ENTITY

The Itera Consulting Group ASA is a public limited company domiciled in Oslo, Norway. The consolidated financial statements for the fiscal year ended 31 December 2009 comprise of the Itera Consulting Group ASA, Objectware AS, Cicero Consulting AS, Promis AS, Itera Networks AS, Itera Gazette AS, Compendia AS, Itera Offshoring Services AS, Xit Consulting AS, Itera Sweden AB, Itera Consulting Group Sweden AB, Itera Networks AB, Objectware AB, Itera Consulting Group Denmark ApS and Itera Consulting Group Ukraine.

BASIS OF PREPARATION

Statement of compliance

The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRSs).

The consolidated financial statements were authorized for issue by the Board of Directors on 7 April 2010.

Basis of measurement

The consolidated financial statements have been prepared on the historical cost basis.

Functional and presentation currency

These consolidated financial statements are presented in Norwegian kroner (NOK), which is the group functional currency. All financial information presented in NOK has been rounded to the nearest thousand.

Use of estimates and judgments

The preparation of financial statements in conformity with IFRSs requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected.

The most significant estimates that require management judgment are the following:

Estimated work in progress – see note 2
Provision for bad debts – see note 11
Capitalized development cost – see note 12
Value of deferred tax asset – see note 14

SIGNIFICANT ACCOUNTING POLICIES

The accounting policies set out below have been applied consistently to all periods presented in these consolidated financial statements, and have been applied consistently by group entities.

Basis of consolidation

Subsidiaries are entities controlled by the group. Control exists when the group has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. In assessing control, potential voting rights that currently are exercisable are taken into account. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases. The accounting policies of subsidiaries have been changed when necessary to align them with the policies adopted by the group.

Transactions eliminated on consolidation

Intra-group balances and transactions, and any unrealized income and expenses arising from intra-group transactions, are eliminated in preparing the consolidated financial statements. Unrealized gains arising from transactions with equity accounted investees are eliminated against the investment to the extent of the group's interest in the investee. Unrealized losses are eliminated in the same way as unrealized gains, but only to the extent that there is no evidence of impairment.

Foreign currency transactions

Transactions in foreign currencies are translated to the respective functional currencies of group entities at exchange rates at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies at the reporting date are retranslated to the functional currency at the exchange rate at that date. The foreign currency gain or loss on monetary items is the difference between amortized cost in the functional currency at the beginning of the period, adjusted for effective interest and payments during the period, and the amortized cost in foreign currency translated at the exchange rate at the end of the period.

Non-monetary assets and liabilities denominated in foreign currencies that are measured at fair value are retranslated to the functional currency at the exchange rate at the date that the fair value was determined. Foreign currency differences arising on retranslation are recognized in profit or loss, except for differences arising on the retranslation of available-for-

→ NOTES GROUP

Itera

Annual Report 2009

sale equity instruments, a financial liability designated as a hedge of the net investment in a foreign operation, or operation, or qualifying cash flow hedges, which are recognized directly in equity.

Share capital

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary shares and share options are recognized as a deduction from equity, net of any tax effects.

Repurchase of share capital (treasury shares)

When share capital recognized as equity is repurchased, the amount of the consideration paid, which includes directly attributable costs, is net of any tax effects, and is recognized as a deduction from equity. Repurchased shares are classified as treasury shares and are presented as a deduction from total equity. When treasury shares are sold or reissued subsequently, the amount received is recognized as an increase in equity, and the resulting surplus or deficit on the transaction is transferred to / from retained earnings.

Cost of equity transactions

Transaction costs directly relating to an equity transaction are recognized against equity after deducting tax expenses.

Fixed assets

Items of property, plant and equipment are measured at cost less accumulated depreciation and accumulated impairment losses. The cost of property, plant and equipment at 1 January 2004, the group's date of transition to IFRSs, was determined by reference to its fair value at that date.

Cost includes expenditure that is directly attributable to the acquisition of the asset. The cost of self-constructed assets includes the cost of materials and direct labour, any other costs directly attributable to bringing the assets to a working condition for their intended use, and the costs of dismantling and removing the items and restoring the site on which they are located.

Gains and losses on disposal of an item of fixed assets are determined by comparing the proceeds from disposal with the carrying amount of fixed assets, and are recognized net within "other income" in profit or loss. When revalued assets are sold, the amounts included in the revaluation surplus reserve are transferred to retained earnings.

Depreciation fixed assets

Depreciation is recognized in profit or loss on a straight-line basis over the estimated useful lives of each part of an item of property, plant and equipment. Leased assets are depreciated over the shorter of the lease term and their useful lives unless it is reasonably certain that the group will obtain ownership by the end of the lease term.

The estimated useful lives for the current and comparative periods are as follows:

Furniture and fittings	5–10 years
Software	3–5 years
Machinery and equipment	3 years

Depreciation methods, useful lives and residual values are reviewed at each reporting date.

Intangible assets

Intangible assets are capitalized if their future recoverability can reasonably be established. Intangible assets are capitalized at cost. Amortization is recognized in the income statement on a straight-line basis over the estimated useful lifetimes of intangible assets unless such lifetimes are indefinite. Goodwill and intangible assets with an indefinite useful lifetime are systematically tested for impairment at each balance sheet date. Other intangible assets are amortized from the date they become available for use.

Software expenditure is capitalized as intangible assets if this expenditure is not considered to be part of the acquisition cost for hardware. Repair and maintenance are normally included in the income statement. If increased revenue can be proved as a result of the repair and maintenance, the cost will be included as additional software.

Research and development

Expenditure on research activities, undertaken with the prospect of gaining new scientific or technical knowledge and understanding, is recognized in profit or loss when incurred.

Development expenditures related to major new business concepts and software products is capitalized only if development costs can be measured reliably, the product or process is technically and commercially feasible, future economic benefits are probable, and the group intends to and has sufficient resources to complete development and to use or sell the asset. The expenditure capitalized includes the cost of materials, direct labour and overhead costs that are directly attributable to preparing the asset for its intended use. Other development expenditure is recognized in profit or loss as incurred.

→ NOTES GROUP

Itera

Annual Report 2009

Capitalized development expenditure is measured at cost less accumulated amortization and accumulated impairment losses.

Amortization

Amortization is recognized in profit or loss on a straight-line basis over the estimated useful lives of intangible assets, other than goodwill, from the date that they are available for use. The estimated useful lives for the current and comparative periods are as follows:

Capitalized development costs 3–5 years

Leasing

Lease agreements are classified as financial or operational according to the actual content of the agreements. If the greater part of the financial risk and control of the object of the leasing agreement is the responsibility of the lessee, the agreement is classified as financial lease, and the associated assets and liabilities are capitalized. Other lease agreements are classified as operational lease and the expenditures are included in the income statement.

Work in progress

Work in progress represents the gross unbilled revenue expected to be collected from customers for contract work performed to date. It is measured to cost plus profit recognized to date less recognized losses.

Accounts receivable

Trade and other receivables are initially measured at cost. A provision is made for doubtful receivables based on individual assessment of potential risk and recognized in the financial statements.

Impairment

A financial asset is assessed at each reporting date to determine whether there is any objective evidence that it is impaired. Individually significant financial assets are tested for impairment on an individual basis. The remaining financial assets are assessed collectively in groups that share similar credit risk characteristics.

All impairment losses are recognized in profit or loss. Any cumulative loss in respect of an available-for-sale financial asset recognized previously in equity is transferred to profit or loss.

Defined contribution plans

The Itera Consulting Group pension schemes is defined contribution plans. A defined contribution plan is a post-employment benefit plan under which an entity pays fixed contributions into a separate entity and will have no legal or constructive obligation to pay further amounts. Obligations for contributions to defined contribution pension plans are recognized as an employee benefit expense in profit or loss when they are due. Prepaid contributions are recognized as an asset to the extent that a cash refund or a reduction in future payments is available.

Share-based payments

Employee stock options in the Itera Consulting Group represent rights for employees to subscribe shares in the Itera Consulting Group at a future point in time, at a pre-determined exercise price. The stock options are conditional upon achievement of performance conditions, both financial and others. Exercise in general also requires that the individual is still employed in the Itera Consulting Group.

The value of the stock options are calculated at the time of grant and recognized in the income statement distributed over the accrual period. Stock options are normally distributed with an exercise price that exceeds the share price at the time of grant, that is, without intrinsic value.

Employer's national insurance contribution with the taxable advantages for the employee is currently recognized in the income statement over the accrual period, based on the extent of earning at the balance sheet date.

Provisions

A provision is recognized if, as a result of a past event, the group has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability.

Revenue

Revenue from services rendered is recognized in profit or loss in proportion to the stage of completion of the transaction at the reporting date. The stage of completion is assessed by reference to surveys of work performed. Revenues related to subscriptions are recognized on a straight-line basis over the contract period. Revenues from fixed price projects and similar types of customer agreements is recognized according to the percentage of completion method.

Provisions are made for losses in connection with long-term

→ NOTES GROUP

Itera

Annual Report 2009

contracts when these losses are identified and the amounts can be reliably estimated.

Financial income and expenses

Financial income comprises interest income on funds invested (including available-for-sale financial assets). Interest income is recognized as it accrues in profit or loss, using the effective interest method. Dividend income is recognized in profit or loss on the date that the group's right to receive payment is established, which in the case of quoted securities is the ex-dividend date.

Financial expenses comprise interest expense on loans and changes in the fair value of financial assets at fair value through profit or loss. All borrowing costs are recognized in profit or loss using the effective interest method.

Income tax

Income tax expense comprises current and deferred tax. Income tax expense is recognized in profit or loss except to the extent that it relates to items recognized directly in equity, in which case it is recognized in equity.

Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous years. Deferred tax is recognized using the balance sheet method, providing for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes.

A deferred tax asset is recognized to the extent that it is probable that future taxable profits will be available against which the temporary difference can be utilised. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised.

Statement of cash flow

The cash flow statement is compiled using the indirect method. Cash and cash equivalents include cash, bank deposits and other short-term investments with terms not exceeding three months that immediately, and with no material exchange rate exposure, can be exchanged for cash.

Earnings per share

The group presents basic and diluted earnings per share (EPS) data for its ordinary shares. Basic EPS is calculated by dividing the profit or loss attributable to ordinary shareholders of the Company by the weighted average number of ordinary

shares outstanding during the period. Diluted EPS is determined by adjusting the profit or loss attributable to ordinary shareholders and the weighted average number of ordinary shares outstanding for the effects of all dilutive potential ordinary shares, which comprise convertible notes and share options granted to employees.

Events after balance sheet date

New information on the group's position at the balance sheet date is taken into account in the financial statements. Events after the balance sheet date that do not affect the company's position at the balance sheet date, but will affect the company's position in the future, are recognized if significant.

IFRS standards not yet implemented

A number of new standards, amendments to standards and interpretations are not effective for the year ended 31 December 2009, and have not been applied in preparing these consolidated financial statements:

IAS 32 (R 2009) Classification of Rights Issues
IAS 39 (amended 2009) Eligible Hedged Items
IFRS 1 (R 2008) First-time Adoption of International Financial Standards
IFRS 1 (R 2009) Additional Exemptions for First-time Adopters
IFRS 2 (R 2009) Group Cash-settled Share-based Payment Transactions
IFRS 3 (R 2008) Business Combinations
IAS 27 (amended 2008) Consolidated and Separate Financial Statements
IFRIC 15 Agreements for the Construction of Real Estate
IFRIC 17 Distribution of Non-Cash Assets to Owners
IFRS 9 Financial Instruments
IFRIC 14 (amended 2009) Prepayments of a Minimum Funding Requirement
IFRIC 19 Extinguishing Financial Liabilities with Equity Instruments
IAS 24 (R 2009) Related Party Disclosure
IFRS 7 Disclosures for first time Adopters

The new standards are not considered to have a significant effect for the group.

→ NOTES 1 GROUP

Itera

Annual Report 2009

1 OPERATING SEGMENTS

The operation in the Itera Consulting Group is divided in two business areas: IT and communication. Industry slippage created by new digital technology means that technology is communication, and communication is technology. The subsidiary Itera Gazette operates in the communication area, but with an increasing proportion of digital communication.

Similarly, the group segmented its operations in the IT and communication. Moreover, the group has a natural segmentation by countries. The group has reviewed the new requirements for segment information under IFRS 8 and has found no reason to change existing practice which is also used for internal reporting, including reporting to the chief decision maker, the CEO.

Transactions and transfers between the business areas are carried out on ordinary commercial terms, corresponding to the terms used for external parties.

2009
Amounts in NOK 1 000

Business areas	IT Business Solutions	Digital Communications	Group
Operating revenue	403 242	43 284	446 526
Group eliminations	-34 820	-250	-35 070
Total revenue	368 422	43 034	411 456
EBITDA	38 523	1 092	39 615
Depreciation	12 638	477	13 115
Operating profit	25 885	615	26 500
Investments	15 750	444	16 194
Total assets	156 374	15 328	171 965
Total liabilities	75 562	12 377	87 939

2008

Operating revenue	422 610	52 868	475 478
Group eliminations	-26 126	-502	-26 628
Total revenue	396 484	52 366	448 850
EBITDA	58 626	-2 143	56 483
Depreciation	10 623	1 697	12 320
Operating profit	48 003	-3 840	44 163
Investments	22 596	247	22 843
Total assets	160 482	18 446	178 928
Total liabilities	75 695	15 989	91 684

NOTES 1-2 GROUP

Itera

Annual Report 2009

2009

Amounts in NOK 1 000
Geographical areas	Ukraine	Norway	Sweden	Denmark	Group
Sales revenue	1 496	354 141	62 147	28 742	446 526
Group eliminations	-1 496	-30 730	-1 708	-1 136	-35 070
Total revenue	0	323 411	60 439	27 606	411 456
Investments	230	13 619	877	1 468	16 194
Total assets	443	111 774	39 489	20 259	171 965
Total liabilities	15	41 302	39 019	7 602	87 938

2008

Sales revenue	371 311	68 718	35 448	475 477
Group eliminations	-24 366	-2 114	-148	-26 628
Total revenue	346 945	66 604	35 300	448 849
Investments	16 042	5 040	1 761	22 843
Total assets	117 070	36 296	25 562	178 928
Total liabilities	46 795	36 403	8 486	91 684

2 WORK IN PROGRESS

Work in progress consist of earned, not invoiced revenue.

Amounts in NOK 1 000	2009	2008
Gross work in progress	3 355	6 211
Provision for impairment	-704	-1 319
Net work in progress	2 651	4 892

Work in progress represents the gross unbilled amount expected to be collected from customers for contract work performed to date. It is measured at cost plus profit recognized to date less progress billings and recognized losses. If payments receives from customers exceed the income recognized, then the difference is predented as deferred income.

→ NOTES 3-4

GROUP

Itera

Annual Report 2009

3 EARNINGS PER SHARE

Amounts in NOK 1 000	2009	2008
Profit for the year	20 650	34 090
Average number of outstanding shares	83 395	84 531
Outstanding options to employees	378	1 388
Average number of shares including dilution	83 395	84 531
EBITDA per share	0.48	0.67
Earnings per share	0.25	0.40
Diluted earnings per share	0.25	0.40

Itera Consulting Group ASA has as of 31 December 2009 outstanding the total 378 000 stock options to employees, of which 188 334 to employees in the parent company. The exercise price of the options is NOK 6.20. The terms in regards and the exercise are within 1 year.

In calculating the diluted number of shares, only the outstanding options with diluting effect is included. The options with diluting effect is the options with an exercise price lower than the average stock exchange price. For the year 2009 average stock exchange price was NOK 3.50 (NOK 4.04) and the total number of options with diluting effect was 0 (0).

	2009	2008
Average number of outstanding shares	83 395	84 531
Dilution of outstanding stock options	0	0
Average number of outstanding shares including dilution	83 395	84 531

4 OTHER CURRENT LIABILITIES

Amounts in NOK 1 000	2009	2008
Holiday pay	15 156	17 723
Customer prepayments	8 274	8 437
Accrued wages and bonuses	9 401	7 921
Accrued expenses	12 146	9 127
Total	44 977	43 208

→ NOTES 5 GROUP

Itera

Annual Report 2009

5 FINANCIAL RISK MANAGEMENT

The Itera Consulting Group is exposed to different financial risks such as; credit risk, liquidity risk, currency risk and interest rate risk. Overall, these risks are considered as low. The group has established guidelines to deal with these risks. The main principle is to minimize exposure to financial risks, and the group holds no financial assets or liabilities for speculative purposes.

Credit risk

Credit risk is the risk of financial loss to the group's receivables from customers and other current receivables. The group has established a credit policy under which each new large customer is analyzed individually for creditworthiness before the group's standard payments.

The group's exposure to credit risk is no influenced mainly by the individual characteristics of each customer, but customers as a group. Based on the fact of increase in the collection ratio, it is allocated more resources for following up overdue accounts receivable. A provision is made for receivables older than 90 days based on individual assessment of potential risk and recognized in the financial statements. The groups exposure in accounts receivable is presented in note 11.

Liquidity risk

Liquidity risk is the risk that the group will not be able to meet its financial obligations as they fall due. The group's approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the group's reputation. The group has established a credit facility in Fokus Bank, see note 16. During 2009 the credit facility was used in some short periods during the July and August, but mainly the credit facility was unused.

Currency risk

The group is exposed to currency risk through its businesses in Sweden, Denmark and Ukraine. The exposure to currency risk is limited by the fact that the expenses are in the same currencies in Sweden and Denmark. Of the group's total revenue, 15% is in Swedish kroner (SEK) and 7% in Danish kroner (DKK). A 10% change in the NOK value against DKK and SEK will affect the consolidated operating revenue with 2.2%.

In Ukraine the group operates in three different currencies, USD, Euro and Hryvnia. The main exposure is in USD. A 10% change in the NOK value against USD will affect the consolidated operating profit by 0.1%.

Interest rate risk

The group is exposed to interest risk related to the bank deposits. The group has no external financing or external security reserves other than own shares and has therefore no material risk tied to interest or securities.

→ NOTES 6-7

GROUP

Itera

Annual Report 2009

6 PAYROLL AND PERSONELL EXPENSES

Amounts in NOK 1 000	2009	2008
Salaries	220 455	225 279
Share-based payments	67	590
National insurance contribution	33 405	36 225
Pension cost	12 927	9 668
Other benefits	6 350	8 530
Capitalized payroll	-4 893	-6 356
Total payroll and personell expenses	268 311	273 936
Average number of employees	381	381

7 SHARE-BASED PAYMENTS

As of 31 December 2009 the Itera Consulting Group had a total of 378 000 stock options that were outstanding to employees. Of these 188 334 were outstanding to employees of the parent company. The strike price for these stock options are NOK 6.20. These stock options are aimed at key employees in the group. They are conditional on the achievement of defined financial and other targets, and are current within 1 year. Names are allocated to these stock options programmes in accordance with the year in which they are issued and when they can be exercised between 1 and 3 years from the date of allocation (I, II or III).

Fair value of the stock options is calculated on the grant date and charged as an expense over the expected life period of 1 to 3 years. It is charged NOK 67 thousand in 2009 (NOK 590 thousand) in connection with the stock option programmes. There is not granted stock options in 2008 or 2009. Fair value is calculated using the Black-Scholes-Merton option pricing model.

It is assumed that the historical volatility is an indication of future volatility. Expected volatility is therefore set equal to historical volatility. Interest rate is based on rates collected from Norges Bank for corresponding period as the stock options expected life.

An annual turnover of 5% is expected for stock options awarded on 18 September 2007, and for calculation purposes, dividend of NOK 0.50 per year is applied.

As of 31 December 2009, the outstanding options, are not in the money and it is accrued KNOK 0 (0) in national insurance contribution.

Programme	Number	Fair value	Exercise price 1)	Share price 2)	Grant date	Exercise period
2007 III	378 000	NOK 0.46	NOK 6.20	NOK 6.10	18 September 2007	15-30 September 2010
Total	378 000

1) The exercise price is the average share price that applies during the last 30 days prior to the date of award.
2) The share price is set at its actual value on the date of award. The company is operating on the premise that the exercise price is the same as the price on the date of award and that the options do not have any intrinsic value on this date despite slight differences between 1) and 2).

→ NOTES 7-8 GROUP

Itera

Annual Report 2009

Programme	Number	Interest	Volatility
2007 III	378 000	5.60%	24.00%
Total	378 000
	2009 Number	Weighted average exercise price	2008 Number
---	---	---	---
Outstanding as of 1 January	1 388 125	NOK 5.54	3 462 182
Exercised during the period	0		-1 186 054
Forfeited during the period	-1 010 125	NOK 5.30	-888 003
Granted during the period	0		0
Outstanding as of 31 December	378 000	NOK 6.20	1 388 125

8 REMUNERATIONS

Pursuant to Section 6-16a of the Norwegian Public Limited Act, the Board of Directors will present the following remuneration guidelines to the Annual General Meeting:

"The Board of Director's statement on the stipulation of salaries and other remunerations to senior executives

The Itera group aims to offer competitive salaries in the labour market so that Itera Consulting Group ASA and its subsidiaries are able to attract and retain executive employees with the desired expertise. Remuneration schemes must not pose a threat to the Itera-group's reputation.

Executive employees have a fixed salary as well as a variable (bonus) salary. Variable salaries are primarily linked to the financial targets of the group and/or its individual subsidiaries. A percentage of the variable salaries may also be linked to personal targets.

Benefits in kind, can be offered to executive employees to the extent such benefits have a logical connection the employee's function or are in line with market practice.

Executive employees are covered by the contributory pension schemes of the respective companies.

Executive employees will also be considered for inclusion in the group's stock options programmes if these continue. There are currently one stock options programme for executive- and key employees. Each year the Board considers whether or not such options programmes should continue. Any options will be allocated without an intrinsic value. Proposals relating to new stock options programmes will be presented to the Annual General Meeting.

The CEO's salary and other salary-related remunerations will be determined by the Board. Salaries and other remunerations for group executives and the managing directors of subsidiaries are determined by the CEO following consultation with the Chairman of the Board.

As a main principle, no termination payment agreements will be signed. However, the group will honour existing agreements.

The Board of Directors confirms that the guidelines set forth in the statement and presented for the Annual General Meeting in 2009 were complied in 2009. The guidelines are unchanged from 2009 to 2010."

→ NOTES 8 GROUP

Itera

Annual Report 2009

Compensation to senior management

Amounts in NOK 1 000

Name	Position	Salary	Bonus	Other benefits	Value of options	Total taxable remuneration	Pension benefit cost to company
Arne Mjøs	CEO	1 813	400	91	0	2 304	64
Frank Martinsen	CFO	1 465	150	14	0	1 629	64
Total 2009		3 278	550	105	0	3 933	128
Arne Mjøs	CEO	1 740	270	89	231	2 330	61
Frank Martinsen	CFO	1 424	80	15	129	1 648	61
Total 2008		3 164	350	104	360	3 978	122

The CEO and CFO have no termination payment agreements.

Compensation to the Board of Directors

Amounts in NOK 1 000

Name	Position	2009	2008
Gunnar Gjørtz	Chairman	300	263
Mimi K. Berdal	Vice chairman	225	200
Brita Eilertsen	Board Member	175	175
John M. Lervik	Board Member	175	87
Per A. Boasson	Former Chairman	0	150
Total		875	875

Compensation to the nomination committee

Amounts in NOK 1 000

Name	Position	2009
Erik Sandersen	Leader	30
Gisle Evensen	Member	15
Geir Moe	Member	15
Total		60

Shareholdings owned directly or indirectly and stock options held by the Board as of 31 December 2009

Name	Position	Shares
Gunnar Gjørtz	Chairman	150 000
Mimi K. Berdal	Vice chairman	23 000
Brita Eilertsen	Board Member	100 000
John M. Lervik	Board Member	0
Total		273 000

NOTES 8-9

GROUP

Itera

Annual Report 2009

Shareholdings owned directly or indirectly and stock options held by the senior management as of 31 December 2009

Name	Position	Shares	Options
Arne Mjøs	CEO	15 018 298	121 667
Frank Martinsen	CFO	1 000 000	66 667
Total		16 018 298	188 334

Audit fees

Amounts i NOK 1 000	2009	2008
Audit fee for Itera Consulting Group ASA	165	175
Audit fee for the subsidiaries from KPMG Norway	350	325
Audit fee from KPMG abroad	141	138
Total audit fee from KPMG	656	638
Other authorization statements from KPMG	15	16
Other services from KPMG	145	114
Audit fees from other audit companies	47	45
Total audit fees from other audit companies	47	45
Other authorization statements from other audit companies	0	0
Other services from other audit companies	59	41

9 PENSION

All of the group's pension schemes are contributory schemes. Pension expenses correspond to the paid premiums and have been entered under payroll and personell expenses in the profit and loss account. The group's pension schemes in Norway comply with the Norwegian Mandatory Occupational Pension Act (OTP).

Pension cost

Amounts i NOK 1 000	2009	2008
Norway ¹)	8 025	5 048
Sweden	1 966	2 183
Denmark	2 934	2 436
Total pension cost	12 925	9 667

¹) A cost reduction, amounted to NOK 2 million, is recognized against pension cost in 2009. The cost reduction is related to premium reserve and deposit reserve.

→ NOTES 10-11

GROUP

Itera

Annual Report 2009

10 NET FINANCIAL ITEMS

Amounts in NOK 1 000	2009	2008
Interest income	966	2 434
Net foreign exchange gain	2 268	115
Other	171	229
Total financial income	3 405	2 778
Interest expenses	-263	-347
Net foreign exchange loss	-100	-105
Other	-203	-92
Total financial expenses	-566	-544

11 ACCOUNTS RECEIVABLE

Amounts i NOK 1 000	2009	2008
Gross accounts receivable as of 31 December	43 228	53 405
Provision for bad debt	-470	-956
Net accounts receivable as of 31 December	42 758	52 449

Age distribution of accounts receivable

	Total	Not due	0–30 days	30–60 days	60–90 days	> 90 days
As of 31 December 2009	42 758	30 714	9 532	961	734	817
As of 31 December 2008	52 449	37 031	9 641	1 086	1 405	3 286

Accounts receivable per country/currency

	2009	%	2008	%
Norway	31 657	74%	39 911	76%
Sweden	8 552	20%	8 859	17%
Denmark	2 549	6%	3 679	7%
Total	42 758	100%	52 449	100%

Losses on accounts receivable are classified as operating expenses in the income statement. Maximum credit risk is equal to the net accounts receivable above.

NOTES 12 GROUP

Itera

Annual Report 2009

12 FIXED ASSETS

2009

Amounts in NOK 1 000	Development cost	Software	Machinery & equipment	Furniture & fittings	Other	Total
Acquisition cost
Accumulated as of 1 January	19 363	4 986	25 547	10 862	392	61 150
Additions during the year	7 817	2 591	3 624	2 161	0	16 194
Disposals during the year	0	-585	-1 911	-1 240	0	-3 736
Exchange differences	-237	0	-527	-385	0	-1 149
Accumulated as of 31 December	26 943	6 993	26 733	11 397	392	72 459

Depreciation

Accumulated as of 1 January	7 264	2 292	13 775	5 716	87	29 134
Depreciation	3 792	1 476	5 809	1 974	64	13 115
Disposals during the year		-585	-1 911	-1 240	0	-3 736
Exchange differences	-21	10	123	-67	3	48
Accumulated as of 31 December	11 035	3 193	17 796	6 383	154	38 561

Carrying amounts

As of 1 January	12 099	2 694	11 772	5 146	305	32 016
As of 31 December	15 908	3 799	8 937	5 015	238	33 898
Estimated useful lives	3-5 years	3-5 years	3 years	5-10 years	3 years
---	---	---	---	---	---
Depreciation plan	linear	linear	linear	linear	linear

NOTES 12-13

GROUP

Itera

Annual Report 2009

2008

Amounts in NOK 1 000	Development cost	Software	Machinery & equipment	Furniture & fixtures	Other	Total
Acquisition cost
Accumulated as of 1 January	11 018	2 563	19 167	14 786	392	47 926
Additions during the year	8 461	2 409	10 066	1 729	0	22 665
Disposals during the year	-234	0	-3 931	-6 019	0	-10 184
Exchange differences	118	14	245	366	0	743
Accumulated as of 31 December	19 363	4 986	25 547	10 862	392	61 150

Depreciation

Accumulated as of 1 January	4 196	1 155	12 189	9 425	27	26 992
Depreciation	3 295	1 136	5 516	2 311	62	12 320
Disposals during the year	-234	0	-3 931	-6 019	0	-10 184
Exchange differences	7	1	1	-1	-2	6
Accumulated as of 31 December	7 264	2 292	13 775	5 716	87	29 134

Carrying amounts

As of 1 January	6 822	1 408	6 978	5 361	365	20 934
As of 31 December	12 099	2 694	11 772	5 146	305	32 016
Estimated useful lives	3-5 years	3-5 years	3 years	5-10 years	3 years
---	---	---	---	---	---
Depreciation plan	linear	linear	linear	linear	linear

Intangible fixed assets (development cost) are primarily related to the development of new concepts. The concepts being developed are primarily related to contracts entered into with fixed future income.

In 2009 NOK 7.8 million (NOK 8.5 million) was capitalised in respect of the development of concepts. Expenditure incurred in connection with developments is primarily linked to the wages and salaries paid to employees who have participated in developing these concepts. As of 31 December 2009, NOK 15.9 million (NOK 12.1 million) was entered under intangible fixed assets.

All activities, corresponding to development, is ended 31 December 2009.

The Itera Consulting Group does not have significant differences between net book value and fair value.

13 FOREIGN CURRENCY

Information regarding exchange rates used in the Itera group for 2009.

	Exchange rate 1 Jan	Average	Exchange rate 31 Dec.
SEK	0.9042	0.8223	0.8099
DKK	1.1323	1.1722	1.1173
EUR	9.8650	8.7285	8.3150
USD	6.998	6.2816	5.776
UAH	0.9157	0.7940	0.7335

NOTES 14

GROUP

Itera

Annual Report 2009

14 INCOME TAXES

Amounts in NOK 1 000	2009	2008
Income taxes
Tax payable	-36	1 562
Change in deferred taxes	8 724	10 745
Total	8 688	12 307
Tax payable
Profit before taxes	29 338	46 397
Permanent differences	-2 201	252
Change in temporary differences	1 310	122
Utilization of previously recognized tax losses	-28 447	-40 523
Total	0	6 248
Specification of the deferred taxes
Fixed assets	-6 912	-7 173
Current assets	-1 964	-932
Gain and loss account	1 718	2 147
Provisions according to accounting practices	0	0
Loss carried forward	-48 752	-83 978
Total	-55 910	-89 936
Deferred tax assets	-15 655	-25 182
Recognized in the balance sheet	-11 721	-20 445
Tax rate reconciliation
Profit before tax	29 338	46 397
Tax calculated at the domestic Corporate tax rate of 28%	8 215	12 991
Different taxrate in subsidiaries	208	-613
Permanent differences	616	-71
Unrecognized tax losses for the period	-720	0
Recognized previously unrecognized tax losses	369	0
Income taxes in the statement of comprehensive income	8 688	12 307
Effective tax rate	29.6%	26.5%
Loss carried forward
Norway	36 052	68 280
Sweden	11 755	15 698
Denmark	945	0
Total	48 752	83 978

The group's deferred tax assets as of December 2009 are NOK 15.7 million of which NOK 11.7 million is recognized in the balance sheet. The future utilization of the recognized deferred tax asset is probable, based on budget and cash flow analyses.

→ NOTES 15-18 GROUP

Itera

Annual Report 2009

15 CONTINGENCIES

As of 31 December 2009, the group had a total rent commitment amounting to NOK 26.1 million. The group's leases expire during the period 2010 to 2016, with its main leases expiring in mid-2012.

16 CASH AND CASH EQUIVALENTS

Amounts i NOK 1 000	2009	2008
Cash and cash deposits	71 655	60 267
of which restricted	-8 981	-10 101
Unrestricted cash and cash equivalents	62 674	50 166
Unused credit facilities	15 000	15 000
Cash reserve	77 674	65 166

17 SHARE CAPITAL AND SHAREHOLDERS

Share capital

As of 31 December 2009 Itera Consulting Group ASA had a share capital amounted to NOK 25 602 104 distributed among 85 340 346 shares, each with a face value of NOK 0.30 and fully paid. The share capital is unchanged during 2009. Each share carries a right to one vote at the annual general meeting.

Ownership structure

As of 31 December 2009, the Itera Consulting Group ASA had 2 311 (2 348) shareholders. At year-end 6% (7%) of the company's sharecapital was owned by foreign investors. The company's 20 largest shareholders own 55% (54%) of the company's shares.

Own shares

Itera Consulting Group holds 2 682 884 (3.1%) own shares, of which 694 888 are held through the wholly owned subsidiary Objectware AS. The remaining 1 987 996 are held by Itera Consulting Group ASA. The average number of own shares in 2009 amounted to 1 945 131.

Further information about shares and shareholders follows in a separate section in this report.

18 EVENTS AFTER BALANCE SHEET DATE

Own shares

As of 7 April 2010 the Company has purchased 97 000 own shares at an average price of NOK 4.29 per share. After these transactions the Itera Consulting Group owns the total of 2 799 884, corresponding to 3.3%.

Dividend

The Board of Directors is proposing a dividend of NOK 0.20 per share.

→ STATEMENT OF INCOME PARENT

Itera

Annual Report 2009

Amounts in NOK 1 000	Note	2009	2008
Operating revenue
Sales revenue		11 646	5 557
Total operating revenue		11 646	5 557
Operating expenses
Cost of sales		2 622	0
Payroll and personell expenses	1,2,3	11 660	10 241
Depreciation	4	939	570
Other operating expenses		1 510	785
Total operating expenses		16 731	11 596
Operating profit		-5 085	-6 039
Financial items
Income from investments in subsidiaries	11	39 804	47 401
Interest income from group companies		147	440
Other financial income		2 190	6 645
Interest paid to group companies		612	1 163
Other financial expenses		228	9 262
Net financial items		41 301	44 061
Profit before taxes		36 216	38 022
Income taxes	8	9 395	11 410
Profit of the year	9	26 821	26 612
Allocations and transfers
To dividend		17 068	17 068
To other reserves	9	9 753	9 544
Total allocations and transfers		26 821	26 612

→ STATEMENT OF FINANCIAL POSITION PARENT

Itera

Annual Report 2009

Assets

Amounts in NOK 1 000	Note	2009	2008
Fixed assets
Intangible assets
Deferred tax assets	8	7 025	16 421
Total intangible assets		7 025	16 421
Tangible fixed assets
Machinery, equipment and software	4	3 475	2 244
Total tangible assets		3 475	2 244
Financial fixed assets
Investment in subsidiaries	5	107 584	98 495
Loan to group companies	7	25 289	20 734
Total financial fixed assets		132 873	119 229
Total fixed assets		143 373	137 894
Current assets
Receivables
Intercompany receivables	11	17 377	21 534
Other receivables		1 208	418
Total receivables		18 585	21 952
Bank deposits	12	650	1 678
Total current assets		19 235	23 630
Total assets		162 608	161 525

→ STATEMENT OF FINANCIAL POSITION PARENT

Itera

Annual Report 2009

Equity and liabilities

Amounts in NOK 1 000	Note	2009	2008
Equity
Paid-in capital
Share capital		25 602	25 602
Other paid-in capital		1 890	1 823
Own shares		-596	-259
Total paid-in capital		26 896	27 166
Retained earnings		98 152	92 969
Total retained earnings		98 152	92 969
Total equity	9	125 048	120 135
Liabilities
Current liabilities
Accounts payable		213	0
Public duties payable		855	1 114
Intercompany liabilities		17 560	19 585
Provision for dividend		17 068	17 068
Other current liabilities		1 864	3 623
Total current liabilities		37 560	41 390
Total liabilities		37 560	41 390
Total equity and liabilities		162 608	161 525

Oslo, 7 April 2010

The Board of Directors of Itera Consulting Group ASA

The Board of Directors' Report and the financial statements including notes will be approved by the AGM in the Norwegian language.

This translation to English has been prepared for information purposes only.

→ STATEMENT OF CASH FLOW PARENT

Itera

Annual Report 2009

Amounts in NOK 1 000	2009	2008
Cash flow from operating activities
Profit before taxes	36 216	38 022
Depreciation	939	570
Write-down on investments	0	6 500
Reversing previous years' write-down on investments	0	-9 050
Change in accounts payable	213	-924
Change in other items	-3 739	1 245
Share-based payments	67	169
Net cash flow from operating activities	33 696	36 532
Cash flow from investment activities
Investment in fixed assets	-2 171	-1 113
Investment in subsidiaries	-489	-2 600
Net cash flow from investment activities	-2 660	-3 713
Cash flow from financial activities
Purchase of own shares	-3 421	-12 439
Sale of own shares	0	4 574
Dividend	-16 886	-42 287
Loan from subsidiaries	-11 757	13 599
Net cash flow from financial activities	-32 064	-36 553
Net change in bank deposits	-1 028	-3 734
Bank deposits as of 1 January	1 678	5 412
Bank deposits as of 31 December	650	1 678

→ NOTES PARENT

Itera

Annual Report 2009

GENERAL

The financial statements consist of profit and loss statement, balance sheet, cash flow statement and notes and have been prepared in accordance with the Public Company's Act, Norwegian Accounting Act and the accounting principles generally accepted in Norway (NGAAP).

Basis of measurement

The consolidated financial statements have been prepared on the historical cost basis.

Transactions are allocated to the value of the remuneration at the time of the transaction. Revenues are recognized in the financial statements when earned and expenses are matched earned revenue.

Use of estimates and judgments

The preparation of financial statements in conformity with NGAAPs requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected.

Subsidiaries

Valuation of investments in subsidiaries

Subsidiaries are valued in accordance to the historical cost method in the parent company's financial statements. Investments are valued at the historical cost of the shares unless a write-down has been necessary. The investments are written down to fair value unless the impairment is due to temporary circumstances. Impairment losses are reversed when the basis for impairment are no longer present.

The dividend, group contribution and other distributions from subsidiaries are recognized in the same year as it is accrued in the subsidiary's accounts. If the dividend or group contribution exceeds the earned income after the acquisition date, this represents repayment of invested capital, and the distribution will reduce the book value in the balance sheet of the parent company.

Foreign currency transactions

Monetary assets and liabilities denominated in foreign currencies at the reporting date are retranslated to Norwegian kroner (NOK) at the exchange rate at that date.

Share capital

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary shares and share options are recognized as a deduction from equity, net of any tax effects.

Repurchase of share capital (treasury shares)

Intangible assets

Fixed assets

Fixed assets are entered in the accounts at historical cost, with deductions for accumulated depreciation and write-down. If the fair value of a fixed asset is lower than book value, and the decline in value is not temporary, the fixed asset will be written down to fair value.

Impairment

→ NOTES PARENT

Itera

Annual Report 2009

All impairment losses are recognized in profit or loss. Any cumulative loss in respect of an available for sale financial asset recognized previously in equity is transferred to profit or loss.

Subordinated loans

The parent company has provided subordinated loans to several of its subsidiaries. For the foreign subsidiaries, the loan is amounted in the subsidiary's currency. The subordinated loans are recognized at the exchange rate at the end of the period. The loans are considered as a part of the net investment and the change in exchange rates are recognized against equity.

Accounts receivable

Trade and other receivables are initially measured at cost. A provision is made for doubtful receivables based on individual assessment of potential risk and recognized in the financial statements.

Defined contribution plans

Share-based payments

Employee stock options in the Itera Consulting Group represent rights for employees to subscribe shares in the group at a future point in time, at a pre-determined exercise price. The stock options are conditional upon achievement of performance conditions, both financial and others. Exercise in general also requires that the individual is still employed in the group.

The regulations in the Norwegian Accounting Act § 5-9a is used for stock options granted after 1 January 2005 and charged to the company's accounts.

Revenue recognition

Revenue is normally recognized at the time of delivery of goods or services.

Financial income and expenses

Income tax

Deferred tax is recognized using the balance sheet method, providing for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes.

Statement of cash flow

The statement of cash flow is prepared using the indirect method. Cash and cash equivalents include cash, bank deposits and other short-term investments.

→ NOTES 1-2
PARENT
Itera Corporation
Annual Report 2009

1 PAYROLL AND PERSONNEL EXPENSES

Amounts in NOK 1 000	2009	2008
Salaries	9 058	8 472
Share-based payments	67	169
National insurance contribution 1)	1 288	873
Pension cost	525	414
Other benefits	272	313
Total payroll and personell expenses	11 660	10 241
Average number of employees	13	11

1) In 2008 a cost reduction, from former periods, is recognized against national insurance contribution corresponding to share-based payments.

2 SHARED-BASED PAYMENTS

The Itera Consulting Group ASA has outstanding 188 334 stock options to employees as of 31 December 2009. The exercise price of the stock options are NOK 6.20. The stock option programmes are issued to key employees in the company. The stock options are conditional upon the achievement of performance conditions, both financial and others. The terms in regards of the exercise period of the stock options vary within a timeframe of 1 to 3 years which corresponds to expected life. Names are allocated to these stock options programmes in accordance with the year in which they are issued and when they can be exercised between 1 and 3 years from the date of allocation (I, II or III).

Fair value of the stock options is calculated on the grant date and charged as an expense over the expected life period of 1 to 3 years. It is charged NOK 67 thousand in 2009 (NOK 169 thousand) in connection with the stock option programmes. There is not granted stock options im 2008 or 2009. Fair value is calculated using the Black-Scholes-Merton option pricing model.

An annual turnover of 5% is expected for stock options awarded on 18 September 2007, and for calculation purposes, dividend of NOK 0.50 per year is applied.

As of 31 December 2009, the outstanding options, are not in the money and it is accrued KNOK 0 (0) in national insurance contribution.

Programme	Number	Fair value	Exercise price 1)	Share price 2)	Grant date	Exercise period
2007 III	188 334	NOK 0.41	NOK 6.20	NOK 6.10	18 September 2007	15-30 September 2010
Total	188 334

NOTES 2-4
PARENT
Itera
Annual Report 2009

Programme	Number	Interest	Volatility
2007 III	188 334	5.60%	24.00%
Total	188 334

3 PENSIONS

Itera Consulting Group ASA have pension schemes organised through an insurance company. The company's pension scheme is a defined contribution plan and the cost correspond to premium paid. Pension expense charged for 2009 amounts to NOK 525 thousand (NOK 414 thousand). The group's pension schemes in Norway comply with the Norwegian Mandatory Occupational Pension Act (OTP).

4 FIXED ASSETS

	2009			2008
Amounts in NOK 1 000	Machinery, equipment	Software	Total	Machinery, equipment	Software	Total
Acquisition cost
Accumulated 1 January	2 256	1 174	3 430	2 038	278	2 316
Additions during the year	112	2 059	2 171	218	896	1 114
Disposals during the year	0	0	0	0	0	0
Accumulated 31 December	2 368	3 233	5 601	2 256	1 174	3 430
Depreciation
Accumulated 1 January	912	275	1 187	461	155	616
Depreciation	481	458	939	451	120	571
Disposals during the year	0	0	0	0	0	0
Accumulated 31 December	1 393	733	2 126	912	275	1 187
Carrying amounts
As of 1 January	1 344	899	2 243	858	86	944
As of 31 December	975	2 500	3 475	1 344	899	2 244
Estimated useful lives	3-5 years	3-5 years		3-5 years	3-5 years
Depreciation plan	linear	linear		linear	linear

NOTES 5-6 PARENT

Itera

Annual Report 2009

5 SUBSIDIARIES

Amounts in NOK 1 000	Registrated office	Share capital*	Shareholding	Book value 01.01.	Changes	Book value 31.12.
Itera Gazette AS	Oslo	120	100%	0	0	0
Objectware AS	Oslo	1 000	100%	16 080	0	16 080
Itera Networks AS	Oslo	101	100%	18 100	6 000	24 100
Itera Offshoring Services AS	Oslo	100	100%	0	0	0
Cicero Consulting AS	Oslo	200	100%	19 138	2 300	21 438
Xit Consulting AS	Oslo	454	100%	550	0	550
Compendia AS	Bryne	182	100%	10 687	300	10 987
Promis AS	Oslo	300	100%	17 381	0	17 381
Itera Sweden AB	Stockholm	100	100%	0	0	0
Itera Networks AB	Stockholm	1 400	100%	0	0	0
Itera Consulting Group Sweden AB	Stockholm	111	100%	0	0	0
Objectware AB	Stockholm	100	100%	0	0	0
Itera Consulting Group Denmark ApS	Copenhagen	1 424	100%	16 559	0	16 559
Itera Consulting Group UA	Kiev	50	100%	0	489	489
Total				98 495	9 089	107 584

The share capital is amounted in local currency (thousand), for the Ukrainian company the currency is Euro.

Group contribution

Itera Consulting Group ASA have received NOK 39.8 million in group contribution from the norwegian subsidiaries. In addition, Itera Consulting Group ASA have given a group contribution to the subsidiary Itera Networks AS, Cicero Consulting AS and Compendia AS amounting NOK 6.0 million, respectively NOK 2.3 million and NOK 0.3 million that in accordance with NGAAP is booked against investment in subsidiaries.

6 FOREIGN CURRENCY

Information regarding exchange rates used in Itera Consulting Group ASA for 2009.

	Exchange rate 1 Jan.	Average	Exchange rate 31 Dec.
SEK	0.9042	0.8223	0.8099
DKK	1.1323	1.1722	1.1173
EUR	9.8650	8.7285	8.3150
USD	6.998	6.2816	5.7760
UAH	0.9157	0.7940	0.7335

NOTES 7-8 PARENT

Itera

Annual Report 2009

7 LOANS TO GROUP COMPANIES

Amounts in NOK 1 000	Loans	Subordinated loans	Total 2009	Total 2008
Company name
Itera Networks AS	0	8 000	8 000	2 268
Itera Gazette AS	0	5 000	5 000	5 000
Itera Offshoring Services AS	0	2 000	2 000	0
Itera Sweden AB	0	6 868	6 866	7 665
Itera Networks AB	1 677	0	1 677	1 864
Itera Consulting Group AB	1 745	0	1 745	3 936
Total	3 422	21 868	25 289	20 734

8 INCOME TAXES

Amounts in NOK 1 000	2009	2008
Income taxes
Tax payable	0	0
Change in deferred taxes	9 396	11 410
Total	9 396	11 410

Tax payable

Profit before taxes	36 216	38 022
Permanent differences	-2 652	2 728
Change in temporary differences	260	-220
Utilization of previously recognized tax losses	-33 824	-40 530
Taxable income	0	0
Total	0	0

Specification of deferred taxes

Fixed assets	-291	-32
Provisions according to accounting practices	0	0
Loss carried forward	-24 797	-58 621
Total	-25 088	-58 653
Deferred tax assets	-7 025	-16 421
Recognized in the balance sheet	-7 025	-16 421

NOTES 8-12

PARENT

Itera

Annual Report 2009

Amounts in NOK 1 000	2009	2008
Tax rate reconciliation
Profit before tax	36 216	38 022
Reversing previous years' write-down on investments	0	-6 500
Write-down of shares	0	9 050
Tax calculated at the domestic Corporate tax rate of 28%	10 140	10 646
Permanent differences	-743	764
Recognized previously unrecognized tax losses	0	0
Income taxes in the statement of income	9 396	11 410
Effective tax rate	25.9%	30.0%

9 EQUITY

Amounts in NOK 1 000	Share capital	Other paid-in capital	Own shares	Retained earnings	Total equity
Equity as of 31 December 2008	25 602	1 823	-259	92 969	120 135
Profit for the year	0	0	0	26 821	26 821
Purchase own shares	0	0	-337	-3 091	-3 421
Dividend own shares	0	0	0	182	182
Agio on net investment	0	0	0	-1 661	-1 661
Share-based payment	0	67	0	0	67
Proposed dividend	0	0	0	-17 068	-17 068
Equity as of 31 December 2009	25 602	1 890	-596	98 152	125 048

10 CONTINGENCIES

Itera Consulting Group ASA has offered surety amounting to NOK 2.3 million as a lease guarantee (NOK 2.3 million).

11 FINANCIAL ITEMS

Itera Consulting Group ASA has received NOK 39.8 million in group contribution from the norwegian subsidiaries.

12 RESTRICTED CASH

Itera Consulting Group ASA has bank deposits amounting to NOK 0.6 million, of which NOK 0.5 million is restricted deposits.

→ DIRECTORS' RESPONSIBILITY STATEMENT

Itera

Annual Report 2009

DIRECTORS' RESPONSIBILITY STATEMENT

Today, the chief executive officer and the Board of Directors reviewed and approved the Board of Directors Report and consolidated and separate annual financial statements for Itera Consulting Group ASA as of 31 December 2009 (annual report 2009).

To the best of our knowledge:

the consolidated financial statements are prepared in accordance with IFRS and IFRIC as adopted by the EU and additional Norwegian disclosure requirements in the Norwegian Accounting act, and that were effective as of 31 December 2009.
the separate financial statements are prepared in accordance with the Norwegian Accounting act and Norwegian accounting standards as of 31 December 2009.
the Board of Directors' Report for the group and the parent company in accordance with the requirements in the Norwegian Accounting Act and Norwegian accounting standard no 16 as of 31 December 2009.
the consolidated and separate annual financial statements give a true and fair view of the assets, liabilities, financial position and profit as a whole as of 31 December 2009 for the group and parent company.
the Board of Directors' Report for the group and the parent company include a true and fair view of:
the development and performance of the business and the position of the group and the parent company.
the principal risks and uncertainties the group and parent company face.

Oslo, 7 April 2010

The Board of Directors of Itera Consulting Group ASA

Gunnar Gjortz

Chairman

Mimi K. Berdal

Vice chairman

Brita Eilertsen

Board member

John M. Lervik

Board member

Arne Mjøs

CEO

→AUDITORS REPORT

Itera

Annual Report 2009

KPMG

KPMG AS

P.O. Box 7000 Majorstuen

Sørkedalsveien 6

N-0306 Oslo

Telephone +47 04063

Fax +47 22 60 96 01

Internet www.kpmg.no

Enterprise 935 174 627 MVA

To the Annual Shareholders’ Meeting of Itera Consulting Group ASA

AUDITOR’S REPORT FOR 2009

Respective Responsibilities of Directors and Auditors

We have audited the annual financial statements of the Itera Consulting Group ASA as of 31 December 2009, showing a profit of NOK 26 821 000 for the parent company and a total comprehensive income of NOK 16 889 000 for the group. We have also audited the information in the Board of Directors’ report concerning the financial statements, the going concern assumption and the proposal for the allocation of the profit. The annual financial statements comprise the parent company’s financial statements and the group accounts. The parent company’s financial statements comprise the balance sheet, the statements of income and cash flows and the accompanying notes. The group accounts comprise the statement of financial position, the statement of comprehensive income, the statement of cash flows, the statement of changes in equity and the accompanying notes. The rules of the Norwegian accounting act and good accounting practice in Norway have been applied to prepare the parent company’s financial statement. The rules of the Norwegian accounting act and International Financial Reporting Standards as adopted by the EU have been applied to prepare the group accounts. These financial statements and the Board of Directors’ report are the responsibility of the Company’s Board of Directors and Managing Director. Our responsibility is to express an opinion on these financial statements and on the other information according to the requirements of the Norwegian Act on Auditing and Auditors.

Basis of Opinion

We conducted our audit in accordance with the Norwegian Act on Auditing and Auditors and good auditing practice in Norway, including standards on auditing adopted by Den norske Revisorforening. These auditing standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. To the extent required by law and good auditing practice an audit also comprises a review of the management of the Company’s financial affairs and its accounting and internal control systems. We believe that our audit provides a reasonable basis for our opinion.

Opinion

In our opinion,

the parent company’s financial statements are prepared in accordance with the law and regulations and give a true and fair view of the financial position of the parent Company as of 31 December 2009, the results of its operations and its cash flows for the year then ended, in accordance with the rules of the Norwegian accounting act and good accounting practice in Norway
the group accounts are prepared in accordance with the law and regulations and give a true and fair view of the financial position of the Group as of 31 December 2009, the total comprehensive income, its cash flows and the changes in equity for the year then ended, in accordance with the rules of the Norwegian accounting act and International Financial Reporting Standards as adopted by the EU
the company’s management has fulfilled its duty to produce a proper and clearly set out registration and documentation of accounting information
the information in the Board of Directors’ report concerning the financial statements, the going concern assumption and the proposal for the allocation of the profit is consistent with the financial statements and comply with the law and regulations.

Oslo, 7 April 2010

KPMG AS

Gunnar Sotnakk

State Authorised Public Accountant

Note: This translation from Norwegian has been prepared for information purposes only

Offices in:
	Oslo
Bode
Ake
Arendal
Bergen
Eiseium
Forsøes
Høner	Gomsted
Haugesund
Kristiansand
Løvik
MU i Røra
Molde
Nøvik
Røros	Sandefjord
Sandnessjøen
Slavanger
Stord
Tromsø
Tromheim
Tønsberg
Ålesund
KPMG AS, a Norwegian member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity.
Status/consent revision - medlemmer av Den norske Revisorforening

→
FINANCIAL KEY FIGURES

Itera

Annual Report 2009

	Definitions	2009	2008
Profit and loss
Operating revenue		411 456	448 850
EBITDA		39 615	56 483
EBIT		26 500	44 163
Profit before taxes		29 338	46 397
Profit for the year		20 650	34 090
Financial position
Total fixed assets		45 619	52 461
Total bank deposits		71 655	60 267
Total current assets		126 347	126 466
Total assets		171 965	178 928
Shareholder's equity		84 027	87 244
Total current liabilities		87 938	91 684
Equity ratio	1	49%	49%
Current ratio	2	1.44	1.38
Shares
Number of shares		85 340 346	85 340 346
Average number of outstanding shares		83 395 215	84 531 038
Equity per share	3	1.01	1.03
EBITDA per share	4	0.48	0.66
Earnings per share	5	0.25	0.40
Dividend	7	0.20	0.50
Employees
Number of employees at year end		370	391
Average number of employees		381	381

Definitions

Total equity divided by total assets
Most liquid assets and current receivables divided by current liabilities
Equity divided by number of outstanding shares
Profit/loss before tax plus depreciation divided by average number of outstanding shares
Net profit/loss for the year divided by average number of outstanding shares
Net cash flow divided by average number of outstanding shares
Dividend divided by average number of outstanding shares

→ SHARES AND SHAREHOLDERS

Itera

Annual Report 2009

Shares and shareholders

Itera Consulting Group ASA (the company) intends to ensure shareholders a competitive return in the form of dividends and increases in share price relative to comparable investment alternatives.

Shareholder policy

The company aim to manage group resources in a manner which will ensure shareholders a competitive return in the form of dividends and increases in share price relative to comparable investment alternatives. The share price shall reflect the company's earnings and underlying values. Open communication and equally treatment of the company's shareholders shall contribute to increased share holder values and gain the investors trust.

Investor information

Itera Consulting Group ASA was listed on the Oslo Stock Exchange 27 January 1999. The ticker code is ITE. The company shall treat all shareholders equally concerning information relevant to the share price. All information relevant to the share price is published through the notification system of the Oslo Stock Exchange with additional publishing on company Website, www.iteraconsulting.com. At the website the company also publishes the quarterly reports on-line through webcast. The company holds The Information Symbol and The English Symbol. The shares ISIN NO is 0010001118 and the company's registration number in the Norwegian register Brønnøysund is NO 980 250 547.

Share capital

As of 31 December 2009 Itera Consulting Group ASA had a share capital amounting to NOK 25 602 104 distributed among 85 340 346 shares, each with a face value of NOK 0.30 and fully paid. Each share carries the right to one vote at the shareholders' meeting.

Shareholders

As of 31 December 2009, the Itera Consulting Group had 2 311 (2 348) shareholders. At year-end 6% (7%) of the company's share capital was owned by foreign investors. The twenty largest investors own 55.1% (54.4%) of the shares.

Own shares

The Itera Consulting Group re-purchased during 2009 1.1 million (2.9 million) own shares amounted to NOK 3.4 million (NOK 12.4 million) equal to an average price of NOK 3.04 per share.

The company holds 2 682 884 (1 588 884) owns shares, corresponding to 3.1% (1.8%).

Dividend

During 2009 dividend of NOK 0.20 (NOK 0.50) per share has been paid, totally NOK 17.1 million (44.7 million).

Share price

The shares opened the year at NOK 2.10 and closed at NOK 4.70, corresponding to a change of 140% (-63%), respectively 150% (-54%) taken dividend into consideration. The highest share price during the year was NOK 4.70 and the lowest price was NOK 2.03. The Itera Consulting Group had a market value of NOK 401 million (NOK 171 million) at 31 December 2009.

Stock options programmes

The company operates stock options programmes for key personnel. There are not issued any stock options in 2009. At the year-end there are 378 000 (1 388 125) outstanding stock options. None of the outstanding stock options are in the money at the year-end. Further information of stock options is described in note 7.

→ SHARES AND SHAREHOLDERS

Itera

Annual Report 2009

Shareholders as of 31 december 2009

No	Name	Shareholding	Percentage
1	Arne Mjøs InvestAS	15 718 298	18.4%
2	Delphi Norge	3 053 000	3.6%
3	Olav Werner Pedersen	2 810 000	3.3%
4	Eikestad AS	2 800 000	3.3%
5	DnB NOR SMB VPF	2 670 000	3.1%
6	Storebrand Livsforsikring AS	2 541 500	3.0%
7	RBC Dexia Investor Services Bank (NOM)	2 400 000	2.8%
8	Jøsyra Invest AS	2 200 000	2.6%
9	Marxpist Invest AS	2 031 588	2.4%
10	Itera Consulting Group ASA	1 987 996	2.3%
11	Brødrene Johannessen Holding AS	1 632 000	1.9%
12	Boinvestering AS	1 410 000	1.7%
13	Storebrand Vekst	980 200	1.1%
14	Storebrand aksje innland	815 700	1.0%
15	Aanestad Panagri AS	724 000	0.8%
16	Storebrand Norge H	697 700	0.8%
17	Objectware AS	694 888	0.8%
18	Asbjørn John Buanes	651 000	0.8%
19	Storebrand Norge I	617 700	0.7%
20	Danske Bank AS (NOM)	602 164	0.7%
Total		47 037 734	55.1%
Other shareholders		38 302 612	44.9%
Total number of shares		85 340 346	100.0%

→
SHARES AND SHAREHOLDERS

SHARE PRICE AND VOLUME DEVELOPMENT 2008-2009

SHARE PRICE DEVELOPMENT 2008-2009

→ CORPORATE COVERNANCE

Itera

Annual Report 2009

Corporate Governance

Itera Consulting Group complies with the Norwegian Code of Practice for Corporate Governance.

Implementation and reporting on corporate governance

There are no significant deviations between the Code of Practice and the way it is implemented in Itera Consulting Group ASA (the company).

The company's corporate governance principles are adopted by the Board of Directors and ensure an appropriate division of roles and responsibility and well-functioning cooperation among the company's shareholders, the Board of Directors (the Board) and its senior management, and that the company's activities are subject to satisfactory control. An appropriate division of roles, effective cooperation, and satisfactory control contribute to the best possible value creation over time, to the benefit of owners and other stakeholders.

The company's code of ethics addresses impartiality, conflicts of interests, relation with customers and suppliers, relations with media, insider trading and relevant financial interests of a personal nature. The code of ethics applies to all employees in the Itera Consulting Group.

Business

The object of Itera Consulting Group is to build and manage next generation digital solutions and services, by smart use of technology.

The Articles of Association can be found on the company's website, iteraconsulting.com.

The annual report describes the company's targets and principal strategies and the market is kept updated through the interim reports.

Equity and dividends

As of 31 December 2009, Itera Consulting Group had total equity of NOK 84 million. The Board continually reviews the capital situation in light of the company's strategy, target and risk profile.

The company aim to manage group resources in a manner which will ensure shareholders a competitive return in the form of dividends and increases in share price relative to comparable investment alternatives. The company's dividend policy, adopted by the Board of Directors, is to distribute a dividend of 20–50% of a normalized result after tax. The annual dividend payment will depend on the company's financial situation, need for working capital and investments or acquisition possibilities.

The Board of Directors makes an assessment every year in connection with the preparations for the Annual General Meeting (AGM) whether, and to what extent, the Board shall ask for authority from the AGM to increase the share capital and/or purchase own (treasury) shares. Such authority will normally be valid for one year at a time, and the purpose for which the authority may be applied is clearly communicated to the AGM.

Equal treatment of shareholders and transactions with close associates

The company has a single class of shares, and all shares carry the same rights in the company. Equal treatment of all shareholders is crucial. All information relevant to the share price is published through the notification system of the Oslo Stock Exchange.

Transactions in own (treasury) shares are executed on the Oslo Stock Exchange or by other means at the listed price. If there are material transactions between the company and a shareholder, Board member, member of senior management,

→ CORPORATE COVERNANCE

Itera

Annual Report 2009

or a party closely related to any of the aforementioned, the Board will generally ensure that independent valuations are available.

Freely negotiable shares

The shares are listed on the Oslo Stock Exchange (OSE) and are freely negotiable. The Articles of Association include no form of restriction on negotiability.

General Meetings

The company's Annual General Meeting (AGM) is open to all the company's shareholders. Shareholders may exercise their vote through a representative or proxy. All shares have equal voting rights. There are no restrictions on ownership or any known shareholder agreements.

The AGM minutes are published through the notification system of the Oslo Stock Exchange and on the Company's website, iteraconsulting.com.

Nomination Committee

In accordance with the Itera Consulting Group's Articles of Association, the Annual General Meeting has established a Nomination Committee.

The Nomination Committee submits recommendations to the Annual General Meeting for the election of members of the Board of Directors. The recommendation includes relevant information on each candidate's background and independence. Furthermore, the Committee proposes remuneration to the member of the Board of Directors.

The members of the Committee are: Erik Sandersen, Gisle Evensen and Geir Moe.

The Board of Directors composition

The company aims to ensure a balanced composition of the Board of Directors in terms of competence, experience and background relevant to the company's operations. It is also desirable that the Board reflect both the company's ownership structure and the need for independent representatives.

The current Board consists of four members elected at the company's Annual General Meeting and the composition satisfies the requirements for independence contained in the Norwegian Code of Practice for corporate governance.

The work of the Board of Directors

The Board annually adopts a plan for its work, emphasizing goals, strategies and implementation. The Board receives monthly financial reports for the group and all its subsidiaries with the management's comments on the economic and financial status. The Board discusses strategy and budgets in extended board meetings. The Board holds 8–10 board meetings per year and conducts an annual self-evaluation of its work.

The Board will nominate members to an Audit Committee following its constitution after the 2010 Annual General Meeting. The composition of the Audit Committee and its mandate will comply with recent new legislation.

Risk management and internal control

Risk management and internal control is performed through various processes within the group, both on a board level and in daily management of the company. The Board receives regular reports from management outlining the financial and operational performance of the company.

In connection with the budget work and approval of the budget, the Board evaluates the internal control systems and the most important risk factors that the group will be confronted with. The company has followed a growth strategy over recent years, and in view of this the Board has paid particular attention to ensuring that the internal control systems apply to all aspects of the group's activities. The Board also considers the need for any further measures in relation to the risk factors identified.

Remuneration of the Board of Directors and the Nomination Committee

The remuneration paid to the members of the Board is decided by the AGM having considered proposals by the

→

CORPORATE COVERNANCE

Itera

Annual Report 2009

Nomination Committee. The remuneration paid to the members of the Nomination Committee is decided by the AGM having considered proposals by the Board. Information about remuneration to the Board and the Nomination Committee is described in the notes to the financial statement.

Remuneration of executive personnel

The Board has adopted guidelines for remuneration of executive employees in accordance with the Norwegian Public Limited Liability Companies Act, section 6-16a. Further information on remuneration for 2009 for members of the senior management is presented in Note 8 to the consolidated financial statements.

Information and communications

The company endeavors to give accurate and sufficiently extensive information each quarter and publish this information as quickly as possible. The interim reports are normally published within three weeks after the end of a quarter. Preliminary annual report is published in the mid February. The company holds public presentations in connection with the publication of its interim reports. The presentations are distributed by web cast so that anyone unable to attend can follow the presentation in real time or view it at a later time. Quarterly interim reports, presentation material and webcasts are all available on the company's website.

The complete annual report and accounts are distributed to shareholders no later than two weeks prior to the AGM and published at the company's web site three weeks before the AGM.

The company will ensure that all relevant information is accessible for the market. Information will be given shareholders and other parties in the market simultaneously and with the most efficient methods. In meetings with shareholders, analysts and others, special emphasis is given to not discussing issues that are considered to be price sensitive.

The company holds The Information Symbol and The English Symbol.

→

Frank Martinsen

Chief Financial Officer

Take-overs

The Board will handle any take-over bids in compliance with the principle of equal treatment of shareholders. The Board and management will ensure that shareholders are given adequate information in all situations that will affect shareholders' interests.

The Board will give its opinion on the bid to the shareholders, and the Board members are obliged to inform the shareholders on whether they intend to accept the bid, if they have made a decision.

Auditor

With one exception, the Itera Consulting Group employs the same auditing firm for the parent company and all its subsidiaries. The auditors act as consultants but not in matters of strategy or in operational assignments. The auditors attend the board meeting that deals with the annual accounts and otherwise as required. Annually the auditor briefs the Board about accounting principles, risk areas, judgment items and internal control.

→ DEVELOPMENT 2004-2009

Itera

Annual Report 2009

REVENUES
NOK million

EBITDA
NOK million

EBIT
NOK million

EMPLOYEES
Number

EBITDA-MARGIN
%

EBIT-MARGIN
%

BANK DEPOSITS
NOK million

CASH FLOW from operations
NOK million

EQUITY RATIO
%

→
DEVELOPMENT 2007-2009

QUARTERLY

Itera

Annual Report 2009

REVENUES
→ 2007 → 2008 → 2009
NOK million

EMPLOYEES
→ 2007 → 2008 → 2009
Number

EBITDA
→ 2007 → 2008 → 2009
NOK million

EBITDA-MARGIN
→ 2007 → 2008 → 2009
%

EBIT
→ 2007 → 2008 → 2009
NOK million

EBIT-MARGIN
→ 2007 → 2008 → 2009
%

→

ITERA OFFICES

Itera

Annual Report 2009

itera

GAZETTE

iteragazette.no
Youngstorget 3, inng Ploens gate
Pb. 8776 Youngstorget, 0028 Oslo
+47 23 17 99 00
[email protected]

itera

CONSULTING

Norway
iteraconsulting.no & objectware.no & promis.no
Sognsveien 77 A-B
Pb. 3977 Ullevål Stadion, 0806 Oslo
+47 23 19 92 00
[email protected]
Sweden
iteraconsulting.se
Wallingatan 20, 2 tr
Wallingatan 20, 111 24 Stockholm
+46 8 694 9015
[email protected]
Denmark
iteraconsulting.dk
Rentemestervej 2A
2400 København NV
+45 70 13 61 00
[email protected]
Ukraine
iteraconsulting.ua
Zhylanska Str. 75
Kiev, 01032
+38 044 499 32 01

itera

NETWORKS

Norway
iteranetworks.no
Sognsveien 75 C, inng 10c, 5.etg
Pb. 3824 Ullevål Stadion, 0805 Oslo
+47 23 00 84 40
[email protected]
Sweden
iteranetworks.se
Kistagången 2, 5tr
Box 1223, 16428 Kista, Sverige
+46 8 563 008 00
[email protected]

SOFTWARE-AS-A-SERVICE:

CICERO CONSULTING

cicero.no
Sognsveien 75 C, inng 10c, 5.etg
Pb. 3963 Ullevål Stadion, 0805 Oslo
+47 22 88 81 50
[email protected]

COMPENDIA

compendia.no
Forum Jæren, Hettandsgata 9
Pb. 84, 4349 Bryne
+47 51 77 08 00
[email protected]

HEADQUARTER:

itera

Itera ASA
iteraasa.com

Sognsveien 77 A-B
Pb. 3834 Ullevål stadion, 0805 Oslo
+47 23 00 76 50
[email protected]

→ THE LITTLE BIG COMPANY

itera

itera AEA
iteraasa.com
Sugrassion 77 A-B
Ph: 3834 lillevall.stadion_0805 Oslo
+47 23 00 76 00
[email protected]

AI assistant

Itera — Annual Report 2009

3639_rns_2010-04-15_a463dc47-42b4-45c4-9763-a590fcd5bad3.pdf

KEY FIGURES

Shares

Equity

Employees

OPERATING REVENUE

REVENUE BY INDUSTRY

Breaking new ground in next generation

GROUP STRUCTURE

THE FOCUSED ONE BILLION COMPANY

POSITION

STRATEGY

CAPABILITIES

itera

COMMUNICATION

CONSULTING

OPERATIONS

SOFTWARE-AS-A-SERVICE

Towards a focused company

Delivering in challenging times

Tapping into the global talent pool

Pan-Nordic scalability

Positioning the Itera brand

Investing in our people

Looking ahead

The full service IT provider

A full service provider

Bringing the group together

A leading player

Integration with cloud services

Seamless service integration

A lot for a few, less for the masses

Pan-Nordic business

SIMONSEN ADVOKATFIRMA

Case

BanQsoft

Reinforcing a digital commitment

Offline and online

Industry overlap

The social media – new opportunities

Good development

New patterns of customer behavior in banking

Short time-to-market

Social media

Engaging collaboration

Innovation Lab

DnB NOR

Swedbank

Board of directors' report

Market conditions

Business operation

In 2009, the group implemented a seamless integrated nearshoring capability to ensure future competitiveness.

Group profit

Research and development

Cash flow and financial position

Financial risk

Organisation

Equality and diversity

External environment

Shares and shareholders

Corporate governance

The parent company

Going concern

Allocation of profit

Outlook for 2010

FINANCIAL KEY FIGURES

Financial position

Share information

Employees

Definitions

412 mnok

27 mnok

72 mnok

REVENUE BY COUNTRY

REVENUE BY INDUSTRY

REPORTING ENTITY

BASIS OF PREPARATION

Statement of compliance

Itera Annual Report 2009