Readsoft Annual-Report 2012

2012 aNNUaL rEpOrt
Table of contents
1 2 4 The year 2012 in brief Statement by Per kerberg, President and CEO Market and competition 9 Offering 13 Strategies 17 Expertise and commitment 22 Risks and risk management 24 Corporate governance 28 Board of Directors 30 Corporate management 31-58 Administration Report 2012 59 60 62 63 64 34 Consolidated income statement 35 Consolidated balance sheet 37 Consolidated cash-flow statement 38 Changes in equity, Group 39 Income statement, Parent Company 40 Balance sheet, Parent Company 42 Cash flow statement, Parent Company 43 Changes in equity, Parent Company 44 Notes Audit report The share 2012 Six-year summary Glossary and definitions Financial information
8-21 Operations
22-30 Governance and responsibility
65 Addresses
ReadSoft AB is a public company, Corp. reg. no. 556398-1066. Its headquarters are located in Helsingborg, Sweden. All values are expressed in Swedish kronor. Kronor is abbreviated to SEK, thousands of kronor to SEK 000s and millions of kronor to SEK million. Figures in parentheses refer to 2011,
unless otherwise stated.
Data regarding markets and competition are ReadSofts own assessments, unless a specific source is given. These assessments are based on the best and most recently available facts
from sources, including those published in the public sector and the IT sector.
This report contains future-oriented information based on ReadSoft managements current expectations. Although the management considers expectations expressed in such future oriented information to be reasonable, no guarantee can be given that these expectations will prove correct. Consequently, actual future results can vary considerably compared with those expressed in the future-oriented information due to such factors as changed conditions in the economy, market and competition, changes in legal requirements and other political measures as well as fluctuations in exchange rates and other factors. A printed version of the Annual Report is sent to all who have requested a copy and is available on www.readsoft.com, as both an HTML version and a PDF version. A printed version can also be ordered from ReadSoft AB.
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Our custome
We have more than 8,500 custo to companies of all sizes and in multinational corporations and flows, such as engineering, tele nies, banks, government agenc
How does ReadSoft make money?
ReadSoft generates revenue from software license sales, support and maintenance con tracts, training and customized development, and hardware sales. Once our software is fully developed and license sales can begin, the production cost per license is very small, so sales of our product licenses provide high profit margins. Our service offering is packaged around our products, and our ongoing service contracts comprise a significant part of our sales. We also offer cloud solutions as a subscription service, which generates recurring revenue.
ReadSoft in
High Product breadth and degree of BPM integration Anydoc Brainware
With operations in 17 countries and partners in 70, ReadSoft has the largest su in research and development 600 committed employees ReadSofts values OMX Stockholm direct return on the share 2.8 percent.
We are world leaders

ReadSoft is a leader in the batch transaction capture segment and is the largest provider of invoice automation in the world, a market segment expected to grow the most in the years to come. The total market is fragmented with approximately 150 players. The five largest companies account for roughly 47 percent of the market for batch transaction capture.
ReadSoft is the market leader in data captu integration and high market coverage.
Kofax
Low Low
Market co
ReadSoft offers the most integrated solutions and, at the sa penetration. This makes us the market leader in the larges
Source: AIIM and Harvey Spencer Capture Software Product Study,
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omers
ReadSofts w for Orac ork le flo sy w s
ReadSoft in the cloud
00 customers worldwide. Our offering is suited s and industries, but is particularly attractive to ons and other organizations with large document ing, telecommunications and insurance compant agencies, retailers and market research firms.
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ReadSoft Capture
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Our offering
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Since its formation in 1991, ReadSoft has offered advanced solutions for all kinds of document management. Regardless of the format or media, document information can be interpreted, managed and integrated with various types of business systems generating real advantages to the user: Lower document management costs Increased security since documents cannot be manipulated without being detected Improved control and management of document flows Enhanced efficiency since information is available to all
in two minutes!
Kofax
gest support network in the industry SEK 782 million in net sales approximately 14 percent of earnings is invested values are described by four key words: commitment, creativity, competence and cheerfulness listed on NASDAQ
ta capture, with the highest level of ge.
ReadSoft
EMC
Market coverage
High
d, at the same time, has the largest market the largest segment, batch transaction capture.
duct Study, May 2011
ar
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SEK
NET SALES
781.7
THE YEAR I N BR IE F
million
Net sales, 12 months per Net sales,rolling rolling 12 months per geographic market, SEK million geographic market, SEK million
400 350 300 250
Net sales totaled SEK 781.7 million (663.0).
SEK
E A R N I NGS A F T E R TA X PE R SH A R E
1.57
200 150 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2010 Rest of Europe Nordic region 2011 2012
US and the rest of the world
Earnings after tax per share amounted to SEK 1.57 (1.97).
Trend, rolling 12 12 months, SEK million Trend, rolling months

800 16 14 12 10 8 6 4 2 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2010 2011 2012 EBITDA,% 700 600 500 400 300
SEK
DI V I DE N D PROPOSE D BY T H E BOA R D
0.60
/share
200 100 0
At the Annual General Meeting, the Board will propose that a dividend of SEK 0.60 (0.50) per share be paid for 2012.
Net sales, SEK million Profit before tax, %
SEK
E BI T DA
63.0 74.8
Revenue distribution, SEK million Revenue distribution, SEK million

300 250
million
200 150 100 50 0

Licenses Support and Consulting Hardware, maintenance services other contracts
EBITDA for 2012 was SEK 63.0 million (74.5).
2010
2011
2012
SEK
million
Cash flow from operating activities, Cash flow from operating SEK million SEK million activities,
140 120 100 80 60 40 20 0 2008 2009 2010 2011 2012
CASH FLOW, OPERATING ACTIVITIES
Cash ow from operating activities amounted to SEK 74.8 million (126.4).
reads O F t ann U a L re P O rt 2 0 1 2
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Competitive to gene
I am pleased to report that ReadSoft is continuing to grow at a rapid pace. In 2012, we increased our total sales by 18 percent and our license sales by 12 percent. The end of the year was also at record levels in terms of strength, with a sales increase of 22 percent in the fourth quarter compared with the corresponding period in 2011. Our growth is a good indication that we are continuing to capture market shares and that we are further strengthening our leading position in the industry.
Focus on the margin

Our EBITDA improved by 10 percent in the fourth quarter compared with 2011. However, we did not reach established profit level goals for the full year, due in part to nonrecurring costs at the beginning of the year and the acquisition of foxray. To strengthen our growth, we also invested in additional staff. Today, we have 100 more employees than last year. Nonetheless, in light of the financial turbulence around the world, we are presenting good figures.
New organization for scalability

In 2012, a new strategic platform was initiated that will extend to 2015. This is based on a new vision: ReadSoft will be the leading supplier in document process automation. We are already world leaders in automated invoice processing systems and we have strong opportunities to realize our vision based on this position. We have also worked on several fronts to improve our margin while remaining focused on growth. We carried out a change in our organizational structure, making it more scalable and better able to utilize our expertise. We erased country boundaries and grouped our subsidiaries in larger regions, so that we can more efficiently utilize our resources in, for instance, customer implementations. Expanded cross-border cooperation also provides
Our growth is a good indication that we

are continuing to capture market shares and that we are further strengthening our leading position in the industry.
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CEO S STATEM E NT
solutions continue rate strong growth

incentive for our employees to succeed and achieve the targets we have set. During the year, we consolidated our development labs into two distinct functional operations Capture and Workflow. As a results of that consolidation, we can leverage synergies and thereby more rapidly develop market-responsive new products and deliver our existing products with greater functionality.
Cloud becoming more important

A major technology shift is providing both opportunities and challenges for our industry. Software is shifting from being locally installed to being offered as a service in the cloud. This change demands new products, business models, supply models and new pricing strategies. The trend toward cloud-based services has already begun and is expected to accelerate at a growing pace. Our first cloud-service, ReadSoft Online, was launched in 2011. Its development has been positive and we have already exceeded our internal sales target for this product. The business model is based on customers paying per document, which provides a steady flow of recurring revenues. The cloud services are mainly in demand by small and medium-sized enterprises, but interest has now also grown among large global corporate groups.
Our rapid expansion in the cloud demonstrates that our solutions are also in demand by smaller companies. This creates a healthy mix of many small and several very large companies, providing opportunities for a more even and balanced revenue flow. Innovation is another important contributor to our continued growth. Today, ReadSoft has a leading position in the market due to our commitment to continuously create useful new functions and develope smart solutions on the cutting edge. In order to further strengthen our focus on innovation, we have established a new function in the scope of the new organization the Chief Technology Officer (CTO).
Join me for a day at work
Global solutions and local business

ReadSoft is growing both geographically and in terms of sales. During the year, we established our 17th subsidiary, in South Africa, which has already proven successful and is delivering strong revenue. We continue to evaluate new geographic markets are potential new acquisitions. While our solutions are available globally, our business is largely deployed locally around the world. It is vital for us to have a geographic presence, either directly or through our partners. Today, we sell our solutions directly to SAP and Oracle users, through partners to other business systems, and also in the cloud for smaller local business systems. With these three channels, we cover the entire market and we will develop them further in 2013.
Attractive solutions for continued growth

In early 2012, we acquired the German firm, foxray, strengthening the competitiveness of our offering to companies that handle large amounts of documents. Within the year, we successfully integrated the companys human resources and technologically into ReadSofts operations. We can already see what opportunities this provides. In fact, as a direct result of the foxray acquisition, we were able to close two of the largest deals in ReadSofts history in 2012.
employer. The positive results also indicate that we have succeeded in integrating the companies we have acquired into the tolerant and open culture that prevails here. For an innovation-driven company like ReadSoft, the employees are our most important resource and I would therefore like to take this opportunity to thank everyone for contributing to the strong growth trend we had during the year. In summary, we will continue to work for growth while at the same time prioritizing a better profit margin. We have a lead in the market, innovative solutions, both on premise and in the cloud, that are attractive to both large and small companies across the world. We have an efficient, scalable and market-focused organization, a strong financial position and, most importantly, committed and competent employees. I can only view the future with optimism. Helsingborg, March 2013 Per kerberg President and CEO
We have what it takes

I am very proud to report that this years employee survey, again reflects that our staff is content and that our company is perceived as an innovative workplace with opportunities to grow. In the surveys of the past five years, more than 90 percent of the employees have said that they are satisfied with ReadSoft as an
READSOFT ANNUAL REPORT 2012
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MARKET AND COMPETITION
ReadSoft is well positioned in a growing market

The market for automatic document management is expected to grow 11 percent by 2016. ReadSoft remains the leader of the largest segment, batch transaction capture.
Growth in the automated document management market is being driven by a number of parallel trends. Some are new and others have been around a while, but have become more distinct over the years. After 22 years in the market, ReadSoft continues to lead its segment, due to its ability to innovate, to identify the technology shifts early on, and to be responsive to the markets needs.
Growing interest in cloud services

Analyst Harvey Spencer believes that the trend toward the adoption of cloud-based solutions is one of the factors that will positively affect growth in automated document management. Gartner also foresees increased demand for cloud services and SaaS, and expects these offerings to become a larger part of the Enterprise Content Management (ECM) market by 2013. 1)
Aditro is one of the leading suppliers in the Nordic region in terms of business process outsourcing, consulting services and software. The company currently has 1,300 employees and 12,000 customers.
Factors driving our market

The primary factors that are currently driving the market trend include an accelerating transition to digital documents, a growing need for efficiency enhancements and higher demands on control and standardization.
Need for greater efficiency

In a globalized market where both competition and the need for information constantly increases, companies must continuously strive to further improve the efficiency of their business processes. The need for better workflows is a factor that drives the market to an even greater extent than the need for cost reductions. According to a study by Paystream Advisors, 75 percent of the respondents note a faster authorization of invoices as the greatest advantage, compared to 58 percent that sees lower process costs as the greatest advantage.2)
More digital documents

The transition from paper-based to digital documents is finally accelerating. The vision of a paperless society was born in the early 1990s, but it has taken more than 20 years to truly begin to become a reality. Today, nearly all documents are created digitally and to a growing extent, they are remaining digital throughout the entire business process.
Although we handle 20 million documents a year, ReadSofts solution succeeded in reducing the lead times by more than 50 percent. This has given us a strong competitive advantage.
Tom Rapaport, Director, FRM Services at Aditro.
1) Emerging Technology Analysis: ECM Technologies in a Cloud Service Maturity Framework, Gartner, January 2012. The Gartner Report(s) described herein, (the Gartner Report(s)) represent(s) data, research opinion or viewpoints published, as part of a syndicated subscription service, by Gartner, Inc. (Gartner), and are not representations of fact. Each Gartner Report speaks as of its original publication date (and not as of the date of this Annual Report) and the opinions expressed in the Gartner Report(s) are subject to change without notice. 2) Invoice & Workflow Automation Adoption, Benchmarking Survey Report, PayStream Advisors, Q3 2012.
Scan in the QR code to get more information on smart customer solutions from ReadSoft. Or visit www.readsoft.com
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Greater centralization
The size of financial process automation projects is increasing, and more often managed by global corporate groups. Global market for document autoGlobal market for document automation software This trend is driven by the fact that many mation software international companies are focused on enhancing the efficiency of their administration by concentrating its operations North America 46% to a few global service centers, known as Europe, Middle East, Shared Service Centers (SSC). Doing this Africa 39% efficiently requires process-integrated Rest of the world 15% automated document management for financial information and other types of documents.
Source: Harvey Spencer Associates.
Process cost per transaction

(Labor and outsourcing)
USD 25 20 92% 15 10 5 0 Procurement + Cost per = Full process order invoice Other companies Top Performer
More outsourcing
Growing numbers of companies are opting to outsource the management of business processes to external suppliers, referred to as Business Processing Outsourcing (BPO). These suppliers, such as Accenture, IBM and Infosys, manage large amounts of documents and need efficient solutions to create a profitable business. According to Gartner, the BPO market grew by 6.6 percent in 2011, making it the fastest-growing segment in the market for IT services. 3)
Source: The Hackett Group.
Anticipated revenue for data capture software globally, Frvntade intkter fr programvaror 2010-2016
fr datafngst, globalt 2010-2016
USD 4,500 4,000 3,500 3,000 2,500 2,000 1,500 1,000 500 0 2010 2011 2012 2013 2014 2015 2016
World market for data capture, 2012

USD 2.8, by segment
Batch Image Capture, 22% Ad-hoc Image, 22% Ad-Hoc Transaction, 16% Batch Transaction, 40%
Chasing costs
More than 80 percent of all the information a company receives is unstructured. An estimated 25 to 30 billion USD is invested every year in collecting, interpreting and measuring business information through manual entry on computers. A large part of the manual data entry has been moved to low-cost countries, such as China and India, but salary costs have begun to increase there too. The investment in document management automation pays for itself quickly once it is integrated with the business process. The clearest example of this has been invoice processing, which, when linked to purchasing management, often pays for itself within one year. According to Aberdeen Group, a company that currently works entirely manually can save up to 92 percent by automating its invoice-management process. 4)
ReadSoft is the market leader in data capture with the highest level of integration and high market coverage.
High
Product breadth and degree of BPM integration
Anydoc Brainware
Kofax
ReadSoft
EMC Low Low Market coverage High
Need for better control

More than ever, organizational decisionmakers need to monitor and analyze the performance of their operations. By integrating document management automation with existing business systems and supplementing it with business intelligence tools, better conditions can be continuously created through analyses based on information updated in real time. Organizations also face the pressure of accelerating development and increased
ReadSoft offers the most integrated solutions and, at the same time, has the largest market penetration. This makes us the market leader in the largest segment, batch transaction capture.
Source: AIIM and Harvey Spencer Capture Software Product Study, May 2011
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MARKET AND COMPETITION
global competition driving companies to seek ways to improve collaboration between various departments.
New and stricter regulations

The global economy is driving the development of international regulations that prevent financial crime and improve risk management. Consequently, global companies must increasingly install common systems that comply with set standards. One example is Basel II, which stipulates that every bank that conducts international business must have risk management systems. Another example includes the US Patriot Act, which affects all companies that export to the US and have a bank account abroad. The US companies code, the Sarbanes-Oxley Act (SOX), impacts both companies in the US and the rest of the world. In the EU, directives have been issued that will harmonize various kinds of business operations within the entire union. Regulations similar to SOX are also in effect in Japan. This regulatory trend results in processes and requirements on IT systems gradually becoming more similar in all countries.
We have a technical lead

Today, ReadSoft has the markets most advanced and powerful platform for
document automation. It is able to handle all kinds of media, regardless of whether it is received as a digital documents or physical paper, making it wellpositioned for the accelerating trend towards a paperless society. Early on, we identified the trend towards cloud-based services and since 2011, have a commercial cloud-based offering in the market. Our platform also has capacity to process more than 100 million invoices per year, which makes it the natural choice for companies that have SSCs or work with BPOs. At the same time, it is scalable, making it suitable for companies with smaller document volumes as well. According to Paystream Advisors Invoice Automation Benchmarking Report, ReadSofts invoice-management solution is highly scalable, which means that it can easily meet the invoice processing requirements of companies of various sizes. This makes the system attractive to both large global corporations and small local companies. Our products can be integrated into all leading business systems and handle a large number of financial business processes. A high degree of automation combined with our excellent understanding of companies internal processes, delivers major advantages to organizations that seek to enhance the efficiency of
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did you know that ...
...as early as 1994, a cloud was used as a symbol for the Internet.
their business processes, such as invoice processing. We have also developed competitive solutions to ensure the traceability of the documents and to easily produce all relevant statistics, satisfying organizations higher regulatory requirements and need for control.
Positioned as a leader in the market

In the largest market segment, batch transaction capture, ReadSoft plays a leading role with a market share of 11 percent. The increased interest in cloud services, mobility, and the gradual transition to electronic invoices have further strengthened our position. In 2011, we launched both mobile services and the cloud service ReadSoft Online. With many subscribers on board with these services throughout the world, this is the area of ReadSoft that is growing the fastest. As automatic document management increases in strategic importance, large companies seek global suppliers that have resources to supply comprehensive, high capacity solutions. Our worldwide presence, with subsidiaries in 17 countries and partners in 70, offers strong support during installation and operation. One of the most important areas within document automation is the handling of financial information, such as invoices and order confirmations. In this fastest growing market area, ReadSofts solutions offer many clear benefits for customers. We are currently the world leader in products for invoice automation and have the worlds most used software in this area, with more installations than the rest of the market combined.
Advantages of improved workflow Advantages of improved workflow

Faster invoice authorization Greater efficiency for employees Better overview of responsibilities Lower process costs Lower fees in delayed payments and penalty interest rates Better compliance to statutory requirements
75% 50% 33% 58% 20% 14%
attest rankas som den strstaof nyttan med frenklat Faster authorizat ion is Snabbare ranked as the greatest benefit a simplified workflow. arbetsflde. Klla: Paystream Advisors. Source: Paystream Advisors.
Sources: Unless otherwise stated, information is based on reports from Harvey Spencer Associates. 3) Market Share Analysis: Business Process Outsourcing, Worldwide, 2011, Gartner, May 8, 2012. Gartners reports as described here represent data, research documentation or published opinions and form part of a subscription service from Gartner, Inc. (Gartner) and are not be equated with facts. Each Gartner report is based on its date of publication (and not on the date of publication of this annual report), and the content of Gartners report(s) may be revised without warning. 4) Extract from the report Invoicing and Workflow- Integrating Process Automation to Enhance Operational Performance, from May 2011, written by Scott Pezza, Aberdeen Group.
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OPERATIONS OFFERING
We offer faster, less expensive and more secure document management

With a flexible solution, we offer global corporate groups and smaller companies the opportunity to easily automate document processes. The effect is faster and less expensive processing and better control.
Vodafone has a Shared Service Center in Auckland, New Zealand, which handles the companys invoicing in New Zealand and Australia.
We have a clear business concept

Our business concept is to develop, sell and lease software that enables customers to automate their document handling.
We have a strong customer offering

We help companies, organizations and authorities to develop, improve and enhance the efficiency of their business processes. Our software platform offers solutions that automatically manage the companys documents and processes regardless of the target system or industry. The solutions can be integrated with other authorization or archive systems, and function as our own complete solution set, or as a part of our partners solutions, such as those for invoice processing. Our software is utilized in many stages and in a variety of ways. Some customers process all their documents through our solutions in order to sort them and send invoices to the accounting department, questionnaires to the marketing department and applications to the human resources department and their respective systems. Others use our solutions for a specific
Within two months of installing ReadSofts solution, the number of invoices we processed per month had already increased by 50 percent.
Michael McManus, Commercial Payments Manager at Vodafone New Zealand
process, such as sending supplier invoices or forms straight to the right administrator in the records management system. By digitizing documents at an early stage, the information immediately becomes available to everyone who needs access to it. This increases the security of the organization since the documents become traceable. It also reduces the risk of erroneous data entry, since documents cannot be manipulated without the manipulation being detected. The work processes also become transparent since document handling can be monitored throughout the organization. Faster processing and less labor input provides our customers with both time and cost savings and in turn, the possibility of providing their own customers with higher levels of service, shorter response times and shorter processing times. These factors strengthen the organizations competitive standing, improve results and enhance conditions for growth.
We have a broad platform

Our document automation platform is easy to implement and designed to provide users with flexibility. It comprises two primary components: Capture and Workflow.
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Our global presence
Stockholm Helsingborg Oslo Helsinki
Copenhagen Hamburg London Amsterdam Raleigh

Madrid
Wroclaw New Orleans Paris
Berlin Frankfurt Bern
Kuala Lumpur
So Paolo
Sydney
Santiago
Johannesburg
Headquarters Local ofces
Countries in which ReadSoft and/or ReadSofts partners are represented.
Capture
Here, information is captured and interpreted from all kinds of documents, in whatever media or file format the customer needs to process ranging from a hand-written letter to an electronic invoice. The documents are then sorted automatically, and all information needed later in the process is extracted and validated.
Direct sales
Our internal sales organization mainly works directly with large companies, international corporate groups and Business Process Outsourcing enterprises. More than two thirds of sales are made directly to the market. In direct sales, we provide customers help to improve their processes and implement our products. In addition to this, we also train our customers when
new system solutions are introduced so that they can get started quickly and efficiently. Training can range from specific selective services to taking complete control of the entire training process. Our consulting organization assists customers through all phases of the process, from analysis to implementation. In many cases, our personnel also offer our customers consulting services when choosing supplementary technology.
Workflow
The quality-assured captured information is sent into the customers business system, while existing information in the system is also gathered to provide support to the processing of the incoming data. For example, customer numbers and purchasing orders are matched with incoming invoices. All authorized users in the company are then given access to the information allowing them to, for example, code and authorize invoices on their computer or mobile phone.
Customer offering
ReadSoft in the cloud
Partner sales
In order to broaden our offering and increase the possibilities of a faster expansion, particularly with small and medium-sized enterprises in markets where we are not represented locally, we work together with approximately 70 partners around the world. Our partnerships enable us to capitalize on complementary technologies and solutions while providing partners with access to our unique functionality and expertise.
ReadSofts w for Orac ork le flo sy w s
uct od pr s m te
Par tne in o rs the
products low rkf systems wo ERP r
ReadSoft Capture
We effectively cultivate the market through two parallel sales channels: Direct sales and Partner sales.
su l t i ng se
rvi ces an
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10
ar
We have multiple sales channels
Aftermarket
As we gradually develop new functions and solutions, we work systematically to offer them to our existing customers. Within the scope of our Customer Care initiative, we actively help our customers
ct du Sof dS ts wo rk flo w pro of fo r rc t s S A P s y s t e m s t om e co s n
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OPERATIONS OFFERING
to continuously improve the efficiency of more processes. Due to our global footprint, we are able to offer service and support worldwide, which is a major benefit, for multinational corporations in particular.
Revenues from license sales

Customers who choose to install our platform in their own business system will buy a license for the right to use our solution. The cost of this license is based on the number of documents the product is expected to handle per year and is a nonrecurring cost. When the number of customer documents increases, an additional fee is paid for the expanded volume. We also offer the option of leasing our solutions. The lease consists of a combination of license revenues and support and maintenance contracts. Customers who choose to use our services in the cloud instead of buying a fixed installation, pay a running fee per processed document. Since the software is on a central server, all updates take place automatically.
i
... 90 percent of Microsofts 2011 R&D budget was invested in cloud-related development.
Our revenues come from several parallel streams

ReadSofts business model is based on four parallel revenue streams: licenses, consulting services, support and maintenance contracts and hardware. Most of our customers request comprehensive solutions with high levels of service. In this common scenario, a single customer would be contributing to several revenue streams simultaneously.
Revenues from hardware

To be able to offer our customers a comprehensive solution, we also sell thirdparty products from partners, primarily scanners. We can thereby ensure that the customer receives a functioning comprehensive solution.
Norra Redovisningshuset is a Swedish accounting firm that offers its customers bookkeeping and accounting services.
Revenues from consulting services

During the installation of our products, customization and integration with existing systems are often required. In these cases, the customer also purchases consulting services and training from us. This is charged either on a currentaccount basis or at a fixed price.
Support and maintenance contracts

Customers who buy a fixed installation usually also sign a support and maintenance contract. This contract includes software updates and telephone support. The cost of the support and maintenance contract corresponds to approximately 20 percent of the license price. Support and maintenance contracts are mandatory for the first year and are then extended automatically unless terminated by the customer. Since our solutions are often a business-critical component of our customers operations, our support contracts are typically renewed.
Proportion of sales, %
Proportion of sales, %
ReadSoft Online has made our customer service both better and faster.
Pernilla Larsson, Administrator at Norra Redovisningshuset
Licenses, 32% Consulting services, 33% Support and maintenance contracts, 29% Hardware, 6%
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OPERATIONS STRATEGIES
Clear vision and strategies for profitable growth

ReadSoft is the world leader in invoice automation. We will use this position to also become leaders in all other areas of document automation. To get there, we have formulated a clear vision and a number of well-defined strategies for the next three years.
Our vision
In 2012, a new vision was formulated: Leading supplier in document process automation. We are already world leaders in invoice automation and we have strong opportunities to realize our vision based on this position.
Strong innovative ability

Today, we have a technical lead over our competitors. We will keep this lead by focusing on our core areas, of document interpretation and system integration. Already in 2012, our newly aligned organization allowed us to increase the number of innovations in our product portfolio a development that will be strengthened in future years. By developing and broadening our cloud services, we increase our revenue base. ReadSoft Online is currently the fastest growing area of the company and, during the year, we developed a number of new services. Our extensive experience of document automation and our large customer base, make us an attractive partner to other companies developing cloud services. For example, today we have a close partnership with Microsoft, both in terms of technology and business systems.
ING Group is a global finance player with Dutch origins. It offers banking services, insurance and financial management to more than 60,000 private and corporate customers in 60 countries.
Our strategies
Efficient organization
Thanks to a well-functioning, highly productive organization, we maintain and develop a high level of efficiency. By the end of 2012, we had already implemented a number of changes with the aim of enhancing the efficiency of our organization. Among these changes, was the merging of five development labs into one for Capture and one for our ERP solutions (including products and solutions for SAP and Oracle). We also consolidated our administrative and sales organization, grouping our 17 subsidiaries into four geographic regions. We are thereby better to leverage the expertise that exists in the company and more efficiently utilize our resources. These organizational changes have created a more efficient, agile and process-oriented organization and an environment positioned for faster growth.
ReadSoft is growing
We leverage the expertise that exists in the company to automate other processes as well. We already have a large customer base that has chosen our solutions for invoice processing. There is considerable potential here for creating additional sales by expanding our services to other
The launch of ING Direct in the UK is the most successful yet, due in large part to ReadSofts technology and expertise.
Nicholas Grierson, Project Manager at ING Direct
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financial process areas, and for introducing our cloud services. An important part of our growth strategy is to further develope our consulting services and our Customer Care program so that we help to nurture all of our customers so that they benefit from our solutions to the greatest extent possible. We offer a global, scalable service, which increases quality, customer satisfaction and efficiency. We build strategic partnerships with ERP (Enterprise Resource Planning) suppliers, as well as a number of global customers and players in Business Processing Outsourcing (BPO). BPO is a sector of the IT market that is growing rapidly and is in great need of powerful comprehensive solutions in document automation. In this area, we had a breakthrough in 2012 and currently have solutions in production at some of the largest BPOs in the world. We are intensifying efforts with large international customers. The objective is to achieve higher growth in this customer category than in the group as a
whole, which was also the case in 2012. We will also be strengthening our efforts in emerging markets, such as Russia, India, the Middle East and eastern Europe in the upcoming years. In parallel, we are continuously working to expand and deepen our partner sales. This means that we establish new partnerships and intensify cooperation with our existing partners. Our long-term goal is to increase partner sales to about 50 percent of our total license sales. This will enable us to increase the volume of sales of support and maintenance contracts without requiring a large amount of human resources. At the same time, it takes time to build a strong partner relationship and we have chosen to prioritize quality over quantity. We work continuously to find suitable new partners and cultivate our current partner relationships.
acquisitions. We will continue to focus on supplemental acquisitions that can strengthen our offering. However, we will also be active in the consolidation that is under way in the industry. Historically, we have been successful at integrating the technology and staff resources from an acquisition, which is the result of a well-developed methodology.
ReadSoft has what it takes

ReadSoft has a very advanced position in a market that is undergoing a technological paradigm shift. Our solutions are of central significance to the new way of working. We have a technological and market lead, and we have the resources to keep and extend it. With our technical platform, strong balance sheet and skilled employees, we have excellent conditions to increase volumes and improve the margins in order to realize our vision in the long term.
Strategic acquisitions
Over the years, ReadSoft has quickly grown its solution offerings and its revenue through several successful strategic
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OPERATIONS STRATEGIES
ReadSoft Groups organization

CEO
VP Human Resources
VP Corporate Communications
CTO office
CFO Finance&Admin
COO
SVP Special Markets
SVP Northern Europe
SVP EMEA
SVP North America
SVP ASIA/PAC & LATAM
SVP ERP Automation Lab
SVP Capture Automation Lab
Legal
Marketing
BPO
Sweden
UK
US
Australia
Raleigh
Kista
ITInfrastructure
Product Management
Global Accounts
Norway
Germany
Malaysia (Asia)
Brndby
Helsingborg
ITBusiness & Information Systems
Consulting Services
Emerging Markets
Finland
France
Brazil
Frankfurt
Hamburg
Accounting
Support & Customer Care
Denmark
Switzerland
Chile (Latin America)
Wroclaw
Berlin
Business Controllers
Corporate Sales
Benelux
Spain
Order & Reception
Partner Sales
South Africa
Deployment Process Management
To make the organization more scalable and to better leverage our collective expertise, an extensive reorganization was carried out in 2012. By erasing the country boundaries and grouping our 17 subsidiaries in four geographic regions, we are creating an efficient, agile and process-oriented organization, which provides conditions for more rapid growth.
Produktutvecklingskostnader, Mkr
120 100 80 60 40 20 0 2008 2009 2010 2011 2012
Product development costs, SEK million
Kassaflde frn den lpande Cash flow from operating verksamheten, Mkr
activities, SEK million
Rrelsemarginal EBITDA, %
12 10 8 6 4 2 0
Operating margin (EBITDA), %
140 120 100 80 60 40 20 0 2008 2009 2010 2011 2012
2008
2009
2010
2011
2012
Innovation is one of ReadSofts core values and a cornerstone of the companys growth strategy. The innovative work is concentrated on finding solutions and applications in close cooperation with partners and users. Our innovation know-how enhances not only products and functions, but also processes, applications and service among partners and users.
In order to realize our strategies, we must have both human resources and financial strength. We currently have an optimized organization and a solid financial position with a strong balance sheet and our cash flow is also favorable.
We continue to take steps in the right direction regarding our EBITDA. The weak start to 2012, which was impacted by nonrecurring costs and the acquisition of foxray, demonstrates we have not yet achieved the expected result levels for the full year. Investments made in acquisitions, employees, products, organization and geographic establishment were necessary for our long-term growth. To improve our earnings and margins for the future, we are working on a series of measures.
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OPE R AT ION S COM PE T E NCE A N D COM M I T M E N T
An attractive workplace with committed employees

ReadSoft is an international, publicly listed company that is permeated by a spirit of openness, humanism and tolerance. With approximately 600 employees in 17 countries, we have a major responsibility for how our operations affect health, safety and social development.
We work actively to achieve financial, social and environmental sustainability. To accomplish this goal, we have a number of Group-wide policies and directives that govern our daily work.
Employees
ReadSoft aims to be an attractive company to work for which is why leadership and continuous skill development are priority areas. ReadSoft works to ensure that all employees feel motivated and that they play a role in delivering customer benefits based on the Groups core values, presented by our 4Cs: Commitment, Creativity, Competence and Cheerfulness. Our ambition is for ReadSoft to be perceived as a global company that is open and full of development opportunities.
Since 2010, we have recognized the Leader of the Year and the Colleague of the Year through special awards. Anyone in the company can nominate candidates based on a criteria that emanate from our values. In addition to this this, the candidates should also have done something out of the ordinary during the year that positively impacted ReadSoft as a company.
Relations affect the atmosphere in the company and the importance of building good relationships both within the company and with customers and partners. Execution stands for always being committed to finding the best solution, working in a positive spirit and delivering what has been promised.
In 2012, a Talent Program for Future Leaders was also initiated, with the aim of identifying and developing future managers within ReadSoft.
Leadership development
MORE Leadership is a two-day training program that helps managers better understand their strengths and development potential. The program is led by external consultants and followed up with an evaluation. Between 2007 and 2012, more than 120 managers, team leaders and project managers participated in the program. MORE stands for Mission, Organization, Relations and Execution:
Skills development
Our Training Center in Stockholm is responsible for having an effective and
Development of employees
All sales and marketing personnel in the company attend a course that teaches how to solve customer problems and deliver added value. The program is conducted internally on three levels. Global training activities and local training efforts within the subsidiaries are also ongoing. All new employees undergo introductory training at the headquarters in Helsingborg.
i
...companies that supply cloud services went from 0 employees in 2007 to 550,000 employees in 2010.
Mission represents leadership that is characterized by creativity, competence, optimism and commitment to achieving results and setting targets. Organization stands for a positive view of change and the ability to develop both personnel and the organization.
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structured training organization for both employees and partners worldwide. At the center, we develop methods, educational programs and materials to efficiently communicate our collective knowledge throughout the organization and ensure that the right training is provided to the right people at the right time. ReadSoft Academy is our Learning Management System, which is a tool for learning that strengthens expertise and, by extension, improves our offering. In 2012, it was rolled out internally and to our partners.
leadership, commitment and attractiveness as an employer.
Diversity
ReadSoft encourages the development of increased diversity and, in accordance with ReadSofts equal opportunity policy, no special treatment of employees may occur in terms of employment or work duties on the basis of gender, religion, age, disability, sexual orientation, nationality, political conviction or social or ethnic origin.
Fitness benefits
In general, ReadSoft sees a very low rate of employee absence due to illness and virtually no long-term absence due to illness. In Sweden, the total sickness absence figure in 2012 was only 1.0 percent (1.3) of ordinary working hours. We continuously work to maintain this low level of absenteeism through fitness and exercise benefits that stimulate activity and by arranging joint healthpromoting activities.
Participation
ReadSofts intranet is a well-developed tool that features multiple discussion forums and that is used daily by most employees. ReadSoft also publishes a global employee magazine, ReadSoft PEOPLE, which is issued four times a year. The magazine is produced by employees in the organization and is a vital part of our corporate culture.
Internal recruitment
ReadSoft has a conscious strategy of recruiting internally and developing internal career paths. This increases our ability to retain and develop our skills over time. We also encourage relocations both internally and between Group companies around the world. This promotes the development of individuals, the company and our corporate culture while providing us more opportunities to utilize our competence globally.
stas i V insk Y, sweden
Leader of the Year 2012
Awards
Every year, ReadSoft awards the Colleague of the Year and Leader of the Year. These awards are given to people who not only live up to our 4Cs and MORE Leadership, but who also distinguish themselves during the year in a way that has positive effects on ReadSoft as a company. In 2012, Blake Evans was named Colleague of the Year and Simon Shorthose and Stas Ivinsky were named Leader of the Year.
Working climate
As a part of our continuous improvement efforts, we conduct a global, webbased employee survey at the company. The purpose of the survey is to identify potential areas for improvement and thereby build a more efficient organization that preserves our positive corporate culture, supports our strategies, and improves results. The most recent survey was conducted in October 2012 and had a strong response rate of 87 percent. The results were again very positive. In this latest survey, the responses were assessed by two indexes, the Employee Satisfaction Index (ESI) and Leadership Index (LSI). These were then compared with an average index based on corresponding surveys from other companies. In terms of ESI, ReadSoft employee responses were strong, reflecting an index of 91 (out of 100) compared to the average index of 85. Similarly, our index for LSI was 75 compared to the market average of 71. The survey also reveals that ReadSofts employees are more positive than the average in all measured areas: employee satisfaction & working climate,
Why do you think you won

this award?
During the year, I worked on facilitating the cooperation and relationship between two large groups in ReadSoft: the Capture Automation Lab and our subsidiaries. It was a fantastic journey we made together and I assume that it was these efforts that were the reason I was chosen.
Environment
As a result of ReadSofts business, paper processing at companies and organizations around the world is decreasing. Several of our customer solutions thereby contribute to reducing paper consumption. ReadSofts solutions also reduce the need for manual work, which minimizes the risk of work-related injuries since monotonous work patterns are replaced by technology. Accordingly, ReadSoft contributes to developing a sustainable society in the markets in which our technology is available.
What has the award meant to you?

Quite a lot, it is a huge honor, positive for motivation and contributes to the awareness of the trust I have from friends, colleagues and management. And at the same time, it is a major responsibility to continue to contribute to our shared goals, together with the fantastic people who work in this unique company.
Efficient distribution
Our products are primarily delivered through an Internet-based link from the Parent Company, resulting in no impact on the environment during delivery and distribution.
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Our values
In a global group with so much individual and cultural diversity as that seen at ReadSoft, shared values are particularly important. Our shared values the 4Cs are a long-term commitment tied to our business concept, targets and strategies. They guide our decisions and our way of doing business. COMMITMENT Employees are expected to take a large amount of personal responsibility for their own work. Commitment to taking on new challenges and striving for continuous improvement characterizes our spirit. The desire to always carry the companys business forward has often been a crucial factor through the years. CREATIVITY Creativity has the highest priority at ReadSoft. Creativity, innovation and energy, as well as the desire to take on new challenges are staff qualities that can directly affect the companys success and profitability. Consequently, a creative spirit and working environment are crucial to the companys future. COMPETENCE One of ReadSofts strengths is the high level of education and competence of its employees. There is a strong desire to grow, learn new things and develop both personally and professionally. Employees continuously participate in skill development projects conducted in-house and with the help of external training companies. They can also develop through internal career opportunities offered by ReadSoft. CHEERFULNESS Laughter and consideration for each other lead to improved results. ReadSoft has an open and unpretentious atmosphere. It is important that all employees contribute to a pleasant workplace.
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Minimized travel
Employees by market
Employees by market
To minimize the need for physical transportation, we have invested in advanced video conferencing equipment. With it, we can hold our teams together and have regular meetings regardless of the geographical distances, thereby eliminating any negative environmental impact.
Sustainable economy
ReadSoft has a financial responsibility to create growth and profitability for all of its stakeholders. The objective is to increase the value of the company over time and thus ensure sustainable
Our Environmental Policy

Nordic region, 38% Rest of Europe, 37% US and the rest of the world, 25%
Distribution of staff 2012 Distribution of staff 2012
Although ReadSoft does not conduct operations requiring registration or permits under the Swedish Environmental Code, its environmental work is integrated with its daily operations through an Environmental Policy. The direct responsibility for environmental issues lies locally with each unit. In accordance with our Environ mental Policy, our aim is to:
BL ake EVans, USA
Colleague of the Year 2012
Sales and marketing, 27% Professional Services, 39% Research and Development, 18% Business Support, 16%
Comply with all applicable environmental legislation and other environmental requirements in effect in the markets where the Group conducts operations. Avoid wasting resources. Look after the waste we generate and reuse and recycle materials. Ensure that our operations do not pollute the environment. Take environmental issues into consideration when designing and choosing locations for our offices. Strive to always expand our environmental thinking and utilize the best established methods in our environmental efforts.

this award?
It think it is because of my devotion to ReadSoft, my colleagues and the other departments. This is reflected in my performance, both internally and externally. I believe in the solutions we offer our customers, which makes it easy to present them to our prospective customers. ReadSoft is a great workplace with gifted and fun people. The strength of the teamwork is fantastic and, as a company, we get better when we work together.
Gender distribution, Group 2012 Gender distribution, Group 2012
Women, 26% Men, 74%
Ethics and morals

2012
ReadSofts Code of Conduct summarizes the Groups ethical guidelines. It includes guidelines on how regulations and laws should be followed, the individuals rights, ethical business rules and rules against corruption. The following international principles form the basis of ReadSofts Code of Conduct:

It means a great deal since I know what qualities the people I work with have. There are many who would be more than worthy of this award, who contribute to our results and make ReadSoft a pleasant and enjoyable place to work. I am humble about being chosen this year from all of the people who were certainly nominated. The previous recipients are also incredible people so being able to become one of them is also fantastic.
Age distribution, Group Age distribution, Group 2012

Number
240 200 160 120 80 40 0 <29 30-39 40-49 50-59
The UN Universal Declaration of Human Rights.

>60 Years
The UN Global Compact initiative. The ILO declaration of fundamental principles and rights at work.
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development and long-term returns for our shareholders. We contribute to community economic development through the use of our products and by providing employment opportunities.

...ReadSoft Online was named the 2012 Environmental Product of the Year in document management by Document Management Magazine. This award is recognition for the companys effort to supply innovative business solutions that work for a better environment.
Corporate social responsibility

ReadSoft actively participates in the communities where we conduct business through such efforts as social sponsorship. The initiative is taken on a local level.
SIMON SHORTHOSE, U K
Leader of the Year 2012

this award?
I hope that this is the culmination of many different things, from the work of rebuilding ReadSofts UK operations and becoming an important player in the market to delivering some large new deals and driving our expansion in BPO and SaaS.

A nice trophy... but even more important, it is recognition of the hard work and the efforts my team and I have made to achieve the companys targets and values.
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Risk management secures

Uncertainty of future events is something that all business operations face. Future events can have a positive effect on a companys business operations, offering opportunities to generate increased value. Or they can have a negative impact, resulting in a risk of the company being unable to meet its targets and thereby limiting its capacity to generate value for shareholders and other stakeholders. Accordingly, the ability to handle risks is a key part of the management and control of ReadSofts operations.
Operational risks
Market-related risks
Economy
A weak economy increases the risk of prolonged business processes, which affects the customers decision making and propensity to buy.
Risk management
Software and solutions for document automation are not generally considered to be particularly sensitive to economic fluctuations since this type of investment is usually made to reduce costs and increase efficiency. The risks that may nevertheless arise as a result of a weak economy are offset by global sales to countries with differing economic cycles. To be able to respond rapidly to deviations, ReadSoft also continuously monitors average lead times for the sales cycle of each individual market and of the Group. ReadSoft has chosen to pursue an active acquisition strategy, meaning that potential candidates for acquisition are continuously monitored and evaluated.
Exposure
Sales by market, SEK million
400 350 300 250 200 150 100 50 0 2010 Nordic Region 2011 Rest of Europe 2012 US and the rest of the world
Sales by market area, SEK million
Market consolidation
A restructuring and consolidation of the market for automatic document management is currently under way.
In 2006, ReadSoft made two strategic acquisitions to strengthen its position in the SAP and Oracle area. In 2009, all of the intellectual property in Spear Solutions AB and Spear Imaging Inc. was acquired. In 2010, ReadSoft acquired approximately 44 percent of Skye Process A/S, a newly established Norwegian consulting company in the SAP area. In February 2012, ReadSoft acquired the German company, foxray AG.
Competition-related risks
Refined technology
ReadSofts products do well against the existing competition, both technically and in terms of price. However, there is always a risk that a new or existing player will develop further refined technology in the future. To ensure that its customers are offered an attractive and competitive range of products, ReadSoft continuously invests in the development of new and existing products to strengthen its position as an innovator and market leader. ReadSoft also has well-defined processes for how a concept can most efficiently be developed into a finished commercial product.

120 100 80 60 40 20 0 2008 2009 2010 2011 2012
Access to expertise
To maintain and strengthen its position at the forefront of technical development, ReadSoft needs skilled employees in the IT field. ReadSoft competes with a large number of companies for these professional groups, which are of a limited size.
ReadSoft devotes considerable efforts to attracting employees and stimulating and developing its employees and work environment through opportunities for international assignments and other measures. In addition to competitive salaries, ReadSoft also has various kinds of incentive programs and regularly conducts activities to promote job satisfaction.
Number of employees by number of years employed Number of employees by number

300 250 200 150 100 50 0 2010 2011 2012
of years employed
0-3 years 4-6 years 7-9 years >10 years
Shifts in technology
ReadSoft conducts operations in the IT sector, which is a dynamic market, characterized by rapid shifts in technology.
ReadSoft works with all types of documents, both paper-based and electronic. Its solutions are also compatible with the major, market-leading business systems. Through close cooperation with major customers and research operations, ReadSoft gains access to early information about technical and market trends.
ReadSoft maintains continuous contact with universities and research centers to be able to convert ideas from reports and seminars into commercial products. ReadSoft also has a Group-wide function responsible for monitoring market trends, competitors and other areas.
Sales by industry
Dependence on customers
ReadSoft supplies its products both directly to end customers and as third-party products in the system installations of partners. In both cases, the customer/ partner is naturally able to choose competing alternatives.
ReadSoft does not normally have any individual customers that represent more than 1-2 percent of its total sales over a 12-month period. Sales are also well distributed across different industries. This means that the risk of being dependent on a single customer or industry is currently very limited.
Sales by industry
Bank, insurance 16% Government 9% Manufacturing 32% Pharmaceuticals 3% Education 1% Retail 6% Service bureaus 7% Other 26%
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G O V E R N A N C E A N D responsibility R I S K M A N A G E M E N T
business opportunities
ReadSoft is affected by general economic trends, currency fluctuations and other company-specific factors in our business environment. ReadSoft strives to identify and manage these risks in the most cost-efficient and balanced manner possible to enable the company to achieve its financial and operational goals through carefully considered risk assumptions within established frameworks.
Operational risks
Product-related risks
Valuation of intangible assets
Software development related to the development of new products is capitalized in the balance sheet and then amortized straight-line over the estimated commercial lifetime of the product.
Risk management
All capitalized product development costs are continuously appraised and tested for impairment at year-end. The impairment test performed at year-end showed no need for any additional impairment.
Exposure
Proprietary software development, SEK million
70 60 50 40 30 20 10 0 2008 2009 2010 2011 2012 Amortized Capitalized
Intellectual property rights

Development-intensive, knowledge-based companies are always at risk of new or existing competitors copying the solutions they have developed.
ReadSoft stores source code for proprietary software in a secure manner and legal protection is sought to the furthest extent possible through patent applications.
The vital part of the technology in ReadSofts invoice solution is protected by Swedish and European patents. ReadSoft also has international protection for its brands.
Product liability
Potential failures could arise in ReadSofts products that could lead to liability claims and damages.
In projects that affect customers business critical processes, extensive testing is conducted before production begins to avoid the risk of disruptions to the customers production operations as a result of ReadSofts installed software. All contracts signed with external parties are carefully reviewed and approved by legal experts.
ReadSoft maintains customary insurance protection for product liability which limits its direct risk.
Other disputes
In all commercial operations, disputes can arise as a result of the differing perceptions of the parties involved with regard to liability, contractual interpretation and other matters.
Neither ReadSoft nor its subsidiaries are currently party to any dispute, legal action or arbitration proceedings. Nor are there any known circumstances that could be expected to lead to a dispute that could damage ReadSofts financial position to a material degree.
Financial risks
ReadSoft is exposed to financial risks that may affect the companys performance. Financial risks are managed pursuant to a finance policy established annually by the Board. At year-end, the Group had bank overdraft facilities amounting to SEK 95.3 million (55.4), of which SEK 0 million (0) was utilized.
Liquidity and financing risk

Financing risk is the risk that refinancing of maturing loans will become difficult or costly, thereby impeding ReadSofts ability to fulfill its payment obligations.
To better deal with liquidity fluctuations during the course of the year, the Group has bank overdraft facilities, primarily through the Parent Company but also locally through subsidiaries.
Foreign-exchange risk, transaction exposure and translation effects

The Group operates internationally and is exposed to foreign-exchange risks. These primarily arise through the Parent Companys invoicing of foreign subsidiaries and partners, which is mainly in EUR.
When necessary, ReadSoft uses forward contracts signed with external parties. Decisions on hedging of currency flows are made by the Board on a continuous basis throughout the year.
At year-end, there were currency hedges in EUR corresponding to approximately 30-40 percent of the estimated inflow in 2013. A sensitivity analysis was made of pretax earnings effects caused by currency fluctuations for all currencies used in the Group. This analysis indicates the following significant effects on a change of +/- one percent in average exchange rates and rates at the balance-sheet date. SEK/EUR +/- SEK 1.5 million USD/EUR +/- SEK 0.4 million GBP/EUR +/- SEK 0.3 million Impairment losses on the Groups accounts receivable resulting from confirmed credit losses have not exceeded 0.5 percent of sales in the past two years.
Credit risk
As a natural part of its business operations, ReadSoft grants credit to its customers. This carries a risk of exposure to potential losses upon customer insolvency.
In all of the ReadSoft Groups sales companies, credit checks are continuously carried out on the Groups customers.
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Statement by ReadSofts Chairman of the Board,

Gran E Larsson:
Working on the Board of Directors of ReadSoft is exciting. There is a strong entrepreneurial spirit here combined with a broad range of expertise and experience in automated document management. It is important that those of us on the Board keep our sights on the long-term objectives by focusing the business on the markets and segments with the best potential for profitable growth. The economic trend has led the Board to elevate decision readiness in preparedness to address weaker demand. Strong corporate governance is important in this situation. It is important to monitor a sound balance between development of the Groups business opportunities and the identification and management of the risks posed by an increasingly complex business environment. Since spring 2012, ReadSoft has worked to define a new organization with the aim of operating with a stronger focus on the core business and even more transparent operations. As an international listed company, ReadSoft must reflect a spirit of openness, humanism and tolerance. With approximately 600 employees in 17 countries, we have a major responsibility to how our operations affect the health, safety and social development of the communities we serve. Likewise, it is a given that we always comply with and respect the legislation and regulations that apply to our business in our respective markets.
Gran E Larsson Chairman of the Board, ReadSoft AB
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GOVERNANCE AND RESPONSIBILITy CORPORATE GOVERNANCE
Confidence in the company is important to ReadSoft

All business decisions in the company must be defensible from a financial and ethical perspective. Through transparency and accessibility, we want to provide our shareholders and other stakeholders with insight into our decision pathways, responsibilities, authorizations and control systems. We shall also provide accurate, reliable and current financial information. ReadSoft AB is primarily governed by the application of legislation, decisions made from the Annual General Meeting, the companys Articles of Association, the listing agreement with NASDAQ OMX Stockholm, the Swedish Code of Corporate Governance (the Code), the work of the Board of Directors, the President and corporate managements continuous leadership of the companys operations. includes the appointment of the Board of Directors and external auditors, the adoption of the financial statements, the decision on discharge from liability for the President and Board and the appropriation of profits. The Board of Directors is appointed on the basis of proposals from the Nomination Committee or shareholders. The next Annual General Meeting will be held on April 25, 2013. The Notice can be found on page 64.
Authorization of the Board to buy and sell ReadSoft shares. Authorization of the Board to decide on a share issue.
Work of the Board of Directors

In 2012, the Board of Directors made decisions concerning the companys strategy, organizational issues, focus, guidelines and direction. The Board monitors the work of the President through continuous follow-up of the operations during the year and is responsible for ensuring that the companys organization, management and guidelines for administration are prepared in an appropriate manner and that an adequate internal control is in place. In addition to applicable legislation, the listing agreement and the Code, the work of the Board is governed by a formal work plan that is established annually.
2012 Annual General Meeting

The Annual General Meeting of ReadSoft was held on April 26, 2012. The Chairman of the Board, Gran E Larsson, was elected as the Chairman of the Meeting. All Board members elected by the Annual General Meeting were present. The Minutes of the 2012 Annual General Meeting are available on ReadSofts website at www.readsoft.com. The Annual General Meeting passed the following resolutions:
Operations and Articles of Association

As stated in the Articles of Association, the companys operations comprise the manufacture and sale of systems for automatic capture of written characters and conducting operations compatible therewith. The Articles of Association are available in their entirety at www.readsoft.com.
Adoption of the 2011 income statement, balance sheet, consolidated income statement and consolidated balance sheet. Appropriation of the companys profit in accordance with the adopted balance sheet. Discharge from liability for the Board members and the President. Election of Board members. Approval of incentive programs for employees.
The Board of Directors held ten meetings

Attendence Gran E Larsson Lennart Pihl Anna Sderblom Jan Andersson Lars Appelstl Hkan Valberg Peter Gille 10 of 10 10 of 10 10 of 10 10 of 10 10 of 10 10 of 10 10 of 10
Annual General Meeting

ReadSofts highest decision-making body formally convenes at the Annual General Meeting, which must be held within six months of the end of the fiscal year. The agenda of the Annual General Meeting
Information about ReadSofts Board members is available on pages 28-29.
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Overview of corporate governance in ReadSoft

Board meetings and key decision items:
February 13 February 15 February 27 Extraordinary Board meeting Year-end Report By letter Interim Report for the first quarter Statutory meeting Strategy Interim Report for the second quarter Corporate governance issues/Financial planning Interim Report for the third quarter Financial plan
AUDITORS
SHAREHOLDERS COMMITTEE
NOMINATION
April 26 April 26 June 11 July 17 August 27 October 22
BOARD OF DIRECTORS
COMMITTEES
December 18
Remuneration to the Board for the period from AGM 2012-AGM 2013
Name Gran E Larsson Position Chairman Board fee, SEK 315,000 140,000 140,000 140,000 140,000 140,000
PRESIDENT AND CORPORATE MANAGEMENT STAFFS
Lennart Pihl Anna Sderblom Jan Andersson Lars Appelstl Hkan Valberg Peter Gille
R&D
SALES & MARKETING
PROFESSIONAL SERVICES
SOLUTION MANAGEMENT
Remuneration excludes travel expenses. Fees are not paid to members of the Audit or Nomination Committee.
Among other guidelines, the work plan stipulates the decisions to be made by the Board and determines how the work of the Board shall be conducted. The work plan also stipulates the division of duties between the Board and the President. The Board works according to an annual plan with a fixed agenda for each meeting. The President, CFO and Legal Counsel participate in the Board meetings, providing reports and taking minutes. The Chairman of the Board leads the Boards work and ensures that the Board fulfills its duties. The Chairman is also responsible for informing Board members of everything they need to know to be able to complete their work. In addition, the Chairman represents ReadSoft in certain matters of ownership. The Board held 10 (11) meetings in 2012. At two of these meetings, on February 15 and October 22, the Board convened with the auditors. The Articles of Association stipulate that the Board of Directors shall comprise not fewer than three and not more than seven members, with or without deputies. The Board is elected by the Annual General Meeting and, in 2012,
comprised of Gran E Larsson, Lennart Pihl, Anna Sderblom, Jan Andersson, Lars Appelstl, Hkan Valberg and Peter Gille. Six of seven Board members own ReadSoft shares. On December 31, 2012, the total shareholdings of the Board were 1,193,580 Series A shares and 5,979,890 Series B shares, corresponding to approximately 42 percent of the voting rights and 22 percent of the capital. The Nomination Committee believes that the Board fulfills the established standards for the Board to effectively and independently manage ReadSofts business. There is a high level of expertise and a majority of the elected Board members are independent from the company, its management and principal owners. For further information, refer to the table on pages 28-29 and www.readsoft.com.
Ownership structure
Refer to page 61.
Authorization
The 2012 Annual General Meeting resolved to grant the Board of ReadSoft authorization to decide, on one or more occasions, on the purchase and transfer of own shares until the 2013 Annual General Meeting. Purchase may be made of a maximum number of shares so that the companys possession of shares at any time does not exceed ten (10) percent of the total number of shares in the company. The purpose of the authorization is to give the Board of Directors the possibility to adjust the companys capital structure and to enable acquisition financing through the use of own shares. In addition, the 2011 Annual General Meeting resolved to authorize the Board to make decisions, on one or more occasions although not later than until the 2013 Annual General Meeting, regarding an increase of the share capital totaling a maximum of SEK 320,000 through new share issues of a maximum of 3,200,000 Series B shares with a right to deviate from the shareholders preferential rights. These authorizations
Evaluation of the Boards work

Through the agency of the Chairman, all Board members were given the opportunity to evaluate the Boards work during 2012. The Board has studied and discussed the collated results of the evaluation.
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GOVERNANCE AND RESPONSIBILITy CORPORATE GOVERNANCE
were granted so that the Board could be empowered to finance future corporate acquisitions against payment in shares and/or through new share issues against payment in capital contributed in kind. The Board must be able to make decisions in this regard without having to convene a General Meeting.
6. Joint IT-based business systems are implemented for the purpose of increasing the speed at which financial information is prepared and improving access to this information within the company. 7. Group-wide documentation is prepared for use in sales and delivery processes with counterparties. The principal risks associated with the operation are described on pages 22-23.
Internal control and risk management

The primary goal of the companys system for internal control and risk management is to achieve a high level of reliability in all external financial reporting and to ensure that the companys financial reports are prepared in accordance with legislation, generally accepted accounting principles in Sweden and other requirements for listed companies. The key components of the companys system for internal control and risk management include the following: 1. Establishing, on an annual basis, the reporting structure and reporting instructions for all companies in the ReadSoft Group that stipulate that the companies must submit a financial report on a monthly basis in accordance with legal requirements and the companys financial manual. This report forms the basis of the Groups consolidated reporting. 2. The local finance organizations are responsible for ensuring that the companies reports are prepared in accordance with all legal requirements and established instructions. Control of the subsidiaries financial reports is executed by the Group controller function. A consolidated financial report is presented to Group management and the Board of Directors on a monthly basis. Group management and the Board work continuously to assure the quality of the financial reporting received. 3. Senior executives of the Parent Company are represented on the Boards of Directors of the Groups legal subsidiaries. 4. The distribution of responsibility and right of decision stipulated in job descriptions, authorization instructions and policies are continuously followed up and updated when necessary. 5. As in the Parent Company, work plans for the boards and instructions to the presidents of the Groups subsidiaries are established annually. This documentation regulates such issues as responsibility and right of decision.
monitoring the work of the companys auditors, the companys internal control systems, current risk scenario and financial information, and handling other issues assigned to the Committee by the Board. In 2012, the Committee convened three times and Gran E Larsson and Lennart Pihl were present at all of these meetings.
Internal auditing
The Board of Directors has evaluated whether a special review function (internal auditing) should be established. Following this evaluation, the Board deemed the establishment of a special review function unnecessary, taking into account such considerations as the size and risk scenario of the company.
President
The President takes care of operational management and is responsible for the accounts as per the Swedish Companies Act. He is also responsible for the execution of the decisions made by the Board. The President shall also provide the Board with the fundamental materials required to make decisions, and to present matters and explain his proposals to the Board. Together with corporate management, consisting of eleven people, the President shall make decisions concerning matters of strategy. The responsibilities and authority of the President and the allocation of work between the President and the Board are contained in special instructions.
Nomination Committee
The 2012 Annual General Meeting resolved to commission the Chairman of the Board to form a Nomination Committee. The largest shareholders, according to voting rights, as of September 30, 2012 were asked to participate in the Nomination Committee. For the 2013 Annual General Meeting, the Nomination Committee includes Jan Andersson, Lars Appelstl, Jonas Fredriksson as a representative of E hman Jr Fonder AB, Gran E Larsson, Chairman of the Board of ReadSoft, Jan Srlvik as a representative of Nordea Fonder and Vivianne Sandqvist as a representative of Lnsfrskringar Fondfrskring. The Code states that if more than one Board member is included in the Nomination Committee, not more than one of them may be dependent in relation to the companys major shareholders. Gran E Larsson, Jan Andersson and Lars Appelstl are Board members. The deviation is motivated by the fact that Jan Andersson and Lars Appelstl are principal owners of the company.
Auditors
hrlings PricewaterhouseCoopers AB was elected at the 2012 Annual General Meeting as the auditors for ReadSoft. The chief auditor is Mikael Eriksson and the assisting auditor is Eric Salander. Neither of the auditors has auditing assignments in other companies that would constitute a conflict of interest with their assignment for ReadSoft. The auditors mandate period ends at the 2013 Annual General Meeting. The Nomination Committee, with the support of the companys Audit Committee, has the task of presenting a proposal to the Annual General Meeting regarding the election of auditors.
Audit Committee
Each year, the Board of Directors appoints an Audit Committee following the Annual General Meeting. The Code stipulates that the Audit Committee shall comprise not less than three Board members. ReadSofts Audit Committee comprises two members, which the Board deems warranted in consideration of the companys size and structure. The current Audit Committee comprises Gran E Larsson and Lennart Pihl. The Committee is responsible for addressing issues concerning the procurement of auditing services and audit fees,
Remuneration Committee
Each year, the Board of Directors appoints a Remuneration Committee following the Annual General Meeting. The current Remuneration Committee comprises Gran E Larsson and Hkan Valberg. The Remuneration Committee is responsible for issues concerning compensation and other terms of employment for ReadSofts management. In 2012, the Committee convened twice and Gran E Larsson and Hkan Valberg were present at both meetings. The Remuneration Committee provides supporting documentation for decisions to the Board.
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Gran E Larsson
Chairman of the Board Other Board assignments: Chairman of the Boards of AB Sagax (publ.) and Aqeri Holding AB (publ.). Vice Chairman of Avega Group AB (publ.) and Board member of Header Compression Sweden Holding AB (publ.) and Habia Cable AB. Education: B.Sc. Engineering 1967 and B.Sc. Business Economics 1969. Current position: Active Board work. Previous positions: President of Micronic Laser Systems AB, Standard Radio AB, Tidningarnas Telegrambyr AB, Norstedts Tryckeri AB, Interforward AB, Ferag Inc. Chairman of the Boards of QlikTech International AB, Sandrew Metronome AB, Tolerans AB, Ferag Japan Ltd, Standard Radio AB and the Hildur Nordin Heritage Foundation. Shareholding in ReadSoft: 120,000 (78,000) Series B shares. Independent in relation to the company and its principal owners. Born: 1943. Elected: 1998, Chairman of the Board since 2000.
Peter Gille
Board member Other Board assignments: A number of Nexus subsidiaries. Education: B.Sc. System Science 1988, Uppsala University, and Executive MBA 2003, (Universities of Paris and Edinburgh). Current position: President of Nexus Technology. Previous positions: Various executive positions at the Oracle Group 1994-2006. Consultant at Corda Adesystem, Enator Corda, 1988-1994. Shareholding in ReadSoft: 0 (0) shares. Independent in relation to the company and its principal owners. Born: 1962. Elected: 2009.
Jan Andersson
Board member Other Board assignments: Chairman of the Board of Fast2 and Ekros & Hultberg. Board member of Addnode Group AB (publ.) and Skye AS. Education: M.Sc. in engineering, Linkping Institute of Technology, Data Technology program. Current position: Active Board work in ReadSoft AB. Previous positions: President of ReadSoft, Chairman of the Board of AIIM International, Board member of Netwize AB (publ.), ADRA Datasystem and Cortex Software AB. Shareholding in ReadSoft: 596,790 (596,790) Series A shares and 2,911,195 (3,511,195) Series B shares. Born: 1959. Elected: 2011.
Anna Sderblom
Board member Other Board assignments: Chairman of the Board of Avega Group AB (publ.) and Algoryx Simulations AB. Member of the Boards of Ortivus AB (publ.), Excanto AB and SSE Business Lab. Education: B.Sc. Mathematics 1994, Lund University. B.Sc. Business Economics 2003, Stockholm University. Ph.D. Economics 2011, Stockholm School of Economics. Current position: Researcher and teacher, Stockholm School of Economics. Previous positions: Technical Support Manager and Director of Marketing, Microsoft Nordic. Director of Marketing, Posten Brev. Partner/Investment Manager Startup Factory and Industrifonden. Shareholding in ReadSoft: 10,000 (10,000) Series B shares. Independent in relation to the company and its principal owners. Born: 1963. Elected: 2004.
Information regarding shareholding at ReadSoft pertains to directly owned shares or shares owned through companies at December 31, 2012.
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board of directors
Auditors report on the Corporate Governance Report

To the Annual Meeting of the shareholders in ReadSoft AB (publ.), corporate registration number 556398-1066.
E NGAGE M E N T A N D R E S P ON S I B I L I T Y We have audited the corporate governance report for the year 2012 on pages 24-29. It is the Board of Directors that is responsible for the corporate governance report and that it has been prepared in accordance with the Annual Accounts Act. Our responsibility is to express an opinion on the corporate governance report based on our audit. T H E S COP E OF T H E AU DI T We conducted our audit in accordance with Fars auditing standard RevU 16 The auditors examination of the corporate governance report. This standard requires that we have planned and performed the audit to obtain reasonable assurance that the corporate governance report is free of material misstatements. An audit includes examining, on a test basis, evidence supporting the information included in the corporate governance report. We believe that our audit provides a reasonable basis for our opinion set out below. OP I N ION In our opinion, the corporate governance report has been prepared and is consistent with the annual accounts and the consolidated accounts.
Lennart Pihl
Board member Other Board assignments: Chairman of Kinnarps AB, Green Cargo AB, Priveq Home Improvement AB and Bertex AB. Deputy Chairman of MultiQ AB and Heatex AB; Board member of Duroc AB and the Chamber of Commerce and Industry of Southern Sweden (Northwest Skne). Education: B.Sc. Business Economics, Lund University. Current position: Senior Advisor and management consultant in his own company. Previous positions: President of Acrimo 1987-1997, President of Bong Ljungdahl 1997-2003. Shareholding in ReadSoft: 20,000 (20,000) Series B shares. Independent in relation to the company and its principal owners. Born: 1950. Elected: 2001.
Lars Appelstl
Chief Technology Officer (CTO) and Board member Other Board assignments: None. Education: B.Sc. Computer Science, Institute of Technology at Linkping University 1986. Master of Science, Case Western Reserve University, Cleveland, Ohio 1986. Current position: Chief Technology Officer (CTO) at ReadSoft. Previous positions: Systems Developer, Norsk Data, Oslo 1986-1988, Consultant, Frontec, Stockholm 1988-1991. Shareholding in ReadSoft: 596,790 (596,790) Series A shares and 2,911,195 (3,511,195) Series B shares. Born: 1959. Elected: 1991.
Hkan Valberg
Board member Other Board assignments: Prodacapo AB and a number of Advent Softwares subsidiaries. Education: B.Sc. Engineering, Institute of Technology at Linkping University, 1986. Current position: President EMEA region at the US company Advent Software. Previous positions: MAS/ PCM Nordic (IBM subsidiary) General Manager, EVP Sales & Marketing, i2Technologies, Client Executive, Nordic Manager and Industri Matematik International, Vice President World Wide Product Marketing, Development and Alliances. Shareholding in ReadSoft: 7,500 (7,500) Series B shares. Independent in relation to the company and its principal owners. Born: 1962. Elected: 2008.
Malm, March 28, 2013 hrlings PricewaterhouseCoopers AB Mikael Eriksson Authorized Public Accountant Chief Auditor Eric Salander Authorized Public Accountant
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corporate management
Per kerberg
President and CEO Education: B.Sc. Business, Economics, Mid Sweden University in Sundsvall, 1990. Shareholding in ReadSoft: 54,000 Series B shares and convertibles of SEK 9,000,000. Born: 1966. Employed since: 2011.
Lars Appelstl
Chief Technology Officer (CTO) Education: B.Sc. Computer Science and Master of Science, Cleveland Ohio, 1986. Shareholding in ReadSoft: 596,790 Series A shares and 2,511,195 Series B shares. Born: 1959. Employed since: 1991.
Jan Bertilsson
Chief Financial Officer (CFO) Education: B.Sc. Business Economics, University of Gothenburg School of Business, Economics and Law, 1981. Shareholding in ReadSoft: 25,475 Series B shares and convertibles of SEK 635,000. Born: 1957. Employed since: 1997.
Peter Sandin
Chief Operating Officer (COO) Education: Master of Science Electrical Engineering, Lund University, 1991, and Executive MBA, Lund School of Economics and Business Administration, 2002. Shareholding in ReadSoft: Convertibles of SEK 440,000. Born: 1967. Employed since: 2010.
Johan Holmqvist
Vice President Corporate Communications Education: Masters level courses at Lund University School of Economics and Management, 1999. Shareholding in ReadSoft: 21,000 Series B shares and convertibles of SEK 799,250. Born: 1972. Employed since: 2009.
Anna Ronnelin
Vice President Human Resources Education: B.A. Human Resources at Lund University, 1995. Shareholding in ReadSoft: 3,000 Series B shares and convertibles of SEK 265,000. Born: 1968. Employed since: 2000.
Peter Hrwing
Senior Vice President Region EMEA and Special Markets Education: B.Sc. Business Economics, Lund University School of Economics and Management, 1985. Shareholding in ReadSoft: 63,151 Series B shares. Born: 1961. Employed since: 2007.
Martin Lackmann
Senior Vice President Region Northern Europe Education: Computer and Systems Sciences, Stockholm University, 1985. Shareholding in ReadSoft: Born: 1957. Employed since: 2000.
Bob Fresneda
Senior Vice President Region North America Education: Major in Marketing and Minor in Accounting, Southeastern Louisiana University, 1985. Shareholding in ReadSoft: 41,450 Series B shares and convertibles of SEK 1,153,500. Born: 1963. Employed since: 1999.
Bjrn Gabrielsen
Senior Vice President Region Latin America & Asia/Pacific Education: M.Sc. Metallurgy, NTH Trondheim, 1986. and Business Administration, NHH, Oslo, 1982. Shareholding in ReadSoft: Convertibles of SEK 1,532,000. Born: 1961. Employed since: 2000.
Bjrn Karlsson
Senior Vice President Capture Automation Lab Education: Technical college graduate, 1993. Shareholding in ReadSoft: 6,000 Series B shares. Born: 1973. Employed since: 1997.
Rowland Archer
Senior Vice President ERP Automation Lab Education: M.Sc. Electrical Engineering and Computer Sciences, Massachusetts Institute of Technology, 1978. Shareholding in ReadSoft: Convertibles of SEK 1,532,000. Born: 1953. Employed since: 2010.
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2012
Administration report
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Administration report 2012

The Board of Directors and President of ReadSoft AB (publ), corp. reg. no. 556398-1066, hereby submit their administration report for the 2012 fiscal year.
Operations
ReadSoft develops and markets software that provides complete solutions for document automation and data processing. Through unique technology, data from the web, e-mail, faxes and paper can be captured, interpreted, processed and presented in a uniform format in the customers enterprise resource planning system. The products are developed in-house and marketed internationally in around 70 countries through subsidiaries and partners. The Parent Company, ReadSoft AB, administers and develops wholly owned operating subsidiaries and conducts sales in markets where it does not have subsidiaries. A substantial part of the development and maintenance of new and existing products and applications is also carried out by the Parent Company.
Group structure
ReadSoft AB (Publ) is the Parent Company of a Group that includes wholly owned subsidiaries, as stated in Note 13. The operational subsidiaries are active in the development of software, selling the Groups products and providing support and service for these products.
Acquisitions during the year

On February 27, 2012, ReadSoft acquired 100 percent of the German company, foxray AG, a leading supplier of platforms and solutions for the automation of business processes. The company has 40 employees, is headquartered in Hamburg, Germany and reported sales of approximately EUR 7 million in 2011, primarily in the European market.
currencies in countries in which ReadSoft is established, but overall these fluctuations had no significant impact on Group sales translated into SEK. License revenues amounted to SEK 248.3 million (221.7) in 2012, accounting for 32 percent (33) of total revenues. Revenues from maintenance contracts amounted to SEK 260.6 million (225.2) for 2012. Revenues from product-related consulting services totaled SEK 223.7 million (180.8) and sales of hardware amounted to SEK 39.8 million (26.3). Other revenues totaled SEK 9.3 million (9.0). Consolidated operating profit totaled SEK 65.6 million (77.6), EBITDA amounted to SEK 63.0 million (74.5), profit after financial items to SEK 63.2 million (79.8) and profit after tax to SEK 47.6 million (58.4). The operating margin was 8.4 percent (11.7), the EBITDA margin was 8.1 percent (11.2), the profit margin after financial items was 8.1 percent (12.0) and the operating margin after tax was 6.1 percent (8.8). The item Other operating expenses/income in the income statement comprises exchange-rate differences for the year and amounted to an expense of SEK 1.8 million (expense: 0.4). Tax for the year, which totaled an expense of SEK 15.6 million (expense: 21.3), was affected by a new rate of tax in Sweden on deferred tax. Parent Company sales for 2012, including intra-Group items, totaled SEK 258.6 million (234.5). Purchases from and sales to Group companies accounted for 37 percent (29) and 95 percent (91) of operating expenses and sales. The Parent Companys profit before tax and appropriations totaled SEK 26.3 million (44.7).
Sales and profit

For 2012, consolidated sales totaled SEK 781.7 million (663.0). Sales in the Nordic market amounted to SEK 175.5 million (165.5). In the other European markets, sales totaled SEK 377.2 million (283.2). Sales in the US and the rest of the world amounted to SEK 229.0 million (214.3). Total sales growth in 2012 amounted to 18 percent of which 10 percent was organic and 8 percent was attributable to the acquisition of foxray AG in February 2012. During the year, the SEK fluctuated against
Financing and liquidity

The Groups equity/assets ratio at year-end was 44.6 percent (45.8). The Groups cash and cash equivalents totaled SEK 113.5 million (156.5) at December 31, 2012. the amount of SEK 95.3 million (55.4), of which SEK 0.0 million (0.0) was utilized. Cash flow for 2012 amounted to SEK 74.8 million (126.4). In 2012, ReadSoft issued a new convertible loan in a nominal amount of SEK 8.6 million that extends from June 14, 2012 to December 15, 2015. The convertible
debentures entitle the holders to convert the loan to ReadSoft Series B shares at a conversion price of SEK 24.50 during the period from June 16, 2015 to November 27, 2015. Upon full conversion, the number of Series B shares will increase by 350,000 and the share capital by SEK 35,000. Convertible debentures that are not converted will be redeemed at the nominal amount on December 15, 2015. A convertible loan was issued in June 2010 that comprised 350,000 convertible debentures in a nominal amount of SEK 4.7 million can be converted to ReadSoft Series B shares at a conversion price of SEK 13.50 during the period December 10, 2012 to May 21, 2013. By December 31, 2012, 88,000 convertible debentures had been converted to ReadSoft Series B shares. This increased share capital by SEK 8,800. The remaining convertible debentures mature on June 7, 2013, and will then be repaid if no conversion has occurred. In 2012, the Board of ReadSoft was granted authorization to decide on the purchase and transfer of own shares until the 2013 Annual General Meeting. Purchase and transfer may be made of a maximum number of shares so that the companys holding of shares does not at any time exceed ten (10) percent of the total number of shares in the company. At December 31, 2012, ReadSoft held 2,540,696 repurchased Series B shares at a cost of SEK 28.1 million. The equity/assets ratio of the Parent Company at year-end was 63.4 percent (60.8). The Parent Companys cash and cash equivalents totaled SEK 21.0 million (71.6) at December 31, 2012. The Parent Company has a bank overdraft facility in the amount of SEK 90.1 million (50.0), of which SEK 0.0 million (0.0) was utilized.
Finance policy
ReadSofts finance policy is determined by the Board and applies for one year. The finance policy establishes guidelines for handling financial risks within the ReadSoft Group. Financial activities are intended to achieve the highest possible return on the companys cash and cash equivalents, or the lowest possible loan costs when the company is in a situation of
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net liability, with limited, controlled risk levels and favorable preparedness to meet the companys financial obligations at any given time. Decisions on hedging of currency flows are made by the Board on a continuous basis throughout the year. At year-end, there were currency hedges in EUR corresponding to approximately 30-40 percent of the estimated inflow in 2013.
Personnel
The average number of employees in the Group during the year was 564 (482), of which 26 percent (24) were women and 74 percent (76) men. At year-end, the number of employees was 590 (506). The distribution of employees and salaries and benefits paid are presented in Note 5.
prised Gran E. Larsson and Hkan Valberg. The Audit Committee comprises Gran E. Larsson and Lennart Pihl.
Nomination Committee
The Nomination Committee comprises Jan Andersson, Lars Appelstl, Gran E. Larsson, Jonas Fredriksson representing E hman Jr Fonder AB, Jan Srlevik representing Nordea Fonder and Vivianne Sandqvist representing Lnsfrskringar Fondfrskring.
Investments, amortization, depreciation and impairment

In the acquisition analysis of foxray AG, acquisition-related intangible assets in the form of trademarks, cooperative agreements and proprietary software were identified with a value of SEK 21.6 million. Amortization in an amount of SEK 4.3 million was implemented on these intangible assets in 2012. Consolidated goodwill amounted to SEK 36.3 million. Other investments in acquisition-related intangible assets were made in an amount of SEK 0.1 million (0.2) during the year. Total depreciation of acquisition-related intangible assets in the form of trademarks, cooperative agreements and proprietary software were made during the year in the amount of SEK 7.6 million (6.6). The Groups investments in tangible assets during the year primarily comprised the acquisition of computer and office equipment and amounted to SEK 6.6 million (6.9). Depreciation totaling SEK 8.8 million (7.9) was recognized for 2012. Research and development relating to new and existing products was conducted during the year. The total product development expenses for the year amounted to SEK 110.6 million (98.4). Of these expenses, SEK 61.7 million (53.1) was capitalized. Capitalized expenses for proprietary software development were amortized by SEK 40.5 million (33.5) for 2012. Investments in acquired software licenses amounted to SEK 0.6 million (2.5). Depreciation of acquired software licenses totaling SEK 2.3 million (2.1) was recognized for the year. The Parent Companys total investments during the year were SEK 2.7 million (5.1) and depreciation was SEK 5.1 million (4.8).
Major shareholders
Major shareholders and the shareholder structure are presented in The share 2012 on pages 60 and 61.
Work of the Board of Directors

The Board of Directors of ReadSoft AB comprises seven regular members, one woman and six men. The Boards procedural rules are established for one year at a time and regulate such matters as the distribution of responsibilities among Board members, the Chairman and the President. The Board works according to an annual plan including a fixed agenda for each meeting. The President and company employees participate in the Board meetings, providing reports and taking minutes. During the year, the Board held ten meetings. At these Board meetings, decisions were made concerning the year-end report, interim reports, the Annual General Meeting and approval of the budget. Other important items addressed at this years meetings included strategic issues relating to the market and products. Through the agency of the Chairman, all Board members were given the opportunity to evaluate the Boards work during 2012. The Board studied and discussed the overall results of the evaluation at the meeting in February 2013. For further information regarding the work of the Board, refer to the Corporate Governance Report.
Events after the close of the fiscal year

No special events have occurred after the close of the fiscal year.
Outlook
ReadSoft assesses the underlying demand for the solutions that the company markets as favorable and thus foresees solid conditions for improved results and continued growth.
Proposal for the allocation of profit brought forward The following profit is at the disposal of the Annual General Meeting, SEK 000s: Share premium reserve Profit brought forward Profit for the year Total The Board proposes that profit be allocated as follows, SEK 000s: Proposed dividend of SEK 0.60 per share to shareholders* To be carried forward Total 19,899 191,473 211,372 40,068 131,896 39,408 211,372
The following committees were active during the year

The Remuneration Committee, which handles issues concerning salaries and pensions for senior management, com-
*) This calculation is based on all shares issued and full conversion of the fifth convertible loan (also refer to Note 21). At the closing date, the treasury shares and as yet unconverted shares will be exempt from dividend.
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CONSOLIDATED INCOME STATEMENT
CONSOLIDATED INCOME STATEMENT SEK 000s Net sales Capitalized expenses for proprietary software development Note 4 9 2012 781,726 61,710 843,436 Goods for resale Personnel costs Other external costs Other operating expenses/income Portion of income from associated companies Depreciation, amortization and impairment loss on intangible assets Depreciation, amortization and impairment loss on tangible assets 5 6, 7 8 31 9 10 -73,702 -477,697 -166,176 -1,842 703 -50,289 -8,830 -777,833 Operating profit Financial income and expenses Financial income Financial expenses Total net financial items Profit before tax Tax on profit for the year Profit for the year 3, 12 11 11 1,949 -4,314 -2,365 63,238 -15,649 47,589 3,610 -1,410 2,200 79,779 -21,332 58,447 65,603 2011 663,012 53,150 716,162 -42,184 -410,684 -137,540 -409 2 259 -42,166 -7,859 -638,583 77,579
Earnings after tax per share, (SEK) Earnings after tax per share after full dilution (SEK) Average number of shares outstanding, excluding repurchase of own shares Average number of shares outstanding, excluding repurchase of own shares and after full dilution
1.57 1.50 30,280,077 31,643,244
1.97 1.90 29,651,280 30,718,613
Earnings per share were calculated as the earnings for the period after tax attributable to the Parent Company shareholders divided by the average number of shares outstanding during the period, excluding repurchase of own shares. Earnings per share after full dilution were calculated as the earnings for the period after tax attributable to the Parent Company shareholders divided by the average number of shares outstanding for the period, excluding repurchase of own shares and after full dilution of current convertible loan.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME SEK 000s Profit for the year Other comprehensive income Translation difference Cash-flow hedges, net after tax Other comprehensive income for the year Total comprehensive income for the year -2,688 -1,650 -4,338 43,251 90 1,836 1,926 60,373 Note 2012 47,589 2011 58,447
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CONSOLIDATED BALANCE SHEET
CONSOLIDATED BALANCE SHEET SEK 000s ASSETS Fixed assets Intangible assets Proprietary software development Software licenses acquired Goodwill Other intangible assets Total intangible assets Tangible assets Equipment Total tangible assets Financial assets Participations in associated companies Other participations Deferred tax assets Other non-current receivables Total financial assets Total fixed assets 31 27 12 15 7,996 416 47,100 2,938 58,450 324,978 7,788 416 43,198 3,414 54,816 248,162 10 16,076 16,076 17,312 17,312 9 9 9 9 122,036 5,191 102,494 20,731 250,452 100,778 6,624 66,236 2,396 176,034 Note December 31, 2012 December 31, 2011
Current assets Inventories Goods for resale Total inventories 16 2,727 2,727 542 542
Current receivables Accounts receivable Other current receivables Financial derivative instruments Current tax assets Prepaid expenses for annual support and maintenance contracts Prepaid expenses and accrued income Total current receivables 20 23 17 294,689 5,856 908 7,003 22,378 37,821 368,655 229,504 4,499 2,491 6,206 23,197 35,863 301,760
Cash and cash equivalents Total current assets Total assets
22
113,484 484,866 809,844
156,505 458,807 706,969
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CONSOLIDATED BALANCE SHEET
CONSOLIDATED BALANCE SHEET SEK 000s EQUITY AND LIABILITIES Equity Share capital, 32,903,940 shares at par value of SEK 0.10 Other contributed capital Hedge reserve Translation reserve Earnings brought forward including profit for the year Total equity 18 3,290 72,708 186 -7,557 292,298 360,925 3,268 69,762 1,836 -4,869 254,106 324,103 Note December 31, 2012 December 31, 2011
Non-current liabilities Convertible loan Long-term financial liabilities Deferred tax liabilities Provisions Total long-term liabilities 21 32 12 33 22,468 8,617 38,636 4,858 74,579 18,642 32,160 50,802
Current liabilities Convertible loan Current financial liabilities Bank overdraft facility Accounts payable Current tax liabilities Other current liabilities Prepaid income for annual support and maintenance contracts Accrued expenses and deferred income Provisions Total current liabilities 24 33 21 32 22 3,180 2,521 29,179 14,624 30,373 195,937 93,668 4,858 374,340 1,404 16,596 9,534 28,998 189,747 85,785 332,064
Total equity and liabilities
809,844
706,969
Pledged assets Contingent liabilities
25 26
55,547 none
50,000 none
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CONSOLIDATED CASH FLOW STATEMENT
CONSOLIDATED CASH-FLOW STATEMENT SEK 000s Operating activities Operating profit before financial items Depreciation/amortization Other items not affecting liquidity Interest received Interest paid Income tax paid/received Cash flow from operating activities before changes in working capital Increase/decrease in inventories Increase/decrease in current receivables Increase/decrease in current liabilities Cash flow from operating activities 65,603 59,119 953 1,949 -4,314 -7,847 115,463 -2,185 -66,461 27,970 74,787 77,579 50,025 156 3,610 -1,410 -8,146 121,814 71 -18,731 23,229 126,383 Note 2012 2011
Investing activities Investments in intangible assets Investments in tangible assets Acquisition of subsidiary Investments in associated companies Increase/decrease in non-current receivables Cash flow from investing activities 33 -62,296 -6,613 -18,526 476 -86,959 -55,651 -6,878 -400 6,107 -56,822
Financing activities Loans raised Amortization of liabilities Sale of treasury shares Repurchase of own shares Dividend paid to Parent Company shareholders Cash flow from financing activities 5,602 -21,313 -15,138 -30,849 15,825 -5,602 999 -7,408 3,814
Cash flow for the year Cash and cash equivalents at start of year Cash and cash equivalents at year-end
-43,021 156,505 113,484
73,375 83,130 156,505
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CHANGES IN EQUITY GROUP
CHANGES IN EQUITY GROUP Share capital SEK 000s As shown in the balance sheet, December 31, 2010 Total comprehensive income for the year Dividends Conversion Sale of treasury shares Capital portion of convertible loan As shown in the balance sheet, December 31, 2011 3,268 470 69,762 1,836 -4,869 254,106 19 2,189 999 3,249 Other contributed capital 67,103 Hedging reserve Translation reserve Earnings fwd incl profit for the year 202,068 58,447 -7,408
0 1,836
-4,959 90
Share capital SEK 000s As shown in the balance sheet, December 31, 2011 Total comprehensive income for the year Dividends Conversion Share issue in conjunction with acquisition, note 33 Capital portion of convertible loan As shown in the balance sheet, Dec 31, 2012 3,290 22 3,268
Other contributed capital 69,762
Hedging reserve
Translation reserve
Earnings fwd incl profit for the year 254,106 47,589 -15,138
1,836 -1,650
-4,869 -2,688
2,730 5,741 216 72,708 186 -7,557 292,298
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INCOME STATEMENT PARENT COMPANY
INCOME STATEMENT PARENT COMPANY SEK 000s Net sales Note 2012 258,607 258,607 2011 234,547 234,547
Goods for resale Personnel costs Other external costs Other operating expenses/income Depreciation of fixed assets 5 6, 7 8 9, 10
-74,460 -125,758 -56,622 17,703 -5,071 -244,208
-59,860 -124,847 -46,638 26,844 -4,770 -209,271 25,276
Operating profit Financial income and expense Profit from participations in Group companies Profit from participations in associated companies Financial income Financial expenses Total net financial items Net profit before appropriations and tax Appropriations Tax on profit for the year Profit for the year 28 3, 12 29 30 11 11
14,399
5,713 298 8,730 -2,798 11,943 26,342 12,975 91 39,408
10,580 11,016 -2,128 19,468 44,744 6,661 -2 074 49,331
STATEMENT OF COMPREHENSIVE INCOME PARENT COMPANY SEK 000s Profit for the year Other comprehensive income Translation difference Other comprehensive income for the year Total comprehensive income for the year -4,197 -4,197 35,211 -1,398 -1,398 47,933 Note 2012 39,408 2011 49,331
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BALANCE SHEET PARENT COMPANY
BALANCE SHEET PARENT COMPANY SEK 000s assets Fixed assets Intangible assets Software licenses acquired Total intangible assets 9 5,008 5,008 6,529 6,529 Note December 31, 2012 December 31, 2011
Tangible assets Equipment Total tangible assets 10 5,040 5,040 5,930 5,930
Financial assets Participations in Group companies Receivables from Group companies Shares in associated companies Other participations Other non-current receivables Total financial assets Total fixed assets 13 14 31 27 15 135,697 195,628 6,384 416 400 338,525 348,573 93,868 185,057 6,384 416 400 286,125 298,584
Current assets Current receivables Accounts receivable Receivables from Group companies Other receivables Current tax assets Prepaid expenses and accrued income Total current receivables 20 17 8,429 52,102 601 4,688 7,722 73,542 8,458 41,092 776 3,835 6,579 60,740
Cash and cash equivalents Total current assets Total assets
22
21,014 94,556 443,129
71,605 132,345 430,929
40
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BALANCE SHEET PARENT COMPANY
BALANCE SHEET PARENT COMPANY SEK 000s EQUITY AND LIABILITIES Equity Share capital, 32,903,940 shares at quotient value of SEK 0.10 Statutory reserve Share premium reserve Earnings brought forward Profit for the year Total equity 18 3,290 66,215 40,068 131,896 39,408 280,877 3,268 66,215 37,123 96,159 49,331 252,096 Note December 31, 2012 December 31, 2011
Untaxed reserves Tax allocation reserve Accumulated accelerated depreciation Total untaxed reserves 28 28 0 11,146 1,829 12,975
Non-current liabilities Convertible loan Liabilities to Group companies Deferred tax liabilities Provisions Total non-current liabilities 12 32 21 23,174 9,981 179 4,858 38,192 19,285 14,639 192 34,116
Current liabilities Convertible loan Bank overdraft facility Accounts payable Liabilities to Group companies Other current liabilities Prepaid income for annual support and maintenance contracts Accrued expenses and deferred income Provisions Total current liabilities 24 32 21 22 3,470 8,357 60,463 2,237 18,163 26,512 4,858 124,060 1,753 4,105 79,195 2,275 17,668 26,746 131,742
Total equity and liabilities
443,129
430,929
Pledged assets Contingent liabilities
25 26
41,500 5,346
41,500 5,411
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CASH-FLOW STATEMENT PARENT COMPANY
CASH-FLOW STATEMENT - PARENT COMPANY SEK 000s Operating activities Operating profit before financial items Depreciation/amortization Other items not affecting liquidity Interest received Interest paid Income tax paid/received Cash flow from operating activities before changes in working capital Increase/decrease in current receivables Increase/decrease in current liabilities Cash flow from operating activities 15,149 5,071 -24,597 7,980 -2,798 -7,307 -6,502 -11,024 -14,257 -31,783 27,494 4,770 -25,050 8,798 -2,128 -4,487 9,397 3,185 27,232 39,814 2012 2011
Investing activities Investments in intangible assets Investments in tangible assets Investments in subsidiaries Investments in associated companies Increase/decrease in non-current receivables Cash flow from investing activities -566 -2,112 -26,372 8,976 -20,074 -2,466 -2,593 -216 -4,678 40,496 30,543
Financing activities Loans raised Dividends from subsidiaries Dividends from associated companies Dividends Amortization of liabilities Sale of treasury shares Group contributions paid Group contributions received Cash flow from financing activities 8,575 14,867 298 -15,138 -6,411 -12,925 12,000 1,266 15,825 11,505 -7,408 -28,758 999 -11,900 10,000 -9,737
Cash flow for the year Cash and cash equivalents at start of year Cash and cash equivalents at year-end
-50,591 71,605 21,014
60,620 10,985 71,605
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CHANGES IN EQUITY PARENT COMPANY
CHANGES IN EQUITY PARENT COMPANY Share capital Statutory reserve Share premium reserve 34,464 Profit brought forward 80,704 -1,398 23,262 -7,408 19 2,189 999 470 3,268 Share capital 66,215 Statutory reserve 37,123 Share premium reserve 37,123 96,159 Earnings brought forward 96,159 -4,197 49,331 -15,138 22 2,729 5,741 216 3,290 66,215 40,068 131,896 39,408 49,331 Profit/ loss for the year 49,331 39,408 -49,331 Profit/ loss for the year 23,262 49,331 -23,262
SEK 000s As shown in the balance sheet, December 31, 2010 Comprehensive income for the year Appropriation of preceding years profit Dividends Conversion Sale of treasury shares Capital portion of convertible loan As shown in the balance sheet, December 31, 2011
3,249
66,215
SEK 000s As shown in the balance sheet, December 31, 2011 Comprehensive income for the year Appropriation of preceding years profit Dividends Conversion Sale of treasury shares Capital portion of convertible loan As shown in the balance sheet, December 31, 2012
3,268
66,215
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NOTES
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33
Notes on consolidated accounts

Note 1 Accounting policies
1.1 Basis for preparation of the annual accounts
The consolidated accounts were prepared in accordance with the Annual Accounts Act, RFR 1 Supplementary Accounting Rules for Groups, International Financial Reporting Standards (IFRS) and the interpretation statements issued by the International Financial Reporting Interpretations Committee (IFRIC), as adopted by the EU. The annual accounts of the Parent Company were prepared in accordance with the Swedish Annual Accounts Act, recommendation RFR 2 Accounting for Legal Entities and the statements issued by the Swedish Financial Reporting Board. The regulations in RFR 2 primarily stipulate that IFRS is to be applied with certain exceptions. The functional currency of the Parent Company is SEK, which is also the reporting currency of the Parent Company and the Group. Accordingly, the financial reports are presented in SEK. All amounts are stated in SEK 000s unless otherwise specified. and recognition of financial assets and liabilities. IFRS 9 was issued in November 2009 for financial assets and in October 2010 for financial liabilities and replaces the sections of IAS 39 related to the classification and measurement of financial instruments. IFRS 9 states that financial assets must be classified into two categories: measurement at fair value or measurement at amortized cost. Classification is determined upon initial recognition based on the companys business model and characteristics in the contractual cash flows. For financial liabilities, no major amendments were made compared with IAS 39. The greatest change pertains to liabilities that are identified at fair value. For these, the part of the fair value change that is attributable to the own credit risk must be recognized in other comprehensive income instead of profit insofar as doing so does not cause an accounting mismatch. The Group intends to apply the new standard not later than the fiscal year beginning January 1, 2015, and has not yet evaluated its effects. The Group will evaluate the effects of the outstanding phases with regard to IFRS 9 when they are completed by IASB. applied, but provides guidance on how it should be applied when other IFRS already require or allow measurement at fair value.
1.2 Consolidated accounts

a) Subsidiaries Subsidiaries are all companies in which the Group has the right to formulate financial and operating strategies in a manner commonly accompanying shareholdings amounting to more than half of the votes. The occurrence and effect of any voting rights that are currently possible to utilize or convert are taken into account in the assessment of whether the Group exercises controlling influence over another company. Subsidiaries are included in the consolidated accounts starting on the date on which control passes to the Group. They are excluded from the consolidated accounts starting on the date on which the control expires. The acquisition method is used to recognize the Groups business acquisitions. The consideration for the acquisition of a subsidiary comprises the fair value of transferred assets and liabilities and the shares issued by the Group. The consideration also includes the fair value of all assets or liabilities that result from an agreement regarding a contingent consideration. Acquisitionrelated costs are expensed as they arise. Identifiable acquired assets and assumed liabilities in a business acquisition are initially valued at fair value on the date of acquisition. For each acquisition, the Group determines if all holdings without controlling influence in the acquired company are recognized at fair value or the holdings proportional share of the acquired companys net assets. The amount by which the consideration, any non-controlling interests and the fair value of previous shareholdings on the acquisition date exceed the fair value of the Groups share of identifiable acquired net assets is recognized as goodwill. If the amount is less than the fair value of the acquired subsidiarys assets, i.e. in the event of a bargain purchase, the difference is recognized directly in the Statement of Comprehensive Income. Intra-Group transactions and balances, as well as unrealized profits and losses on transactions between Group companies, are eliminated. The accounting policies for subsidiaries have been changed where necessary to guarantee a consistent application of the Groups principles. b) Associated companies Associated companies are all companies in which the Group has a significant but not controlling influence, as is
New and amended standards applied by the Group

None of the IFRS or IFRIC interpretation statements that are compulsory for the fiscal year that began January 1, 2012, have had any material impact on the Group.
New standards, amendments and interpretations of existing standards not applied in advance by the Group.
At the time of preparing the consolidated financial statements as of December 31, 2012, a number of standards and interpretations had been published, but not yet become effective. A preliminary assessment is provided below of the impact that the introduction of these standards and interpretations may have on ReadSoft ABs financial statements. Amendments have been made to IAS 1 Presentation of Financial Statements with regard to other comprehensive income. The most significant change in the revised IAS 1 is the requirement that the items recognized in other comprehensive income must be presented divided into two groups. This division is based on whether the items may be reclassified to the income statement (reclassification adjustments) or not. The change does not address the issue of which items should be included in other comprehensive income.
IFRS 10 Consolidated Financial Statements is based on already existing principles since it identifies control as the decisive factor for determining if a company should be included in the consolidated financial statements. The standard provides additional guidance to assist the determination of control when it is difficult to assess. The Group intends to apply IFRS 10 for the fiscal year beginning January 1, 2014, and has not yet evaluated its full effect on the financial statements. IFRS 12 Disclosures of Interests in Other Entities comprises required disclosures for subsidiaries, cooperative arrangements, associated companies and non-consolidated structured companies. The Group intends to apply IFRS 12 for the fiscal year beginning January 1, 2014, and has not yet evaluated its full effect on the financial statements. IFRS 13 Fair Value Measurement has the aim that measurements at fair value shall be more consistent and less complex by the standard providing an exact definition and a common source in IFRS for fair value valuations and associated disclosures. The standard provides guidance for fair value measurements of all kinds of assets and liabilities, both financial and non-financial. The requirements do not extend the area of application for when fair value should be
IFRS 9 Financial Instruments deals with the classification, measurement
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NOTES
typically the case with respect to shareholdings of between 20% and 50% of the votes. Shares in associated companies are recognized according to the equity method and are initially valued at cost. The Groups recognized value of holdings in associated companies includes goodwill that is identified upon the acquisition, net after any impairment losses. The Groups share of profits that arose in the associated company after the acquisition is recognized in profit and loss and its share of changes in other comprehensive income after the acquisition is recognized in other comprehensive income. Accumulated changes after the acquisition are recognized as changes in the carrying amount of the holding. When the Groups share of the losses in an associated company amount to or exceed its holding in the associated company, including any unsecured receivables, the Group recognizes no further losses, unless the Group has assumed obligations or made payments on behalf of the associated company. Unrealized gains on transactions between the Group and its associated companies are eliminated proportionately to the Groups share of the associated company. Unrealized losses are also eliminated unless the transaction constitutes proof that there is a need for impairment of the asset transferred. The accounting policies applied in associated companies have been changed where necessary to guarantee a consistent application of the Groups policies. Dilution gains and losses in participations in associated companies are recognized in profit and loss.
which is the functional currency and reporting currency of the Parent Company. The accounts of foreign subsidiaries have been translated as follows: Balance sheets are translated at the closing-day rate. Income statements are translated at the average exchange rate for the year. Exchange-rate differences that arise in the translation of foreign subsidiaries are recognized in other comprehensive income. In the event of a foreign subsidiary being sold, such exchange-rate differences are recognized in profit and loss as part of the capital gains/losses. Transactions in foreign currency are translated to the functional currency at the transaction-date exchange rate. Monetary assets and liabilities in foreign currency are translated to the functional currency at the closing-date exchange rate. Exchange-rate differences resulting from translation are recognized in the profit and loss. Nonmonetary assets and liabilities recognized at historic cost are translated at the transaction-date exchange rate. As part of the financing of subsidiaries, some of the Parent Companys receivables were converted into subordinated loans. Exchange-rate differences arising in the translation of these loans have been recognized in comprehensive income.
necessary resources to do so must be available. There must be a market for the software, and the company must deem that it will result in financial advantages for ReadSoft. It must be possible to calculate product development expenses to be carried forward in a reliable manner. The cost includes expenses directly attributable to the research and development department and product department, and the departments shares of joint expenses. Assets are generally amortized straight-line over the period during which the anticipated benefits are expected to accrue to the company, starting from the time when commercial production begins. The period of amortization is normally three years for products and five years for a software platform. There is no capitalization in the Parent Company, only in the Group. b) Purchased software licenses In conjunction with the acquisition of software licenses, the costs incurred for purchase and implementation are capitalized. Such costs are amortized straight-line during the expected useful life of the software. The period of amortization is normally three to five years. c) Goodwill Goodwill comprises the amount by which the cost exceeds the fair value of the Groups share of the acquired subsidiarys identifiable net assets at the time of acquisition. Goodwill in acquisitions of subsidiaries is recognized under intangible assets. Goodwill is tested annually to identify any potential need to recognize impairment losses and is recognized at cost less accumulated impairment losses. Impairment losses on goodwill are not reversed. Gains or losses upon the divestment of a unit include the remaining carrying amount of the goodwill pertaining to the divested unit. d) Other intangible assets Other intangible assets comprise acquired brands, customer relations and proprietary software, and are recognized at cost less accumulated amortization and impairment losses. Straightline amortization is applied to distribute the cost of the other intangible assets over their estimated useful life (three to 15 years).
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33
1.5 Tangible fixed assets

Tangible fixed assets are recognized at cost less accrued depreciation. Expenses directly attributable to the acquisition of an asset are included in the cost. Additional expenses are added to the carrying amount of the asset or recognized as a separate asset, depending on which is more appropriate, only if it is probable that future financial benefits associated with the asset will benefit the Group and the cost of the asset can be reliably measured. All other expenses for repairs and maintenance are recognized as costs in profit and loss for the period during which they are incurred. Depreciation is recognized straightline over the expected service life of the asset as follows: Vehicles 4 years Equipment 3-6 years The recognized residual values of the assets in the balance sheet and the useful life are tested annually with regard to any additional impairment requirements.
1.3 Segment reporting

Operating segments are reported in a manner that agrees with the internal reporting submitted to the highest executive decision-maker. The highest executive decision-maker is the function that is responsible for the allocation of resources and assessment of the operating segments results. ReadSofts highest executive decision-maker is the companys CEO. The regular internal reporting of results to the CEO that meets the criteria for representing a segment involves the Group as a whole. In other regards, sales are monitored for individual products and product groups, and results are monitored in each geographic market. In our view, none of these review levels meets the criteria for an operating segment, which is why ReadSoft recognizes the Group in its entirety as its sole segment.
1.7 Impairment of assets

Assets with an indefinite useful life are not depreciated; instead, an annual determination is made of whether there is a need for impairment. Assets that are depreciated are measured for impairment whenever events or changes of conditions indicate that the carrying amount may not be recoverable. Assets are impaired in the amount by which the assets carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an assets fair value less sales
1.6 Intangible assets

a) Proprietary software development ReadSoft develops its own standardized software. The expenses of developing these products are capitalized if they meet the following criteria: The software must be technically possible to complete. There must be a clear intention to complete the software for use by the company or for sale, and the
1.4 Translation of foreign currencies

The functional currency of a Group company is the currency in which that company operates. The financial statements of a subsidiary are valued in the functional currency of its country. The consolidated accounts are in SEK,
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NOTES
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33
costs and its value in use. In testing the need for impairment, assets are grouped at the lowest levels at which there are separate identifiable cash flows: cashgenerating entities. A previous impairment of an asset may be reversed if there is a change in the assumptions used to determine the assets recoverable amount at the time of the impairment, with the exception of goodwill. The reversed amount increases the carrying amount of the asset, but not by more than the value the asset would have had (after reductions for normal depreciation) if it had not been impaired.
1.8 Inventories
Inventories have been measured at the lower of cost and net selling price.
1.9 Accounts receivable

Accounts receivable are recognized initially at fair value and then at accumulated cost less any reservation for reduction in value. A reservation for reduction in value is made if there is objective proof that the Group will not receive all amounts due under the original terms of the receivable. The reserved amount is recognized in profit and loss.
1.10 Cash and cash equivalents

Cash and cash equivalents include cash, bank balances and other current investments with a duration of not more than 90 days from the time of acquisition. An exercised bank overdraft facility is recognized as a current liability.
Sweden is secured through an insurance plan which, according to a statement by the Swedish Financial Reporting Boards Emerging Issues Task Force, URA 42, is a defined-benefit plan. For the 2012 fiscal year, the company does not have access to information from the insurer that would enable defined-benefit recognition of the plan, and it has therefore been recognized as if it were a defined-contribution plan. The years fees for ITP pension insurance totaled SEK 11,178,000 (10,796,000). Alectas surplus funds can be distributed to the policyholders and/or the insured. At year-end 2012, Alectas surplus in the form of the collective consolidation level amounted to approximately 129 percent (113). The collective consolidation level comprises the market value of Alectas assets, expressed as a percentage of the insurance commitments calculated in accordance with Alectas actuarial calculation assumptions, which do not comply with IAS 19. In defined-contribution pension plans, the company pays fixed premiums and is under no obligation to pay additional premiums. Premiums for both defined-benefit and defined-contribution plans were charged in their entirety to the profit for the year. For more information on remuneration to employees and related parties, see Note 5 Personnel.
the financial risks and advantages associated with ownership, is classified as financial leasing. Other leasing agreements are classified as operational leases. The financial leasing agreements the Group has entered into are for cars and office equipment, and are not of material significance. Operational leasing comprises rental contracts for office premises. The expenses remaining on irrevocable leasing and rental contracts are specified in Note 7. All leasing agreements are recognized within the Parent Company pursuant to the rules for operational leasing.
1.16 Loan costs

Any costs of current loans are recognized directly as an expense in the income statement, except for loan costs that are directly attributable to purchases, construction or the production of an asset that will require a significant amount of time to complete for use or sale. This kind of loan cost is capitalized as a part of the cost of the asset.
1.17 Convertible debentures

Fair value of the liability portion of convertible debentures is determined through the use of market interest rates for an equivalent non-convertible debenture. This amount is recognized as a liability at accrued cost until the liability ceases through conversion or redemption. The outstanding portion of the amount received is attributable to the portion pertaining to options. This is recognized in net equity net after tax.
1.13 Revenue recognition

ReadSoft recognizes revenue on a delivery basis. A license is considered to have been delivered once a binding order or contract has been established and the customer has access to the software. If an order or contract includes restrictive conditions, revenue is recognized only when these conditions have been met. Revenue deriving from installations, training or hardware is recognized once these have been performed or delivered. Work carried out on a current-account basis is recognized as revenue as the work is carried out. Work carried out under ongoing fixed-price contracts is gradually recognized as revenue as the work is completed. In an assessment of the degree of completion in the percentage of completion method, actual hours in relationship to calculated hours are used. Revenues from software service contracts have been allocated to periods over the duration of the contract. The portion of these accruals not recognized as income is recognized in the consolidated balance sheet under the items Prepaid expenses for annual service contracts and Prepaid income for annual service contracts.
1.11 Income tax

The Groups tax comprises current tax and changes in deferred tax. Deferred tax is recognized in its entirety according to the balance-sheet method on all temporary differences arising between the taxable value of assets and liabilities and their carrying amount in the consolidated accounts. However, if the deferred tax accrues as a result of a transaction that comprises the first recognition of an asset or liability that is not a company acquisition and which, at the time of the transaction, affects neither the carrying amount nor taxable earnings, it is not recognized. Deferred tax is calculated based on the tax rates decided on or announced as of the balance-sheet date, which can be expected to be in effect when the relevant deferred tax asset is realized or the deferred tax liability is paid. A deferred tax asset resulting from a loss carryforward or other future tax deduction is recognized insofar as it is likely that it will be possible to offset the loss carryforward with a surplus in future taxation.
1.18 Provisions
Provisions are recognized when the Group has a legal or informal obligation as a result of prior events, when it is likely that an outflow of resources will be required to settle the commitment, and when the amount has been calculated in a reliable manner. No provisions are made for future operating losses. If there are a number of similar commitments, the probability of an outflow of resources being required for settlement is assessed for the entire group of commitments. A provision is also recognized if the probability of an outflow pertaining to a special item in this group of commitments is negligible. The provisions are valued at the amount expected to be required to settle the obligation.
1.19 Group contributions

Group contributions are recognized in the Parent Company in accordance with the principal rule in RFR 2 (IAS 27) p2. Group contributions are recognized according to economic reality. This means that Group contributions provided for the purpose of minimizing the Groups total tax are recognized against earnings brought forward less the current tax effect.
1.12 Remuneration to employees

a) Pension commitments IAS 19, Employee Benefits, stipulates how defined-benefit and defined-contribution pension plans shall be recognized. The Groups old-age and family pension undertaking for employees in
1.14 Transfer pricing

Deliveries of licenses and services to subsidiaries belonging to the Group are priced at market rates.
1.15 Leasing
Leasing of fixed assets, whereby the Group, in all material respects, assumes
1.20 Reporting of derivatives and hedging

Derivative instruments are recognized
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NOTES
in the balance sheet by contract date and are measured at fair value, both initially and in subsequent remeasurements. The method of recognizing profit or loss resulting from a revaluation depends on whether the derivative is identified as a hedging instrument and, if so, what type of item is being hedged. Since ReadSofts derivative instruments are used for hedging purposes and are deemed effective, hedge accounting has been applied for these derivative instruments. Refer also to Note 23.
(a) Cash-flow hedges The effective portion of changes in the fair value of derivative instruments that are designated and qualify as cash-flow hedges are recognized in equity. The gain or loss relating to the ineffective portion is recognized immediately in the income statement. Amounts accumulated in equity are recovered to profit and loss in the periods in which the hedged item will affect profit (for example, when forecast sales that are hedged occur). When a hedging instrument expires or is sold,
or when a hedge no longer meets the criteria for hedge accounting and the accumulated gains or losses relating to the hedge are in equity, these gains/ losses remain in equity and are recognized when the forecast transaction is ultimately recognized in profit and loss. When a forecast transaction is no longer expected to occur, the accumulated gain or loss that was recognized in equity is immediately transferred to the income statement.
1 2 3 4 5 6 7 8 9
Note 2 Financial risk management

ReadSoft is exposed to financial risks that may affect the companys performance. Financial risks are managed pursuant to a finance policy established annually by the Board. checks are conducted in all of the Groups sales companies. Impairment losses on the Groups accounts receivable resulting from credit losses have not exceeded 0.5 percent of sales in the past two years. Refer also to Note 17. used in the Group. This analysis indicates the following significant effects on a change of +/- one percent in average exchange rates and rates at the balance-sheet date. SEK/EUR +/- SEK 1.5 million USD/EUR +/- SEK 0.4 million GBP/EUR +/- SEK 0.3 million
10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28
2.1 Liquidity and financing risk

Both in the short and medium term, cash and cash equivalents are deposited in banks and preferably placed in Swedish government securities. To better deal with liquidity fluctuations during the course of the year, the Group has bank overdraft facilities, primarily through the Parent Company but also locally through subsidiaries. At year-end, the Group had bank overdraft facilities in the amount of SEK 90.1 million (50.0) through the Parent Company and SEK 5.2 million (5.4) through subsidiaries.
2.3 Currency risk

The Group operates internationally and is exposed to foreign-exchange risks. These arise primarily through the Parent Companys invoicing of foreign subsidiaries and partners, which is mainly in EUR. To handle the currency risk that may arise as a result of this, ReadSoft may use forward contracts signed with external parties. Decisions on hedging of currency flows are made by the Board on a continuous basis throughout the year. At year-end, the Group had signed currency hedges corresponding to approximately 30 to 40 percent of the anticipated flow for 2013. A sensitivity analysis was performed on the earnings impact caused by currency fluctuations for all currencies
2.4 Reporting of derivatives and hedging

Derivative instruments are recognized in the balance sheet by contract date and are measured at fair value, both initially and in subsequent remeasurement. The method of recognizing profit or loss resulting from a revaluation depends on whether the derivative is identified as a hedging instrument and, if so, what type of item is being hedged. Since ReadSofts derivative instruments are used for hedging purposes and are deemed effective, hedge accounting has been applied for these derivative instruments. Refer also to Note 23.
2.2 Credit risks

As a natural part of the companys business operations, credit is granted to customers. To minimize the risk of customer losses, continuous credit
Note 3 Important estimates and assumptions for reporting purposes

Estimates and assumptions are carried out regularly based on historic results and expectations of a future trend that can be deemed reasonable based on the current situation. performance from 2013 to 2017. The most significant assumptions pertain to sales, operating profit, capitalization of proprietary software and depreciation of said capitalization. The assumption regarding sales is based on the companys historic performance, and an external industry analysis of the markets expected development. The assumptions concerning operating profit, capitalization of proprietary software and depreciation of capitalization made are based on internally prepared budgets and forecasts. For the period beginning in 2017, assumptions are made regarding a growth rate of 2 percent (2). Anticipated future cash flows in accordance with these assessments constitute the basis for the calculation. Changes in working capital and investment needs have hereby been taken into account. In present value calculations of the future cash flows, a weighted average cost of capital (WACC) of 14.8 percent (14.1) before tax was used. Reconciliation was done against external assessments of a reasonable capital cost. The calculations have shown that no impairment requirements exist. A sensitivity analysis shows that there would still be no impairment requirements if the growth rate was cut in half after the first five years and the capital cost were to increase by 2 percentage points to 16.8 percent before tax.
29 30 31 32 33
3.1 Testing of impairment needs

ReadSoft regularly evaluates whether there is a need for impairment of capitalized expenditure for proprietary software, goodwill and other intangible assets (Note 9) pursuant to the accounting principle described in Note 1.7. In conjunction with the annual accounts, the value of capitalized expenditure for proprietary software, goodwill and other intangible assets has been tested for impairment. The smallest cash-generating unit employed is the entire company, since the assets in question are used in the operations of the entire company. The recoverable amount was established based on calculations of the value in use. The calculations are based on assumptions of the companys
3.2 Deferred tax assets and tax-loss carryforwards

Assessments are made to determine current and deferred tax assets or liabilities. These assessments are particularly relevant for deferred tax assets and evaluate the likelihood that deferred tax assets will be utilized to offset future taxable profits. The fair value of these future taxable profits may differ from estimates in terms of the future business climate and earnings potential or changed tax regulations. Refer also to Note 12.
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NOTES
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33
Note 4
Net sales
Geographic segments, SEK million

Sweden 2012 97.5 11.1 2011 88.8 14.0 Rest of Nordic region 2012 78.0 0.5 2011 76.7 1.5 Rest of Europe 2012 377.2 27.3 2011 283.2 7.3 US and rest of the world 2012 229.0 3.1 2011 214.3 3.5 Total 2012 781.7 42.0 2011 663.0 26.3
Tangible and intangible assets
Note 5
Sweden
Personal
2012 Women Men 35 15 7 2 5 5 1 11 6 3 2 2 1 8 6 0 19 20 148 2012 Board and President Other employees 93 38 18 11 10 12 4 23 8 6 8 10 1 13 27 1 81 52 416 Women 32 12 7 1 5 2 1 8 1 2 3 2 7 4 15 13 115 2011 Board and President Other employees 2011 Men 94 24 16 9 10 18 3 25 10 5 8 11 1 14 25 44 50 367
Average number of employees PARENT COMPANY GROUP COMPANIES Sweden Australia Brazil Chile Denmark Finland France Latvia Malaysia Netherlands Norway Poland Switzerland Spain UK South Africa Germany US Total Salaries and remuneration, SEK
PARENT COMPANY Sweden GROUP COMPANIES Sweden Australia Brazil Chile Denmark Finland France Latvia Malaysia Netherlands Norway Poland Switzerland Spain UK South Africa Germany US Total 2,705 1,894 1,481 1,504 1,029 1,187 1,160 1,688 1,068 1,463 720 1,190 984 2,008 1,021 3,067 3,186 32,611 26,864 19,273 4,216 4,533 11,484 1,825 20,084 4,025 5,080 5,346 2,472 694 9,319 17,093 211 62,513 54,931 325,920 2,029 2,357 1,529 1,393 1,024 1,372 1,295 1,846 1,431 1,524 593 1,194 1,262 1,607 3,014 4,874 33,955 20,322 18,039 3,068 3,988 13,265 1,215 18,936 3,248 3,731 6,386 3,053 191 8,902 14,404 34,026 45,165 272,531 5,256 75,957 5,611 74,592
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Note 5 continued Social insurance costs and pension costs, SEK 000s Social costs (including payroll tax) Pension costs Total Total salaries, remuneration, social insurance costs and pension costs, SEK 000s group 2012 70,454 26,978 97,432 2011 62,461 22,866 85,327 PARENT COMPANY 2012 26,526 15,607 42,133 2011 26,992 13,294 40,286 NOTES
1 2 3 4 5
455,963
391,813
123,346
120,489
6 7
In 2012, the Board of the Parent Company, ReadSoft AB, comprised seven (seven) Board members, including one (one) woman. At December 31, 2012, ReadSofts Group management comprised 12 (eight) senior executives, including one (one) woman. Salaries, remuneration, benefits and pension costs were paid to the Board and Group management as follows:
8 9 10
2011 295 512
GROUP Salaries, remuneration and benefits, SEK 000s Chairman of the Board Other Board members President Basic salary Variable remuneration Benefits Other senior executives Basic salary Variable remuneration Benefits Total Pension costs, SEK 000s President Other senior executives Total Totalt 784 3,418 4,202 22,180 516 2,550 3,066 17,185 12,295 1,526 639 17,978 8,191 1,823 519 14,119 2,400 154 2,048 731 2012 311 653 2011 295 512
PARENT COMPANY 2012 311 653 2,400 154 8,544 1,067 390 13,519
11 12 13
2,048 731 6,863 1,715 394 12,558
14 15 16 17 18 19 20
784 2,709 3,493 17,012
516 1,967 2,483 15,041
21 22 23 24 25 26 27
Salaries and benefits to Board members who are also employees of ReadSoft and members of corporate management are recognized in Other senior executives. Board fees were only paid to external Board members. Variable remuneration is mainly based on targets achieved in terms of the Groups earnings per quarter and full-year. A minor portion of the variable remuneration is based on individual targets. Benefits pertain to a company car.
Distribution of remuneration to the Board Gran E Larsson (Chairman) Anna Sderblom Peter Gille Lennart Pihl Jan Andersson Hkan Valberg
2012 311 137 137 137 105 137
2011 295 128 128 128 128
28 29 30 31 32 33
Other remuneration to the Board and related parties Consulting fees were paid to Jan Andersson in an amount of SEK 1,824,000 (0) and to Lennart Pihl in an amount of SEK 68,000 (0). Pensions, severance pay and period of notice The President has a pension agreement with premiums up to the maximum deductible. The President is not entitled to severance pay or promises of early retirement. His period of notice is 12 months. No senior executive is entitled to severance pay or promises of early retirement. The period of notice for senior executives varies between three and 12 months. Guidelines The 2012 Annual General Meeting resolved to apply the following guidelines for remuneration to senior executives: ReadSoft shall offer terms that contribute to the companys ability to recruit and retain senior executives. Remuneration shall comprise fixed and variable salary and other benefits, including a company car and healthcare, as well as pension. Variable salary components shall be based on the outcome relative to defined and measurable targets. Variable remuneration shall not exceed 40 percent of the fixed salary without special reason. Salary and other benefits are normally reviewed annually. The total remuneration shall be market-based, competitive and based on the individuals area of responsibility and performance. Ordinary retirement age shall be 65. At present, the President and Vice President are covered by a special pension plan. Other employees in Sweden are covered solely by the ITP plan. Additional pension benefits shall be defined-premium. The period of notice in case of resignation by the employee shall comply with the law and in case of termination by the company, the period of notice shall generally be a maximum of 12 months. In addition to the above, senior executives may be offered the opportunity to participate in share-related incentive programs. All such incentive programs are subject to General Meeting resolution. For the 2012 Annual General Meeting, the Board has proposed a resolution regarding a convertible debenture program.
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NOTES Note 5 continued Every year, the Board appoints a Remuneration Committee, which has the task of preparing proposals on salary and other terms of employment for the President and other senior executives. The Board ultimately decides on the terms of employment for the President. Insofar as a Board member performs work on behalf of the company or another Group company alongside the work of the Board, a consulting fee and other remuneration for such work shall be able to be paid. The Board shall have the right to diverge from the guidelines, with the exception of share-related incentive programs, if there are special reasons to do so in an individual case. The Boards proposal to the 2013 Annual General Meeting is based on the same principles.
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33
Note 6
Auditors fees, SEK 000s

GROUP 2012 2011 971 74 318 87 136 306 135 2,027 PARENT COMPANY 2012 390 250 255 36 931 2011 338 136 474 1,153 555 295 22 321 94 87 56 2,583
Audit assignment, PwC Audit assignment, other Audit operations in addition to the audit assignment, PwC Audit operations in addition to the audit assignment, other Tax consultation, PwC Tax consultation, other Other services, PwC Other services, other Total
Note 7
Operational leasing, SEK 000s
Expenses for the year for operational leasing totaled SEK 21,394,000 (21,112,000) for the Group and SEK 6,645,000 (6,434,000) for the Parent Company. The expenses and durations remaining on non-cancelable leases and rental contracts in the Group and the Parent Company are presented in the following table. GROUP 2012 Within one year Within two to five years More than five years Total 21,506 39,662 61,168 2011 22,389 40,472 62,861 PARENT COMPANY 2012 7,011 11,903 18,914 2011 6,848 11,059 17,907
Note 8
Other operating expenses/income, SEK 000s

GROUP 2012 2011 409 409 PARENT COMPANY 2012 19,547 -1,844 17,703 2011 25,550 1,294 26,844 -1,842 -1,842
Reversal of impaired receivable from subsidiaries Exchange gains/losses Total
Note 9
Opening cost
Intangible assets, SEK 000s

GROUP 2012 324,757 61,710 386,467 -223,979 -40,452 -264,431 122,036 2011 271,607 53,150 324,757 -190,525 -33,454 -223,979 100,778
Proprietary software development, SEK million
Acquisitions during the year Closing accumulated cost Opening amortization according to plan Amortization for the year Closing accumulated depreciation Carrying amount
Total expenses for proprietary software development amounted to SEK 110,649,000 (98,364,000).
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Note 9, continued Software licenses purchased Opening cost Acquired through business acquisitions Acquisitions during the year Sales and disposals Translation difference Closing accumulated cost Opening amortization according to plan Amortization for the year Sales and disposals Translation difference Closing accumulated amortization Carrying amount GROUP 2012 15,605 227 586 -721 -91 15,606 -8,981 -2,268 721 113 -10,415 5,191 2011 13,564 2,500 -413 -46 15,605 -7,328 -2,108 413 42 -8,981 6,624 PARENT COMPANY 2012 14,692 566 15,258 -8,163 -2,087 -10,250 5,008 2011 12,607 2,466 -381 14,692 -6,521 -2,023 381 -8,163 6,529 NOTES
1 2 3 4 5 6 7 8 9 10 11
Goodwill
GROUP 2012 2011 66,236 66,236 PARENT COMPANY 2012 2011 35,118 246 -26 35,338 -26,361 -6,604 23 -32,942 2,396 35,338 21,569 4,592 101 -319 -142 61,139 -32,942 -7,569 4 99 -40,408 20,731
12 13 14 15 16
Opening cost Acquisition of subsidiary (Note 33) Carrying amount Other intangible assets Opening cost Acquisitions of subsidiaries Acquired through business acquisitions Acquisitions during the year Sales and disposals Translation difference Closing accumulated cost Opening amortization Amortization for the year Sales and disposals Translation difference Closing accumulated impairment losses Carrying amount
66,236 36,258 102,494
17 18 19 20 21 22 23 24 25 26 27 28 29 30 31
The cost of other intangible fixed assets comprises SEK 9.0 million for brands, SEK 16.1 million for customer relations and SEK 36.5 million for technology in the form of proprietary software development. The need for the impairment of intangible assets was determined in accordance with the principles and assumptions described in Notes 1.8 and 3.1.
Note 10
Opening cost
Tangible assets, SEK 000s

GROUP 2012 65,335 1,578 6,613 -9,461 -1,828 62,237 -48,023 -8,830 9,236 1,456 -46,161 16,076 2011 61,087 6,878 -2,479 -151 65,335 -42,644 -7,859 2,451 29 -48,023 17,312 PARENT COMPANY 2012 21,517 2,112 -2,292 21,337 -15,587 -2,984 2,274 -16,297 5,040 2011 20,498 2,593 -1,574 21,517 -14,414 -2,747 1,574 -15,587 5,930
32 33
Acquired through business acquisitions Acquisitions during the year Sales and disposals Translation differences Closing accumulated cost Opening depreciation according to plan Depreciation for the year Sales and disposals Translation differences Closing accumulated depreciation Carrying amount
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NOTES
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33
Note 11
Financial income and expenses, SEK 000s

GROUP 2012 2011 1,392 2,218 3,610 -1,410 -1,410 PARENT COMPANY 2012 7,616 364 750 8,730 -722 -2,076 -2,798 2011 8,694 104 2,218 11,016 -946 -1,182 -2,128 1,199 750 1,949 -4,314 -4,314
Interest income from Group companies External interest income Exchange gains Total Interest expenses to Group companies External interest expenses Total
Note 12
Deferred tax Current tax Total
Tax, SEK 000s

GROUP 2012 -3 601 -12 048 -15 649 2011 -9637 -11695 -21332 PARENT COMPANY 2012 91 91 2011 56 -2130 -2074
Tax on profit for the year
Estimated tax on profit for the year in Sweden was calculated at 26.3 percent. Tax for other countries has been calculated according to the local tax rates. Connection between tax expense for the year and the recognized income before tax, SEK 000s Recognized income before tax Tax according to current tax rate, 26.3% Adjustment of tax expense from earlier years Effect of new tax rate on deferred tax, Sweden Tax effect of nondeductible expenses Tax effect of non-taxable income Change in value of temporary differences/loss carryforwards Adjustment for tax rates in foreign subsidiaries Other, net Recognized tax expense Deferred tax asset/liability attributable to the following temporary differences and loss carryforwards, SEK 000s Deferred tax asset attributable to: Temporary differences on fixed assets Temporary differences on current assets Temporary differences on current liabilities Loss carryforwards Closing deferred tax asset Deferred tax liability attributable to: Temporary differences on fixed assets Temporary differences on current receivables Untaxed reserves Financial cost for convertible loan Closing deferred tax liability -36,466 -1,594 -397 -179 -38,636 -27,075 -955 -3,938 -192 -32,160 -179 -179 -192 -192 8,444 1,878 267 36,511 47,100 421 1,474 41,303 43,198 GROUP 2012 63,238 -16,632 611 3,987 -1,666 826 -2,634 -141 -15,649 GROUP 2012 2011 2011 79,779 -20,982 -87 -3,467 2,006 2,891 -1,949 256 -21,332 PARENT COMPANY 2012 39,317 -10,340 -196 3,990 6,578 59 91 2011 51,405 -13,520 -326 3,026 8,690 56 -2,074
PARENT COMPANY 2012 2011
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Note 12, continued Tax-loss carryforwards Deferred tax assets were recognized in the balance sheet to the extent the company expects to be able to apply them to offset future tax surpluses. At year-end 2012, the Group had tax-loss carryforwards in the amount of SEK 152,717,000 (168,661,000), of which SEK 121,687,000 (136,697,000) was capitalized. GROUP Maturity structure for loss carryforwards, SEK 000s Maturity later than 5 years No maturity date Total 2012 85,311 67,406 152,717 GROUP Unrecognized tax assets, SEK 000s Loss carryforwards Total 2012 8,020 8,020 2011 8,056 8,056 2011 90,223 78,438 168,661 NOTES
1 2 3 4 5 6 7 8 9 10 11 12
Note 13
Subsidiary ReadSoft Financial AB ReadSoft Sverige AB
Shareholdings in subsidiaries, SEK 000s

2012 Domicile Helsingborg Sollentuna Helsingborg Sydney Sao Paulo Santiago Copenhagen Helsinki Paris Riga Kuala Lumpur Amersfoort Oslo Wroclaw St Gallen Madrid Milton Keynes Frankfurt Norderstedt Johannesburg Morrisville Chicago Proportion of equity, % 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 Carrying amount 150 1,400 106 245 446 673 535 82 60 27 190 165 109 778 7,846 1,370 121,515 0 135,697 2011 Proportion of equity, % 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 Carrying amount 150 1,400 106 245 446 673 535 82 60 27 190 165 109 778 7,846 1,370 79,686 93,868
13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33
ReadSoft Software Services AB ReadSoft Pty Ltd, Australia ReadSoft Brasil Ltda, Brazil ReadSoft SA, Chile ReadSoft AS, Denmark ReadSoft Oy, Finland ReadSoft SAS, France ReadSoft Latvia SIA, Latvia ReadSoft Asia Sdn Bhd, Malaysia ReadSoft B.V, Netherlands ReadSoft AS, Norway ReadSoft Sp.z.o.o., Poland ReadSoft Ag, Switzerland ReadSoft Espaa SL, Spain ReadSoft Ltd, UK ReadSoft AG, Tyskland foxray Research and Development AG ReadSoft Southern Africa (Pty) Ltd, South Africa ReadSoft US Solutions lab Inc, US ReadSoft Inc, US Total
ReadSoft Development AS, Denmark Copenhagen
During the year, the acquired company, foxray AG, was merged with ReadSoft AG in Frankfurt, Germany.
Note 14
Opening value New receivables Receivables paid Reclassifications
Receivables from Group companies, SEK 000s

PARENT COMPANY 2012 185,057 50,462 -29,089 -10,802 195,628 2011 195,725 37,429 -31,049 -22,829 5,781 185,057
Translation differences Closing value Of which subordinated loans amounted to SEK 78,528,000 (109,370,000).
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NOTES
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33
Note 15
Opening value New receivables Receivables paid Reclassifications
Other long-term receivables, SEK 000s

GROUP 2012 3 414 355 -707 -124 2 938 2011 9 122 643 -4 936 -1 434 19 3 414 PARENT COMPANY 2012 400 400 2011 4 678 400 -4 678 400
Translation differences Total
Note 16 Note 17
Accounts receivable
Inventories
Goods for resale include purchased licenses and equipment for resale. Goods are valued according to the FIFO method at the lower of cost or net selling price.
Accounts receivable, SEK 000s

GROUP 2012 301,510 -6,821 294,689 GROUP 2011 237,735 -8,231 229,504 PARENT COMPANY 2012 9,710 -1,281 8,429 2011 9,808 -1,350 8,458
Accounts receivable before provisions Provisions for doubtful receivables Total accounts receivable, net after provision
PARENT COMPANY 2011 157,766 56,888 7,581 7,269 229,504 2012 4,456 1,660 711 1,602 8,429 2011 4,721 2,222 724 791 8,458
Aging of accounts receivable Not overdue Overdue 1-60 days Overdue 61-90 days Overdue more than 90 days Total accounts receivable, net after provision
2012 223,597 51,774 13,864 5,454 294,689
As of December 31, 2012, the Group had SEK 77,913,000 (79,969,000) in overdue accounts receivable and the Parent Company had SEK 5,254,000 (5,087,000). In a review of the Groups overdue accounts receivable, a provision of SEK 6,821,000 (8,231,000) was deemed necessary. The corresponding provision for the Parent Company amounted to SEK 1,281,000 (1,350,000). GROUP Change in provision for doubtful receivables Provision at start of year Recovered provisions Provisions for doubtful receivables Provision at year-end 2012 -8,231 5,289 -3,879 -6,821 GROUP Accounts receivable by currency, SEK 000s SEK EUR USD GBP DKK NOK AUD Other currencies Total accounts receivable, net after provision 2012 27,831 129,901 43,722 25,940 11,537 24,025 10,934 20,799 294,689 2011 23,838 95,710 34,505 13,334 12,554 21,499 12,536 15,528 229,504 2011 -9,118 7,521 -6,634 -8,231 PARENT COMPANY 2012 -1,350 975 -906 -1,281 2011 -850 529 -1,029 -1,350
PARENT COMPANY 2012 4,506 3,923 8,429 2011 8,458 8,458
Note 18
Conversion
Share capital, SEK 000s

No. of shares (000s) Series A shares 136 136 Series B shares 3,132 22 3,154 Total 3,268 22 3,290 32,680 224 32,904
Opening value, December 31, 2011 Closing value, December 31, 2012
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Note 18, continued Each share has a quotient value of SEK 0.10. One Series A share entitles the owner to ten votes at the Annual General Meeting and one Series B share to one vote. In 2009, ReadSoft issued a convertible loan containing 350,000 convertible debentures in a nominal loan amount of SEK 4,025,000. The loan extended from June 1, 2009 to June 8, 2012. The convertible debentures entitled the holder to convert the loan to ReadSoft Series B shares at a conversion rate of SEK 11.50 during the period December 9, 2011 to May 21, 2012. The loan was converted in full, whereby the number of Series B shares in ReadSoft increased by 350,000 and share capital by SEK 35,000. In 2010, ReadSoft issued a convertible loan containing 350,000 convertible debentures in a nominal loan amount of SEK 4,725,000. The loan extends from June 8, 2010 to June 7, 2013. The convertible debentures entitle the holder to convert the loan to ReadSoft Series B shares at a conversion rate of SEK 13.50 during the period December 10, 2012 to May 21, 2013. During the period December 10 to December 31, SEK 1,188,000 was converted to 88,000 shares. Convertible debentures that are not converted to ordinary shares will be redeemed at their quotient value on June 7, 2013. Upon full conversion, the number of Series B shares in ReadSoft will increase by another 262,000 and the share capital by SEK 26,200. In 2011, ReadSoft issued a convertible loan containing 350,000 convertible debentures in a nominal loan amount of SEK 6,825,000. The loan extends from June 21, 2011 to December 15, 2014. The convertible debentures entitle the holders to convert the loan to ReadSoft Series B shares at a conversion price of SEK 19.50 during the period from June 23, 2014 to November 28, 2014. Upon full conversion, the number of Series B shares in ReadSoft will increase by 350,000 and the share capital by SEK 35,000. In 2011, ReadSoft issued a convertible loan containing 400,000 convertible debentures in a nominal loan amount of SEK 9,000,000. The loan extends from December 12, 2011 to June 11, 2015. The convertible debentures entitle the holder to convert the loan to ReadSoft Series B shares at a conversion rate of SEK 22.50 during the period December 12, 2014 to May 27, 2015. Upon full conversion, the number of Series B shares in ReadSoft will increase by 400,000 and the share capital by SEK 40,000. In 2012, ReadSoft issued a convertible loan containing 350,000 convertible debentures in a nominal loan amount of SEK 8,575,000. The loan extends from June 14, 2012 to December 15, 2015. The convertible debentures entitle the holders to convert the loan to ReadSoft Series B shares at a conversion price of SEK 24.50 during the period from June 16, 2015 to November 27, 2015. Upon full conversion, the number of Series B shares in ReadSoft will increase by 350,000 and the share capital by SEK 35,000. NOTES
1 2 3 4 5 6 7 8 9 10 11 12 13 14
Note 19
Dividend
15 16 17 18 19
ReadSofts Board has adopted the following dividend policy. ReadSoft shall, over a business cycle, distribute a minimum of twenty (20) percent of its profit after tax to the shareholders through a dividend, repurchase of shares or equivalent action. The Board of Directors will propose to the Annual General Meeting of shareholders a dividend of SEK 0.60 (0.50) per share for 2012.
Note 20
Accrued income Prepaid expenses Total
Prepaid expenses and accrued income, SEK 000s

GROUP 2012 19,237 18,584 37,821 2011 16,517 19,346 35,863 PARENT COMPANY 2012 792 6,930 7,722 2011 436 6,143 6,579
20 21 22 23 24 25
Note 21
Convertible loan, SEK 000s

GROUP 2012 2011 21,375 -695 -634 20,046 -1,404 18,642 PARENT COMPANY 2012 27,937 -797 -496 26,644 -3,470 23,174 2011 22,367 -695 -634 21,038 -1,753 19,285 26,941 -797 -496 25,648 -3,180 22,468
26 27 28 29 30 31 32 33
Value after issue of 1,362,000 convertible debentures Amount classified as equity Financing cost Total liabilities, December 31 Of which, current portion Total
Once each year since 2006, ReadSoft has issued convertible debentures. The first loan matured in 2009. The fourth loan had a duration of three years from June 1, 2009, with 0.45 percent interest above STIBOR 360. The nominal loan amount was SEK 4,025,000. The present value of the loan was calculated as STIBOR 360 plus 1.90 percent, totaling SEK 3,861,000. The conversion period was from December 9, 2011 to May 21, 2012. The conversion rate was SEK 11.50. The loan was converted in full. The fifth loan has a duration of three years from June 8, 2010, with 0.71 percent interest above STIBOR 360. The nominal loan amount is SEK 4,725,000. The present value of the loan is calculated as STIBOR 360 plus 1.90 percent, totaling SEK 4,566,000. The conversion period is December 10, 2012 to May 21, 2013. The conversion rate is SEK 13.50. During the period December 10 to December 31, SEK 1,188,000 was converted to 88,000 shares. Convertible debentures that are not converted to ordinary shares will be redeemed at their quotient value on June 7, 2013. The sixth loan has a duration of 3.5 years from June 21, 2011, with 1.44 percent interest above STIBOR 360. The nominal loan amount is SEK 6,825,000. The present value of the loan is calculated as STIBOR 360 plus 1.90 percent, totaling SEK 6,588,000. The conversion period is June 23, 2014 to November 28, 2014. The conversion rate is SEK 19.50. Convertible debentures that are not converted to ordinary shares will be redeemed at their quotient value on December 15, 2014. The seventh loan has a duration of 3.5 years from December 12, 2011, with 0.77 percent interest above STIBOR 360. The nominal loan amount is SEK 9,000,000. The present value of the loan is calculated as STIBOR 360 plus 1.65 percent, totaling SEK 8,578,000. The conversion period is December 12, 2014 to May 27, 2015. The conversion rate is SEK 22.50. Convertible debentures that are not converted to ordinary shares will be redeemed at their quotient value on June 11, 2015. The eighth loan has a duration of 3.5 years from June 14, 2012, with 1.69 percent interest above STIBOR 360. The nominal loan amount is SEK 8,575,000. The present value of the loan is calculated as STIBOR 360 plus 2.10 percent, totaling SEK 8,272,000. The conversion period is June 16, 2015 to November 27, 2015. The conversion rate is SEK 24.50. Convertible debentures that are not converted to ordinary shares will be redeemed at their quotient value on December 15, 2015.
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NOTES
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33
Note 22 Note 23
Cash and cash equivalents/overdraft facility, SEK 000s
Cash and cash equivalents totaled SEK 113,484,000 (156,505,000) in the Group and SEK 21,014,000 (71,605,000) in the Parent Company, all in cash and bank balances. The Group has an overdraft facility in the amount of SEK 95,313,000 (55,399,000) of which SEK 0 (0) was utilized, and the Parent Company in the amount of SEK 90,124,000 (50,000,000), of which 0 (0) was utilized.
Financial derivative instruments, SEK 000s

Carrying amount in income statement 137 137 Carrying amount in income statement 669 669
ReadSoft uses financial derivative instruments to manage the currency exposure arising in the course of operations.
Outstanding derivative instruments, December 31, 2011 Currency derivatives Total
Capital amount 80,502 80,502
Fair value 2,491 2,491
Outstanding derivative instruments, December 31, 2012 Currency derivatives Total
Capital amount 59,632 59,632
Fair value 908 908
Capital amount refers to the nominal amount in foreign currencies valued at the closing-date rate. The carrying amount in the income statement is recognized under the item Other operating expenses/income. 2012 Fair value of derivative instruments by category Currency derivatives - short-term cash-flow hedges Total All outstanding currency derivatives are in EUR and fall due within 12 months. Asset 908 908 Liability 2011 Asset 2,491 2,491 Liability -
Changes in hedging reserve in shareholders equity Opening value, January 1, 2011 Fair value gains during the year Tax on fair value gains Transfers to the income statement Tax on transfers to the income statement Value, January 1, 2012 Fair value gains during the year Tax on fair value gains Transfers to the income statement Tax on transfers to the income statement Closing value, December 31, 2012
Hedging reserve 2,686 -706 -195 51 1,836 4,156 -1,054 -6,408 1,657 186
Note 24
Accrued vacation pay
Accrued expenses and deferred income, SEK 000s

GROUP 2012 23,478 11,986 27,295 30,909 93,668 2011 22,077 10,320 21,168 32,220 85,785 PARENT COMPANY 2012 9,588 5,002 6,708 5,214 26,512 2011 10,225 5,073 6,200 5,248 26,746
Accrued social insurance costs Accrued salaries Other interim liabilities Total
Note 25
Total
Pledged assets, SEK 000s

GROUP 2012 2011 50,000 50,000 PARENT COMPANY 2012 41,500 41,500 2011 41,500 41,500 55,547 55,547
Chattel mortgages for current and long-term liabilities to credit institutions
The Group also has pledged assets in the form of accounts receivables issued in EUR relating to the granted overdraft facility. This overdraft facility had not been utilized as of December 31, 2012.
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NOTES
Note 26
Total
Contingent liabilities, SEK 000s

GROUP 2012 2011 PARENT COMPANY 2012 5 346 5 346 2011 5 411 5 411
1 2 3 4 5 6
Parent Company guarantees for Group companies liabilities to credit institutions
Note 27
Other participations, SEK 000s

GROUP 2012 2011 416 PARENT COMPANY 2012 416 2011 416 416
7 8 9 10
in Tenant owners association Trklotsen 2, Sollentuna
Note 28
Opening value
Appropriations/Untaxed reserves, SEK 000s

PARENT COMPANY 2012 -12,975 11,146 1,829 0 2011 -19,636 7,094 -433 -12,975
11 12 13 14 15 16
Tax allocation reserve, change for the year Accumulated accelerated depreciation, change for the year Carrying amount
Note 29
Dividends
Profit from participations in Group companies, SEK 000s

PARENT COMPANY 2012 14,867 12,500 -21,654 5,713 2011 11,505 12,000 -12,925 10,580
17 18 19 20 21 22 23
Group contributions received Impairment of shares as a result of Group contributions paid Total
Note 30
Dividends Total
Profit from participations in associated companies, SEK 000s

PARENT COMPANY 2012 298 298 2011 -
24 25 26 27 28
Note 31
Shareholdings in associated companies, SEK 000s
29 30 31 32 33
2011 1,706 4,678 6,384
Since June 2010, ReadSoft has held a 44-percent participation in Skye Process AS, Norway. In 2011, ReadSoft exercised its right to convert its loan to Skye AS to 1,333,333 shares. ReadSofts participation in Skye AS is 25 percent. The companies have not been consolidated since the ownership participation is less than 50 percent and ReadSoft has no controlling influence. GROUP 2012 Opening value Acquisitions during the year Dividend Portion of earnings Tax RReadSofts portion of earnings is calculated from the acquisition date. 7,788 -298 703 -197 7,996 2011 1,397 4,678 2,259 -546 7,788 PARENT COMPANY 2012 6,384 6,384
Note 32
Of which, short-term Total
Financial liabilities, SEK 000s

group 2012 2011 11,138 -2,521 8,617
Credit institutions, etc.
Liabilities to credit institutions, etc., also comprise capitalized continuing leasing obligations on financial leases. The entire liability is in EUR and the long-term portion falls due in its entirety in 2014. reads O F t ann U a L re P O rt 2 0 1 2
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NOTES
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33
Note 33
Acquisitions of subsidiaries, SEK 000s
On February 27, 2012, 100 percent of the capital and shares in foxray AG were acquired. The acquisition was made particularly to strengthen ReadSofts offering to companies that handle large volumes of documents, which is foxrays specialist area. foxray is located in Norderstedt in Germany and employs about 40 people. There are significant synergies in merging the companies operations and the integration work on personnel and technology was conducted during a large part of the year. Since the date of acquisition, revenue from foxrays products has amounted to SEK 53.2 million. Since the operations were integrated during the year, earnings were not recognized separately. foxray AG Purchase considerations Cash paid Fair value of issued shares Estimated supplemental purchase amounts recognized as provisions Total purchase considerations Fair value of acquired net assets Goodwill 26,372 5,741 9,716 41,829 -5,571 36,258
Maximum supplemental purchase amount at balance-sheet date amounted to SEK 19,432,000. Assets and liabilities included in the acquisition: Fair value Carrying amount Cash and cash equivalents Tangible assets Intangible assets Inventories Receivables Liabilities Deferred tax assets Net assets Cash flow from acquisition of subsidiaries Cash paid, purchase amounts Cash and cash equivalents in acquired companies Change in consolidated cash and cash equivalents upon 7,846 1,578 26,388 2,383 28,538 -62,903 1,741 5,571 7,846 1,578 27,677 2,383 28,538 -58,084 9,938 Group -26,372 7,846 -18,526
The Board of Directors and President assure that the consolidated accounts have been prepared in accordance with the international financial reporting standards (IFRS) as adopted by the EU and provide a fair and accurate account of the Groups position and performance. The annual report has been prepared in accordance with generally accepted accounting principles in Sweden and provides a fair and accurate account of the Parent Companys position and performance. The Administration Report for the Group and the Parent Company provides an accurate overview of the development of the Groups and the Parent Companys business, position and earnings, and describes significant risks and uncertainty factors to which the Parent Company and companies in the Group are exposed. Helsingborg March 27, 2013
Gran E Larsson Chairman of the Board
Jan Andersson
Lars Appelstl
Peter Gille
Lennart Pihl
Anna Sderblom
Hkan Valberg
Per kerberg President and CEO
The consolidated and Parent Companys income statements and balance sheets are subject to adoption by the Annual General Meeting on April 25, 2013. Our audit report was submitted on March 28, 2013 hrlings PricewaterhouseCoopers AB Mikael Eriksson Authorized Public Accountant Chief Auditor Eric Salander Authorized Public Accountant
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Auditors report
To the annual meeting of the shareholders of ReadSoft AB (publ), corporate identity number 556398-1066
Report on the annual accounts and consolidated accounts

We have audited the annual accounts and consolidated accounts of ReadSoft AB for the year 2012. The annual accounts and consolidated accounts of the company are included in the printed version of this document on pages 31-58.
Responsibilities of the Board of Directors and the Managing Director for the annual accounts and consolidated accounts
The Board of Directors and the Managing Director are responsible for the preparation and fair presentation of these annual accounts and consolidated accounts in accordance with International Financial Reporting Standards , as adopted by the EU, and the Annual Accounts Act, and for such internal control as the Board of Directors and the Managing Director determine is necessary to enable the preparation of annual accounts and consolidated accounts that are free from material misstatement, whether due to fraud or error.
present fairly, in all material respects, the financial position of the group as of 31 December 2012 and of their financial performance and cash flows for the year then ended in accordance with International Financial Reporting Standards, as adopted by the EU, and the Annual Accounts Act. The statutory administration report is consistent with the other parts of the annual accounts and consolidated accounts. We therefore recommend that the annual meeting of shareholders adopt the income statement and balance sheet for the parent company and the group.
Report on other legal and regulatory requirements

In addition to our audit of the annual accounts and consolidated accounts, we have also audited the proposed appropriations of the companys profit or loss and the administration of the Board of Directors and the Managing Director of ReadSoft AB for the year 2012.
Auditors responsibility
Our responsibility is to express an opinion on these annual accounts and consolidated accounts based on our audit. We conducted our audit in accordance with International Standards on Auditing and generally accepted auditing standards in Sweden. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the annual accounts and consolidated accounts are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the annual accounts and consolidated accounts. The procedures selected depend on the auditors judgment, including the assessment of the risks of material misstatement of the annual accounts and consolidated accounts, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the companys preparation and fair presentation of the annual accounts and consolidated accounts in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the companys internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the Board of Directors and the Managing Director, as well as evaluating the overall presentation of the annual accounts and consolidated accounts. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Responsibilities of the Board of Directors and the Managing Director

The Board of Directors is responsible for the proposal for appropriations of the companys profit or loss, and the Board of Directors and the Managing Director are responsible for administration under the Companies Act.
Auditors responsibility
Our responsibility is to express an opinion with reasonable assurance on the proposed appropriations of the companys profit or loss and on the administration based on our audit. We conducted the audit in accordance with generally accepted auditing standards in Sweden. As a basis for our opinion on the Board of Directors proposed appropriations of the companys profit or loss, we examined the Board of Directors reasoned statement and a selection of supporting evidence in order to be able to assess whether the proposal is in accordance with the Companies Act. As a basis for our opinion concerning discharge from liability, in addition to our audit of the annual accounts and consolidated accounts, we examined significant decisions, actions taken and circumstances of the company in order to determine whether any member of the Board of Directors or the Managing Director is liable to the company. We also examined whether any member of the Board of Directors or the Managing Director has, in any other way, acted in contravention of the Companies Act, the Annual Accounts Act or the Articles of Association. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinions.
Opinions
In our opinion, the annual accounts have been prepared in accordance with the Annual Accounts Act and present fairly, in all material respects, the financial position of the parent company as of 31 December 2012 and of its financial performance and its cash flows for the year then ended in accordance with the Annual Accounts Act. The consolidated accounts have been prepared in accordance with the Annual Accounts Act and
Opinions
We recommend to the annual meeting of shareholders that the profit be appropriated in accordance with the proposal in the statutory administration report and that the members of the Board of Directors and the Managing Director be discharged from liability for the financial year.
Malm March 28, 2013 hrlings PricewaterhouseCoopers AB
Mikael Eriksson Authorized Public Accountant Chief Auditor
Eric Salander Authorized Public Accountant
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The ReadSoft share

ReadSofts Series B shares have been listed on NASDAQ OMX Stockholms Small Cap list since 1999.
Share capital
As of December 31, 2012, the nominal value of ReadSofts share capital amounted to SEK 3,290,394 and the number of shares amounted to 32,903,940 (32,679,940) distributed among 1,354,500 Series A shares and 31,549,440 Series B shares. One Series A share entitles the owner to ten votes at the Annual General Meeting and one Series B share entitles the owner to one vote. All shares entitle their owners to equal participation in the companys profits and assets. among these employees and to encourage further efforts considered beneficial to the Group and ReadSofts shareholders. The loan for 2009 extended from June 1, 2009 to June 8, 2012. The loan was converted in full. The loan for 2010 extends from June 8, 2010 to June 7, 2013. During the period December 10 to December 31, 2012, SEK 1,188,000 was converted to 88,000 shares. The loan for 2011 extends from June 21, 2011 to December 15, 2014. The loan for 2012 extends from June 14, 2012 to December 15, 2015. There is no option program or other rewards program associated with the share. More information about ReadSofts incentive program is available at www. readsoft.com.
Dividend policy
ReadSofts Board has adopted the following dividend policy: ReadSoft shall, over a business cycle, distribute a minimum of twenty (20) percent of the profit after tax to the shareholders through a dividend, repurchase of shares or equivalent action. At the Annual General Meeting, the Board will propose that a dividend of SEK 0.60 (0.50) per share be paid for 2012.
Stakeholder relations
On November 30, a popular Capital Markets Day was held with a number of invited analysts, investors and shareholders. Among the presentations, Per kerberg, ReadSofts President and CEO, and other senior executives presented the companys strategies, products and market. In addition to the Capital Markets Day, a large number of investor relations meetings, approximately ten Swedish Shareholders Association meetings, were held during the year at a number of places around Sweden.
Share price
The total trading volume in 2012 was 10,526,561 shares (14,324,698). The average trading volume per business day was 42,446 Series B shares (56,619). At yearend, the share price was SEK 21.50 (18.70) and amounted to market capitalization of SEK 707 million (611). The highest price was SEK 24.50 (20.90), which was quoted on March 1, 2012, and the lowest was SEK 18.00 (12.00), which was quoted on November 21, 2012. Follow the current share price right now at www.readsoft.com.
Shareholders
At year-end, the company had 4,388 (4,481) shareholders. Of the total share capital, Swedish and foreign institutions held 60 percent (55), the companys founders 21 percent (25) and other investors, including employees, 11 percent (11). At the end of the period, Swedish shareholders owned 85 percent (90) and foreign shareholders 15 percent (10) of the total share capital. At year-end 2012, ReadSoft AB owned, via repurchased shares, 8 percent (9) of the Series B shares.
Incentive program
From 2007 to 2012, ReadSoft offered convertibles to senior executives in the Group with the purpose of achieving a personal and long-term commitment
Investor relations
President and CEO Per kerberg and Vice President Corporate Communications Johan Holmqvist serve as contacts with shareholders. ReadSofts management has the express objective of maintaining an ongoing dialogue with the media and capital markets. Company press releases are distributed through Cision and are available online at www.readsoft.com as they are published. Financial information can be ordered from ReadSoft AB (publ) by phone at +46 42 490 21 00, by fax at +46 42 490 21 20 or by e-mail at info@readsoft.com. The information is also presented on www. readsoft.com. Management can also be contacted at the phone and fax numbers and e-mail address listed above.
Share price and trading volume 2008 - 2012
Price of the Series B share, SEK 35 30 25 20
Volume 3,000 2,500 2,000 1,500
15 10 5 0
2008 2009 2010 2011 2012 2013
1,000 500 0
Press release policy

ReadSoft publishes press releases to announce financial, technology and other areas of company information. Financial releases contain information that is deemed share price-sensitive. Read more at www.readsoft.com.
Readsoft B OMX Stockholm_PI
SX9000 OMX Stockholm Technology_PI Shares sold per month, 000s
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the share
Key data per share 2012 Number of shares at year-end Number of shares at year-end, excluding repurchased shares Average number of shares at year-end, excluding repurchased shares Earnings after tax, SEK Equity, SEK Dividend, SEK Cash flow from operating activities, SEK Share price at year-end, SEK P/E ratio
1)
2011 32,679,940 29,876,780 29,651,280 1.97 10.93 0.50 4.26 18.70 9.49
2010 32,487,940 29,630,780 29,719,843 1.24 9.00 0.25 2.46 12.50 10.08
2009 32,487,940 29,808,906 31,148,423 0.23 8.01 0.15 3.29 14.30 62.17
2008 32,487,940 32,487,940 32,487,940 0.21 8.40 2.67 5.45 25.95
32,903,940 30,363,244 30,280,077 1.57 11.92 0.601) 2.47 21.50 13.69
Proposed dividend
Owner structure as of December 31, 2012 Shareholder Jan Andersson Lars Appelstl Lannebo Microcap II Nordea Investment Funds hman IT-fond Unionen Lnsfrskringar Funds Swedbank Robur Funds Fourth AP Fund Frskrings AB Avanza Pension Goldman Sachs International Ltd Others External shareholders ReadSoft AB Total No. series A shares 596,790 596,790 No. series Series B shares 2,911,195 2,911,195 1,755,000 1,346,790 1,300,000 1,215,170 1,187,279 1,153,644 1,041,224 977,619 788,522 12,421,106 29,008,744 2,540,696 31,549,440 % of capital 10.7 10.7 5.3 4.1 4.0 3.7 3.6 3.5 3.2 3.0 2.4 38.2 92.4 7.6 100.0 % of votes, adjusted 20.9 20.9 3.8 3.1 3.1 2.9 2.8 2.7 2.5 2.4 2.2 32.7 100.0 100.0
160,920 1,354,500 1,354,500
Distribution of shareholders*
Swedish and foreign institutions, 60% Company founders, 21% Private individuals, , 11% ReadSoft AB, 8%
Shareholders by size of holding as of December 31, 2012 Size of holding 1-500 501-1,000 1,001-5,000 5,001-10,000 10,001-15,000 15,001-20,000 20,001Total Number of shareholders 2,494 840 776 125 38 22 93 4,388 Number of shares 503,584 746,836 1,924,535 973,023 494,960 411,125 27,849,877 32,903,940 % of capital 1.5 2.3 5.8 3.0 1.5 1.2 84.6 100.0
*As of December 31, 2012.
Changes in share capital Year 1991 1994 1995 1996 1996 1997 1998 1998 1999 1999 1999 1999 2000 2000 2001 2004 2005 2006 2011 2012 Transaction Incorporation Stock dividend Stock dividend New share issue New share issue Split 100:1 New share issue Non-cash issue Split 10:1 Conversion of subordinated loan New share issue New share issue Stock dividend New share issue New share issue New share issue New share issue New share issue Conversion of convertible loan Conversion of convertible loan Nominal Change in share value, SEK capital, SEK 100 100 100 100 100 1 1 1 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10 50,000 250,000 200,000 50,000 22,000 0 43,942 25,900 0 28,600 115,000 150,000 1,870,884 100,000 140,351 42,500 36,717 122,900 19,200 22,400 Total share capital, SEK 50,000 300,000 500,000 550,000 572,000 572,000 615,942 641,842 641,842 670,442 785,442 935,442 2,806,326 2,906,326 3,046,677 3,089,177 3,125,894 3,248,794 3,267,994 3,290,394 Shares added 2,500 2,000 500 220 566,280 43,942 25,900 5,776,578 286,000 1,150,000 1,500,000 18,708,840 1,000,000 1,403,509 425,000 367,171 1,229,000 192,000 224,000 Total number of shares 500 3,000 5,000 5,500 5,720 572,000 615,942 641,842 6,418,420 6,704,420 7,854,420 9,354,420 28,063,260 29,063,260 30,466,769 30,891,769 31,258,940 32,487,940 32,679,940 32,903,940
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Income statements SEK 000s Net sales Capitalized expenditure for product development Operating expenses Operating profit Net financial income/expense Profit before tax Tax Profit for the year 2012 781,726 61,710 -777,833 65,603 -2,365 63,238 -15,649 47,589 2011 663,012 53,150 -638,583 77,579 2,200 79,779 -21,332 58,447 2010 618,203 44,888 -614,103 48,988 486 49,474 -12,645 36,829 2009 617,679 38,113 -643,481 12,311 -1,001 11,310 -4,218 7,092 2008 584,202 33,578 -608,336 9,444 -2,382 7,062 -141 6,921 2007 525,008 36,984 -537,902 24,090 -397 23,693 -5,857 17,836
Balance sheets SEK 000s Assets Intangible assets Other fixed assets Cash and cash equivalents Other current assets Total assets Equity and liabilities Equity Non-interest-bearing liabilities Interest-bearing liabilities Total equity and liabilities 360,925 412,356 36,563 809,844 324,103 362,820 20,046 706,969 267,461 326,500 15,949 609,910 249,471 307,748 24,184 581,403 272,858 314,526 27,220 614,604 261,651 279,970 24,854 566,475 250,452 74,526 113,484 371,382 809,844 176,034 72,128 156,505 302,302 706,969 162,311 77,495 83,130 286,974 609,910 157,861 70,939 85,374 267,229 581,403 161,563 66,815 73,815 312,411 614,604 179,349 55,016 40,098 292,012 566,475 2012 2011 2010 2009 2008 2007
Share data, Group 2012 Number of shares at end of period Number of shares at end of period, excluding repurchased shares Average number of shares, excluding repurchased shares Equity per share, SEK Equity per share, after full dilution, SEK Earnings after financial items per share,SEK Earnings after financial items per share, after full dilution, SEK Earnings after tax per share, SEK Earnings after tax per share, after full dilution, SEK Cash flow from operating activities per share, SEK Cash flow per share, SEK Share price at year-end, SEK P/E ratio 32,903,940 30,363,244 30,280,077 11.92 11.40 2.09 2.00 1.57 1.50 2.47 -1.42 21.50 13.69 2011 32,679,940 29,876,780 29,651,280 10.93 10.55 2.69 2.60 1.97 1.90 4.26 2.47 18.70 9.49 2010 32,487,940 29,630,780 29,719,843 9.00 8.69 1.66 1.61 1.24 1.20 2.46 -0.08 12.50 10.08 2009 32,487,940 29,808,906 31,148,423 8.01 7.75 0.36 0.35 0.23 0.22 3.29 0.37 14.30 62.17 2008 32,487,940 32,487,940 32,487,940 8.40 8.19 0.22 0.21 0.21 0.21 2.67 1.04 5.45 25.95 2007 32,487,940 32,487,940 32,487,940 8.05 7.90 0.73 0.72 0.55 0.54 0.99 -0.45 14.90 27.10
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six-year S U M M A R Y
Key data 2012 Total capital, SEK million Capital employed, SEK million Equity, SEK million Return on total capital, % Return on capital employed, % Return on equity, % Operating margin (EBITDA), % Operating margin, % Profit margin after financial items, % Profit margin after tax, % Current ratio, times Acid-test ratio, times Equity/assets ratio, % Debt/equity ratio, times Net debt/equity ratio, times Net interest-bearing liabilities, SEK million Percentage of risk-bearing capital, % Interest-coverage ratio, times Ratio of operating profit to sales, % Capital turnover rate, times Product development expenses, SEK million Product development expenses as a percentage of total sales, % Investments in tangible assets, SEK million Average number of employees Number of employees at end of period Sales per employee, SEK million Earnings per employee, SEK million Wages and compensation excluding social security costs, SEK million 809.8 397.5 360.9 8.7 17.7 13.9 8.1 8.4 8.1 6.1 1.3 1.3 44.6 0.10 -0.21 -76.9 43.5 27.8 -0.4 1.0 110.6 14.1 6.6 564 590 1.39 0.96 358.5 2011 707.0 344.1 324.1 12.3 25.8 19.8 11.2 11.7 12.0 8.8 1.4 1.4 45.8 0.06 -0.42 -136.5 44.3 65.9 -4.5 1.0 98.4 14.8 6.9 482 506 1.38 1.01 306.5 2010 609.9 283.0 267.5 8.6 18.4 14.2 9.1 7.9 8.0 6.0 1.2 1.2 43.9 0.06 -0.25 -67.6 40.8 30.2 -3.1 1.0 84.9 13.7 9.6 462 465 1.34 0.95 290.5 2009 581.4 273.7 249.5 2.3 4.8 2.7 4.7 2.0 1.8 1.1 1.2 1.2 42.9 0.10 -0.25 -61.2 39.6 5.5 -4.5 1.0 86.7 14.0 10.3 450 461 1.37 0.90 296.4 2008 614.6 300.1 272.9 1.9 3.8 2.6 7.8 1.6 1.2 1.2 1.3 1.3 44.4 0.10 -0.17 -46.6 41.5 2.8 3.6 1.0 88.6 15.2 12.9 453 433 1.29 0.82 266.7 2007 566.5 286.5 261.7 4.8 9.4 7.1 5.8 4.6 4.5 3.4 1.3 1.3 46.2 0.09 -0.06 -15.2 45.5 16.3 8.6 1.0 77.4 14.7 8.5 420 451 1.25 0.81 230.7
GLOSSA RY A N D DE FINITIONS
Financial definitions
Acid-test ratio Current assets excluding inventories divided by current liabilities. Capital employed Total assets less non-interest-bearing liabilities. Capital turnover rate Net sales divided by average total assets. Current ratio Current assets divided by current liabilities. Debt/equity ratio Interest-bearing liabilities divided by equity. Earnings per employee Profit/loss after depreciation plus payroll expenses divided by the average number of employees. EBITDA Operating profit/loss before capitalization of costs for proprietary software development, depreciation, amortization, interest and tax. Equity Equity includes 73.7 percent of untaxed reserves. Equity/assets ratio Equity including untaxed reserves less tax as a percentage of total assets. Equity per share Equity divided by the average number of shares excluding shares repurchased. Interest-coverage ratio Profit/loss after financial items plus financial expenses divided by financial expenses. Net debt/equity ratio Net interest-bearing liabilities divided by equity. Net interest-bearing liabilities Interest-bearing liabilities minus interestbearing assets. Operating margin Operating profit after depreciation as a percentage of net sales. P/E ratio Share price in relation to earnings per share. Percentage of risk-bearing capital The sum of equity and deferred tax (including minority participation) as a percentage of total assets. reads O F t ann U a L re P O rt 2 0 1 2 Product development expenses Personnel costs, other external costs and depreciation related to personnel involved with research and development. Profit margin Profit/loss after financial items as a percentage of net sales. Return on capital employed Profit/loss after financial items plus financial expenses as a percentage of average capital employed. Return on equity Profit/loss after financial items less current tax as a percentage of average adjusted equity. Return on total capital Return on total capital Profit/loss after financial items plus financial expenses as a percentage of average total assets. Working capital Current assets less cash and cash equivalents and current liabilities.
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Annual Report
ReadSoft distributes a paper version of its Annual Report to new shareholders during the year and to current shareholders who specially request it. ReadSoft also distributes an easy-toread, interactive annual report on its website. Those interested in receiving a paper version, can order one from the website.
Notice to attend the 2013 Annual General Meeting
The Annual General Meeting will be AGM held at 3:00 p.m. on April 25, 2013, at Marina Plaza in Helsingborg, Sweden. Registration and light refreshments, 2:00-3:00 p.m.
25
april 2013
Entitlement to participate in the Annual General Meeting

Shareholders wishing to participate in the Annual General Meeting must be listed in the share register kept by Euroclear Sweden AB (the Swedish Securities Register Center) not later than April 19, 2013 and must notify the company of their intention to attend not later than April 19, 2013.
Financial information
Interim reports, annual reports and ReadSofts press releases can be ordered from ReadSoft AB, Sdra Kyrkogatan 4, SE-252 23 Helsingborg, Sweden, by phone +46 42 490 21 00, fax +46 42 490 21 90, e-mail: info@readsoft.com or on www.readsoft.com.
Registration
Register at www.readsoft.com, by mail to ReadSoft AB, Sdra Kyrkogatan 4, SE-252 23 Helsingborg, Sweden, by telephone at +46 42 490 21 00 or by fax at +46 42 490 21 20. When registering, please state your name, address, telephone number, personal identity or corporate registration number, the number and type of shares you hold, and indicate any assistants.
Subscribe to information
You can subscribe to our financial reports, press releases and share information by e-mail. The service is available via ReadSofts website readsoft.com.
Financial presentations
All of ReadSofts financial reports are available on the Companys website under Investor Relations. Most presentations can be seen live, or are available to watch or listen to afterwards through web conferencing.
Nominee shareholders
To be entitled to participate in the Annual General Meeting, shareholders who have allowed their shares to be registered with a nominee must temporarily re-register the shares with Euroclear Sweden AB in their own name. The change of registration must be made not later than April 19, 2013 and should be requested well in advance of that date.
Financial calendar
Annual General Meeting Interim Report January-March Interim Report January-June Interim Report January-September Interim Report January-December April 25, 2013 April 25, 2013 July 18, 2013
October 23, 2013
Notice
Notice of the Annual General Meeting will be given not later than four weeks prior to the meeting in Post- och Inrikes Tidningar (The Official Swedish Gazette), and will be available on ReadSofts website: www.readsoft.com. An announcement that the Notice has been issued will also be published in Dagens Industri.
February 2014
Product and solution news

At www.readsoft.com, you can monitor the development and progress of the various products and solutions we offer our customers. If you would like to be updated, you can subscribe via RSS.
Follow ReadSoft
www.facebook.com/readsoft https://twitter.com/ReadSoft www.youtube.com/readsoft www.linkedin.com/company/9277
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AD D R E SSE S
ReadSoft Worldwide
Sweden ReadSoft AB (Headquarters) Sdra Kyrkogatan 4 SE-252 23 Helsingborg Sweden Telephone +46 42 490 21 00 E-mail info@readsoft.com ReadSoft Sverige AB Isafjordsgatan 30B, Box 1224 SE-164 28 Kista Sweden Telephone +46 8 566 110 00 E-mail info-se@readsoft.com Asia ReadSoft Asia Sdn Bhd Suite 15-6, Level 15 Wisma UOA Damansara II 6 Jalan Changkat Semantan Damansara Heights 50490 Kuala Lumpur, Malaysia Telephone +60 3 2094 9168 E-mail info-asia@readsoft.com Australia ReadSoft Pty Ltd Suite 1, Ground floor 107 Mount Street North Sydney, NSW 2060 Australia Telephone +61 2 9929 0676 E-mail info-au@readsoft.com Benelux ReadSoft B.V. Astronaut 22 H NL-3824 MJ Amersfoort Netherlands Telephone +31 33 468 1414 E-mail info.benelux@readsoft.com Brazil ReadSoft Brasil Ltda Rua Gomes de Carvalho, 1581 Conjunto 905 Vila Olmpia - So Paulo/SP CEP 04547-006 Brazil Telephone +55 11 3296 5350 E-mail info-br@readsoft.com Chile ReadSoft SA Av. El Bosque Norte 0123 Oficina 1202, Las Condes Santiago, Chile Telephone +56 2 940 6900 E-mail info-cl@readsoft.com Denmark ReadSoft AS Vibeholmsvej 18 DK-2605 Brndby Denmark Telephone +45 39 15 66 00 E-mail info-dk@readsoft.com Finland ReadSoft Oy Lars Sonckin kaari 14 02600 Espoo Finland Telephone +358 10 470 1380 E-mail info-fi@readsoft.com France ReadSoft SAS 46, Rue de Paris FR-786 00 Maisons-Laffitte France Telephone +33 1 34 93 28 13 E-mail info-fr@readsoft.com Germany ReadSoft AG Falkstrae 5 60487 Frankfurt Germany Telephone +49 69 1539402 0 E-mail info-de@readsoft.com North America ReadSoft Inc. 3838 N. Causeway Blvd 24th Floor, Suite 2400 Metairie, LA 70002 USA Telephone +1 504 841 0100 E-mail info-us@readsoft.com Norway ReadSoft AS Lysaker Torg 5 P. O. Box 251 NO-1366 Lysaker Norway Telephone +47 6781 82 83 E-mail info-no@readsoft.com Poland ReadSoft sp. z.o.o Ul. Ruska 2 PL-50079 Wroclaw Poland Telephone +48 7179 301 10 E-mail info@readsoft.com South Africa ReadSoft Southern Africa (Pty) Ltd The Campus, Twickenham Building Sloane Street Bryanston, 2021 South Africa Telephone +27 011 5753485 E-mail info-sa@readsoft.com Spain/Portugal ReadSoft Espaa S.L. C/ Otero y Delage, 15. 28035 Madrid Spain Telephone +34 91 383 36 47 E-mail info-es@readsoft.com Switzerland ReadSoft AG Merlachfeld 181 CH-3280 Murten Switzerland Telephone + 41 26 670 63 90 E-mail info-ch@readsoft.com UK ReadSoft Ltd Platinum House North Second Street Central Milton Keynes MK9 IBZ United Kingdom Telephone +44 1908 688 000 E-mail info-uk@readsoft.com Readsoft Capture Automation Lab Sdra Kyrkogatan 4 SE-252 23 Helsingborg Sweden Telephone +46 42 490 21 00 E-mail info@readsoftonline.com Isafjordsgatan 30B, Box 1224 SE-164 28 Kista Sweden Telephone +46 8 566 110 00 E-mail info-se@readsoft.com Sudportal 1 22824 Norderstedt Germany Telephone +49 40 943 68 200 E-mail info-de@readsoft.com Freiheitstrasse 124/126 15745 Wildau Germany Telephone +49 3375 5251 314 E-mail info-de@readsoft.com ReadSoft ERP Automation Lab Falkstrae 5 60487 Frankfurt Germany Telephone +49 69 1539402 0 E-mail info-de@readsoft.com 3000 Aerial Center Parkway Suite 130 Morrisville, NC 27560 USA Telephone +1 919-439-7805 E-mail ussolutions.lab@readsoft.com
r E a D s O F t a N N U a L r E p O rt 2 0 1 2
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World leader in the document automation market

ReadSoft is a world-leading supplier of document automation software with more than 8,500 customers worldwide. The company develops and markets products that enable automated data entry and the management of a diverse flow of documents, in electronic formats and on paper. For the customer, this technology provides considerable savings and efficiency enhancements. Founded in 1991, ReadSoft has grown to become a world wide corporate Group with subsidiaries in Europe, Africa, North and South America, Asia and Australia. ReadSoft also maintains a large number of local and global partners. ReadSoft has net sales of SEK 782 million, has around 600 committed employees and is listed on the NASDAQ OMX Stockholm.
Grayling Malm / www.grayling.com
ReadSoft AB Sdra Kyrkogatan 4, SE-252 23 Helsingborg, Sweden, telephone +46 (0)42-490 21 00, fax: +46 (0)42-490 21 20 www.readsoft.com

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2012 aNNUaL rEpOrt

22-30 Governance and responsibility

How does ReadSoft make money?

We are world leaders

Source: AIIM and Harvey Spencer Capture Software Product Study,

ReadSoft in the cloud

Par tne in o rs the

products low rkf systems wo ERP r

ct du Sof ts wo rk flo w pro of fo r rc t s S A P s y s t e m s t om e co s n

ta capture, with the highest level of ge.

duct Study, May 2011

Net sales totaled SEK 781.7 million (663.0).

200 150 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2010 Rest of Europe Nordic region 2011 2012

US and the rest of the world

Earnings after tax per share amounted to SEK 1.57 (1.97).

Trend, rolling 12 12 months, SEK million Trend, rolling months

Net sales, SEK million Profit before tax, %

Revenue distribution, SEK million Revenue distribution, SEK million

200 150 100 50 0

EBITDA for 2012 was SEK 63.0 million (74.5).

CASH FLOW, OPERATING ACTIVITIES

Cash ow from operating activities amounted to SEK 74.8 million (126.4).

Focus on the margin

New organization for scalability

 Our growth is a good indication that we

solutions continue rate strong growth

Cloud becoming more important

Join me for a day at work

Global solutions and local business

Attractive solutions for continued growth

We have what it takes

READSOFT ANNUAL REPORT 2012

ReadSoft is well positioned in a growing market

Growing interest in cloud services

Factors driving our market

Need for greater efficiency

More digital documents

READSOFT ANNUAL REPORT 2012

Process cost per transaction

Source: The Hackett Group.

World market for data capture, 2012

Source: Harvey Spencer Associates.

Source: Harvey Spencer Associates.

Product breadth and degree of BPM integration

EMC Low Low Market coverage High

Need for better control

New and stricter regulations

We have a technical lead

Positioned as a leader in the market

Advantages of improved workflow Advantages of improved workflow

75% 50% 33% 58% 20% 14%

READSOFT ANNUAL REPORT 2012

We offer faster, less expensive and more secure document management

We have a clear business concept

We have a strong customer offering

We have a broad platform

Our global presence

Stockholm Helsingborg Oslo Helsinki

Copenhagen Hamburg London Amsterdam Raleigh

Wroclaw New Orleans Paris

Berlin Frankfurt Bern

Headquarters Local ofces

Countries in which ReadSoft and/or ReadSofts partners are represented.

Our growth is a good indication that we

Why do you think you won