QPR Software offers software and services in the areas of enterprise architecture, performance management and process modeling and analysis. Our mission is to help our customers to become agile and efficient in their operations.

We have more than 1,500 private and public sector customers across the globe in more than 50 countries. Shares of QPR Software Plc are listed on the NASDAQ OMX Helsinki Ltd.

Index

Review by the CEO 3
Board of Directors 4
Executive Management Team, as of 30 January 2013 6
Report of the Board of Directors 2012 8
Financial statements 17
Signatures of Board of Directors' Report and Financial Statements 46
Auditor's Report 47
Information to Shareholders 48
Our customers on QPR 49
Recognitions and mentions in industry analyst reports 49
Contact information 50

Review by the CEO

Dear Shareholder,

In 2012, the implementation of QPR Software´s growth strategy proceeded as planned. Our net sales growth accelerated to 24%, due to success in QPR´s growth areas which are enterprise architecture and process analysis solutions. At the same time, earnings per share increased by 26%. Our performance was well in line with our previously published mid-term financial targets that aim at profitable growth and approximately EUR 13 million net sales in 2014.

New software sales by QPR are increasingly made through software rentals rather than perpetual license sales. Our experiences in selling software rentals are encouraging: customers have embraced this model and we have experienced rapid growth in recurring revenues with little customer churn. In 2012, software rental net sales doubled and strong growth is expected to continue also this year.

Professional services net sales also recorded strong growth (+60%), partly due to the consolidation of Nobultec Ltd. The integration of Nobultec into QPR´s Finnish business operations went well. In connection with the integration, our service offering development, consulting and sales resources were strengthened and a new process driven operating model, suitable for the requirements of growing business, was adopted.

I am especially happy with the progress we made in 2012 in strengthening our capabilities. A critical mass of enterprise architecture competences was rapidly acquired and I believe that we have great potential to further grow our enterprise architecture business.

We have estimated our net sales to continue strong organic growth in 2013. At the same time, despite expected growth in net sales, we are estimating our operating profit in euros to remain on the same level as in 2012. The reason for this is that we are continuing investments in our growth businesses. I believe that these investments are well justified and value enhancing for our shareholders in the long term.

The sources for growth in 2013 are expected to be the same as in 2012. In the past few years, we have significantly strengthened our market share in Finland in enterprise architecture, process modeling and analysis solutions. Now it is time for us to seek international growth for our new software products, QPR EnterpriseArchitect and QPR ProcessAnalyzer. This will be done primarily through new resellers and OEM partners in international markets, although I believe that also the existing reseller network will contribute to this growth. Partner business expansion is always a long term investment and the results are not created overnight. However, I believe that we are

well positioned to succeed in this expansion, since QPR has good expertise and long traditions in channel business and an extensive existing reseller network for our QPR Metrics and QPR ProcessDesigner products in over 50 countries. QPR Metrics and QPR ProcessDesigner will be important part of our offering also in the future.

We are now stepping up international reseller partner recruitment activities especially for QPR Enterprise-Architect product and are increasing personnel resources in channel operations in the first half of the year to achieve this. We believe that the combination of our software product and integrated enterprise architecture methodology is very competitive and will have strong demand in the market.

We are also developing international OEM partnerships for QPR ProcessAnalyzer and have established a new team dedicated to this. Our target this year is to recruit the first OEM partners outside Finland and ramp up successfully their QPR ProcessAnalyzer based business.

In recent years, we have significantly strengthened our offering. With our tools and services organizations can now achieve sustainable capabilities for analyzing, planning and improving their business and operations. I believe that it is the business driven approach in our tools and services that has in recent years contributed to our success both in private and public sector organizations.

We have recently seen strong growth in demand for enterprise architecture solutions in many markets. We believe that this market demand stays strong in 2013 and enterprise architecture solutions will be the main growth driver for QPR in the near future. In the midand long term, I believe that process analysis business based on QPR ProcessAnalyzer product will become increasingly important part of our business.

Finally, I would like to extend my gratitude to our customers, business partners and employees for a successful year in 2012!

Jari Jaakkola

Chief Executive Officer

Board of Directors

QPR Board of Directors had 13 meetings in 2012 (13). The average attendance percentage in meetings was 92 (94). The Board of Directors made a self-assessment of its operation. The Board has not established any committees. Chairman of the Board received an annual emolument of EUR 25,230 and a member an emolument of EUR 16,820. No separate meeting fees were paid.

Vesa-Pekka Leskinen

b. 1950
Member of the Board since July 2003.
Chairman of the Board since January 2006.

Mr. Vesa-Pekka Leskinen is the Chairman of the Board of Kauppamainos Oy and was the CEO of Kauppamainos from 1979 to September 2010. He is the majority owner of Kauppamainos Oy. The main area of business of Kauppamainos has been investor relations and communications, in relation to which Kauppamainos has designed and delivered nearly a hundred annual reports of various companies, participated in the preparation of tens of equity issues, and have been supporting the IPO process of more than ten companies. Mr. Leskinen has personally been involved in carrying out the investor relations and communication of public listed companies.

Vesa-Pekka Leskinen is also the founder of Quartal Oy and was the majority owner of the company until 1999. Quartal Oy is focusing on developing and delivering computerized delivery solutions and communication services, especially for the stock market and the companies having business therein. In addition, Vesa-Pekka Leskinen is a board member in Vianaturale Oy. By education Mr. Leskinen is an undergraduate and has an MAT degree.

Mr. Leskinen held 851,400 shares of QPR Software Plc at December 31, 2012. Kauppamainos Oy, whose majority owner Mr. Leskinen is, held 475,170 shares of QPR Software Plc at December 31, 2012.

Kirsi Eräkangas

b. 1965
Member of the Board since March 2012.
Independent member.

Kirsi Eräkangas is a member of Board of Directors of Finpro and Innoctus Oy. She is owner of Nomadi Oy, an investment and development company cooperating with several IT start-ups.

Kirsi Eräkangas is a one of the co-founders of the publicly listed software company Basware Corporation. The company, specialized in automating financial and procurement processes, is a one of the most successful Finnish software companies. Eräkangas had a central role in developing Basware's business, and she held several executive positions 1988–2005. Her latest operative responsibility covered Basware's professional services globally. She was Basware's board member 1993–2008, latest as the Vice Chairman.

Earlier she has been member of Board of Directors of Biocomputing Platforms Ltd (2007–2010) and Softability Oy (2006–2008) as well as the member of the Board of Directors (2007–2012) and Chairman of the Board (2008–2010) of Nervogrid Oy. She was a member of the Board of Directors of Nobultec Ltd in 2008, a company acquired by QPR Software in 1 August, 2011, and the Chairman of the Nobultec Board during 2009–2011. Mrs. Eräkangas is also a member of the Finnish Association of Professional Board Members.

QPR Software Plc's Board of Directors (from left)): Kirsi Eräkangas, Jyrki Kontio, chairman of the board Vesa-Pekka Leskinen and Topi Piela.

Kirsi Eräkangas holds a M.Sc. degree in Economics and EMBA degree. She is preparing her dissertation at Aalto University School of Economics about board work in growth companies.

Kirsi Eräkangas held 7,000 shares of QPR Software Plc at December 31, 2012.

Jyrki Kontio

b. 1961
Member of the Board since March 2008.
Independent member.

Mr. Jyrki Kontio is an entrepreneur in his own consulting company R & D-Ware Oy. Previously, he was Professor of Software Product Business at the Helsinki University of Technology in 2002–2007. Prior to this assignment, Kontio worked for 15 years at Nokia Corporation, serving in various software and process management leadership and research positions. He has also worked as Senior Researcher at the University of Maryland in the USA. Mr. Kontio has a M.Sc. degree in Business Administration and a Doctor degree in Technology.

Jyrki Kontio held no shares of QPR Software Plc at December 31, 2012.

Topi Piela

b. 1962
Member of the Board since March 2012.
Independent of the Company.

Topi Piela is the CEO and a member of the Board of Directors of Balance Capital Oy, deputy to CEO of Ulkomarkkinat Oy and a member of the Finnish Association of Professional Board Members. Mr. Piela is also a member of the Board of Directors of Piela Ventures Oy and JJPPPT Holding Oy. He is also a member of the State Pension Fund investments committee.

Earlier, Topi Piela served as the Managing Director of Amanda Capital Plc, after which he assumed a position in the Board of Directors of Amanda and worked also as a chairman until spring 2011. Piela's previous positions include Investment Director at Ilmarinen Mutual Pension Insurance Company, Managing Director and co-founder of Arctos Rahasto Oy, and Securities and Investment Director of Ålandsbanken Ab. He has also served on the investment committees of several Finnish and European private equity funds. Topi Piela has earlier been member of QPR Software Board of Directors during 2006–2009.

Mr. Piela has a M.Sc degree in Economics and has CEFA and Advanced Insurance Examination diplomas.

Mr. Piela held 1,052 shares of QPR Software Plc at December 31, 2012. Ulkomarkkinat Oy, whose Deputy to CEO Mr. Piela is, held 1,657,986 shares of QPR Software Plc at December 31, 2012.

Executive Management Team, as of 30 January 2013

Jari Jaakkola

b. 1961
Chief Executive Officer since January 2008.
Member of the Executive Management Team since August 2006.

Mr. Jari Jaakkola worked from August 2006 to January 2008 as Senior Vice President, Business Operations at QPR Software Plc. Jari Jaakkola's previous experience covers leadership positions in Sonera Corporation and Metsä Board Corporation. He also has extensive experience from positions in international advertising and PR agencies and the Finnish media. Mr. Jaakkola holds a B.A. degree in journalism from Tampere University and an MBA from Henley Management College.

CEO Jari Jaakkola will lead Resellers & Russia unit, responsible for QPR's Channel sales and Russian business until VP Maija Erkheikki returns from her maternity leave in August, 2013.

Mr. Jaakkola held 234,000 shares of QPR Software Plc at December 31, 2012. His 100%-owned company Value FM Ltd held 12,550 shares of QPR Software Plc at December 31, 2012.

Matti Erkheikki

b. 1978
Senior Vice President, Direct & OEM business since September 2012.
Member of the Executive Management Team since July 2007.

Mr. Matti Erkheikki is responsible for business operations in Finland and the global OEM channel business. Matti Erkheikki has been employed by QPR Software since February 2002. Initially he worked as a consultant implementing QPR solutions globally. Since August 2005 he worked as a Business Development Manager and since July 2006 as the Regional Vice President of USA and Canada for QPR's Californiabased subsidiary QPR Software, Inc. As of July 2007 he has been responsible for QPR's business operations in Finland. Matti Erkheikki holds a Master's degree in Industrial Engineering and Management.

Matti Erkheikki held 22,500 shares and his wife 2,000 shares of QPR Software Plc at December 31, 2012.

Eero Knuutila

b. 1978
Vice President, Sales, Finland since June 2012.
Member of the Executive Management Team since June 2012.

Eero Knuutila is responsible for all product and service sales to QPR's domestic customers. Before joining QPR he was the Head of Sales and Marketing of Nobultec Ltd. QPR acquired all shares of Nobultec Ltd in August 2011, and Knuutila continued as the Head of Sales and Marketing of the subsidiary until June 2012. Before Nobultec Eero Knuutila has held, among others, the following positions: Solution Manager at Oy L M Ericsson Ab, Product Manager at MatchOn Sports Ltd and Software developer/consultant at Proha Plc. Knuutila was co-founder and Deputy CEO of mobile gaming company Sumea Interactive Oy during 2001–2003. Eero Knuutila holds Master's degree in Engineering with Industrial Engineering and Management as his main subject.

Eero Knuutila held 63,940 shares of QPR Software Plc at December 31, 2012.

Pauli Leppänen

b. 1965
Chief Financial Officer since January 2013.
Member of the Executive Management Team since January 2013.

Mr. Pauli Leppänen is responsible for the Group's finance and administration. Additionally he is responsible for holding QPR's insider register and monitoring the compliance with Insider Guidelines, as well as coordinating and reporting on the Group's internal controls and risk management.

Before QPR Pauli Leppänen has worked as a Partner in Sagacitas Finance Partners Oy and as an independent consultant (2011–2012), as SVP, Head of Corporate Control and acting CFO at TeliaSonera AB (2003– 2010); in Sonera Corporation as VP, Head of Corporate Control (2000–2002) and Senior Controller – International Accounts (1998–1999); as Head of Corporate Accounts at Outokumpu Oyj (1994–1997); and as Business Segment Controller at Outokumpu Technology Oy (1990–1993). He has undergraduate studies in Aalto University, School of Business.

Pauli Leppänen held 10,000 shares of QPR Software Plc at December 31, 2012.

Mikko Mäki-Rahkola

b. 1979
Vice President, Delivery, Finland since June 2012.
Member of the Executive Management Team since August 2011.

Mr. Mikko Mäki-Rahkola is responsible for product and service deliveries to QPR's domestic customers. He is also the managing director of Nobultec Ltd (auxiliary name used in business: QPR Technology Services), a fully owned subsidiary of QPR Software Plc. Mikko Mäki-Rahkola has extensive experience from business process improvement especially in the SAP ecosystem. Between 2005–2011 he acted as the Managing Director of technical SAP service provider Nobultec Ltd, whose shares QPR acquired in August 2011. From 2002 to 2005 he worked as a consultant at Accenture Technology Solutions (Finland) and in 2001–2002 as a consultant at Fujitsu Invia. Mikko Mäki-Rahkola holds Master's degrees both in Economics and Computer Sciences.

Mikko Mäki-Rahkola held 156,103 shares of QPR Software Plc at December 31, 2012.

Jaakko Riihinen

b. 1958
Senior Vice President, Products & Technology since August 2012.
Member of the Executive Management Team since August 2012.

Mr. Jaakko Riihinen is responsible for the Company's software product portfolio, product strategy, product management, product development and internal ICT. He has a more than 30 years' experience in ICT business. Before QPR he worked in Nokia Siemens Networks as the Head of Research & Development at OSS Business Line as well as in the company's restructuring program 2008–2012. Prior to this, in 2001–2008, he worked as Director, Enterprise Architecture in Nokia and Nokia Siemens Networks. Jaakko Riihinen held several managerial positions in Nokia 1992–2001, and was the CEO of AmbraSoft Finland Ltd 1987–1992.

Jaakko Riihinen has undergraduate studies in Engineering, at Aalto University School of Science and Technology.

Jaakko Riihinen held 30,000 shares of QPR Software Plc at December 31, 2012.

Report of the Board of Directors 2012

Highlights in 2012:

Net sales EUR 9,321 thousand (2011: 7,539), growth 24%.
Net sales growth was achieved through strong organic business growth (15%) and the consolidation of Nobultec Ltd.
Recurring revenue (software rentals and maintenance services) grew 17%.
Operating profit EUR 874 thousand (755), growth 16%.
Operating margin 9.4% (10.0).
Cash flow from operating activities was EUR 1,777 thousand (1,261), growth 41%.
Profit before taxes EUR 833 thousand (705), growth 18%.
Profit for the period EUR 662 thousand (521), growth 27%.
Earnings per share EUR 0.054 (0.043), growth 26%.
The Board of Directors proposes to the Annual General Meeting that the Company pay a dividend of EUR 0.04 per share for the financial year 2012 (2011: 0.03).

BUSINESS OPERATIONS

QPR Software's business operations consist of software and professional services sales. The Company reports income for products and services as follows: software license sales, software maintenance services, software rentals and professional services.

QPR reports the following business segments: International Operations (software license and rental sales, maintenance and professional services sales outside of Finland) and Finland Operations (software license and rental sales, maintenance and professional services sales in Finland).

NET SALES

Net sales in 2012 were EUR 9,321 thousand (2011: 7,539), and grew 24%. Organic business growth was 15%, and in addition the growth was accelerated by the acquisition of Nobultec Ltd in late 2011. Finland Operations represented 60% and International Operations 40% of net sales.

Net sales in Finland rose 48% compared to 2011. Strong growth was due to organic business growth in QPR's software and professional services net sales and the consolidation of Nobultec Ltd as of August 2011. Organic growth was 41%. Fastest sales growth was achieved in software aimed at process and enterprise architecture development and in related professional services.

International net sales in 2012 remained on the same level as in 2011. Net sales grew significantly in many markets, such as Germany and Far Eastern countries,

Net sales by business segment

		Share,		Share,	Change,
EUR thousand	2012	%	2011	%	%

International operations	3,830	41	3,836	51	-0.2
Finland operations	5,491	59	3,703	49	48.3
Total	9,321	100	7,539	100	23.6

Net sales by product

		Share,		Share,	Change,
EUR thousand	2012	%	2011	%	%

Software licenses	1,797	19	1,822	24	-1.4
Software maintenance services 3,223		35	3,181	42	1.3
Software rentals	1,221	13	606	8	101.5
Professional services	3,080	33	1,930	26	59.6
Total	9,321	100	7,539	100	23.6

but developed unfavorably in Southern Europe and Russia.

New software sales by QPR are increasingly made through software rentals rather than perpetual license sales, which in 2012 was reflected as small decline in software license net sales and significant increase in net sales from software rentals. In Finland, clear majority of new sales are made on a rental basis. Internationally, the transition is still ongoing.

In 2012, software license net sales decreased slightly, while the other product groups showed increase in net sales. The growth was fastest (+101%) in software rental net sales. Total recurring revenue (software maintenance services and rentals) grew 17%. Professional service net sales also showed strong growth (+60%), with the consolidation of Nobultec accelerating the growth.

In 2012, QPR delivered software and professional services in Finland, among others, to Aalto University, Cargotec Corporation, Certia, City of Turku, DNA, Finland´s Environmental Administration, The Finnish Communication Regulatory Authority, The Finnish Defence Forces, The Finnish Tax Administration, The Finnish National Board of Education, HK Ruokatalo, Lassila & Tikanoja Group, Metso Paper, The Ministry of Agriculture and Forestry, The Ministry of Education, The Ministry of Social Affairs and Health, Nordic Investment Bank, Onninen Group, Outotec Group, Public Sector ICT Unit at The Ministry of Finance, Rautaruukki Corporation, and Vaisala Corporation.

In the international markets, QPR delivered software, among others, to Alfa Bank and Russian Ventures Company in Russia, Diehl AKO and Robert Bosch GmbH in Germany, Purac Petrochem in Belgium, Highland Council in the UK, Istanbul CPA in Turkey, Malaysian Administrative Modernisation and Management Planning Unit, Mine Health and Safety Council and North West Corporation in South Africa, City of Pessac and Pouey International in France, Pädagogische Hochschule PHBern and SVA Aargau Sozialversicherung AG in Switzerland, Redecard S.A. in Brazil, and United Chemical Company in Kazakhstan.

FINANCIAL PERFORMANCE

Operating profit by business segment

EUR thousand	2012	2011	Change, %
International operations Finland operations Not allocated	402 848 -376	472 646 -363	-14.8 31.3 -3.6
Total	874	755	15.8

Operating profit increased 16% to EUR 874 thousand (755). Operating profit in Finland Operations was higher than in the previous year. Personnel recruitments made during the year have increased the level of expenses in Finland as planned. Operating profit in QPR's international business was lower due to higher credit losses (EUR 319 thousand compared to EUR 191 thousand in 2011).

Depreciation and amortization grew 19%, due to the consolidation of Nobultec Ltd and increase in the amortization of capitalized product development expenses. Total expenses increased 25%, mainly due to the consolidation of Nobultec and outlays in growth businesses. Personnel expenses grew 20% and were 64% of total expenses.

Net financial expenses in 2012 were EUR 41 thousand (50). Profit before taxes increased 18% to EUR 833 thousand (705).

Income taxes decreased to EUR 171 thousand (184) and the effective tax rate to 21% (26), due to utilization of tax losses from previous years for which no deferred tax benefit was recorded earlier. Profit for the period increased 27% to EUR 662 thousand (521) and earnings per share increased 26% to EUR 0.054 (0.043).

FINANCE AND INVESTMENTS

Cash flow from operating activities developed very favorably in 2012 and increased 41% to EUR 1,777 thousand (1,261), mainly due to accelerated turnover of receivables.

Cash and cash equivalents at the end of the year were EUR 1,404 thousand (1,020).

Investments in 2012 totaled EUR 693 thousand (1,256). The majority of the investments were made in product development.

Interest-bearing liabilities decreased and were EUR 339 thousand (566) at the end of the reporting period. The gearing ratio was -36% (-15). Current liabilities include deferred revenue in total of EUR 1,044 thousand (1,046). Return on investment rose to 25% (21).

Equity ratio rose from the previous year and was 51% (44). At the end of 2012, the consolidated shareholders' equity stood at EUR 2,981 thousand (2,973). Return on equity rose to 22% (18).

The Annual General Meeting on March 22, 2012 authorized the Board of Directors to decide on issuing a maximum of 4,000,000 new shares, to decide on conveyance of a maximum of 500,000 own shares held by the Company, and to decide on acquiring a maximum of 250,000 own shares. The authorizations are in force until the next Annual General Meeting. On March 22, 2012, the Company issued a stock exchange release on the Board of Directors' decision to start acquiring own shares through public trading in NASDAQ OMX Helsinki Ltd.

PRODUCT AND SERVICE DEVELOPMENT

Product development expenses in 2012 were EUR 1,619 thousand (1,313), representing 17% (17) of net sales. Product development expenses do not include amortization of capitalized product development expenses.

In 2012, product development expenses were capitalized for a total amount of EUR 380 thousand (356). The amortization period for capitalized product development expenses is four years. The amortization of capitalized product development expenses in the reporting period was EUR 278 thousand (203).

Product development employed 28 persons at the end of 2012, which corresponds to 35% of the total personnel.

During the year, product development activities focused on the development of a new version of the QPR product family, released in October 2012. Product development activities are especially focused on the QPR ProcessAnalyzer and QPR Enterprise-Architect products.

In its new process analysis business, the Company has adopted a more active IPR strategy than previously. As a result of this, QPR filed patent applications in respect of five separate inventions in Finland and the USA in 2012. The inventions relate to automated business process discovery based on processing event data.

The Company increased significantly its efforts for service offering development in 2012. Through service offering development the Company aims to grow its local business in Finland, and to accelerate its international software sales by offering complementary service concepts and solutions to its channel partners.

PERSONNEL

At the end of 2012, QPR employed a total of 81 persons (73). Average number of personnel in the reporting period was 78 (72). Personnel expenses totaled EUR 5,491 thousand (4,594).

The average age of employees is 36.5 years. 14% of the employees are women. Of the employees, 72% percent have a Master's or Bachelor's degree.

For incentive purposes, the Company has a bonus program that covers all employees. Short-term remuneration of the top management (executive management team of the Company) consists of salary, fringe benefits and a possible annual bonus based on net sales and operating profit performance. The maximum annual bonus of executive management team, including the CEO, is 40% of the annual base salary. Long-term remuneration of the executive management team consists of a share-based incentive plan. In 2011, the Board of Directors of QPR Software resolved on a new share-based incentive plan for management in years 2011–2013. The plan aims to align the objectives of shareholders and key employ-

ees to increase shareholder value, to commit key employees to the Company and to offer them a competitive reward plan based on ownership of shares in the Company. Information on share-based incentive plan was published in a stock exchange release on March 25, 2011.

SHARE CAPITAL, SHAREHOLDERS AND TRADING IN SHARES

The Company's share capital at the end of the reporting period was EUR 1,359,089.93 divided into 12,444,863 shares.

The Company has one share class. Each share has one vote and an equal right to dividend. The book counter value of the share is EUR 0.11. The Company's shares are included in the Finnish book-entry securities system managed by Euroclear Finland Oy.

At the end of the review period, the Company had a total of 597 shareholders (588). In the reporting period, trading in the Company's shares amounted to EUR 438 thousand (953), i.e. an average of EUR 1,718 per trading day (3,737).

Trading in shares totaled 501,186 shares (1,122,981), giving an average of 1,965 shares per trading day (4,404). Turnover in shares corresponds to 4.0% of the total shares (9.0) and the average price was EUR 0.87 per share (0.85). The highest closing price during the year was EUR 0.97 (0.94) and the lowest EUR 0.80 (0.74).

At the end of the year, the total market value of the Company shares was EUR 11,551 thousand (10,794) at the closing price of EUR 0.95.

Own shares

The number of repurchased own shares in the public trading of NASDAQ OMX Helsinki Ltd during the year was 106,482. At the end of the year, the Company held 285,887 of its own shares with a total nominal value of EUR 31,221 and a total purchase price of EUR 260,906. Own shares held by the Company (treasury shares) represent 2.3 % of the Company's share capital and votes.

The Board of Directors has been granted by the Annual General Meeting of March 22, 2012 a share repurchase authorization, valid until the next Annual General Meeting, to repurchase maximum 250,000 of the Company's shares. According to the authorization, the Company may use the repurchased shares to adjust the Company's capital structure, as payment in corporate acquisitions or assets related to its business, or as part of the Company's incentive programs in a manner and to the extent decided by the Board of Directors, or to be transferred for other purposes or to be cancelled.

At the end of the reporting period, unused authorization was 165,168 shares.

SHARE-BASED INCENTIVE PLAN

QPR Software Plc's Board of Directors approved in 2011 a share-based incentive plan for the Group's executive management team (incl. the CEO). The plan aims to align the objectives of shareholders and key employees to increase shareholder value, to commit key employees to the Company, and to offer them a competitive reward plan based on ownership of shares in the Company.

The plan includes three one-year earning periods, which are the calendar years 2011, 2012 and 2013. The Company's Board of Directors shall decide on the earnings criteria and the targets to be established for them at the beginning of each earning period. Incentives for the earnings periods 2011 and 2012 were based on QPR Software's consolidated net sales growth and operating profit. The earnings criteria were not met in 2011 and 2012 and thus no incentives for these years are paid.

Any incentives for the earning period 2013 shall be paid in 2014. Incentive will be paid partly in the form of the Company shares (50%) and partly in cash (50%). The cash proportion is primarily aimed at covering taxes and tax-related costs arising from the incentive.

The total incentive payable on the basis of the plan, including Company shares and cash, shall not exceed 2/3 of the annual salary of the key employee concerned. The Company may use its treasury shares for conveyance.

The person may not transfer the shares during the lock-up period, which will end on March 31, 2014. Should a person's employment or service in a Group company end during the lock-up period, he or she must return, gratuitously, the received incentive to the Company. Members of the executive management team must hold shares also after the lock-up period. The shares received by such person on the basis of the plan may not be transferred, if the value of his or

Major shareholders, December 31, 2012

		% of shares and
Registered shareholders	Number of shares	votes

Ulkomarkkinat Oy	1,657,986	13.3
Pelkonen Jouko, total	1,380,000	11.1
Pohjolan Rahoitus Oy	1,370,000	11.0
Pelkonen Jouko Antero	10,000	0.1
Leskinen Vesa-Pekka, total	1,326,570	10.7
Leskinen Vesa-Pekka	851,400	6.8
Kauppamainos Oy	475,170	3.8
Alesco S.A.	1,300,000	10.4
Oy Autocarrera Ab	1,245,817	10.0
Junkkonen Kari Juhani	512,016	4.1
Fortel Invest Oy	417,407	3.4
Sr Eq Technology	323,277	2.6
Piekkola Asko	316,438	2.5
Marttila Päivi, total	312,127	2.5
Marttila Päivi	284,972	2.3
Edina Oy	27,155	0.2
QPR Software Plc	285,887	2.3
Jaakkola Jari, total	246,550	2.0
Jaakkola Jari	234,000	1.9
Value FM Oy	12,550	0.1
Pääkkönen Esa	246,054	2.0
Leskinen Veli-Mikko	232,530	1.9
Kanninen Matti	195,826	1.6
Virtanen Tony	172,112	1.4
Laakso Janne	163,453	1.3
Mäki-Rahkola Mikko	156,103	1.3
Lehto Teemu	136,468	1.1
Becker Kai-Erik Wilhelm	130,000	1.0
20 largest, total	10,756,621	86.4
Other shareholders	1,688,242	13.6
Total	12,444,863	100.0

Distribution of shareholders by sector, December 31, 2012

	Number of		Shares and
	shareholders	%	votes, total	%

Private companies	34	5.7	6,070,640	48.8
Financial and insurance institutions	3	0.5	22,670	0.2
Households	540	90.5	4,983,070	40.0
Non-profit organizations	1	0.2	1	0.0
Foreign	2	0.3	1,320,470	10.6
European Union	16	2.7	44,012	0.4
Other countries	1	0.2	4,000	0.0
Total,		597 100.0	12,444,863 100.0
of which nominee-registered	6		22,797

Distribution of shareholding by size, December 31, 2012 Number of Shares and
Number of shares	shareholders	%	votes, total	%

1 - 500	282	47.2	51,222	0.4
501 - 1,000	115	19.3	98,514	0.8
1,001 - 5,000	118	19.8	286,409	2.3
5,001 - 10,000	24	4.0	194,656	1.6
10,001 - 50,000	32	5.4	723,377	5.8
50,001 - 100,000	4	0.7	263,844	2.1
100,001 - 1,700,000	22	3.7	10,826,841	87.0
Total		597 100.0	12,444,863 100.0

her shareholding in the Company is less than 50% of his or her annual salary. This restriction is valid for as long as his or her employment or service in a Group company continues.

In addition to this incentive plan, the Company has a separate bonus system that covers the whole personnel.

OPTION SCHEMES

During the year, the Company had no option schemes effective.

ACQUISITIONS AND REORGANIZATIONS

In November 2012, QPR paid the remaining purchase price of EUR 100 thousand for the business operations of Trodos Consulting and United Project and Services Group in Russia. At the same time, QPR purchased the remaining 20% of shares in its subsidiary QPR CIS Oy, operating in Russia and CIS countries, for EUR 80 thousand and recorded the amount as an adjustment in equity in accordance with step acquisitions under IFRS 3.

In December 2012, a merger of a 100% subsidiary StrongDocs Oy into the parent company QPR Software Plc was completed. The merger did not have any impact on consolidated results or balance sheet.

GOVERNANCE

QPR Software Plc complies with the NASDAQ OMX Helsinki Ltd Guidelines for Insiders issued on October 9, 2009 and the Corporate Governance Code, effective as of October 1, 2010.

The Company's Corporate Governance Statement is available on the Investor section of the Company's website, www.qpr.com. Also, available in the investor section is further information, such as administration of the insider register, the public insider register, list of major shareholders, articles of association, charter of the Board, description of how internal control and internal audit are organized, introductions of the members of the Board and Executive Management Team, and the information published by the Company during the financial year.

Decisions made by the Annual General Meeting

Following decisions were made by the Annual General Meeting (AGM) on March 22, 2012:

The AGM confirmed the Company's financial statements and the Group's financial statements for the financial year 2011, and discharged the Board of Directors and the Managing Director from liability.

The AGM approved the Board's proposals that a pershare dividend of EUR 0.03, a total of EUR 367,314, be distributed for financial year 2011. The payments were made to shareholders who were entered in the Company's shareholder register, maintained by Euroclear Finland Ltd, on the record date of March 27, 2012. The date of the payment was April 3, 2012.

The AGM resolved that the Board of Directors consists of four (4) ordinary members. The AGM elected the following members to the Board of Directors: Kirsi

Eräkangas, Jyrki Kontio, Vesa-Pekka Leskinen and Topi Piela.

In its first meeting immediately following the AGM, the Board of Directors elected Vesa-Pekka Leskinen as Chairman of the Board.

The AGM elected KPMG Oy Ab, Authorized Public Accountants, to continue as QPR Software Plc's auditors.

The AGM decided to keep the Board members' emoluments unchanged. The Chairman of the Board receives an annual emolument in total of EUR 25,230 and other members of the Board receive an annual emolument in total of EUR 16,820 each.

The decisions made by the AGM are available in the stock exchange release published by the Company on March 22, 2012, which is available on the investors section of the Company's web site, www.qpr.com.

MANAGEMENT AND AUDITORS

On January 1, 2012, the Executive Management Team of QPR Software Plc consisted of the following persons: Chief Executive Officer Jari Jaakkola (chairman); Vice President, International Operations Maija Erkheikki; Vice President, Finland Operations Matti Erkheikki; Vice President, Communications and Marketing Jyrki Karasvirta, Vice President, Business Development Teemu Lehto; Chief Financial Officer Päivi Martti; Managing Director of Nobultec Ltd Mikko Mäki-Rahkola; and Vice President, Products and Technology Sami Tähtinen.

In June 2012, Jaakko Riihinen was appointed Senior Vice President, Products & Technology, and member of the executive management team. Mr. Riihinen began his work on August 13, 2012. He moved to QPR from Nokia Siemens Networks, where he since 2008 worked as Head of Research & Development at OSS Business Line as well as in the company's restructuring program. Prior to this, in 2001–2008, he worked as Director, Enterprise Architecture in Nokia and Nokia Siemens Networks.

In June 2012, Mikko Mäki-Rahkola was appointed Vice President, Delivery in Finland.

In June 2012, Eero Knuutila was appointed Vice President, Sales in Finland and Member of the Executive Management Team. He has been with QPR since August 2011, before which he was the Head of Sales and Marketing of Nobultec Ltd. Before Nobultec, he has held, among others, the following positions: Solution Manager at Oy L M Ericsson Ab, Product Manager at MatchOn Sports Ltd and Software developer/ consultant at Proha Plc. Knuutila was co-founder and Deputy CEO of mobile gaming company Sumea Interactive Oy during 2001–2003.

In September 2012, when Vice President Maija Erkheikki started her maternity leave, Jaakko Salminen started as acting Vice President and member of the executive management team, responsible for the Resellers & Russia unit. Jaakko Salminen has previously worked as CEO of Finnish Software Entrepreneurs, Managing Director of Ravensoft and in several other management positions in technology companies.

In October 2012, Pauli Leppänen was appointed Chief Financial Officer at QPR Software Plc as of January 7, 2013. He moves to QPR from Sagacitas Finance Partners Oy, where he has worked as a Partner. In addition, he has worked as SVP, Head of Corporate Control and acting CFO at TeliaSonera AB (2003– 2010), and in financial management leadership positions in Sonera Corporation (1998–2002) and Outokumpu Oyj (1990–1997). The previous CFO, Mrs. Päivi Martti, continued in her position until January 7, 2013. After this, from her own initiative, she started as Director, HR & Administration at QPR.

Starting January 9, 2013, when acting Vice President Jaakko Salminen's contract ended, CEO Jari Jaakkola leads the Resellers & Russia unit until Vice President Maija Erkheikki returns from her maternity leave in August 2013.

Starting January 30, 2013, the Executive Management Team of QPR Software Plc consisted of Chief Executive Officer Jari Jaakkola (chairman); Senior Vice President, Direct & OEM business Matti Erkheikki; Vice President, Sales in Finland Eero Knuutila; Chief Financial Officer Pauli Leppänen; Vice President, Delivery in Finland Mikko Mäki-Rahkola; and Senior Vice President, Products and Technology Jaakko Riihinen.

KPMG Oy Ab, Authorized Public Accountants, acted as QPR Software Plc's auditors, with Authorized Public Accountant Sixten Nyman as the principal auditor.

SHARES HELD BY THE BOARD AND CEO

The members of QPR Software Plc's Board of Directors, the Chief Executive Officer, and persons or entities closely related to them, held a total of 1,581,172 Company shares on December 31, 2012, representing 12.7% of the total number of shares and votes (December 31, 2011: 15.2). The amounts include own holdings, and holdings of spouses, persons under guardianship, and controlled entities.

The members of QPR Software Plc's Board of Directors or the CEO (including persons and entities closely related to them) did not hold any QPR stock options on December 31, 2012.

Shareholding by insiders, December 31, 2012

Name and position	Shares held by the insider	By controlled entities	By closely related persons *)	Stock options
Vesa-Pekka Leskinen,
Chairman of the Board		851,400 475,170	0	0
Kirsi Eräkangas,
Member of the Board	7,000	0	0	0
Jyrki Kontio,
Member of the Board	0	0	0	0
Topi Piela,
Member of the Board	1,052	0	0	0
Sixten Nyman,
principal auditor	0	0	0	0
Jari Jaakkola,
Chief Executive Officer	234,000	12,550	0	0
Insiders by definition:
Maija Erkheikki,
VP, Executive Management Team	2,000	0	22,500	0
Matti Erkheikki,
SVP, Executive Management Team	22,500	0	2,000	0
Jyrki Karasvirta,
VP, Executive Management Team	1,000	0	0	0
Eero Knuutila
VP, Executive Management Team	63,940	0	0	0
Teemu Lehto,
VP, Executive Management Team	136,468	0	200	0
Päivi Martti,
VP, Executive Management Team	15,000	0	0	0
Mikko Mäki-Rahkola,
VP, Executive Management Team	156,103	0	0	0
Jaakko Riihinen
SVP, Executive Management Team	30,000	0	0	0
Jaakko Salminen,
VP, Executive Management Team	0	0	0	0

*) Shares held by spouses and persons under guardianship.

AUTHORIZATIONS OF THE BOARD OF DIRECTORS

The Annual General Meeting on March 22, 2012 decided to authorize the Board of Directors to decide on an issue of new shares and conveyance of treasury shares held by the Company (share issue), either on one or several occasions. The share issue can be carried out as a share issue against payment or without consideration on terms to be determined by the Board of Directors.

The authorization also includes the right to issue special rights, in the meaning of Chapter 10 Section 1 of the Companies Act, which entitle to the Company's new shares or treasury shares against consideration. In the share issue and/or based on the special rights a maximum of 4,000,000 new shares can be issued and a maximum of 500,000 treasury shares can be conveyed. The authorization is in force until the next Annual General Meeting.

The Annual General Meeting decided to authorize the Board of Directors to decide on a repurchase of own shares. Based on the authorization, an aggregate maximum amount of 250,000 shares of the Company's own shares may be repurchased, either on one or several occasions. The authorization is in force until the next Annual General Meeting.

The conditions of all authorizations of the Board of Directors decided by the Annual General Meeting are available in their entirety on the stock exchange re-lease published by the Company on March 22, 2012, which is available on the investors section of the company's web site, www.qpr.com.

INTERNAL CONTROL

Internal control and risk management in QPR Software Plc aims to ensure that the Company operates efficiently and effectively, distributes reliable information, complies with regulations and operational principles, reaches its strategic goals, reacts to changes in the market and operational environment, and ensures continuity of its business.

It is the duty of the Board of Directors to monitor the appropriateness, effectiveness and efficiency of risk management and internal control in QPR Software Group. Risk management report covering the risks presented in the Risk Management section is presented to the Board in connection with quarterly financial reporting.

The threat caused by the risks to shareholders is used as a criterion when the Board of Directors evaluates these risks. The Board of Directors also monitors that the Company has defined operational principles for internal control and that the Company monitors the effectiveness of internal control.

RISK MANAGEMENT

Coordination of risk management and internal control and the related reporting is the responsibility of the Chief Financial Officer. Risk management in QPR Software is guided by the requirements of legislation, shareholders' expectations regarding business objectives, and expectations among important stakeholders, such as customers and personnel.

Risk management in QPR Software aims systematically and comprehensively to identify risks related to the Company's operations and ensures that risks are managed and taken into account in decision-making. The Company does not have a separate risk management organization, and risk management is part of routine responsibilities throughout the organization. Risk management is developed by constantly improving operative processes in the Company.

QPR Software identifies the risks by their materiality: if realized, the risks selected for monitoring would have a material impact on the Company's business operations. QPR has identified the following four groups of risks related to its operations: risks related to business operations, risks related to information and products, risks related to financing, and risks related to new businesses.

Property, operational and liability risks are covered by insurance.

QPR Software Plc's Management System has received ISO9001:2008 quality certification covering the Company's all activities.

Risks related to business operations

The following risks are related to QPR Software's business operations:

Country risk. The instrument used for measuring country risk is the potential loss of country-specific revenue. Risk is managed by constantly gathering market information and by having a geographically spread business.

Customer risk. The instrument used for measuring customer risk is the potential loss of annual customer revenue. Risk is managed by taking good care of every customer and reseller.

Service delivery risk. The instrument used for measuring the risk is reclamations regarding the length and quality of the delivery. Risk is managed by professional and right-timed recruitment and by internal development of project management.

Personnel risk. The instrument used for measuring personnel risk is the adequacy of competencies needed for achieving strategic targets. Risk is managed by professional recruitment, professional supervisory work and by securing possibilities for job rotation as well as for learning and growth.

Legal risk. The instrument used for measuring legal risk is the estimated total combined financial value of all legal disputes on the Company in Euros. The risk is managed by in-depth knowhow on contractual jurisprudence and by performing both ethically and according to the Company values.

Number of Strategic and Advanced Partners. The instrument used for measuring the risk is number of partners in both categories. Risk is managed by active new recruitment and by QPR Partner Program.

Financial risk. The instrument used for measuring financial risk is the forecasted operative cash flow before investments. Risk is managed by following constantly the Company's financial position (cash flow calculation and forecasts).

QPR's market and customer risks are mitigated as follows: the Company conducts business in more than 50 countries, both in public and private sectors as well as in several different business verticals.

Reasonable credit risk concerning individual business partners is characteristic to any international business. QPR seeks to limit this credit risk by continuous monitoring of standard payment terms, receivables and credit limits.

No significant changes have taken place in risks related to business operations during the financial period.

Risks related to business operations in Russia

QPR monitors the following risks in the Russian subsidiary OOO QPR Software:

Country risk. The metric used for measuring country risk is the potential loss of country-specific revenue. Risk is managed by constantly gathering information from political and economic development and by having a customer base that is spread geographically and among different industries.

Customer risk. The metric used for measuring customer risk is losing a customer. Risk is managed by good customer care and reseller support.

Personnel risk. The metric used for measuring personnel risk is adequacy of competencies needed for achieving strategic goals. Risk is managed by professional recruitment, good supervisory work and by securing possibilities for job rotation as well as for learning and growth.

Financial risk. The metric used for measuring financial risk is forecasted operative cash flow. Risk is managed by following constantly the subsidiary's financial position (cash flow calculation and forecasts) and contracts.

No significant changes have taken place in risks related to Russian business operations in 2012.

Risks related to information and products

QPR Software has identified the following three risks related to information and products:

Risk related to own products. The risk is managed by securing the competitiveness of the Company's offering at all times. The company seeks to ensure the security of products by automated virus prevention.

Intellectual Property Rights. The Company's Intellectual Property Rights (IPR) are secured by the confidentiality of the source code.

In addition, the Company aims to secure by up-todate contract management and internal training that third-party IPRs are not used unauthorized in QPR products. The Company has legal expenses insurance.

Data security. Data security risks are related to the confidentiality of corporate, insider and customer information. Risk is managed by ongoing internal training, keeping instructions up-to-date at all times, and by good technical protection of the Company's data network.

No significant changes have taken place in QPR's information and product related risks during 2012.

Risks related to financing

QPR Software has identified the following two financing risks:

Foreign currency risk. The instrument used for measuring foreign currency risk is the realized exchange rate fluctuation and the future outlook for it. The risk is managed by using the Euro as the primary invoicing currency and by currency hedging according to the Company's hedging policy. At the end of 2012, the Company had not hedged its foreign currency (noneuro) trade receivables.

The Company constantly monitors how the open positions of the three biggest invoicing currencies develop.

Operative credit risk. The instrument used for measuring operative credit risk is the turnover rate of accounts receivable. Risk is managed by monitoring accounts receivable and by effective collection of overdue receivables. Management of financial risks in 2012 is described in more detail in Note 26, on pages 42-43.

No significant changes have taken place in QPR's financial risks during 2012.

Risks related to new businesses

QPR Software has identified the following two risks related to new businesses:

Growth of new business. The instrument used for measuring the risk is share of consolidated net sales. Risk is managed by the correct allocation of resources and investments.

Product development outlays to new business. The instrument used for measuring the risk is the amount of development outlays made to the new businesses in relation to the consolidated net sales.

LEGAL DISPUTES

During 2012, QPR had no material legal disputes.

SIGNIFICANT EVENTS DURING THE YEAR

During the first half of 2012, QPR integrated the business of Nobultec Ltd into its Finnish business operations. In connection with the integration, the Group's service offering, consulting and sales resources were strengthened and a process driven operating model, suitable for the requirements of growing business, was adopted.

In September, QPR established a Global OEM Business team to speed up the international growth for QPR ProcessAnalyzer and to search for OEM partners who will include QPR's products as part of their software or services.

In October, QPR Software and ProcessGold, a German pioneer in process mining, announced that the two companies have signed a strategic partnership agreement. The goal of the co-operation is to pave way for Automated Business Process Discovery (ABPD) by using QPR ProcessAnalyzer software product. The partnership involves resale rights of QPR ProcessAnalyzer for ProcessGold, sharing of best practices and other co-operation initiatives. Combined, both companies have over 200 commercial process analysis projects under their belt making them the ultimate ABPD pioneers.

In November, QPR released the fourth generation of the QPR ProcessAnalyzer software product. QPR ProcessAnalyzer 4.0 provides a Web user interface with collaborative functionalities targeted to business users and process owners, and a Microsoft Excel client with robust capabilities for the more demanding needs of process analysts.

In November, QPR ProcessAnalyzer won the Quality Innovation Award 2012 in the SME category. The competition organized by the Finnish Quality Association assesses nominees based on innovativeness and quality. QPR ProcessAnalyzer is an Automated Business Process Discovery (ABPD) software product that enables organizations to use the data in their business support systems for process development and improvement. QPR ProcessAnalyzer follows the track of the 2011 winner Angry Birds, developed by Rovio Entertainment Ltd.

SUBSEQUENT EVENTS

Starting January 9, 2013, when acting VP (Resellers & Russia) Jaakko Salminen's contract ended, CEO Jari Jaakkola leads the Resellers & Russia unit until VP Maija Erkheikki returns from her maternity leave in August 2013.

OUTLOOK FOR 2013

Recent forecasts published by market research firms estimate that in 2013, the value of global software sales will grow approximately 6% and global professional services sales will grow approximately 5%.

QPR estimates its net sales to continue strong organic growth in 2013, arising especially from software rental and enterprise architecture services. The Company estimates its operating profit in euros to be approximately on the same level as in 2012, due to continuing outlays in QPR's growth businesses.

In 2013, the Company aims to continue significant investments in the development of its new software products. QPR has recently launched two new software products that have excellent growth prospects. QPR EnterpriseArchitect has already established a leading market position in Finland, and in 2013 the Company focuses on its international growth. The Company also invests in recruiting OEM partners for its innovative new QPR ProcessAnalyzer software product. By developing its professional service offering, the Company aims to grow its local business in Finland, and to accelerate its international software sales by offering complementary service concepts and solutions to its channel partners.

THE BOARD OF DIRECTORS' PROPOSAL ON DIVIDEND

The Board of Directors proposes to the Annual General Meeting on March 14, 2013 that a dividend of EUR 0.04 per share be paid to shareholders for the financial year 2012, totaling EUR 486 thousand. The dividend shall be paid to a shareholder that has been entered into the Company's shareholder register on the record date of the dividend payment on March 19, 2013. The Board of Directors proposes to the AGM that the dividend be paid on April 3, 2013.

The dividend proposed by the Board for the financial year 2012 represents 27% of the Company's consolidated cash flow from operations in 2012. The Board of Directors has in 2011 decided on a dividend policy whereby the Board intends to propose to the AGM dividends of approximately 30–50% of annual cash flow from operations. When preparing the dividend proposals, the Board takes into account the Company's financial position, profitability and business prospects.

The distributable funds of the parent company were EUR 1,410 thousand at December 31, 2012. No material changes have taken place in the Company's financial position after the end of the financial year.

The Board of Directors' proposals to the Annual General Meeting are available in their entirety in the Notice for AGM, published on February 5, 2013. The Notice is also available on the Company's web site, www.qpr.com.

Financial statements

Consolidated Income Statement, IFRS

(EUR 1,000)	Note	2012	2011

Net sales	3	9,321	7,539
Other operating income	4	158	79
Materials and services	6	402	250
Employee benefit expenses	7	5,491	4,594
Depreciation and amortization	8	681	572
Other operating expenses	9	2,031	1,448
Total expenses		8,605	6,864
Operating profit		874	755
Financial income	10	21	116
Financial expenses	10	-62	-166
Financial items, net		-41	-50

Profit before tax		833	705
Income taxes	11	-171	-184
Profit for the period		662	521

Other comprehensive income statement items:
Exchange differences on translating foreign operations Income tax relating to components of other comprehensive income		-103 0	4 0
Other comprehensive income, net of tax		-103	4
Total comprehensive income		559	525

Profit for the period attributable to:
Equity holders of the parent company		662	530
Non-controlling interests		0	-9
		662	521
Total comprehensive income attributable to:
Equity holders of the parent company		559	534
Non-controlling interests		0	-9
		559	525
Earnings per share, EUR	12	0.054	0.043

Consolidated Balance Sheet, IFRS

(EUR 1,000)	Note	2012	2011

ASSETS Non-current assets
Capitalized product development expenses	13	812	710
Other intangible assets	13	744	1,050
Goodwill	14	513	513
Tangible assets	15	140	118
Other investments		5	5
Long-term receivables	17	96	59
Deferred tax assets	18	19	38
Total non-current assets		2,329	2,493

Current assets
Trade and other receivables	19	3,111	4,248
Cash and cash equivalents	20	1,404	1,020
Total current assets		4,515	5,268
TOTAL ASSETS		6,845	7,761

EQUITY AND LIABILITIES
Equity
Share capital	21	1,359	1,359
Other funds		21	21
Treasury shares		-261	-158
Translation difference		-169	-66
Invested non-restricted equity fund		5	5
Retained earnings		2,026	1,820
Equity attributable to shareholders of the parent company		2,981	2,981
Non-controlling interest		0	-8
Total equity		2,981	2,973
Non-current liabilities
Deferred tax liabilities	18	71	90
Other long-term liabilities	22	0	56
Interest-bearing liabilities	22	113	340
Total non-current liabilities		184	486

Current liabilities
Trade and other payables	23	3,453	4,076
Interest-bearing liabilities	22	226	226
Total current liabilities		3,679	4,302
Total liabilities		3,863	4,788
TOTAL EQUITY AND LIABILITIES		6,845	7,761

Consolidated Cash Flow Statement, IFRS

(EUR 1,000)	Note	2012	2011

Cash flow from operating activities
Profit for the period		662	521
Adjustments for the profit
Depreciation		681	572
Other adjustments	24	-133	146
Changes in working capital:
Increase (-)/decrease (+) in short-term non-interest bearing receivables		1,276	-268
Increase (+)/decrease (-) in short-term non-interest bearing liabilities		-532	296
Interest expense and other financial expenses paid		-39	-23
Interest income and other financial income received		21	27
Income taxes paid		-159	-10
Net cash from operating activities		1,777	1,261
Cash flows from investing activities
Acquired subsidiries, less acquired cash		-81	-565
Purchases of tangible assets		-91	-75
Capitalized producrt development expenses		-380	-356
Other investments in intangible assets		-141	-260
Net cash used in investing activities		-693	-1,256
Cash flows from financial activities
Repayments of long-term borrowings	24	-226	-226
Purchase of treasury shares		-103	-100
Dividends paid		-367	-362
Net cash used in financing activities		-696	-688
Net change in cash and cash equivalents		388	-683

Cash and cash equivalents at the beginning of year		1,020	1,703
Effect of exchange rate differences		-4	1
Cash and cash equivalents at the end of year		1,404	1,020

Parent Company Income Statement, FAS

(EUR 1,000)	Note	2012	2011

Net sales	3	7,714	6,568
Other operating income	4	157	79

Material and services	6	271	173
Employee benefits expenses	7	4,523	3,896
Depreciation	8	594	526
Other operating expenses	9	1,669	1,257
Total expenses		7,057	5,851

Operating profit		814	795
Financial income and expense	10	-11	-28
Profit before appropriations and taxes		803	768
Extraordinary items		-27	0
Profit before taxes		776	768
Income taxes	11	-187	-200
Profit for the period		589	568

Parent Company Balance Sheet, FAS

(EUR 1,000)	Note	2012	2011
ASSETS

Non-current assets
Intangible assets	13	1,266	1,368
Tangible assets	15	139	81
Investments in associated companies	16	1,187	1,110
Other investments	16	5	5
		2,597	2,564
Current assets
Long-term receivables	17	56	32
Deferred tax asset	18	0	29
Short-term receivables	19	3,097	4,225
Cash and cash equivalents	20	1,320	865
		4,473	5,150
Total assets		7,070	7,714


SHAREHOLDERS' EQUITY AND LIABILITIES
Shareholders' equity
Share capital	21	1,359	1,359
Invested non-restricted equity fund		5	5
Retained earnings		1,076	875
Treasury shares		-261	-158
Profit for the period		589	568
Total shareholders' equity		2,769	2,649
Liabilities
Non-current liabilities	22	113	396
Current liabilities	23	4,188	4,669
Total liabilities		4,301	5,064
Total shareholders' equity and liabilities		7,070	7,714

Parent Company Cash Flow Statement, FAS

(EUR 1,000)	2012	2011

Cash flow from operating activities
Operating profit	814	795
Adjustment for the period:
Depreciation	594	526
Non-cash transactions	-29	0
Financial items, net	-18	4
Income taxes paid	-157	0
Net cash before changes in working capital	1,203	1,325
Changes in working capital
Change in short-term receivables, non-interest bearing	1,308	-268
Change in short-term liabilities, non-interest bearing	-769	223
Change in long-term receivables, non-interest bearing	-52	68
Change in working capital	488	23
Net cash from operating activities	1,692	1,347

Cash flows from investing activities
Purchases of intangible assets	-531	-438
Purchases of tangible assets	-117	-64
Investments in subsidiary shares	-82	-917
Investments in subsidiary loans receivable, net	186	-140
Net cash used in investing activities	-544	-1,560
Cash flows from financing activities
Repayments of long term borrowings	-226	-226
Purchase of own shares	-103	-100
Disposal of treasury shares	0	217
Dividends paid	-367	-362
Net cash used in financing activities	-696	-472
Net change in cash and cash equivalents	451	-685

Cash and cash equivalents at the beginning of the period	865	1,550
Cash and cash equivalents received through merger	4	0
Cash and cash equivalents at the end of period	1,320	865

Statements of Changes in Equity

(EUR 1,000)	Share capital		Other Translation funds differences	Treasury shares	Invested non-restr. equity fund	Retained earnings	Equity attributable to share- holders of the parent controlling company	Non- interest	Total
			-70	-275		1.653
Equity Jan 1, 2011	l.359				5		2.693		2,694
Dividends paid						$-362$	$-362$		-362
Repurchase of shares				$-100$			$-100$		$-100$
Disposal of treasury shares				217			217		217
Comprehensive income						529	533	-9	524
Equity Dec 31, 2011			-bb	-158		1,820	2,981	-8	2,973
Dividends paid						$-367$	$-367$		-367
Repurchase of shares				$-103$			$-103$		$-103$
Subsidiary shares						-89	-89	8	$-81$
Comprehensive income			-103			662	559		559
Equity Dec 31, 2012	1,359	21	$-169$	$-261$	5	2,026	2,981		2,981

		Restricted equity		Non-restricted equity
(EUR 1,000)	Number of shares	Share capital	Treasury shares	Invested non-restr. equity fund	Retained earnings	Total	Share- holders' equity, total

Equity Jan 1, 2011	12,444,863	1,359	-275		1,238	968	2,328
Dividends paid					$-362$	$-362$	$-362$
Repurchase of shares			$-100$			$-100$	$-100$
Disposal of treasury shares			217			217	217
Profit for the year					568	568	568
Equity Dec 31, 2011	12.444.863	1,359		5	1.443	.290	2,649
Dividends paid					-367	-367	-367
Repurchase of shares			$-103$			$-103$	$-103$
Profit for the year					589	589	589
Equity Dec 31, 2012	12, 444, 863				.665	l.410	2.769

Notes to Financial Statements

ACCOUNTING PRINCIPLES

Basis of preparation

QPR Software Plc's Financial Statements have been prepared according to the International Financial reporting Standards (IRFS), in accordance with the IAS and IFRS standards and SIC and IFRIC interpretations valid on December 31, 2012.

As of January 1, 2012, the Group has applied the following new and revised standards and interpretations. The following implemented revised standards have not materially influenced the consolidated financial statements:

Amendment IFRS 7 "Financial Instruments Disclosures".
Amendment IAS 12 "Income Taxes".

Financial statements for the parent company QPR Software Plc have been prepared in accordance with Finnish Accounting Standards (FAS) that differ in certain respects from the IFRS standards used in the consolidated financial statements.

Principles of consolidation

QPR's Consolidated Financial Statements include the parent company QPR Software Plc and the subsidiaries controlled by it. With regard to subsidiaries, the parent company's control is based on full ownership of the shares capital or a majority holding. Company does not own shares in joint ventures or affiliates.

Subsidiaries acquired during the financial period are consolidated from the date which the Group has acquired control and are no longer consolidated from the date that control ceases. Intra-Group shareholdings are eliminated using of the acquisition cost method. Intra-Group business transactions, internal receivables and liabilities, unrealized profits, and the Group's internal profit distribution are eliminated in the Consolidated Financial statements. The profit for the financial year to the shareholders of the parent company and non-controlling interests is presented separately in the income statement, and the share of the non-controlling interest in shareholders' equity is presented as its own component in the consolidated balance sheet.

Continuity of operations

The Consolidated Financial Statements have been prepared in accordance with the principle of continuity.

Foreign currency translation

The Consolidated Financial Statements have been presented in Euro, which is the operating and presentation currency of the parent company. The operating currency of subsidiaries is the local bookkeeping currency.

Transactions denominated in foreign currency have been translated into the operating currency using the exchange rate valid on the transactions date. Monetary items have been converted into the operating currency using the exchange rate at the closing date and non-monetary items using the exchange rate on the transactions date. The exchange gains and losses from business operations are included in the corresponding items above operating profit. The exchange gains and losses from financial assets or liabilities denominated in foreign currency are included in financial income and expenses.

The income statements of foreign subsidiaries are translated into Euro using the average exchange rates for the year and the balance sheets are translated using the exchange rates on the balance sheet date. Translation differences arising from the elimination of foreign subsidiaries and translation of equity items accumulated after the acquisition are entered in other comprehensive income. Foreign currency gains and losses from monetary items that are part of the net investment in a foreign unit are recognized in other comprehensive income.

Revenue recognition

Net sales include normal sales income from business operations deducted by taxes related to sales and

discounts granted. When net sales are calculated, it is adjusted for exchange rate differences of foreign currency.

Revenue recognition of product sales requires that there is a binding agreement of the sale, the product has been delivered, proceeds from the transaction can be reliably specified, the financial gain will benefit the company with sufficient probability, and significant benefits and risks related to ownership or rights of the use of the product have been transferred to the buyer. Income from services is recognized when it is probable that economic benefit will arise to the Group and when the income and costs associated with the transactions can be reliably determined.

The consolidated net sales consist mainly of software license sales, software rentals, maintenance fees and professional services sales.

Software license net sales are recognized in connection with the delivery, when significant benefits and risks related to ownership or rights of the use of the product have been transferred to the buyer, and the seller has no de-facto control to the product anymore.

Software rentals, right to use software for the time being, are recognized on an accrual basis during the agreement period.

Net sales of temporary rental licenses (12 months or less) are recognized partly in license net sales and in maintenance fees.

Maintenance fee covering software updates and customer support is recognized on an accrual basis during the agreement period.

Net sales of consulting services are recognized when the delivery has been made.

Other operating income

Public subsidies are presented in profit or loss for the period in other operating income, except when they are related to investments, in which case they are deducted from the acquisition cost of the asset.

Pension plans

The Group's pension scheme is a defined contribution plan managed by a pension insurance company. The expenses are recognized in the comprehensive income statement in the financial period in which the contribution is payable.

Share-based payments

The Group has applied IFRS 2 "Share-based payments" for all such stock option plans for key personnel, where options have been granted after November 7, 2002 and cannot be vested until January 1st 2005. Expenses associated with earlier option plans have not been presented in the comprehensive income statement.

Options are valued at fair price at the date of grant and recognized as an expense in the income statement during the term of the options. The expense determined at the date of grant is based on Group estimate on the amount of option rights expected to be vested at the end of the term. The fair value is determined on the basis of the Black-Scholes method.

Cash acquired on exercise of option rights based on share subscription, is recognized in a fund in nonrestricted equity. The Company had no option plans in effect during the financial year or the preceding year.

The Group has a share-based incentive plan for management. Incentives will be paid partly in the form of the Company shares and partly in cash. The benefits granted in the plan are measured at fair value at the grant date and recognized as an expense evenly during the earnings period. The result impact of the plan is presented under employee benefit expenses.

Operating profit

IAS 1 "Presentation of Financial Statements" does not define the concept of operating profit. The Group uses the following definition of operating profit: operating profit is the sum of net sales and other operating income, less the cost of materials and services, employee benefits, other operating expenses, as well as depreciation, amortization and write-downs. Exchange rate differences arising from working capital items are included in operating profit, whereas exchange rate differences arising from financial assets and liabilities are included in financial income and expenses.

Impairment

On each closing date, the Group reviews asset items for any indication of impairment losses. If there are such indications, the amount recoverable from the said asset item is assessed. The recoverable amount is the higher of the asset item's fair value less the cost arising from disposal and its value in use. The recoverable amount of financial assets is either the fair value or the present value of expected future cash flows discounted at the original effective interest rate.

An impairment loss is recognized in the comprehensive income statement when the carrying amount is greater than the recoverable amount. Intangible assets with an indefinite useful life are assessed for impairment annually, or more frequently if there are indications of impairment.

Goodwill is not amortized but its recoverable amount is estimated annually or more frequently if circumstances indicate that the value may be impaired. Goodwill is allocated to the cash-generating units. An impairment loss is recognized in the consolidated comprehensive income statement, if the impairment test shows that the carrying amount of goodwill exceeds its recoverable amount. In this case the goodwill is recorded at its recoverable amount. After the initial recognition, goodwill arising from business combinations is valued at original acquisition cost, less impairment losses recognized. Impairment losses on goodwill cannot be reversed.

Income taxes

The tax expenses in the comprehensive statement consist of tax based on taxable income for the financial period and deferred tax. Tax based on the taxable income for the financial period is calculated on the basis of taxable income and the tax rate valid in each country. The tax is adjusted by any taxes associated with previous financial periods.

Deferred taxes are calculated at tax rates enacted by the balance sheet date.

A deferred tax asset is recognized in the amount that it is likely that taxable income will be generated in the future against which the temporary difference can be utilized. Deferred tax liabilities are recognized in the balance sheet in full.

In the parent company financial statements, income taxes are recorded in accordance with FAS.

Intangible assets

Goodwill represents the excess of the cost of an acquisition over the fair value of the Group's share of the net assets of the acquired company. Goodwill is valued at the original acquisition cost less impairments.

Product development expenditures during the financial period are recognized as expenses, except for development expenditure leading to new products and significant revisions, which are capitalized and amortized during their useful life. Amortization starts when the product version has been released. Maintenance and minor revisions are directly recorded as expenses. Product development projects started before 2006 have not been capitalized. The useful life of capitalized product development expenditures is 4 years.

Other intangible assets with a definite useful life are amortized over their useful life. Useful life time of the other intangible assets is 2–5 years.

Tangible assets

The balance sheet values of tangible assets are based on original acquisition cost less accumulated depreciation and impairment losses. Depreciation is calculated using the straight-line method and is based on the estimated useful life of the asset.

Borrowing costs for assets taking a long time period to complete are capitalized. Other borrowing costs are recognized as an expense for the period during which they arise. Immediate transaction costs directly attributable to the acquisition of a particular loan are recognized in the original accrued acquisition cost of the loan and are recorded as interest expense using the effective interest method.

Useful life times of assets:

Machinery and equipment; 3-7 years
ADP machinery and equipment; 2-5 years

Lease agreements

Lease agreements of tangible assets where the Group has a substantial part of the risks and rewards of ownership are classified as finance leases. Finance lease agreements are recorded in the balance sheet as tangible fixed assets at the start of the lease term at the lower of the fair value of the leased property and the present value of the minimum lease payments. The asset acquired under a finance lease is depreciated over the shorter of the asset's useful life and the lease term. The corresponding rental obligations are included in interest-bearing liabilities.

Lease agreements where the lesser retains a significant portion of the risks and rewards of ownership are treated as other leases. Payments made under other leases are charged to the comprehensive income statement on a straight-line basis over the period of the lease.

In the parent company financial statements, lease payments are recognized as annual expense in accordance with FAS.

Financial assets and liabilities

Financial assets and liabilities are initially recognized at the value of the purchased or sold asset on the trade date.

After initial valuation, financial assets are classified into four groups: financial assets at fair value through comprehensive income, held-to-maturity investments, financial assets available for sale, and loans and other receivables. Transaction costs are included in the original carrying amount of the financial liabilities.

Financial liabilities are classified into financial liabilities at fair value through comprehensive income, or other financial liabilities. Financial liabilities at fair value through comprehensive income are valued at fair value using the effective interest method. Other financial liabilities are valued at amortized cost.

On the reporting date, management assesses whether the value of a financial instrument has been impaired and recognizes such an impairment loss in financial items in the comprehensive income statement. Derecognition of financial assets from the balance sheet takes place when the Group has lost a contractual right to receive the cash flows or when it has transferred substantially the risks and rewards outside the Group.

Derivative contracts

All derivative contracts are categorized as financial assets available for sale. The Group does not apply hedge accounting under IAS 39. Unrealized and realized gains and losses arising from changes in fair value are recognized in the comprehensive income statement in financial income and expenses.

Cash and cash equivalents

Cash and cash equivalents include cash, bank deposits, and other short-term very liquid investments with a maturity of no more than three months calculated from the date of acquisition.

Treasury shares

Repurchase of own shares as well as the related direct costs are recorded as deductions in equity.

Provisions

Provisions are recognized according to IAS 37, when the Group has a present legal or constructive obligation as the result of a past event, it is probable that an outflow of resources will be required to settle the obligation, and a reliable estimate of the amount can be made.

Restructuring provisions are recognized when a detailed and appropriate plan has been prepared and the Company has begun to implement the plan, or has announced that it will do so. Restructuring provisions are based on actual expenses to be incurred e.g. from employee termination payments.

A provision for a loss-making agreement is recognized when unavoidable expenditure required to fulfill the obligations exceeds the benefits obtainable from the agreement.

Accounting principles necessitating management consideration and essential factors of uncertainty related to management estimates

When preparing the Consolidated Financial Statements, management is required to make estimates and assumptions regarding the future and to consider the appropriate application of accounting principles, which means that actual results may differ from those estimated. The most significant situations forcing management to use consideration and estimates are related, among others, to the following:

estimated useful lives of intangible and tangible assets,
impairment testing of goodwill and other assets,
from which point onwards development projects qualify for the capitalization of development expenses,
probability of future taxable profit against which the tax-deductible temporary differences can be utilized,

fair value of trade receivables,

amount of provisions, and
acquired operations.

Adoption of new or revised IFRS standards

The Group has not yet adopted following published new or amended standards and interpretations. The Group will adopt them immediately after the standard or interpretation is effective or, when applicable, at the beginning of the next financial year. (* = The standard or interpretation has not yet been approved for adoption by the European Union.)

Management estimates that the new or revised standards will not have a material impact on the Consolidated Financial Statements.

Amendment IAS 1 "Presentation of Financial Statements" (effective from July 1, 2012 or in the financial year beginning thereafter). The main change is the requirement of grouping the comprehensive income items depending on whether they can subsequently be recycled to income subject to certain conditions.
Amendment to IAS 19 "Employee Benefits" (effective for financial years beginning on or after January 1, 2013). The major changes are as follows: in future all actuarial gains and losses are immediately recognized in other comprehensive income, i.e. the corridor approach is eliminated, and finance costs are calculated on a net funding basis.
IAS 28 "Investments in Associates and Joint Ventures", revised 2011 (in the EU effective for financial years beginning on or after January 1, 2014). Following the issue of IFRS 11 the revised IAS 28 includes the requirements for joint ventures, as well as associates, to be equity accounted.
Amendments to IAS 32 "Financial Instruments: Presentation" (effective for financial years beginning on or after January 1, 2014). The amendments provide clarifications on the application of presentation requirements for offsetting financial assets and financial liabilities on the statement of financial position and give more related application guidance. The amended standard is to be applied retrospectively.
Amendments to IFRS 7 "Financial Instruments: Disclosures" (effective from January 1, 2013 or in the financial year beginning thereafter). The amendments clarify disclosure requirements for financial assets and liabilities that are offset in the statement of financial position or subject to master netting arrangements or similar agreements. The disclosures required by those amendments are to be provided retrospectively.
IFRS 9 "Financial Instruments"* (effective from January 1, 2015). IFRS 9 is part of a larger project to reform the accounting for financial instruments that is still under construction. The first stage of the new standard includes instructions for the classification and valuation of financial instruments. Later stages of the project relate to impairment of financial instruments and hedge accounting.
IFRS 10 "Consolidated Financial Statements" (in the EU effective from January 1, 2014 or in the financial year beginning thereafter). In line with the existing principles, IFRS 10 defines control as the central factor in determining whether an entity is included in the consolidated financial statements. The standard also provides additional guidance on the definition of control in situations when it is difficult to assess.
IFRS 11 "Joint Arrangements" (in the EU effective from January 1, 2014 or in the financial year beginning thereafter). IFRS 11 emphasizes the rights and obligations arising from the joint arrangement, rather than its legal form, in the accounting treatment of the joint arrangement. There are two types of joint arrangements; joint operations and

joint ventures. Joint ventures shall be accounted for by using the equity method, and the former option to use proportionate consolidation will no longer be allowed.

IFRS 12 "Disclosure of Interests in Other Entities" (in the EU effective from January 1, 2014 or in the financial year beginning thereafter). IFRS 12 collects in one place the disclosure requirements related to various interests in other entities, including subsidiaries, associated companies, joint arrangements, and unconsolidated structured entities.
IFRS 13 "Fair Value Measurement" (effective from January 1, 2013 or in the financial year beginning thereafter). IFRS 13 combines a framework for measuring fair value together with the required disclosures about fair value measurement. The new standard also includes the definition of fair value. The use of fair value is not extended, but the standard provides guidance in determining fair value when the use is permitted or required by another standard. IFRS 13 will expand the disclosures to be provided for non-financial assets measured at fair value.

2. Segment information

Business segments

QPR Software Group's operations are mainly managed as two business segments: International operations (software license, maintenance and professional services sales outside of Finland) and Finland operations (software license, maintenance and professional services sales in Finland).

Management monitors the segments through performance reporting, including net sales to external customers, operating profit and investments. Management does not allocate any financial items, taxes or administrative expenses related e.g. to the public listing of the Company to the segments. Segment assets are not monitored by management, and accordingly assets are not allocated to the segments.

Expenses are generated either directly in the business or through cost allocation. Expenses for product development, marketing, IT and accounting are allocated in relation to net sales, and reviewing the validity of allocation. All non-allocated costs are administrative expenses.

The accounting and valuation principles for the segments are the same as in the Consolidated Financial Statements.

Group (EUR 1,000)	2012	2011

Net sales
International operations	3,830	3,836
Finland operations	5,491	3,703
Total net sales	9,321	7,539
Operating profit
International operations	402	472
Finland operations	848	646
Not allocated	-376	-363
Total operating profit	874	755
Financial income and expenses	-41	-50
Income taxes	-171	-184
Profit for the period	662	521
Other information
Depreciation and amortization
International operations	278	269
Finland operations	403	303
Total depreciation and amortization	681	572

3. Net sales

Group net sales are accrued solely from software business, with following break-down in the financial year:

	Group		Parent company
(EUR 1,000)	2012	2011	2012	2011
Software licenses	1,797	1,822	1,566	1,478
Software maintenance services	3,223	3,181	3,086	3,175
Software rentals	1,221	606	1,219	595
Professional services	3,080	1,930	1,843	1,320
Total net sales	9,321	7,539	7,714	6,568
The geographical break-down of the net sales was as follows:
Domestic	5,491	3,703	4,492	3,663
International	3,830	3,836	3,024	2,548
Sales to Group companies			198	357
Total net sales	9,321	7,539	7,714	6,568
4. Other operating income
Adjustment to Nobultec Ltd purchase price	53	-	53	-
Governments grants	103	79	103	79
Other items	2	0	1	0
Total	158	79	157	79

5. Acquired business operations

No acquisitions were made in 2012.

In 2011 QPR Software Plc acquired the entire share capital of SAP business process development company, Nobultec Ltd., for a purchase price of EUR 904 thousand. EUR 402 thousand of the purchase price was allocated to customer relationships, which are amortized over five years. Goodwill arising from the acquisition was EUR 513 thousand.

6. Materials and services

Materials and services	402	250	271	173

Materials and services include mainly commissions and localization fees charged by the reseller network.

7 . Employee benefit expenses

Salaries	4,493	3,768	3,690	3,185
Pension expenses - defined contribution plans	803	657	663	563
Other personnel expenses	195	169	170	148
Total	5,491	4,594	4,523	3,896
Average number of personnel during the year	78	72	60	55

	Group	Parent Company
	2012	2011	2012	2011
Salaries and other short-term benefits:
Chief Executive Officer Jari Jaakkola	176	155	176	155
Members of the Board of Directors	76	79	76	79
Executive Management Team	650	518	650	518
Total	902	752	902	752
External services *	28	0	28	0
Board fees by member:
Leskinen Vesa-Pekka, Chairman of the Board			25	25
Eräkangas Kirsi			13	-
Kontio Jyrki			17	17
Piela Topi			13	-
Gerdt Aino-Maija, until March 21, 2012			4	17
Piekkola Asko, until March 21, 2012			4	17
Laine Antti, until March 18, 2011			-	4
Total			76	79

Salaries, bonuses, fringe benefits, vacation pay and change in bonus accruals for Management

* External services consist of the fees paid for 2012 to a consultant who worked as acting Vice President and member of the executive management team.

The Company does not have any exceptional pension arrangements for the CEO. The period of notice for the CEO is three (3) months. Compensation on termination is equivalent to six (6) month's salary. QPR Software Plc's Annual General meeting held on March 22, 2012 decided that the Chairman of the Board receives an annual emolument of EUR 25,230 and that other members of the Board receive an annual emolument of EUR 16,80 each. No separate meeting fees are paid.

In 2012, the Executive Management Team's bonuses were based on Group net sales, process analysis business net sales, and Group operating profit. The Group's Executive management Team does not enjoy benefits related to termination of their contract.

The Group's Management Team has a share incentive scheme. The plan includes three one-year earning periods which are the calendar years 2011, 2012 and 2013. The Company's Board of Directors shall decide on the earnings criteria and the targets for them at the beginning of each earning period. In 2011 and 2012 the criteria were based on the Group's net sales growth and operating profit.

In 2011 and 2012 the performance criteria were not met.

The potential incentive for the earning period 2013 will be paid in 2014. Incentives will be paid partly in the form of the Company's shares (50%) and partly in cash (50%). The proportion to be paid in cash is primarily intended to cover taxes and tax-related costs arising from the incentive.

The bonus payable on the basis of the plan during each year, including the Company shares and cash, shall not exceed 2/3 of the annual salary of the person concerned. The maximum number of shares to be conveyed on the basis of the plan for 2013 is approximately 220,000. The Company may use its own shares for conveyance. On December 31, 2012, the Company held 285,887 treasury shares.

The shares may not be transferred during the lock-up period, which will end on March 31, 2014. Should a person's employment or service in a Group company end during the lock-up period, he or she must return, gratuitously, the received incentive to the Company. Members of the Executive Management Team must hold shares also after the lock-up period. The shares received on the basis of the plan may not be transferred, if the value of his or her shareholding in the Company is less than 50% of his or her annual salary. This restriction is valid for as long as his or her employment or service in a Group company continues.

The Company does not have any stock option schemes. The Company does not have any related party loans.

8. Depreciation and amortization

	Group		Parent company
(EUR 1,000)	2012	2011	2012	2011
Intangible assets	622	501	534	465
Tangible assets
Machinery and equipment	59	71	59	61
Total	681	572	594	526
No write-downs of the assets have been made during 2011 and 2012.
9. Other operating expenses
Non-statutory indirect employee costs	212	183	180	167
Expenses of office premises	413	344	225	201
Travel expenses	276	285	242	241
Computers and software	193	136	172	127
Marketing and other sales promotion	165	212	150	193
External services	561	255	574	232
Doubtful receivables and bad debts	319	191	195	157
Capitalized product development expenses	-380	-356	-380	-343
Other expenses	272	198	312	282
Total	2,031	1,448	1,669	1,257
Other expenses include fees paid to the Company's auditor, as follows:
Auditing	51	57	48	50
Tax consulting	1	1	1	0
Other services	4	2	2	2
Total	56	60	52	53
Product development expenses incurred during the year
Expenses charged to income	1,239	957	1,239	970

Product development expenses mainly consist of personnel expenses. Expenses charged to income do not include amortization of earlier capitalized expenses. Amortization is presented in Note 13.

Capitalized expenses 380 356 380 343 Total 1,619 1,313 1,619 1,313

10 . Financial income and expenses

	Group		Parent company
(EUR 1,000)	2012	2011	2012	2011
Interest income	12	20	18	45
Interest expense	-16	-20	-21	-28
Other financial income and expenses	-8	-23	-7	-10
Exchange rate differences	-29	-27	0	-35
Total	-41	-50	-11	-28

Exchange rate differences included in the income statement
Exchange rate differences included in net sales	8	-9	-2	-29
Exchange rate differences included in expenses	-13	4	-14	4
Exchange rate gains in financial items	9	97	12	22
Exchange rate losses in financial items	-38	-124	-12	-57
Total	-34	-32	-16	-60

11. Income tax expense

Taxes for the financial year	202	-2	158	-
Taxes from previous years	-30	0	0	-
Deferred tax	-1	186	29	200
Total	171	184	187	200

Reconciliation between the tax expense recorded in the income statement and the Finnish tax rate (24.5%):

833	705
204	183

-1	-1
-19	-8
0	3
-14	0
1	7
171	184

Other items include tax amounts in subsidiaries totaling EUR 9 thousand (1).

12. Earnings per share

Earnings per share are calculated by dividing the profit for the period attributable to shareholders of the parent company by the weighted average number of shares outstanding.

Profit for the period attributable to shareholders of the parent company (EUR thousand)	662	521
Number of shares outstanding (1,000 pcs)	12,234	12,143
Earnings per share (EUR/share)	0.054	0.043

13. Intangible assets

	Computer	Other intangible	Capitalized product
Group (EUR 1,000) Acquisition cost Jan 1, 2011	software 649	assets 1,898	development 1,061	Total 3,608
Accum. amortization and write-downs Jan 1, 2011	-479	-1,225	-504	-2,208
Book value Jan 1, 2011	170	673	557	1,400
Increases	75	19	356	450
Acquired subsidiaries, acquisition cost	31	402	0	433
Acquired subsidiaries, accumulated amortization	-22	0	0	-22
Amortization for the period	-76	-222	-203	-501
Acquisition cost Dec 31, 2011	755	2,319	1,417	4,491
Accum. amortization and write-downs Dec 31, 2011	-577	-1,447	-707	-2,731
Book value Dec 31, 2011	178	872	710	1,760
Transfer from tangible assets, acquisition cost	0	16	0	16
Transfer from tangible assets, accum. amortization	0	-6	0	-6
Increases	3	44	380	427
Decreases	-1	-18	0	-19
Amortization for the period	-69	-275	-278	-622
Acquisition cost Dec 31, 2012	757	2,361	1,797	4,915
Accum. amortization and write-downs Dec 31, 2012	-646	-1,728	-985	-3,359
Book value Dec 31, 2012	111	633	812	1,556
Parent company (EUR 1,000)
Acquisition cost Jan 1, 2011	649	935	1,055	2,639
Accum. amortization and write-downs Jan 1, 2011	-480	-262	-504	-1,245
Book value Jan 1, 2011	169	674	551	1,394
Increases	73	3	362	438
Amortization for the period	-73	-188	-203	-465
Acquisition cost Dec 31, 2011	722	939	1,417	3,078
Accum. amortization and write-downs Dec 31, 2011	-553	-450	-707	-1,710
Book value Dec 31, 2011	168	489	710	1,368
Increases	10	43	380	433
Amortization for the period	-68	-188	-278	-534
Acquisition cost Dec 31, 2012	732	981	1,798	3,511

Accum. amortization and write-downs Dec 31, 2012 -621 -638 -985 -2,244 Book value Dec 31, 2012 110 343 812 1,266

14. Goodwill

Group (EUR 1,000)	2012	2011
Acquisition cost Jan 1	513	-
Increases	-	513
Acquisition cost Dec 31	513	513
Book value Dec 31	513	513

Goodwill has arisen from the acquisition of Nobultec Ltd in 2011, and has been allocated entirely to the cash-generating unit Nobultec Ltd.

Goodwill has been tested for impairment in the last quarter of 2012 and the discount rate used in impairment testing was 9.5%.

The recoverable amount evaluated in the impairment test is based on the 2013 budget and on subsequent development assessed on the basis of the budget. Key variables used in the calculations are the growth rates of net sales, expenses and EBITDA. The growth of net sales has been determined by taking into account the company's actual performance, market position and growth potential in its market.

Based on zero-growth scenario sensitivity analyses, management believes that it is unlikely that a change in key variables used in the test would lead to a situation where the book value of goodwill in the balance sheet would exceed the unit's recoverable amount.

Nobultec Ltd's sales growth is broadly designed to be in line with the Company's strategy for the planning period. The recoverable amount based on cash flows for the next five years is about EUR 1,145 thousand, and about EUR 864 thousand in a zero-growth scenario. If the unit's annual growth in the planning period were -2%, the sensitivity analyses show that the unit's recoverable amount would be about EUR 830 thousand, based on cash flows for the next five years.

If Nobultec Ltd's annual net sales growth in the planning period were lower than -10%, it would constitute a situation in which there are indications of goodwill impairment. If the fair value of goodwill proved to be lower than the unit's book value in an impairment test, an impairment loss would be recorded as an expense in the income statement and would be allocated primarily to the goodwill in the balance sheet.

15. Tangible assets

	Machinery and	Other tangible
Group (EUR 1,000)	equipment	assets	Total
Acquisition cost Jan 1, 2011	1,018	3	1,021
Accum. depreciation and write-downs Jan 1, 2011	-933	-3	-936
Book value Jan 1, 2011	85	0	85
Increases	76	0	76
Acquired subsidiaries, acquisition cost	62	0	62
Acquired subsidiaries, accumulated depreciation	-34	0	-34
Depreciation for the period	-71	0	-71
Acquisition cost Dec 31, 2011	1,156	3	1,159
Accum. depreciation and write-downs Dec 31, 2011	-1,038	-3	-1,041
Book value Dec 31, 2011	118	0	118
Transfer to intangible assets, acquisition cost	-16	0	-16
Transfer to intangible assets, accum. amortization	6	0	6
Increases	117	0	117
Decreases	-26	0	-26
Depreciation for the period	-59	0	-59
Acquisition cost Dec 31, 2012	1,231	3	1,234
Accum. depreciation and write-downs Dec 31, 2012	-1,091	-3	-1,094
Book value Dec 31, 2012	140	0	140

1,010	1,010
-932	-932
78	78
64	64
-61	-61
1,074	1,074
-993	-993
81	81
117	117
-59	-59
1,192	1,192
-1,053	-1,053
139	139

16. Shares in subsidiaries and other entities

The parent company of the Group is QPR Software Plc.

		Parent company
Subsidiaries	Domicile	2012	2011
Owned directly by the parent company:
QPR CIS Oy*	Helsinki, Finland	100%	80%
StrongDocs Oy**	Helsinki, Finland	-	100%
Nobultec Ltd	Helsinki, Finland	100%	100%
QPR Service Oy	Helsinki, Finland	100%	100%
QPR Software Inc.	San Jose, CA, USA	100%	100%
Owned indirectly by the parent company:
QPR Software AB	Stockholm, Sweden	100%	100%
QRP Software OOO	Moscow, Russia	100%	80%

* The parent company acquired the remaining 20% in November 2012.

** The company merged into the parent company on December 7, 2012.

		Parent company (EUR 1,000)
Shares in subsidiaries	2012	2011
Acquisition cost Jan 1	1,110	193
Increases	82	917
Decreases	-6	0
Acquisition cost Dec 31	1,187	1,110
Book value Dec 31	1,187	1,110
Other shares

Acquisition cost Jan 1 Acquisition cost Dec 31	5 5	5 5
Book value Dec 31	5	5
Total book value of shares Dec 31	1,191	1,115

17. Long-term receivables

	Group		Parent company
(EUR 1,000)	2012	2011	2012	2011
Withholding tax receivables	96	59	56	32
Total	96	59	56	32

18. Deferred tax assets and liabilities

decrease by EUR 53 thousand.

Deferred tax assets, based on tax-loss carryforwards, have changed as follows:

	Group			Parent Company
(EUR 1,000)	2012	2011	2012	2011
Jan 1	38	233	29	229
Recorded in comprehensive income	-19	-195	-29	-200
Dec 31	19	38	0	29

The subsidiary in the United States, QPR Software Inc., has tax loss carryforwards after the official tax filings totaling approximately EUR 350 thousand, based on which EUR 19 thousand (9) has been recognized as a deferred tax asset in 2012.

Deferred tax liabilities arise from the allocation of Nobultec Ltd purchase price to customer relationships, and have changed as follows:

Jan 1	90	0
Acquired subsidiaries	0	99
Recorded in comprehensive income	-19	-9
Dec 31	71	90
19. Trade and other receivables
Trade receivables	2,375	3,488	1,921	2,831
Accrued income and prepaid expenses	477	381	222	115
Income tax receivables	26	29	0	0
Other receivables	233	350	231	307
Receivables from Group companies			724	972
Total	3,111	4,248	3,097	4,225
Geographical breakdown of trade receivables:
Finland	1,012	1,626	874	1,470
Other European countries	538	553	537	808
Countries outside Europe	825	1,309	509	553
Total	2,375	3,488	1,921	2,831
Currency breakdown of trade receivables:
			Group
(EUR 1,000)	2012	%	2011	%
EUR	1,787	75.2	2,587	74.2
USD	344	14.5	576	16.5
ZAR	138	5.8	161	4.6
SEK	68	2.9	62	1.8
JPY	26	1.1	24	0.7
GBP	11	0.5	7	0.2
RUB	1	0.0	73	2.1

Total 2,375 100.0 3,488 100.0 The main part of trade receivables is in EUR. The most significant invoicing currencies after EUR were USD and ZAR during the financial year. If the value of USD and ZAR against EUR were to decrease by 10%, and the share of currencies were to remain in the same level, the value of trade receivables would decrease by EUR 44 thousand, equaling 1.85% of the total value of trade receivables. Correspondingly, if the value of all non-EUR invoicing currencies were to decrease by 10%, the value of trade receivables would

NOK 0 0.0 -2 -0.1

Age analysis of trade receivables:

			Group
(EUR 1,000)	2012	%	2011	%
Not due	1,997	84.1	2,839	81.4
0 - 90 days overdue	344	14.5	359	10.3
90 - 180 days overdue	25	1.1	70	2.0
More than 180 days overdue	9	0.4	220	6.3
Total	2,375	100.0	3,488	100.0

Fair value of trade receivables:

The initial book value of trade receivables approximates fair value because the effect of discounting is insignificant due to the short maturity.

Breakdown of the Parent company's accrued income and prepaid expenses:

	Parent company
(EUR 1,000)	2012	2011
Accrued income	63	20
Prepaid expenses	159	95
Total	222	115

Breakdown of the Parent company's receivables from Group companies:

QPR CIS Oy	467	694
Nobultec Ltd	0	-1
StrongDocs Oy	0	3
QPR Services Oy	257	277
Total	724	972

20. Cash and cash equivalents

		Group		Parent company
(EUR 1,000)	2012	2011	2012	2011
Bank accounts	1,404	1,020	1,320	865
Total	1,404	1,020	1,320	865

21. Shareholders' equity

The Company has one series of shares and the maximum value of share capital is EUR 1,359 thousand. All the issued shares have been fully paid.

Other funds

Includes the reserve fund in subsidiary QPR Software AB.

Treasury shares

Treasury shares include the purchase price of own shares held by the Group.

Calculation of the distributable funds

		Parent company
(EUR 1,000)	2012	2011
Retained earnings	1,076	875
Profit for the period	589	568
Treasury shares	-261	-158
Invested non-restricted equity fund	5	5
Distributable funds	1,410	1,290

22. Other non-current liabilities and interest-bearing loans

Non-current	Group		Parent company
(EUR 1,000)	2012	2011	2012	2011
Deferred tax liabilities	71	90	-	-
Other non-interest-bearing liabilities	0	56	0	56
Pension loans	113	340	113	340
Total	184	486	113	396

Amortization of interest-bearing loans:
2013	226	227	226	227
2014	113	113	113	113
Total	339	340	339	340

Interest-bearing loans consist of a 2.8% fixed-rate pension loan, whereby an interest rate sensitivity analysis is not meaningful.

Current

Pension loans	226	226	226	226

23. Trade payables and other liabilities

	Group		Parent Company
	2012	2011	2012	2011
Trade payables	182	65	137	46
Accrued expenses and prepaid income	1,908	2,410	1,565	2,188
Advances received	1,044	1,046	1,009	962
Other liabilities	319	555	226	484
Liabilities to Group companies			1,024	762
Total	3,453	4,076	3,961	4,442
The value of trade payables in foreign currency was low in 2012 and 2011. Breakdown of the Parent company's accrued expenses and prepaid income:
Holiday pay, including social costs			541	480
Bonuses, including social costs			234	104
Prepaid income			701	1,539
Accrued interest expenses			2	4
Other accrued expenses			88	62

Breakdown of the Parent company's liabilities to Group companies:

QPR Software Inc	428	408
QPR Software OOO	45	60
Nobultec Ltd	215	0
QPR Software AB	337	294
Total	1,024	762

Total 1,565 2,188

24. Adjustments to the cash flow from operating activities

Deferred taxes	-1	155
Adjustment to Nobultec Ltd purchase price	-53	-
Other items	-79	-9
Total	-133	146

25. Commitments and contingent liabilities

Business mortgage * Lease liabilities and rent commitments	1,337	1,337	1,337	1,337
Maturing during one year	397	231	397	235
Maturing during 2-5 years	91	77	91	53
Total	1,826	1,645	1,826	1,626

* Business mortgages EUR 1,337 thousand are in Nordea as a counter security for a guarantee on the pension loan from Ilmarinen.

Rental commitments include office rental agreements:

Rental agreement (October 25, 2011) for 2 years. First termination date is November 30, 2013 and the notice period is 6 months.
Rental agreement (November 21, 2012) that does not have a fixed end date. First termination date is November 30, 2013 and the notice period is 3 months.

Rental guarantees totaling EUR 60 thousand are included in Cash and cash equivalents in the balance sheet. On December 31, 2012, the Group and the Parent company had no derivative contracts.

26. Financial Risk Management

The International business operations of QPR Group are exposed to risks typical in normal international transactions. Financial risk management aims to secure sufficient financing cost-effectively and to monitor, and when necessary, to mitigate the materializing risks. Risk management is a centralized responsibility of the Group's financing function and the CEO. The general risk management policies are approved by the QPR Software Plc Board of Directors. The Board is also responsible for supervising the adequacy, appropriateness and effectiveness of the Group's risk management.

Foreign exchange risk

The main sales currency for the Group is Euro and the majority of purchases are made in Euros.

The main part of trade receivables is in EUR. The most significant invoicing currencies after EUR were USD and ZAR during the financial year. If the value of USD and ZAR against EUR were to decrease by 10%, and the share of currencies were to remain in the same level, the value of trade receivables would decrease by EUR 44 thousand, equaling 1.85% of the total value of trade receivables. Correspondingly, if the value of all non-EUR invoicing currencies were to decrease by 10%, the value of trade receivables would decrease by EUR 53 thousand.

In accordance with the foreign exchange risk policy approved by the Board of Directors on 19 May, 2010, the Company started foreign currency hedging in June 2010. The purpose of the currency hedging is to reduce the added uncertainty of exchange rates and to minimize the adverse impact of the exchange rate changes to the Group's cash flow, financial results and equity.

The intention is not to eliminate all the risks but to reduce the significant risks to an acceptable level at an acceptable cost. Management regularly reviews the Company's foreign exchange risks, taking into account the hedging costs.

The hedging techniques used by the Company are forward contracts and options. At the end of the reporting period, the Company did not have any forward contracts or options.

Interest rate risk

At closing, the Company had interest-bearing liabilities totaling EUR 339 thousand. These liabilities bear a fixed interest rate. The effect of interest rate changes on the Group result is insignificant and the Group did not take any hedging measures during the financial period.

Liquidity risk

Liquidity risk is defined as financial distress or extraordinary high financing costs due to a shortage of liquid funds in a situation where business conditions unexpectedly deteriorate and require financing.

The objective of liquidity risk management is to maintain sufficient liquidity and to ensure that it is available for business purposes fast enough without endangering the value of investments.

The Group's interest-bearing loans do not include any covenants.

Maturity schedule of liabilities (amounts are undiscounted):

Group (EUR 1,000)	Book value	0–6 months	6 months-1 year	1–2 years
Pension
loans	339	113	113	113
Trade and other payables	502	502
Total	841	615	113	113

Operative credit risk

The Group's international business operations are by their nature exposed to credit risk related to individual partners. However, the Group has a wide customer base and reseller network spread over several market areas. The Group's trade receivables thereby arise from a large number of resellers and customers in several market areas, and accord-ing to management's estimate there are no concentrations of reseller, customer, or geographical risks. In addition, continuous and active monitoring of receivables and credit limits aims at mitigating the Group's credit risks. The Group's maximum credit risk corresponds to the book value of trade receivables.

27. Key figures of the Group 2010-2012

Group (EUR 1,000)	2012	2011	2010

Net sales	9,321	7,539	6,937
Growth of net sales, %	23.6	8.7	4.8
Operating profit	874	755	752
% of net sales	9.4	10.0	10.8
Profit or loss before tax	833	705	707
% of net sales	8.9	9.4	10.2
Profit for the period	662	521	527
% of net sales	7.1	6.9	7.6

Return on equity, %	22.2	18.4	20.0
Return of investments, %	25.5	21.5	21.0
Interest-bearing liabilities	339	566	793
Cash and cash equivalents	1,404	1,020	1,703
Net liabilities	-1,065	-454	-910
Equity	2,981	2,973	2,694
Gearing, %	-35.7	-15.3	-33.8
Equity ratio, %	51.3	44.2	42.6
Total balance sheet	6,845	7,761	7,250

Investment in non-current assets	518	1,478	350
% of net sales	5.6	19.6	5.0
Research and development expenses	1,619	1,313	1,278
% of net sales	17.4	17.4	18.4

Personnel average for period	78	72	63
Personnel at the beginning of period	73	65	57
Personnel at the end of period	81	73	65

28. Key figures per share 2010-2012

Group	2012	2011	2010
Earnings per share, EUR	0.05	0.04	0.04
Equity per share, EUR	0.24	0.24	0.22
Dividend per share *, EUR	0.04	0.03	0.03
Dividend per profit, %	80.0	75.0	75.0
Effective dividend yield, %	4.21	3.41	3.30
Price/earnings ratio (P/E)	19.00	22.00	22.75
Development of share price
Average price, EUR	0.95	0.87	0.91
Lowest closing price, EUR	0.80	0.74	0.62
Highest closing price, EUR	0.97	0.94	1.00
Closing price on Dec 31, EUR	0.95	0.88	0.91
Market capitalization on Dec 31, EUR 1,000	11,551	10,794	11,032
Development of trading volume
Number of shares traded, 1,000 pcs	501	1,123	882
% of all shares	4.0	9.0	7.1
Number of shares on Dec 31, 1,000 pcs	12,445	12,445	12,445
Average number of shares outstanding, 1,000 pcs	12,234	12,143	12,166

* Year 2012: The Board of Director's proposal to the Annual General Meeting to be held on March 14, 2013.

29. Capital management

Group (EUR 1,000)	2012	2011
Interest-bearing liability	339	566
Liquid assets	1,404	1,020
Net liabilities	-1,065	-454
Total equity	2,981	2,973
Gearing, %	-35.7	-15.3
Equity ratio, %	51.3	44.2
Balance sheet total	6,845	7,761

The development of Group capital structure is monitored, in particular, through gearing and equity ratio.

Definition of Key Indicators

Return on equity (ROE), %: Profit for the period x 100 Shareholders' equity (average)

Return on investment (ROI), %: Profit before taxes + interest and other financial expenses x 100 Balance sheet total - non-interest bearing liabilities (average)

Equity ratio, %: Total equity x 100 Balance sheet total - advances received

Gearing, %: Interest-bearing liabilities - cash and cash equivalents x 100 Total equity

Earnings per share, euro: Profit for period Weighted average number of shares outstanding during the financial year

Equity per share, euro: Equity attributable to shareholders of the parent company Number of shares outstanding at the end of the financial period

Dividend per share, euro: Total dividend paid Number of shares outstanding at the end of the financial period

Dividend / profit, %: Dividend per share x 100 Earnings per share

Effective dividend yield, %: Dividend per share x 100 Share price at the end of the financial period

Price/earnings ratio (P/E): Share price at the end of the financial period Earnings per share

Market capitalization: (Total numbers of shares - treasury shares) x share price at the end of the financial period

Turnover of shares, % of share capital: Turnover (number of shares) x 100 Number of shares issued (average)

Signatures of Board of Directors' Report and Financial Statements

Helsinki, Finland, February 5, 2013

QPR Software Plc Board of Directors

Vesa-Pekka Leskinen Kirsi Eräkangas Chairman of the Board Board member

Jyrki Kontio Topi Piela

Board member Board member

Jari Jaakkola Chief Executive Officer

Auditor's note

An auditor's report concerning the performed audit has been given today.

Helsinki, Finland, February 5, 2013

KPMG Oy Ab Authorized Public Accountants

Sixten Nyman Authorized Public Accountant

Auditor's Report

To the Annual General Meeting of QPR Software Plc

We have audited the accounting records, the financial statements, the report of the Board of Directors, and the administration of QPR Software Plc for the year ended December 31, 2012. The financial statements comprise the consolidated statement of financial position, income statement, statement of comprehensive income, statement of changes in equity and statement of cash flows, and notes to the consolidated financial statements, as well as the parent company's balance sheet, income statement, cash flow statement and notes to the financial statements.

Responsibility of the Board of Directors and the Managing Director

The Board of Directors and the Managing Director are responsible for the preparation of consolidated financial statements that give a true and fair view in accordance with International Financial Reporting Standards (IFRS) as adopted by the EU, as well as for the preparation of financial statements and the report of the Board of Directors that give a true and fair view in accordance with the laws and regulations governing the preparation of the financial statements and the report of the Board of Directors in Finland. The Board of Directors is responsible for the appropriate arrangement of the control of the company's accounts and finances, and the Managing Director shall see to it that the accounts of the company are in compliance with the law and that its financial affairs have been arranged in a reliable manner.

Auditor's Responsibility

Our responsibility is to express an opinion on the financial statements, on the consolidated financial statements and on the report of the Board of Directors based on our audit. The Auditing Act requires that we comply with the requirements of professional ethics. We conducted our audit in accordance with good auditing practice in Finland. Good auditing practice requires that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and the report of the Board of Directors are free from material misstatement, and whether the members of the Board of Directors of the parent company or the Managing Director are guilty of an act or negligence which may result in liability in damages towards the company or have violated the Limited Liability Companies Act or the articles of association of the company.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements and the report of the Board of Directors. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation of financial statements and report of the Board of Directors that give a true and fair view 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 company's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements and the report of the Board of Directors.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion on the consolidated financial statements

In our opinion, the consolidated financial statements give a true and fair view of the financial position, financial performance, and cash flows of the group in accordance with International Financial Reporting Standards (IFRS) as adopted by the EU.

Opinion on the company's financial statements and the report of the Board of Directors

In our opinion, the financial statements and the report of the Board of Directors give a true and fair view of both the consolidated and the parent company's financial performance and financial position in accordance with the laws and regulations governing the preparation of the financial statements and the report of the Board of Directors in Finland. The information in the report of the Board of Directors is consistent with the information in the financial statements.

Opinion on discharge from liability and distribution of profit

We support the adoption of the financial statements. The proposal by the Board of Directors regarding the treatment of distributable funds is in compliance with the Limited Liability Companies Act. We support that the Board of Directors of the parent company and the Managing Director be discharged from liability for the financial period audited by us.

Helsinki, Finland, February 5, 2013

KPMG OY AB

Information to Shareholders

The share of QPR Software Plc

The share of QPR Software Plc is quoted on the main list of the NASDAQ OMX Helsinki Ltd, in the Information technology sector, Small Cap segment. The trading started on March 8, 2002.

Trading code: QPR1V
ISIN code: FI0009008668

Annual General Meeting

The Annual General Meeting will be held on Thursday 14 March, 2013 starting at 1:00 p.m. at the Company's headquarters Huopalahdentie 24, 00350 Helsinki, Finland.

A shareholder of the Company that has been entered into the Company's shareholders' register maintained by Euroclear Finland Ltd on 4 March, 2013 has the right to participate in the General Meeting.

The shareholder willing to participate in the Annual General Meeting shall inform the Company of the participation on 6 March, 2013, at 4.00 p.m. at the latest, in writing to the address QPR Software Plc, Huopalahdentie 24, 00350 Helsinki, by phone to the number +358 50 436 1658, or by email to the address [email protected].

The letter or message of participation shall be at the destination prior to the expiry of the registration period. The possible proxies are asked to be delivered in connection with the registration to the address set forth above.

A holder of nominee registered shares has the right to participate in the Annual General Meeting by virtue of such shares, based on which he/she on the record date of the Annual General Meeting, i.e. on 4 March, 2013, and would be entitled to be registered in the shareholders' register of the Company held by Euroclear Finland Ltd. The right to participate in the

Sixten Nyman Authorized Public Accountant

Annual General Meeting requires, in addition, that the shareholder on the basis of such shares has been registered into the temporary shareholders' register held by Euroclear Finland Ltd at the latest by 11 March, 2013 by 10:00 a.m. (Finnish time). As regards nominee registered shares this constitutes due registration for the Annual General Meeting.

A holder of nominee registered shares is advised to request without delay all necessary instructions regarding the temporary registration in the shareholders' register of the Company, the issuing of proxy documents and registration for the Annual General Meeting from his/her custodian bank.

Dividend

The Board of Directors proposes to the Annual General Meeting that a dividend of EUR 0.04 per share be paid to shareholders for financial year 2012. The Board of Directors proposes to the Annual General Meeting that dividend be paid on 3 April, 2013.

Financial information in 2013

In 2013, QPR Software Plc will publish its financial information as follows:

Interim Report 1-3/2013: Thursday, 18 April, 2013.
Interim Report 1-6/2013: Friday, 19 July, 2013.
Interim Report 1-9/2013: Tuesday, 22 October, 2013

The interim reports and all stock exchange bulletins of QPR Software Plc are available on the Investor pages of the Company's Internet pages, www.qpr.com.

Changes of addresses

If the address of a shareholder changes, we request to contact the custodian bank holding the shareholder's book-entry account.

Our customers on QPR

"With QPR Suite 2012 each of our 148 individual site creates their respective process map based on a modular concept using a global reference model which is amended individually according to their local needs. With the help of QPR we have been able to get another step closer to our goal of operational excellence."

Johannes Mauser Head of Quality ALPLA Group, Austria

"If you are looking to drive an effective performance measurement and management culture in your organization and ensure strategic objectives are aligned, then look no further than QPR."

Gert Pelser CEO, Real People South Africa South Africa

"QPR offers an easy and fast way for drafting process descriptions, communicating these and promote process improvement in a collaborative approach."

Egils Harasimjuks Head of the Latvian Health Inspectorate, Latvia "At Vaisala, we are committed to continuous process improvement. QPR ProcessAnalyzer has enabled us to do just that easily and effectively, saving valued time for our organizations by quickly pinpointing the development areas."

Arto Puukko

Process Development Manager, Group Quality, Vaisala Corporation, Finland

"Enterprise architecture supports operational development and makes one agile in reacting to changes. We trust our commitment to enterprise architecture will promote the university's strategic goal of becoming a world-class university by 2020."

Patrik Maltusch Head of IT Architecture Aalto University, Finland

Recognitions and mentions in industry analyst reports

QPR Software has been recognized or included in the following recent analyst reports or research reports:

2012

Gartner: Hype Cycle for Performance Management, 2012 (August 2012)
Gartner: Hype Cycle for Analytic Applications, 2012 (August 2012)
Gartner: Hype Cycle for Business Process Management, 2012 (July 2012)
Gartner: Market Trends: Analytics, Business Intelligence and Performance Management to Be All-Pervasive by 2020 (June 2012)
Gartner: Magic Quadrant for Corporate Performance Management Suites (March 2012)
Gartner: Research note: Understand How Automated Business Process Discovery (ABPD) Can Help Improve Business Processes (March 2012)

2011

Gartner: Magic Quadrant for Business Process Analysis Tools (December 2011)
Bloor Research: QPR go full BPM with the latest release of QPR Suite 2012 (December 2011)
Gartner: The Gartner Business Intelligence Service Vendor Guide, 2011 (October 2011)
Gartner: Hype Cycle for Performance Management, 2011 (September 2011)
Gartner: CPM Suite User Survey 2011: Customer Experiences With CPM (August 2011)
Bloor Research: Automating Business process discovery (February 2011)

Contact information

QPR Software Plc

Domicile: Helsinki (Finland)

Business ID: 0832693-7

Official address: Huopalahdentie 24, 00350 Helsinki, Finland

Customer Care: Tel: +358 290 001 156 [email protected] QPR Software Plc Head Office Huopalahdentie 24, 00350 HELSINKI

Oulu office Teknologiantie 1 90590 OULU

Tel: + 358 290 001 150 Fax: + 358 290 001 151 www.qpr.com

Moscow Office OOO QPR Software Butyrskaya str.62 125167 Moscow RUSSIAN FEDERATION

Tel: +7 495 737 63 03 Fax: +7 495 737 63 03 www.qpronline.ru

Finland

Russian Federation

AI assistant

QPR Software Oyj — Annual Report 2012

3334_10-k_2013-02-21_6a7fa49b-7b5b-47d9-b454-b50de33d6dc2.pdf

Index

Review by the CEO

Dear Shareholder,

Board of Directors

Vesa-Pekka Leskinen

Kirsi Eräkangas

Jyrki Kontio

Topi Piela

Executive Management Team, as of 30 January 2013

Jari Jaakkola

Matti Erkheikki

Eero Knuutila

Pauli Leppänen

Mikko Mäki-Rahkola

Jaakko Riihinen

Report of the Board of Directors 2012

BUSINESS OPERATIONS

NET SALES

Net sales by business segment

Net sales by product

FINANCIAL PERFORMANCE

Operating profit by business segment

FINANCE AND INVESTMENTS

PRODUCT AND SERVICE DEVELOPMENT

PERSONNEL

SHARE CAPITAL, SHAREHOLDERS AND TRADING IN SHARES

Own shares

SHARE-BASED INCENTIVE PLAN

Major shareholders, December 31, 2012

Distribution of shareholders by sector, December 31, 2012

OPTION SCHEMES

ACQUISITIONS AND REORGANIZATIONS

GOVERNANCE

Decisions made by the Annual General Meeting

MANAGEMENT AND AUDITORS

SHARES HELD BY THE BOARD AND CEO

Shareholding by insiders, December 31, 2012

AUTHORIZATIONS OF THE BOARD OF DIRECTORS

INTERNAL CONTROL

RISK MANAGEMENT

Risks related to business operations

Risks related to business operations in Russia

Risks related to information and products

Risks related to financing

Risks related to new businesses

LEGAL DISPUTES

SIGNIFICANT EVENTS DURING THE YEAR

SUBSEQUENT EVENTS

OUTLOOK FOR 2013

THE BOARD OF DIRECTORS' PROPOSAL ON DIVIDEND

Financial statements

Consolidated Income Statement, IFRS

Consolidated Balance Sheet, IFRS

Consolidated Cash Flow Statement, IFRS

Parent Company Income Statement, FAS

Parent Company Balance Sheet, FAS

Parent Company Cash Flow Statement, FAS

Statements of Changes in Equity

Notes to Financial Statements

Company information

ACCOUNTING PRINCIPLES

Basis of preparation

Principles of consolidation

Continuity of operations

Foreign currency translation

Revenue recognition

Other operating income

Pension plans

Share-based payments

Operating profit

Impairment

Income taxes

Intangible assets

Tangible assets

Lease agreements

Financial assets and liabilities

Derivative contracts

QPR Software Oyj Annual Report 2012