Annual Report 2015

Vitec at a Glance

A software company growing through acquisitions

INDUSTRY-SPECIFIC BUSINESS SYSTEMS

Vitec develops and supplies business-critical standardised software to satisfy industry-specific needs. Our growth is taking place through the acquisition of mature software companies in the Nordic region.

LONG-TERM CUSTOMER RELATIONS

We adopt a long-term approach, focusing on our customers' security. We create value through our supportive product offering, which facilitates development and increased profitability for our customers.

BUSINESS MODEL WITH RECURRING REVENUE

Our business model is based on a high proportion of recurring revenue. This creates the conditions to act in the long-term, as we are less sensitive to temporary downturns within individual companies.

GROWTH THROUGH ACQUISITIONS

Vitec has a pronounced acquisition-based growth strategy, with considerable focus on profitability and stable cash flows. By focusing on strong cash flows, we are creating the financial conditions for continued acquisition-driven growth.

HISTORY

Vitec was established in 1985 as a spin-off company from the University of Umeå, and since 1998 it has been a public company based on software. During our 30-year history, we have experienced continuous growth and have recorded a profit every year. Vitec is now a Nordic software Group with 450 employees.

PROPORTION OF SALES

	THE GROUP'S OPERATIONS
--	------------------------

Vitec at a Glance 2
2015 in brief 3
Important events in 2015 4
CEO's comments6
Strategies and goals8
Our Business Areas12
Employees20
History 22
The share 26
ANNUAL REPORT
Directors' Report29
Corporate Governance Report 34
Board of Directors and Group management38

Multi-year summary40
Proposed allocation of profits 41
Consolidated statement of comprehensive income42
Consolidated statement of financial position 43
Consolidated statement of changes in equity44
Consolidated statement of cash flows45
Income statement, Parent Company46
Balance sheet, Parent Company47
Changes in equity, Parent Company 48
Cash flow statement, Parent Company49
Notes 50
Proposed allocation of the company's profit68
Auditor's Report69
Shareholder information 71

Text and production: Vitec. The people shown in the pictures are Vitec employees. Printing: Arkitektkopia in Umeå.

2015 in brief

2015 was a consistently strong year for Vitec. We achieved historically high levels as regards operating profit and conducted four corporate acquisitions. In March we acquired the Norwegian software company Fox Publish AS and its Swedish sister company Adservice AB, whose main product is a publication system for estate agents. In July we acquired two companies in Business Area Auto: the Norwegian software company Infoeasy AS and the Danish company Datamann A/S. In December we conducted the fourth acquisition of the year in the form of the Norwegian software company Nice AS, whose product comprises industry-specific software for insurance companies in Denmark, Norway and Sweden. These acquisitions also increased our geographic spread, so that Sweden now accounts for less than 50 per cent of total revenues.

The increased sales are primarily due to these acquisitions, whereas organic growth accounts for 2 per cent.

In June, in addition to existing credit, Vitec took out a credit facility for SEK 250 million with Nordea. This agreement has a duration of four years, and the credit can be utilised successively for one or more acquisitions.

At an Extraordinary General Meeting in December, it was decided to implement a 5-for-1 share split. As a result of the split, the total number of shares in the company increased from 5,879,338 shares to 29,396,690 shares.

618,4 MSEK NET SALES +26 % CHANGE IN NET SALES 100,6 MSEK OPERATING PROFIT

16 % OPERATING MARGIN

	2015	2014
Net sales (TSEK)	618 385	491 956
Operating profit (TSEK)	100 607	68 592
Profit after financial items (TSEK)	94 686	64 545
Operating margin (%)	16	14
Return on equity (%)	29	23
Return on capital employed (%)	21	18
Solidity (%)	31	34
Adjusted shareholder's equity per share (SEK)	9,24	8,85
Earnings per share (SEK)	2,66	1,75
Dividend* (SEK)	0,67	0,55
P/E	28,2	15,1
Average numbers of employees	422	344

* Proposed dividend 2016 is 0,90 SEK per share

Important events in 2015

Vitec reduces dilution by redeemed convertible

Vitec redeems the convertible debenture as Norrlandsfonden signed in 2008. The loan amounted to SEK 10 million, fixed rate of 3.9 % and a conversion price of SEK 35. Upon full conversion it would have resulted in a dilution of approximately 4.6 % of the capital and approximately 2.1 % of the votes in Vitec. Vitec now pays 37.1 million in cash on redemption. Norrlandsfonden has also granted a loan of SEK 25 million which runs for six years with straight-line amortization that will partly finance the repurchase.

Vitec signs multiannual contract with Länsförsäkringar

Vitec has signed an agreement with Länsförsäkringar Fondliv for the supply and maintenance of a new pension and insurance schemes. The product includes functions for calculations of retirement, disability and survivor benefits.

Vitec acquires Norwegian Fox Publish AS

In March Vitec Software Group AB (publ) agreed to acquire 100% stake in the software company Fox Publish AS and its Swedish sister company Adservice AB. The two companies offer a publishing system for real estate agents.

Svein Roger Westengen, new Manager of Business Area Estate Agents in Norway.

New Manager of Business Area Estate Agents in Norway

Svein Roger Westengen, Manager of Business Area Auto in Norway is since April also Manager of Business Area Estate Agents in Norway, succeeding Erik Hansen.

Cost-cutting program in Business Area Estate Agents

As a consequence of Swedbank Fastighetsbyrå AB having announced its successive transition to a proprietary estate agent system, Vitec is adjusting its organization. A cost-cutting program was initiated in April, affecting the Estate Agents Sweden Division.

Vitec has signed a SEK 250 revolving credit facility for acquisitions

In addition to existing credit facilities Vitec signed a SEK 250 million revolving credit facility with the bank Nordea in June. The agreement has a term of four years and the credit can be called up gradually. Through the acquisition credit facility of SEK 250 million, we have secured capital that will allow us to continue the strategic plan to grow through acquisitions of vertical market software companies

Vitec acquires Datamann A/S in Denmark

In July Vitec agreed to acquire 100 % of the Danish software company Datamann A/S, whose main product is industry-specific software for the Danish automotive industry. Datamann was founded in 1977 and has since then supplied industry-specific software to the Danish market.

Vitec acquires Infoeasy AS in Norway

In July Vitec also agreed to acquire 100 % of the Norwegian software company Infoeasy AS, whose product is industry-specific software for the Norwegian automotive industry. The business was built up during the 80's and has since then delivered industry-specific software to the Norwegian market.

HusmanHagberg chooses Vitec Express

In August Vitec signed a three-year contract with the HusmanHagberg real estate broker chain to provide the cloudbased real estate broker system Vitec Express.

Recruitment of Marketing Manager

Vitec has grown from a local company in Sweden to a Nordic software group. This bring challenges in branding and marketing, which is why a Marketing Manager has been recruited.

Maria Skogelid, Marketing Manager from September.

Vitec supplies Acute to Diacor

Vitec and the Finnish healthcare company Diacor have signed a contract for using the Acute electronic medical record system. Diacor has 13 highly modern medical centeres in the metropolitan area of Helsinki and one in Turku.

Vitec acquires Nice Norwegian Insurance Computer Environment AS (Nice AS)

In December Vitec agreed to acquire 100 % of the Norwegian software company Nice AS, whose product is industry-specific software for insurance companies in Norway, Denmark and Sweden. Nice has since 1987 focused on the development, implementation and operation of fully integrated system solutions for insurance companies.

"-All four acquisitions in 2015 have a business model and operations fully in line with our growth strategy. They are established companies with a niche product line of software for specific industries. Functions with clear synergies will be integrated into the Group, but from that it is important to disrupt the business as little as possible. They are well-managed companies that will continue their profitable operations." says Lars Eriksson M & A.

Vitec carries out a share split 5-for-1

The Extraordinary General Meeting of Vitec Software Group AB (publ) held in December resolved in a share split 5-for-1, meaning that each share is divided into five shares of the same class. As a result of the split, the total number of shares increased from 5,879,338 shares to 29,396,690 shares. The number of A shares increased from 800,000 shares to 4,000,000 shares and the number of B shares increased from 5,079,338 shares to 25,396,690 shares. The number of Class A shares increased from 800,000 shares to 4,000,000 shares, and the number of Class B shares increased from 5,079,338 shares to 25,396,690 shares.

A 30-year-old that is continues to grow

Vitec's 30th birthday was in May 2015. We celebrated with cake in all our offices and, on the same day, at the Annual Meeting. Other than that, things went on as usual.

All in all 2015 was a consistently strong year. All of our business areas performed better than in 2014, and for the first time the Group reported an operating profit in excess of SEK 100 million. The operating margin for 2015 was 16.3 per cent, which is the strongest in our history. Our business model, which aims for a high proportion of recurring revenue, is continuing to produce good results. Recurring revenue amounted to 78 per cent for the whole of 2015 as compared to 76 per cent for 2014. The high proportion of recurring revenue enables us to act long-term and to be consistent, while also providing capacity for absorbing temporary downturns in individual business areas.

Four acquisitions were made during 2015. All of them have done well and in line with our expectations. These acquisitions increased our geographic spread, with Sweden now accounting for less than 50 per cent of total revenues. They also improved our spreading of risks. Four of our seven business areas now have sales in excess of SEK 100 million, and no single business area makes up more than 30 per cent of the Group's revenue.

Vitec's growth is driven by acquisitions. Since 1998, we have acquired more than 25 profitable, solid, niche software companies, each of which has a significant proportion of recurring revenue. We intend to continue growing through acquisitions, focusing on the Nordic region. One important component of our continuing to make acquisitions is our ability to obtain financing. During the year we obtained a credit facility for SEK 250 million which runs for four years and is intended for acquisitions. This credit facility constitutes a substantial improvement in Vitec's financing capacity. It means that, together with the anticipated cash flow from our businesses, we will have some SEK 350 million available for new investments and acquisitions over the next four years.

STRONG PRICE TREND AND SHARE SPLIT

Vitec's share price has developed well for a long time. Vitec shares are now among the most "expensive" on the stock market, with a price above SEK 300 per share. As a result, the Board decided last autumn to split the shares so as to make trading easier. Each existing share was split into five new shares and all comparative key figures in this Annual Report have been converted to reflect that split.

INCREASED DIVIDEND – AGAIN

The proposed SEK 0.90 dividend for 2015 is an increase of 34 per cent over 2014. The dividend has thus increased for the fourteenth year in a row. Vitec's first dividend as a listed company, in 2002, was equivalent to SEK 0.05 per share. As our sales and profits have grown, we have been able to increase the dividend year after year.

SUSTAINABLE PROFITABLE GROWTH

Vitec's constant growth entails continual change in our operations and our organisation. Our strategic choices, along with the ability of our employees and our organisation to renew and to adapt, have led to profitable growth over the years. This has been true regardless of economic or interest rate situations. We are continuing along this path – working within specialised software niche markets in order to create sustainable and profitable growth!

Lars Stenlund, CEO

Strategy for sustainable and profitable growth

Vitec will continue along its fixed path: to operate in a number of independent and specialized niche markets in order to achieve sustainable and profitable growth.

Vision

To be a growth company in the mature part of the software industry.

Objective

To consolidate and professionalize vertical segments in the software industry.

Mission

Enabling customers to maximize their opportunities and to develop and secure their business through business-critical software.

Values

Our products are our bedrock. Industry-specific ERP systems. Making it easy. Simple solutions win out in the end. Transparency and trust. Collaboration and responsibility generate success.

FINANCIAL TARGETS

	Growth	Operating margin	Dividend policy
Targets	Sustainable and profitable growth.	Operating margin: target 15%	At least one-third of annual net profit should be distri buted to shareholders.
Outcome 2015	Growth 26%. Average value 2009-2015: 27% per year.	Operating margin: 16%.	Dividend SEK 0,90, pro posed by the Board, earn ings per share SEK 2,66.
Outcome five years	700 600 500 400 300 200 100 0 2011 2012 2013 2014 2015	20% 15% 10% 5% 0% 2011 2012 2013 2014 2015	3 2,5 2 1,5 1 0,5 0 2011 2012 2013 2014 2015
	Net sales, MSEK	Operating margin	Earnings per share, SEK

Strategy for sustainable and profitable growth

1 VERTICAL NICHES – INDUSTRY-SPECIFIC SOFTWARE

Our strategy is to operate within narrow, specialised niches where we can offer business-critical, standardised software for industry-specific needs (Vertical Market Software). We focus on sectors in the Nordic countries where our specific products can cost-effectively provide our customers with the optimum conditions to develop and safeguard their businesses. The vertical niches must fulfil the following criteria:

Proprietary software

Vitec acquires companies that are dominated by proprietary products and that consequently are not dependent on third-party suppliers to any great extent.

Few competitors

Suppliers of general software can only offer limited, less cost-effective systems for customers within our selected niche markets. Only a few small-scale suppliers offer industry-specific software.

Strong position on small markets

Vitec is striving to achieve a market-leading position in selected business niches, which produces important economies of scale.

High entry barriers

Our selected niche markets are characterised by a high degree of specialisation, where customers demand software products that have been developed for the sector's specific and partially unique needs. This presupposes business-critical software that often has a high return cost for the customer and long lead times in development. High demands for specialisation, together with a relatively small market segment, means that large investments are required for competitors who want to become established in the selected niches.

2 BUSINESS MODEL WITH HIGH PROPORTION OF RECURRING REVENUE

Our business model is based on a high proportion of recurring revenue, which provides us with stable and predictable cash flows. This creates the conditions to act in the long-term and we are less sensitive to temporary downturns within individual companies. An important precondition for our continued growth.

Developments are moving towards cloud-based services, where the software's functions are delivered over the Internet. This means that our offering is being extended to also encompass operation and storage. With a clear shift from traditional licensing to a subscription model (SaaS), the proportion of recurring revenue and the operating margin are increasing at the same time. For our customers, this means low investment costs and that costs for development, operation, maintenance, upgrading and support are included in the ongoing agreement. A secure overall offering at a known cost.

3 GROWTH DRIVEN BY ACQUISITIONS

Vitec has a pronounced growth strategy, where growth is principally achieved through the acquisition of mature software companies in the Nordic region. The acquisitions offer proprietary products that are specific to a particular industry, either within a niche where Vitec already has operations or in a new niche where we have the potential to achieve a market-leading position.

Our knowledge about the development, sale and support of software makes it possible for us to identify appropriate acquisition targets that are in line with our strategy. One decisive factor when making acquisitions is that our earnings per share must increase.

We are continually identifying and evaluating acquisition targets on the Nordic market. We constantly have around a 100 interesting niche software companies on our prospect list. As a result, the conditions for continued profitable acquisitions are good.

4 STRATEGY FOR BRANDS AND PRODUCTS

Our strategy when it comes to products and companies is that all operations within the Group must contribute to strengthening the Vitec brand. As a rule, this means that we place the name Vitec in front of the name of acquired companies, and gradually shift towards a logo and visual identity for Vitec. Acquisitions can mean that we offer different software with partially overlapping functionality. In such situations, we always manage acquired products without implementing any immediate changes. With recent developments, we are considering the possibility of creating new components that offer support to all product lines, in order to generate the greatest possible benefit for the customer. In this way, a process is initiated that future-proofs the products and creates a new, joint product line for all customers within that niche.

Our Business Areas

Vitec offers standardised, business-critical software to seven different sectors in the Nordic region. Each sector makes up a business areas, and our employees are dedicated and focused on the sector's specific needs and challenges. We are therefore able to offer our customers standardised products that are adapted to their particular industry-specific needs.

Business Area Estate Agents

Our industry-specific software supports estate agents in every phase of the business process. From the time the property comes in, through marketing, viewings and offers, to finally concluding the deal and signing the contract. The cloud-based business system provides the estate agent with the freedom to access the system easily from a mobile phone, tablet or computer. Any time, any place.

During the year, Vitec has acquired the company Fox Publish AS and its Swedish sister company Adservice AB. The companies offer modern software that is specifically developed for the production and publishing of the marketing material that estate agents need in their sales process.

In Sweden, the roll-out of Vitec Express has continued successfully, and the number of users has increased by 70 per cent during the year. In Norway, too, there is considerable demand for cloud-based business systems, and we have started working on the next generation of our product.

Our customers are estate agent chains and independent estate agents who offer everything from houses and co-operative apartments to commercial properties. Our customers in Norway include EiendomsMegler 1, DNB Eiendom and Eiendomsmegler Krogsveen. In Sweden, customers include Länsförsäkringar, HusmanHagberg, Bjurfors and Erik Olsson.

Total revenues in Business Area Estate Agents amounted to SEK 207.0 million, an increase of 11 per cent. Licence revenues increased by 102 per cent to SEK 5.6 million. Recurring revenue increased by 13 per cent to SEK 191.1 million, while service revenue decreased by 26 per cent to SEK 9.2 million. Recurring revenue as a proportion of sales stood at 92 per cent, while the operating margin was unchanged at 16 per cent.

BUSINESS AREA SALES.

Business Area Real Estate

Vitec offers industry-specific software for companies in the construction and real estate industry in Sweden. Our comprehensive business systems support and optimise our customers' main processes, such as leasing and sales, customer service, finance, technical management and energy monitoring.

This has been a successful year for the business area. For example, there has been a dramatic increase in demand for our product Vitec Hyra. In addition, the year's customer event has been well attended, and our customers have appreciated having the opportunity to both exchange knowledge and network in the sector.

The business area's customers are private and municipal construction and real estate companies. Almost 75 per cent of the largest companies on the Swedish market use several items of the business-critical software that Vitec develops specifically for the sector. These companies include PEAB, Fortifikationsverket, Rikshem, Botkyrkabyggen and Vasakronan.

Total revenues in Business Area Real Estate amounted to SEK 142.6 million, an increase of 6 per cent. Licence revenues decreased by 27 per cent to SEK 9.2 million. Recurring revenue increased by 9 per cent to SEK 82.0 million, while service revenue increased by 12 per cent to SEK 49.3 million. Recurring revenue as a proportion of sales stood at 58 per cent, while the operating margin increased to 17 per cent.

BOPLATS SVERIGE

Boplats Sverige is a joint online marketplace where municipal and private property owners can market their vacant rental apartments throughout Sweden. Vitec has developed unique software that makes it possible for real estate companies to publish vacant properties on Boplats Sverige quickly and easily. The marketplace is unique in its field, providing a broad overview of how many vacant rental apartments are available, where they are, what they cost and who is leasing them out. Boplats Sverige has developed positively during the year and 25 new property owners have signed up.

www.boplatssverige.se

12 %

24,9 MSEK +22 %

142,6 MSEK +6 %

OPERATING PROFIT Share of group

RECURRING REVENUES SHARE OF BUSINESS AREA SALES.

23 %

Business Area Finance & Insurance

Vitec offers industry-specific software for banks and insurance companies in the Nordic region.

In Denmark and Norway, our software for portfolio management, trading, order management and Corporate Treasury is renowned on the market. In Sweden, our software for pension calculations and mortgage calculations holds a market-leading position.

In 2015, a technology upgrade was performed for the PORTMAN product in Denmark, which has resulted in improved stability and performance. In Sweden, Länsförsäkringar Fondliv is one of our new customers. In December, Vitec acquired the Norwegian software company Nice AS, which offers industry-specific software for insurance companies in Norway, Denmark and Sweden.

Major customers in Denmark include BEC, Nordea, Nykredit and Danske Bank. Customers in Sweden include Nordea, Länsförsäkringar Fondliv and SEB. Eika and DNB two examples of our Norwegian customers.

Total revenues in Business Area Finance & Insurance amounted to SEK 101.2 million, an increase of 84 per cent. Licence revenues increased by 73 per cent to SEK 6.8 million. Recurring revenue increased by 83 per cent to SEK 77.2 million, while service revenue increased by 95 per cent to SEK 16.5 million. Recurring revenue as a proportion of sales stood at 76 per cent, while the operating margin increased to 14 per cent.

LINDA TYBRING BA Manager F & I Sweden

KIM ANDREASEN BA Manager F&I Denmark

DAG RAMBERG CEA Nice AS, acquired 2015

23 % 101,2 MSEK +84 % NET SALES Share of group

RECURRING REVENUES SHARE OF BUSINESS AREA SALES.

76 %

16 %

Business Area Auto

Vitec offers industry-specific software for the automotive industry in Denmark and Norway. This business-critical software supports work processes related to car sales, handling tyre centres and the distribution of car parts, for example. The products also have links to several different repair shop programs, facilitating car repair work by service workshops.

During 2015, Vitec acquired the companies Infoeasy AS in Norway and Datamann A/S in Denmark. Both of these companies offer industry-specific software for the car parts industry. The business system for car inspections in Norway has also been upgraded during the year.

Customers include importers, wholesalers, retailers and workshops offering services to the automotive industry. Our customers in Norway include Sørensen og Balchen, Mekonomen, Nettbuss and Vest Buss Gruppen. Customers in Denmark include Terminalen and Nelleman.

The two acquisitions within Business Area Auto have contributed to total revenues increasing by 151 per cent to SEK 71.1 million. Licence revenues increased from SEK 0 to SEK 0.5 million. Recurring revenue increased by 121 per cent to SEK 60.0 million, while services increased from SEK 0.5 million to SEK 7.1 million. Recurring revenue as a proportion of sales stood at 84 per cent, while the operating margin stood at 21 per cent.

16 % 71,1 MSEK +151 %

NET SALES Share of group

13 % 14,9 MSEK +282 %

84 %

12 %

RECURRING REVENUES SHARE OF BUSINESS AREA SALES.

Business Area Health

Vitec offers industry-specific software to companies working within healthcare in Finland. The products are cloud-based and support our customers' work with medical records, for example. The business systems from Vitec are the first cloud-based systems in the sector to handle E-archive, a national standard for electronic records. Our customers are principally group practices, hospitals, occupational healthcare, physiotherapy and rehabilitation centres. During 2015, we entered into an agreement with Diacor, which is a new and important customer. In addition, some of our biggest customers are the Finnish Student Health Service (FSHS), Orton, Tampere Municipality's occupational health service and Helsinki Municipality's occupational health service.

Total revenues in Business Area Health increased by 41 per cent to SEK 61.5 million. Recurring revenue increased by 36 per cent to SEK 48.3 million, while services increased by 71 per cent to SEK 12.1 million. However, licence revenues decreased by 59 per cent to SEK 0.3 million. Recurring revenue as a proportion of sales stood at 79 per cent, while the operating margin is unchanged at 9 per cent.

Business Area Energy

Vitec offers industry-specific software to energy companies and consultancy firms within the energy sector. For example, we develop advanced forecasting systems for electricity traders, as well as calculation & map systems for owners of electricity and district heating networks. 2015 has been a successful year for the business area, with several new customers around Europe. The geographic market comprises the Nordic countries, the Baltic states, the rest of Europe and the Middle East. Our customers include Fingrid, Vattenfall, E.ON and Svenska Kraftnät.

Total revenues in Business Area Energy amounted to SEK 24.1 million, an increase of 6 per cent. Recurring revenue increased by 8 per cent to SEK 17.3 million, while service revenue increased by 4 per cent to SEK 6.6 million. Recurring revenue as a proportion of sales stood at 72 per cent, while the operating margin increased to 37 per cent.

Business Area Media

Our industry-specific software has been developed to support the administrative processes in companies in the daily press. We also develop software for breweries and distribution companies. 2015 has entailed a reduction in sales, although also a clear improvement in profits for the business area. During the year, we have developed a new module which is a web-based tool for certifying supplier invoices. The largest customers are Åbro Bryggeri, Galatea Spirits and the MittMedia Group.

Total revenues in Business Area Media decreased by 52 per cent to SEK 10.5 million. Licence revenues decreased by 84 per cent to SEK 0.8 million. Recurring revenue decreased by 38 per cent to SEK 4.6 million, while service revenue decreased by 44 per cent to SEK 5.2 million. Recurring revenue as a proportion of sales stood at 44 per cent. However, the operating margin increased from 8 per cent to 23 per cent.

Employees who inspire and develop each other

Being an employee at Vitec is inspirational. The company is constantly growing, as are the opportunities for development within the framework of the Group.

SKILL SHARING

In 2015, we had approximately 450 employees around the Nordic region. Our employees are specialists in their respective business areas and with regard to their skills. However, there are also joint issues where we can benefit from the solid experience that exists in the Group. We have many good examples of value-creating exchanges between business areas and countries. In 2015, for example, extensive product design work was conducted within Business Area Real Estate. This was passed out into the Group, and now all the business areas can benefit from the work.

Within the Group, we also work with something we refer to as collegial levels, internal networks based on professional roles. For example, the development managers within our business areas meet a couple of times a year to exchange experiences and get to know each other better. New companies in the Group are invited along, thereby gaining access to important forums. The collegial levels for sales staff, product managers and marketing managers are in the starting blocks. These are areas that we believe will enjoy positive effects from contacts between different business areas and countries.

LEADERSHIP WITHIN VITEC

Experienced, secure managers are important for our success and for our corporate culture. Good managers help employees to grow, and ensure that the focus is on those tasks that create value. The managers are faced with similar issues and challenges, regardless of the country or operation. Within Vitec, we are constantly working with managerial development in various forms. We conduct annual Vitec Leadership Training with participants from the entire Nordic region. This relates to leadership based on values, where the lecturers are mainly individuals from the Group management. The training provides the participants with a good insight into what is expected of managers within Vitec. In addition, the Group management and participating managers have the opportunity to get to know each other better. Important networks are built and the conditions are created for inter-disciplinary contacts that benefit the entire Group. To make the managers' day-to-day work easier, readily accessible courses are available online, for example prior to development appraisals and salary reviews.

"For us coming from a small contractor-driven company, it feels exciting to be purchased by Vitec."

Helge Sundquist

COMPETENCE ASSURANCE

Vitec normally recruits between 20-30 people each year, and this is an important and difficult job. We have a fully worked-through approach that, as far as possible, ensures that we recruit the right people for the right positions. Our managers are often recruited internally, which means that we keep a look-out for individuals with leadership potential during most of our recruitments. Our employees gradually build their expertise and become increasingly valuable to us. It is therefore important to make the most of the opportunity when we can match an employee's skills and desire for development with a vacant position internally. In order to increase awareness of this throughout the Group, we conduct an annual process focusing on succession planning. We will continually develop and challenge our employees to ensure that new doors can be opened internally. This requires awareness, perseverance and creativity.

We also have to be able to adjust our size in line with events in the outside world. As a result, we have a clear changeover process that reduces uncertainty and facilitates the necessary decisions. Changes can be implemented

quickly, maintaining respect and consideration for employees who are affected. This means that changeovers are both time-efficient and cost-effective, which benefits all parties.

NEW ACQUISITIONS

During the year, we have welcomed 92 new employees through acquired companies in Denmark, Norway and Sweden. In order to create continuity and security during the initial period in the Group, the acquisitions initially report to the M&A function. During this period, the acquisition is prepared for integration through continual communication and a certain amount of synchronisation, mainly with regard to finance, IT and brand. In addition, an introduction – "Welcome to the Vitec Group" – is staged for all employees in the acquired company.

Helge Sundquist is the Sales and Marketing Manager at the Norwegian company Nice, which was acquired by Vitec in December 2015.

"For us coming from a small contractor-driven company, it feels exciting to be purchased by Vitec. Vitec has a clear strategy and long experience of running and developing companies like ours. We can also feel a little proud – we are so good that the listed company Vitec wanted to buy us!"

PREVENTIVE HEALTH CARE

Many of our employees have sedentary jobs. ActiVitec is our joint venture for inspiring movement and exercise. Each office has its own ActiVitec representative who co-ordinates joint voluntary activities. There are a wide variety of activities, including running, curling, yoga and valuable advice about pause gymnastics.

CONVERTIBLE PROGRAMMES

Through incentive programmes, Vitec offers its employees the opportunity to share in Vitec's growth in value. Convertibles have been selected as a tool to make it possible for employees in the company to share in the company's growth in value, at the same as minimising the risk that a negative price trend could entail. At present, there is an ongoing programme targeted at employees in the Group.

Jörgen Nordström is a developer within Business Area Real Estate in Umeå and has worked at Vitec since 1989.

"Working at Vitec in 2015 has been both exciting and challenging, with many new customers and wishes that have driven our products forward. Despite the fact that there has been a great deal to do at times for some developers and consultants, I feel that the atmosphere has been excellent. In my opinion, the convertible programmes and the rising share price are building on the positive atmosphere and the feeling of involvement."

"Working at Vitec in 2015 has been both exciting and challenging.

Jörgen Nordström

History

1985

Vitec was established in Umeå by research colleagues Olov Sandberg and Lars Stenlund, who were both working at the University of Umeå at the time. The company's first product was a program for monitoring energy usage in properties.

1990

Vitec moved to Uminova, the University of Umeå's business park, and the operation was scaled up. The company sought external financing and the Board of Directors was strengthened with external members.

1999

Vitec was listed on AktieTorget. A number of acquisitions of companies and product rights were conducted. The acquisitions gave Vitec a nationwide network of offices and strengthened the company's market position. Growth during 1997-1999 stood at 50%, 57% and 86% respectively.

2000

The company's sales exceeded SEK 40 million. During the period up to 2002, sales remained stationary, although profit levels improved as the company generated synergies. In the 2002 financial year, Vitec paid out a dividend for the first time, which was a unique phenomenon in the IT sector in Sweden in 2002 – the year when the IT bubble burst.

1995

The electricity market was deregulated at the same time as Vitec launched a product for detailed needs forecasts regarding electricity. The program quickly became the most widely used product among the companies buying and selling electricity on the newly launched electricity market, NordPool.

1998

Vitec was listed on Innovationsmarknaden. A public share issue was conducted that supplied the company with approximately SEK 10 million and 2,000 shareholders. A growth strategy was formulated, in which acquisitions were an important component for achieving volume and economies of scale more quickly.

2004

Vitec acquired the Västerås-based company Deva Invision AB. Vitec and Deva already had an established collaboration for the supply of Internet-based systems to the property sector.

The acquisition strategy was resumed and the business concept of wholly-owned software companies under the joint Vitec brand, with operations in clearly delimited niches, was further refined.

2005

The Group's third business area, Media, was established when Vitec acquired the Linköping-based company Veriba AB. The product was mainly targeted at newspaper publishers and Veriba was the largest player on the Swedish market.

In the autumn, the Linköpingbased company IBS Vertex was acquired, which was a subsidiary of IBS and one of Vitec's main competitors in the real estate sector. Through this acquisition, Vitec became by far the most dominant software supplier to the real estate sector, and the Group's turnover reached SEK 85 million.

2010

On 2 July 2010, Vitec acquired the software company Capitex AB, which supplied business systems to estate agents and new producers of housing, as well as pension calculation systems to banks and insurance companies.

The year was characterised by extremely high growth of 119 per cent, of which organic growth made up 11 per cent and acquisition-driven growth made up 108 per cent.

The organisation was expanded with Business Area Finance & Insurance.

2007

Vitec acquired the Gothenburg-based company Svensk FastighetsData, the largest supplier of software for estate agents in Sweden. With this acquisition, the fourth business area was created, Estate Agents, and Vitec achieved an annual turnover of approximately SEK 140 million.

2009

Vitec became the majority shareholder in the listed company 3L System AB (publ), a software company that, like Vitec, focused on supplying business systems to selected industries.

In December 2009, Vitec had 52.2 per cent of the votes and capital, which meant that 3L System was consolidated as a subsidiary in the Vitec Group as from 1 January 2010.

2011

On 4 July, Vitec was listed on Nasdaq Stockholm.

On 5 July, the Norwegian software company IT-Makeriet AS was acquired, which produced industry-specific business systems for estate agents in Norway.

2012

On 23 January, Vitec announced its intention to acquire the outstanding shares in the listed subsidiary company 3L System, and on 17 February a prospectus was published regarding a public purchase offer. The acquisition was conducted and 3L System was delisted from the First North exchange.

On 3 September, Vitec acquired the Norwegian software company Midas Data AS, which had products aimed at estate agents in Norway. On 5 October, Vitec sold the consultancy business in the USA to its only customer, The Berry Company, LLC.

2013

In March, Business Area Estate Agents was restructured in Sweden. This change was intended to reduce the general production of services and increase the focus on products. In June, a corresponding restructuring operation was performed in Business Area Estate Agents in Norway.

On 20 December, Vitec acquired the Finnish software company Acute FDS Oy, which offered SaaS-based products for electronic medical records handling to healthcare companies in Finland. Vitec took possession on 28 February 2014, acquiring a turnover of approximately EUR 5.3 million. Business Area Health was established.

2014

Vitec established its seventh business area, Auto, with the acquisition of the Norwegian software company Auto-Data Norge AS. The company's programs are targeted at the Norwegian car parts industry.

In June, Vitec acquired the Danish company Aloc A/S, whose products are targeted at the finance and insurance sector.

The share and the shareholders

Vitec Software Group's Class B shares are listed on Nasdaq Stockholm, in the Small Cap segment, under the ticker VIT B. In 2015, Vitec shares were traded at a total value of SEK 418.3 million. The average daily trading volume was 7,305 shares with a value of SEK 1,717 thousand, and during the year 35.4 per cent of the total amount of shares were traded. The closing price for the Vitec share was SEK 75.00, while in 2014 it was SEK 26.50. During the year, the highest price paid was SEK 75.00 on 28 and 30 December and the lowest was SEK 25.85 on 7 January.

On 31 December 2015, the total number of shares of Vitec was 29,396,690, of which 4,000,000 are Class A shares and 25,396,690 are Class B shares.

A pre-emption clause exists for the Class A shares.

The share capital amounts to SEK 2.9 million and the nominal value is SEK 0.10 per share.

A 5-for-1 share split, meaning that each share is divided into five shares of the same class, was completed during the fourth quarter. After the end of the financial year, 500,000 Class A shares have been converted into Class B shares, according to split conditions mentioned in the Articles of Association, §5 Share Class. The market value of the issued shares at the end of the year was SEK 2,204.8 million.

STOCK MARKET

Vitec's Class B shares are listed on Nasdaq Stockholm, in the Small Cap segment, under the ticker VIT B and ISIN code SE0000514630. The minimum trade is one (1) Class B share.

SHAREHOLDER INFORMATION

Vitec aims to provide consistent, detailed and timely information about the Group's development and financial position to shareholders and the stock market. Information is provided in the form of continuous reports, year-end reports, annual reports, interim reports, press releases and decisions at the Annual General Meeting. All reports are published in Swedish and in English through GlobeNewswire (Nasdaq Stockholm's press release service) and at www.vitecsoftware.com.

Interim reports are distributed in printed form to registered shareholders who have requested this. Reports in printed form can be ordered via [email protected].

ANALYSES OF VITEC

During the year, Vitec has been monitored by Remium, www.remium.com.

SHARE PRICE AND TURNOVER 2011-2015

OWNERSHIP STRUCTURE

Ownership structure and the number of shares owned by the Board, to the best of Vitec's knowledge, as at December 31, 2015. The number of shareholders stood at 2,915 on December 31, 2015.

	No. of Class A shares	No. of	Class B shares Share capital % Voting rights %
Lars Stenlund*	1 820 000	326 280	7,3	28,3
Olov Sandberg*	1 820 000	124 565	6,6	28,0
Jerker Vallbo*	360 000	138 405	1,7	5,7
Thomas Eklund		1 746 440	5,9	2,7
SBB and Trust, Boston		1 536 315	5,2	2,3
Grenspecialisten Förvaltning AB		1 161 135	3,9	1,8
Nils-Eric Öquist		965 815	3,3	1,5
Fidelity Low-Priced Stock Fund		950 500	3,2	1,5
NCT Exempt ACC US pension fund		854 765	2,9	1,3
SEB Sverigefond småbolag		805 035	2,7	1,2
Other shareholders		16 787 435	57,3	25,7
*includes family and/or ownership through companies.	4 000 000	25 396 690	100,0	100,0

OWNERSHIP STRUCTURE

Holding	No. of shareholders	No. of Class A shares	No. of Class B shares		Holding % Voting rights %	Market value (SEK)
1-500	1 400		297 328	1,0	0,5	22 300
501-1 000	431		372 447	1,3	0,6	27 934
1 001-5 000	752		1 823 587	6,2	2,8	136 769
5 001-10 000	134		1 025 274	3,5	1,6	76 896
10 001-15 000	42		535 831	1,8	0,8	40 187
15 001-20 000	27		471 870	1,6	0,7	35 390
20 001-	129	4 000 000	20 870 353	84,6	93,0	1 865 276
Total 31/12/2015	2 915	4 000 000	25 396 690	100,0	100,0	2 204 752

SHARE CAPITAL DEVELOPMENT

Year	Transaction	Total share capital	Total no. of Class A shares	Total no. of Class B shares
1985	Company founded	50 000	500	-
1990	Bonus issue	100 000	1 000	-
1990	New issue	156 000	1 160	400
1995	New issue	164 000	1 160	480
1997	Bonus issue/split	328 000	23 200	9 600
1997	New issue	340 000	23 200	10 800
1997	Split	340 000	4 640 000	2 160 000
1997	Conversion of Class A shares	340 000	4 000 000	2 800 000
1997	Bonus issue	850 000	10 000 000	7 000 000
1997	New issue	900 000	10 000 000	8 000 000
1998	New issue	1 500 000	10 000 000	20 000 000
1998	New issue	1 641 000	10 000 000	22 820 000
1999	Consolidation	1 641 000	1 000 000	2 282 000
2000	New issue	1 732 000	1 000 000	2 464 000
2004	New issue	1 786 100	1 000 000	2 572 200
2007	New issue	1 808 000	1 000 000	2 616 000
2008	New issue	1 883 000	1 000 000	2 766 000
2008	Conversion	1 883 000	800 000	2 966 000
2009	New issue	1 916 350	800 000	3 032 700
2010	New issue	2 125 725	800 000	3 451 450
2011	New issue	2 183 538	800 000	3 567 075
2012	New issue	2 574 164	800 000	4 348 327
2013	New issue	2 654 164	800 000	4 508 327
2014	New issue	2 674 164	800 000	4 548 327
2014	New issue	2 899 164	800 000	4 998 327
2014	New issue	2 939 669	800 000	5 079 338
2015	Split	2 939 669	4 000 000	25 396 690
	Total	2 939 669	4 000 000	25 396 690

KEY FIGURES

		2015	2014	2013	2012	2011
Adjusted equity per share	(SEK)	9,24	8,85	6,39	5,92	5,36
Earnings per share	(SEK)	2,66	1,75	1,16	1,30	1,21
Earnings per share after dilution	(SEK)	2,64	1,68	1,09	1,16	1,04
Paid dividends per share	(SEK)	0,67	0,55	0,50	0,40	0,25
Cash flow per share	(SEK)	5,28	4,40	1,97	2,25	2,17
P/E ratio		28,20	15,13	15,31	10,89	9,75
P/Adjusted equity		8,12	2,99	2,77	2,33	2,08

GEOGRAPHICAL OWNERSHIP BREAKDOWN

Holding	Holding (%)
Sweden	75
Europe (Sweden excluded)	7
USA	11
Other countries	7
Total 31/12/2015	100

DEVELOPMENT FOREIGN OWNERSHIP

Directors' Report

with its registered office in Umeå, hereby submit the annual report and consolidated accounts for the 2015 financial year.

All amounts are reported in thousands of kronor (SEK th) unless otherwise indicated. Information in brackets refers to the previous year.

This English version of the annual report is a translation of the original Swedish version. In the event of variances, the Swedish version shall take precedence over the English translation.

THE BUSINESS

²⁸ VITEC ^| Annual Report ²⁰¹⁵ The Board of Directors and the CEO of Vitec Software Group AB (publ), Vitec is a software manufacturer that designs industry-specific business applications for the Nordic market. The company, with operations in Sweden, Norway, Finland and Denmark, is growing in the mature part of the software industry by consolidating vertical software segments. Our customers include estate agents, construction firms, real estate companies, banks, insurance companies, energy providers, healthcare providers, car part dealers and newspaper publishers.

The Group's 450 employees generate annual sales of SEK 630 million. The Vitec share is quoted on the Nasdaq Stockholm Exchange.

Business Area Estate Agents Business systems for estate agents.
Business Area Real Estate Business systems for construction and real estate companies.
Business Area Media Business systems for newspaper publishers and companies supplying special solutions within distribution.
Business Area Energy Business systems for forecasting wind power, electricity and heating needs, as well as for the technical management and maintenance of distribution networks.
Business Area Health Business systems for electronic handling of medical records for healthcare.
Business Area Auto Business systems for the automotive sector with support for sales, purchasing, stock control, invoicing, accounting and pay administration.
Business Area Finance & Insurance Business systems for the finance and insurance industry, as well as standardised software for tax calculations, pension calculations and housing calculations.

Vitec has a growth-oriented strategy and is constantly on the lookout for new acquisitions. The objective is to be the market leader within the niche markets in which Vitec operates. The current market is made up of Sweden at 49.8 per cent, Norway 23.0 per cent, Denmark 16.1 per cent, Finland 10.4 per cent and other countries 0.7 per cent.

NET SALES AND RESULTS

The Group's net sales totalled SEK 618.4 million (492.0) in 2015, an increase of 26 per cent compared to 2014. The increased net sales can mainly be attributed to the acquisitions within the Auto and Finance & Insurance business areas. Approximately 2 per cent of the increase is made up of organic growth.

Operating profit amounted to SEK 100.6 million (68.6), which corresponded to an operating margin of 16 per cent (14). The operating profit included depreciation and impairments totalling SEK 85.8 million (56.3).

Net financial items were negative, amounting to SEK -5.9 million

(-4.0). Financial income amounted to SEK 0.8 million (1.5) and principally comprised interest on investments in money market funds. Financial expense amounted to SEK -6.7 million (-5.6) and comprised interest on credit facilities and convertible bonds.

Profit for the year after tax amounted to SEK 78.2 million (49.1), of which SEK 78.2 million (49.1) was attributable to the Parent Company's shareholders.

DEVELOPMENT OF BUSINESS AREAS*

The Group's operations are organised in and controlled from the segments (business areas) Estate Agents, Real Estate, Media, Energy, Health, Auto and Finance & Insurance.

SEK m	External sales		Growth %	Operating pro after acquisi	fit before and tion related costs	Operating mar gin before and after acquisi tion related costs %
	2015	2014	2015	2015	2014	2015	2014
BA Estate Agent	207,0	185,8	11	33,2	29,4	16	16
BA Real Estate	142,6	134,3	6	24,9	20,5	17	15
BA Media	10,5	21,8	-52	2,4	1,7	23	8
BA Energy	24,1	22,7	6	8,8	7,0	37	31
BA Health	61,5	43,6	41	5,7	3,8	9	9
BA Auto	71,1	28,3	151	14,9	3,9	21	14
BA Finance & Insurance	101,2	55,0	84	13,9	6,3	14	11
Shared	0,4	0,5	-20	-	-	0	0
Vitec Group	618,4	492,0	26	103,9	72,7	17	15
Acquisition-related costs				-3,2	-4,1
Operating profit after acquisition-related costs				100,6	68,6	16	14

*Due to non-recurring acquisition related costs, development is difficult to follow. For this reason, the operating profit above is described before and after acquisition related costs.

Business Area Estate Agents

This business area includes Vitec Mäklarsystem AB, Capitex AB, Vitec IT-Makeriet AS, the Group Vitec Midas AS, Fox Publish AS and ADservice Scandinavia AB. Total revenues amounted to SEK 207.0 million (185.8), an increase of 11 per cent. Licence revenues increased by 102 per cent to SEK 5.6 million. Recurring revenues increased by 13 per cent to SEK 191.1 million. Service revenues decreased by 26 per cent to SEK 9.2 million. Recurring revenue as a proportion of sales stood at 92 per cent (91). The operating margin was unchanged and stood at 16 per cent (16).

Business Area Property Management

This business area includes Vitec Förvaltningssystem AB, Vitec Fastighetssystem AB, Vitec Capifast AB, Vitec Software AB and Vitec AB. Total revenues amounted to SEK 142.6 million (134.3), an increase of 6 per cent. Licence revenues decreased by 27 per cent to SEK 9.2 million. Recurring revenues increased by 9 per cent to SEK 82.0 million. Service revenues increased by 12 per cent to SEK 49.3 million. Recurring revenue as a proportion of sales stood at 58 per cent (56). The operating margin increased to 17 per cent (15).

Business Area Media

This business area includes Vitec Veriba AB, Retail i Linköping AB and 3L Media AB. Total revenues amounted to SEK 10.5 million (21.8), a decrease of 52 per cent. Licence revenues decreased by 84 per cent to SEK 0.8 million. The sales figure for Jan-Dec 2014 included a one-time sale of a software license to Eniro. From a results perspective, the one-time sale entailed a zero result as the goodwill entry in Business Area Media was impaired by SEK 4.8 million. Recurring revenues decreased by 38 per cent to SEK 4.6 million. Service revenues decreased by 44 per cent to SEK 5.2 million. Recurring revenue as a proportion of sales stood at 44 per cent (34). The operating margin increased to 23 per cent (8).

Business Area Energy

This business area comprises Vitec Energy AB. Total revenues amounted to SEK 24.1 million (22.7), an increase of 6 per cent. Recurring revenues increased by 8 per cent to SEK 17.3 million. Service revenues increased by 4 per cent to SEK 6.6 million. Recurring revenue as a proportion of sales stood at 72 per cent (71). The operating margin increased to 37 per cent (31).

Business Area Health

This business area comprises the Group AcuVitec Oy. Total revenues amounted to SEK 61.5 million (43.6), an increase of 41 per cent. Licence revenues decreased by 59 per cent to SEK 0.3 million (0.6). Recurring revenue increased by 36 per cent to SEK 48.3 million (35.6), while services increased by 71 per cent to SEK 12.1 million (7.1). Recurring revenue as a proportion of sales stood at 79 per cent (82). The operating margin stood at 9 per cent (9).

Business Area Auto

This business area comprises Autodata AS, as well as Datamann A/S from 1 July 2015 and Infoeasy AS from 2 July 2015. Total revenues amounted to SEK 71.1 million (28.3). Licence revenues increased to SEK 0.5 million (0). Recurring revenue increased by 121 per cent to SEK 60.0 million (27.1), while services increased by 1,444 per cent to SEK 7.1 million (0.5). Recurring revenue as a proportion of sales stood at 84 per cent (96). The operating margin stood at 21 per cent (14).

Business Area Finance & Insurance

The business area includes Vitec Capitex AB, the Group Aloc A/S and, from 7 December 2015, Nice AS. Total revenues amounted to SEK 101.2 million (55.0), an increase of 84 per cent. Licence revenues increased by 73 per cent to SEK 6.8 million. Recurring revenues increased by 83 per cent to SEK 77.2 million. Service revenues increased by 95 per cent to SEK 16.5 million. Recurring revenue as a proportion of sales stood at 76 per cent (77). The operating margin increased to 14 per cent (11). The operations within Aloc A/S were consolidated in the business area as from 30 June 2014 and are the reason behind the dramatic growth.

ACQUISITIONS AND CHANGES TO THE LEGAL STRUC-TURE DURING 2015.

Four acquisitions were conducted during 2015, resulting in changes to the legal structure. On 1 March, Fox Publish AS and ADservice Scandinavia AB were consolidated. The Danish company Datamann A/S was consolidated on 1 July, and the Norwegian company Infoeasy AS on 2 July. On 7 December, Norwegian Insurance Computer Environment AS (Nice AS) was consolidated. A new company, Vitec Megler AB, was established in December. This company is a subsidiary of Vitec Midas AS.

OBJECTIVES

Vitec has a growth-oriented strategy and is constantly on the lookout for new acquisitions. Historic growth has amounted to 27 per cent per year on average. The Board of Directors has set the goal of achieving an operating margin of 15 per cent and to continue the work of focusing on continual growth.

OUTCOME

%	Average value
	2011-2015	2011	2012	2013	2014	2015
Growth	15	15	8	-5	32	26
Operating margin	13	11	11	11	14	16

IMPORTANT EVENTS IN 2015 Q1

Vitec reduces dilution by redeemed convertible

Vitec signs multiannual contract with Länsförsäkringar

Vitec acquires Norwegian Fox Publish AS

Q2

New Manager of Business Area Estate Agents in Norway

Svein Roger Westengen, Manager of Business Area Auto in Norway is since April also Manager of Business Area Estate Agents in Norway, succeeding Erik Hansen.

Cost-cutting program in Business Area Estate Agents

Vitec has signed a SEK 250 revolving credit facility for acquisitions In addition to existing credit facilities Vitec signed a SEK 250 million revolving credit facility with the bank Nordea in June. The agreement has a term of four years and the credit can be called up gradually. Through the acquisition credit facility of SEK 250 million, we have secured capital that will allow us to continue the strategic plan to grow through acquisitions of vertical market software companies

Q3

Vitec acquires Datamann A/S in Denmark

In July Vitec agreed to acquire 100 % of the Danish software company Datamann A/S, whose main product is

industry-specific software for the Danish automotive industry. Datamann was founded in 1977 and has since then supplied industry-specific software to the Danish market.

Vitec acquires Infoeasy AS in Norway

Recruitment of Marketing Manager

Vitec has grown from a local company in Sweden to a Nordic software group. This bring challenges in branding and marketing, which is why a Marketing Manager has been recruited.

HusmanHagberg chooses Vitec Express

In August Vitec signed a three-year contract with the HusmanHagberg

real estate broker chain to provide the cloud-based real estate broker system Vitec Express.

Q4

Vitec supplies Acute to Diacor

Vitec acquires Nice Norwegian Insurance Computer Environment AS (Nice AS)

Vitec carries out a share split 5-for-1

The Extraordinary General Meeting of Vitec Software Group AB (publ) held in December resolved in a share split 5-for-1, meaning that each share is divided into five shares of the same class. As a result of the split, the total number of shares increased from 5,879,338 shares to 29,396,690 shares. The number of A shares increased from 800,000 shares to 4,000,000 shares and the number of B shares increased from 5,079,338 shares to 25,396,690 shares.The number of Class A shares increased from 800,000 shares to 4,000,000 shares, and the number of Class B shares increased from 5,079,338 shares to 25,396,690 shares.

SIGNIFICANT EVENTS AFTER THE END OF THE PERIOD Pressmeddelanden 2016

February: New Head of Business Area Real Estate

Magnus Persson is from February 1 the new head of Vitec Business Area Real Estate. Magnus, former Director of Sales in the business area is succeeding Johan Kull who after almost four years leaves for a new position within the parent company, Vitec Software Group AB (publ).

February: Reclassification of Class A shares into Class B shares

Vitec Software Group AB (publ) today announced that owners of 500 000 A shares of Vitec have converted class A shares to class B shares in accordance with the conversion clause set out in the Articles of Association § 5 Classes of shares. After conversion, the number of A shares of Vitec will amount to 3,500,000 shares while the number of B shares will amount to 25,896,690 shares. The total number of shares of Vitec, including both A and B shares is unchanged at 29,396,690 shares.

February: Nordea Small Cap Fund increases in Vitec

Vitec's principal owners Olov Sandberg and Lars Stenlund, who earlier today announced that they together reclassified 500,000 A-shares to B-shares now announces that they have sold all of these B shares to Nordea Small Cap Fund Sweden and Nordea Small Cap Fund Nordic.

March: New Head of Business Area Health

Janne Vainio is from March 14 new Director of Vitec Business Area Health. Janne has 15 years within the business, the last years as account director, and he is well versed in the industry and in customer needs. Former Director Ilari Laaksonen will move forward to a different position in the Vitec Group but continue to work close to Janne in the organization.

LIQUIDITY, CASH FLOW AND FINANCIAL STATUS

The Group's cash and cash equivalents, including short-term investments, amounted to SEK 60.3 million (71.1) at the end of the period. In addition to these cash and cash equivalents there was a bank overdraft facility of SEK 20 million, and SEK 172.1 million as an unused portion of a credit facility totalling SEK 250 million.

Cash flow from operating activities was SEK 140.3 million (129.3).
Cash flow from investment activities stood at SEK -168.1 million (-209.1), distributed between the change in long-term receivables at SEK -0.5 million, the acquisition of subsidiaries at SEK -85.6 million (-148.5), intangible assets including capitalised work at SEK -70.2 million (-49.8) and investments in tangible assets at SEK -11.8 million (-10.8).
The cash flow from financing activities amounted to SEK 11.9 million (129.6), distributed between new bank loans at SEK 102.9 million (148.2), the redemption of convertible loans at SEK -36.8 million, dividends at SEK -19.7 million (-14.6) and amortisation at SEK -34.5 million (-63.9). In the previous year there was also a convertible programme for employees (14.1) and a new share issue (45.8).

Total interest-bearing liabilities amounted to SEK 241.1 million (191.9) on 31 December 2015, distributed between long-term interest-bearing liabilities at SEK 207.2 million (132.6) and short-term interest-bearing liabilities at SEK 33.9 million (59.3) During the year, a new loan has been taken out with Norrlandsfonden at a value of SEK 25.0 million. In connection with this, a convertible loan from Norrrlandsfonden was resolved in the amount of SEK 36.8 million. In conjunction with the acquisition of Datamann A/S, SEK 54.9 million was used from the credit facility. In conjunction with the acquisition of Nice AS, SEK 23.0 million was used from the credit facility. The Group's net interest-bearing assets and interest-bearing liabilities amounted to SEK -180.8 million (-120.8)

Vitec has implemented a 5-for-1 share split, which means that each previous share has been split into five shares of the same class. After the split, the total number of shares in the company has increased from 5,879,338 shares to 29,396,690 shares.

Equity attributable to Vitec's shareholders amounted to SEK 271.6 million (260.1). The equity ratio was 31 per cent (34). The payment of dividends after the Annual General Meeting in May 2015 amounted to SEK 0.67 per share, totalling SEK 19.7 million.

INVESTMENTS

Investments amounted to SEK 70.2 million in intangible assets, distributed between software and product rights at SEK 4.6 million and capitalised work at SEK 65.6 million, as well as SEK 11.8 million in tangible assets. Through the acquisitions of Fox Publish AS, ADservice Scandinavia AB, Datamann A/S, Infoeasy AS and Nice AS, SEK 123.7 million was invested in product rights, brands, customer contracts and goodwill.

RESEARCH AND DEVELOPMENT

Vitec develops and supplies niche-oriented software and Internet services. An aggressive development operation is an essential part of our strategy and a condition for long-term survival. Strategically focused development strengthens the existing operation and makes it possible for new products and services to be launched. This development comprises ongoing improvements within existing product areas. These improvements will benefit existing customers via maintenance agreements and SaaS agreements.

INTANGIBLE ASSETS

The Group's intangible assets comprise goodwill, product rights, brands and customer contracts that arise through acquisitions as well as capitalised development work and software. As at 31 December 2015, the reported value of goodwill stood at SEK 202.1 million (190.9), product rights SEK 229.1 million (197.8), capitalised development costs SEK 109.2 million (76.6), customer contracts SEK 62.3 million (47.9) and brands SEK 8.8 million (7.8).

EQUITY

Consolidated shareholders' equity as at 31 December 2015 amounted to SEK 271.6 million (260.1). Equity attributable to shareholders amounted to SEK 271.6 million (260.1).

During the fourth quarter, the company implemented a 5-for-1 share split, which means that each previous share has been split into five shares of the same class. After the split, the total number of shares in the company has increased from 5,879,338 shares to 29,396,690 shares. The number of Class A shares has increased from 800,000 shares to 4,000,000 shares, and the number of Class B shares from 5,079,338 shares to 25,396,690 shares.

As at 31 December, there was an ongoing convertible programme totalling SEK 13.5 million, which can be converted to a maximum of 442,210 Class B shares and increase the share capital by SEK 0.04 million.

EMPLOYEES

During 2015, Vitec had an average of 422 employees (344), of whom 112 (101) were women. At the end of the year, the number of employees totalled 433 (393).

INFORMATION ABOUT NON-FINANCIAL PROFIT INDICATORS

The Group has a shared IT infrastructure where all employees have access to the same basic internal Group information. The structure includes tools for electronic communication. The shared IT infrastructure has an economic impact through increased efficiency, an environmental impact through reduced travel and a social impact through an increased sense of belonging to a team. Newly acquired companies are brought into the IT infrastructure as soon as possible.

The health and fitness venture ActiVitec has continued during 2015. Health-promoting activities have been arranged at all offices in Sweden, both with and without elements of physical activity. This has been positively supported, and our employees have become more and more health aware. Good habits, balance in life and health are important cornerstones of the culture within Vitec. Examples of activities in 2015 include:

Food lectures with employees and customers
Health bingo
Spin of Hope for the Swedish Childhood Cancer Foundation
Participation in locally arranged races
Cycle Wednesday
Boxercise
Lunchtime walks

There are several collegial forums within the Group, i.e. internal networks based on our professional roles. In these it is possible to exchange experiences and spread Vitec's culture.

THE PARENT COMPANY

The Parent Company's net sales amounted to SEK 66.8 million (54.9) and essentially comprised invoicing to subsidiary companies for executed intra-Group services in the form of premises, data communication and telephony, financial reporting, HR and management/business development. Profit after tax amounted to SEK 54.4 million (31.5), including anticipated dividends from subsidiaries.

The Parent Company's cash and cash equivalents amounted to SEK 45.3 million (65.8). Cash and cash equivalents comprise a Group currency account where the Parent company has the highest level account in relation to the bank. The subsidiaries' cash and cash equivalents consequently comprise receivables/liabilities in relation to the Parent Company. The Parent Company has a bank overdraft facility of SEK 20 million (20) and a credit facility for acquisitions of SEK 250 million, of which SEK 172.1 million was unused on the balance sheet date.

Investments amounted to SEK 1.6 million (2.0) in intangible assets, SEK 0.8 million (5.2) in tangible assets and SEK 123.8 million (231.8) in shares in subsidiaries. The value of shares in subsidiaries has been adjusted down by SEK 11.2 million during the year, in respect of the downward adjustment of the conditional purchase price for AcuVitec Oy. Shortterm, non-interest bearing liabilities have decreased to a corresponding extent.

Long-term interest-bearing liabilities amounted to SEK 207.2 million (130.3) in the form of convertible debentures at SEK 13.5 million (13.2) and bank loans at SEK 193.7 million (114.5). In the previous year there was a vendor note in respect of the Aloc acquisition for SEK 2.6 million. Short-term interest-bearing liabilities amounted to SEK 33.3 million (59.3) in the form of convertible debentures at SEK 0 million (9.6), bank loans at SEK 33.3 million (47.1) and a vendor note in respect of the Aloc acquisition at SEK 0 million (2.6). During the year, new loans have been taken out at a value of SEK 102.9 million.

In May, a share dividend of SEK 19.7 million (14.6) was paid out.

RISKS AND UNCERTAINTIES

Through its operations, the Group is exposed to various risks, both in the form of risks in the business and in the form of financial risks. Below is a description of the most critical factors.

Business-related risks

Employees and recruitment

The Group is heavily dependent on skilled labour and specialist expertise. By being a modern employer that provides the opportunity for interesting work duties, flexible working hours, preventive health care, supplementary salary in the event of parental leave, development and career opportunities within the Group, etc., Vitec is able to attract and retain qualified employees. However, there is a risk that this will not be able to take place on acceptable terms, despite market-level remuneration, as there is stiff competition for experienced employees from other software and product development companies. Thanks to the Group's geographic spread, various positions can be located based on conditions on the labour market in various locations around Sweden and the Nordic region.

Customer-dependence

Vitec has entered into agreements with a large number of customers. The Board of Vitec considers that the Group is not dependent to a decisive extent on any one single customer. However, the customer structure can be more or less concentrated within the Group's various business areas. Within Business Area Estate Agents, there are individual major customers as well as framework agreements with customers on behalf of franchisees, which mean that customer-dependence can be considered higher than for the Group as a whole. No single customer is responsible for more than 10 per cent of the Group's sales.

Supplier-dependence

Vitec purchases bandwidth from telecom operators. These telecom operators are important for Vitec being able to run its business. Vitec also purchases support services that are integrated in the business systems, and such support services mainly comprise property-related information or the transfer of such information by text message. Vitec has alternative supplier solutions, but despite this is dependent on its suppliers' delivery reliability in order to avoid operational disruptions that could entail negative consequences for profit and financial status.

IT infrastructure

The IT infrastructure in the Group is centralised. Considerable emphasis is placed on organisation and prevention in respect of this infrastructure, as operational stoppages can entail negative consequences for profit and financial status. The operation of the IT infrastructure is secured through redundancy and the geographic spreading of risks. An operational disruption procedure has been adopted by the Group management. In this, processes and information pathways have been determined in order to manage operational disruptions and disaster recovery. Training exercises are conducted once a year.

Acquisition and integration of implemented acquisitions

Vitec has conducted a number of acquisitions over the years. To varying extents, acquisition situations always entail risks that can have significant negative effects for the acquiring party. Risks linked to acquisitions include financial, legal and operational risks. There are many financial risks, but one particularly significant risk is the risk of paying too high a purchase sum. There are also risks that arise when financing the purchase sum, which can involve taking out or taking over an interest-bearing loan that adversely impacts on the Group's profit and financial status. There are many legal risks, but one particularly high risk is linked to the assumption of liability for the acquired company's or the acquired asset's commitments and historic operations, as well as the tax situation.

The operational risks largely relate to integrating the acquired company or asset while retaining profitability. There are no guarantees that the prior anticipated positive operational or financial effects that normally give rise to an acquisition will actually be realised, or that it will not result in a negative impact on the Group's profits and financial status. Neither is there any guarantee that the Group's implemented acquisitions will result in positive effects for the Group. An assessment of the need for impairment is performed annually for acquired goodwill, brands and product rights. If these are not considered to have been correctly valued during such an assessment, this can result in an impairment, which could have a negative impact on results.

Investments in product development

Every year, Vitec invests significant resources in the development of new and existing products, which is a precondition for Vitec continuing to supply competitive business and operational systems.

It is extremely important for Vitec to be able to finance and achieve a return on the results of its product development. In order to plan, implement and follow up the Group's product development more successfully, the Group has a product investment plan that is adopted in the budget process each year and followed up monthly for each business area.

Fixed price projects

The business areas within the Group occasionally enter into agreements with customers regarding undertakings in project form at a predetermined fixed price, known as fixed price projects. Fixed price projects can result in significant losses if the work resources actually used exceed the work resources that were estimated to be required at the time of the tender. Companies in the Group may continue to take on fixed price projects, and there are no guarantees that such fixed price projects will not result in losses, which can have a negative impact on the Group's profits and financial status.

Industry and market-related risks

Economic situation

The Group's development and financial status are partially dependent on outside factors over which Vitec has no influence, such as the general economic situation, its customers' market conditions and the occurrence of new, competing products and services. Vitec offers operational systems that are often central and prioritised by customers. However, both the renewal of licence agreements and new sales are affected by the commercial sector in general reducing its investments during economic downturns. Future economic downturns can consequently have a negative effect on the Group's operations, growth, profits and financial status.

Technical development

Technical and market development are ever-present within the software industry. It is important for Vitec to be able to predict changes in our customers' needs and adapt our offer accordingly if we are to continue to develop according to plan.

Intellectual property rights

Development-intensive software companies always run the risk of new or existing competitors copying developed solutions. For this reason, Vitec stores source codes for proprietary and acquired software in a secure manner.

Product liability

Any faults that may arise in the products could lead to claims for liability and damages. In projects relating to processes that are vital for our customers, test runs are performed in test environments at the customer before the start of production. Vitec also offers test operation in certain cases. All the companies in the Group have current insurance cover in respect of product liability, so the direct risk is limited.

Other disputes

Disputes can arise in all commercial operations, for example as a result of parties' differing perceptions as regards liability, interpretations of liability, etc. As far as possible, Vitec employs industry-standard agreements with fines up to a limited amount. Major agreements that deviate from the standard are approved by the Group management and/or the Board of the Parent Company, along with insurance and legal experts. Vitec or its subsidiaries are currently not involved in any disputes, legal processes or arbitration processes.

Financial risks

Vitec's exposure to financial risks and the handling of such risks is described in Note 20.

Sensitivity analysis

Below is a presentation of how profit and earnings per share are altered by various factors.

Vitec purchases services, subscriptions and statistical information from external suppliers to the value of SEK 82.9 million annually. A change of 1 per cent would affect profits by around SEK 0.6 millon.
Staff costs represent the largest cost item in the Group, amounting to SEK 336.1 million. A change of 1 per cent would affect profits by around SEK 2.6 millon.
Acquisitions are financed to a large extent by loans from banks or through convertible bonds. The interest rate is often variable. A change to the interest rate of one percentage point for existing interest-bearing liabilities as at 31/12/2015 would affect profits by SEK 3.3 million.
Vitec's involvement in foreign subsidiaries is increasing, which entails increased currency and translation risks. The Group's current structure entails currency exposure in Norwegian kroner, Danish kroner and in relation to the euro. A 5 per cent change to the exchange rate for these currencies this year would have affected the Group's profits by approx. SEK 0.191 million.

	Impact on profit, SEK th			Impact on profit, SEK/share
Influencing factors	Change, %	2015	2014	2015	2014
Subcontractors and subscriptions	+/- 1	633	665	0.02	0.02
Staff costs	+/- 1	2,570	2,757	0.09	0.10
Loan interest (change percentage point on loan interest)	+/- 1	3,327	1,919	0.11	0.07
Exchange rate change NOK, DKK and EUR	+/- 5	191	184	0.01	0.01

Corporate Governance Report

The corporate governance of Vitec is based on Swedish legislation, principally the Swedish Companies Act and the Swedish Annual Accounts Act, regulations for issuers at Nasdaq Stockholm and the Swedish Code of Corporate Governance. The most important internal control instruments are the Articles of Association adopted by the Annual General Meeting, followed by the Board of Directors' rules of procedure and the Board's instructions for the CEO. In addition, the Board has established a number of policies, guidelines and instructions that are binding and that apply to the operations of the entire Group.

The Swedish Code of Corporate Governance must be applied by all companies on the Stockholm Stock Exchange. The code is based on the "comply or explain" principle, which means that it is possible to deviate from the regulations, provided the company provides an explanation for the deviation and also presents the selected alternative. Vitec complies with the provisions, with the sole exception that the composition of the Nomination Committee does not follow the code (points 2.3 and 2.4). The Nomination Committee has appointed CEO Lars Stenlund as Chairman of the Committee, as this can be deemed a natural choice bearing in mind the Vitec's ownership structure. The influence of the main owners is also so important that we have decided to allow them to be included in the Nomination Committee. The Nomination Committee's members consider that accepting this assignment does not give rise to any conflicts of interest.

SHAREHOLDERS

The Class B shares in Vitec Software Group AB (publ) are listed on Nasdaq Stockholm. At the end of 2015, Vitec had 2,917 shareholders. Lars Stenlund and Olov Sandberg were the largest owners, with 7.3 per cent of the capital and 28.3 per cent of the votes and 6.6 per cent of the capital and 28.0 per cent of the votes respectively. In total, the company's three largest owners owned 100 per cent of the Class A shares and 2.3 per cent of the Class B shares, while the 10 largest owners owned 34.4 per cent of the Class B shares. At the same time, the total stock market value amounted to SEK 2,204.8 million. The number of shares amounted to 29,396,690, of which 25,396,690 were Class B shares and 4,000,000 were Class A shares.

ANNUAL GENERAL MEETING

The shareholders' right to decide on Vitec's affairs is exercised at the Annual General Meeting (AGM), which is the company's highest decision-making body. At the AGM, all shareholders are given the opportunity to exercise the influence over the company represented by their respective shareholding. Each Class A share represents ten votes and each Class B share represents one vote. Shareholders who are registered in Euroclear Sweden's share register on the closing day, and who have applied, are entitled to participate and vote at the Meeting. The AGM must be held within six months following the end of the financial year. Mandatory tasks at the AGM include adopting the balance sheet and income statement, as well as handling the results for the year. The AGM also decides on remuneration principles for senior executives and on discharge from liability for the Board members and the CEO. Following proposals from the Nomination Committee (see below), the AGM elects Board members up until the end of the next AGM. The Articles of Association may be amended by a resolution at the AGM in accordance with the rules set out in the Swedish Companies Act. The AGM is conducted in Swedish and will be broadcast live via the company's website.

2015 Annual General Meeting

The Annual General Meeting was held on 6 May at Väven in Umeå. The company's Board, management, Nomination Committee and auditor were present at the Meeting. 81 shareholders representing 66% of the votes were present. The minutes from the AGM can be found on the website, www.vitec.se.

2016 Annual General Meeting

The Annual General Meeting will be held at 5.30 pm 11 May at Väven in Umeå. Information regarding application can be found at www.vitecsoftware.com.

NOMINATION COMMITTEE

The Nomination Committee's main task is to propose to the AGM candidates for election to the Board of Directors and as Chairman of the Board, as well as to propose candidates for selection as auditors in consultation with the Audit Committee.

The work of the Nomination Committee must be characterised by openness and discussion in order to achieve a well-balanced Board. The Nomination Committee has studied the Board evaluation that has been conducted. The Nomination Committee is also tasked with proposing a Chairman for the AGM, proposing the fees for the Board of Directors as well as any fees for committees, in addition to fees for the auditors.

The 2015 AGM decided that the three largest shareholders should each appoint a member of the Nomination Committee, and it was decided that the Nomination Committee should comprise the Chairman of the Board and three members.

The Nomination Committee's members ahead of the AGM on 11 May 2016 are:

Lars Stenlund, CEO. Holder of 1,570,000 Class A shares and 327,280 Class B shares (incl. family).
Crister Stjernfelt, Chairman of the Board of Vitec. Holder of 8,000 Class B shares.
Olov Sandberg, Vice President and Director of Information. Holder of 1,570,000 Class A shares and 124,565 Class B shares (incl. family).
Jerker Vallbo, CTO. Holder of 360,000 Class A shares and 138,405 Class B shares (incl. family).

The Nomination Committee has held one meeting prior to the 2016 AGM. No remuneration has been paid for work in the Nomination Committee.

ARTICLES OF ASSOCIATION

The Articles of Association stipulate that Vitec is a pubic limited company, whose operations involve purchasing, managing and selling fixed and loose property as well as conducting compatible operations. The share capital shall amount to a minimum of SEK 1,600,000 and a maximum of SEK 6,400,000. The company's shares shall be able to be issued in two series, Series A and Series B. During voting at the AGM, Series A shares (Class A shares) shall entail 10 votes and Series B shares (Class B shares) one vote. If shares of both types are issued, the number of shares of each series may amount to a maximum of ninety-nine hundredths of the entire number of shares in the company. Read the full Articles of Association at www.vitec.se.

BOARD OF DIRECTORS

The task of the Board of Directors is to manage the company's affairs on behalf of the owners. The Board's work is governed by applicable laws and recommendations as well as by the Board's rules of procedure, which include rules regarding the division of work between the Board and the CEO, financial reporting, investments and financing. The rules of procedure are determined annually at the statutory Board meeting, held in conjunction with the AGM.

Board of Directors' responsibilities

The Board of Directors has overall responsibility for the company's organisation and management, as well as for ensuring that guidelines for the management of the company's funds are structured appropriately. The Board is responsible for ensuring that the company is governed according to applicable laws and ordinances, and that it complies with the regulations for issuers that include the Swedish Code of Corporate Governance, as well as that the Group's established internal regulations are followed. The Board is also responsible for developing and following up the Group's strategies through plans and goals, for decisions regarding the acquisition and sale of operations, for major investments, for additions to and replacements for the Group management, and for continually monitoring operations during the year. Every year, the Board adopts the annual accounts, the applicable business plan, business-related policies and the CEO's rules of procedure. The Board must also determine the required guidelines for the company's actions in society, with the aim of safeguarding long-term value creation and ensuring that ethical guidelines are established for the company's behaviour.

Composition

According to the Articles of Association, the Board of Directors of Vitec must comprise between three and seven members with a maximum of three deputies. The Board comprises five regular members and no deputies, and none of the Board members are employees of the company. Board members are appointed for one year at a time. The CEO is not included in the Board of Directors, but does attend all Board meetings to present reports, except on occasions when the work of the CEO is being evaluated. The CEO reports to the Board regarding the operational work in the Group, and ensures that the Board receives objective and relevant decision-making data.

At the Annual General Meeting on 6 May 2015, the following Board members were elected: Crister Stjernfelt, Chairman of the Board, Anna Valtonen, member, Kaj Sandart, member, Jan Friedman, member and Birgitta Johansson-Hedberg, member. The table on page 38 shows e.g. the Board members and the Board's assessment of dependence in relation to the company and the shareholders.

Chairman of the Board

The Chairman of the Board of Directors, Crister Stjernfelt, leads the Board's work to ensure it is conducted in accordance with laws and regulations. The Chairman monitors the operation in dialogue with the CEO, and is responsible for ensuring that other Board members receive the information that is necessary for high-quality discussions and decisions. The Chairman is also involved in evaluation and development issues in respect of the Group's senior executives.

Work of the Board of Directors

The work of the Board follows an annual cycle in order for the Board to fulfil its work duties optimally. At the start of the year, the Board deals with the year-end report and the Annual Report, as well as matters that are to be raised at the AGM. The Group's results are reviewed at each meeting, and interim reports are approved for publication each quarter. The statutory Board meeting is held directly in conjunction with the AGM, at which point authority to sign for the company, the CEO and the committee members are decided. Once a year, the Board holds a longer meeting that is devoted principally to strategic issues, and at the end of the year the budget for the coming year is dealt with.

During a business year, Vitec holds at least seven regular Board meetings as well as a statutory meeting directly in conjunction with the AGM. Extraordinary Board meetings are held if necessary. A total of 10 Board meetings have been held during 2015, including the statutory meeting. All members elected by the AGM were present at all the Board meetings, with the exception of members Anna Valtonen and Birgitta Johansson-Hedberg who participated per capsulam at one meeting.

At the Board's minuted meetings, the Group's profits and status have been covered and interim reports and the annual report have been approved for publication. Future matters such as market assessments, potential acquisitions, the focus of business activities and organisational issues have been dealt with. All the meetings have followed an approved agenda that, together with supporting data for each item on the agenda, has been distributed to all Board members approximately one week before the meeting. The minutes have been sent to the members in accordance with the Code's regulations. The work of the Board of Directors was evaluated at the end of the year.

Evaluation

The work of the Board is evaluated once a year by the Board members answering a number of predefined questions relating to both formal and collaboration-oriented circumstances. The Chairman compiles the answers, including comments, and presents this material to the Nomination Committee. The evaluation of the 2015 business year indicates a well-functioning collaboration and good efficiency within the work of the Board. All members are positive with regard to continued involvement.

Important decisions

Vitec redeemed the convertible loan provided by Norrlandsfonden in 2008. At full conversion, this would have entailed a dilution of 4.6 per cent of the capital and 2.1 per cent of the votes. The loan was redeemed for SEK 37.1 million, nominal amount SEK 10 million with a conversion price of SEK 35 (SEK 7 after the split).

Vitec entered into an agreement regarding the acquisition of Fox Publish AS and Adservice Scandinavia AB. Both companies offer publication systems for estate agents. The payment was NOK 14.2 million cash, and with a maximum additional purchase price of NOK 8 million.

In addition to existing credit, Vitec has reached an agreement for a loan facility of SEK 250 million from Nordea for acquisitions. The agreement has a term of four years, and the credit can be called up gradually for acquisitions.

Vitec acquired Datamann A/S in Denmark, whose main product is software for the Danish automotive industry. Cash payment totalling DKK 44.4 million. Infoeasy AS, a Norwegian software company producing software for the Norwegian automotive sector, was acquired the day after. Cash payment totalling NOK 15.4 million.

In December, Vitec made its fourth acquisition of the year, purchasing 100 per cent of the shares in Nice Norwegian Insurance Computer Environment AS for NOK 25 million cash. The company's industry-specific software is produced and adapted for insurance companies in Norway, Sweden and Denmark.

The Board's rules of procedure

The Board of Directors' rules of procedure were adopted on 6 May 2015 and must be revised annually at the statutory Board meeting. The rules of procedure will be revised at other times if necessary. The rules of procedure include the Board's responsibilities and work duties, the duties of the Chairman of the Board, audit issues, as well as specifying which reports and financial information the Board must procure prior to each regular Board meeting. The rules of procedure also include instructions for the CEO. Furthermore, the rules of procedure prescribe the Board's work as a remuneration committee.

AUDIT AND REMUNERATION COMMITTEE

The Board of Directors as a whole acts as both an Audit and a Remuneration Committee. The description of the duties as regards the work as an Audit Committee is established as an appendix to the applicable rules of procedure. The work as a Remuneration Committee is regulated in the applicable rules of procedure. The rules of procedure and the appendix were adopted at the statutory Board meeting on 6 May 2015. During 2015, the Audit Committee has held three meetings and the Remuneration Committee has held meetings in conjunction with regular Board meetings.

CEO AND GROUP MANAGEMENT

The CEO is appointed by the Board of Directors. Lars Stenlund is the company's CEO, and Olov Sandberg, Lars Eriksson and Patrik Fransson have all been appointed Vice Presidents. The CEO is responsible for the day-to-day administration of the company's and the Group's operations according to the Board of Directors' instructions and directives. For example, this entails responsibility for financial reporting, the production of information and decision-making data, as well as ensuring that agreements and other measures are not in conflict with applicable laws and regulations.

Lars Stenlund

CEO, born 1958 and employed since 1985.

Shareholding: Holds 1,570,000 Class A shares, 327,280 Class B shares. Lars has been a Board member at Vitec during the period 1985- 2009. Ph.D in applied physics (1987) at the University of Umeå. CEO of Vitec since 1990. Founder of the company along with Olov Sandberg.

Other directorships: Board member of the University of Umeå, Algoryx Simulation AB, C4 Contexture AB and Umeå Datakonsulter AB.

The Chairman of the Board holds annual evaluation discussions with the CEO in accordance with the CEO's instructions and the applicable specification of requirements.

Group management

The Group management works alongside the CEO, and together they are responsible for day-to-day operations. The Group management comprises the CEO, CFO, COO and the person responsible for M&A. The Group management normally meets every month to go through the previous month's results, to update plans, guidelines and applicable decisions, and to discuss strategic issues. An extended strategy meeting is held with the Board of Directors every year, and other meetings are held as necessary.

The Group management decides jointly, in accordance with the guidelines determined by the Board of Directors in the instruction regarding the division of work between the Board and the CEO, on issues within its area of expertise and issues that are long-term and strategic in nature, such as corporate development, marketing, financing, investments and environmental issues. The Group management also prepares issues that have to be decided by the Board. The table on page 39 presents the members of the Group management and their positions etc.

AUDITORS

One or two auditors, or one or two registered auditing firms, with a maximum of two deputies, are appointed following a proposal from the Nomination Committee to examine the company's annual report and the accounts, as well as the Board of Directors' and the CEO's administration of the company. At the 2015 AGM, PricewaterhouseCoopers AB was appointed with Niklas Renström as the auditor with overall responsibility.

The Group's auditors participate in all Audit Committee meetings and in particular report their observations in respect of internal control, the general review of the third quarter's interim accounts as well as the closing accounts.

INTERNAL CONTROL

The Board of Directors is responsible for internal control in accordance with the Swedish Companies Act and the Swedish Code of Corporate Governance. The report regarding internal control and risk management in respect of financial reporting for the 2015 financial year has been prepared and submitted by the Board of Directors in accordance with Chapter 6 §6 of the Annual Accounts Act as well as section 7.4 of the Swedish Code of Corporate Governance.

The Board of Directors is responsible for the work in respect of corporate governance within Vitec, and consequently for the work with internal control. The overall purpose is to protect the Group's assets and thereby the shareholders' investments. The Board is also responsible for ensuring that financial reporting is drawn up in accordance with the applicable law. Quality assurance of the Group's financial reporting takes place by means of the Board handling all critical accounting issues as well as the financial reports that the company submits. This presupposes that the Board handles issues regarding internal control, compliance with regulations, significant uncertainties in reported values, any uncorrected errors, events after the closing date, changes to estimates and assessments, any observed irregularities and other circumstances that affect the quality of the financial statements.

Control environment

Active, committed Board work is the foundation for good internal control. The Board has established clear working processes and rules of procedure for its work. An important part of the Board's work is to draw up and approve a number of fundamental policies, guidelines and frameworks related to financial reporting. The company's steering documents are the "Board of Directors' rules of procedure" and the "CEO's instructions". The purpose of these rules of procedure and policies is, in part, to create the foundations for good internal control. Following up and revision are performed continually, and are communicated to all employees who are involved in the financial reporting. The Board continually evaluates the business's performance and results through an appropriate package of statements, including an income statement and key figures, as well as other significant operational and financial information. The Board of Directors in its entirety functions as the Audit Committee. During 2015, the entire Board has consequently monitored the systems for risk management and internal control. These systems are intended to ensure that the business is conducted in accordance with laws and ordinances and is effective, and that the financial reporting is reliable. The Board has studied and evaluated the procedures for accounting and financial reporting, as well as following up and evaluating the work, qualifications and independence of the external auditors. During 2015, the Board has conducted a review with the company's external auditors. Other established policies that form the foundation for internal control within Vitec are the Finance policy, the Information policy, the Information security policy and the IT policy.

All the business areas work within, or are about to start working within, the same structures, financial systems, account plans and policies, which facilitates the creation of suitable procedures and control systems Each business area has a Board and rules of procedure determined by the Group management.

Risk assessment

Vitec applies a method for risk management and risk assessment to ensure that the risks to which the company is exposed, and which can influence internal control and financial reporting, are handled within the processes that have been adopted. Significant risks that are taken into consideration are market risks, operational risks such as risks associated with acquisitions and product development, as well as other risks that affect financial reporting. A systematic, documented updating of all identified risks is performed annually.

Vitec works continually and actively with risk analysis, risk assessment and risk management, to ensure that the risks to which the company is exposed are handled in a suitable manner within the frameworks that have been established. For example, the risk assessment looks at the company's administrative procedures in respect of invoicing and contract management. Significant risks that can affect financial reporting are items that are based on estimates and assessments, such as ongoing development projects, goodwill, etc.

Risk management

The risks are followed up in various ways and at various levels. At each Board meeting, the Board of Vitec receives a presentation of the Group's results and status, liquidity, key figures, etc. The Group management jointly analyses the results of all the reporting units every month. All investments in the Group are managed by the Group management, with product investment being the largest single item. Product investments have a separate process both in the budget work and when following up such work. Reporting takes place monthly and is documented. Each business area has a separate Board of Directors that meets 2-4 times a year. At least one of the Board members is included in the Group management. The Board meetings are minuted. The COO and the Group's controller have a close dialogue with each business area manager, and each month they conduct detailed reviews of major projects, product development, outstanding accounts receivable, etc. The handling of financial risks such as liquidity, currency, credit and refinancing risks is performed by the Group management, where the finance policy adopted by the Board is the governing factor.

Control activities

Control activities are used to handle the risks that the Board and the Group management deem to be significant for the business, the internal control and the financial reporting. Control structures are designed to handle the risks that the Board deems to be significant for the internal control of the financial reporting. These control structures comprise in part an organisation with a clear division of responsibilities, clear procedures and clear work roles. Examples of control activities include reporting decision-making processes and arrangements for significant decisions (such a new, large customers, investments, agreements, etc.) as well as examining all financial statements that are presented. An ongoing analysis of the financial reporting, along with the analysis that is performed at Group level, is a very important element in ensuring that the financial reporting is free from material misstatements.

According to the Swedish Companies Act, the Board of Directors must appoint an Audit Committee. The Board has found it appropriate for the entire Board to make up the Audit Committee. The fact that the Board is relatively small is considered to make this work easier. Several of the Board's members possess accounting expertise.

Information and communication

The company's steering documentation, in the form of policies, guidelines and manuals relating to internal and external communication, is continually updated and communicated internally via relevant channels, such as internal meetings, internal news mails and the intranet. For communication with external parties, there is a clear policy specifying all the guidelines as to how information is to be provided – the company's established information policy. The purpose of the policy is to ensure that all information obligations according to the applicable regulations for issuers are complied with correctly and in full.

Following up and monitoring

Every month, the segments are followed up by the respective management (business area board or similar). The COO and Group Controller analyse the results and report to the Group management. The Group management studies these analyses and in turn analyses the Group's results compared to the previous year, the budget and expectations. The Group management's analyses and conclusions are submitted to the Board at each regular meeting.

The company continually evaluates the internal controls in respect of the financial reporting, and ensures that reporting to the Board is working successfully. This is achieved above all by asking questions and looking at the work of the CFO. The company's auditors take part on three occasions per year, notifying their observations about the company's internal procedures and control systems, and the Board's members have the opportunity to ask questions. Every year, the Board adopts a position regarding significant risk areas and evaluates the internal control.

Internal audit

Given the size and complexity of the operation, in combination with existing Board reporting and reporting to the Audit Committee, the Board has judged that it is not financially justifiable to establish a separate internal audit function. The internal control presented above is deemed to be sufficient to safeguard the quality of the financial reporting.

GUIDELINES REGARDING REMUNERATION TO SENIOR EXECUTIVES

At the 2015 AGM, guidelines were established regarding remuneration to the company's CEO and other senior executives within the Group. The decision by the AGM generally corresponds with previously applied principles for remuneration. The guidelines apply to agreements that are entered into after the 2015 AGM or where subsequent changes are made regarding remuneration. The Board of Directors has not appointed a Remuneration Committee, but instead the Board as a whole handles issues relating to remuneration and other employment conditions. The AGM decided that remuneration to senior executives should comprise fixed salary and pension. Pension benefits must be defined-contribution. The combined remuneration should be at the market-going rate and competitive, and should be in relation to responsibilities and authorisation. When determining salaries, the individual's areas of responsibility, expertise and experience must be taken into account, and as a general rule these must be reassessed once a year. The Board may deviate from the guidelines if there is a particular reason to do so in an individual case.

Prior to the 2016 AGM, the Board has proposed unchanged conditions as regards guidelines for remuneration to the company's CEO and other senior executives.

THE SHARE AND THE OWNERSHIP STRUCTURE

Name/company	Class A shares	Class B shares	Share capital %	Voting rights %
Lars Stenlund	1 820 000	326 280	7,3	28,3
Olov Sandberg	1 820 000	124 565	6,6	28,0
Jerker Vallbo	360 000	138 405	1,7	5,7
Thomas Eklund		1 746 440	5,9	2,7
SBB and Trust, Boston		1 536 315	5,2	2,3
Grenspecialisten Förvaltning AB		1 161 135	3,9	1,8
Nils-Eric Öquist		965 815	3,3	1,5
Fidelity Low-Priced Stock Fund		950 500	3,2	1,5
NCT Exempt ACC US pension fund		854 765	2,9	1,3
SEB Sverigefond småbolag		805 035	2,7	1,2
Other shareholders		16 787 435	57,3	25,7
	4 000 000	25 396 690	100,0	100,0

* Includes family

At the end of the financial year, the total number of issued shares totalled 29,396,690, of which 4,000,000 are Class A shares (40,000,000 votes) and the remaining 25,396,690 are Class B shares (25,396,690 votes). The share capital amounts to SEK 2.9 million and the nominal value is SEK 0.10 per share. During the fourth quarter, the company implemented a 5-for-1 share split, which means that each previous share has been split into five shares of the same class. The ownership structure and the Board's shareholding relate to the holding on 31/12/2015, to the best of Vitec's knowledge. The number of shareholders amounted to 2,915.

Following the end of the financial year, 500,000 Class A shares have been converted to Class B shares in accordance with the conversion reservation specified in §5 of the Articles of Association, Share type.

There is a pre-emption reservation in respect of Class A shares, although there are no other provisions limiting the right to transfer shares. There are no limits regarding how many votes each shareholder may exercise at the AGM. Board members and any deputies are appointed at the AGM for the period up to the next AGM. There are no provisions in the Articles of Association regarding the appointment and dismissal of Board members. Vitec Software Group AB (publ) has not entered into any agreements that will be affected by a possible purchase offer. Vitec Software Group AB (publ) does not hold any of its own shares.

Employees in Vitec Software Group AB (publ) do not hold shares where the voting rights for such shares cannot be exercised directly by the employees. As at 31 December, there is an ongoing convertible programme in relation to personnel.

There is authorisation from the 2015 AGM that entitles the Board, on one or more occasions up to and including the next AGM, to decide on the issue of up to 2,500,000 Class B shares deviating from the shareholders' preferential right. The reason why the Board might deviate from the shareholders' preferential right is to facilitate financing during the acquisition of companies or product rights in a cost-effective manner. During 2015, this authorisation has not been utilised.

Vitec is listed on Nasdaq Stockholm, on the Small Cap list. The share price on 31 December 2015 was SEK 75.00 (26.50). The stock market value of the shares issued at year-end amounted to SEK 2,204.8 million (779.0).

Board of Directors

BOARD OF DIRECTORS

Crister Stjernfelt, Kaj Sandart, Anna Valtonen, Birgitta Johansson-Hedberg och Jan Friedman.

CRISTER STJERNFELT (1943)	ANNA VALTONEN (1974)	KAJ SANDART (1953)	JAN FRIEDMAN (1952)	BIRGITTA JOHANSSON HEDBERG (1947)
Education: Economic Studies at Stock holm University.	Education: PhD. Department of Indus trial and Strategic Design, Helsinki, 2007.	Education: Civil Engineering, KTH Royal Institute of Technolo gy 1977.	Education: Master of Business Admin istration, Stockholm School of Economics 1978.	Education: BA, Psychology 1972, Lund University.
Position: Chairman since 2013, Director since 2009.	Position: Director since 2012.	Position: Director since 1998.	Position: Director since 2010.	Position: Director since 2011.
Professional experience: Chairman of Ortivus AB, AcelQ AB and Oryx Simu lations Verklighetsmodeller i Sverige. Director of Digital Route AB, DGC One AB and Carmenta Sweden. Previously CEO of WM-Da ta AB and CEO of Logica AB.	Professional experience: Dean of the Aalto University School of Arts, Design and Architecture in Helsinki, Finland and Vice President of Aalto University. Previously professor and President of the Umeå Institute of Design (2009) and industry design in Nokia (1997-2009) e.g. Head of Design Research & Foresight. Several international assignments.	Professional experience: Director of Hallvarsson & Halvarsson Group and deputy at Milox AB. Director of Baltic Sea Action Group Sweden. Previously Com munications Manager at ÅF and Svensk Energiförsörj ning.	Professional experience: Chairman of Sportamore AB (publ), Nordic Public Affairs AB, Proffsmagasinet Svenska AB, Group AB, MittMedia and Grönklitts gruppen. Director of MittMedia Förvaltning AB. Many years' experience as board member and consultancy assignments.	Professional experience: Chairman of Almi Stock holm Sörmland AB and The Swedish Linnaeus Society. Vice Chairman of Resolu tionsdelegationen. Director of Sveaskog AB, Sankt Lukas and Copenhagen Economics A/S. Previously CEO of Lantmännen, Föreningssparbanken and Liber.
Holdings in Vitec: 8,000 Class B shares. No convertibles.	Holdings in Vitec: No shares. No convertibles.	Holdings in Vitec: 121,000 Class B shares (including family). No convertibles.	Holdings in Vitec: 258,650 Class B shares through companies. No convertibles.	Holdings in Vitec: 7,500 Class B shares. No convertibles.

The Board composition meets the requirements of Nasdaq Stockholm and the Swedish Corporate Governance Code concerning independent directors. For further information about the Board members, go to www.vitecsoftware.com, Investor Relations, Corporate Governance. All Board members meets the independence requirements in relation to Vitec Software Group, its management and major shareholders.

Group Management

GROUP MANAGEMENT

Patrik Fransson, Maria Kröger, Lars Stenlund and Lars Eriksson.

LARS STENLUND (1958)	LARS ERIKSSON (1955)	PATRIK FRANSSON (1966)	MARIA KRÖGER (1968)
Position: Founder and CEO. Employed since 1985.	Position: Vice President, M&A and Business development.	Position: Vice President, COO.	Position: CFO. Employed since 2011.
Education: PhD in Applied Physics (1987) at the University of Umeå.	Education: Civil Engineering, Industrial Eco nomics, Linköping University 1979.	Education: Computer Science at University of Umeå 1990 and MBA Executive program at Stockholm School of Economics.	Education: Master of Science in Economics, University of Umeå 1990.
Professional experience: Director of the University of Umeå, Algoryx Simulation AB, C4 Contex ture AB and Umeå Datakonsulter AB. Previously employed at the University of Umeå.	Professional experience: Director of Affärskonsulting Lars Eriksson AB. Previously CEO and Director of Företagsbyrån i Stockholm AB.	Professional experience: Outsourcing Director at Logica, CIO at H&M and CEO at CodeFac tory AB.	Professional experience: Authorised Public Accountant EY.
Holdings in Vitec Software Group: 1,570,000 Class A shares. 327,280 Class B shares (including family). No convertibles. No options.	Holdings in Vitec Software Group: 32,500 Class B shares. 3,140 convertibles 1501. No options.	Holdings in Vitec Software Group: 96,190 Class B shares. 7,860 convertibles 1501. No options.	Holdings in Vitec Software Group: 10,000 Class B shares. 7,860 convertibles 1501. 50,000 options.

Lars Stenlund and Olov Sandberg have issued call options to Maria Kröger. All options run on the same terms, with each option entitling the holder to acquire one (1) share at a price of SEK 28.00 per share on 1 January 2018.

Multy-year summary

		2015	2014	2013	2012	2011	2010	2009
Net sales	(TSEK)	618 385	491 956	371 631	389 200	359 598	313 410	144 510
Business Area Estate Agent	(TSEK)	207 011	185 750	181 152	168 785	135 306	82 588	45 335
Business Area Real Estate	(TSEK)	142 557	134 315	130 718	120 086	120 140	108 118	61 989
Business Area Energy	(TSEK)	24 114	22 672	19 849	21 327	19 286	17 844	15 979
Business Area Media	(TSEK)	10 547	21 759	26 128	65 233	70 583	97 338	21 207
Business Area Health	(TSEK)	61 492	43 627	-	-	-	-	-
Business Area Auto	(TSEK)	71 082	28 302	-	-	-	-	-
Business Area Finance & Insurance	(TSEK)	101 219	55 004	13 704	12 950	14 208	7 522	-
Shared	(TSEK)	363	527	80	819	75	0	0
Growth	(%)	26	32	-5	8	15	117	6
Profit after financial items	(TSEK)	94 686	64 545	38 069	40 130	35 693	20 440	17 939
Profit after tax	(TSEK)	78 191	49 065	30 229	31 984	26 061	14 245	13 456
Profit after tax attributable to owners of the parent	(TSEK)	78 191	49 065	30 229	31 183	24 654	14 089	13 456
Profit growth attributable to owners of the parent	(%)	59	62	-3	26	75	5	20
Profit margin	(%)	13	10	8	8	7	4	9
Operating margin	(%)	16	14	11	11	11	7	13
Total assets	(TSEK)	872 019	772 901	387 981	429 133	327 743	293 308	221 323
Solidity	(%)	31	34	44	36	40	37	38
Equity ratio after full conversion	(%)	33	37	48	41	49	44	48
Degree of indebtedness	(times)	2,09	1,70	1,53	1,66	1,60	1,69	1,58
Return on capital employed	(%)	21	18	16	20	21	11	17
Return on equity	(%)	29	23	19	24	25	19	24
Sales per employee	(TSEK)	1 465	1 430	1 332	1 297	1 236	1 269	1 112
Value added per employee	(TSEK)	1 212	1 164	1 052	985	915	892	836
Personnel expenses per employee	(TSEK)	797	801	793	732	706	728	664
Average numbers of employees	(num ber)	422	344	279	300	291	247	130
Adjusted shareholders' equity per share	(SEK)	9,24	8,85	6,39	5,92	5,36	4,35	4,59
Earnings per share	(SEK)	2,66	1,75	1,16	1,30	1,21	0,71	0,71
Earnings per share after dilution	(SEK)	2,64	1,68	1,09	1,16	1,04	0,63	0,61
Paid dividends per share*	(SEK)	0,67	0,55	0,50	0,40	0,25	0,20	0,15
Cash flow per share	(SEK)	5,28	4,40	1,97	2,25	2,17	1,38	1,01
P/E		28,20	15,12	15,31	10,89	9,75	13,61	8,34
P/Adjusted equity		8,12	2,99	2,77	2,33	2,08	2,21	1,29
P/S		3,57	1,58	1,26	0,91	0,68	0,65	0,78

Calculation bases:
Results used for the calculation of earnings per share	(TSEK)	78 191	49 065	30 229	31 183	24 654	14 089	13 456
Cash flow for the calculation of cash flow per share	(TSEK)	155 134	123 220	51 505	55 243	46 787	27 532	19 240
Average number of shares	(psc)	29 396 690	28 003 405	26 141 635	24 604 375	21 546 315	19 936 940	19 024 540
The number of shares after dilution	(psc)	29 788 016	29 431 975	28 175 425	27 338 170	24 172 025	23 041 270	22 561 580
The number of shares issued on the closing date	(psc)	29 396 690	29 396 690	26 541 635	25 741 635	21 835 375	21 257 250	19 163 500
Share price at end of period	(SEK)	75,00	26,50	17,70	13,80	11,16	9,62	5,90

Definitions, see Note 29 Key Figure Definitions

*Number of shares and key figures related to shares have been recalculated due to split.

Proposed allocation of profits

THE FOLLOWING AMOUNTS ARE AT THE DISPOSAL OF THE ANNUAL GENERAL MEETING:

	253,383,334
Profit for the year	54,429,446
Share premium reserve	110,475,051
Profit brought forward	88,478,837

THE BOARD PROPOSES THAT THE PROFIT BE ALLOCAT-ED SUCH THAT:

	253,383,334
is carried forward	116,451,262
is carried forward to the share premium reserve	110,475,051
SEK 0.90 per share is distributed to shareholders	26,457,021

BOARD'S STATEMENT ACCORDING TO CHAPTER 18 §4 OF THE SWEDISH COMPANIES ACT (2005:551)

The Board proposes that shareholders at the AGM on 11 May 2016 should decide on a dividend payment amounting to a maximum of SEK 26,457,021. This statement has been produced in accordance with the provisions in Chapter 18 §4 of the Swedish Companies Act, and constitutes the Board's assessment of whether the proposed dividend is justifiable bearing in mind that specified in Chapter 17 §3 paragraphs 2 and 3 of the Swedish Companies Act.

The Board's assessment is that the size of the proposed dividend constitutes a satisfactory balance between the Group's capital structure and future growth opportunities. In the Board's opinion, the proposed dividend does not prevent the company or other companies included in the Group from fulfilling their obligations in the short and long term, and is thereby justifiable bearing in mind the Swedish Companies Act's 'precautionary rule' (Chapter 17 §3 of the Swedish Companies Act 2005:551).

Consolidated statement of comprehensive income

Note	2015	2014
OPERATING REVENUE (1,2)
Recurring revenues	480,552	372,838
Licence revenues	23,098	24,928
Service revenues	106,191	87,997
Other revenues	8,544	6,193
NET SALES	618,385	491,956
Capitalized development costs	62,108	46,261
Other operating revenue (5)	36,931	2,809
TOTAL REVENUE	717,424	541,026
OPERATING EXPENSES
Goods for resale	-6,835	-2,786
Subcontractors and subscriptions	-82,890	-66,546
Other external expenses (7,23)	-84,786	-68,041
Staff costs (6,21)	-336,133	-275,665
Depreciation and impairment (12)	-85,838	-56,319
Other operating expenses (5)	-20,335	-3,077
TOTAL EXPENSES	-616,817	-472,434
OPERATING PROFIT	100,607	68,592
Financial income	826	1,547
Financial expense	-6,747	-5,594
NET FINANCIAL ITEMS (8)	-5,921	-4,047
PROFIT BEFORE TAX	94,686	64,545
Tax (10)	-16,495	-15,480
PROFIT FOR THE YEAR	78,191	49,065
OTHER COMPREHENSIVE INCOME THAT MAY BE RECLASSIFIED TO THE INCOME STATEMENT
Hedging net investment in foreign operations	8,177	-7,584
Deferred tax on hedging of net investment in foreign operations	-1,799	1,669
Translation of net investment in foreign operations	-26,320	7,239
OTHER COMPREHENSIVE INCOME FOR THE PERIOD	-19,942	1,324
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD	58,249	50,389
PROFIT FOR THE YEAR ATTRIBUTABLE TO:
- Shareholders of the Parent Company	78,191	49,065

TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE TO:
- Shareholders of the Parent Company	58,249	50,389
EARNINGS PER SHARE: (11)
- Before dilution	2.66	1.75
- After dilution	2.64	1.68

Average number of shares	29,396,690	28,003,405
Number of shares after dilution	29,788,016	29,431,975

Consolidated statement of financial position

	Note	31/12/2015	31/12/2014
ASSETS

FIXED ASSETS
Intangible assets	(3,12)
Goodwill		202,103	190,902
Capitalized development costs		109,171	76,562
Software		3,860	3,226
Brands		8,793	7,752
Product rights		229,079	197,815
Customer agreements		62,321	47,884
		615,327	524,141
Tangible assets
Buildings		9,034	9,115
Investments in leased premises		4,438	2,443
Equipment		15,905	17,231
		29,377	28,789

Financial assets
Other long-term receivables		835	-
Deferred tax	(10)	5,952	6,001
TOTAL FIXED ASSETS		651,491	558,931

CURRENT ASSETS
Inventories
Goods for resale	(15)	399	339
		399	339
Current receivables
Accounts receivable	(16)	129,107	122,992
Current tax		6,973	1,755
Other receivables		6,503	928
Prepaid expenses and accrued income	(17)	17,278	16,842
		159,861	142,517

Cash and cash equivalents	(18)	60,268	71,114

TOTAL CURRENT ASSETS		220,528	213,970
TOTAL ASSETS		872,019	772,901

	Note	31/12/2015	31/12/2014
EQUITY AND LIABILITIES
Equity	(19)
Share capital		2,940	2,940
Other contributed capital		121,963	121,963
Reserves		-25,885	-5,943
Retained profits including profit for the year		172,520	141,170
EQUITY ATTRIBUTABLE TO SHAREHOLDERS OF THE PARENT COMPANY		271,538	260,130
LONG-TERM LIABILITIES
Convertible debentures	(20)	13,513	13,205
Liabilities to credit institutes	(20)	193,709	117,065
Remuneration to employees after completed employment	(21)	8,033	12,724
Other long-term liabilities	(20)	4,779	25,698
Deferred tax	(10)	89,747	72,329
TOTAL LONG-TERM LIABILITIES		309,781	241,021
SHORT-TERM LIABILITIES
Convertible debentures	(20)	0	9,637
Liabilities to credit institutes	(20)	33,845	49,647
Accounts payable		14,582	17,223
Tax liabilities		20,313	10,538
Other liabilities		89,488	66,435
Accrued expenses and prepaid income	(22)	132,472	118,270
TOTAL SHORT-TERM LIABILITIES		290,700	271,750
TOTAL EQUITY AND LIABILITIES		872,019	772,901
PLEDGED ASSETS CONTINGENT LIABILITIES	(24)	387,240 -	394,767 -

Consolidated statement of changes in equity

					Total equity attributable
	Share capital	Other contributed capital	Reserves**	Retained profits	to shareholders of the Parent Company
OPENING EQUITY 01/01/2014	2,654	67,517	-7,267	106,703	169,607
Profit for the year	-	-	-	49,065	49,065
Hedging net investment in foreign operations	-	-	-7,584	-	-7,584
Deferred tax on hedging of net investment in foreign operations	-	-	1,669	-	1,669
Translation of net investment in foreign operations	-	-	7,239	-	7,239
Comprehensive income for the year	2,654	67,517	-5,943	155,768	219,996
Option element convertible bonds	-	-865	-	-	865
Conversion of bonds	61	7,974	-	-	8,035
Issue of new shares after issue costs*	225	45,607	-	-	45,832
Dividend	-	-	-	-14,598	-14,598
CLOSING EQUITY 31/12/2014	2,940	121,963	-5,943	141,170	260,130
Profit for the year	-	-	-	78,191	78,191
Hedging net investment in foreign operations	-	-	8,177	-	8,177
Deferred tax on hedging of net investment in foreign operations	-	-	-1,799	-	-1,799
Translation of net investment in foreign operations	-	-	-26,320	-	-26,320
Comprehensive income for the year	2,940	121,963	-25,885	219,361	318,379
Redemption of bonds	-	-	-	-27,145	-27,145
Dividend	-	-	-	-19,696	-19,696
CLOSING EQUITY 31/12/2015	2,940	121,963	-25,885	172,520	271,538

* Amount for issue of new shares reported net after issue costs of SEK 1,419 thousand.

** Reserves are made up in their entirety of translation differences when translating foreign operations as well as hedge accounting of these.

Consolidated statement of cash flows

2015	2014
OPERATING ACTIVITIES
Operating profit 100,607	68,592
Adjustments for items not included in cash flow
Other operating revenue -11,213	-
Depreciation and impairment 85,838	56,319
175,232	124,911
Interest received 826	1,547
Interest paid -6,747	-5,594
Income tax paid -14,177	2,356
CASH FLOW FROM OPERATING ACTIVITIES BEFORE CHANGES IN WORKING CAPITAL 155,134	123,220

Changes in working capital
Increase/decrease in inventories 51	-59
Increase/decrease in operating receivables -4,281	-28,653
Increase/decrease in operating liabilities -10,611	34,820
CASH FLOW FROM CURRENT OPERATIONS 140,293	129,328
INVESTMENT ACTIVITIES
Change in long-term receivables -501	-
Acquisition of subsidiaries (net impact on liquidity) * -85,580	-148,522
Acquisition of intangible assets and capitalised development costs -70,174	-49,815
Acquisition of tangible assets -11,821	-10,783
CASH FLOW FROM INVESTMENT ACTIVITIES -168,076	-209,120

FINANCING ACTIVITIES
Dividend to shareholders of the Parent Company -19,696	-14,598
Redemption convertible loan -36,781	-
New loans 102,901	162,224
Amortisation of loans -34,478	-63,907
Issue of new shares -	45,832
CASH FLOW FROM FINANCING ACTIVITIES 11,946	129,551

CASH FLOW FOR THE YEAR -15,837	49,759
CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR 71,114	21,319
	36
EXCHANGE RATE DIFFERENCES IN CASH AND CASH EQUIVALENTS 4,991

*Payment for acquisition of subsidiaries in 2015 consisted of proceeds for Fox Publish AS, ADservice Scandinavia AB, Datamann A/S, Infoeasy AS and Nice AS. Payment amounted to SEK 80.6 million. All acquisitions related to the entire outstanding share capital and meant that control was obtained in all companies. An additional payment of SEK 4.9 million was made for the acquisition of Aloc A/S. The payment did not result in any changes in share capital or control. Payment for acquisition of subsidiaries in 2014 consisted of proceeds for AcuVitec, Autodata and Aloc. All acquisitions related to the entire outstanding share capital and meant that control was obtained in all companies.

**Cash and cash equivalents are defined as funds for which there is an insignificant risk of value fluctuations and that can easily be converted to cash at a known amount.

Income statement, Parent Company

	Note	2015	2014
NET SALES	(4)	66,720	54,913
Other operating revenue	(5)	33,706	2,421

OPERATING EXPENSES	(4)
Other external expenses	(7,23)	-45,030	-34,758
Staff costs	(6,21)	-27,720	-24,700
Depreciation	(13)	-2,744	-2,215
OPERATING PROFIT		24,932	-4,339

Profit from financial items	(8)
Income from shares in Group companies		39,907	31,459
Interest income and similar income items		516	912
Interest expenses and similar expense items		-6,235	-4,991
NET FINANCIAL ITEMS		34,188	27,380

PROFIT AFTER FINANCIAL ITEMS		59,120	23,041

Appropriations	(9)	-822	8,309
PROFIT BEFORE TAX		58,298	31,350

Tax	(10)	-3,869	143
PROFIT FOR THE YEAR		54,429	31,493

Profit for the year is consistent with total comprehensive income

Balance sheet, Parent Company

Note	31/12/2015	31/12/2014
ASSETS

FIXED ASSETS
Intangible assets (13)
Software	3,635	2,960
Product rights	192	739
	3,827	3,699
(13) Tangible assets
Buildings	8,963	9,115
Investments in leased premises	1,474	1,820
Equipment	2,742	2,725
	13,179	13,660
Financial assets
Shares in subsidiaries (14)	685,879	573,317
Receivables from Group companies	9,019	9,728
	694,898	583,045

TOTAL FIXED ASSETS	711,904	600,404
CURRENT ASSETS
Current receivables
Receivables from Group companies	40,185	41,803
Other receivables	57	-
Prepaid expenses and accrued income (17)	3,152	2,253
	43,394	44,056

Cash and bank	45,306	65,839
TOTAL CURRENT ASSETS	88,700	109,895
TOTAL ASSETS	800,604	710,299

	Note	31/12/2015	31/12/2014
EQUITY AND LIABILITIES
Restricted equity	(19)
Share capital		2,940	2,940
Statutory reserve		14,917	14,917
Total restricted equity		17,857	17,857
Unrestricted equity	(19)
Share premium reserve		110,475	137,620
Profit brought forward		88,479	76,682
Profit for the year		54,429	31,493
Total unrestricted equity		253,383	245,795
TOTAL EQUITY		271,240	263,652
UNTAXED RESERVES	(26.27)	2,222	2,500
LONG-TERM LIABILITIES	(20)
Convertible debentures		13,513	13,205
Liabilities to credit institutes		193,709	117,064
Other long-term liabilities		4,779	-
TOTAL LONG-TERM LIABILITIES		212,001	130,269
SHORT-TERM LIABILITIES
Convertible debentures	(20)	-	9,637
Liabilities to credit institutes	(20)	33,331	49,647
Accounts payable		2,621	1,738
Liabilities to Group companies		232,675	199,480
Current tax liabilities		2,755	113
Other short-term liabilities		38,824	48,431
Accrued expenses and prepaid income	(22)	4,935	4,832
TOTAL SHORT-TERM LIABILITIES		315,141	313,878
TOTAL EQUITY AND LIABILITIES		800,604	710,299
PLEDGED ASSETS	(24)	359,176	359,634
CONTINGENT LIABILITIES		-	-

Changes in equity, Parent Company

				Profit brought
		Statutory	Share premium	forward and profit
	Share capital	reserve	reserve	for the year	Total equity
EQUITY 01/01/2014	2,654	14,917	83,174	91,279	192,024
Issue of new shares after issue costs*	225	-	45,607	-	45,832
Option element convertible bond	-	-	865	-	865
Conversion of bonds	61	-	7,974	-	8,035
Dividend	-	-	-	-14,598	-14,598
Profit for the year	-	-	-	31,493	31,493
EQUITY 31/12/2014	2,940	14,917	137,620	108,175	263,652
Redemption convertible bond	-	-	-27,145	-	-27,145
Dividend	-	-	-	-19,696	-19,696
Profit for the year	-	-	-	54,429	54,429
EQUITY 31/12/2015	2,940	14,917	110,475	142,908	271,240

* Issue of new shares reported net after issue costs of SEK 1,209 thousand.

Cash flow statement, Parent Company (indirect method)

OPERATING ACTIVITIES	2015	2014
Operating profit	24,932	-4,339
Adjustments for items not included in cash flow
Depreciation	2,744	2,215
	27,676	-2,124
Received dividend subsidiaries	30,607	26,259
Interest received	516	912
Interest paid	-6,235	-4,991
Income tax paid	-1,824	-615
CASH FLOW FROM OPERATING ACTIVITIES BEFORE CHANGES IN WORKING CAPITAL	50,739	19,441

Changes in working capital
Increase/decrease in operating receivables	9,962	-27,954
Increase/decrease in operating liabilities	34,892	172,164
CASH FLOW FROM CURRENT OPERATIONS	95,593	163,651

INVESTMENT ACTIVITIES
Acquisition of subsidiaries*	-128,713	-231,770
Acquisition of intangible assets	-1,641	-1,970
Acquisition of tangible assets	-750	-5,214
Change in long-term receivables	709	-9,728
CASH FLOW FROM INVESTMENT ACTIVITIES	-130,395	-248,682

FINANCING ACTIVITIES
Redemption convertible loan	-36,782	-
Paid dividend	-19,696	-14,598
New loans	102,901	162,224
Issue of new shares	-	45,832
Amortisation of debt	-32,154	-63,907
CASH FLOW FROM FINANCING ACTIVITIES	14,269	129,551

CASH FLOW FOR THE YEAR	-20,533	44,520
CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR	65,839	21,319
CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR **	45,306	65,839

Payment for acquisition of subsidiaries in 2014 consisted of proceeds for Acute, Autodata and Aloc. All acquisitions related to the entire outstanding share capital and meant that control was obtained in all companies.

**Cash and cash equivalents are defined as funds for which there is an insignificant risk of value fluctuations and that can easily be converted to cash at a known amount. Short-term investments comprises funds that can be converted to cash at a known amount within one banking day.

Notes

NOTE 1 ACCOUNTING AND VALUATION PRINCIPLES ETC.

GENERAL

The consolidated financial statements have been prepared in accordance with the International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB), as well as the interpretations issued by the International Financial Reporting Interpretations Committee (IFRIC) as approved by the European Commission for application within the EU. The Swedish Financial Reporting Board's recommendation, RFR 1 Supplementary rules for consolidated financial statements, is also applied.

The Parent Company applies the same accounting principles as the Group, except in those cases specified below under the section "Parent Company's accounting principles".

The Annual Report and the consolidated financial statements have been approved for publication by the Board of Directors on 30 March 2016. The consolidated statement of comprehensive income and financial status, as well as the Parent Company's income statement and balance sheet, will be subject to adoption at the Annual General Meeting on 11 May 2016.

PRECONDITIONS FOR PREPARATION OF THE STATE-MENTS

Functional currency and presentation currency

The Parent Company's functional currency is the Swedish krona, which is also the presentation currency for the Parent Company and the Group. Financial statements are consequently presented in Swedish kronor. All amounts are rounded to the nearest thousand kronor (SEK thousand) unless otherwise indicated.

Valuation grounds

Assets and liabilities are valued at their historic acquisition values. No financial assets or liabilities are reported at a value that differs significantly from the fair value as at 31 December 2015.

With regard to the additional purchase price for AcuVitec Oy, there is a discrepancy between book value and fair value amounting to SEK 50 thousand, although this discrepancy is not deemed to be significant.
With regard to the additional purchase price for Fox Publish AS, there is a discrepancy between book value and fair value amounting to SEK 57 thousand, although this discrepancy is not deemed to be significant.
With regard to the remaining purchase price for Nice AS, there is a discrepancy between book value and fair value amounting to SEK 23 thousand, although this discrepancy is not deemed to be significant.

Assessments and estimates

Preparing financial statements in accordance with IFRS entails the use of important accounting estimates. The Board of Directors and the management make certain assessments in the application of the company's accounting principles. These assessments and assumptions are based on historic experiences as well as other factors that are deemed reasonable under the prevailing circumstances. The actual results can differ from these assessments if other assumptions are made or other conditions exist. Principles for assumptions and assessments are reviewed regularly. Up until the submission of the Annual Report, nothing has occurred that gives rise to any amendments.

The areas where assumptions and assessments are of particular importance for Vitec's consolidated accounts are:

Capitalised development costs, product rights, customer agreements, brands and goodwill. This relates primarily to recovering the value of the development work, product rights and customer agreements, as well as impairment testing of brands and goodwill. The estimates and assumptions that entail a risk of significant adjustments in reported values for assets and liabilities over the next financial year are discussed below under the heading Intangible assets.
Defined-benefit pension plans. This relates primarily to a pension plan

in Norway and the actuarial assumptions that are used in the calculation. The relevant assumptions are presented in note 21, Pensions.

Additional purchase prices when acquiring companies. This relates to acquisitions where the purchase price is divided into two or more parts. One part that is paid in conjunction with the acquisition and other parts that are paid if certain conditions are satisfied within a certain period of time after the acquisition. For example, this might relate to growth in profit and/or sales as well as guarantee commitments. Regardless of these conditions, the purchase price will be entered at the fair value at the time of the acquisition. The acquisition analysis must be adopted within 12 months. After this, adjustments to the purchase price are recognised via profit for the year. As at 31 December 2015, there are two purchase prices in the balance sheet that are subject to assessments:
Fox Publish AS, a purchase price that can generate three different payments, although at the latest in March 2018.
AcuVitec OY, a purchase price that can generate a payment in spring 2016.

Significant applied accounting principles

The accounting principles described below have been applied consistently in the financial statements that have been submitted, unless otherwise indicated.

NEW OR ALTERED ACCOUNTING PRINCIPLES, 2015 ON-WARDS

No accounting principles have been altered as from 1 January 2015. No changes by IFRS have had any significant impact on the Group's accounts.

NEW OR ALTERED ACCOUNTING PRINCIPLES, 2016 ON-

WARDS

A number of new or altered standards are entering into force as from 2016. These have not been applied in advance by Vitec. To the extent the anticipated effects of these are not described below, they are not expected to have any significant effect on the Group's accounts.

IFRS 9 Financial instruments. This standard covers the classification, measurement, reporting, impairment and conclusion of reporting of financial instruments. The standard also handles general rules for hedge accounting. Vitec has not yet investigated the full effect of IFRS 9. The mandatory application date for IFRS 9 is 1 January 2018.

IFRS 15 Revenue from contracts with customers. This standard affects when and how a company should report revenue. The standard will affect aspects of revenue recognition as regards the timing of revenue recognition (fulfilment of the performance obligation) as well as how combined services, such as SaaS services, should be distributed between different income types. Vitec has not yet investigated the full effect of IFRS 15. The mandatory application date for IFRS 15 is 1 January 2018.

IFRS 16 Leasing. This standard means that the difference between financial and operational leasing is removed. All leasing agreements exceeding 12 months must be recognised in the balance sheet. The standard will principally affect the reporting of future rental contracts for premises. This will probably enter into force in 2019.

CLASSIFICATION OF SHORT-TERM AND LONG-TERM ITEMS

Long-term receivables and liabilities are essentially the amounts that are expected to be due for payment later than one year from the end of the reporting period. Short-term receivables and liabilities are due for payment within one year from the end of the reporting period.

OPERATING SEGMENT REPORTING

The operations in Vitec are organised into and controlled on the basis of segments that are reported to the most senior decision-makers within Vitec. These make up the Group management, which evaluates the results and allocates resources to the operating segments. For more information about operating segments, see Note 2 Information about operating segments.

CONSOLIDATED FINANCIAL STATEMENTS

The Group covers all companies (including structured companies) over which the Group has control. The Group controls a company when it is exposed to or is entitled to a variable return from its holding in the company, and has the potential to affect the return through its influence in the company. Subsidiaries are included in the consolidated accounts from the day on which control is transferred to the Group. They are excluded from the consolidated financial statements from the day on which control ceases.

The acquisition of a subsidiary is viewed as a transaction through which the Group indirectly acquires the subsidiary's assets and assumes its liabilities. In the acquisition analysis, the fair value of the acquired assets and transferred liabilities on the acquisition date is determined. In addition, the value of any holdings without control is determined. Transaction charges that arise are recognised directly in profit for the year.

In the event of the acquisition of an operation where the transferred payment, any holding without control and the fair value of a previously owned share (in the case of acquisitions in stages) exceed the fair value of the acquired assets and transferred liabilities that are recognised separately, the difference is recognised as goodwill. When this difference is negative, referred to as an acquisition at a low price, this is recognised directly in profit for the year. The transferred payment in conjunction with the acquisition does not include payments relating to the regulation of previous business connections. This type of settlement is recognised in the profit.

Conditional transferred payments/additional purchase prices are recognised at their fair value at the time of the acquisition. In cases where the conditional transferred payment is classified as an equity instrument, no revaluation is performed and settlement is recognised directly against equity. For other conditional transferred payments, these are revalued at each reporting occasion and the change is recognised in profit for the year. Acquisitions from holdings without control are recognised as a transaction within equity, i.e. between the Parent Company's owners (within retained profits) and holdings without control. The change of holdings without control is based on their proportional share of net assets. For this reason, goodwill does not occur in these transactions. Goodwill is not amortised, but is test annually for any impairment. Subsidiaries' financial statements are included in the consolidated financial statements from the time of acquisition until the date when the control ceases.

Internal Group assets and liabilities, income and expenses, as well as unrealised gains and losses between Group companies, are eliminated. Unrealised losses are eliminated in the same way as unrealised gains, although only to the extent there is no impairment requirement. The Group's equity only includes that part of the subsidiaries' equity that has been added after the acquisition.

INTERNAL PRICING

When invoicing between Group companies, prices are set based on business terms in cases when the end customer is external. In cases where invoicing refers to internal Group services, invoice takes place at cost price. Decisions regarding which prices are to apply are taken by the Group management. When invoicing foreign subsidiaries, the cost plus method is applied.

REVENUE RECOGNITION

Recurring revenues

Recurring revenue principally comprises annual agreements regarding SaaS, maintenance, support, licence renewal, operation and statistical information. Income recognition of statistical information takes place on delivery, while income recognition of other agreements takes place linearly over time.

There are seasonal variations in the recurring revenue. This relates primarily to transaction-based income, which varies during the year.

Licence revenues

Licence revenues comprise one-off charges in conjunction with new sales of software licences. The precondition for income recognition of the new sale of a software licence is that installation must have taken place. At this point, income recognition is generally performed for the entire licence. In the case of products with a significant proportion of customisation, the standard part of the licence is clearly defined with separate pricing in order to facilitate income recognition. Depending on the scope of any customisation, income recognition for the entire licence revenue is performed at installation if customisation is not included or if it is not particularly extensive. If the proportion of customisation is significant, successive income recognition of the licence is performed based on the degree of completion of the customisation. The degree of completion is assessed according to the proportion of the agreed delivery that has been completed, based on agreed and completed functionality. A combined risk assessment of the assignment as a whole is always performed on a case-by-case basis. The importance of licence revenues in the traditional sense is declining, as many new deals are based on the Software as a Service (SaaS) business model.

Below are applicable criteria for revenue recognition of licence revenue and, where applicable, service revenue:

Written agreement signed by both parties.
The licence fee must be a fixed amount or be calculated according to a reliable method and there must be no opportunity for termination, or the credit period is shorter than twelve months.
It is probable that payment will be received.

Service revenues

The service revenues comprise consultancy services on an ongoing basis and at a fixed price. Consultancy services on an ongoing basis are subject to income recognition at their earned value in line with the provision of the services. Income that is not invoiced to the customer is recognised as accrued income in the balance sheet. Consultancy services at a fixed price are subject to income recognition with regard to the degree of completion of the assignment, also taking into account the amount of resources that are required to complete the assignment. The degree of completion is assessed according to the proportion of the agreed delivery that has been completed, based on agreed and completed functionality, as well as actual time spent in relation to calculated time. Income that is not invoiced to the customer is recognised as accrued income in the balance sheet. If the invoiced amount exceeds the earned value determined in the final accounts, the excess invoicing is recognised as prepaid income. As it is probable that the total expenditure for completing the assignment will exceed the total revenues, the loss is recognised immediately.

Sale of goods

Goods for resale comprise hardware and third party software, excluding OEM licences which are recognised as licence revenues. Income recognition takes place on delivery.

Other revenues

Other revenues principally comprise unrealised exchange rate differences. See also Note 5.

LEASING, RENTAL AGREEMENTS AND OTHER NON-CAN-CELLABLE CONTRACTS

Operational leasing agreements, rental agreements, etc.

Costs in respect of operational leasing agreements are recognised in profit for the year linearly over the leasing period. Benefits obtained in conjunction with entering into an agreement are recognised in profit for the year as a decrease in leasing charges linearly over the term of the leasing agreement. Variable charges are expensed in the periods in which they arise. In addition to these, there are future commitments in the form of non-cancellable contracts. These comprise rental agreements in respect of premises as well as agreements regarding telephony and data communication.

Financial leasing agreements

The obligation to pay future leasing charges in respect of tangible financial leasing agreements is recognised as long-term and short-term liabilities in those cases where the amounts are significant. The leased assets are depreciated over the relevant asset's useful life, whereas the leasing payments are recognised as interest and repayment of the liabilities. The minimum leasing charges are distributed between interest expense and repayment of the outstanding liability. The interest expense is spread over the leasing period, so that each accounting period is subject to an amount corresponding to a fixed interest rate for the liability recognised during the relevant period. Variable charges are expensed in the periods in which they arise.

FINANCIAL INCOME AND EXPENSES

Financial income comprises exclusively interest income on financial investments in the form of fixed interest investments, as well as dividends in the Parent Company. Dividends are recognised when the entitlement to receive a dividend has been established. Anticipated dividends are recognised in the Parent Company only when the company issuing the dividend is a wholly owned subsidiary. Financial expenses comprise interest expenses on loans and accounts payable. Loan costs are recognised in the results with the application of the effective interest method, except in those cases where they are directly attributable to the purchase, design or production of a qualified asset as they are included in the asset's acquisition value.

RECEIVABLES AND LIABILITIES IN A FOREIGN CURRENCY Operating receivables and operating liabilities in a foreign currency are translated at the exchange rate at the end of the reporting period, and exchange rate differences are recognised in operating profit.

TAX

The Group's total tax comprises current tax and deferred tax. Tax is recognised in profit for the year, except when underlying transactions are recognised in other comprehensive income or in equity, whereupon the associated tax effect is recognised in other comprehensive income or in equity. Current tax is tax that is to be paid or received with regard to the current year. This also includes the adjustment of current tax attributable to previous periods. Deferred tax is calculated according to the balance sheet method on the basis of temporary differences between recognised and taxable values of assets and liabilities. The amounts are calculated based on how the temporary differences are expected to be evened out, and with the application of the tax rates and tax rules that have been decided or notified at the end of the reporting period. Temporary differences are not taken into account in consolidated goodwill, nor in differences attributable to shares in subsidiary and associated companies that are not expected to be taxed within the foreseeable future. Deferred tax receivables in deductible temporary differences and deficit deductions are only recognised to the extent it is likely that these will entail lower tax payments in future.

Deferred tax receivables and liabilities are offset when there is a legally enforceable right to do so for the tax receivables and tax liabilities in question, and when the deferred tax receivables and tax liabilities refer to tax charged by the same tax authority and relate either to the same taxable entity or different taxable entities, where the intention exists to settle the balances through net payments.

INTANGIBLE AND TANGIBLE ASSETS

Intangible assets

Goodwill

In the event of an acquisition, goodwill is recognised in those cases where the transferred payment exceeds the actual value of identifiable acquired assets and transferred liabilities. As regards goodwill attributed to acquisitions before 1 January 2004, Vitec has elected not to apply IFRS retroactively.

Goodwill is valued at acquisition value minus any accumulated impairment. Goodwill is distributed to cash-generating units and is assessed at least once a year for impairment, see heading Impairment of non-financial assets below. The assessment is based on assumptions and estimates which are associated with an amount of uncertainty.

Capitalised development costs

Costs for software development are capitalised when it is probable that the project can become successful bearing in mind its commercial and technical potential, and when the costs can be reliably estimated. The development work comprises research and development. Only costs for development are capitalised as an asset in the balance sheet. The acquisition value of the asset comprises salaries and other costs that are directly related to its development. Capitalised development costs are written off over an estimated useful life of five years. Assessment of the asset's value takes place continually and per development project, after which impairment is performed if required. The asset is recognised at the acquisition value less accumulated depreciation and any impairment. The assessment is based on assumptions and estimates which are associated with an amount of uncertainty.

Software

The asset comprises the right of usage of standard software in the form of business systems, Group accounting systems, development environments and other administrative systems. The asset is written off over five years and recognised at the acquisition value less accumulated depreciation and any impairment.

Brands

Brands are normally deemed to have an indeterminate useful life. Brands are valued at acquisition value minus any impairment. Brands are distributed to cash-generating units and are assessed at least once a year for impairment. The assessment is based on assumptions and estimates which are associated with an amount of uncertainty. The Group only includes brands that have been identified in acquisition analyses.

Product rights

Product rights principally comprise acquired source code. These are written off over 5-10 years. The asset is recognised at the acquisition value less accumulated depreciation and any impairment. Assessment of the asset's value is performed through estimates of future discounted cash flows. This assessment is based on assumptions and estimates which are associated with an amount of uncertainty.

Customer agreements

Acquired customer agreements are written off over 8-10 years and recognised at the acquisition value less accumulated depreciation and any impairment.

Tangible assets

Tangible assets are recognised in the statement of financial position when it is probable that future economic benefits will flow to the company and the acquisition value of the asset can be calculated reliably. The tangible assets are recognised at the acquisition value after deductions for accumulated depreciation and any impairment. The acquisition value includes the purchase price and direct costs attributable to the asset for transporting it to site and in a condition that it can be utilised in the operation. Gains or losses that arise when disposing of or divesting tangible assets comprise the difference between the sale price and the recognised value, less direct sales expenses. The profit item is recognised as other operating revenue/expenses.

Depreciation of tangible assets has been based on the assets' depreciable amounts, which correspond with the original acquisition value, and constitutes 20-33 per cent annually for computers and 10-20 per cent annually for other equipment. Depreciation on investments in rented premises is written off over the remaining rental period. At the end of 2013, a private apartment was acquired for which the Parent Company has obtained title deeds. The apartment is depreciated at 2 per cent annually.

Leased assets

Leasing agreements, where essentially all risks and benefits associated with ownership fall to the lessor, are classified as operational leasing. Leasing agreements, where risks and benefits associated with ownership essentially fall to the lessee, are classified as financial leasing. When reporting tangible financial leasing, the asset is recognised as a fixed asset in the consolidated statement of financial position, valued at the current value of the minimum leasing charges when the agreement was entered into. The asset is written off over its useful life. Obligations regarding future leasing charges are recognised as short-term and long-term liabilities.

FINANCIAL INSTRUMENTS

Financial instruments that are recognised in the statement of financial position include interest-bearing receivables, other receivables, accounts receivable as well as cash and cash equivalents on the asset side. Accounts payable, accrued expenses and loans can be found on the liability side.

Reporting financial assets and liabilities

A financial asset or liability is included in the statement of financial position when the company becomes a party to the instrument's contractual terms and conditions. A receivable is included when the company has acted and there is a contractual liability for the other party to pay, even if the invoice has not yet been sent. Accounts receivable are included in the statement of financial position when the invoice has been sent. Liabilities are included when the other party has acted and there is a contractual liability to pay, even if the invoice has not yet been received. Accounts payable are included when the invoice has been received. A financial asset is removed from the statement of financial position when the rights in the agreement are realised, fall due or the company loses control of them. The same applies to a part of a financial asset. A financial liability is removed from the statement of financial position when the obligation in the agreement is fulfilled or ceases in some other way. The same applies to a part of a financial liability.

Classification and valuation (see Note 28 for the categories' values)

Financial instruments are initially recognised at the acquisition value corresponding to the instrument's fair value plus transaction costs, except for derivative instruments for which transaction costs are expenses immediately. A financial instrument is classified when recognised for the first time, including on the basis of the purpose for which the instrument was acquired. All financial assets and liabilities are classified in the following categories:

Financial assets and liabilities valued at fair value via the income statement. Additional purchase prices in conjunction with acquisitions are included in this category.
Investments that are held to maturity. Vitec has no financial instruments in this category.
Loans receivable and accounts receivable. Vitec's accounts receivable, other receivables as well as cash and cash equivalents are included in this category.
Financial assets that can be sold. Vitec has no financial assets in this category.
Financial liabilities valued at their accrued acquisition value. Vitec's accounts payable, other liabilities, accrued expenses and loans are included in this category.

Loans receivable and accounts receivable

Loans receivable and accounts receivable are financial assets that are not derivatives, that have determined or determinable payments and that are not listed on an active market. These assets are valued at their accrued acquisition value. On each reporting occasion, an evaluation is carried out as to whether there are objective indications that a loan receivable is in need of impairment; loan receivables are assessed individually. Impairment of loan receivables is recognised as other operating expenses.

Accounts receivable are recognised at the amount that is expected to be received after deductions for doubtful receivables. A provision regarding reduction in value is made when the receivable is more than 90 days old, or earlier if the amount that is expected to be paid, after individual assessment, is below the asset's reported value. The anticipated duration of accounts receivable is short, which is why the value is recognised without discounting. When an account receivable cannot be collected, it is written off against the value reduction account for accounts receivable. Impairment of accounts receivable is recognised as other external expenses. The recovery of amounts that have previously been written off reduces the sales expenses in the results.

Cash and cash equivalents

The Parent Company's and the Group's cash and cash equivalents include the Group's balance in Group accounts and other bank accounts, including currency accounts and money in transit. Cash and cash equivalents are valued at their accrued acquisition value. The Group's cash and cash equivalents are exposed to the risk of exchange rate fluctuations, but can always be converted easily to cash at a known amount.

Short-term investments

Short-term investments comprise fixed interest investments or investments in money market funds. The investments can be converted to cash at a known amount within one banking day.

Financial liabilities valued at their accrued acquisition value Accounts payable and loans are classified in the category other financial liabilities. Accounts payable have a short anticipated duration and are valued without discounting at a nominal amount. Loans are classified as other financial liabilities, which means that they are recognised at their accrued acquisition value according to the effective interest method.

Convertible debentures

Convertible debentures are reported both as a financial liability and as equity. The various parts are distributed after a valuation conducted in conjunction with a share issue. The interest expense is spread over the expected term of the loan.

Hedging net investment in foreign operations

The Group has taken out loans in foreign currencies (EUR, NOK and DKK) to hedge investments in foreign subsidiaries. The loans are valued at the exchange rate on the balance sheet date. The Group recognises exchange rate differences directly to equity, after adjustment for the tax element. Any ineffective element of the exchange rate difference is recognised directly in the income statement as a financial item.

EARNINGS PER SHARE

Earnings per share before dilution are calculated as profit for the year attributable to shareholders of the Parent Company divided by the weighted average number of outstanding shares. When calculating earnings per share after dilution, the results are adjusted by the interest after tax that is attributable to the convertible bonds that may be converted. The number of shares is adjusted by the sum of the weighted average number of shares that can give rise to the dilution effect.

PROVISIONS

A provision is recognised in the balance sheet when there is a formal or informal commitment as a result of a event that has occurred, and where it is probable that an outflow of resources is required to settle the commitment and a reliable estimate of the amount can be made. In cases where some or all of the amount that is required to settle a provision is expected to be paid by a third party, the reimbursement is recognised when, and only when, it is as good as certain that it will be received if the obligation is settled. The reimbursement is recognised as an asset in its own right in the balance sheet. The amount that is recognised for the reimbursement cannot exceed the provision. The cost for a provision is recognised in the income statement net following deductions for any reimbursement from a third party.

CONTINGENT LIABILITIES

A contingent liability is recognised where there is a possible commitment deriving from events that have occurred, and whose occurrence is confirmed only by one or more uncertain future events that do not lie entirely within the company's control occurring or failing to occur, or when there is a commitment that derives from occurred events but that has not been recognised as a liability or provision due to it being unlikely that an outflow of resources will be required to settle the commitment, or that size of the commitment cannot be calculated with sufficient accuracy.

INVENTORIES

Inventories are valued at the acquisition value or the net sales value, whichever is the lowest, and only exist to a minor extent.

IMPAIRMENT OF NON-FINANCIAL ASSETS

The value of capitalised development costs, product rights, customer agreements, brands and goodwill is tested to determine any need for impairment. Goodwill and brands with an indeterminate useful life are assessed annually. This assessment takes place by means of the recognised value being compared with the recovery value, where the recovery value is defined as the asset's fair value (minus sales expenses) or the value in use, whichever is the higher. The value in use is calculated by discounting the future cash flows the asset it expected to generate, in perpetuity, by an interest rate based on the market's assessment of riskfree interest and risk. The cash flows are based on budgets/forecasts determined by the company management.

In the calculation, the assets are referred to the smallest cash-generating unit where an independent cash flow can be determined. The smallest cash generating unit is a business area. The discount rate after tax amounts to 8.63-9.43 per cent, and is based on a risk-free bond yield with a duration of 10 years with an addition for assessed risk. The assessment is based on assumptions and estimates which are associated with an amount of uncertainty. An impairment is recognised when an asset's or cash-generating unit's recognised value exceeds the recovery value. An impairment is recognised as a cost in profit for the year. When the impairment requirement has been identified for a cash-generating unit, the impairment amount is distributed in the first instance to goodwill. After this, a proportional impairment of other assets included in the unit is performed. Vitec's most recent assessment was conducted in conjunction with the preparation of the final accounts for 2015.

REMUNERATION TO EMPLOYEES

Short-term remuneration is calculated without discounting, and is reported when the services are received. Costs for bonuses and other variable salary portions are recognised when a legal or informal obligation exists for the company to pay remuneration and the payment can be calculated reliably.

Pensions and other remuneration after completed employment can be classified as defined-contribution plans or defined-benefit plans. The majority of the Group's pension commitments comprise defined-contribution plans that are fulfilled through continual payments to independent authorities or bodies. Obligations in respect of fees for defined-contribution plans are recognised as a cost in the income statement when they arise. There are a small number of employees with defined-benefit ITP plans with continual payments to Alecta. These are recognised as defined-contribution plans since Alecta does not supply the information that is required. As a result, we do not have the information that is required to recognise the plan as a defined-benefit plan. However, there is nothing to indicate any significant commitments exceeding that which is paid to Alecta.

Remuneration on termination of employment is recognised as a provision in conjunction with staff being given notice only if the company is demonstrably obliged to terminate an employment before the normal time, or when remuneration is paid as an incentive to encourage voluntary departure. When remuneration is paid as an incentive to encourage voluntary departure, a cost and a provision are recognised if it is likely that the offer will be accepted and if the number of employees who will accept the offer can be estimated reliably.

PARENT COMPANY'S ACCOUNTING PRINCIPLES

The Parent Company complies with the Annual Accounts Act and the Swedish Financial Reporting Board's recommendation, RFR 2 Reporting of legal entities. The application of RFR 2 means that the Parent Company must apply the same accounting principles as the Group as far as possible within the framework of the Annual Accounts Act, the Act on Safeguarding of Pension Commitments, and with respect to the correlation between accounting and taxation.

Altered accounting principles and the differences between the Parent Company's and the Group's accounting principles are set out below.

The Parent Company applies the change in RFR 2 in respect of IRFS 12 Disclosure of Interests in Other Entities. The information requirements in RFR 2 can be found in Chapter 5 §8 of the Annual Accounts Act, and correspond with that which was previously included in RFR 2 in respect of IAS 27. Unless otherwise indicated, the Parent Company's accounting principles have otherwise been amended in accordance with that which is described for the Group.
For the Parent Company, an income statement is presented. For the Group, a statement of comprehensive income is presented. For the Parent Company, the designations balance sheet and cash flow statement are used for the reports that, for the Group, have the titles statement of financial position and statement of cash flows. For the Parent Company, the income statement and balance sheet are set out in accordance with the schedules in the Annual Accounts Act, while the statement of comprehensive income, the statement of changes in equity and the cash flow statement are based on IAS 1 Presentation of Financial Statements and IAS 7 Statement of Cash Flows. The differences compared to the Group's reports that apply in the Parent Company's income statement and balance sheet principally comprise the recognition of equity and the occurrence of provisions as a separate heading in the balance sheet.
Shares in subsidiaries are recognised in the Parent Company according to the acquisition value method, and conditional purchase prices are valued on the basis of the likelihood that they will be paid. In the consolidated financial statements, conditional purchase prices are recognised at fair value with value changes through profit. For the Parent Company, transaction charges are included in the recognised value, which does not apply to the Group.
In the Parent Company, all leasing agreements are recognised according to the rules for operational leasing.
In the Parent Company, untaxed reserves are recognised inclusive of deferred tax. In the Group, untaxed reserves are split into deferred tax and shareholders' equity.
The anticipated dividend from subsidiaries is reported in those cases where the Parent Company has the sole right to decided on the size of the dividend. The Parent Company has entered a receivable in respect of anticipated dividends from subsidiaries. This amounts to a total of SEK 39.4 million, divided between: Vitec Capitex AB SEK 2.9 million, Vitec Energy AB SEK 5.9 million, Vitec Förvaltningssystem AB SEK 15.4 million, Vitec IT-Drift AB SEK 1.5 million, Vitec Mäklarsystem AB SEK 12.7 million and Vitec Veriba AB SEK 1.0 million. An anticipated dividend has not been entered in respect of foreign subsidiaries.

NOTE 2 INFORMATION ABOUT OPERATING SEGMENTS

The Group management follows up and distributes resources based on operating segments. The basis for the subdivision in 2015 are the segments Estate Agents, Real Estate, Energy, Media, Finance & Insurance, Health and Auto.

Estate Agents Business systems for estate agents.
Real Estate Business systems for construction and real estate companies.
Media Business systems for newspaper publishers and companies supplying special solutions within distribution.
Energy Business systems for forecasting wind power, electricity and heating needs, as well as for the technical management and maintenance of distribution networks.
Health Business systems for electronic medical records handling for healthcare.
Auto Business systems for the automotive sector with support for sales, purchasing, stock control, invoicing, accounting and payroll administration.
Finance & Insurance Business systems for the finance and insurance industry, as well as standardised software for tax calculations, pension calculations and housing calculations.

Geographic markets based on customers' registered offices The following table shows the Group's net sales converted to SEK million for the period January - December in 2015 as well as 2014 based on our customers' registered offices. The distribution of fixed assets is also presented by geographic market.

Market	Net sales			Fixed assets
	2015	2014	2015	2014
Sweden	308.1	298.2	184.0	181.7
Norway	142.1	106.1	190.7	137.3
Finland	64.1	46.9	119.7	138.4
Denmark	99.8	37.3	157.0	95.5
Rest of Europe	4.1	2.9	-	-
Rest of the world	0.1	0.6	-	-
Total	618.4	492.0	651.5	552.9

		Estate agents	Real estate		Media		Energy		Insurance	Finance &	Health		Car parts		Group-wide		Eliminations		Total
Per operating segment, SEK million	2015	2014	2015	2014	2015	2014	2015	2014	2015	2014	2015	2014	2015	2014	2015	2014	2015	2014	2015	2014
Recurring revenues		191.1 168.9	82.0	75.5	4.6	7.5	17.3	16.0	77.2	42.2	48.3	35.6	60.0	27.1	-	-	-		- 480.6 372.8
Licences	5.6	2.8	9.2	12.6	0.8	4.9	0.0	0.1	6.8	3.9	0.3	0.6	0.5	-	-	-	-		23.1	24.9
Service revenues	9.2	12.4	49.3	44.0	5.2	9.2	6.6	6.4	16.5	8.5	12.1	7.1	7.1	0.5	0.1	-	-		- 106.2	88.1
Other revenues	1.1	1.6	2.0	2.2	0.0	0.3	0.2	0.2	0.8	0.4	0.8	0.3	3.4	0.7	0.2	0.5	-	-	8.5	6.2
Internal sales	1.9	1.3	0.4	0.3	0.1	0.5	-	-	1.6	0.6	0.5	-	-	-	87.9	72.4	-92.3	-75.1	0.0	0.0
Net sales		209.0 187.0 142.9 134.6			10.6	22.4	24.1		22.7 102.8	55.6	62.0	43.6	71.1	28.3	88.3	72.9	-92.3		-75.1 618.4 492.0
Capitalisation, own work	19.4	17.8	11.8	12.0	0.2	0.1	2.2	2.4	15.3	6.8	5.9	5.5	7.4	1.7	-	-	-	-	62.1	46.3
Depreciation	-26.4	-19.1	-11.3	-9.3	-0.1	-7.2	-1.8	-1.4	-12.3	-5.5	-8.5	-5.8	-7.7	-2.8	-6.5	-5.2	-	-	-74.6	-56.3
Share in profit of associated companies																			0.0	0.0
Operating profit	33.2	29.5	24.9	20.5	2.4	1.7	8.8	7.0	13.9	6.3	5.7	3.8	14.9	3.9	-3.2	-4.1	-		- 100.6	68.6
Financial items, net	0.5	0.4	-	-	-	-	-	-	-	-	-0.3	-0.3	-	0.1	-6.1	-4.3	-	-	-5.9	-4.1
Consolidated profit before tax																			94.7	64.5
Other information
Investments in fixed assets	51.6	19.2	11.8	12.0	0.2	0.1	2.2	2.5	43.1	88.6		6.9 135.0	81.0	46.8	4.4	12.0	-		- 201.2 316.2
Closing balance Goodwill	90.6	85.3	27.4	27.4	7.3	7.3	-	-	30.5	28.0	17.5	28.8	28.8	14.2	-	-	-		- 202.1 191.0
Closing balance Other tangible and intangible assets	98.6	85.3	32.7	30.3	0.2	0.1	5.1	4.5	96.3		72.5 102.2 109.6		84.1	29.3	23.4	30.0	-		- 442.6 361.8

No single customer is responsible for more than 10 % of the Group's revenue.

NOTE 3 ACQUISITIONS

Fox Publish AS and ADservice Scandinavia AB

On 2 March 2015, Vitec acquired all the shares in Fox Publish AS and ADservice Scandinavia AB against cash payments of SEK 15 million and SEK 0.4 million respectively. Fox develops and provides a publication system for estate agents and operates on the Norwegian market. ADservice Scandinavia is a sales company for the Swedish market. The companies are consolidated as from the acquisition date. The goodwill is not tax-deductible and is deemed to be attributable to the expected profitability, complementary expertise as well as anticipated synergies in the form of the joint development of our products. The acquisition increases Vitec's presence on the Norwegian and Swedish software markets. An additional purchase price of SEK 1.0 million has been paid in 2015. The remaining expensed purchase price stands at SEK 6.7 million and is dependent on discrete events within a maximum period of 36 months following the acquisition date. SEK 2.9 million has been recognised as shortterm debt as at 31 December 2015. The maximum purchase price is SEK 24.1 million. The acquisition-related expenses amount to SEK 0.1 million as at 31 December, and are recognised as other external costs through comprehensive income. From the acquisition date up to and including 31 December, the revenues in the acquired companies amount to SEK 19.9 million. If consolidation had occurred at the beginning of the year, the companies would have brought the Group a further approx. SEK 5.0 million in revenue. The following purchase price allocation is preliminary until twelve months have passed since the acquisition date.

PRELIMINARY PURCHASE PRICE ALLOCATION

	Fox Publish AS and ADservice Scandinavia AB	Fair value, adjustment	Fair value recognised in the Group
Brands	-	434	434
Product rights	-	11,120	11,120
Customer agreements	-	6,875	6,875
Intangible assets	123	-	123
Tangible assets	366	-	366
Financial assets	5	-	5
Current receivables	4,887	-	4,887
Cash and cash equivalents	983	-	983
Deferred tax liabilities	-	-4,966	-4,966
Short-term liabilities	-4,706	-	-4,706
Net identifiable assets and liabilities	1,658	13,463	15,121
Goodwill on consolidation			8,936
Total			24,057
The Group's acquisition value			24,057

CALCULATION OF NET CASH OUTFLOW

	Fair value
The Group's acquisition value	-24,057
Expensed conditional portion of purchase price (earn out)	7,689
Acquired cash and cash equivalents	983
Net cash outflow	-15,385

Datamann A/S

On 1 July, Vitec acquired all the shares in Datamann A/S against a cash payment of SEK 54.9 million. The company's main product is software for the Danish automotive sector.

The company is consolidated as from the acquisition date. The goodwill is not tax-deductible and is deemed to be attributable to the expected profitability, complementary expertise as well as anticipated synergies in the form of the joint development of our products. The acquisition increases Vitec's presence on the Danish software market, as well as providing access to new markets. The acquisition-related expenses amount to SEK 1.8 million as at 31 December, and are recognised as other external costs through comprehensive income. From the acquisition date up to and including 31 December, the revenues in the acquired company amount to SEK 19.4 million. If consolidation had occurred at the beginning of the year, the company would have brought the Group a further approx. SEK 19.2 million in revenue. The following purchase price allocation is preliminary until twelve months have passed since the acquisition date.

PRELIMINARY PURCHASE PRICE ALLOCATION

	Datamann AS	Fair value, adjustment	Fair value recognised in the Group
Brands	-	1,835	1,835
Product rights	-	30,589	30,589
Customer agreements	-	11,472	11,472
Tangible assets	1,069	-	1,069
Inventories	111	-	111
Current receivables	4,665	-	4,665
Cash and cash equivalents	15,235	-	15,235
Deferred tax liabilities	-65	-10,316	-10,380
Short-term liabilities	-12,003	-	-12,003
Net identifiable assets and liabilities	9,013	33,580	42,593
Goodwill on consolidation			12,308
The Group's acquisition value			54,901

CALCULATION OF NET CASH OUTFLOW

	Fair value
The Group's acquisition value	-54,901
Acquired cash and cash equivalents	15,235
Net cash outflow	-39,666

Infoeasy AS

On 2 July, Vitec acquired all the shares in Infoeasy AS against a cash payment of SEK 16.3 million. The company's main product is industry-specific software for the Norwegian automotive sector.

The company is consolidated as from the acquisition date. The goodwill is not tax-deductible and is deemed to be attributable to the expected profitability, complementary expertise as well as anticipated synergies in the form of the joint development of our products. The acquisition increases Vitec's presence on the Norwegian software market, as well as providing access to new markets. The acquisition-related expenses amount to SEK 0.5 million as at 31 December, and are recognised as other external costs through comprehensive income. From the acquisition date up to and including 31 December, the revenues in the acquired company amount to SEK 10.4 million. If consolidation had occurred at the beginning of the year, the company would have brought the Group a further approx. SEK 12.2 million in revenue. The following purchase price allocation is preliminary until twelve months have passed since the acquisition date.

PRELIMINARY PURCHASE PRICE ALLOCATION

	Infoeasy AS	Fair value, adjustment	Fair value recognised in the Group
Brands	-	282	282
Product rights	-	10,739	10,739
Customer agreements	-	1,378	1,378
Intangible assets	896	-	896
Tangible assets	24	-	24
Financial assets	334	-	334
Current receivables	2,530	-	2,530
Cash and cash equivalents	4,274	-	4,274
Deferred tax liabilities	-	-3,348	-3,348
Long-term liabilities	-1,241	-	-1,241
Short-term liabilities	-3,663	-	-3,663
Net identifiable assets and liabilities	3,156	9,051	12,208
Goodwill on consolidation			4,166
Total			16,373
The Group's acquisition value			16,373

CALCULATION OF NET CASH OUTFLOW

	Fair value
The Group's acquisition value	-16,373
Acquired cash and cash equivalents	4,274
Net cash outflow	-12,099

Nice AS

On 7 July, Vitec acquired all the shares in Norwegian Insurance Computer Environment AS (Nice AS) against a cash payment of SEK 25.2 million. The company's main product is industry-specific software for insurance companies in Norway, Denmark and Sweden.

The company is consolidated as from the acquisition date. The goodwill is not tax-deductible and is deemed to be attributable to the expected profitability, complementary expertise as well as anticipated synergies in the form of the joint development of our products. The acquisition increases Vitec's presence on the Norwegian software markets. The acquisition-related expenses amount to SEK 0.8 million as at 31 December, and are recognised as other external costs through comprehensive income. From the acquisition date up to and including 31 December, the revenues in the acquired company amount to SEK 3.0 million. If consolidation had occurred at the beginning of the year, the company would have brought the Group a further approx. SEK 18.1 million in revenue. The following purchase price allocation is preliminary until twelve months have passed since the acquisition date.

PRELIMINARY PURCHASE PRICE ALLOCATION

	Nice AS	Fair value, adjustment	Fair value recognised in the Group
Brands	-	403	403
Product rights	-	15,019	15,019
Customer agreements	-	4,435	4,435
Intangible assets	72	-	72
Current receivables	981	-	981
Cash and cash equivalents	9,691	-	9,691
Deferred tax liabilities	-	-5,362	-5,362
Long-term liabilities	-756	-	-756
Short-term liabilities	-3013	-	-3,013
Net identifiable assets and liabilities	6,975	14,495	21,470
Goodwill on consolidation			3,730
Total			25,200

CALCULATION OF NET CASH OUTFLOW

	Fair value
The Group's acquisition value	- 25,200
Expensed share of purchase price	2,016
Acquired cash and cash equivalents	9,691
Net cash outflow	-13,493

NOTE 4 INCOME AND EXPENSE BETWEEN GROUP COMPANIES

The Parent Company's net sales include invoicing to Group companies at 99 per cent (99) and in operating costs it stands at 1 per cent (1).

NOTE 5 OTHER OPERATING INCOME AND OTHER OPERATING EXPENSES

The expensed conditional purchase price for AcuVitec Oy has been impaired by SEK 11.2 million. This correction has been recognised as other operating income and as an impairment of goodwill in accordance with IFRS 3:58. Residual other operating income and other operating expenses refer in their entirety to exchange rate differences attributable to operating receivables and liabilities.

The Parent Company's other operating income comprises in its entirety unrealised exchange rate differences.

NOTE 6 EMPLOYEES, STAFF COSTS AND REMUNERATION TO SENIOR EXECUTIVES

Average number of employees
		2015			2014
	Men	Women	Total	Men	Women	Total
The Parent Company
Sweden	7	15	22	7	13	20
Subsidiaries
Sweden	150	45	195	146	54	200
Denmark	72	13	85	29	8	37
Norway	49	22	71	36	15	51
Finland	27	16	43	20	10	30
France	5	1	6	5	1	6

At the end of the year, the number of employees totalled 433 (393).

Gender distribution among senior executives

The Board of the Parent Company comprises five members, two of whom are women. The Group's management team comprises four individuals, one of whom is a woman. Business Area managers comprise nine men and one woman.

Group, total 310 112 422 243 101 344

Salaries and other remuneration

	2015			2014
	Salaries and other remuneration	Payroll overheads (of which pension premiums)	Salaries and other remuneration	Payroll overheads (of which pension premiums)
The Parent Company	16,895	9,011 (3,116)*	15,125	8,273 (2,909)*
Subsidiaries		239,717 79,287 (25,169)		176,329 65,254 (20,089)
Group, total		256,612 88,298 (28,285)**		191,454 73,537 (22,998)**

*Of the Parent Company's pension premiums, SEK 1,446 thousand (2,067) refers to senior executives.

** Of the Group's pension premiums, SEK 2,786 thousand (3,087) refers to senior executives.

Salaries and other remuneration divided between Board members, senior executives and other employees

	2015		2014
	Senior executives (of which bonus es etc.)	Other employees	Senior executives (of which bonus es etc.)	Other employees
The Parent Company	7,143 (0)	9,752	8,390 (0)	6,735
Subsidiaries	8,744 (0)	230,973	9,144 (0)	167,185
Group, total	15,887 (0)	240,725	17,534 (0)	173,920

Directors' fees – Payment has taken place in accordance with the decision of the Annual General Meeting. The Chairman of the Board receives a fee of SEK 230 thousand per year. The other four Board members who are not employees of the company receive a combined fee of SEK 460 per year. In both cases, the remuneration level applies as from the date of the AGM.

Parent Company's CEO – The CEO's salary amounted to SEK 1,836 thousand, with no Director's fee. The CEO's pension solution from the company includes the entitlement to an annual premium payment amounting to 35 per cent of salary. In the event of notice from the company's side, salary will be payable for the notice period of 6 months, as well as a severance payment totalling 18 months' salary. The severance payment is offset against remuneration from another employer.

Remuneration to Board members and senior executives in the Parent Company

All remuneration is deemed to be at the market-going rate. External members receive Directors' fees.

There is no variable remuneration. No consultancy agreements exist with any Board member or senior executive. The pension plans are defined-contribution and are based on a retirement age of 65. The notice period set out in applicable legislation or an applicable collective bargaining agreement normally applies between Vitec and other senior executives. In the event of notice from Vitec's side, Maria Kröger and Patrik Fransson are entitled to 6 months' severance pay and Lars Eriksson is entitled to 9 months' severance pay.

There is an ongoing convertible programme for employees and senior executives in the form of convertible debentures. The share issues have been implemented on market terms, which is why there is no benefit to be recognised as share-related remuneration. Board members' and senior executives' holdings of shares and convertible bonds can been seen in the Corporate Governance Report.

	Basic salary/ Directors' fees	Other benefits	Pension cost	Total
Chairman of the Board, Crister Stjernfelt	230 (223)	- (-)	- (-)	230 (223)
Board member, Kaj Sandart	115 (112)	- (-)	- (-)	115 (112)
Board member, Jan Friedman	115 (112)	- (-)	- (-)	115 (112)
Board member, Birgitta Johans son-Hedberg	115 (112)	- (-)	- (-)	115 (112)
Board member, Anna Valtonen	115 (112)	- (-)	- (-)	115 (112)
CEO, Lars Stenlund	1,836 (1,958)	- (-)		648 (713) 2,484 (2,671)
*Other senior executives, Parent Company	4,617 (5,704)	14 (37)		798 (1,354) 5,429 (7,095)
Total	7,143 (8,390)		14 (43) 1,446 (2,067) 8,603 (10,500)

The previous year's remuneration and benefits are presented in brackets.

* Other senior executives in the Parent Company refer to Patrik Fransson, Lars Eriksson and Maria Kröger.

Kaj Sandart and Jan Friedman have invoiced their fees plus payroll overheads and VAT via companies. This procedure is cost-neutral for Vitec.

NOTE 7 FEES AND REIMBURSEMENT OF COSTS TO AUDI-TORS

	Group		The Parent Company
	2015	2014	2015	2014
PWC, auditing assignment	1,373	983	651	520
PWC, audit activities other than auditing assignment	117	60	-	60
PWC, tax consultancy	-	40	-	40
PWC, other assignments	18	5	18	5
Total audit fees	1,508	1,088	669	625

NOTE 8 NET FINANCIAL ITEMS

	Group		The Parent Company
	2015	2014	2015	2014
Interest income	826	1,547	516	912
Dividend, subsidiaries	-	-	39,907	31,459
Other financial expenses	-30	-32	-	-
Interest expenses	-6,717	-5,562	-6,234	-4,991
Net financial items	-5,921	-4,047	34,189	27,380

NOTE 9 APPROPRIATIONS

	The Parent Company
	2015	2014
The difference between booked depreciation and depreciation according to plan	278	-424
Received Group contributions	-	8,733
Group contributions paid	-1,100	-
Total	-822	8,309

NOT 10 TAX

	Group		The Parent Com pany
	2015	2014	2015	2014
Current tax
Current tax on profit for the year	-22,374	-13,490	-3,946	-77
Adjustment of current tax from previous years	-	-	77	220
	-22,374	-13,490	-3,869	143
Deferred tax
Deferred tax in respect of temporary
differences	2,011	-1,990	-	-
Revaluation of deferred tax due to altered tax
rates in Norway and Denmark as from 2016	3,868	-	-	-
	5,879	-1,990	0	0
Total recognised tax expense	-16,495	-15,480	-3,869	143

RECONCILIATION BETWEEN APPLICABLE TAX RATE AND EFFECTIVE TAX RATE

Recognised profit before tax	94,686	64,545	58,298	31,350
Of which in Sweden	93,239	43,342	-	-
Of which in Finland	-1,358	3,658	-	-
Of which in Norway	8,340	15,939	-	-
Of which in Denmark	-5,537	1,606	-	-
Tax according to applicable tax	-21,131	-14,964	-12,826	-6,897
Tax effect of:
-non-deductible expenses	-428	-750	-134	-102
-non-taxable income	6	4	8,780	6,922
-change in non-capitalised deficit deduction	-	-	234	-
-correction of previous tax calculations and altered tax rates	5,058	230	77	220
Recognised effective tax	-16,495	-15,480	-3,869	143

RECOGNISED DEFERRED TAX RECEIVABLES

Closing balance	5,952	6,001	-	-
Differences between booked value and taxa ble value of fixed assets in Aloc A/S	2,081	2,223	-	-
Deferred tax Aloc A/S in respect of impaired capitalisations	3,871	3,778	-	-

RECOGNISED DEFERRED TAX LIABILITIES

Closing tax liability	89,747	72,329	0	0
Untaxed reserves	1,973	887	-	-
Pension liability	-2,008	-3,436	-	-
Intangible assets	89,782	74,878	-	-

OPENING BALANCE/CLOSING BALANCE ANALYSIS DEFERRED TAX

Opening balance	72,329	31,110	-	-
Product rights, customer agreements, brands and pension liability in acquisitions plus net
capitalisations	16,332	41,004	-	-
Change in untaxed reserves	1,086	215	-	-

TEMPORARY DIFFERENCES, GROUP

		Deferred tax liabilities
	2015	2014
Product rights, customer agreements and brands	65,683	58,034
Pension liability	-2,008	-3,436
Accumulated excess depreciation	1,973	887
Capitalised development costs	24,099	16,844
	89,747	72,329

CHANGES IN DEFERRED TAX LIABILITY IN TEMPORARY DIFFERENCES

	01/01/2015	Recog nised in compre hensive income for the year	Recog nised in other compre hensive income	Recog nised in	equity 31/12/2015
Acquired net assets	54,598	-8,553	-3,493	24,991	67,543
Effect of altered tax rate	-	-3,868	-	-	-3,868
Hedge accounting	-	-1,799	-	1,799	0
Accumulated excess depreciation	887	1,086	-	-	1,973
Capitalised develop ment costs	16,844	7,255	-	-	24,099
	72,329	-5,879	-3,493	26,790	89,747

There are no non-capitalised deferred tax receivables in respect of deficit deductions.

NOTE 12 CONSOLIDATED FIXED ASSETS

INTANGIBLE ASSETS (SEK MILLION)

	Goodwill		costs	Capitalised development	Software		Brands		Product rights		Customer agree ments		Total
	2015	2014	2015	2014	2015	2014	2015	2014	2015	2014	2015	2014	2015	2014
Opening acquisition value	195.6	129.6	164.0	116.1	9.9	4.9	7.8	2.1	272.7	128.2	55.1	7.2	705.1	388.1
Purchases*	29.1	64.2	65.5	47.9	1.6	1.7	3.0	5.5	67.5	138.9	24.2	46.3	190.9	304.5
Acquisition of operations	-	-	-	-	8.6	3.1	-	-	-	-	-	-	8.6	3.1
Translation difference	-8.0	1.8	-	-	-0.7	0.2	-0.6	0.2	-14.3	5.6	-4.1	1.6	-27.8	9.4
Closing accumulated acquisition values	216.7	195.6	229.5	164.0	19.4	9.9	10.1	7.8	325.9	272.7	75.1	55.1	876.9	705.1
Opening depreciation	-4.7	-	-87.4	-67.9	-6.7	-2.6	-	-	-75.0	-53.8	-7.2	-3.7	-181.0	-128.0
Acquisition of operations	-	-	-	-	-7.3	-2.9	-	-	0.0	-	-	-	-7.3	-2.9
Translation difference	-0.1	-	-	-	1.0	-	-	-	2.3	-	0.6	-	3.8	0.0
Depreciation and impairment for the year	-9.9	-4.7	-32.9	-19.5	-2.5	-1.2	-1.4	-	-24.2	-21.2	-6.2	-3.5	-77.0	-50.1
Closing accumulated depreciation	-14.6	-4.7	-120.3	-87.4	-15.6	-6.7	-1.3	0.0	-96.9	-75.0	-12.8	-7.2	-261.5	-181.0
Closing book value	202.1	190.9	109.2	76.6	3.9	3.2	8.8	7.8	229.0	197.7	62.3	47.9	615.3	524.1

*Goodwill, brands, customer agreements and product rights are attributable to acquisitions, whereas capitalised development costs are attributable to in-house time spent and, to a lesser extent, purchased consultancy services. Software is attributable to purchases.

TANGIBLE ASSETS (SEK MILLION)

	Buildings		Equipment in leased premises		Equipment, vehicles		Equipment*		Equipment, art		Total
	2015	2014	2015	2014	2015	2014	2015	2014	2015	2014	2015	2014
Opening acquisition value	9.2	8.0	10.4	3.6	0.4	-	52.4	28.7	1.0	0.0	73.3	40.3
Purchases	0.2	1.2	4.2	1.9	-	-	5.9	8.7	-	-	10.3	11.8
Sales/retirement of assets	-	-	-6.7	-0.9	-0.3	-	-16.6	-1.9	-0.1	-	-23.7	-2.8
Acquisition of operations	-	-	-	5.8	2.1	0.4	1.1	16.9	-	1.0	3.3	24.0
Translation difference	0.0	-	-0.2	-	-0.1	-	-1.1	-	-0.3	-	-1.6	0.0
Closing accumulated acquisition values	9.4	9.2	7.7	10.4	2.1	0.4	41.8	52.4	0.6	1.0	61.5	73.3
Opening depreciation	-0.2	0.0	-8.0	-2.3	-0.2	-	-35.7	-18.7	-0.4	0.0	-44.5	-21.0
Sales/retirement of assets	-	-	6.7	0.8	0.0	-	16.5	1.3	-	-	23.2	2.1
Acquisition of operations	-	-	-	-5.6	-1.1	-0.1	-0.8	-13.7	-	-	-1.8	-19.4
Translation difference	0.0	-	-0.3	-	0.0	-	-0.1	-	-	-	-0.3	0.0
Depreciation and impairment for the year	-0.2	-0.2	-1.6	-0.9	-0.2	-0.1	-6.8	-4.6	-	-0.4	-8.8	-6.2
Closing accumulated depreciation	-0.4	-0.2	-3.3	-8.0	-1.3	-0.2	-26.8	-35.7	-0.4	-0.4	-32.1	-44.5
Closing book value	9.0	9.1	4.4	2.4	0.9	0.2	14.9	16.6	0.2	0.6	29.4	28.8

*Equipment also includes computers.

NOTE 11 EARNINGS PER SHARE

Earnings per share amounted to SEK 2.66 (1.75). Earnings per share after dilution amounted to SEK 2.64 (1.68). The financial instruments that can produce future dilution effects are made up entirely of the convertible debentures presented in Note 20.

	31/12/2015	31/12/2014
Earnings per share before dilution, SEK	2.66	1.75
Profit when calculating earnings per share	78,191	49,065
Average number of shares (weighted average)	29,396,690	28,003,405

Earnings per share after dilution, SEK	2.64	1.68
Profit when calculating earnings per share after dilution	78,500	49,412
Number of shares after dilution	29,788,016	29,431,975

Impairment testing of goodwill and brands

Goodwill and brands are not amortised annually, but rather are impairment tested once a year. The Group conducts its testing in the lowest cash-generating unit, i.e. business area/segment. The impairment testing is based on a calculation of the value in use. The calculations are based on the value of estimated future cash flows, on the basis of budget/financial forecasts that have been approved by the management and that cover a five-year period. The cash-flows beyond the five-year period have been forecasted with long-term stable growth of 2 per cent, which is on a par with the anticipated growth in GDP and therefore is a reasonable assumption regarding the rate of growth beyond the explicit forecast period. Both the rate of growth and the cost trend during the first five years are based on the management's experiences and their assessment of the development of the markets in which Vitec operates. The discount rate is calculated as the Group's weighted average capital cost, including risk premium.

The most important assumptions in the impairment test are the assumptions regarding the revenue and cost trends. The cash flows that have been forecasted have been based on an annual revenue growth of 2 per cent. The cost trend for the segments has been forecasted at 1.5 per cent. The forecasted cash flows have been calculated at their current value with a discount rate after tax amounting to 8.63-9.43 per cent (approx. 10.6-11 per cent before tax). The growth rate in the terminal value is estimated at 2 per cent. An account of important assumptions per segment can be seen from the following table.

Vitec has conducted a sensitivity analysis regarding important assumptions, where the management has found that no reasonable changes to the assumptions produce any impairment as at 31 December 2015. All business areas demonstrate an adequate margin to impairment as at 31 December 2015.

During the third quarter of 2015, the conditional purchase price for AcuVitec OY was impaired by SEK 11.2 million, which resulted in other operating income and the impairment of goodwill.

%	BA Estate Agents	BA Real Estate	BA Media	BA Energy	BA Health	BA Auto	BA F & F
Discount rate	8.63	9.16	9.43	8.63	8.63	9.16	8.63
after tax	(8.02)	(8.02)	(8.02)	(8.02)	(8.02)	(8.02)	(8.02)
Growth rate	2.00	2.00	2.00	2.00	2.00	2.00	2.00
	(2.00)	(2.00)	(2.00)	(2.00)	(2.00)	(2.00)	(2.00)
Changes in	1.50	1.50	1.50	1.50	1.50	1.50	1.50
costs	(1.50)	(1.50)	(1.50)	(1.50)	(1.50)	(1.50)	(1.50)
Sustainable operating margin	13.80	17.30	16.30	29.60	12.30	19.40	12.30

Goodwill

Goodwill amounts to SEK 202,103 thousand (190,902). Goodwill is divided between the segments/business areas Estate Agents SEK 90,581 thousand (85,270), Real Estate SEK 27,426 thousand (27,427), Media SEK 7,306 thousand (7,306), Finance & Insurance SEK 30,509 thousand (27,953), Health SEK 17,452 thousand (28,764) and Auto SEK 28,829 thousand (14,182).

Capitalised development work

This comprises in-house time spent on product development, as well as external consultancy services to a smaller extent. Depreciation is initiated cautiously when the capitalisation is entered. All development projects are written off over 5 years.

Software

Software comprises acquired right of usage/program licences, for example the Group's business systems and Group accounting systems as well as other administrative systems. The asset is written off over 5 years.

Brands

Brands amount to SEK 8,793 thousand (7,752). Brands are divided between the segments/business areas Estate Agents SEK 2,294 thousand (2,103), Health SEK 642 thousand (2,042), Auto SEK 3,027 thousand (1,051) and Finance & Insurance SEK 2,831 thousand (2,556). All the brands are identified in prepared acquisition analyses. The brands are deemed to have an indeterminate useful life, as they enjoy high recognition and have been established for a long time. There are currently no known legal, contractual or competitive factors that will limit the useful life. The value is assessed at least once a year for impairment.

Product rights

Product rights comprise acquired product rights (source code) The depreciation period is 5-10 years. The company management assesses the appropriated depreciation period on a case-by-case basis. Based on experience from the acquisitions that have been conducted, the company management can ascertain that a depreciation period of 10 years corresponds better with the actual circumstances regarding the lifetime of the rights, rather than the period of five years which is otherwise used in practice.

The acquisition values, residual values and remaining depreciation period for product rights of significant value amount to:

Vitec Software (Business Area Real Estate): acquisition value SEK 6,051 thousand, residual value SEK 0 thousand, remaining depreciation period 0 years.
Mäklarsystem (Business Area Estate Agents): acquisition value SEK 15,700 thousand, residual value SEK 3,331 thousand, remaining depreciation period 2 years.
3L System (Business Area Real Estate): acquisition value SEK 13,515 thousand, residual value SEK 5,354 thousand, remaining depreciation period 4 years.
Capitex (Business Area Estate Agents): acquisition value SEK 13,950 thousand, residual value SEK 6,276 thousand, remaining depreciation period 4.5 years.
Capitex (Business Area Finance & Insurance): acquisition value SEK 8,091 thousand, residual value SEK 3,643 thousand, remaining depreciation period 4.5 years.
Capitex (Business Area Real Estate): acquisition value SEK 5,859 thousand, residual value SEK 2,636 thousand, remaining depreciation period 4.5 years.
Vitec IT-Makeriet (Business Area Estate Agents): acquisition value SEK 7,531 thousand, residual value SEK 3,679 thousand, remaining depreciation period 5.5 years.
Vitec Midas (Business Area Estate Agents): acquisition value SEK 37,229 thousand, residual value SEK 22,300 thousand, remaining depreciation period 6.7 years.
AcuVitec (Business Area Health): acquisition value SEK 72,762 thousand, residual value SEK 66,866 thousand, remaining depreciation period 8.2 years.
AutoData (Business Area Auto): acquisition value SEK 17,873 thousand, residual value SEK 12,975 thousand, remaining depreciation period 6.3 years.
Aloc (Business Area Finance & Insurance): acquisition value SEK 47,914 thousand, residual value SEK 40,417 thousand, remaining depreciation period 8.5 years.
FOX (Business Area Estate Agents): acquisition value SEK 11,120 thousand, residual value SEK 8,977 thousand, remaining depreciation period 9.2 years.
Infoeasy (Business Area Auto): acquisition value SEK 10,739 thousand, residual value SEK 9,733 thousand, remaining depreciation period 9.5 years.
Datamann (Business Area Auto): acquisition value SEK 30,589 thousand, residual value SEK 28,770 thousand, remaining depreciation period 9.5 years.
Nice (Business Area Finance & Insurance): acquisition value SEK 15,019 thousand, residual value SEK 14,121 thousand, remaining depreciation period 9.9 years.

Customer agreements

Comprise customer agreements identified in acquisition analyses. The depreciation period is 8-10 years. The useful life for customer agreements is based on the length of time net payments are expected to be received from these agreements, bearing in mind legal and economic factors. The customer agreements' acquisition values, residual values and remaining depreciation period amount to:

Vitec Midas (Business Area Estate Agents): acquisition value SEK 4,613 thousand, residual value SEK 2,230 thousand, remaining depreciation period 4.7 years.
AcuVitec (Business Area Health): acquisition value SEK 26,807 thousand, residual value SEK 23,934 thousand, remaining depreciation period 6.2 years.
AutoData (Business Area Auto): acquisition value SEK 10,950 thousand, residual value SEK 7,550 thousand, remaining depreciation period 6.3 years.
Aloc (Business Area Finance & Insurance): acquisition value SEK 8,550 thousand, residual value SEK 6,894 thousand, remaining depreciation period 6.5 years.
Fox Publish (Business Area Estate Agents): acquisition value SEK 6,671 thousand, residual value SEK 5,385 thousand, remaining depreciation period 9.2 years.
ADservice Scandinavia (Business Area Estate Agents): acquisition value SEK 204 thousand, residual value SEK 187 thousand, remaining depreciation period 9.2 years.
Datamann (Business Area Auto): acquisition value SEK 11,472 thousand, residual value SEK 10,790 thousand, remaining depreciation period 9.5 years.
Infoeasy (Business Area Auto): acquisition value SEK 1,378 thousand, residual value SEK 1,180 thousand, remaining depreciation period 9.5 years.
Nice (Business Area Finance & Insurance): acquisition value SEK 4,435 thousand, residual value SEK 4,170 thousand, remaining depreciation period 9.9 years.

NOTE 13 FIXED ASSETS, PARENT COMPANY

INTANGIBLE ASSETS (SEK MILLION)

	Software		Product rights		Total
	2015	2014	2015	2014	2015	2014
Opening acquisition value	5.8	4.1	9.7	10.4	15.5	14.5
Purchases	1.6	1.7	-	0.3	1.6	2.0
Sales/retirement of assets			-	-1.0		-1.0
Closing accumulated acquisition values	7.4	5.8	9.7	9.7	17.1	15.5
Opening depreciation	-2.8	-2.2	-9.0	-9.1	-11.8	-11.3
Sales/retirement of assets			-	1.0		1.0
Depreciation for the year	-1.0	-0.6	-0.5	-0.9	-1.5	-1.5
Closing accumulated depreciation	-3.8	-2.8	-9.5	-9.0	-13.3	-11.8
Closing book value	3.7	3.0	0.2	0.7	3.9	3.7

TANGIBLE ASSETS (SEK MILLION)

	Equipment in leased
		Buildings		premises		Equipment*	Total
	2015	2014	2015	2014	2015	2014	2015	2014
Opening acquisition value	9.2	8.0	2.7	0.8	4.0	2.7	15.9	11.5
Purchases	0.0	1.2	0.3	1.9	0.4	2.1	0.8	5.2
Sales/retirement of assets	-	-	-0.6	0.0	-0.8	-0.8	-1.4	-0.8
Closing accumulated acquisition values	9.3	9.2	2.5	2.7	3.6	4.0	15.3	15.9
Opening depreciation	-0.2	0.0	-0.9	-0.6	-1.3	-1.8	-2.3	-2.4
Sales/retirement of assets	-	-	0.6	0.0	0.8	0.8	1.4	0.8
Depreciation for the year	-0.2	-0.2	-0.7	-0.3	-0.4	-0.2	-1.2	-0.7
Closing accumulated depreciation	-0.3	-0.2	-1.0	-0.9	-0.8	-1.3	-2.2	-2.3
Closing book value	8.9	9.1	1.4	1.8	2.7	2.7	13.1	13.6

* Equipment also includes computers.

FINANCIAL ASSETS (SEK MILLION)

	Shares in subsidiaries
	2015	2014
Opening acquisition value	573.4	341.6
Acquisitions during the year	123.8	231.8
Adjustment of purchase price	-11.2	0.0
	685.9	573.4
Other financial receivables	9.0	9.7
Closing book value	694.9	583.1

Vitec continually acquires companies and operations, which either be-

NOTE 14 SHARES IN SUBSIDIARIES

SUBSIDIARIES

				Voting
		Acqui	Capital	rights		Book	Book	Adjusted
		sitions, year	portion, %	portion, %	Number of shares	value 31/12/2015	value 31/12/2014	equity 31/12/2015
Vitec Nice AS	Software company	2015	100	100	40,000	26,041	-	6,596
Vitec Infoeasy AS	Software company	2015	100	100	1,000	16,849	-	2,868
Vitec Datamann A/S	Software company	2015	100	100	3,000	56,714	-	11,170
Fox Publish AS	Software company	2015	100	100	1,000	23,771	-	3,125
ADservice Scandinavia AB Software company		2015	100	100	1,000	400	-	670
Aloc A/S	Software company, Parent Company of Aloc AS	2014	100	100	20,000	88,658	88,658	21,203
Vitec Autodata AS	Software company	2014	100	100	30,000	37,285	37,285	14,695
IMHO Oy	Holding company, owns 47% of the shares in AcuVitec	2014	100	100	19,800	49,598	49,598	1,761
AcuVitec Oy	Software company, Parent Company of Acute France SARL	2014	100	100	85,714	45,016	56,229	8,362
Vitec Midas AS	Software company, Parent Company of IT-Drift AS and Vitec Megler AB	2012	100		100 3,256,596	78,981	78,981	22,000
Vitec Capitex AB	Software company	2011	100	100	1000	8,289	8289	3,315
Vitec IT-Makeriet AS	Software company	2011	100	100	300	20,707	20,707	10,138
Capitex AB	Software company	2010	100	100	5,000	17,527	17,527	27,371
3L System AB	Holding company, Parent company of 3L Media, Vitec Förvaltningssystem and Vitec Capifast	2009	100		100 2,350,400	121,751	121,751	35,884
Vitec Mäklarsystem AB	Software company	2007	100	100	1,000	68,083	68,083	19,091
Vitec Software AB	Dormant company	2005	100	100	2,000	999	999	784
Vitec Veriba AB	Software company	2005	100	100	6,000	7,332	7,332	3,604
Vitec AB	Dormant company	2003	100	100	18,000	2,654	2,654	3,046
Vitec Fastighetssystem AB Software company		2000	100	100	200,000	12,665	12,665	5,885
Vitec IT-Drift AB	Responsible for internal IT	1999	100	100	1,000	1,008	1,008	3,624
Vitec Energy AB	Software company	1998	100	100	1,000	1,551	1,551	9,257
Total						685,879	573,317	214,449

come separate business areas or are incorporated in existing business areas. The acquisitions are restructured from time to time, for example by means of the operations in two separate companies in the same business area being merged in one of the companies. On such occasions, the above book values may be corrected through the movement of assets identified at the time of the acquisition, in the form of goodwill, product rights, customer agreements and brands. When this occurs, it is described in the Annual Report.

Via subsidiaries, Vitec Software Group AB owns the following companies:

Via Vitec Veriba AB Retail i Linköping AB (software company/consultancy company).
Via 3L System AB 3L Media AB, Vitec Förvaltningssystem AB and Vitec Capifast AB (software companies).
Via Vitec Midas AS Vitec IT Drift AS (responsible for server operation in Norway) and Vitec Megler AB.
Via AcuVitec Oy Acute France Sarl (product development on behalf of the parent company AcuVitec).
Via IMHO Oy AcuVitec Oy (holding company).
Via Aloc A/S Aloc AS (sales company)

NOTE 15 INVENTORIES

INFORMATION ABOUT THE SUBSIDIARIES' CORPORATE REGISTRATION NUMBERS AND REGISTERED OFFICES:

	Corp. reg.
	number	Registered office
Vitec Nice AS	844699832	Sandvika, Norway
Vitec Infoeasy AS	981875923	Bergen, Norway
Vitec Datamann A/S	59943510	Søborg, Denmark
Fox Publish AS	997102126	Oslo, Norway
ADservice Scandinavia AB	556659-1466	Stockholm
Vitec Megler AB	559035-4816	Kalmar
Aloc AS	976876768	Oslo, Norway
Aloc A/S	14788484	Odense, Denmark
Autodata AS	817159362	Oslo, Norway
IMHO Oy	25351376	Tampere, Finland
Acute France Sarl	483949459	Valbonne, France
AcuVitec Oy	18369420	Tampere, Finland
Vitec IT Drift AS	986363238	Oslo, Norway
Vitec Midas AS	944507302	Oslo, Norway
Vitec Capitex AB	556875-8105	Umeå
Vitec IT-Makeriet AS	974405229	Oslo, Norway
Vitec Capifast AB	556844-4110	Stockholm
Capitex AB	556197-8437	Kalmar
3L System AB	556321-2546	Stockholm
3L Media AB	556584-9931	Stockholm
Vitec Förvaltningssystem AB	556591-2101	Stockholm
Retail i Linköping AB	556582-1203	Linköping
Vitec Mäklarsystem AB	556367-6500	Umeå
Vitec Software AB	556443-2200	Umeå
Vitec Veriba AB	556368-0585	Umeå
Vitec AB	556571-5090	Umeå
Vitec Fastighetssystem AB	556563-7773	Umeå
Vitec IT-Drift AB	556459-9347	Umeå
Vitec Energy AB	556347-7073	Umeå

Inventories have been valued according to the lowest value principle. Inventories comprise goods for resale and exist to a minor extent. The value as at 31 December 2015 amounted to SEK 399 thousand (339).

NOTE 16 ACCOUNTS RECEIVABLE

The Group's accounts receivable as at 31 December 2015 amounted to SEK 129,107 thousand. Accounts receivable are initially recognised at fair value and thereafter at accrued acquisition value with the application of the effective interest method, less any provision regarding reduction in value. A provision regarding reduction in value is made when the receivable is more than 90 days old, or earlier if the amount that is expected to be paid, after individual assessment, is below the asset's reported value. The provision for doubtful accounts receivable amounts to SEK 688 thousand (567). The Group's established customer losses amount to SEK 305 thousand (163) for 2015.

AGE ANALYSIS IN RESPECT OF PROVISION FOR DOUBTFUL RECEIVABLES

	2015	2014

Due in less than 3 months	114	-
Due in 3-6 months	215	531
Due in more than 6 months	359	36
	688	567
AGE ANALYSIS IN RESPECT OF DUE BUT NOT RESERVED ACCOUNTS RECEIVABLE

	9,321	10,053
Due in more than 6 months	627	-
Due in 3-6 months	1,384	-
Due in less than 3 months	7,310	10,053

NOTE 17 PREPAID EXPENSES AND ACCRUED INCOME

	Group		The Parent Company
	31/12/2015	31/12/2014	31/12/2015	31/12/2014
Accrued income	6,721	11,382	-	-
Prepaid rent	2,919	2,394	1,963	1,972
Prepaid insurance premiums	621	712	198	-
Other entries	7,017	2,354	991	281
Total	17,278	16,842	3,152	2,253

NOTE 18 CASH AND CASH EQUIVALENTS

Cash and cash equivalents are defined as funds for which there is an insignificant risk of fluctuations in value. The Group's cash and cash equivalents amount to SEK 60,268 thousand in the form of bank balances and cash. The Group has a Group currency account.

NOTE 19 SHAREHOLDERS' EQUITY

Registered share capital on 31/12/2015 amounts to SEK 2,939,669 and comprises: Class A shares, 4,000,000 shares (40,000,000 votes), and Class B shares, 25,396,690 shares (25,396,690 votes). During the financial year, a dividend has been paid at SEK 0.67/share, totalling SEK 19,695,782. The proposed, although not yet adopted, dividend amounts to SEK 0.90/share, totalling SEK 26,457,021. The dividend is recognised as a liability after it has been approved by the AGM.

TYPES OF SHARES

	2015	2014
Shares at the start of the year
Vitec Class A	800,000	800,000
Vitec Class B	5,079,338	4,508,327
Total at the start of the year	5,879,338	5,308,327
New share issue Vitec Class B		450,000
Conversion of bonds Vitec Class B		121,011
Split 5-for-1	23,517,352
Shares at the end of the year	29,396,690	5,879,338
Shares at the end of the year

Total at the end of the year	29,396,690	5,879,338
Vitec Class B	25,396,690	5,079,338
Vitec Class A	4,000,000	800,000

The management of shareholders' equity has the objective of safeguarding Vitec's financial stability, handling financial risks and ensuring the Group's short-term and long-term need for capital. Except for short periods, Vitec's indebtedness must not be so high that further financing cannot be arranged. The Group's capital structure is managed and adjusted in line with changes in economic conditions. The Group monitors capital usage with the aid of various key figures, such as net liability, return on capital employed and equity/assets ratio. Vitec's dividend policy means that the company's goal must be to distribute at least a 1/3 of profits after tax annually. When assessing the scope for this, however, consideration must always be given to the company's need for financing, its capital structure and its status otherwise. Vitec encourages employees to become shareholders by issuing convertible bonds. See also the Directors' report for further details.

NOTE 20 FINANCIAL RISKS AND THE HANDLING OF SUCH RISKS

The Group's policy for handling financial risks is based on profits being generated by the operating business and not through investments in financial instruments. Only low-risk investments are permitted. Financial activities are tasked with supporting the operating business as well as identifying and optimally limiting the financial risks. Financial activities are conducted in the Parent Company. Through centralisation and co-ordination, economies of scale are made possible in respect of obtained conditions for financial transactions and financing. The financial risks are handled according to the finance policy adopted by the Board.

Liquidity and financing risks

The Group's cash and cash equivalents amounted to SEK 80 million as at 31 December 2015, including unutilised overdraft facility. In addition, there is the unutilised portion of a credit facility for acquisitions, amounting to SEK 172 million. Vitec's finance policy specifies guidelines regarding how the Group's liquidity is to be managed. A low risk profile is sought, which entails investing in Swedish banks that have been granted permission by the Swedish Financial Supervisory Authority to conduct banking operations, or in foreign banks with similar permission. Investments in securities must take place in treasury bills, money market funds or in K1 rated interest-bearing securities. Liquidity must not be below one month's budgeted costs, and it must be possible to liquidate investments within one month.

Vitec has historically financed, and intends to continue financing, a certain part of the business through loans from credit institutes. Loan agreements may contain terms involving restrictions for the company (known as covenants). Such an agreement currently exists with the Group's bank. The Group's NetDebt/EBITDA (interest-bearing liabilities including convertible bonds) in relation to EBITDA (operating profit before depreciation) must not exceed 2.0, and the equity/assets ratio must be at least 25 per cent. In the event NetDebt/EBITDA exceeds 2.0 or the equity/assets ratio is below 25 per cent, the company must initiate discussions with the bank regarding a possible change to this key figure. As at 31 December, NetDebt/EBITDA amounted to 0.97 and the equity/assets ratio stood at 31 per cent. The conditions were consequently satisfied on the balance sheet date. Borrowing entails certain risks for the company's shareholders. For example, in the event of dramatically altered circumstances on Vitec's markets, the company might experience problems obtaining new credit facilities and consequently might need to use a larger share of the cash flow for interest payments and repayments. This could have an adverse effect on the company.

Managing capital

Risk management

The Group's objectives in respect of the capital structure are to safeguard the Group's ability to continue its business, so that it can continue to generate a return for the shareholders and benefit for other stakeholders, as well as to achieve an optimum capital structure in order to keep the costs for the capital down. The Group assesses the capital on the basis of the debt/equity ratio, in the same way as other companies in the sector. This key figure is calculated as net debt divided by total capital. Net debt is calculated as total borrowing (encompassing the entries Short-term borrowing and Long-term borrowing in the Group's balance sheet) less cash and cash equivalents. Total capital is calculated as Equity in the Group's balance sheet plus net liability.

Vitec does not have any absolute measure of the debt/equity ratio, but the Group's guidelines state that indebtedness, except for short periods, must not be so high that further financing cannot be arranged in order to act quickly on investment opportunities that may arise.

DEBT/EQUITY RATIO

	31/12/2015	31/12/2014
Total borrowing	241	190
Deduction, cash and cash equivalents	-60	-71
Net liability	181	119
Total equity	272	260
Total capital	453	379
Debt/equity ratio, %*	40	31

*The debt/equity ratio in the multi-year summary in the Directors' Report is calculated differently, see Note 29.

DIVIDEND

	2015	2014
The dividend for the 2014 financial year amounted to SEK 0.67 per share (0.55)	19,696	14,598
Total expensed or paid dividends	19,696	14,598
	2015	2014
For the 2015 financial year, the Board has proposed a dividend of SEK 0.90 per share (0.67). The total amount of the proposed dividend is not recognised as a liability as at 31 December 2015, but is expected to be settled with retained
profits in May 2016.	26,457	19,696
	26,457	19,696

Credit risk

Accounts receivable are associated with a certain credit risk. Vitec's business model often entails prepayments and credit controls. Vitec has no significant concentration of credit risks in its accounts receivable. In the event Vitec's customers cannot pay their invoices on time, or at all, Vitec is at risk of incurring credit losses. It cannot be guaranteed that the credit losses will not increase, which can have a negative impact on Vitec's business, financial status and profits. The maximum exposure to credit risk corresponds to the Group's recognised value for receivables, which amounted to SEK 129,107 thousand on 31/12/2015 after provisions for estimated losses. For further information regarding accounts receivable, refer to Note 16. The Parent company does not have any external credit risks at the end of the year.

Currency risks

Currency risks can be divided into transaction exposure and translation risk. Via ownership of foreign subsidiaries in Norway, Denmark and Finland, and via transactions in Vitec Energy AB, Vitec's operations entail sales in various currencies to a certain extent, and hence transaction exposure principally in relation to Norwegian kroner, Danish kroner and the euro. The Group has not performed any currency hedging in 2015.

Translation risk arises when translating subsidiaries' income statements and balance sheets to Swedish kronor from other currencies. As the subsidiaries report in their local currency, the Group is exposed to exchange rate fluctuations when consolidating these companies. The acquisitions of AcuVitec OY, Autodata AS, Aloc A/S and Datamann A/S were financed through loans in the local currencies in order to reduce the translation exposure.

In the event of currency translation of balance sheet items on the balance sheet date, 31 December 2015, the following exchange rates have been used:

NOK	0.9557
DKK	1.2242
EUR	9.135

A 5 per cent change in the value of foreign currencies in 2015 would have affected the profit and equity for the year by approx. SEK -191 thousand, divided between NOK -385 thousand, DKK 140 thousand and EUR 54 thousand.

Interest risk

Vitec's interest risk for interest-bearing assets is settled by means of cash and cash equivalents being invested in such a way that the maturity date for the fixed interest term and the investment matches known outflows and/or the amortisation of liabilities. Long-term financing takes place through loans from banks and financing institutes, as well as through convertible bonds. The interest rate in respect of loans from banks and financing institutes is variable, while interest for convertible bonds is usually tied for 180-day intervals or fixed in exceptional cases. A change of 1 per cent in the interest rate for the existing loan portfolio would affect the profit and equity for the year by approximately SEK 3.3 million.

TERM ANALYSIS

	Group		The Parent Company
	2015	2014	2015	2014
Long-term interest-bearing liabilities
Liabilities to credit institutes	193,709	117,065 193,709		117,064
Convertible bonds	13,513	13,205	13,513	13,205
Total long-term interest-bearing liabilities		207,222 130,270 207,222 130,269
Long-term non interest-bearing liabilities
Other liabilities	4,779	25,698	4,779	23,375
Total long-term non interest-bearing liabilities	4,779	25,698	4,779	23,375
Total long-term liabilities		212,001 155,968 212,001 153,644

Short-term interest-bearing liabilities
Overdraft facility, limit SEK 20,000	-	-	-	-
Liabilities to credit institutes	33,845	49,647	33,331	49,647
Convertible bonds	-	9,637	-	9,637
Total short-term interest-bearing liabilities	33,845	59,284	33,331	59,284
Total interest-bearing liabilities		241,067 189,554 240,553 189,553
Short-term non interest-bearing liabilities
Accounts payable	14,582	17,223	2,621	1,738
Other liabilities	37,796	24,054	37,796	23,554
Accrued expenses	35,116	33,231	3,515	3,476
Total short-term non interest-bearing liabilities	87,494	74,508	43,932	28,768
Total financial liabilities		333,340 289,760 284,485 218,321
Term analysis

Long-term and short-term interest-bearing liabilities excluding convertible bonds (Capital amount)
Within 1 year after the balance sheet date	29,178	49,647	28,664	49,647
Longer than 1 years but within 3 years after the balance sheet date	57,326	86,271	57,326	86,271
Longer than 3 years but within 5 years after the balance sheet date	21,292	25,362	21,292	25,362
Longer than 5 years after the balance sheet date	119,758	5,431	119,758	5,431
Convertible bonds (Capital amount)*
Convertible bonds within 1 year after the balance sheet date	-	9,637	-	9,637
Convertible bonds longer than 1 year but within 5 years after the balance sheet date	13,513	13,205	13,513	13,205
Interest**
Within 1 year after the balance sheet date	5,146	4,008	5,146	4,008
Longer than 1 years but within 3 years after the balance sheet date	8,140	4,016	8,140	4,016
Longer than 3 years but within 5 years after the balance sheet date	2,192	793	2,192	793
Longer than 5 years after the balance sheet date	1,105	1,100	1,105	1,100
Non interest-bearing liabilities
Within 1 year after the balance sheet date	37,797	74,508	37,797	28,768
Longer than 1 years but within 3 years after the balance sheet date	4,779	25,698	4,779
Total capital and interest
Within 1 year after the balance sheet date		72,121 137,800	71,607	92,060
Longer than 1 years but within 3 years after the balance sheet date		83,758 129,190		78,979 103,492
Longer than 3 years but within 5 years after the balance sheet date	23,484	26,155	23,484	26,155
Longer than 5 years after the balance sheet date	120,863		6,531 120,863	6,531

* The above assumptions regarding capital amounts are based on no conversions taking place.

** The above assumptions regarding interest payments are based on an average interest rate of 1.35 per cent (2.85)

Convertible debentures

Loan 1501 (Convertible programme, staff), long-term liability

Convertible debenture 1501 amounts to a nominal SEK 14,070 thousand. The option element in the convertible loan is calculated at SEK 865 thousand. The option element is recognised as equity in accordance with IAS 32. The remainder of the loan, including interest (SEK 13,513 thousand) is recognised as a long-term liability. The term of the loan is 1 January 2015 – 31 December 2017, and the interest rate is Stibor 180. The conversion price is SEK 31.80. Conversion may be requested during the period 1 November to 30 November 2017. On conversion, the share capital may increase by a maximum of SEK 44,221. At full conversion of loan 1501 convertible programme, staff, the dilution amounts to approx. 1.5 per cent of the capital and 0.7 per cent of the votes. The share issue has been conducted on market terms. In our assessment, therefore, there is no benefit for the participants in the convertible programme.

In order to establish the value of the option element, the loan amount is discounted to the applicable interest rate and the market rate. The value of the option element comprises the difference between the two calculations. The interest rate at the time of the share issue has been used.

NOTE 21 PENSIONS

Vitec has both defined-contribution and defined-benefit pension plans. Defined-benefit plans are used in Sweden and Norway. The Swedish defined-benefit pension plan is safeguarded through an insurance policy with Alecta. For the 2015 financial year, the company has not had access to the information that would make it possible to report this plan as a defined-benefit plan. The pension plan according to Alecta ITP2 that is secured through an insurance policy with Alecta is therefore recognised as a defined-contribution plan. The collective solvency level for Alecta amounted to 153 per cent in 2015 (143).

Defined-contribution plans

Defined-contribution pension plans entail that the company makes periodic payments to separate authorities or funds, and the remuneration level is dependent on the return achieved on these investments. The charges for the year for defined-contribution pension insurance, including Alecta ITP2, amounted to SEK 23,002 thousand (21,676).

Defined-benefit plans

The pension plans refer to parts of the Norwegian subsidiaries and cover retirement pension in companies acquired during 2014. The employee must be affiliated to the plan for a certain number of years in order to achieve full entitlement to retirement pension. The funded pension obligations are secured by management assets. The contributions for the year for defined-benefit pensions amounted to SEK 1,893 thousand. The charges for 2016 are expected to amount to around NOK 1,760 thousand. OBLIGATIONS IN RESPECT OF EMPLOYEES, DEFINED-BENEFIT PLANS

	Group		The Parent Company
	31/12/2015	31/12/2014	31/12/2015	31/12/2014
Other pension commitments,
Norway	8,033	12,225	-	-
Total defined-benefit plans	8,033	12,225	0	0

DEFINED-BENEFIT OBLIGATIONS AND THE VALUE OF MANAGEMENT

ASSETS
	Group		The Parent Company
	31/12/2015	31/12/2014	31/12/2015	31/12/2014
Current value of funded, defined-benefit obligations in Norway	24,692	27,497	-	-
Management assets' fair value, Norway	-16,659	-15,272	-	-
Net liability funded obliga tions, Norway	8,033	12,225	0	0

RECONCILIATION OF NET AMOUNT FOR PENSIONS IN THE BALANCE SHEET

	Group		The Parent Company
	31/12/2015	31/12/2014	31/12/2015	31/12/2014
Opening balance	12,225	-	-	-
Acquisition of companies	-	12,728	-	-
Change in value	-3,077	-	-	-
Translation difference	-1,115	-503	-	-
Total defined-benefit plans	8,033	12,225	0	0

CHANGES IN THE OBLIGATION FOR DEFINED-BENEFIT PLANS RECOG-NISED IN THE BALANCE SHEET

	Group		The Parent Company
	31/12/2015	31/12/2014	31/12/2015	31/12/2014
Opening balance	27,497	-	-	-
Acquisitions	-	28,631	-	-
Change in value	-1,341	-	-	-
Translation difference	-1,464	-1,134	-	-
	24,692	27,497	0	0

CHANGE IN MANAGEMENT ASSETS

	Group		The Parent Company
	31/12/2015	31/12/2014	31/12/2015	31/12/2014
Opening balance	15,272	-	-	-
Acquisitions	-	15,903	-	-
Change in value	1,085	-	-	-
Translation difference	302	-631	-	-
	16,659	15,272	0	0

ACTUARIAL ASSUMPTIONS

	Group
%	31/12/2015	31/12/2014
Discount rate	2.7	2.3
Anticipated return on the pen sion funds' assets	2.7	2.3
Future wage increases	2.5	2.75
Future increases in pensions	2.25	2.5

NOTE 22 ACCRUED EXPENSES AND PREPAID INCOME

	Group		The Parent Company
	31/12/2015	31/12/2014	31/12/2015	31/12/2014
Accrued salaries	28,419	24,010	2,288	2,254
Accrued special payroll tax	5,012	3,639	702	648
Prepaid income	78,518	69,376	-	-
Payroll overheads	13,826	12,023	719	708
Other	6,697	9,221	1,227	1,222
Total	132,472	118,269	4,936	4,832

NOTE 23 LEASING AGREEMENTS AND SIMILAR FUTURE COMMITMENTS

Operational leasing agreements and future commitments in the form of non-cancellable contracts

There are currently no operational leasing agreements. Future commitments in the form of non-cancellable contracts comprise premises contracts as well as agreements in respect of telephony and data communication. Variable charges and sub-letting to not occur. No agreements include the potential to acquire the objects. All agreements can be extended. Index clauses are included in the premises contracts. There are no restrictions resulting from agreements entered into regarding dividends, loan options and further leasing agreements.

	Group		The Parent Company
	2015	2014	2015	2014
Charges for the period	15,494	15,894	8,192	8,380
Charges within one year	17,838	16,692	8,914	8,065
Charges later than one year but within five years.	45,772	39,418	11,503	8,212
Charges later than five years	1,112	3,856	-	-

NOTE 24 PLEDGED ASSETS, GROUP AND PARENT COMPANY

	Group		The Parent Company
	31/12/2015	31/12/2014	31/12/2015	31/12/2014
Business mortgages	32,000	32,000	32,000	32,000
Shares in subsidiaries	355,240	362,767	327,176	327,634
Total	387,240	394,767	359,176	359,634

The above securities are pledged for liabilities to credit institutes and overdraft facilities, see Note 20.

NOTE 25 RELATED PARTIES

There are no outstanding loans, guarantees or sureties from Vitec to the benefit of Board members, senior executives or auditors in Vitec. None of the Board members, senior executives or auditors in Vitec have had any direct or indirect involvement in business transactions with Vitec that are or were unusual in nature or with respect to their terms. The following related party transactions are reported.

Senior executives are covered by convertible programmes in the form of convertible debentures, which are taken out on market terms. The following senior executives are taking part in the ongoing convertible programme 1501: Patrik Fransson SEK 250 thousand, Lars Eriksson SEK 100 thousand and Maria Kröger SEK 250 thousand.
All Swedish companies in the Group lease premises from the Parent Company through customary leasing agreements. All the companies that lease premises from the Parent Company are 100 per cent owned by Vitec. In addition to costs for premises, the Parent Company also invoices for intra-group services.

NOTE 26 UNTAXED RESERVES

	31/12/2015	31/12/2014
The difference between booked depreciation and depreciation according to plan	2,222	2,500
Total	2,222	2,500

NOTE 27 DEFERRED TAX

Deferred tax at 22 per cent (22) in the Parent Company's untaxed reserves amounts to SEK 489 thousand (550).

NOTE 28 FINANCIAL INSTRUMENTS

Classification and valuation

Financial instruments are initially recognised at their acquisition value corresponding to the instrument's fair value plus transaction costs. A financial instrument is classified when recognised for the first time, including on the basis of the purpose for which the instrument was acquired. All financial assets and liabilities are classified in the following categories:

Financial assets and liabilities valued at fair value via the income statement. Additional purchase prices in conjunction with acquisitions are included in this category.
Investments that are held to maturity. Vitec has no financial instruments in this category.
Loans receivable and accounts receivable. Vitec's accounts receivable, other receivables as well as cash and cash equivalents are included in this category.
Financial assets that can be sold. Vitec has no financial assets in this category.
Financial liabilities valued at their accrued acquisition value. Accounts payable, other liabilities, accrued expenses and loans are included in this category.

	RECOGNISED VALUE OF FINANCIAL ASSETS AND FINANCIAL LIABILITIES
--	----------------------------------------------------------------

	Valuation criteria according to IAS 39
		Loans receivable and accounts receivable		Financial liabilities valued at
	Note			fair value		Accrued acquisi tion value
		2015	2014	2015	2014	2015	2014
Financial assets
Accounts receivable		16 129,107 122,992		-	-	-	-
Other receivables		6,503	928	-	-	-	-
Cash and cash equivalents	18	60,268	71,114	-	-	-	-
Financial liabilities
Convertible deben tures (long-term)	20	-	-	-	-	13,513	13,205
Convertible deben tures (short-term)	20	-	-	-	-	-	9,637
Liabilities to credit institutes (long-term)	20	-	-	-		- 193,709 117,065
Liabilities to credit institutes (short-term)	20	-	-	-	-	33,845	49,647
Other liabilities (long term)		-	-	4,779	23,375	-	2,323
Other liabilities (short term)		-	-	37,218	23,375	578	679
Accounts payable		-	-	-	-	14,582	17,223
Accrued expenses	22	-	-	-	-	35,116	33,231
Total			195,878 195,034	41,997		46,750 291,343 243,010

Financial assets

Cash and cash equivalents – The Group's cash and cash equivalents have been invested in banks or money market funds during the year.

Receivables – The Group's receivables principally comprise accounts receivable. Payment terms are normally 30 days net. In exceptional cases, the customer may receive financing through a payment plan that extends over the subsequent 12 months.

Financial liabilities

Supplier credit – Supplier credit comprises normal accounts payable with payment terms of 30 days net.

Loans

The Group's loans comprise liabilities to credit institutes and convertible debentures. Some of the Group's borrowing in EUR, DKK and NOK, amounting to SEK 138,640 thousand, is identified as hedging of the net investment in the Group's subsidiaries in Norway, Finland and Denmark. The fair value of the borrowing as at 31 December 2015 stood at SEK 138,640 thousand. The exchange rate gain from the translation of the borrowing to Swedish kronor amounts to SEK 8,178 at the end of the reporting period, and is recognised in other comprehensive income after deductions for deferred tax.

Convertible debentures

In December 2014, the Parent Company issued 1,407 convertible bonds at SEK 10,000 each, with a nominal value of SEK 14,070 thousand. Conversion may be requested during the period 1–30 November 2017. The conversion price is SEK 31.80. Convertible bonds are recognised in the balance sheet as follows.

Nominal value of convertible bonds	14,070
Equity share	- 865
Total	13,205

Interest expense*	333
Interest paid	- 24
Liability share	13,513

*The interest expense is calculated by multiplying the estimated market interest rate (2.5 per cent) by the liability share.

Other short-term liabilities

Parts thereof.

Accrued expenses

Salary liabilities and parts of other accrued expenses

Financial assets and liabilities valued at fair value

According to IFRS 7, information must be provided about the fair value of each financial asset and financial liability, irrespective of whether they are reported in the balance sheet or not. Vitec judges that the fair value of the financial assets/liabilities is close to the book value reported in the Annual Report.

According to the standard, financial assets and liabilities that are valued at fair value must be split into three levels.

Level 1: Fair value of financial instruments that are traded on an active market.

Level 2: Fair value of financial instruments that are not traded on an active market, but that have been established with the aid of valuation techniques based on market information.

Level 3: In cases where one or more items of essential input data are not based on observable market information.

All of the company's financial instruments that are subject to valuation at fair value are classified as level 3. The change for the year in respect of financial instruments at level 3 refers primarily to additional purchase prices for acquisitions. Conditional purchase prices are valued at fair value based on available data, such as contractual terms, as well as relevant assessments in respect of anticipated fulfilment of conditions. When calculating fair value, an assumed interest rate of 0.9% has been used. As the difference between fair value and book value is marginal, no correction has taken place.

The following table shows the difference between fair value and book value.

RECURRING VALUATIONS AT FAIR VALUE, AS AT 31 DECEMBER 2015

	Level 1	Level 2	Level 3	Book value
Additional purchase price AcuVitec OY	-	-	33,346	33,395
Additional purchase price Fox Publish AS	-	-	6,333	6,690
Residual purchase price Nice AS	-	-	1,889	1,911
Total	-	-	41,568	41,997

RECURRING VALUATIONS AT FAIR VALUE, AS AT 31 DECEMBER 2014

	Level 1	Level 2	Level 3	Book value
Additional purchase price AcuVitec OY	-	-	46,333	46,750
Total	-	-	46,333	46,750

NOTE 29 KEY FIGURE DEFINITIONS

Profit margin

Profit after tax through net turnover.

Operating margin

Operating profit through net turnover.

Equity/assets ratio

Shareholders' equity, including equity attributable to non-controlling interests, in relation to total assets.

Debt/equity ratio

Average liabilities in relation to average shareholders' equity and non-controlling interests.

Return on capital employed

Profit after financial items plus interest expenses in relation to average capital employed. Capital employed is defined as total assets less non interest-bearing liabilities and deferred tax.

Return on equity

Reported profit after tax in relation to average shareholders' equity.

Sales per employee

Net sales in relation to average number of employees.

Value added per employee

Operating profit before profit from shares in associated companies, plus depreciation and staff costs in relation to the average number of employees.

Adjusted equity per share

Equity in relation to the number of shares issued at the closing date.

Earnings per share

Profit for the year attributable to the Parent Company's shareholders in relation to the average number of shares.

Cash flow per share

Cash flow from operating activities before the change in operating capital in relation to the average number of shares

P/E ratio

Share price on the closing date in relation to earnings per share.

P/Adjusted equity per share

The share price on the closing date multiplied by the number of shares issued on the closing date in relation to the equity.

P/S

The share price on the closing date multiplied by the average number of shares in relation to net sales.

Proposed allocation of the company's profit

The following amounts are at the disposal of the Annual General Meeting:

	253,383,334
Profit for the year	54,429,446
Share premium reserve	110,475,051
Profit brought forward	88,478,837

The Board proposes that the profit be allocated such that:

	253,365,334
is carried forward	116,451,262
is carried forward to the share premium reserve	110,457,051
SEK 0.90 per share is distributed to shareholders	26,457,021

With reference to that stated above and that which has otherwise come to the attention of the Board, it is the opinion of the Board that a comprehensive assessment of the company's and the Group's financial status entails that the dividend is justifiable with reference to those requirements that the business's nature, scope and risks business stipulate regarding the size of the company's and the Group's equity, as well as the company's and the Group's consolidation requirement, liquidity and status otherwise.

The consolidated financial statements and the Annual Report have been prepared in accordance with the international accounting standards referred to in Regulation (EC) No 1606/2002 of the European Parliament and of the Council of 19 July 2002 on the application of international accounting standards and good accounting practice, and provide a fair view of the Group's and the Parent Company's position and results. The Directors' Report for the Group and the Parent Company provide a fair overview of the Group's and the Parent Company's operations, position and results, as well as describing significant risks and uncertainties facing the Parent Company and the companies included in the Group. As can be seen from Note 1, the Annual Report and the consolidated financial statements have been approved for issue by the Board of Directors on 30 March 2016. The consolidated statement of comprehensive income and the statement of financial status, as well as the Parent Company's income statement and balance sheet, will be subject to adoption at the Annual General Meeting on 11 May 2016.

Umeå March 30, 2016

Crister Stjernfelt Chairman of the Board

Anna Valtonen Director

Kaj Sandart Director

Jan Friedman Director

Birgitta Johansson-Hedberg Director

Lars Stenlund CEO

Our Auditor´s Report was submitted April 15, 2016

PricewaterhouseCoopers AB Niklas Renström Authorized Public Accountant

Auditor's Report

To the Annual General Meeting of Vitec Software Group (publ), corporate reg. no. 556258-4804

REPORT ON THE ANNUAL REPORT AND THE CONSOLI-DATED FINANCIAL STATEMENTS

We have carried out an audit of the annual report and consolidated financial statements of Vitec Software Group AB (publ) for 2015, with the exception of the Corporate Governance Report on pages 34-39. The company's annual report and the consolidated financial statements are included on pages 34-68 in the printed version of this document.

The Board of Directors and CEO are responsible for the annual report and consolidated financial statements.

The Board of Directors and CEO are responsible for the preparation and fair presentation of the annual report in accordance with Annual Accounts Act as well as the consolidated financial statements in accordance with International Financial Reporting Standards, as adopted by the EU, and the Annual Accounts Act, and for such internal control as the Board of Directors and CEO determine is necessary to enable the preparation of an annual report and consolidated financial statements that are free of material misstatement, whether due to fraud or error.

Auditor's responsibility

Our responsibility is to express an opinion on the annual report and the consolidated financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing and generally accepted auditing standards in Sweden. These standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the annual report and the consolidated financial statements are free of material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the annual report and consolidated financial statements. The procedures selected depend on the auditor's judgement, including the assessment of the risks of material misstatement in the annual report and the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the company's preparation and fair presentation of the annual report and the consolidated financial statements 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 an evaluation of the appropriateness of the accounting principles that have been used, and of the reasonableness of the Board of Directors' and the CEO's estimates in the accounts, as well as an evaluation of the overall presentation of the annual report and the consolidated financial statements.

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

Opinions

In our opinion, the annual report has been prepared in accordance with the Annual Accounts Act and present fairly, in all material respects, the financial position of the Parent Company as of 31 December 2015 and its financial performance and cash flows for the year in accordance with the Annual Accounts Act. The consolidated financial statements have been prepared in accordance with the Annual Accounts Act and present fairly, in all material respects, the financial position of the Group as of 31 December 2015 and its financial performance and cash flows for the year in accordance with the International Financial Reporting Standards, as adopted by the EU, and the Annual Accounts Act. Our opinions do not cover the Corporate Governance Report on pages 34-39. The Directors' Report is consistent with the other parts of the annual report and the consolidated financial statements.

We therefore recommend to the Annual General Meeting of shareholders that the income statement and balance sheet of the Parent Company and the Group be adopted.

REPORT ON OTHER REQUIREMENTS ACCORDING TO LAWS AND OTHER STATUTES

In addition to our audit of the annual report and consolidated financial statements, we have examined the proposed appropriations of the company's profit or loss and the administration of the Board of Directors and CEO of Vitec Software Group AB (publ) for the year 2015. We have also performed a statutory review of the Corporate Governance Report.

Responsibilities of the Board of Directors and CEO

The Board of Directors is responsible for the proposed appropriations of the company's profit or loss, and the Board of Directors and CEO are responsible for administration under the Companies Act and for ensuring that the Corporate Governance Report on pages 34-39 is prepared in accordance with the Annual Accounts Act.

Auditor's responsibility

Our responsibility is to express an opinion with reasonable assurance on the proposed appropriations of the company's profit or loss and on the administration based on our audit. We conducted the audit in accordance with generally accepted auditing standards in Sweden. As a basis for our opinion on the Board of Directors' proposed appropriations of the company's profit or loss, we examined the Board of Directors' reasoned statement and a selection of supporting evidence in order to be able to assess whether the proposal is in accordance with the Companies Act.

As a basis for our opinion concerning discharge from liability, in addition to our audit of the annual report and consolidated financial statements, we examined significant decisions, actions taken and circumstances of the company in order to determine whether any member of the Board of Directors or the CEO is liable to the company. We also examined whether any member of the Board of Directors or the CEO has, in any other way, acted in contravention of the Companies Act, the Annual Accounts Act or the Articles of Association.

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

Moreover, we have read the Corporate Governance Report and, based on this and our knowledge of the company and the Group, believe we have sufficient grounds for our opinion. This means that our statutory review of the Corporate Governance Report has a different focus and a significantly reduced scope compared with the focus and scope of an audit in accordance with Internal Standards on Auditing and generally accepted auditing standards in Sweden.

Opinions

We recommend to the Annual General Meeting of shareholders that the profit be appropriated in accordance with the proposal in the Directors' Report and that the members of the Board of Directors and the CEO be discharged from liability for the financial year.

A Corporate Governance Report has been prepared, and its statutory information is consistent with the remainder of the annual report and the consolidated financial statements.

Stockholm, April 15, 2016

PricewaterhouseCoopers AB Niklas Renström Authorised Public Accountant

Shareholder information

ANNUAL GENERAL MEETING

Vitec Software Group's Annual General Meeting of shareholders 2016 will be held on Wednesday, May 11, 2016 at 5.30 p.m. at Väven (P5), Storgatan 46 A, Umeå. Registration to the Annual General Meeting takes place between 4.30–5.15 p.m. After the meeting a buffet will be served.

REGISTRATION AND NOTICE OF ATTENDANCE

Shareholders who wish to attend the Annual General Meeting must:

be recorded in the share register kept by Euroclear Sweden AB, the Swedish securities registry, on May 3, 2016; and
give notice of attendance to the Company at the latest on Wednesday May 4, 2016 3:00 p.m. Notice of attendance can be given by telephone +46 (0)90 15 49 00 on weekdays between 8 a.m. and 5 p.m. or on www.vitecsoftware.com.

Notice of attendance may also be given in writing to: Vitec Software Group AB "Annual General Meeting 2016" Box 7965 S-907 19 Umeå Sweden

When giving notice of attendance, please state name, date of birth or registration number, email address, telephone number and number of attending assistants (maximum 2), if any.

The Annual General Meeting will be conducted in Swedish.

SHARES REGISTERED IN THE NAME OF A NOMINEE

In addition to giving notice of attendance, shareholders having their shares registered in the name of a nominee, must request the nominee to temporarily enter the shareholder into the share register as per Wednesday May 4, 2016, in order to be entitled to attend the Annual General Meeting. The shareholder should inform the nominee to that effect well before that day.

PROXY

Shareholders represented by proxy shall issue a power of attorney for the representative. A power of attorney issued by a legal entity must be accompanied by a copy of the entity's certificate of registration (should no such certificate exist, a corresponding document of authority must be submitted). In order to facilitate the registration at the Annual General Meeting, the power of attorney in the original, certificate of registration and other documents of authority should be sent to the Company in advance to the address above for receipt by May 10, 2016. Forms of power of attorney in Swedish and English are available on www.vitecsoftware.com.

DOCUMENTS

Complete documentation will, by April 20, 2016 be held available at www. vitecsoftware.scom. The documents will also be sent to shareholders who so request and state their postal address.

INTERIM REPORTS 2016

Interim Report January - March 2016	2016-05-11
Annual General Meeting	2016-05-11
Interim Report January - June 2016	2016-07-14
Interim Report January - September 2016	2016-10-20

DIVIDEND

The Board of Directors has decided to propose the Annual General Meeting to resolve on a dividend of SEK 0.90 per share.

head office umeå Tvistevägen 47, Box 7965, 907 19 Umeå, Sweden Phone +46-90-15 49 00 " www.vitecsoftware.com

AI assistant

Vitec Software Group B — Annual Report 2015

2988_10-k_2016-04-20_6da1f2b4-515b-4f77-a61f-1440276aed33.pdf

Annual Report 2015

Vitec at a Glance

A software company growing through acquisitions

INDUSTRY-SPECIFIC BUSINESS SYSTEMS

LONG-TERM CUSTOMER RELATIONS

BUSINESS MODEL WITH RECURRING REVENUE

GROWTH THROUGH ACQUISITIONS

HISTORY

CONTENTS

2015 in brief

618,4 MSEK NET SALES +26 % CHANGE IN NET SALES 100,6 MSEK OPERATING PROFIT

Important events in 2015

Vitec reduces dilution by redeemed convertible

Vitec signs multiannual contract with Länsförsäkringar

Vitec acquires Norwegian Fox Publish AS

New Manager of Business Area Estate Agents in Norway

Cost-cutting program in Business Area Estate Agents

Vitec has signed a SEK 250 revolving credit facility for acquisitions

Vitec acquires Datamann A/S in Denmark

Vitec acquires Infoeasy AS in Norway

HusmanHagberg chooses Vitec Express

Recruitment of Marketing Manager

Vitec supplies Acute to Diacor

Vitec acquires Nice Norwegian Insurance Computer Environment AS (Nice AS)

Vitec carries out a share split 5-for-1

A 30-year-old that is continues to grow

STRONG PRICE TREND AND SHARE SPLIT

INCREASED DIVIDEND – AGAIN

SUSTAINABLE PROFITABLE GROWTH

Strategy for sustainable and profitable growth

Vision

Objective

Mission

Values

FINANCIAL TARGETS

Strategy for sustainable and profitable growth

1 VERTICAL NICHES – INDUSTRY-SPECIFIC SOFTWARE

Proprietary software

Few competitors

Strong position on small markets

High entry barriers

2 BUSINESS MODEL WITH HIGH PROPORTION OF RECURRING REVENUE

3 GROWTH DRIVEN BY ACQUISITIONS

4 STRATEGY FOR BRANDS AND PRODUCTS

Our Business Areas

Business Area Estate Agents

Business Area Real Estate

BOPLATS SVERIGE

Business Area Finance & Insurance

Business Area Auto

16 % 71,1 MSEK +151 %

13 % 14,9 MSEK +282 %

Business Area Health

Business Area Energy

Business Area Media

Employees who inspire and develop each other

SKILL SHARING

LEADERSHIP WITHIN VITEC

COMPETENCE ASSURANCE

NEW ACQUISITIONS

PREVENTIVE HEALTH CARE

CONVERTIBLE PROGRAMMES

History

1985

1990

1999

2000

1995

1998

2004

2005

2010

2007

2009

2011

2012

2013

Vitec Software Group B Annual Report 2015