annual report - anoto - digital writing solutions los angeles, california to get closer to high end...

Annual Report2014

Anoto Annual Report 2014content

3 Word from the CEO

7 The company & technology in brief

8 2014 in brief

9 Anoto in numbers

10 Business areas

18 Business Overview 2014

20 Ofice locations

21 Management report

23 Anoto Group

28 Parent company

32 Notes

56 Audit report

57 Corporate Governance report

59 Board of Directors

60 Senior Management

61 The Anoto share

63 Five-year summary

65 Definitions

66 Annual General Meeting

Anoto • Annual Report 2014 • Found online at http://www2.anoto.com/investors

To our shareholders2014 was another challenging year for Anoto although a year when we got the first confirmation that our reorganization over the last 3 years and the chosen strategy is starting to pay off. Following a good first quarter within healthcare we received an offer from a large investment company to sell Anoto Enterprise Solutions, including our 51% holdings in Destiny Wireless. We entered into a negotiation with the objective to create a structure whereby Anoto would deliver hardware and software products and the new entity would invest in global market expansion. However we did not reach an acceptable agreement and the negotiations were terminated in August. At the same time several larger business opportunities emerged and we decided to make the necessary commitments to keep Anoto Enterprise Solutions within Anoto Group. In parallel we continued to invest in product development to expand our business from digital pen and paper to also include digital writing solutions for interactive displays and interactive walls. Following the proof of concept and Panasonic launch of Touch Pen with its 4K ultra high resolution tablet with Anoto Surface™ technology we entered into a project with one of the world’s largest IT companies to develop a broad range of products. We invested in We-Inspire and established a wholly owned subsidiary and a new office in Los Angeles, California. With these new initiatives we were able to demonstrate Anoto’s unique position and capabilities to enable intuitive, high precision digital writing solutions in a multi user environment including large interactive walls, small and large interactive displays with touch and pen input, paper, and smart accessories. The positive feedback from users within creative industries makes us firmly believe that we are on the right track.

Revenues for 2014 were 141 MSEK compared to 144 MSEK in 2013. 65% of revenues was from enterprise solutions. Operating expenses were reduced to 143 MSEK from 176 MSEK in 2013. Through a private placement, a rights offering and a convertible loan we raised a total of 84 MSEK net to finance operations and working capital during the year.

We want to thank our shareholders and investors for the patience, participation and financial support that was needed to realize our business plan without having to reduce the upside revenue potential of our business.

“2014 was the first year that we were able to demonstrate the full potential of our unique technology.”

–Stein Revelsby, CEO at Anoto Group.

Word fromthe CEO


Digital Writing - a personal intuitive way to connectDigital writing is about to become one of the four most common ways to interact in a rapidly expanding world of ubiquitous computing, in addition to touch, voice and gesture. Most display manufacturers and interactive whiteboard suppliers are looking to enable their products with support for stylus or digital pen input. Operating systems become more pen centric and the trend is moving towards touch and pen to replace mouse and keyboard. In 2014 we made significant progress in our efforts to make our products smaller, more cost efficient, more intuitive, easier to install and use. “It’s just a pen” – everybody knows how a pen works. A digital pen should be as intuitive as a pencil or a ball point pen and it should be easy to plug and play with devices and applications.

Since we decided to work more closely with a few select partners, who are market leaders or specialists within their market segments, Anoto takes less go to market responsibility in return for a stronger commitment and to achieve better scalability with dedicated partners that have more sales and marketing resources. Also by building more products on the same architecture we achieve better synergies and reduces the support burden and can utilize more resources to understand customer requirements and end user needs for features and functionality.


Focus on pen centric applicationsIn 2014 we made a strategic decision to expand our business from enterprise solutions and education to also include creative industries. Our core business is digital writing and our core product is the pen. Therefore our target customers are anyone who prefers to use the pen instead of or as a complement to a mouse, a keyboard or a finger. Within Anoto Enterprise Solutions a precise pen is needed to make a valid handwritten signature. The handwritten signature is the most common, universal way to identify a person in relation to contracts, applications, forms, or transactions. Signature on paper is still needed in most markets –and Anoto offers a secure, identical and efficient solution to capture ink on paper and transfer data electronically. A number of new ways to utilize biometrics are introduced in addition to e-sign solutions within banking, insurance and point of sales. However many of these systems requires complicated back end infrastructure and large investments to make them secure, reliable and valid for authorization. Many available solutions for the digital capture of handwritten signatures lack precision and solid proof of origin. Anoto saw an increasing interest during 2014 for its solutions to capture signatures on paper in combination with the ability to capture signatures on displays.

We see a further large potential for continuous improvement by combining our low cost unique dot pattern with our precise pens and our ability to trace original signatures and verify them

by utilizing biometric features and personal identity. The fact that we offer solutions for paper as well as displays opens up for significant business opportunities attractive to system integrators and software companies.

Within creative industries there is already a large installed base of digital writing solutions from companies like Adobe and Wacom, some of which are complementary and others will be competing solutions to Anoto. We recently established an office in Los Angeles, California to get closer to high end users within entertainment and design. Animation movie makers, fashion and shoe designers, car designers, advertising agencies and creative education institutions are the most demanding and sophisticated users of digital writing and they also still use paper in their daily work for sketching, storyboarding and brainstorming. The activities at wholly owned US subsidiary We-Inspire Inc. has opened doors to many of these users and potential customers. Our ambition is to capture a significant market share together with our partners and to capitalize on Anoto’s ability to offer a broad range of intuitive, highly precise and cost efficient digital writing solutions for any surface; paper, ultra large walls, small and large displays, and to partner with leading software and solutions providers to combine their installed base with our state of the art products and solutions.


Unique position 2014 was the first year we were able to demonstrate the full potential of our unique technology and the main reason why we attract interest from some of the world’s largest hardware and software companies to build products and solutions on our technology platform. Users want intuitive solutions to work with their existing applications. Designers want precise tools and the ability to easily change effects, colors, shapes and sizes. With Anoto they can use analog plastic palettes, short cuts or action areas on accessories or paper for easy navigation in combination with large interactive walls or displays and collect, create, share or transfer content. Groups can work together in collaboration and brainstorming and include all content in a work flow, be able to interact in real time and even include sketches and notes made with ink on paper. Display manufacturers can easily integrate Anoto Live Surface™ to enable ultimate precision, even on large displays for meeting rooms to replace traditional whiteboards and combine with any touch technology for better price performance.

Stein RevelsbyChief Executive Officer, Anoto Group

April 14, 2015

For display manufacturers Anoto offers high precision at a low cost without complicated issues related to calibration or electronic and magnetic interference. We foresee a fast growing opportunity to equip meeting rooms with interactive walls, large wall mounted displays with touch and pen input, interactive tables where several users can use their pens to annotate, sketch and write at the same time. We foresee a future when people can continue use their personalized handwritten signatures, express their ideas, sketch, draw and take notes, connect, share and interact in a seamless environment, in the field, in the office or at home.

I want to thank our employees, our management and our partners for their loyalty, enthusiasm and hard work and emphasize the importance of individual skills and persistence in combination with coordinated team work to succeed.


It’s both analog and digital.Anoto digital writing eliminate the need for duplication. Signatures, handwritten text, notes, checkmarks or sketches are all available immediately, in analog and digital forms.

It’s precise. Anoto digital writing deliver pixel-by-pixel precision. The most precise technology in the market.

Each stroke is a true replica, indistinguishable to the eye.

It’s mobile.Anoto digital writing can be used anywhere—wired or wireless. It has an integratable infrastructure suitable for small to large enterprise solutions. Cost-effective and environmentally conscious.

It’s secure.Anoto digital writing encrypts data directly while capturing the handwriting.

It’s scalable.Anoto digital writing is the only technology in the market that works on small as well as ultra-large surfaces, paper as well as plastics and glass screens.

The company & technology in brief

About AnotoAnoto Group AB is a global leader in digital writing solutions, which enables fast and reliable transmission of handwriting into a digital format. Anoto operates worldwide through a global partner network that delivers user-friendly digital writing solutions for efficient capture, transmission, distribution and storage of data. Anoto is currently in use across multiple business segments, e.g. consumer, healthcare, banking and finance, transportation and logistics and education.


2014 in brief

• Net sales amounted to MSEK 141 • The result after tax was MSEK -63 • Earnings per share amounted to SEK -0.13 • Cash flow for the year was MSEK -3 • Acquisition of 25 percent of the shares in We-Inspire GmbH and establishment of We-Inspire Inc • Two share issues and a issue of convertible bonds with a total contribution after expenses of MSEK 9

(TSEK) 2010 2011 2012 2013 2014

Net sales 212,293 192,286 198,646 144,306 141,465

Other income 0 0 0 0 0

Gross profit 143,970 136,567 143,563 97,474 92,839

Operating profit -74,475 -242,980 -42,173 -163,451 -56,249

Profit/loss after tax -77,326 -243,879 -44,829 -168,302 -62,851

Cash flow 274 -57,103 -18,482 1,549 -3,099

Earnings per share (SEK) -0.60 -1.89 -0.33 -1.03 -0.13

Shareholder Equity per share (SEK) 3.07 1.17 0.95 0.13 0.11

Equity/asset ratio (%) 82 65 60 36 37

Average no of employees 108 94 103 111 106

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2014 Net Revenue by Business Area

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OVERVIEW

Business areasexplained

Intuitive and Precise Tools for HandwritingAnoto’s offerings are based on a joint technology that is primarily comprised of a pen with a built-in infrared camera and a unique dot pattern. The infrared camera in the pen effectively captures the dot pattern printed on various surface types, such as glass, paper and plastic. Information registered by the pen is sent in digital format for presentation to a computer, a smartphone or an interactive wall.

Based on a unique pen technology, Anoto has formulated offerings which via different partners and our own solutions, addresses several application areas. Behind each offering are the business areas that form the basis of Anoto’s report structure.

AnotoDigital Writing

Technology

Original Equipment Manufacturers (OEM)

Independent Software Vendors (ISV)

Solution Providers

Anoto Direct Sales


Enterprise Solutions

EducationNote TakingVotingInteractive DisplaysCollaboration Solutions

HealthcareField ServicesTransport & LogisticsPharmaceuticalTelecomBanking & Insurance

Intellectual properties Distribution channelsBusiness areas Application areas

Business Areas:

Anoto Enterprise Solutions offerings are based on our pens combined with dot pattern, software tools and forms applications, as well as our own solutions for digital writing, document and signature capture.

The Technology Licensing offerings are based on customized pen products and built in digital writing solutions for OEM customers who develop applications, market and sell to end customers.

The C Technologies offering is based on C-Pen, a handheld scanner solution combined with optical character recognition that works like a digital highlighter pen. The product and technology is sold under its own brand and via OEM customers.


Business areas explained Enterprise Solutions

Healthcare

The Welsh Ambulance Service Trust (WAST) select the Anoto digital pen is the best fit for its patient data capture requirements.Following a highly successful pilot of Anoto’s digital writing technology with paramedics at the Swansea Ambulance station in 2013, the Welsh Ambulance Service Trust (WAST) is to roll-out 1,700 digital pens to ambulance crews across Wales.

Each year in Wales, around 500,000 patient clinical records are completed by WAST’s ambulance crews. As well as leaving a copy of the form with the patient at home or hospital a duplicate paper copy of the form is filed by the ambulance clinician at the end of their shift. These forms are transported to the WAST clinical audit department for scanning and data verification.

This current process can take a considerable time and the management team at WAST need more timely clinical data on their interaction with patients in order to share information across the NHS, as well as drive and measure improvements in patient care.

During 2013, WAST evaluated a range of technologies, including tablet devices, to generate a digital patient record and concluded that the Anoto pen was the best fit for its patient data capture requirements.

Anoto introduces a new digital writing solution Yorkshire Commission and Support Unit (CSU)Anoto recently helped Yorkshire Commission and Support Unit (CSU) to reduce the burden of daily administration tasks carried out by healthcare staff, saving them on average 1.5 hours per day.

Everyone who starts receiving full-time care for health needs is assessed for NHS Continuing Healthcare. To carry out assessments, forms are used often referred to as the Decision Support Tool (DST). The clinical administration team within the Yorkshire CSU, would print off the required DST forms on a daily basis and give them to the Continuing Health Care (CHC) nurses for their daily visits. The nurses would fill in a form for the patient during a visit and return the forms back to the CSU where the notes are then manually typed into a system. This would take approximately 1.5 hours per form to input.

The benefits of the new digital writing solution:

• 1.5 hours administration saved through efficiency• No re-keying of information or duplication of work • Standard form digitalised available to use immediately• Verified and accurate data• Information easily shared with other organisations and

health professionals• Information instantly accessible within Trusts database

and stored as a secure digital form• Mandatory time and date stamp applied for audit purposes


With an updated and fully integrated solution, Jackson Lift Group had technology that delivered even more:

• Solution deployed in all 7 regional offices and distributed out to local team

• Users of this solution increased to 188 engineers in total• Printing on demand incorporated as part of the solution• Functionality that permitted the pre-population of data

from the service management system • Better customer service• Better cash flow• A solution for the future

A cool outcome as digital writing technologies introduced to Aqua Cooling SolutionsAqua Cooling Solutions asked Anoto to help them design a new digital writing solution that would benefit their business, customers and users. Anoto assisted Aqua Cooling Solutions with a digital writing solution that gave them the capability of writing to computer in real time. Handwritten information is captured as digital data and subsequently converted into a PDF and automatically emailed to the Finance Department for invoice processing.

Using a digital writing solution capable of both data capture and back office integration, Aqua Cooling Solutions have seen vast improvements in the efficiency of the overall business.

Field ServicesServices market segment apply to data collection outside the permanent workplace, such as in different types of surveys and controls in which forms are frequently used. More specifically, it can be used in the construction industry, the public sector such as in the police force, the oil and gas industry, and by housing associations. Customized Anoto solutions and products can be found in all industries and tailored to meet the specific demands and needs to quickly transfer handwritten text and illustrations into a digital format, including:

• Crime scene investigations• Various types of inspections, such as insurance injuries

and cars in traffic• Inventory of stock• Verification and check lists for deliveries

Jackson Lift Group upgraded to a mobile solution Anoto has recently helped Jackson Lift Group to implement a mobile solution for their local maintenance and emergency callout teams throughout the UK. Already an Anoto customer, benefiting from digital writing technology for some years, Jackson Lift Group required more functionality to meet the changes in processes and business demands.

Business areas explained Enterprise Solutions


Business areas explained

PharmaceuticalUsing pen and paper is natural, simple and intuitive. Now it comes with all the benefits of modern technology. The big difference from a normal ballpoint pen is what Digital Pen and Paper lets you do with handwritten information. Namely, whatever text and images a digital pen puts on the paper is converted into digital data. And because users are doing the most intuitive thing in the world—using pen and paper—there’s little need for training, no reason to change your processes and an excellent chance of true compliance.

In the market segment Pharmaceutical there are a number of typical areas that digital writing technology can provide benefits:

• Easily deployed • Very well received/accepted by trial study doctors• Ensures traceability of collected data. • Reduces time a drug takes to get to market, this may

represent millions of euro in earned revenue

Anoto has helped to reduce the administrative burdens, whilst ensuring more information is available digitally to assist with proactive planning.

Actelion Pharmaceuticals Clinical trials world-wide aided by Digital Pen and PaperThe road to approving a new drug is cumbersome. Clinical trials are extensive and detailed research studies which test the safety and efficiency of a drug. A digital writing solution accelerates the information flow in clinical trials and speeds up the approval of new drugs. It helps to capture, validate, integrate and process clinical research data using Case Report Forms.

Actelion Pharmaceuticals conducts medical trials the world over. They use data capture tools – Anoto digital pen and paper technology which record data for researchers in 12 trials throughout Western Europe, the United States, Australia and Israel. Data is handled with the help of a web-based system and there is more than 500 pens in use.

For each patient enrolled in a clinical trial a CRF is printed on paper with unique pattern. Research doctors use digital pens to record the data on the paper which allows a unique identification for each patient and each CRF field. This seemingly easy solution is very well received by doctors because it is already familiar and requires very little training and no change in the normal visit procedure.

TelecommunicationsDigital writing solutions, that include Live™ Pen 2 and Anoto Live™ software are helping many large organizations to implement better streamlined paper processes whilst allowing critical data to be securely managed. As a result, efficiency across the business is greatly increased and more importantly, customer experience is significantly improved.

Telekom Shops in Germany, successfully migrate to a Virtual Desktop environment with a cost-efficient solutionDuring 2014, T-Systems signed a contract to migrate the Group’s 800 Telekom Shops as part of a program to move to a Virtual Desktop environment that enhances signature capture solutions.

Telekom Shop utilizes 5,000 digital pens and Anoto Live™ software solutions to process approximately 6 million pages per annum, and flawlessly handle 14 signatures and 166 views per minute. With Anoto Live™, Telekom customer’s enrolment forms are completed and signatures captured with an Anoto digital pen in the shops which is then transmitted to their Data Centre. Customer data is processed quickly and efficiently, often taking just minutes from signature to archiving. This solution eliminates scanning and postage costs, guarantees data security and confidentiality, and ensures customer contracts are always correctly signed and dated. The bottom line is that the Anoto digital writing solution has allowed Telekom Shop to cut contract printing by 50%.

Digital pen technology can make a real difference to the way retail handles data and documents. Apart from cost saving, the real value is seen when employees are able to spend more time with customers and less time processing forms, increasing customer satisfaction that really does matter.




Transport & LogisticsWhether transporting passengers, medical supplies or regular packages, transport and logistics companies all face the same challenges: To be reliable, cost efficient and deliver on time. An increasing number of companies around the world have turned to digital writing solutions to overcome their data collection challenges.

Areas where digital writing solutions are very well suited are:

• Tracking and tracing• Signature capture• Proof of delivery• Load control

Anoto digital writing reduces costs by £75k per monthHireco, the market leaders in trailer hire, outsource the servicing of its fleet to service vendors. With 65 vendors located throughout the UK, ranging from very small to large independent companies, Hireco required a more effective way to help manage the vendors. Anoto developed an end-to-end digital writing solution that enabled Hireco to gain back more control over processes and put the control firmly in their hands.

As a result of the solution implemented, Hireco have saved £3 per month per trailer on servicing costs. With controls applied and correct recharging processes now in place, Hireco have estimated savings are £1,400,000 per annum.

Main benefits:

• Saves time and reduces costs• Improved control over servicing and the ability to monitor

parts costs• Driver and Vehicle Standards Agency (DVSA) compliant

Banking & InsuranceBanks and insurance companies around the world are increasingly discovering the benefits with digital writing technology. Digital writing practically eliminates the need for data entry, is easy to use, requires minimal training and provides almost instant information to clients.

Within Banking and Insurance there are several application areas where digital writing is the ideal solution.

Some examples are:

• Signature capture• Loan applications• Documenting client information• Inspections

Savings Bank of Kaiserslautern capturing customers’ digital signatures In Germany for instance, the Savings Bank of Kaiserslautern is using digital pens at its headquarters to capture customers’ digital signatures for legally binding financial documents. The bank and its customers have greatly benefited from the digital writing solution. Thanks to the solution the business process which used to take 10 days has been cut down to 5 minutes.




We-Inspire: Ultimate collaboration solutionsIn 2014 Anoto acquired 25% of we-inspire GmbH, a company specializing in software for digital collaboration environments and Anoto set up a 100% owned subsidiary, We-inspire Inc., based in Los Angeles, California to sell We-inspire solutions in the US market. We-inspire solutions enables multiple users to work on ultra-large interactive wall surfaces and to interact by using different devices, such as Anoto digital pens, mobile phones and tablets.

Workgroups are able to collaborate and interact by drawing, writing, making notes, import documents, pictures or movies, sketches and even capture analogue content written on paper in real time. Work can be saved locally or in the cloud to be distributed to participants of a meeting.

The solution is already in use at large companies within construction (Skanska), toy manufacturing (Lego), German car manufacturers (BMW and Daimler), Austrian police and a global pharmaceuticals company (Merck). We-inspire solutions demonstrates the unique capability of Anoto’s technology and allows for real time interaction between multiple users on different devices combined with high precision digital writing on small, analog (paper) as well as ultra-large surfaces and screens.

Sales focus is on high performance users within film, media and creative industries as well as large corporations need for collaborative work space solutions within product development, planning and research.


C Technologies C-PenC Technologies’ main product is the C-Pen, a handheld scanner combined with character recognition that works like a highlighter pen. With the help of a C-Pen, the user can easily transfer printed text into a format that can be edited in computers or mobile devices. Data retrieval occurs line by line, and the user easily controls what is captured and transferred. The C-Pen technology is also used as a basis for several products from C Technologies business partners, primarily for teaching and learning programs.

The products are sold under a separate brand through a network of distributors and suppliers in a number of different countries, primarily in Europe. In other regions and in special markets, our products are being sold under a third-party brand (OEM) or co-branding.


Technology LicensingAnoto offers leading OEM businesses (Original Equipment Manufacturer) working in the fields of education, note taking, electronic voting and interactive displays, solutions based on Anoto’s pen technology and unique dot pattern to provide intuitive, precise and interactive solutions. Within the business area Technology Licensing, Anoto has entered into a few large cooperation agreements. The customers have their own marketing, distribution channels and sometimes unique market segments. The digital pens and solutions are adapted according to specific requirements from the market segment.

Note TakingWanting digitized notes from meetings or classes is becoming increasingly common. Livescribe has developed a new low-cost mobile computing platform that enhances productivity, learning and communication for anyone who uses pen and paper. The company’s flagship product, Livescribe 3 smartpen was launched in November 2013. It captures valuable handwritten information and transfer it to iOS 7 compatible devices: iPhone 4s newer, iPad 3rd Gen or newer, iPad Air, iPad Mini, and iPod Touch 5th Gen or newer. Ideal for moving notes from meetings and lectures directly into workable files—and its speakers play back recorded audio from the moment of making the notes.

Interactive DisplaysWriting on glass has quickly become a popular and intuitive way to interact with smartphones and tablets. Panasonic launched the world’s first tablet with built-in technology from Anoto. The product is a 20-inch flat screen with ultra-high (4K) resolution aimed at professional users who work with computer-aided design and engineering, or in other areas where large-format paper traditionally has been used.

Based upon the first proof of concept with Panasonic Anoto is now also working with other displays manufacturers to embed Anoto SurfaceTM high precision digital writing functionality into a range of products from smaller tablets to larger All-in-Ones and large TV size interactive displays for meeting rooms.

Benefits with Anoto TechnologyThe advantages of Anoto’s technology compared with other solutions include cost-effectiveness, flexibility and performance. Surfaces such as glass, whiteboards and books do not require built-in electronics, which keeps costs and complexity to a minimum. The intelligence lies in the pen, and the same pen can be used for different surfaces, and different pens can be used on one single surface. Anoto’s digital pen technology offers maximum precision across the whole surface, irrespective of size. Anoto SurfaceTM can be embedded in displays with different touch technologies without interfering with electronics or complicate calibration. Furthermore Anoto dot pattern can be used on analog surfaces like palettes or pads for easy pen navigation and to create efficient short cuts or action areas.

Business areas explained Technology Licensing


EducationInteractive solutions create a learning environment that is more oriented towards the individual and where the traditional classroom model is replaced by a more student-centric and interactive approach to teaching.

Anoto has several strong OEM customers that focus on the education:

• TStudy, with several interactive products: TNote, a solution that facilitates distance learning; Symphony, a solution for work in the classroom; and DOTnote, a simple and effective solution for taking notes.

• Steelcase (Polyvision), a manufacturer of interactive whiteboards, offers several products for conference rooms and educational environments.

• Dai Nippon Printing (DNP), which supplies screens and also offers the interactive products: OpenNOTE, a collaborative learning tool for students in the classroom; and OpenSTAGE, an interactive meeting/presentation tool for educational environments and meetings in enterprises.

• PLUS, a manufacturer of equipment for education, like interactive whiteboards and the UPIC series which includes interactive wireless panels and pads for education and business. The solutions for education are often packaged together with whiteboards, projectors and books to offer customers complete solutions.

VotingThe use of digital pen and digital paper where the paper constitutes the ballots is an effective solution to meet the demands for quick results and rules for verification. Since 2012, Anoto works with market leader Smartmatic for electronic voting systems to develop a portfolio of products for voting, polling and census.

Three Interacting ComponentsAnoto’s OEM partners’ solutions are based on three interacting components:

• Digital pen technology comprising hardware and software components that can be integrated with other products or serve as the basis for new products.

• Software modules for handling dot pattern and design, and printing. The pattern can be printed with a regular printer, digital and laser printers and also printed on surfaces, such as whiteboards, glass or thin film.

• Software applications developed by Anoto’s partners.

Business areas explained Technology Licensing


Business overview 2014

Business Overview 2014Anoto Enterprise Solutions is selling Anoto’s own applications Anoto Live Forms™, Anoto Live Enterprise™ and Anoto Live PDF™ as well as digital pens and software components to partners and system integrators around the world. Business focus is on companies and government organizations need for efficient signatures, document and data capture. In 2014 a majority of the business was from the UK and the healthcare sector but also financial institutions and telecom in Germany, Japan and Turkey. Anoto’s business development efforts in India resulted in several leads and pilot projects with significant potential.

Customers within Technology Licensing develop and sell products based on Anoto’s intellectual property, software, and digital pen products. For many years, Anoto has licensed its technologies to providers of interactive classroom solutions as well as learning aids for children. Productivity tools, such as for note-taking and meeting productivity, are also long-established products in our Technology Licensing segment. Recently, Anoto has established two new application areas through partners: voting solutions and digital design automation. Voting solutions are based on our traditional digital paper technology, while digital design automation solutions help animators and designers unleash the creative power of digital writing with interactive touch displays.

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Anoto Enterprise Solutions Technology Licensing C Technologies


Anoto Enterprise SolutionsAnoto Enterprise Solutions focus on business to business solutions, hardware and software, primarily for signatures, documents- and mobile data capture.

Healthcare• Partner Phoniro expanded their business and launched Health

Diary solution in Sweden. Patients with terminal illness report their condition using digital pens.

• Anoto achieved HIPAA compliance in the US for Anoto Live Forms™ to be used with Electronic Medical records.

• Anoto built custom web portal for the Aneurin Bevan Health Board which facilitates cross-agency sharing of patient data in Wales.

• Partners Shareable Ink, Infomax and NextGen expanded their customer base in the US.

Banking and Insurance• Our partners XMS/Magicturk received a large contract of more

than 1.100 pens from a financial institution to equip their sales force to capture signatures and new contracts in combination with iPads.

Telecom• T-Systems signed a contract to migrate the Group’s 800

Telekom Shops in Germany to Anoto’s Live™ Pen 2 and Anoto Live™ software solutions as part of a program to move to a Virtual Desktop environment and 5,000 pens was delivered. Paper processes are streamlined and critical data is securely managed, improving efficiency across the enterprise whilst enhancing the customer experience. Customers signing up for service are required to sign contracts that must be securely captured and archived, in addition to supplying the customer with a copy of the agreement. Millions of forms are processed each year.

Technology LicensingCustomers within Technology Licensing primarily develops and sells their own products based on Anoto technology and digital pens. Anoto’s revenue is primarily royalty per unit sold but also often a combination of product revenue and royalty.

• Panasonic sold its first 2000 units of Toughpad 4K UTMB5 and UTMB6, the world’s first 20 inch tablet with a 4K resolution display and built-in Anoto Live™ enabled technology for digital writing with Panasonic branded Touch Pen.

• Anoto developed a prototype and entered into a major project with one of the world’s largest IT companies with the objective to launch a range of interactive displays with embedded digital writing functionality in 2015 and 2016. Initial target customers are designers within automotive, entertainment and creative industries. A significant part of the development cost is covered by Non Refundable Engineering revenues.

• In the second quarter Anoto acquired 25% of we-inspire GmbH, a company specializing in software for digital collaboration environments and Anoto set up a 100% owned subsidiary, We-inspire Inc., based in Los Angeles, California to sell We-inspire solutions in the US market. We-inspire solutions enables multiple users to work on ultra-large interactive wall surfaces and to interact by using different devices, such as Anoto digital pens, mobile phones and tablets. Workgroups are able to collaborate and interact by drawing, writing, making notes, import documents, pictures or movies, sketches and even capture analogue content written on paper in real time. Work can be saved locally or in the cloud to be distributed to participants of a meeting. The solution is already in use at large companies within construction (Skanska), toy manufacturing (Lego), German car manufacturers (BMW and Daimler), Austrian Police and a global pharmaceuticals company (Merck). Sales focus is on high performance users within film, media and creative industries as well as large corporations need for collaborative work space solutions within product development, planning and research.

• Partner TStudy expanded their business in China and purchased 60,000 pens and 40,000 licenses.

• Partner Smartmatic committed to their exclusivity contract and purchased 10,000 licenses.

• Partner Livescribe sold approximately 170,000 pens.

C TechnologiesC-Technologies develops and markets C-Pen which captures and transfers printed information to computers and smartphones.

Business overview 2014


3 Japan Anoto regional officeAnoto K.K.7F Dai-3 Nishi Aoyama Bldg. 1-8-1 ShibuyaShibuya-ku, Tokyo Japan 150-0002 Tel +81 (0)3-5774-1212Fax +81 (0)3-5774-1211

4 USA Anoto regional office

Anoto Inc.200 Friberg Parkway, Suite 3001Westborough, MA 01581USA Tel +1-508-983-9550Fax +1-508-983-9551

We-Inspire Inc.7083 Hollywood BlvdLos Angeles, CA 90028-8901USA

Anoto offices Partners’ market reach

1 Sweden Anoto headquarter

Anoto Group AB Traktorvägen 11SE-226 60 LundSwedenTel +46 (0)46 540 12 00 Fax +46 (0)46 540 12 02

1 C TechnologiesTechnologiesTraktorvägen 11SE-226 60 LundSwedenTel +46 (0)46 540 12 00Fax +46 (0)46 540 12 02

2 UK Anoto regional office

Anoto Ltd.Rosewood, Crockford LaneChineham Park, BasingstokeRG24 8UTUKTel +44 (0) 1256 774400Fax +44 (0) 1256 774401

The Croft Business ParkKirk Deighton, WetherbyWest YorkshireLS22 5HGUKTel +44 (0) 1937 858170Fax +44 (0) 1937 585860

Destiny Wireless Ltd.Finance HousePark StreetGuildford, SurreyGUI 4XBUKTel +44 8458 558 855

1

34

2

International office locations

Anoto is close to customersAnoto has its own sales organization with offices in Sweden, Japan, the Netherlands (opened in February 2013), the United States and the United Kingdom. The organization works via a global partner network next to selling directly to end-users in selected vertical markets across the globe.


The Board of Directors and CEO of Anoto Group AB (publ.), Corporate Identity No. 556532-3929, hereby submit the annual accounts and consolidated accounts for the January 1 – December 31, 2014 financial year.

Group StructureAnoto Group AB is the parent company in the corporate business group, performing group-wide functions only to its subsidiaries. The operational activities including sales are performed by the subsidiaries Anoto AB, C Technologies AB, Anoto Inc., We-Inspire Inc., Anoto-Maxell K.K., Anoto Ltd, Ubiquitous Systems Ltd and Destiny Wireless Ltd. From here on we refer to the entire business group as “Anoto”, unless otherwise follows from the context.

EnterpriseAnoto is a high-tech company that has developed a unique technology for digital writing, enabling rapid, reliable conversion of handwritten text and illustra-tions to digital form. The organization is divided into three business areas: ”Enterprise Solutions”, “Technology Licensing” and “C Technologies”. The entire business is based on digital camera technology and image processing in real time.

Anoto Business AreasAnoto Enterprise Solutions (former Business Solutions)Anoto Enterprise Solutions focuses on systems, products and services that target businesses, pri-marily in the field of forms processing, document management and signature capture. The offering is Pen Solutions which includes solutions for creating a form in digital format, digital processing of hand-written forms and automatic generation of a digital version of a document with handwritten signatures and notes. Anoto has an indirect business model and markets its products through partners, such as system integrators, software developers and IT consulting firms, all of which offer customized solutions with Anoto technology to their customers.

Anoto Enterprise Solutions had a positive devel-opment during the year. The Net sales increased by MSEK 4 compared to the previous year and reached MSEK 93 in 2014. Anoto has, during the year, worked intensely with the product portfolio, which shall generate sales in the years to come. Anoto is focusing on the consolidation of resources with software- and solution providers in order to be in a position to offer better packaged products and solutions to other partners, system integrators and re-sellers within different market segments. At the same time we are increasing our efforts within sales and marketing in order to strengthen our business and to attract larger partners.

Nurse Tech Fund (NTF) in the UK had a positive effect on sales during the first quarter. Additional funds will be available for investments during the first quarter of 2015.

During the year Anoto launched a new pen for Enterprise Solutions, LivePen 2. During December 5,000 units was delivered to T-Systems/T-Mobile to be used for registering of new customer contracts in the German T-Mobile shops.

Technology LicensingCustomers within Technology Licensing develop and sell products based on our intellectual property, software, and digital pen products. For many years, Anoto has licensed its technologies to providers of interactive classroom solutions as well as learning aids for children. Productivity tools, such as for note-taking and meeting productivity, are also long-established products in our Technology Licensing segment. Recently, Anoto has established two new application areas through partners: voting solutions and digital design automation. Voting solutions are based on our traditional digital paper technology, while digital design automation solutions help animators and designers unleash the creative power of digital writing with interactive touch displays.

The Net sales within Technology Licensing was MSEK 3 below previous year, totaling MSEK 39.

In the beginning of 2014 Panasonic presented their new tablet Toughpad 4K UT-MB5 during the Consumer Electronics Show (CES) in Las Vegas Sales to Panasonic during the year has not met our expectations but has paved way for other strategically important co-operations.

A major project with one of the world’s largest IT companies was escalated during the quarter and is progressing well. The objective is to launch a range of interactive displays with embedded digital writ-ing functionality from the second half of this year. Final contract negotiations has just started and we are currently bound by confidentiality agreements. We expect however to be able to disclose more details during the first half of 2015.

During the year Anoto acquired 25% of the Austrian company We-Inspire who has invented a unique software which enables interactive collaboration over large surfaces with input possibilities from several sources such as paper, smartphone, tablet, laptop and pen. A new subsidiary with its own staff was established in Los Angeles, California in order to establish We-Inspire on the American market.

Livescribe sold approximately 170,000 units in 2015 and during the fourth quarter they announced the release of Echo Desktop, an update to their Livescribe Desktop software for managing notes and pen-casts created with the award-winning Echo Smartpen. In addition, through a new partnership with Anoto and our Live PDF service (www.livepdf.net), Echo and Sky WiFi Smartpen customers can now print any paper or document and capture handwriting and sketches with their Smartpen.

TStudy China purchased 60,000 pens and licenses in 2014. TStudy is Anoto’s preferred partner in China and strengthened by the USD 6.5m fund raise in the second half of 2014 is planning for further strong growth in 2015.

C TechnologiesC Technologies develops, manufactures and sells C-Pen®, a handheld scanner solution with char-acter recognition software. The C-Pen captures printed information such as text, numbers and codes, decodes the information and transfers it to computers and smartphones. The products are made available through the C-Pen brand and as OEM-branded versions.

The Net sales in C Technologies was MSEK 10 dur-ing 2014 which was in line with the previous year.

The business was downsized during last year. C Technologies continues to sell its products to OEM customers as well as within select retail channels.

Shares and ShareholdersThere were as per end of 2014 689,353,534 issued Anoto shares. According to Euroclear Sweden AB’s statistics, there were 7,542 shareholders on December 31, 2014, representing an increase of approximately 44 per cent over the past 12 months.

The largest shareholder as per 31st of December 2014 was Solid Technologies Ltd. owning 14.3 per cent of the votes and capital.

Corporate Governance ReportThe Corporate Governance Report is located in a separate section after the financial reports in the annual report.

EmployeesThe average number of employees within the Group increased/decreased from 111 to 106 in 2014. The Group had 95 employees (100) at the year-end.

Remarks on the Statement of Comprehansive IncomeNet sales for the year decreased by two per cent from MSEK 144 to MSEK 141.

Anoto’s gross profit for the year increased to MSEK 93 (96), and the gross margin was 67 per cent (68).

Overhead costs decreased during 2014 by MSEK 27 compared to the previous year. The major reason for the decrease is the restructuring undertaken during the third quarter of 2013 combined with additional cost savings implemented during 2014.

Anoto capitalizes non-customer financed develop-ment- and patent expenses meeting the IAS 38 criteria. A total of MSEK 5 (1) was capitalized in 2014.

The profit before depreciations and amortizations (EBITDA) in the period was MSEK -49 (-79).

As a part of the annual closing process Anoto tested the value of the Group goodwill and found that there is no evidence of impairment regarding group goodwill. Anoto Group has during the year made write-downs of MSEK 2 (4) in connection with the continuous review of the company’s pat-ent portfolio.

The operating result for the year was MSEK -56 (-163).

Remarks on the Statement of Financial Position and the Statement of Cash FlowsThe total assets decreased by MSEK 5. Short term and long term liabilities have decreased by MSEK 1 to MSEK 105.

The liabilities per end of 2014 include loans of MSEK 36 which stems from the two British companies acquired during 2011/2012 and the convertible loan of MSEK 18 issued in Q2 2014 with maturity in February 2015.

Group Equity at the end of the year amounted to MSEK 78 compared to MSEK 83 in previous year. The equity/debt ratio at year-end is 47 percent (48).

The cash flow from operating activities was MSEK -93 (-89). Working capital decreased by MSEK 37

Management Report2014


(7). Cash flow from investment activities during the year was MSEK -6 (-4). The cash flow from financ-ing activities was 96 (95), including net proceeds from share issues of 95 MSEK. The cash flow for the year was MSEK -3 (2). Closing cash at end of year was MSEK 4 (7).

InvestmentsThe net investments for the year totaled MSEK 6 (4).

Research and DevelopmentAnoto’s R&D efforts are focused on upgrading and integration of hardware and software for solutions within digital data capture using digital pens. The R&D expenses during the year were MSEK 70 (83) equivalent to 44 percent (45) of the total operating expenses. The number includes amortization of capitalized development of MSEK 1 (1).Pursuant to its compliance with IAS 38, the Group capitalized MSEK 5 (1) during 2014. Including capitalization, the Group´s R&D expenses totaled MSEK 75 (84) for the year. Anoto has an extensive patent portfolio. At the end of 2014, the Group had 27 active patent applications and owned 289 registered patents within the area of digital pen and paper technology.

DisputesAt the beginning of 2014 Anoto was involved in a dispute with a vendor concerning payment of pens produced during 2013. The book value of the vendor balance per 31st of December was MSEK 14.1. During March 2014 Anoto reached an agreement with the vendor regarding a payment plan. As per end of 2014 the liability has been fully settled.

EnvironmentAnoto does not pursue any activities that require environmental permits. None of its units are envi-ronmentally certified.

Risk ManagementLiquidity and financing riskAnoto´s liquid assets, as cash and bank deposits, amounted at the end of 2014 to MSEK 4 (7).

The Group has, through the 2011/2012 acquisitions of Destiny Wireless Ltd and Ubiquitous Systems Ltd, borrowings of MSEK 18. These loans are secured against the current assets of the acquired enti-ties. During the second quarter of 2014 Anoto issued convertible loan notes totaling MSEK 18 with maturity in February 2015. The convertible entitles the loan note holders to convert their loan into Anoto shares at a discount of 15%. There are no other loans in the Group and apart from those in the acquired businesses. The Group has neither any interest bearing liabilities nor pledged accounts receivables, inventory or fixed assets.

In March the company carried out a directed share issue of 19,3 million shares at SEK 0,85 and in November the company carried out a rights issue of 245 million shares at SEK 0,25. The share issues provided the company with a total of MSEK 77 after issue expenses. The management and the board believes that the working capital, including the con-version of the convertible loan in February and the private placement of shares is in March is sufficient for the Company’s needs for the next twelve months.

See further under “Significant Events after the Year-end”.

If projects and/or larger deals get delayed and the Company’s earnings capacity is not improved it may be necessary to ask shareholders for the approval to secure more financing with or without deviation from the shareholders preferential rights. The Company may also ask shareholders for the approval to secure more financing to be able to capitalize on larger opportunities and secure higher growth in revenues.

Currency exposure.Anoto conducts the main part of its sales interna-tionally, and a majority of the invoicing is in EUR, GBP, USD and JPY. A significant part of the costs are in SEK, USD and GBP. Margins and earnings are sensitive to currency fluctuations, mainly against the Euro where the company has predominantly income. The Board believes that the distribution between the Group’s operating currencies provides a sufficient balance in the foreign currency exposure and that the company therefore should not work with hedging of currency net flows.

In 2014, 20 percent of the total income was in EUR, 32 per cent in USD and 39 per cent in GBP. Refer to Note 4 for a detailed description of the company’s risk management policies.

Credit riskThe management of credit risks can be broken down into commercial risks and financial risks. The provisions set aside for bad debt losses as of the balance sheet date have not identified any commercial credit risks. For additional information about credit risks in accounts receivable, refer to Note 27. The financial credit risk is managed as part of the Anoto’s finance policy.

Insurance riskAnoto’s insurance coverage is reviewed annually with respect to traditional business insurance policies for property, liability, travel, etc. Anoto’s insurance policy for patent disputes expired in 2005 and has not been renewable on reasonable terms. However, claims filed before the policy expired are still covered. The company plans to take out an insurance policy for patent disputes as soon as it can do so on reasonable commercial terms.

Patent risks, etc.Anoto continually expands its patent portfolio by applying for patents on innovations linked to Anoto’s technology in order to supplement previous patent applications and patents granted. Anoto cannot guarantee that all patent applications will be approved or that our intellectual property rights will not be called into question, declared null and void, or circumvented.

Third parties have claimed that Anoto infringes their intellectual property rights, and may do so also in the future. Defending Anoto against such assertions can be costly in terms of time, money and other resources. Legal disputes can compel Anoto to pay damages or other compensation, to modify its products and technology, and/or to enter into license agreements with licensors. Anoto cannot guarantee that such licenses will be available at all or be possible to obtain on reasonable terms. Anoto cannot guarantee that such licenses will be available at all or be possible to obtain on reasonable terms.

Employee PoliciesTo realize Anoto’s business concepts, we depend on a multitude of skilled employees who are whole-heartedly engaged in their work and who have a good understanding of the communication between people from different cultures and backgrounds. We strive to make use of all of our employees’ compe-tences in best possible ways. No employee should under any circumstance be discriminated against. We apply a clear policy on gender equality, equal opportunities and anti-discrimination. We strongly encourage an environment of respect and honesty, with open and clear communication by and between all parties involved in Anoto’s business.

In a knowledge based company like Anoto, employee competences are our most important assets. Without constantly adding knowledge to the workforce and allowing the transfer of knowledge between colleagues, the company cannot develop.

Competence development is therefore a priority at Anoto. Development plans are determined individu-ally to ensure that the goals and ambitions of both the employees and the company are aligned.

The Board and Its Rules of ProcedureThe Anoto Group AB Board of Directors consists of five regular members. Refer to the section entitled “Corporate Governance Report” in this annual report for a detailed account of the Board’s composition and working methods.

The Extra General Meeting on January 2nd 2015 authorized the Board to issue shares and/or con-vertibles and/or warrants capped at a total equiva-lent to MUSD 4 prior to the next Annual General Meeting – as well as to depart from the preferential rights of shareholders.

Guidelines on Remuneration for Senior ExecutivesRemuneration for the CEO and senior executives in 2014 appears in Note 9, “Salaries and other remu-nerations”. The Board has proposed to the Annual General Meeting that the guidelines on remuneration for senior executives remain unchanged in 2015.

Significant Events after Year-EndOn the 9th of February, the company announced that all holders of the convertible bonds, totaling 17.7 million, issued during the second quarter of 2014 had chosen to exercise the option to convert into shares. The number of shares issued totaled 49,166,659. The effect on the company´s liquidity was therefore limited to the interest payment of MSEK 1.4.

On the 11th of March Anoto announced that an order worth MSEK 10 for a roll-out of 1,700 pens to Welsh Ambulance Service Trust had been awarded.

On the 23rd of March the Company announced that it, with support from the authorization granted by the Extra General Meeting on the 2nd of January 2015, has completed a private placement of 79,625,292 new shares. The placement was com-pleted at 0.427 SEK and provided the Company with 33.3 MSEK after transaction related expenses.

OutlookThe activity level is high and the business momentum is increasing in all areas. Anoto Enterprise Solutions is preparing for two large tenders within healthcare and insurance. We-inspire is setting up distributors and re-sellers in the US and Europe. Final contract negotiations with the large OEM partner for interac-tive displays has started and Anoto is also pursuing additional opportunities for large interactive displays. Operating expenses will increase somewhat in Q1 due to the tight deadlines and plans for product release with the new OEM partner later this year including costs related to materials, testing and a few additional external consultants.

Proposed Appropriation of Accumulated Result (SEK):

Share premium reserve 62,037,309

Profit brought forward -

Loss for the year -36,205,912

Total 25,831,397

The Board of Directors and CEO propose that the retained earnings of SEK 25,831,397 is carried for-ward. With regard to the financial position of the Group and parent company, refer to the following accounts.

Management Report 2014


(TSEK) Note Group2014

Group2013

Net sales 5 141,465 144,306

Cost of goods and services sold 11 -48,626 -48,128

Gross profit/loss 92,839 96,178

Selling expenses 8,14,31,33 -57,745 -70,030

Administrative expenses 8,9,10,14,31,33 -30,057 -31,702

Research & development costs 8,14,33 -69,516 -82,389

Other operating income 12 12,570 208

Other operating costs 13 -4,340 -75,716

Operating profit/loss 11 -56,249 -163,451

Financial income 16 214 38

Financial cost 16 -7,455 -4,877

Profil/loss before taxes -63,490 -168,290

Taxes 17 639 -12

Profit/Loss for the year -62,851 -168,302

Other comprehensive income/cost

Items that will not be classified to profit/loss for the year:

Translation differences for the year -8,841 5,194

Tax attributable to items in other comprehensive income/cost 0 0

Other comprehensive income/cost for the year -8,841 5,194

Total comprehensive income/cost for the year -71,692 -163,108

Total profit/loss for the year attributable to:

Shareholders of Anoto Group AB -62,038 -166,231

Non-controlling interest -813 -2,071

Total profit/loss for the year -62,851 -168,302

Total comprehensive income/cost for the year attributable to:

Shareholders of Anoto Group AB -69,337 -161,226

Non-controlling interest -2,355 -1,882

Total comprehensive income/cost for the year -71,692 -163,108

Earnings per share before and after dilution (SEK)1)2) -0.13 -1.03

Earnings per share on total comprehensive income/cost before and after dilution (SEK)1)2) -0.15 -1.00

Weighted average number of shares 473,688,069 162,858,591

Weighted average number of shares after dilution2) 473,688,069 162,858,591

Statement of comprehensive income

1. Profit/Loss for the year attributable to shareholders of Anoto Group AB divided by the average number of shares during the year.2. Profit/Loss for the year attributable to shareholders of Anoto Group AB divided by the sum of the weighted average number of shares during the year.

Group2014


(TSEK) Note Group 2014/12/31

Group 2013/12/31

ASSETS

Non-current assets

Intangible fixed assets

Capitalized development expenditures 18 5,337 1,696

Patents 19 813 3,517

Goodwill 22 69,519 61,538

Brands 20 1,211 1,331

Other intangible assets 21 2,092 3,236

Total intangible fixed assets 78,972 71,318

Property, plant and equipment

Equipment and tools 23 2,046 3,084

Total property, plant and equipment 2,046 3,084

Financial fixed assets

Other long-term securities 25 4,361 2,853

Other long-term receivables 26 121 752

Total financial fixed assets 4,482 3,605

Total non-current assets 85,500 78,007

Current assets

Inventory

Finished goods and goods for sale 20,553 27,985

Current receivables

Accounts receivable 27 36,979 27,502

Other receivables 9,400 20,292

Prepaid expenses and accrued income 28 10,516 11,055

Total current receivables 56,895 58,849

Liquid assets 3,909 7,008

Total current assets 81,357 93,842

TOTAL ASSETS 166,857 171,849

Statement of financial position Group



Group 2013

SHAREHOLDERS´ EQUITY AND LIABILITIES

Shareholders´ equity 37

Share capital 13,967 7,797

Ongoing new share issue - 884

Other capital contributed 640,682 578,661

Other reserves -2,746 7,480

Profit brought forward and Profit/loss for the year -573,661 -512,165

Non-controlling interest -16,198 -16,770

Equity attributable to the shareholders of Anoto Group AB 62,044 65,887

Long-term liabilities/Provisions

Long-term interest bearing liabilities 32 - 1,011

Advance payments from customers - -

Other long-term liabilities 2,124 -

Total long-term liabilities/provisions 2,124 -

Current liabilities

Provisions for product warranties 29 497 493

Short-term interest bearing liabilities 32 35,875 16,313

Accounts payable 31,735 42,708

Advance payments from customers 9,351 12,931

Other liabilities 7,669 11,042

Accrued expenses and deferred income 30 17,562 21,464

Total current liabilities 102,689 104,951

TOTAL SHAREHOLDERS´ EQUITY AND LIABILITIES 166,857 171,849

Pledged assets 34 20,501 18,148

Contingent liabilities 35 - -

Statement of financial position Group



Group2013

OPERATING ACTIVITIES 38

Profit after financial items -63,490 -168,290

Items not affecting cash flow:

Change in provisions 29 4 341

Depreciation and amortization on assets 14, 18-23 7,283 12,332

Impairment losses of fixed assets 14, 18-23 72,379

Other items 969 97

Tax paid 17 -12 -12

Cash flow from operating activities before change in working capital-55,246 -83,250

Cash flow from change in working capital

Change in operating receivables -9,086 -15,180

Change in inventory 7,432 2,931

Change in operating liabilities -35,242 6,097

Total change in working capital -36,896 -6,152

Cash flow from operating activities -92,142 -89,402

Capital expenditure

Capitalized development expenditures 18 -4,773 -960

Patents 19 -180 -1,672

Brands 20 -101 -350

Equipment and tools 23 -904 -964

Shares in group companies 40

Cash flow from net capital expenditures -5,958 -3,946

Total cash flow before financing activities -98,100 -93,348

Financing activities

New share issue 76,515 94,800

Convertible loan 18,486 -

Cash flow from financing activities 95,001 94,897

Cash flow for the year -3,099 1,549

Liquid assets at beginning of the year 7,008 5,459

Liquid assets at end of the year 3,909 7,008

Statement of cashflows Group


Statement of changes in shareholders´ equity Group

(TSEK)Share

capitalOngoing new

share issueOther capital contributed1)

Translation reserve2)

Profit brought forward incl

profit for the year

Shareholders equity attributable to the shareholders of Anoto Group AB

Non controlling interest

Total shareholders

equity

Shareholders´ equity January 1, 2013 2,741 471,420 2,464 -345,934 130,691 -14,888 115,803

Total profit/loss for the year -166,231 -166,231 -2,071 -168,302

Other comprehensive income/cost 5,016 5,016 189 5,205

Total comprehensive income/cost for the year 0 0 0 5,016 -166,231 -161,215 -1,882 -163,097

New share issue 5,056 97,080 102,136 102,136

Ongoing new share issue 884 10,161 11,045 11,045

Shareholders´ equity December 31, 2013 7,797 884 578,661 7,480 -512,165 82,657 -16,770 65,887

Total profit/loss for the year -62,038 -62,038 -813 -62,851

Other comprehensive income/cost -7,299 -7,299 -1,542 -8,841

Total comprehensive income/cost for the year 0 0 0 -7,299 -62,038 -69,337 -2,355 -71,692

Convertible loan 542 542 542

Acquisition of minority interest -2,927 -2,927 2,927 0

New share issue 6,170 -884 62,021 67,307 67,307

Shareholders´ equity December 31, 2014 13,967 0 640,682 -2,746 -573,661 78,242 -16,198 62,044

1. Includes parent company statutory reserve and premium reserve from share issues. For changes in these items references are made to changes in parent company equity.2. From translation of Financial reporting from foreign subsidiaries.


(TSEK) Note Parent company2014

Parent company2013

Net sales 9,556 6,804

Gross profit/loss 9,556 6,804

Administrative expenses 8,9,10,14,31,33 -6,387 -5,692

Other operating income 12 - 127

Other operating costs 13 -341 -

Operating profit/loss 2,828 1,239

Profit/loss on shares in group companies 15 -37,000 -143,604

Interest and similar income 16 -541 3

Interest and similar expenses 16 -2,035 -586

Profil/loss before taxes -36,748 -142,948

Taxes 17

Profit/loss for the year -36,748 -142,948

(TSEK) Note Parent company 2014

Parent company2013

Profit/loss for the year -36,748 -142,948

Other comprehensive income/cost 0 0

Total comprehensive income/cost -36,748 -142,948

Statement of comprehensive income

Income statement

Parent Company2014


(TSEK) Note Parent company 2014-12-31

Parent company 2013-12-31

ASSETS

Non-current assets

Intangible fixed assets

Patents 19 103 165

Brands 20 46 56

Total intangible fixed assets 149 221

Property, plant and equipment

Equipment and tools 23 - -

Total property, plant and equipment - -

Financial fixed assets

Other long-term securities 2,853 2,853

Shares in group companies 24 1,532 1,532

Receivables - group companies 110,000 110,000

Total financial fixed assets 114,385 114,385

Total non-current assets 114,534 114,606

Current assets

Current receivables

Receivables from subsidiaries 71,552 92,601

Other receivables 255 10,946

Prepaid expenses and accrued income 28 189 315

Total current receivables 71,996 103,862

Liquid assets 120 3,933

Total current assets 72,116 107,795

TOTAL ASSETS 186,650 222,401

Balance sheet

SHAREHOLDERS´EQUITY

Restricted equity

Share capital 13,967 7,797

Ongoing new share issue 0 884

Statutory reserve 123,031 158,737

Total restricted equity 136,997 167,418

Non restricted equity

Share premium reserve 62,037 107,241

Profit brought forward and Profit/loss for the year -36,206 -142,948

Total non restricted equity 25,831 -35,707

Equity attributable to the shareholders of Anoto Group AB 162,829 131,711

Current liabilities

Accounts payable 2,369 8,046

Loans 17,700

Liabilities to group companies 1,200 76,200

Other liabilities 180 1,506

Accrued expenses and prepaid income 30 2,372 4,938

Total current liabilities 23,822 90,690

TOTAL SHAREHOLDERS´ EQUITY AND LIABILITIES 186,650 222,401

Pledged assets 34 0 0

Contingent liabilities 35 0 0

Parent company


(TSEK) Note Parent company 2014-12-31

Parent company 2013-12-31

OPERATING ACTIVITIES 38, 39

Profit after financial items -36,748 -142,948

Depreciation and amortization on assets 14, 18-23 72 137

Impairment of shares in group companies 15 37,000 143,604

Cash flow from operating activities before change in working capital324 793

Cash flow from change in working capital

Change in operating receivables -16,174 -103,275

Change in operating liabilities -84,812 -6,788

Total change in working capital -100,986 -110,063

Cash flow from operating activities -100,662 -109,270

Capital expenditure

Patents 19 0 -62

Brands 20 0 -32

Acquisitions of shares in Group companies 0 18,441

Cash flow from net capital expenditures 0 18,347

Total cash flow before financing activities -100,662 -90,923

Financing activities

Convertible loan 18,486 0

New share issues 78,363 94,800

Cash flow from financing activities 96,849 94,800

Cash flow for the year -3,813 3,877

Liquid assets at beginning of the year 3,933 56

Liquid assets at end of the year 120 3,933

Cash flow statement Parent company


Changes in shareholders´ equity Parent company

Number of shares 2014 2013

Registered opening balance 389,882,641 137,037,081

Rights issue, March 20131) 25,739,937

Issue in kind, April 20132) 10,847,740

Rights issue, December 20133) 216,257,883

Rights issue, January 20144) 44,179,254

Private placement, March 20145) 19,291,639

Rights issue, November 20146) 245,000,000

Registered closing balance 698,353,534 389,882,641

Par value (SEK) 0.02 0.02

(TSEK)Share

capitalOngoing new

share issueOther capital contributed 2

Profit brought forward incl

profit for the year

Shareholders equity attributable to the shareholders of Anoto Group AB

Non controlling interest

Total shareholders

equityTotal

equity

Shareholders´ equity January 1, 2013 2,741 170,126 172,867 17,772 -29,161 -11,389 161,478

Total profit/loss for the year -142,948 -142,948 -142,948


Total comprehensive income/cost for the year 0 0 0 0 -142,948 -142,948 -142,948

Allocations of income -11,389 -11,389 -17,772 29,161 11,389 0

New share issue 5,056 5,056 97,080 97,080 102,136

Ongoing new share issue 884 884 10,161 10,161 11,045

Shareholders´ equity December 31, 2013 7,797 884 158,737 167,418 107,241 -142,948 -35,707 131,711

Total profit/loss for the year -36,748 -36,748 -36,748


Total comprehensive income/cost for the year 0 0 0 0 -36,748 -36,748 -36,748

Convertivble loan 542 542 542

Allocations of income -35,706 -35,706 -107,242 142,948 35,706 0

New share issue 6,170 -884 5,286 62,038 62,038 67,324

Shareholders´ equity December 31, 2014 13,967 0 123,030 136,998 62,037 -36,206 25,831 162,829

The change in number of shares and their par value, see below.

All the shares are fully paid for and entitles the holder to an equal percentage of dividend.

1. Rights issue, subscription ratio 2:5 at share price SEK 1.702. Issue in kind in relation to the acquisition of Shanwell Holding Ltd at SEK 1.70.3. Rights issue, subscription ratio 3:2 at share price SEK 0.25.4. Final registration of Rights issue undertaken in December 2013, subscription ratio 3:2 at price SEK 0.25.5. Private placement with the support of the Board’s authorization to issue shares without regard for the preferential rights of shareholders at share price SEK 0.85.6. Rights issue, subscription ratio 3:5 at share price SEK 0.25.


Note 1 General accounting policiesNote 2 Anoto’s accounting policiesNote 3 Assessments when applying the

Group’s accounting policies and the main sources of uncertain estimates

Note 4 Risk management by the GroupNote 5 Net salesNote 6 Average number of employeesNote 7 Board of Directors and management

split by genderNote 8 Salaries and remunerationsNote 9 Remunerations to Board of Directors

and CEONote 10 Audit feesNote 11 Operating costs by typeNote 12 Other operating incomeNote 13 Other operating costNote 14 Depreciation and amortizationNote 15 Profit/loss on participations in group

companies - Parent CompanyNote 16 Financial income and expenses

- Group - Parent Company

Note 17 TaxesNote 18 Capitalized development expendituresNote 19 PatentsNote 20 BrandsNote 21 Other intangible assetsNote 22 GoodwillNote 23 Equipment and toolsNote 24 Participation in Group companiesNote 25 Other long-term investmentsNote 26 Other long-term receivablesNote 27 Accounts receivableNote 28 Prepaid expenses and accrued incomeNote 29 Provisions for product warranty

commitmentsNote 30 Accrued expenses and deferred

incomeNote 31 Share-based payments to employeesNote 32 Interest bearing liabilitiesNote 33 Leasing expensesNote 34 Pledged assetsNote 35 Financial instrumentsNote 36 Related partiesNote 37 EquityNote 38 Specification to Statement of Cash

FlowsNote 39 Events after December 31, 2014Note 40 Parent Company details

Note 1:The consolidated accounts of Anoto Group AB (publ.) (Anoto) have been prepared in compliance with the Swedish Annual Accounts Act, International Financial Accounting Standards (IFRS), interpre-tations from IFRS Interpetations Committe as accepted by EU and the Swedish Financial Reporting Board recommendation RFR 1 “Complementary accounting standards for group accounting”.

The parent companyís annual accounts have been prepared in compliance with the Swedish Annual Accounts Act (≈RL ) and the Swedish Financial Reporting Board recommendation RFR 2, “Accounting for legal entities”. In addition, Swedish Financial Reporting Board statements applicable for listed companies are observed. The consolidated and annual accounts, which are specified in thou-sands of Swedish kronor (SEK Thousand), refer to January 1 - December 31 for income statement items and December 31 for balance sheet items.

The annual report and consolidated accounts have been approved for distribution by the Board and the CEO on April 15, 2015 The Group’s statement of comprehensive income and statement of financial position, and the parent company’s income state-ment and balance sheet, will be subject to approval by the Annual General Meeting on May 21, 2015 .

Note 2:

The GroupSignificant accounting policies appliedOther than the revaluation of certain financial instruments, assets and liabilities are based on historical cost.

The parent company´s functional currency, Swedish kronor (SEK), is also the reporting cur-rency for the Group.

Below is a summary of the accounting principles used by the Group. The accounting principles have, with the exceptions described, been applied con-sequently to all periods presented, in the Group´s financial reports.

Assessments and applications in the financial reportsPreparation of financial statements in conformity with IFRS requires management to make esti-mates and assumptions that affect the application of accounting policies and reported amounts of assets, liabilities, revenues and expenses. Actual results may differ from these estimates. Estimates and assumptions are reviewed periodically. Changes in estimates are recognized in the period in which it is revised if the revision affects only that period, or the period in which the revision is made and future periods if the revision affects both current and future periods.

Classification etc.Fixed assets and financial liabilities consist of amounts expected to be recovered or settled after more than twelve months from the closing date. Current assets and current liabilities consist of amounts to be recovered or paid within twelve months from the closing date.

Consolidated accountsThe consolidated accounts cover Anoto Group AB (publ.), the parent company, and the companies in which the parent company has a controlling interest. Controlling interest means the direct or indirect right to outline a company´s financial and operational strategies in order to achieve economic benefits. In determining whether a controlling influence exists, potential voting rights that are exercisable or con-vertible are considered.

The consolidated accounts have been prepared in accordance with the purchase method. The his-torical cost is the sum of the fair values of assets paid, accrued or overtaken liabilities, as well as for the equity instruments that Anoto has issued in exchange for the controlling interest in the acquired unit. Transaction costs that arise, with the exemption of transaction costs arising from issues of equity instruments or debt instruments, are recognized directly in profit or loss for the year.

The historical cost is allocated among the unit’s identifiable assets, contingent and other liabilities that meet the criteria for accounting in accordance with IFRS 3, Business Combinations, reported at fair value. If the historical cost exceeds net acquired assets and liabilities in accordance with the above, the difference is reported as goodwill. When the dif-ference is negative, a so called bargain purchase, this is recognized directly in profit or loss for the year.

Transferred consideration in connection with the acquisition does not include payments that applies to settlement of previous business relations. This type of settlement is recognized in profit or loss.

Contingent payments are reported at fair value on the acquisition date. In cases where a contingent payment is classified as an equity instrument, no revaluation is done, and settlement is done in equity. Other contingent payments are revalued at every reporting date, and the change is recognized in profit or loss for the year.

In companies that are not wholly owned subsid-iaries, non-controlling interests are recognized. There are two alternative ways for reporting non-controlling interests, either as the proportionate share of net assets or at fair value meaning that goodwill is included in the non-controlling interest. The choice of method can be made individually for each acquisition.

Financial statements of subsidiaries are consolidated from the date of acquisition until the date that control ceases.

Notes2014


In cases where the subsidiary’s accounting policies do not comply with Group accounting policies, adjustments are made to the Group’s account-ing policies. Losses attributable to non-controlling interest is distributed even in cases where non-controlling interest will be negative.

Acquisition of non-controlling interestAcquisition by non-controlling interest is recog-nized as a transaction in equity, i.e. between the owners of the parent company (within retained earnings) and non-controlling interest.Therefore, no goodwill arise on these transactions. The change in non-controlling interest is based on its proportion-ate share of net assets.

Divestment to non-controlling interestSales to non-controlling interest, in which control remains, reported as a transaction inequity, i.e. between parent company and non-controlling interest. The difference between the price received and the non-controlling interests proportionate share of net assets acquired is recognized in retained earnings.

Elimination of intra-Group transactionsAll intra-Group transactions are eliminated in the consolidated accounts. IntraGroup transactions include internal sales, profits and balances, as well as shareholders’ contributions to Group companies and impairment losses on participations in Group companies.

Transactions in foreign currenciesA functional currency is assigned to each foreign subsidiary. The functional currency is the cur-rency of the primary economic environment in which the companies carry out their business. Monetary assets and liabilities in foreign currencies are translated to the functional currency to the exchange rate in effect on the balance sheet date. Exchange rate differences arising from translation are recognized against profit or loss for the year. Non-monetary assets and liabilities recognized at historical costs are translated at the exchange rate at the time of the transaction. Non-monetary assets and liabilities recognized at fair values are trans-lated at the functional currency to the exchange rate applicable at the time of valuation to fair value.

The financial reports of the foreign subsidiaries that have a different functional currency than Anoto’s functional currency (the Swedish krona) are recal-culated at the exchange rate on the balance sheet date for all balance sheet items, including goodwill and other consolidated surpluses and deficits and at the average exchange rate for all items included in the result.

The translation differences that arise stem from the difference between the average exchange rates in the income statement and the exchange

rates on the balance sheet date, as well as the translation of net assets at a different exchange rate as of year-end than as of the beginning of the year. Translation differences are reported separately in the statement of comprehensive income as translation differences for the period and are accumulated in the equity as translation reserve. In the event that the foreign operation is not wholly owned the translation difference is distributed to non-controlling interests based on its proportionate share of ownership. If con-trol, significant influence or joint control ceases in a foreign operation, the translation differences attributable to the entity are realised and they are reclassified from revaluation reserve in equity to net income. In case of a divestment where control remains, a pro rata share of cumulative translation adjustments is transferred from revaluation reserve to non-controlling interestt.

Revenue recognitionRevenue is received from product sales, licenses, royalties and development projects. Revenue from product and license sales is recognized when essentially all risks and rights associated with ownership have been transferred to the purchaser, normally at the time of delivery.

Royalties are reported during the same month as the partner makes the actual sale.

Revenue attributable to development projects, Non Refundable Engineering (NRE), is recognized in the same period as the service is rendered. The extent to which each development project has been completed is normally based on a quarterly analy-sis. The project’s estimates are updated with the costs until the current date in order to determine the percentage of the total estimated costs that have accrued. An anticipated loss on a project is reported immediately as a cost.

Financial income and expensesFinancial expenses comprise of interest expense on borrowings, the effect of dissolving the present value of provisions, revaluation losses on financial assets valued at fair value through profit or loss and impairment of financial assets. Borrowing costs are recognized in earnings using the effective interest method, except to the extent they are directly attrib-utable to the acquisition,construction or production of assets that take a substantial period of time to get ready for intended use or sale, in which case they are part of the acquisition value.

Exchange gains and losses are reported net.

Intangible assets GoodwillGoodwill, which is reported in connection with the acquisition of subsidiaries in accordance with the above, is initially reported as an asset at historical

cost. As described in note 22 the Group has two cash-generating units for which the goodwill value is tested separately. Goodwill is not amortized but subject to an impairment test annually or when-ever needed by calculating the recoverable amount of the corresponding cash-generating unit. The recoverable amount is defined as the asset’s net realisable value or value in use, whichever is higher. The impairment test allocates goodwill among the cash-generating units that are expected to benefit from acquisition synergies. An impairment loss is recognized if the the value of the unit reported by the Group exceeds the recoverable amount. The impairment loss is charged to earnings for the year.

Regarding goodwill acquired before January 1, 2004 : The Group has at the transition to IFRS not adopted IFRS retrospectively as per the transition date. Reported net book value thus equals net book value as per January 1, 2004 having considered periodic impairment testing.

Research and developmentExpenses for research related to acquiring new scientific or technical knowledge are expensed immediately as they occur. Expenses for develop-ment, where the results from research or other knowledge are applied to achieve new or improved products, are reported as an asset in the statement of financial position if it is technically possible to complete the product, if there is an intention to complete and use or sell the product and if it is likely that the product will generate future economic benefits. The reported value includes all directly attributable expenses, such as mate-rial and services, payroll and registration of legal rights. Other expenses related to development are expensed directly as they occur. In the statement of the financial position development expenses are reported at actual cost less accumulated amortiza-tion and write-downs.

Amortization of capitalized development expenses begins in conjunction with the intangible asset being brought into use.

Other intangible assetsOther intangible assets acquired by the Group mainly relates to patents, brands and licenses and are reported at acquisition cost less accumulated amortizations and write-downs.

Subsequent expensesSubsequent expenditure on capitalized intangible assets are recognized as an asset in the statement of financial statement only when it increases the future economic benefits for the specific asset to which they relate. All other expenditure is expensed as incurred.

Tangible fixed assetsProperty, plant and equipment consisting of equipment, computer equipment and computer programs is reported at accumulated deprecia-tion according to plan and any impairment losses. Acquisition cost includes purchase price and expenses directly attributable to the bringing of the asset to its use as intended with the acquisition. Other expenses are added to the acquisition cost only if it is probable that such expenses will lead to future economic benefits and if such expenses can be calculated properly. Other related costs are reported as expenses as they occur.

Exchange rates used at recalculation of foreign subsidiaries, see table above.

Average exchange rate On balance sheet date

Country Currency 2014 2013 2014 2013

United States USD 6,858 6,514 7,812 6,508

Japan JPY (100) 6,487 6,688 6,536 6,179

The Netherlands EUR 9,097 8,649 9,516 8,943

Great Britain GBP 11,292 10,186 12,139 10,733


Depreciation and amortization according to planDepreciation and amortization according to plan are based on the historical costs and are done on a straight-line basis over the estimated economic useful lives of the assets in view of the following depreciation and amortization periods:

• Patents 10 years

• Capitalized development expenditures 3 years

• Brands 10 years

• Equipment 5 years

• Capital expendture on rented assets 5 years

The depreciation and amortization methods used, residual values and useful life of assets are reas-sessed at the end of each year.

Impairment losses Write-down of tangible and intangible fixed assetsIf there is an indication that a Group asset has decreased in value, its recoverable amount is determined. The recoverable amount is defined as the asset’s net realisable value or value in use, whichever is higher. When determining the value in use, the present value of the future cash flows that the asset is expected to give rise to during its useful life is estimated. An impairment loss is recognized if the Group’s reported value exceeds the recoverable amount, and the impairment loss is charged to result for the year.

Write-down of financial assetsAt the time of each reporting the company evalu-ates the existence of objective evidence of an impairment in financial assets, such as identifiable occurances having a negative effect on the pos-sibilities to regain the acquisition cost.

LeasesLease contracts are classified as either financial or operational leases. In a financial lease, the financial risks and benefits related to ownership are essen-tially transferred to the leasee. If that is not the case, it is an operational lease. The Anoto Group has no significant financial lease contracts. Cost for operational leases are distributed evenly over the lease period.

Profit per shareThe calculation of profit per share is based on the annual result in the Group attributable to the share-holders of the parent company and the weighted average of outstanding shares during the year. When calculating the profit per share after dilution the result and the average number of shares are adjusted in order to consider potential dilution from preference shares, which during the reporting periods relates to options granted to employees.

Receivables and liabilities in foreign currenciesReceivables and liabilities in foreign currencies are reported at the exchange rate on the balance sheet date, and unrealised exchange gains and losses are included in earnings. Exchange gains/losses on operating receivables and liabilities are reported as other operating income/expenses. Exchange rate differences on financial receivables and liabilities are reported as financial items.

Financial instrumentsThe Group’s financial instruments consist mostly of accounts receivable, liquid assets, long-term receiv-ables, accounts receivables, financial investments, interest bearing liabilities and accounts payables.

Reporting of and derecognition from the statement of financial positionA financial asset or financial liability is recognized in the statement of financial position when the company becomes party to the instrument’s contractual terms. A receivable is recognized when the company has performed and there is a contractual obligation on the counterpart to pay, even if the invoice has not been sent. Accounts receivable are recorded in the state-ment of financial position when the invoice is sent. Liabilities are recognized when the counterparty has performed and there is contractual obligation to pay, even if the invoice has not been received. Accounts payable are recognized when an invoice is received.

A financial asset is derecognized from the state-ment of financial position when the rights to the agreement are realized, expired or when the com-pany loses control over them. The same applies to portions of financial assets. A financial liability is derecognized from the statement of financial position when the obligation in the agreement is fulfilled or become extinguished in some other way. The same applies for part of a financial liability.

A financial asset and a financial liability are offset and the net amount is recognized in the statement of financial position only when the company has a legal right to set off the amounts and intends either to settle the net amounts or at the same time realize the receivable and settle the liability. Acquisition or divestment of financial assets are reported on the transaction day. The transaction day is the date on which the company commits to acquire or divest the asset.

Classification and valuationFinancial instruments, except for derivative instru-ments, are initially stated at cost, corresponding to the instrument´s fair value. Transaction costs are added to this for all financial instruments except for those belonging to the financial assets category, which are reported in the income statement at fair value. The classification of a financial instrument on the initial reporting depends on the intention of the acquirer. The classification decides how the financial instrument is valuated on the initial reporting date as described below.

Derivative instruments are reported initially at their fair value meaning that transaction costs are charged against profit or loss for the period. After the initial recognition, derivative instruments are reported as described below.

Liquid assetsLiquid assets consist of cash and bank balances, as well as current investments. A current investment is classified as a liquid asset if it can easily be con-verted to cash at a known amount and it is exposed to only a negligible risk of value fluctuations.

Loan receivables and accounts receivableLoan receivables and accounts receivable are mon-etary assets which are not derivatives, that have defined payment plans or identifiable payments and which are not listed on an active market place. These assets are valued at accrued historical cost. Accounts receivable are reported net after deduc-tion of doubtful accounts receivable.

Financial assets available for sale Financial assets available for sale are assets that are not derivative assets identified as available-for-sale or are not classified in any of the other categories. They are included in current assets and manage-ment does not intend to dispose of the investment within 12 months after the reporting period.

Other financial liabilitiesLoans and other financial liabilities, such as accounts payable, are included in this category.The liabilities are measured at accrued acquisi-tion value.

Convertible bondThe Group issued a convertible bond (compound financial instruments) that the owner can trans-form into a certain number of ordinary shares in the issuing entity. The convertible bond contains both a liability and an equity component. The Group recognizes the liability and equity com-ponents separately in the statement of financial position. Initially, the issuer of a convertible bond, the carrying amount of the liability component by measuring the fair value of a similar liability that does not have the right to conversion. The carrying amount of the equity component, which represents the right to convert the instrument into ordinary shares is then determined by at the fair value of the compound financial instrument as a whole is reduced by the fair value of the financial liability. In the subsequent recognition, the liability component is measured at amortized cost using the effective interest method. The equity component is not re-measured except on conversion or redemption.

InventoryInventory, consisting of finished products and critical components, is reported at historical cost (in accordance with FIFO) or net realisable value, whichever is lower. The cost of inventories includes costs incurred to acquire inventory assets and transport them to their current site and condition.

Pensions and compensations to employeesAll pension plans in the Group are classified as defined contribution pension plans, as Anotos´s obligation is limited to the contributions that the company has undertaken to pay. In those cases, the size of an employee´s pension depends on the contributions the company pays into a fund or to an insurance company and the capital return on those contributions. Consequently it is the employee who takes the actuarial risk (that the benefit becomes less than expected) and the investment risk (that the invested assets will be insufficient to support the expected benefit). The company´s commit-ments concerning service costs paid to defined contribution pension plans are charged against profit in pace with employees´performance of their service for the company during a period.

Short-term compensation paid to employees is calculated without discounting and is reported as an expense when the related services were received. A provision for estimated bonus pay-ment is reported when the Group has a legal or constructive obligation to make such payments due to the fact that the services in question have been received from the employees and the provision amount can be estimated in a reliable manner.

Termination benefits are payable when employ-ment is terminated by the Group before the normal retirement date or whenever an employee accepts voluntary redundancy in exchange for these ben-efits. The Group recognizes termination benefits at the earliest of the following dates: (a) when the Group no longer has the opportunity to withdraw the offer of compensation; and (b) when the entity recognizes costs for a restructuring that is within the scope of IAS 37 and involves the payment of severance pay.


TaxesAll tax deemed payable on reported earnings is reported in the annual result. The tax has been calculated in accordance with each country’s tax regulations and included in the tax on profit/loss for the year item.

The Group’s total tax in the statement of com-prehensive income consists of current tax on tax-able earnings for the period and deferred tax. The Group’s tax consists primarily of current tax on taxable earnings of foreign subsidiaries for the period.

The Group uses the balance sheet method to calculate deferred tax assets and liabilities. In accordance with the balance sheet method, the calculation is based on tax rates as of the balance sheet date as applied to temporary differences between the reported and tax value of an asset or liability, as well as tax loss carry-forwards. Deferred tax assets are reported in the statement of financial position only in amounts that can presumably be utilized within the foreseeable future.

Temporary differences are not taken into consid-eration in consolidated goodwill or in difference attributed to initial recognition of assets and liabilities not classified as acquisitions of business operations that, at the time of transaction, did not affect either net profit or taxable profit.

Reporting cash flowThe cash flow statements are prepared in accor-dance with the indirect method, i.e., profit/loss after financial items is adjusted for transactions that have not given rise to payments or disburse-ments during the period, as well as for any income and expenses attributable to the cash flow of investing activities.

ProvisionsA provision is reported when there is a commitment as the result of an event, and it is probable that an outflow of resources will be required to settle the commitment and an amount can be reliably estimated. The following provisions are reported in the statement of financial position:

Product warrantiesProvisions for product warranty commitments relate to the sale of pens. The warranty time period is 12 months and the provision is classified as short-term. As there is not yet any reliable his-tory concerning the number of warranty issues, the provision is calculated with regard to the expected outcome during the existing warranty time period.

Disclosures about related partiesFor disclosures about the company’s transactions with related parties, refer to Note 9 “Remuneration for senior executives”, Note 31 Share based pay-ments to employees and Note 37 “Related party transactions”. There were no other transactions with related parties.

Segment reportingThe evaluation of the Group sales is based on three application areas Business Solutions, Technology Licensing och C Technologies. The outcome of the application areas is of a combination of invoicing of goods and services from various parts of the business, which are not represented by separate financial statements. The application areas utilize common resources with regards to development and administration and a split of costs below Gross profit would be possible only if based on rough estimates. The same applies also to the Group

assets & liabilities. Evaluation of Group expenses is applied to the Group as a whole and there is no independent financial information available to the fields of application. The Group has consequently not identified any operating segments.

New and changed IFRS standards and interpretations 2014The following new and changed standards and interpretations that have come into effect in 2014 and has affected the Group’s financial statements:

StandardsIFRS 10 Group accounting

IFRS 11 Joint operation

IFRS 12 Disclousure of interest in other entities

Changes in IAS 27 Separate financial statements

Changes in IAS 28 Investments in associates

Changes in IAS 32 Financial instruments, Classification (offset of financial assets and financial liabilities)

Changes in IAS 36 Impairment of assets (Disclosure of net realisable value for non-financial assets)

Changes in IAS 39 Financial instruments: Recognition and measurement (Replacing the counterparty for derivatives and extension of hedge accounting)

Managements´ judgment is that new and revised standards have not had any material impact on the consolidated financial statements 2014

The following describes the new and revised IFRS standards and interpretations that have come into effectThe new and amended standards and interpreta-tions that have been issued but which becomes effective for annual periods beginning 1 January 2015 or later has not yet applied by the Group.

IFRS 9 Financial Instruments will be effective no earlier than for annual periods beginning January 1, 2018. How it will affect the Group has therefore not been investigated yet.

IFRS 15 Revenue by customer contracts will be effective no earlier than for annual periods begin-ning January 1, 2017. How it will affect the Group has therefore not been investigated yet.

Management believes that other new and revised standards and interpretations not yet entered into force, is not expected to have any material impact on the consolidated financial statements when they applied for the first time.

Parent CompanyThe parent company’s annual accounts have been prepared in compliance with the Swedish Annual Accounts Act (ÅRL) and the Swedish Financial Reporting Board recommendation RFR 2, “Accounting for Legal Entities”. In addition, Swedish Financial Reporting Board statements applicable for listed companies are observed. Application of RFR 2 entails that the parent com-pany, in the annual report for the legal entity, shall comply with all EU-endorsed IFRSs and pronounce-ments as far as possible within the framework of the Annual Accounts Act, the Pension Obligations Vesting Act, and taking into account the connec-tion between reporting and taxation. The recom-mendation indicates which exceptions from and amendments to IFRS are to be made.

For details of the parent company’s accounting policies, refer to the Group’s accounting policies above. The section below is limited to the parent company’s deviations from the Group’s policies.

Changes to accounting principles

The changes in RFR 2 Accounting for legal entities that have entered into force for the financial year 2014 applies to the following areasIFRS 10 Group accounting

IFRS 11 Joint operations

IAS 40 Investment property

IAS 37 Provisions, Contingent Liabilities and Contingent Assets

Changes in RFR 2 have not had any significant effect on the parent company’s financial statements.

Changes in RFR 2 that has not yet come into force

The changes in RFR 2 Accounting for legal entities which enters into force from 1 January 2015 concerns the following areas:IAS 19 Employee benefits

IFRS 14 Regulatory deferral accounts

Management believes that the changes in RFR 2, which has not yet entered into force, is not expected to have any material impact on the parent company’s financial statements when they applied for the first time.

Classification and presentation formatAn income statement and a comprehensive state-ment of income are presented for the parent com-pany, whereas for the Group, these two financial statements form one comprehensive statement of income. In addition, for the parent company the titles balance sheet and cash flow are used for the financial statements which in the Group are titled statement of financial position and statement of cash flows, respectively. The income statement and balance sheet of the parent company are presented in accordance with the format prescribed in the Annual Accounts Act, whereas the statement of comprehensive income, statement of changes in equity and cash flow statement are based on IAS 1 Presentation of Financial Statements and IAS 7 Statement of Cash Flows. The differences in the parent company´s income statement and balance sheet compared with the Group´s financial state-ments consist mainly of the reporting of financial income and costs and the reporting of equity.

LeasesThe parent company’s financial lease contracts are reported as operational lease contracts.

Financial instrumentsThe parent company does not apply the presenta-tion rules of IAS 39. The parent company reports financial fixed assets at historical cost less any impairment losses and financial current assets at the lower of cost or net realizable value.

Holdings in subsidiaries and associated companies Holdings in Group and associated companies are reported at historical cost. If the reported value of the investment exceeds the recoverable amount (refer to section above on impairment losses), an impairment loss is recognized. Transaction costs are included in the reported cost for the subsidiary. Contingent payments are measured according to the probability that the payment will be made.

Any changes in the provision/receivable is added to/reduces the reported cost. Acquisition to a low price corresponding to future expected losses and costs is dissolved during the expected periods the losses and costs arise. Acquisition to a low price arising from other reasons is recognized as provision except for the share that exceeds fair


value on acquired identifiable non-monetary assets. The share that exceeds this value is taken up as an income immediately. The part that does not exceed the fair value on acquired identifiable non-monetary assets is taken up as an income in a systematic way over a period that is calculated as the remaining weighted average useful life of the acquired identi-fied assets and which can be depreciated.

Note 3:

Critical assessments when applying the company’s accounting policiesWhen applying the Groupís accounting policies (as described in Note 2), management has made the following assessments that have the most significant impact on the amounts that appear in the financial reports.

Key sources of uncertainty in the estimatesThe information below concerns key assumptions about the future and other key sources of uncer-tainty in the estimates on the balance sheet date that entail significant risk of substantial adjust-ments to reported assets/liabilities for the next financial year.

Impairment tests for goodwillWhen testing for impairment losses, the value in use is calculated for the cash generating unit to which goodwill has been allocated. The value in use is based on the estimated future cash flows that the cash-generating unit is expected to give rise to. The reported value for goodwill is SEK 70 million as of the balance sheet date. For additional information about impairment losses, refer to Note 22.

Impairment tests for capitalized development expendituresWhen testing for impairment losses, the value in use is calculated for the technology and products developed by the company. The value in use is based upon the estimated future cash flows that the technology and products are expected to generate, refer to Note 18.

Note 4:

Risk management by the GroupThe Anoto Board of Directors has adopted a finan-cial policy for:

• Simplifying and harmonizing the Group’s financial activities

• Defining rules for the financial risks that are accepted by the Board

• Adopting guidelines for the Group to operate independently

• Delegating management of financial risks to the CFO

The areas of the financial policy that most affect Anoto’s management of risks are liquidity and currency.

Liquidity policyIn accordance with the Finance policy of the Group the cash need of the Group is continu-ously updated.

These cash flow analyses give information about cash planning, deposits, interest periods etc.

In accordance with the liquidity policy, available cash shall consist of cash and negotiable securi-ties with an official credit rating equivalent to Moodys P1.

Risk definitions Other price risksThe risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices (other than those arising from interest rate risk or currency risk), whether those changes are caused by factors related to the individual financial instrument or its issuer, or factors affecting all similar financial instruments traded in the market.

Payment dueA financial asset is past due when a counterparty has not paid at the agreed due date.

Credit riskThe risk that one party to a financial instrument will fail to discharge an obligation and cause a financial loss.

Liquidity riskThe risk that an entity will encounter difficulty in meeting obligations associated with financial liabilities that are settled by delivering cash or another financial asset.

LoansLoans are financial liabilities, other than short-term trade payables on normal credit terms.

Market riskThe risk that the fair value or future cash flows from a financial instrument will fluctuate because of changes in market prices. There are three types of market risk: currency risk, interest rate risk and other price risk.

Interest riskThe risk that the fair value or future cash flows from a financial instrument will fluctuate because of changes in market interest rates.

Currency riskThe risk that the fair value or future cash flows from a financial instrument will fluctuate because of changes in foreign exchange rates.

Liquidity and financing riskAnoto´s liquid assets, as cash and bank deposits, amounted at the end of 2014 to MSEK 4 (7).

Due to the, in 2013 loss making operations and consequently the strained liquidity, the Board decided, early March 2014, to propose a private placement of approximately SEK 16 million.

The private placement, which was made exercising the Board’s mandate to issue shares, was consid-ered adequate for handling the company’s short-term financing. In the spring of 2014 discussions

with a potential buyer for the sale of the Group’s activities within the Enterprise Solutions (Business Solutions) was initiated.

The due diligence process and negotiations took longer than anticipated and in order to further strengthen the company’s short-term financing, the Board decided, on June 19 2014, to issue con-vertible bonds totaling 18 million. During August Anoto decided to abandon negotiations on a pos-sible sale of the Enterprise Solutions. As sales in the first half was insufficient to manage liquidity, the Board decided on August 30 to convene an Extraordinary General Meeting for the purpose of obtaining approval for a rights issue. The rights issue was completed in November, and provided the company with 52 million, after transaction expenses. With the proceeds from the offering, the company could settle all overdue debts to the company’s creditors and suppliers.

The management and the board believes that the working capital, including the conversion of the convertible loan in February and the private placement of shares is in March is sufficient for the Company’s needs for the next twelve months.

See further under “Significant Events after the Year-end” in the management report. If projects and/or larger deals get delayed and the Company’s earnings capacity is not improved it may be neces-sary to ask shareholders for the approval to secure more financing with or without deviation from the shareholders preferential rights.

The Company may also ask shareholders for the approval to secure more financing to be able to capitalize on larger opportunities and secure higher growth in revenues.

The Group has, through the 2011 and 2012 acqui-sitions of Destiny Wireless Ltd and Ubiquitous Systems Ltd, borrowings of MSEK 18. These loans are secured against the current assets of the acquired entities. During the second quarter of 2014 Anoto Group issued convertible bonds amounting to 18 million maturing in February 2015. The convertibles entails the right to convert into shares at a discount of 15%. There are no other loans in the Group and apart from the recently acquired business the Group has neither any interest bear-ing liabilities nor pledged accounts receivables, inventory or fixed assets.

There are no credit promises or liquidity reserve, e.g. overdraft facilities. No part of the borrowing is due for payment within the next twelve months. The only financial liabilities that, apart from the interest on the loans, will affect the cash flow are accounts payable and other current liabilities. All these liabilities fall due within 3 months.

Maturity structure financial liabilities (TSEK) :

2014 0-3 months 4-6 months 7-12 months 1-5 years

Borrowings 17,700 0 18,175 0

Accounts payable 31,735

Other current liabilities 7,669 2,124

2013 0-3 months 4-6 months 7-12 months 1-5 years

Borrowings 520 520 1040 17,324

Accounts payable 42,708

Other current liabilities 6,775


10 000

20 000

30 000

0

-10 000

-20 000

-30 000

-40 000

-50 000

USD EUR SEK JPY GBP

Actual Net flows by currency:

Currency exposure and currency policy Transaction exposureTransaction exposure arises when income and expenses are in different currencies. Anoto has sig-nificant currency flows in USD,EURO, JPY and GBP because most of its invoicing is in those currencies.

Anoto’s Board decided in 2012 on changes in the Group’s currency policy, which means that the hedging of future cash flows are no longer made. This is mainly due to the difficulty in forecasting flows in different currencies of six months.

The surplus in EUR depends on the Group´s invoic-ing in mostly EUR on the European market and on almost no costs in this currency. The net exposure in EUR decreased due to lower sales to EU customer in combination with the establishment of an office in the Netherlands.

The net exposure in USD is unchanged compared to last year. The expenses in USD are a combina-tion of the purchasing of components and finished goods along with current expenses incurred in the USA based subsidiaries.

The net exposure in JPY has decreased during 2014, following lower expenses. The Group´s cost in JPY is related to the operations of the subsidiary in Japan.

The net exposure in GBP has, due to now having three subsidiaries in the UK, decreased slightly during the year. The Net sales in GBP is related to invoicing to customers in the UK by our UK based subsidiary and the costs in GBP is related to the running of the UK business.

Hedge accounting under IAS 39 does not apply.

Sensitivity analysis exposure:The impact on profit/loss before tax of a 5% change in exchange rates is:

USD/SEK +/- 1,0 MSEK

EUR/SEK +/- 0,8 MSEK

JPY/SEK +/- 0,1 MSEK

GBP/SEK +/- 0,7 MSEK

Translation exposureHedging of translation exposure is determined by the Group finance policy. Currently no hedging of the translation exposure is undertaken as the risk is limited. An annual analysis of the risk takes place in order to identify changes in exposure. The net assets in the subsidiaries in the US, Japan and UK amount to MSEK -47, MSEK -15 and MSEK -54 respectively.

The effect on the translation reserve with a 5 per-cent change of the exchange rate is:

USD/SEK +/- 0,4 MSEK

JPY/SEK +/- 0,0 MSEK

GBP/SEK +/- 0,3 MSEK

Credit riskThe management of credit risks can be broken down into commercial risks and financial risks. The provisions set aside for bad debt losses as of the balance sheet date have not identified any commercial credit risks.

For additional information about credit risk in accounts receivable, refer to Note 27. The financial credit risk is managed as part of the Group’s finance policy. For other financial instruments is assessed that no significant credit risks exist.


Net sales per Market

(TSEK) Group2014

Group2013

Sweden 8,516 13,657

Rest of EU 72,789 65,128

USA 24,003 31,915

Japan 10,781 16,879

Rest of Asia 12,739 7,199

Rest of the world 12,637 9,528

Total 141,465 144,306

Assets per Market

(TSEK) Intangible asset Tangible assets

2014 2013 2014 2013

Sweden 7,511 8,084 607 1,633

USA 0 0 172 65

England 71,461 63,234 1,262 1,287

Japan 5 99

Total 78,972 71,318 2,046 3,084

Net sales per income type

(TSEK) Group2014

Group2013

Goods 62,172 76,082

Services 79,293 68,224

Total 141,465 144,306

Net sales of the parent company only consist of inter-company invoicing of shared services.

Group sales per product group

(TSEK) Group2014

Group2013

Royalty 11,661 18,580

NRE1) 5,428 9,776

Licenses 29,030 29,574

Components 0 3,204

Digital pens 62,172 76,082

Other 33,174 7,090

Total 141,465 144,306

1. Revenues from software/hardware development of customer products

Note 5: Net sales


2014No. of employees

2014Whereof men


2013Whereof men

Parent company

Group companies:

Sweden 43 33 55 39

USA 10 8 9 7

Japan 3 2 3 2

Netherlands 2 2

United Kingdom 48 37 44 35

Total 106 82 111 83


2014Whereof men


2013Whereof men

Board of Directors Parent company 5 4 6 4

Management Parent company 0 0 0 0

Board of Directors Group companies 25 25 25 25

Management Group companies (Sweden) 11 10 10 9

Total 41 39 41 38

Note 6: Average number of employees

Note 7: Board of Directors and management split by gender


(TSEK) Group 2014

Group 2013

Parent company 2014

Parent compan 2013

Salaries

Board of Directors and CEO 4,006 4,902 1488 2383

Other senior executives1) 6,189 4,347

Other employees Sweden 18,828 30,228

Other employees USA 2,797 5,881

Other employees UK 33,349 27,987

Other employees Japan 1,606 1,631

Other employees Holland 1,602 1,678

Total salaries 68,377 76,654 1488 2383

Payroll overhead

Board of Directors and CEO 579 1,352 420 749

Other senior executives1) 1,162 1,119


Other employees USA 177 469

Other employees UK 3,750 3,177

Other employees Japan 107 108

Other employees Holland 165 135

Total payroll overhead 11,855 15,858 420 749

Whereof:

Sweden 40,564 58,411 1,908 3,132

USA 2,974 6,350

UK 38,338 31,816

Japan 1,820 1,845

Holland 1,869 1,896

Total 85,565 100,318 1,908 3,132

Salaries and other remunerations are included in the statement of comprehensive income headlines as follows:

Selling expenses 26,696 31,299

R&D expenses 42,012 49,256

Administrative expenses 16,856 19,763 3,132

Total 85,565 100,318 1,908 3,132

Pension expenses

Board of Directors and CEO 20 74

Other senior executives1) 711 1,004


Other employees USA 0 0

Other employees UK 1,239 652

Other employees Japan 107 106

Other employees Holland 102 83

Total pension expenses 5,333 7,806 0 0

Total salaries and remunerations 85,565 100,318 1,908 3,132

Note 8: Salaries and remunerations

1. The Group has 11 (13) senior executives

The notice period for the CEO is six months from the company and six months from the employee.

The period of notice for other senior executives is three to six months if the company terminates their employment provided that the Security of Employment Act can be applied.

No agreements have been entered into for pension commitments or the equivalent for either Board members or senior executives above and beyond that which is covered by notes.

One executive is entitled to financial compensation equivalent to six months salary in case of discharge.

Apart from a salary during the period of notice, no of the other senior executive receives financial compensation in case of discharge.

The retirement age for the CEO and other senior executives is 65. The pension premium is 1,3% of the pensionable salary for the CEO and 15-19% for other senior executives.


Cont. Note 8: Salaries and remunerations

(TSEK) Salaries/Remunerations Bonus Pension

premiumsOther

Remunerations Total

Board and CEO 2014

Stein Revelsby - CEO 2,518 2,518

Jörgen Durban - Chairman of the Board 554 554

Gunnel Duveblad - Board member 250 250

Erik Tronbøl - Board member 84 84

Joonhee Won - Board member 150 150

Andrew Hur - Board member 250 250

Kjell Bråthen - Board member 50 50

Antonio Mugica - Board member 150 150

Total1) 4,006 0 0 0 4,006


premiumsOther

Remunerations Total

Board and CEO 2013

Stein Revelsby - CEO 2 520 2 520

Jörgen Durban - Chairman of the Board 500 500

Gunnel Duveblad - Board member 200 200

Erik Tronbøl - Board member 100 100

Ulrika Hagdahl - Board member 67 67

Andrew Hur - Board member 200 200

Kjell Bråthen - Board member 200 200

Total1) 3 787 0 0 0 3 787

Note 9: Remunerations to Board of Directors and CEO


premiumsOther

Remunerations Total

Management 2014

Group management 6196 188 8281 14665

Total 6196 188 0 8281 14665


premiumsOther

Remunerations Total

Management 2013

Group management 4347 1139 6836 12322

Total 4347 0 1139 6836 12322

Compensation to Group management may originate from Group companies.

1. Compensation to Board members (Board fee) are paid from the parent company. Compensation to the CEO may originate from Group companies.

Guidelines for compensation to the Executives of the Company (Annual General meeting 2014)The compensation level and structure shall be at market level. The total compensation shall be a balanced mix of fixed salaries, variable compensation, retirement and health plans, any other benefits and terms for dismissal and severance payments. The compensation may also comprise stock related long term incentive programmes.

The variable compensation varies for the respective Executive and shall primarily be related to Anoto s result and operative goals and may at the most be fifty percent of the fixed salary. However, the variable compensation for the CEO may be at most 75 % of the fixed salary.

The retirement plan shall be competitive. The CEO shall have a pension premium based retirement plan of 35 % of the fixed salary. The other Executives shall have pension premium based retirement plans corresponding to the (Swedish) ITP plan. Other benefits, like health plans and company cars, shall be competitive. As a main rule all of the executives shall have a mutual notice period of six months. Under certain conditions, some Executives may have an additional three months notice period in case Anoto gives notice. The CEO shall have a mutual notice period of six months and a severance payment of twelve months salary in case Anoto terminates the employment without juste cause.

Stock related incentive plans are to be determined by the AGM. Issues and transfers of securities determined by the AGM according to the rules of §16 in the Swedish Companies Act are not comprised by these guidelines in case the AGM has or will make such decisions. The Board shall be entitled to deviate from these guidelines in a certain case should there be specific reasons.

The Board has deviated from the guidlines in relation to the CEO concerning both retirement plan and notice period.

1. Compensation to Board members (Board fee) are paid from the parent company. Compensation to the CEO may originate from Group companies.


Note 10: Audit fees

Note 11: Operating cost by type

Note 12: Other operating income

Note 13: Other operating cost

(TSEK) Group 2014

Koncernen 2013

Parent company 2014

Parent company 2013

Deloitte

Audit assignment, Deloitte 300 300 150 150

Tax advisory services 0 21 0 21

Other services 137 153 137 153

Total 437 474 287 324

Other auditors

Audit assignment, other auditors 318 244 0 0

Tax advisory services 23 10 0 0

Other services 0 0 0 0

Total 341 254 0 0

Total 778 728 287 324

(TSEK) Group 2014

Group 2013

Parent company 2014

Parent company 2013

Exchange gains 12,390 208 - 127

Other 180 - -

Total 12,570 208 0 127

(TSEK) Group 2014

Group 2013

Parent company 2014

Parent company 2013

Impairment of intangible assets -2,097 -72,379 - -

Other operating expenses -1,605 - -

Exchange losses -638 -3,337 -341 -

Total -4,340 -75,716 -341 0

(TSEK) Group2014

Group 2013

Raw materials and supplies -54,628 -49,763

Change in inventories 7,432 2,931

Personnel cost -82,298 -98,619

External services -29,352 -35,474

Rent -12,024 -10,668

Travel expenses -6,087 -6,745

Marketing and PR -4,699 -5,831

Depreciation -5,186 -12,332

Other external expenses -19,102 -15,748

Total -205,944 -232,249

An audit assignment involves examining the annual accounts and accounting records, as well as the management of the company by the. Board of Directors and CEO, other tasks that the company’s auditor is obligated to perform, and advisory services and other assistance occasioned by observations made during said examination or performance of said tasks. Audit activities in addition to the audit assignment involves reviews as certificates etc. By tax advisory is meant advisory services related to taxes, VAT and fees. Everything else is other services.


Note 14: Depreciation and amortization

Depreciation of property, plant and equipment, and amortization of intangible fixed assets are included in the statement of comprehensive income and income statement as follows:

(TSEK) Group 2014

Group 2013

Parent company 2014

Parent company 2013

Amortization intangible fixed assets

Cost of goods and services sold1) -1274 -1153

Selling expenses -786 -3,149

Administrative expenses -409 -1,425 -72 -131

Research & development expenses -947 -3,703

Total amortization intangible fixed assets -3,416 -9,430 -72 -131

Depreciation tangible fixed assets

Cost of goods and services sold1) -157 -144

Selling expenses -592 -1,049

Administrative expenses -308 -475 0 -6

Research & development expenses -713 -1,233

Total depreciation tangible fixed assets -1,770 -2,901 0 -6

Total -5,186 -12,331 -72 -137

Note 15: Profit/loss on participations in group companies - Parent Company

Note 16: Financial income and expenses - Group

(TSEK) Parent company 2014

Parent company 2013

Impairment of shares in Anoto AB1) -68,604

Impairment of shares in Anoto AB2) -37,000 -75,000

Total -37,000 -143,604

(TSEK) Group 2014

Group 2013

Financial income

Interest income bank deposits 2 5

Other interest income 54 33

Other financial income 158 -

Total financial income 214 38

Financial expenses

Interest expenses on loans -4,899 -1,671

Expenses from assets/liabilities at market value - -1,429

Other interest expenses -1,076

Other financial expenses -1,480 -1,777

Total financial cost -7,455 -4,877

Total financial net -7,241 -4,839

Of which:

Interest income from instruments valued at accrued acquisition value

2 5

Interest expenses from instruments valued at accrued acquisition value

-4,899 -1,671

1. Refers to writedown related to impairment of Group goodwill linked to the value of the shares in Anoto AB.2. Refers to write-down related to unconditional shareholders contribution to the subsidiary Anoto AB. The shareholders contribution was made to cover the subsidiary s loss for the

year and restore its equity to the level of share capital.

1. A review of the allocation of depreciation and amortization of tangible and intangible assets at the cost functions presented in the statement of comprehensive income has been made in 2014. An analysis has been carried out on fixed assets used in the production process and the depreciation and amortization thus constitute indirect manufacturing costs have been allocated to the “Cost of goods sold”. This is for 2014 meant that 1274 thousand was allocated to cost of goods sold and for 2013, an adjustment has been made which meant that 1153 thousand was allocated to cost of goods sold.


Cont Note 16: Financial income and expenses - Parent Company


Parent company 2013

Financial income

Interest on current investments

Interest income bank deposits 1 3

Other interest income 0

Total financial income 1 3

Financial expenses

Interest expenses on loans -1,848 -586

Other financial expenses -12 0

Other financial expenses -175 0

Total financial cost -2,035 -586

Total financial net -2,034 -583

(TSEK) Group 2014

Group 2013

Parent company 2014

Parent company 2013

Current tax1) 639 -12 0 0

Total 639 -12 0 0

Correlation between tax expenses for the year and reported profit/loss before tax

(TSEK) Group 2014

Group 2013

Parent company 2014

Parent company 2013

Reported profit/loss before tax -63,490 -168,290 -36,206 -142,948

Tax in accordance with current tax rate of 22% (26,3%) 13,968 37,024 7,965 31,449

Tax impact of non-deductible expenses: - - - -

Intra-group adjustments that disregard deferred tax 1,672 -15,829 -8,140 -31,593

Other non-deductible expenses -92 -86 -5 -5

Tax impact of non-taxable income - - -

Adjustment for tax effects in foreign group companies -7,643 -5,683 - -

Increase/decrease of tax deficits without corresponding capitalization -7,266 -15,438 180 149

Tax reported 639 -12 0 0

Tax deficit

(TSEK) Group 2014

Group 2013

Parent company 2014

Parent company 2013

Opening balance -594,600 -524,427 -25,209 -25,887

Tax deficit of the year -33,039 -70,173 806 678

Adjustment due to changed taxation

Closing tax deficit -627,639 -594,600 -24,403 -25,209

Nominal amount, tax asset 22% 138,081 130,812 5,369 5,546

Note 17: Taxes

1. Primary foreign subsidiaries.

There are no temporary differences. The nominal value of tax assets (22 %) in accordance with the above have been reported at 0 in the balance sheet. Due to the fact that the Group still reports a loss, the nominal value of tax assets is not reported in the balance sheet. Tax deficits refers to the Swedish companies and are not limited in time.There are additional tax deficits in our foreign subsidiaries which amounts to approximately MSEK 187 and are not limited in time.


(TSEK) Group 2014

Group 2013

Parent company 2014

Parent company 2013

Accumulated historical costs

Opening accumulated historical costs 109,581 151,795 24,218

Capitalizations for the year1) 4,773 960

Impairment losses for the year -43,241 -24,218

Translation difference 469 67

Closing accumulated historical costs 114,823 109,581 0 0

Accumulated amortizations and impairment losses according to plan

Opening accumulated amortizations -107,885 -150,181 -24,218

Amortizations for the year according to plan -1,265 -866

Impairment losses for the year 43,241 24,218

Translation difference -336 -79

Closing amortizations and impairment losses according to plan -109,486 -107,885 0 0

Closing residual value 5,337 1,696 0 0

Note 18: Capitalized development expenditures

1. Internally developedAmortizations by function are shown in note 14. Impairment losses are reported on line “Other operating costs”.

When testing for impairment losses, the value in use is calculated for the technology and products developed by the company. Thevalue in use is based upon the estimated future cash flows that the technology and products are expected to generate. If the bookvalue exceeds the value in use for a specific asset the value is impaired.

1. Internally developed2. Adjustment of opening amortization balance due to clerical error.Amortizations by function are shown in note 14. Impairment losses are reported on line ”Other operating costs”.

(TSEK) Group 2014

Group 2013

Parent company 2014

Parent company 2013


Opening accumulated historical costs 85,189 83,517 13,996 13,934

Capitalizations for the year1) 180 1,672 0 62

Impairment losses for the year -9,605 0 0 0

Closing accumulated historical costs 75,764 85,189 13,996 13,996


Opening accumulated amortizations -81,672 -73,137 -13,831 -13,709

Amortizations for the year according to plan -787 -6,252 -62 -122

Impairment losses for the year 7,508 -3,735 0 0

Adjustment opening balance2) 0 1,452 0 -

Closing amortizations and impairment losses according to plan -74,951 -81,672 -13,893 -13,831

Closing residual value 813 3,517 103 165

Note 19: Patents


(TSEK) Group 2014

Group 2013

Parent company 2014

Parent company 2013


Opening accumulated historical costs 2,148 1,798 104 72

Capitalizations for the year1) 101 350 32



Opening accumulated amortizations -817 -619 -48 -39

Amortizations for the year according to plan -221 -198 -10 -9

Closing amortizations and impairment losses according to plan -1,038 -817 -58 -48


Note 20: Brands

1. Internally developedAmortizations by function are shown in note 14. Impairment losses are reported on line ”Other operating costs”.

Amortizations by function are shown in note 14. Impairment losses are reported on line “Other operating costs”

(TSEK) Group 2014

Group 2013

Parent company 2014

Parent company 2013



Capitalizations for the year



Opening accumulated amortizations -12,102 -9,988 0 0

Amortizations for the year according to plan -1,144 -2,114 0 0



Note 21: Other intangible assets


(TSEK) Anoto AB 2014

Anoto AB 2013

Destiny Wireless2014

Destiny Wireless2013

Anoto Ltd2014

Anoto Ltd2013


Opening accumulated historical costs 298,674 298,674 28,416 27,790 33,122 13,387

Acquisitions for the year 0 0 18,464

Translation differences 0 0 3,643 626 4,338 1,271

Closing accumulated historical costs 298,674 298,674 32,059 28,416 37,460 33,122


Opening accumulated write downs -298,674 -230,070 0 0 0 0

Write downs for the year -68,604 0 0 0 0

Closing accumulated write downs -298,674 -298,674 0 0 0 0

Closing net balance 0 0 32,059 28,416 37,460 33,122

(TSEK) Anoto AB Assumed value

Anoto AB Changed value

Destiny Wireless Assumed value

Destiny Wireless Changed value

Anoto Ltd Assumed value

Anoto Ltd Changed value

2014

Market growth - - 3,0% 0,4% 2,0% 1.1%

Discount rate after tax - - 15,0% 15,9% 15,0% 20.2%

Gross profit - - 71,5% 70,4% 63,5% 61.8%

Cost increase - - 2,0% 2,6% 3,0% 3.9%

2013

Market growth - - 2% 0 2% 0,7%

Discount rate after tax - - 15% 16,9% 15% 15,7%

Gross profit - - 75% 70% 75% 73,9%

Cost increase - - 3% 6,2% 6,2% 3,4%

Important variables Method for estimating amounts

Market growth Group management expects a long-term positive development on the markets where Anoto s products are used. The growth forecasts are built on underlying forecasts and discussions with partners and customers together with the expected long-term growth.

Discount rate The discount rate is determined with regards to the market conditions and the required return of the Group. Considering Anoto s current tax position where the Group companies will not pay any tax over a forseeable time, the difference between discount rate before and after tax will be minimal.

Gross profit The long-term forecasted gross profit is calculated with caution compared to present level, but it is reasonableto expect lower margins as the market matures. The ambition is however still to keep up the gross profit margin.

Cost increase The company believe it is reasonable to calculate with a general cost increase over time which in the forecast is expected to be in line with the inflation.

Note 22: Goodwill

The recoverable value of goodwill related to; the acquisition of Destiny Wireless Ltd exceeds the reported value by MSEK 2, related to the acquisition of Anoto Ltd by MSEK 11. The reported value does not include any depreciation.

The variables used in the calculation of future value in use to estimate eternal cash flow and the changed values showing the recoverable value equal to reported value are the following:

* The variables assumed values have changed one by one respectively. When the value of one variable changes, possibly effects on other variables have been considered.

Assumed values related to gross margins have been updated compared to previous year following changes in and reallocations between parts of the business, changes in forecasts and changes in sales mix affecting the gross margin in the respective cash generation unit.

The total reported amount of goodwill is externally acquired.

Impairment testingThe goodwill balance consists of Goodwill from three acquisitions. In 2001 the Group acquired shares in Anoto AB resulting in a goodwill of 299 MSEK. During 2011 Anoto acquired Destiny Wireless Ltd, which resulted in an increase of the Group Goodwill value by 27,8 MSEK and in the beginning of 2012 Anoto acquired the UK based company Ubiquitous Systems Ltd, creating an additional goodwill of 13,6 MSEK. In relation to the most recent acquisition of Shanwell Holding Ltd, 18,5 MSEK was added to the total goodwill balance. During the year operations in Ubiquitous Systems Ltd has been transferred to Shanwell Holding Ltd, currently Anoto Ltd.

The Group thus performs impairment testing on three separate cash generating units.

During the fourth quarter 2013 Anoto has written down remaining goodwill from the acquisition of Anoto AB of 68,6 MSEK. The write down was related to the older part of the groups operations, not including CGU Destiny Wireless or CGU Anoto Ltd. The goodwill attributable to the old part of the groups operations which is no longer expected to generate positive cash flows. Hence during the year end closing process the Board decided to write down the goodwill balance attributable to CGU Anoto AB in full.

The impairment was based on a value in use calculation in which a discount rate of 15% (15%) were used.

Impairment testing of goodwill is performed for each cash generating unit respectively annually or when an indication of decline in value occurs. The recoverable value for Group business is defined based on calculations of value in use.

In the calculation of value in use a discount factor of 15 % has been applied. The measurement of value in use is based on management s estimated cash flow forecast for a period of five years. Cash flow for the ensuing years has been extrapolated using an assumed annual growth of 2 %. As a precautionary measure when calculating the cash flow, the margins have been reduced with 1 % annually the first five years together with an increase of operating costs with 2-3 % annually during the same peiod.


(TSEK) Group 2014

Group 2013

Parent company 2014

Parent company 2013



Acquisitions of Group companies 0 1,202

Additions for the year 904 964

Disposals for the year -3,934 -1,095 -700

Disposals for the year -1,996 0

Adjustment opening balance1) 0 8,070

Translation difference 378 -204



Opening accumulated amortizations -36,615 -26,184 0 -695

Acquisitions of Group companies 0 -701

Amortizations for the year according to plan -1,779 -2,902 -5

Disposals for the year 3,932 1,096 700

Disposals for the year 1,814 -41

Adjustment opening balance1) 0 -8,070

Translation difference -357 187



Note 23: Equipment & tools

1. Adjustment of opening amortization balance due to clerical error. Depreciation by function are shown in note 14. Impairment losses are reported on line “Other operating costs”.



Parent company 2013

Opening balance acquisition cost 300,194 300,194

Opening shareholders´ contribution 625,603 550,603

Opening accumulated impairment losses -924,265 -780,661

Shareholders contribution1) 37,000 75,000

Impairment loss for the year2) -37,000 -143,604

Total 1,532 1,532

Destiny Wireless Ltd - Financial summary: (TSEK) 2014 2013

Sales 38,132 34,847

Net result -1,265 -4,034

Fixed assets 2,682 2,372

Current assets 10,315 8,695

Assets 12,997 11,067

Equity -32,971 -28,258

Interest bearing liabilities 18,175 16,482

Other current liabilities 27,793 22,843

Equity & liabilities 12,997 11,067

Note 24: Participation in Group companies

1. Unconditional shareholders contribution to Anoto AB2. Write-down of shares in Anoto AB

The Anoto Group contains sub-groups consisting of the following companies:

Anoto, Inc., USA Anoto Maxell K.K, Japan Destiny Wireless Ltd, UK FAB Licensiering AB C Technologies AB Ubiquitous Systems Ldt, UK

1. The activities of Ubiquitous Systems Ltd planned to be fully transferred to the Anoto Ltd. in 2015 after which the company will be liquidated2. The activities of Ubiquitous Systems Ltd will be transferred to the Anoto Ltd. in 2015 after which the company will be liquidated3. Destiny Wireless Ltd, owned at 51%, is fully consolidated in the Group accounts. Financial summary:

(TSEK) Reg.No. Domicile Total No. ofparticipation

% of capitaland votes

Shareholders’equity

Carryingamount

Anoto AB 556320-2646 Lund 5,000 100% 962 1,332

Anoto Licensiering AB 556665-4306 Lund 1,000 100% 88 100

Anoto Administration AB 556591-2481 Malmö 1,000 100% 5,681 100

1,532

Entity name Domicile Country Operational Parent company Equity

C Technologies AB Lund Sweden Operational Anoto AB 100%

Anoto Inc Boston USA Operational Anoto AB 100%

We-Inspire Inc Los Angeles USA Operational Anoto Inc 100%

Anoto KK Tokyo Japan Operational Anoto AB 100%

Anoto Ltd Basingstoke UK Operational Anoto AB 100%

Ubiquitous Systems Ltd 1) Wetherby UK Operational Anoto AB 100%

Anoto BV2) Amsterdam Netherlands Operational Anoto AB 100%

Destiny Wireless Ltd3) Guildford UK Operational Anoto AB 51%

FAB Licensiering AB Lund Sverige Dormant Anoto AB 100%


(TSEK) Group 2014

Group 2013

Opening balance 2,853 2,853

Acquisistion of shares1) 1,508

Total 4,361 2,853

Note 25: Other long-term investments

1. Acquisition of 25% of the shares in We-Inspire GmbH

The receivables concern deposits in full.

The risk that the Group s customers will not fulfill their obligations, meaning that payments are not received from the customers, is a credit risk. The Group s customers undergo credit checks whereby information about the customers´ financial position is obtained from various credit reporting agencies. The Group has drawn up a credit policy which stipulates how customer credits are to be handled.

Assessment of the need of provisions of Accounts receivable due more than 90 days, are made on an individual basis.

Unsecure receivables amount to 308 (500) KSEK.Unsecure receivables have been reduced by 192 KSEK compared to 2013.

In addition to the reserve for bad debts the company believes that the credit worthiness of customers is satisfactory.

No securities related to Accounts receivable are held by Anoto.

Only one individual receivable exceed 10% of total Accounts receivable.

(TSEK) Group 2014

Group 2013

Opening balance 752 929

Additions 38 14

Settlements -719 -27

Translation difference 50 -164

Total 121 752

(TSEK) 2014 Brutto

2014 Netto

2013 Brutto

2013 Netto

Not due 23,195 23,195 16,597 16,597

Due 1 - 30 days 8,628 8,628 3,679 3,679

Due 31 - 60 days 2,815 2,815 1,311 1,311

Due 61 - 90 days 773 773 980 980

Due more than 90 days 1,875 1,567 5,435 4,935

Total 37,286 36,979 28,002 27,502

(TSEK) No. ofcustomers 2014

% total No. ofcustomers 2014

% share ofvalue 2014

No. ofcustomers 2013

% total No. ofcustomers 2013

% share ofvalue 2013

Concentration of credit risk

Exposure < 1 MSEK 477 95% 37% 213 96% 51%

Exposure 1-10 MSEK 22 5% 63% 8 4% 49%

Exposure > 10 MSEK 1 0% 0% 0 0% 0%

Total 500 100% 100% 221 100% 100%

Note 26: Other long-term receivables

Note 27: Accounts receivable


(TSEK) Group 2014

Group 2013

Parent company 2014

Parent company 2013

Prepaid rent 2,107 2,023

Prepaid insurance 435 459 175 178

Accrued income 7,164 4,933

Other 810 3,640 14 137

Other 10,516 11,055 189 315

(TSEK) Group 2014

Group 2013

Parent company 2014

Parent company 2013

Holiday pay liability 2,101 2,528

Accrued social security 2,756 1,827 440 281

Accrued social security pensions 1,240 1,905 188 188

Accrued salaries and remunerations 1,773 4,001 394 263

Deferred income 1,214 1,771

Accured interest 2,458 1,085

Other 6,020 9,432 265 4,206

Total 17,562 21,464 2,372 4,938

(TSEK) Group 2014

Group 2013

Parent company 2014

Parent company 2013

Opening balance 493 152 - -

Amounts utilized -61 -17 - -

New provitions 429 493 - -

Unutilized reversed amounts -364 -135 - -

Total 497 493 0 0

Note 28: Prepaid expenses and accrued income

Note 30: Accrued expenses and deferred income

Note 31: Share-based payments to employees

Note 29: Provisions for product warranty commitments

Provisions for product warranty commitments relate essentially to the sale of pens during 2014 and 2013. The provisions are based on calculations made on historical data for warranties related to the sale of pens. The whole amount is expected to be paid within 12 months.

The AGM decided on May 22, 2014 on a personnel option program with the following terms:

• The issuance of a maximum of 9,252,113 personnel options.

• Mandate for the Board to be responsible for the details of the incentive program. The options may be exercised to acquire shares from the day after the publishing of the company’s quarterly report for the first quarter of 2017, but not later than 1-30 June 2017.

• Provided that the holder of the option is employed in the Group upon exercise of the options, each option entitling the employee to acquire one share in Anoto Group at a price equal to 150% of the average closing price of the Company’s share on NASDAQ OMX Stockholm during the period from 23 May 2014 up to and including 30 May 2014, i.e. 0.61 SEK.

• During the year, 4,600,000 options were granted to Stein Revelsby (CEO) and 2.3 million options were granted to Dennis Ladd (EVP Products & Technology). The value of outstanding options, calculated using the Black & Scholes valuation model, as per 31st of December 2014 is insignificant for disclosures in accordance with IFRS 2.


(TSEK) Group 2014

Group 2013

Long term interest bearing liabilities

Opening balance 1,011 18,235

Acquisition of Group companies

Additions for the year -254 -1,287

Reclassification to short term loans -757 -16,313

Translation difference 376

Total long term interest bearing liabilities 0 1,011

Short term interest bearing liabilities

Opening balance 16,313 0

Additions for the year 16,670 0

Reclassification to short term loans 757 16,313

Translation difference 2,135 0

Total short term interest bearing liabilities 35,875 16,313

Note 32: Interest bearing liabilities

Note 33: Leasing expenses

Bank loan The loan is secured against current assets in the company where the lenders has priority over other creditors. The loan is repayable on demand but the bank has agreed to extend the loan term for at least another twelve months.

Shareholders loan The loan is secured against current assets in the company. The loan is repayable on demand but the lenders has agreed to extend the loan term for at least another twelve months.

Convertible loan The loan which allows the loan note holders to convert into shares matures during February 2015. The loan note holders then has the possibility to convert into shares at a 15% discount. Within equity per December 31 2014, there is an the amount of KSEK 542, corresponding to the estimated rebate when comparing the interest rate of the loan and the market interest rate, On the 9th of February, the company announced that all holders of the convertible bonds, totaling 17.7 million, issued during the second quarter of 2014 had chosen to exercise the option to convert into shares. The number of shares issued totalled 49,166,659.

Blocked Bank deposits are pledged as security for import of goods into Sweden.

Security against loans are related to the loans in Destiny Wireless.

2014-12-31 2013-12-31

(TSEK) Currency Nominal interest Maturity Nom. value Book. value Nom. value Book. value

Bankloan GBP 12% 2015 10,183 10,183 8,490 8,490

Shareholders´loan GBP 12% 2015 7,992 7,992 8,834 8,834

Convertible loan SEK 8% 2015 17,700 17,700 0 0

Total interest bearing liabilities 35,875 35,875 17,324 17,324

The Group has no finance lease commitments. The amounts associated with equipment at the company s disposal through leases are negligable.

The Group s commitment for leased premises totals to TSE K 7 659 (8,168) for 2015 and TSE K 12 004 (4,402) for 2016 - 2018.

(TSEK) Group 2014

Group 2013

Parent company 2014

Parent company 2013

Blocked bank deposists 351 331 0 0

Security against loans 20,150 17,817 0 0

Note 34: Pledged assets


(TSEK) Loans and accounts receivabler

Financial assets that can be sold

Other financial liabilities Total book value Fair value

Group 2014

Investments 4,361 4,361 4,361

Long-term receivables 121 121 121

Accounts receivable 36,979 36,979 36,979

Other receivables 0 0

Cash 3,909 3,909 3,909

Assets 41,009 4,361 0 45,370 45,370

Borrowings 35,875 35,875 35,875

Accounts payable 31,735 31,735 31,735

Other liabilities 18,208 18,208 18,208

Total 0 0 85,818 85,818 85,818

(TSEK) Loans and accounts receivabler

Financial assets that can be sold

Other financial liabilities Total book value Fair value

Group 2013

Investments 2,853 2,853 2,853

Long-term receivables 752 752 752

Accounts receivable 27,502 27,502 27,502

Other receivables 0 0

Cash 7,008 7,008 7,008

Assets 35,262 2,853 0 38,115 38,115

Borrowings 17,324 17,324 17,324

Accounts payable 42,708 42,708 42,708

Other liabilities 11,042 11,042 11,042

Total 0 0 71,074 71,074 71,074

Note 35: Financial instruments

Disclosures on fair value classification Level 1: According to listed prices on an active market for similar instruments Level 2: According to directly or indirectly observable market data not included in level 1 Level 3: According to indata not observable on the market

Estimation of fair value Accounts receivable and accounts payable For accounts receivable and accounts payable with a remaining life of less than six months, recorded amount is deemed to reflect fair value. Accounts receivable and accounts payable with a due time over six months are discounted at the time of determining the fair value.

Financial assets that can be sold Financial assets that can be sold are valued on the basis of level 1.

Borrowings Borrowings are measured at amortized cost.


Parent company Related party transactions

(TSEK) Selling of goodsand servicesr

Purchasing ofgoods

and services Other

Receivable onrelated party on

December 31

Liability to re-lated party on

December 31

Related parties

Group company 2014 9,556 0 81,395 217,352

Group company 2013 6,804 0 -2,589 126,401

Note 36: Related parties

Note 37: Equity

Capital treatment The Anoto Group has since being founded in 1999 worked on developing a digital pen enabling digital transfer of data written with a digital pen to a computer or similar. Development costs have been significant and since 1999 approximately MSEK 2,293 have been invested as capital by the shareholders. The company s ambition is to achieve profitable growth and in the future be able to pay dividend on invested capital. Anoto Group has sofar not paid any dividend and will suggest to the Annual general meeting of 2015 that no dividend shall be paid out. The company has no outspoken targets regarding dividend, debt/equity ratio or other capital ratios other than the strive for profitability and positive cash flow. When solid profitability has been achieved targets for dividend, debt/equity ratio etc. will be determined.

Bank deposits are pledged as sequrity for Letters of Credit and Bank Guarantees

Translation reserve

(TSEK) 2014 2013

Accumulated exchange rate differences at beginning of the year 7,480 2,464

Exchange rate differences for the year -10,226 5,005

Accumulated exchange rate differences at year end -2,746 7,469

Liquid assets:

(TSEK) Group 2014

Group 2013

Parent company 2014

Parent company 2013

Cash and bank balances 3,909 7,008 120 3,933

Total 3,909 7,008 120 3,933

Interest paid and dividends received

Other financial items 158 0

Interest received 54 38 1 3

Interest paid -7,453 -3,100 -2,035 -586

Total -7,241 -3,062 -2,034 -583

Note 38: Specification to Statement of Cash Flows

One of the largest shareholders of Anoto, Aurora Investment Ltd (owned by TStone), has been represented on the board of directors since the Annual Meeting in May 2010. Transactions with companies within the TStone group amounts to MSEK 13.8 during 2014. All transactions have been made on normal commercial conditions.

Antonio Mugica, representing the second largest shareholder (Goldeigen Kapital), is also the CEO of Anotos partner Smartmatic, has been a member of the Board since the AGM 2014. Transactions with Smartmatic amounts to MSEK 3.7 during 2014. All transactions have been made on normal commercial conditions.

GroupRelated party transactions

(TSEK) Selling of goodsand servicesr

Purchasing ofgoods

and services Other

Receivable onrelated party on

December 31

Liability to re-lated party on

December 31

Närståenderelation

Aktieägare:

Tstudy (Tstone/Aurora) 2014 1,492 0 0 1,490 0

Tstudy (Tstone/Aurora) 2013 1 0 0 0 0

Smartmatic (Goldeigen Kapital) 2014 3,726 0 0 0 0

Smartmatic (Goldeigen Kapital) 2013 0 0 0 0 0

Pen Generations(Tstone/Aurora) 2014 12,325 7,032 0 5,557 1,668

Pen Generations(Tstone/Aurora) 2013 6,505 1,664 0 0 0

For transactions with Board and Executives, see note 9.


Note 39: Events after December 31, 2014

Note 40: Parent Company details

On the 9th of February, the company announced that all holders of the convertible bonds, totaling 17.7 million, issued during the second quarter of 2014 had chosen to exercise the option to convert into shares. The number of shares issued totalled 49,166,659.

On the 11th of March Anoto announced that an order worth MSEK 10 for a roll-out of 1,700 pens to Welsh Ambulance Service Trust had been awarded.

On the 23rd of March the Company announced that it, with support from the authorization granted by the Extra General Meeting on the 2nd of January 2015, has completed a private placement of 79,625,292 new shares. The placement was completed at 0.427 SEK and provided the Company with 33.3 MSEK after transaction related expenses.

Anoto Group is a Swedish limited company with its registered office in Lund. The shares of the parent company are listed on the NASDAQ OMX Stockholm Stock exchange. The address of the head office is Traktorvägen 11, SE 226 60, Lund. The consolidated financial statements for 2014 relate to the parent company and its subsidiaries, jointly referred to as the Group.

Gunnel Duveblad Board member

Andrew Hur Board member

Antonio Mugica Board member

Jörgen Durban Chairman of the Board

Our auditor´s report was submitted on 16 April, 2015.

The report deviates from the standard format.

Deloitte AB

Per-Arne Pettersson Authorized Public Accountant

Stein Revelsby CEO

JoonHee Won Board member

SIGNATURES FOR THE ANNUAL REPORTThe Annual Report and consolidated financial statements were approved by the Board on 15 April 2015. The consolidated statement of comprehensive income and the statement of financial position, as well as the Parent Company’s income statement and balance sheet will be presented to the Annual General Meeting in May 2015 for adoption.

The Board of Directors and CEO affirm that the consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS), as adopted by the EU, and that they provide a true and fair view of the Group’s financial position and earnings. The Annual Report has been prepared in accordance with generally accepted accounting standards and provides a true and fair view of the Parent Company’s financial position and earnings.

The Directors’ Report for the Group and Parent Company provides a true and fair overall account of the development of the Group’s and Parent Company’s business, financial position and earnings and describes significant risks and uncertainties facing the Parent Company and the companies within the Group.

Lund, 15 April, 2015


Auditor’s report2014

To the annual meeting of the shareholders of Anoto Group AB (publ.)

Corporate identity number 556532-3929

Report on the annual accounts and consolidated accountsWe have audited the annual accounts and con-solidated accounts of Anoto Group AB (publ.) for the financial year 2014-01-01 – 2014-12-31. The annual accounts and consolidated accounts of the company are included in this document on pages 21-55.

Responsibilities of the Board of Directors and the Managing Director for the annual accounts and consolidated accountsThe Board of Directors and the Managing Director are responsible for the preparation and fair presen-tation of these annual accounts in accordance with the Annual Accounts Act and of the consolidated accounts in accordance with International Financial Reporting Standards, as adopted by the EU, and the Annual Accounts Act, and for such internal control as the Board of Directors and the Managing Director determine is necessary to enable the preparation of annual accounts and consolidated accounts that are free from material misstatement, whether due to fraud or error.

Auditor’s responsibilityOur responsibility is to express an opinion on these annual accounts and consolidated accounts based on our audit. We conducted our audit in accor-dance with International Standards on Auditing and generally accepted auditing standards in Sweden. Those standards require that we comply with ethi-cal requirements and plan and perform the audit to obtain reasonable assurance about whether the annual accounts and consolidated accounts are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the annual accounts and consolidated accounts. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the annual accounts and consolidated accounts, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the company’s preparation and fair presentation of the annual accounts and consolidated accounts in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company’s internal control. An audit also includes evaluating the appropriateness of accounting poli-cies used and the reasonableness of accounting estimates made by the Board of Directors and

the Managing Director, as well as evaluating the overall presentation of the annual accounts and consolidated accounts.

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

OpinionsIn our opinion, the annual accounts have been prepared in accordance with the Annual Accounts Act and present fairly, in all material respects, the financial position of the parent company as of 31 December 2014 and of its financial perfor-mance and its cash flows for the year then ended in accordance with the Annual Accounts Act. The consolidated accounts have been prepared in accordance with the Annual Accounts Act and present fairly, in all material respects, the financial position of the group as of 31 December 2014 and of their financial performance and cash flows for the year then ended in accordance with International Financial Reporting Standards, as adopted by the EU, and the Annual Accounts Act. The statutory administration report is consistent with the other parts of the annual accounts and consolidated accounts.

We therefore recommend that the annual meet-ing of shareholders adopt the income statement and balance sheet for the parent company and the group.

Report on other legal and regulatory requirementsIn addition to our audit of the annual accounts and consolidated accounts, we have also audited the proposed appropriations of the company’s profit or loss and the administration of the Board of Directors and the Managing Director of Anoto Group AB (publ.) for the financial year 2014-01-01 – 2014-12-31.

Responsibilities of the Board of Directors and the Managing DirectorThe Board of Directors is responsible for the pro-posal for appropriations of the company’s profit or loss, and the Board of Directors and the Managing Director are responsible for administration under the Companies Act.

Auditor’s responsibilityOur responsibility is to express an opinion with reasonable assurance on the proposed appropria-tions 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 whether the proposal is in accordance with the Companies Act.

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

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

OpinionsWe recommend to the annual meeting of share-holders that the loss be dealt with in accordance with the proposal in the statutory administra-tion report and that the members of the Board of Directors and the Managing Director be discharged from liability for the financial year.

ObservationsOn several occasions payments of taxes and social security contributions have been made late. This negligence has caused no material harm for the company, except for penalty interests.

Malmö, April 16, 2015

Deloitte AB

Per-Arne Pettersson

Authorized Public Accountant


Anoto Group AB (publ.) is governed by its Articles of Association and the Swedish Companies Act. Since Anoto is listed on NASDAQ OMX Stockholm, Anoto also applies NASDAQ OMX Stockholm’s Rule Book for Issuers. Since July 1, 2008, Anoto applies the Swedish Code of Corporate Governance (see www.bolagsstyrning.se) Anoto is, in accordance with the Swedish Companies Act and the Swedish Code of Corporate Governance required to present a Corporate Governance Report.

Corporate Governance StructureAnoto is governed by several bodies.

The shareholders exercise their voting rights at General Meetings of the Shareholders by electing the Board of Directors and external auditors and make decisions on other issues like the adoption of the annual report and stipulating how to appoint the Nomination Committee.

The Nomination Committee nominates candidates to the Board of Directors, Chairman of the Board and external auditors. A Nomination Committee is required by the Code, but not by the Companies Act.

The Board is responsible for the appointment of the CEO, the developing of long-term strategy, and controlling and evaluating Anoto’s day-to-day operations.

The CEO is in charge of and responsible for the daily operations and the management of Anoto in accor-dance with the Swedish Companies Act, instructions and guidelines from the Board of Directors.

External auditors appointed by the shareholders at the Annual General Meeting examine the Company’s annual report and accounts as well as the manage-ment by the Board of Directors and the CEO.

Annual General MeetingThe Annual General Meeting is the corporate body where the shareholders in Anoto can exercise their rights by electing the Board of Directors and decid-ing on all other issues voted on at Annual General Meetings in accordance with the Companies Act and the Articles of Association.

The Annual General Meeting is normally held during the first half of May. The notice of the Annual General Meeting, together with the agenda, is published on Anoto’s website and in the Swedish newspaper Post och Inrikes Tidningar (the Swedish Official Gazette). As a courtesy, the date and place for the Annual General Meeting together with information on how to obtain the agenda is published in the Swedish news-papers Dagens Nyheter and Sydsvenska Dagbladet.

All information material for the Annual General Meeting is available in both Swedish and English. The Annual General Meeting is held in Swedish.

Annual General Meeting 2014The Annual General Meeting (AGM) in 2014 took place in Lund on May 22. Jörgen Durban was present from the Board of Directors. Present were also Anoto’s external auditors.

The Annual General Meeting made the following decisions:

• The annual report was presented, and the consolidated income statements and balance sheets were adopted. The Board Members and CEO were discharged from liability. It was resolved that no dividends were to be paid to the shareholders.

• Board Members Jörgen Durban, Andrew Hur and Gunnel Duveblad, were re-elected as Board Members until the end of the next Annual General Meeting.

• Joon Hee Won and Antonio Mugica was elected new board members until the end of the next Annual General Meeting.

• Jörgen Durban was re-elected Chairman of the Board.

• The proposal of the Nomination Committee on how to appoint members of the Nomination Committee, as well as the assignment for the Nomination Committee, was approved.

• The AGM decided to reject the proposed authorization for the Board of Directors to, on one or several occasions prior to the next Annual General Meeting, resolve on an issuance of a maximum of 50,372, 615 new shares with provisions for non-cash payment or payment against set-off of claims or else on conditions enabling the waiving of preferential rights of shareholders.

• The AGM decided to approve the proposed incentive program for senior executives in the Group. The incentive program comprises a maximum of 9,252,113 stock options. Granted options can be exercised for purchase of shares up until the 30th of June 2017.

• The guidelines for compensation to the CEO and other executives of the Company were adopted in accordance with the proposal of the Board of Directors.

Anoto’s Annual General Meeting 2015noto’s Annual General Meeting 2015 will take place on May 13 at Anoto´s office in Lund.

Nomination CommitteeThe Annual General Meeting adopted principles for the establishment of a new Nomination Committee in accordance with the proposal of Nomination Committee. The principles correspond to the princi-ples resolved by the Annual General Meeting 2014.The Chairman of the Board shall be a member of the com-mittee, and is mandated to contact the Company’s three largest shareholders according to the register of shareholders as per the end of September 2014, to ask them to appoint one representative each to constitute the Nomination Committee for the period until another Nomination Committee has been appointed. The representative of the largest shareholder shall be the Chairman of the Nomination Committee. The Chairman shall as soon as possible and no later than 6 months before the Annual General Meeting in 2015 to inform the Company of the names of the members of the committee.

The Nomination Committee formed for the Annual General Meeting 2015 is as folllows: Joonhee Won representing (Aurora Ltd) ,Joon Chung (Solid Technologies Ltd), Antonio Mugica (Goldeigen Kapital) and Jörgen Durban.

The Nomination Committee shall prepare and present to the Annual General Meeting 2014 proposals for the following issues:

1. Chairman at the Annual General Meeting2. Chairman and other Members of the Board3. Fees to the Board of Directors4. Election of Auditors5. Fees to the Auditors6. The Nomination Committee in respect of the

Annual General Meeting 2016

The company is obliged to inform the shareholders of the proposals by the Nomination committee as soon as it becomes aware of the proposals.

Extra General MeetingOne Extra General Meetings were held during 2014.

Extra General Meeting on the 6th of October the following was resolved:- Approval of the Boards decision of the 19th

of June to raise a loan with a nominal value of maximum 20 000 000 and, subject to approval at the Extra General Meeting of the conversion right, possibility to convert the loan into shares in the company.

- Amendment of §4 in the Articles of Association concerning the limits of the share capital from the current minimum of SEK 3,400,000 and a maximum of SEK 13,600,000 to a minimum of 9,000,000 and a maximum of 36,000,000, and an amendment of §5 of the Articles of Association regarding limits on the number of shares from the current minimum of 170,000,000 and maximum 680,000,000 to a minimum of 450,000,000 and maximum of 1,800,000,000 shares.

- Approval of a Rights issue of no more than 272,012,120 new shares at SEK 0,25.

The Board of DirectorsThe Board of Directors, which also appoints the CEO, is ultimately responsible for the organization of Anoto and the management of its operations. According to Anoto’s Articles of Association, the Board shall consist of not less than three and not more than eight directors with not more than five deputies.

Kjell Bråthen resigned from the Board of Directors on the 27th of January 2014 and Erik Erik Tronbøl resigned from the Board of Directors on the 30th of April.

At the Annual General Meeting Jörgen Durban who is the Chairman of the Board, Gunnel Duveblad and Andrew Hur were re-elected and Joon Hee Won and Antonio Mugica were elected new members of the Board of Directors until the end of the next Annual General Meeting.

For information about the Board Members and their remuneration, please refer to Note 9 in the Annual Report. The members of the Board are independent

Corporate governance report 2014


of the management of the company. The Board members Andrew Hur and Joonhee Won is depen-dent of the fourth largest shareholder of Anoto, Aurora Investment Ltd, through their employment in the Korean investment company TStone Corporation which controls Aurora Investment. Andrew Hur and Joonhee Won also has interests in Anoto´s daily business operations through Anoto´s busi-ness relations with several of TStone´s portfolio companies. Antonio Mugica has interests in Anoto´s daily business being the CEO of Anoto´s customer Smartmatic International.

The other Board members are independent in rela-tion to Anoto and its largest owners. The company does therefore comply with the conditions of the Swedish Code of Corporate Governance requiring that a majority of the members elected by the Annual General Meetings are to be independent from the company and its management and that no less than two of the Board members are independent from the largest shareholders.

Rules of ProceduresThe Board of Directors has adopted Rules of Procedures that outlines the work procedures and tasks for the Board, the Audit Committee and the Compensation Committee. The Rules of Procedures are reviewed and adopted at least once a year.

Work of the Board of Directors 2014The Anoto Group AB CFO participated in the board meetings and was the secretary of the Board. When appropriate, other employees of the company par-ticipate in reporting capacities concerning their particular areas of expertise.

The Board continuously evaluated the performance of Anoto, the CEO and Anoto’s management team. The Board held 21 recorded meetings during 2014.

The Board Members attendance at Board Meetings and Committee Meetings is set forth below:

Board Member: Number of board meetingsJörgen Durban 21/21

Gunnel Duveblad 20/21

Andrew Hur 18/21

Kjell Bråthen* 1/1

Erik Tronbøl** 9/9

Joonhee Won*** 8/11

Antonio Mugica*** 8/11

*) Board Member until the 27th of January 2014**) Board Member until the 30th of April 2014***) Board member elected at the Annual General

Meeting 2014

The board has not decided to delegate any respon-sibilities to any sub-committees such as Audit com-mittee and Compensation committee. Hence the board in its entirety has the full responsibility for such matters.

The 2014 Annual General Meeting adopted guidelines for compensation to senior executives, which can be found in Note 9 in the Annual report.

CEO and ManagementAs of December 31, the Management Team consisted of 10 persons, with the CEO in charge. The CEO and Management Team manage and control Anoto’s daily operations.

Shareholders Controlling More than One Tenth of the Shares in the CompanyThe following shareholders have, on the 31st of December, a direct or indirect ownership of more than one tenth of the votes for all shares:

Solid Technologies Ltd. 14,3%

Anoto’s Articles of AssociationThe company´s Articles of Association do not com-prise limitations concerning the number of votes each shareholder can represent in the Annual General Meeting, or specific conditions related to appointment or dismissal of Board members or introduction of amendments to the Articles of Association.

Internal ControlThe Board of Directors is responsible for the internal control under the Swedish Companies Act and the Swedish Code of Corporate Governance. This sec-tion on internal control is focused on the internal control of the financial reporting. Given the size of Anoto, the Board has determined that there is no need for an internal audit department or function, and that Anoto’s finance department sufficiently can carry out the internal control in cooperation with the external auditors.

Control environmentThe corporate culture of Anoto encourages initia-tives while assuming responsibility for meeting the defined strategic objectives of Anoto. Each employee at Anoto has a job description setting out tasks, responsibilities and authorizations.

The CEO has adopted guidelines and policies for spe-cific areas that the employees are required to follow.

Anoto has implemented a Code of Conduct that is applicable to Anoto and its suppliers. The Code of Conduct describes Anoto’s requirements with respect to ethical behavior, child labor and the environment.

A detailed delegation plan has been drawn up with well- defined levels of attestation and decision levels. This is applied throughout Anoto.

Risk assessmentRisk assessments are performed in order to identify and map risks. The most important risks for the internal control of the financial reporting are identi-fied at Group and Company level, as well as at a regional level. The outcomes of the risk assessments result in actions and tasks that support the internal control of the financial reporting.

Control measuresThe Board has implemented a system for control and risk management based on the Board’s Rules of Procedure - also including instructions for the CEO and reports that are to be made to the Board and the Finance Policy. These rules constitute the framework for the internal control.

Anoto’s processes and systems for ensuring effective internal controls are designed with the intention of managing and limiting the risks of material errors in the reporting of financial data, thus ensuring that both strategic and operational decisions are based on accurate financial information.

The operational work of controlling the day-to-day activities is carried out by the CEO and the Management Team. Specific guidelines govern the capacity for decision making on different issues. In addition, there are several operational meeting forums like management meetings and steering committees that address specific control issues in the operational activities. These forums effectively steer Anoto towards the defined strategic objectives.

MonitoringThere are general as well as detailed control mea-sures aimed at preventing, discovering and correct-ing faults and deviations. The control organization is evaluated by the CFO on an ongoing basis with the aim of ensuring quality and efficiency.

The CEO and the CFO continuously keep the Board informed of the Group’s financial position,

performance and any areas of risk. Anoto’s external auditors attend at least two Board meetings per year, at which the auditors provide their assessment and observations on the business processes, accounts and reports. The Chairman of the Board is also in regular contact with the auditors of the Group.

The Board continuously monitors Anoto’s financial performance by reports, as well as information from the CFO at Board Meetings. Regular follow-up ensures compliance with the Company’s Finance Policy, thus identifying any deficiencies in the inter-nal control system.

The internal control also includes detailed annual budgets split on application areas, geographic areas and cost centers. Forecasts are delivered three times a year; in May, August and November. The forecast-ing follows the same organizational set-up as the annual budget. In December, the Board adopts the budget for the following year. In addition to the budgeting and forecasting, Anoto’s Management Team continuously works with overall three-year strategic scenarios.

Auditor’s Report on Corporate GovernanceTo the annual meeting of the shareholdes in Anoto Group AB (publ.) corporate identity number 556532-3929.

It is the Board of Directors and the CEO who are responsible for the corporate governance report for the year 2014 and that it has been prepared in accordance with the Annual Accounts Act.

We have read the corporate governance report and based on that reading and our knowledge of the company and the group we believe that we have a sufficient basis for our opinion. This means that our statutory examination of the Corporate Governance Statement is different and substantially less in scope compared with the focus and scope of an audit in accordance with International Standards on Auditing and generally accepted auditing stan-dards in Sweden.

We believe that the corporate governance statement has been prepared and its statutory information is consistent with the

financial statements..

Malmö, April 16, 2015

Deloitte AB

Per-Arne Pettersson

Authorized Public Accountant

Corporate governance report 2014


JÖRGEN DURBANChairman of the BoardIndependentBorn in 1956Board member since 2010Shareholding: 1,789,267 shares in Anoto Group ABEducation: LL.M, Stockholm University, Sweden

ANDREW HURMember of the BoardNot considered independent in relation to larger shareholdersBorn in 1974Board member since 2011Other positions: Managing Director at TStone Corporation. TStone Corporation owns Aurora Investment Ltd, the largest shareholder in Anoto Group AB with 22,3% of the shares.Shareholding: 0 shares in Anoto Group ABEducation: BA Economics, Korea University

GUNNEL DUVEBLADMember of the BoardIndependentBorn in 1955Board member since 2011Other positions: Chairman of the board of Team Olivia AB, Global Scanning A/S and Stiftelsen Ruter Dam, and board member in amongst others PostNord, HiQ and SWECOShareholding: 70,000 shares in Anoto Group ABEducation: Studies in Information Science, Umeå Universitet, Sweden

ANTONIO MUGICAMember of the BoardNot considered independent in relation to larger shareholdersBorn in 1975Board member since 2014Shareholding: 0 shares in Anoto Group ABOther positions: CEO of Smartmatic International

JOONHEE WONMember of the BoardNot considered independent in relation to larger shareholdersBorn in 1965Board member since 2014Other positions: CEO of TStone Corporation. TStone Corporation is owned by Aurora Investment Ltd, which owns 22,01 million shares in Anoto Group ABShareholding: 0 shares in Anoto Group ABEducation: MBA, Harvard Graduate School, USA

Andrew Hur

Gunnel Duveblad

Jörgen Durban Antonio Mugica

Joonhee Won

Board of directors


Stein RevelsbyCEOBorn in 1962Employed since 2011Shareholding: 900,000 shares in Anoto Group ABEducation: MBA, Norweigan School of Management, Norway

Dan WahrenbergCFOBorn in 1969Employed since 2006Shareholding: 87,500 shares in Anoto Group ABEducation: Master of Science in Business Administration, Lunds University, Sweden

Hein HauglandSVP MarketingBorn in 1970Consultant since 2012Shareholding: -Education: Art Center College of Design, USA

Petter EricsonCTOBorn in 1971Employed since 1996Shareholding: 160,000 shares in Anoto Group ABEducation: Engineering Physics, Lund University of Technology, Sweden

Max MarinissenEVP Global SalesBorn in 1958Employed since 2012Shareholding: -Education: Bachelor of Economics, Hanzehogeschool, the Netherlands

Eduardo CantoSVP Business Development New BusinessBorn in 1973Employed since 2012Shareholding: -Education: Master of Science in Business Administration

Jan SkoglundProduct ManagerBorn in 1956Consultant since 2012Shareholding: 56,000 shares in Anoto Group ABEducation: Business and administration, Stockholm university, Sweden, PA Education, Eskilstuna, Sweden

Dennis LaddEVP Products & TechnologyBorn in 1957Employed since 2012Shareholding: -Education: Bachelor of Arts, State University ofNew York, USA

Pietro ParraviciniSVP Global OperationsBorn in 1965Employed since 2001Shareholding: 1.500 shares in Anoto Group AB Education: Post-graduate degree in Corporate Accounting and Financial Management,AKAD Zurich, Switzerland

Tim AughenbaughSVP Business DevelopmentBorn in 1966Consultant since 2012Shareholding: 2 014 702 shares in Anoto Group ABEducation: BS Engineering, South Dakota State University, USA

Dan Wahrenberg

Hein Haugland

Dennis Ladd

Eduardo Canto

Stein Revelsby

Pietro Parravicini

Tim Augenbaugh

Petter Ericson

Max Marinissen

Jan Skoglund

Senior management


Anoto Group AB (publ.) has been listed on the NASDAQ OMX Stockholm Stock Exchange (ticker: ANOT) since June 16, 2000. Today the share is listed on the Small Cap list of the NASDAQ OMX Nordic Exchange Stockholm. The share was previously traded on the New Market starting on March 15, 2000.

Anoto Group’s share capital of SEK 13,967,071 as per Dec 31st 2014 is allocated among 698,353,534 shares. As per end of March 2015 the share capital of 16,542,909 SEK is allocated among 827,145,485 shares.

Each share entitles the holder to one vote at general meetings and all shares provide equal rights to participation in the company’s assets and profits.

Share price performance and tradingThe price of the Anoto Group share increased by 35 per cent from SEK 0.31 to 0.42 during the year. During the same period, the NASDAQ OMX Stockholm PI was up by 15 per cent and the NASDASQ OMX Technology PI increased by 15 per cent. Anoto Group’s market capitalization was MSEK 293 on December 31, 2014.

ShareholdersAt the end of 2014, Anoto Group had 7,542 shareholders. Foreign shareholders controlled 50 per cent; the ten largest shareholders 45 per cent.

Dividend policyThe company’s future dividend policy will reflect its earnings, financial posi-tion and financing needs. Dividend proposals will be examined in the light of shareholder demands for a reasonable return and the company’s internal financing requirements.

Option programmesThe parent company currently has no outstanding stock option program.

AnalystsAnoto Group is covered by analysts at banks and securities brokers, including Redeye.

The Anoto share


Holdings Total number of shareholders

% total number of shareholders

Hold collectively number of shares

% of share capital

1-1000 2,791 37.0% 1,092,006 0.16%

1001-10000 2,325 30.8% 9,724,707 1.39%

10001-100000 1,832 24.3% 67,754,854 9.70%

100001- 594 7.9% 619,781,967 88.75%

7,542 100% 698,353,534 100.00%

Shareholders by size, december 31, 2014

Share price and trading volume 2013-2014 698,353,534

Number of outstanding options 0

Average number of shares 473,688,069

Average number of outstanding options 0

Earnings per share (SEK) -0.13

Earnings per share incl. options (SEK) -0.13

Cash flow per share (SEK) -0.01

Cash flow per share incl. options (SEK) -0.01

Shareholder s equity per share (SEK) 0.11

Shareholder s equity per share incl. options (SEK) 0.11

Name Share % Total

Solid Technologies Ltd 14.3% 99,711,690

Goldeigen Kapital 9.0% 63,012,612

Försäkringsaktiebolaget Avanza Pension 4.5% 31,383,769

Aurora Investment Ltd 4.4% 30,522,726

Nordnet pensionsförsäkring AB 4.0% 27,632,737

Pine AS 2.3% 15,854,000

Netfonds ASA 2.1% 14,873,679

Double Day Holdings Ltd 1.8% 12,860,000

BK Julius Baer & Co Swedein Main AC 1.4% 9,666,411

Henrik Jönsson 1.3% 8,806,189

Total 45.0% 314,323,813

Per -share data 2014

Largest shareholders 2014-12-31

The Anoto share


TSEK 2010 2011 2012 2013 2014

Net sales 212,293 192,286 198,646 144,306 141,465

Other income - - - -

Gross profit 143,970 136,567 143,563 97,474 92,839

Amortization, intangible fixed assets -43,747 -9,811 -10,534 -9,430 -3,416

Depreciation, property plant & equipment -3,014 -3,789 -4,287 -2,902 -1,770

Operating profit/loss -75,324 -242,980 -42,173 -163,451 -56,249

Profit/loss on participations in Group companies - - - -

Profit/loss on shares in associated companies - - - -

Other financial items -1,449 -869 -2,641 -4,839 -7,241

Profit/loss after financial items -77,272 -243,849 -44,814 -168,290 -63,490

Tax -54 -30 -15 -12 639

Profit/loss after tax -77,326 -243,879 -44,829 -168,302 -62,851

TSEK 2010.12.31 2011.12.31 2012.12.31 2013.12.31 2014.12.31

Assets

Intangible fixed assets 328,614 118,739 128,304 71,318 78,972

Tangible fixed assets 8,943 6,910 4,578 3,084 2,046

Financial fixed assets 1,794 1,486 3,782 3,605 4,482

Total non-current assets 339,351 127,135 136,664 78,007 85,500

Inventory 25,306 27,236 30,916 27,985 20,553

Accounts receivable 19,139 39,138 24,037 27,502 36,979

Other current assets 14,950 18,649 19,631 31,346 19,916

Cash & bank balances, incl current investments 81,044 23,941 5,459 7,008 3,909

Non-current assets held for divestment - - - - -

Total current assets 140,439 108,964 80,043 93,842 81,357

Total assets 479,790 236,099 216,707 171,849 166,857

Liabilities and shareholders equity

Shareholders equity 394,763 152,988 130,691 82,657 78,242

Minority shareholdings -3,160 -13,074 -14,888 -16,770 -16,198

Long term liabilities

Non-interest bearing 19,806 9,903 - 2,124

Interest bearing - 15,695 18,235 1,011 -

Current liabilities

Non-interest bearing 68,381 70,587 82,669 104,951 66,814

Interest bearing - - - 35,875

Total liabilities 88,187 96,185 100,904 105,962 104,813

Total liabilities and shareholders equity 479,790 236,099 216,707 171,849 166,857

Summary of comprehensive income statements

Summary of financial position statements

Five-year summary


TSEK 2010 2011 2012 2013 2014

Profit/loss after financial items -77,272 -243,849 -44,814 -168,290 -63,490

Items that do not affect liquidity 49,632 246,310 16,149 85,052 8,244

Change in working capital 45,002 -50,306 13,144 -9,186 -36,896

Cash flow from operating activities 17,362 -47,845 -15,521 -92,424 -92,142

Cash flow from investing activities -17,088 -9,258 -5,501 -3,946 -5,958

Total cash flow before financing activities 274 -57,103 -21,022 -96,370 -98,100

Cash flow from financing activities - - 2,540 97,919 95,001

Cash flow for the year 274 -57,103 -18,482 1,549 -3,099

2010 2011 2012 2013 2014

Sales growth, % 3 -9 3 -27 -2

Gross margin, % 68 71 72 68 67

Operating margin % neg neg neg neg neg

Profit margin, % neg neg neg neg neg

Capita employed (TSEK) 391,603 220,404 134,038 65,887 62,044

Return on capital employed, % neg neg neg neg neg

Return on shareholder s equity, % neg neg neg neg neg

Proportion shareholders´ funds, % 82 59 53 38 37

Equity/assets ratio, % 82 59 53 38 37

Net debt (TSEK) -81,044 -8,246 12,776 -5,997 -3,909

Earnings per share (SEK) -0.60 -1.89 -0.33 -1.03 -0.13

Earnings per share after dilution (SEK) -0.60 -1.89 -0.33 -1.03 -0.13

Cash flow per share for the year (SEK) 0.00 -0.44 -0.13 0.01 -0.01

Cash flow per share after dilution (SEK) 0.00 -0.44 -0.13 0.01 -0.01

Shareholder s equity per share (SEK) 3.07 1.17 0.95 0.21 0.11

Shareholders s equity per share after dilution (SEK) 3.07 1.17 0.95 0.21 0.11

Average No. Of employees 108 94 103 111 106

Sales per employee (TSEK) 1,966 2,046 1,929 1,300 1,335

Payroll expenses incl. social security contribution (TSEK) 98,019 80,741 92,775 100,318 67,889

(of which pension premiums) 14,068 10,050 7,551 7,806 5,333

Summary of cash flow statements

Key ratios

Five-year summary


Proportion shareholders´ fundsShareholders’ equity, non-controlling interest and deferred tax at the end of the year as a percentage of total assets.

Return of shareholders´ equityProfit for the year as a percentage of average shareholders’ equity.

Return on capital employedProfit after net financial income/expense plus inter-est expense, divided with an average of capital employed.

Gross marginGross profit as a percentage of net sales. Gross profit is defined as net sales less cost of goods sold.

Shareholders´equity per shareShareholders’ equity divided by the weighted average number of shares during the year.

Average number of employeesAverage number of employees during the year.

Net debtInterest-bearing liabilities less liquid assets and current investments.

Sales per employeesNet sales divided by the average number of employees.

Sales growthIncrease in net sales as a percentage of net sales for the previous year.

Earnings per shareProfit after tax divided by the weighted average number of shares during the year.

Operating marginOperating profit/loss after depreciation and amor-tization as a percentage of net sales.

Capital employedTotal assets less non-interest-bearing provisions and liabilities, including deferred tax liabilities.

Equity/assets ratioShareholders’ equity including non-controlling interest as a percentage of total assets.

Profit marginProfit after financial income/expense as a percent-age of net sales.

Cash flow per share for the yearCash flow for the year divided by the weighted average number ofshares during the year.

Definitions


Annual general meeting

Anoto’s Annual General Meeting will be held on May 21, 2015 at 1 p.m. at the Anoto premises, Traktorvägen 11 in Lund, Sweden. Any shareholder wishing to participate in the meeting must notify the company in one of the following ways:

• Phone: +46 46 540 12 00, Fax: +46 46 540 12 02

• E-mail to [email protected]

• In writing to Anoto Group AB, Traktorvägen 11, SE -226 60 Lund, Sweden

The notification must reach the company by 12:00 noon on Monday, May 18, 2015. To be entitled to participate, the shareholder must also be entered in the Euroclear Sweden AB share register by May 15, 2015. Any shareholder who has registered his or her shares under a trustee must temporarily register them in his or her own name with Euroclear Sweden AB by Friday, May 15, 2015. When submitting the notification, please state your name, personal iden-tity or corporate identity number, address, phone number and number of registered shares. If you are participating by proxy, you must submit the authorisation to the company prior to the meeting.

Financial reportingAnoto Group’s financial reports are released in Swedish and English. The easiest way to obtain the reports is by downloading them from www.anoto.com or e-mailing a request to [email protected] or phoning +46 46 540 12 00.

Following is the schedule of Anoto Group’s financial reports for its 2015 financial year.January-March interim report, May 8, 2015

January-June interim report, August 14, 2015

January-September interim report, November 6, 2015

2015 year-end report, February 2016

Anotos general meeting will be held on May 21 2015 at the Anoto premises Traktorvägen 11 in Lund


Annual Report 2015Found online at http://www2.anoto.com/investors

Anoto Group AB is a global leader in digital writing solutions, which enables fast and reliable transmission of handwriting into a digital format. Anoto operates worldwide through a global partner network that delivers user-friendly digital writing solutions for efficient capture, transmission, distribution and storage of data. Anoto is currently in use across multiple business segments, e.g. healthcare, banking and finance, transportation and logistics and education. The Anoto Group has around 100 employees and is headquartered in Lund (Sweden). The company also has offices in Basingstoke and Wetherby (UK), Boston and Los Angeles (US) and Tokyo (Japan). The Anoto share is traded on the Small Cap list of NASDAQ OMX Stockholm under the ticker ANOT.

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