In French, direct object pronouns and indirect object pronouns are usually placed in front of the verb. For example, "Il le lit" (He is reading it). "Il nous lit un journal"(He is reading a newspaper to us).
Sorry if I didn't really understand your question ( and if I make some mistake ) but the subject is "Elle" and not "vous" which is the object ( I didn't know if we say that ). So we conjuguate "lire" with "elle lit" and not "vous lisez". I hope I can have help you.