Annual Report 2021
BIOHIT Annual Report 2021
2
Biohit in Brief CEO’s Review Strategy Corporate Governance Financial Statements
TABLE OF CONTENTS
Highlights from 2021 ………………………………… 4
CEO’s Review ……………………………………………… 6
Strategy ……………………………………………………… 8
Innovative Products …………………………………… 9
Corporate Governance
Statement 2021 ……………………………………… 10
Information for Shareholders ………………… 15
Board of Directors …………………………………… 16
Group Management Team ……………………… 18
Financial Statements
……………………………… 19
BIOHIT Annual Report 2021
3
Biohit in Brief CEO’s Review Strategy Corporate Governance Financial Statements
EUROPE
The year 2021 marked a return to
exhibiting at international trade fairs.
Biohit was featured at the world’s
largest health technology event, Medica,
in Düsseldorf, Germany, and at the
world’s largest pharmaceutical event,
the CPhI trade fair in Milan, Italy.
SOUTH AFRICA
Austell Pharmaceuticals began
distributing GastroPanel tests to the
South African market in spring 2021.
The increasingly prevalent use of
GastroPanel
®
tests is expected to result
in reduced healthcare costs in South
Africa as seen elsewhere.
SWITZERLAND
In 2021, we made an important opening
for the Swiss market as we signed
Acetium
®
lozenge distribution
agreement with Gebro Pharma. A
subsidiary of Austrian Gebro Holding,
Gebro Pharma distributes both OTC and
prescription medicines in Switzerland.
The group was founded in 1947 and in
2020, its revenue was approximately
200M€. We look forward to the launch of
Acetium lozenge to help smokers quit
smoking safely without nicotine in
Switzerland as well.
Global operations
BIOHIT IN BRIEF
Biohit Oyj is a globally
operating Finnish
biotechnology company
that develops diagnostic
and other health products.
Biohit’s mission is
“Innovating for Health”.
Biohit is headquartered
in Helsinki and has
subsidiaries in Italy and
the United Kingdom. Since
1999, Biohit’s Series B
shares (BIOBV) have been
listed on NASDAQ OMX
Helsinki since 1999, in the
Small Cap / Healthcare
segment. The company
was established in 1988.
BIOHIT Annual Report 2021
4
Biohit in Brief CEO’s Review Strategy Corporate Governance Financial Statements
Highlights from 2021
The EU and Business Finland
grant Biohit EUR 900,000 to
finance product development.
MARCH
APRIL
The University of Parma pub-
lishes a study confirming the
reliability of the GastroPanel
®
test.
Suvi Elomaa starts as Produc-
tion Director and a member of
the management team.
JULY
AUGUST
CE-marked GastroPanel
®
rapid
test is ready for the market.
SEPTEMBER
A new clinical trial confirms the
accuracy of the second genera-
tion GastroPanel
®
test.
DECEMBER
JUNE
Jussi Hahtela is appointed CFO
and a member of the manage-
ment team.
Semi Korpela steps down as
CEO.
MAY
Austell Pharmaceuticals
becomes a distributor of the
GastroPanel
®
test in South
Africa.
Päivi Siltala begins work as the
new CEO.
NOVEMBER
Biohit participates in the inter-
national healthcare trade fairs:
CPhI Worldwide in Milan and
Medica in Germany.
BIOHIT Annual Report 2021
5
Biohit in Brief CEO’s Review Strategy Corporate Governance Financial Statements
KEY FIGURES 2021 2020
Revenue (MEUR) 9.4 7.1
EBITDA (MEUR) 0.5 -1.2
Operative EBITDA (MEUR) 0.5 -1.2
Operating profit/loss (MEUR) -1.5 -3.2
Profit/loss before taxes (MEUR) -1.3 -3.3
Profit/loss for the period (MEUR) -1.5 -3.3
Average number of personnel 44 45
Number of personnel at the end of the period 41 46
Equity ratio (%) 76.3 80.8
Earnings per share (EUR), Undiluted -0.10 -0.22
Earnings per share (EUR), Diluted -0.10 -0.22
Shareholders' equity per share (EUR) 0.49 0.58
Average number of shares during the period 15,045,593 15,045,593
Number of shares at the end of the period 15,045,593 15,045,593
REVENUE 20172021, MEUR
11
10
9
8
7
6
5
4
3
2
1
0
20212017 2018 2019 2020
Summary 2021
Revenue
9.4
MEUR
Equity
ratio
76.3
%
Operative
EBITDA
0.5
MEUR
Revenue from
international operations
97.5
%
6
BIOHIT Annual Report 2021
Biohit in Brief CEO’s Review Strategy Corporate Governance Financial Statements
Year of Redirection
and restructuring
Biohit is founded on innovative R&D which has enabled the
commercialization of a unique portfolio of innovative products
and services, which aim to promote medical research and
early diagnosis, and prevent serious illnesses. GastroPanel
®
,
the first line diagnostic test for dyspeptic patients and
Acetium
®
lozenge for smoking cessation have raised growing
interest in the global markets. In 2021 we have increased
our resources in sales and marketing to strengthen our
distribution network and streamline our procedures. Change of
direction is endorsed also with the new Management Team.
2021
was a transition year for a positive
change. Our revenue grew signifi-
cantly to EUR 9.4 million (2020: EUR 7.1 million,
growth 31%). Our EBITDA was EUR +0.5 million.
Growth from previous year was EUR 1.6 million.
Our bottom line was still in minus, but this was
almost entirely caused by the depreciation from
China patents. These depreciations have been
carried out since 2017 and they ended as planned
in 2021.
All in all, the direction of the company was
clear, and the positive development strengthened
towards the year end.
In the second half of 2021 our revenue was
EUR 5.3 million, much stronger than in both of
the comparison period (H2 2020: EUR 4.1 mil-
lion) and first half (EUR 4.1 million). A settle-
ment with Biohit Healthcare (Hefei) Co. Ltd in a
dispute relating to patent licensing agreement
contributed positively to H2 earnings. Actual-
7
BIOHIT Annual Report 2021
Biohit in Brief CEO’s Review Strategy Corporate Governance Financial Statements
ized royalty payments were bigger than provi-
sions.
Launch of new Quick Test
GastroPanel
®
quick test is the further develop-
ment of the unique Biohit GastroPanel
®
examina-
tion which is the most important product for us in
terms of revenue. GastroPanel quick test is based
on immunoassay method detecting GastroPanel
biomarkers from EDTA-plasma or finger prick
blood. In August 2021 we received CE mark for the
plasma version and we will extend the CE mark of
the GastroPanel quick test to also include fin-
ger-prick blood samples. The COVID-19 pandemic
has challenged the clinical research projects, but
we are confident to finalize the studies soon.
The global need in health care is evident for
reliable quick tests intended for diagnosing Heli-
cobacter pylori infection and atrophic gastritis
from patients with dyspeptic symptoms.
New Distribution Agreements
We sell our products through subsidiaries in UK
and Italy and a global distribution network. We
have actively widened the coverage of our sales
activities in the global markets. During the year
2021 we have signed four remarkable distribution
agreements for GastroPanel in South Africa and
Malaysia and Acetium lozenge in Chile and Swit-
zerland. We also attended the most important
industry meetings in September and October
when the global pandemic situation allowed inter-
national traveling.
Implementing the strategy
In the near future we keep on focusing on the
turnaround strategy of strong growth and profita-
bility. Our focus markets are in China, EU, UK and
Middle East where we see great potential espe-
cially with widened distributor networks and
seamless collaboration. We will enhance pro-
cesses by digitalization and automatization. Gast-
ropanel is our flagship product line, and we will
invest in continuous efforts to get our legacy
products in worldwide use by even more customer
oriented approaches. The first-rate quality will
continue to be our top priority in all our actions.
We have positive expectations for the year 2022
due to strong market potential determined for our
products and services. However, we must prepare
the company for the challenges we might be
facing; the IVDR process will still be a challenge
for the whole industry and will require time and
investments from companies. The cost of raw
materials and logistics has been increasing, and
the supply chain contingency has remained a risk
factor for businesses since 2021. The increased
costs affect our profitability due to some delays in
pricing effects.
I took to my new position at Biohit in the begin-
ning of September, and my first few months as
CEO have been work-filled and profoundly engag-
ing. I would first like to thank all my colleagues for
their kind support and the energetic enthusiasm
that is driving our company forward. Our staff
have attained very positive results despite a chal-
lenging year. I would also like to extend my thanks
to our shareholders for their trust and to our
partners for their collaborative efforts.
Päivi Siltala
CEO
Biohit’s strategy, which emphasizes customer orientation, quality, and improving operational
agility and cost-effectiveness remains unchanged; implementation of the strategy will now be
intensified and closely monitored.
8
BIOHIT Annual Report 2021
Biohit in Brief CEO’s Review Strategy Corporate Governance Financial Statements
Strategy 2022
IMPROVING THE
COST STRUCTURE OF
OUR DISTRIBUTION
CHAIN
Streamlining our
processes by digitizing
and automating
operations
EXPANSION OF THE
MARKETING
NETWORK FOR OUR
MAIN PRODUCTS
Our main markets
are China, the EU,
the UK, and the
Middle East
QUALITY AND
EFFICIENCY AS THE
BASIS OF OUR
OPERATIONS
A continuous
approach to develop-
ing and evolving
MISSION:
INNOVATING FOR HEALTH
REFINING OUR
PRODUCT
DEVELOPMENT
Streamlining opera-
tions by concentrat-
ing resources on
those projects critical
to our business
THE MAIN PRIORITIES FOR ENSURING PROFITABLE
GROWTH IN THE COMING YEARS ARE:
In 2022, Biohit’s strategy shifts
to the new era:
INNOVATION BASED
CUSTOMER CENTRIC HEALTH
TECHNOLOGY PIONEER
PROFITABILITY AS THE
FOUNDATION OF BUSINESS
OUR PRODUCTS AIM TO PROMOTE MEDICAL
RESEARCH AND EARLY DIAGNOSIS,
AND PREVENT SERIOUS ILLNESSES.
OUR PORTFOLIO INCLUDES INNOVATIVE
IN VITRO DIAGNOSTICS RELATED TO
DIGESTIVE TRACT, AND PRODUCTS THAT
BIND ACETALDEHYDE.
9
BIOHIT Annual Report 2021
Biohit in Brief CEO’s Review Strategy Corporate Governance Financial Statements
Innovative products
Carcinogenic acetaldehyde is one of the harmful substances in
tobacco smoke. Acetium
®
lozenge binds up to 90% of the
acetaldehyde in saliva.
Acetium
®
reduces the pleasure received from smoking, making it
easier to quit.
The effect of Acetium
®
lozenge on smoking cessation has been
investigated in two clinical studies. Regular use of the lozenge
during smoking increased the likelihood of quitting smoking by a
factor of 1.5 compared to the placebo. Acetium
®
lozenge does not
have the side effects associated with other methods of quitting
smoking, such as nicotine addiction or possible side effects from
medicines.
BIOHIT’S R&D COOPERATION ACROSS
DIFFERENT SCIENTIFIC FIELDS, IN
NOVATIONS AND APPLICATIONS HAVE
ESTABLISHED VALUABLE RESULTS
FOR HEALTHCARE WORLDWIDE. GAS
TROPANEL
®
TESTS AND ACETIUM
®
LOZENGES ARE EXAMPLES OF OUR
INNOVATIVE PRODUCTS FOR THE PRO
MOTION OF HEALTH AND PREVENTION
OF DISEASES.
GASTROPANEL
®
GASTRIC
HEALTH TEST
GastroPanel
®
is a unique test developed by Biohit for the diagnosis
of upper abdominal disorders. GastroPanel
®
reliably evaluates the
health of the gastric lining. Launched in 2021, the GastroPanel
®
rapid tests can deliver results in just 15 minutes.
GastroPanel
®
combines four tests to analyze the health of the
stomach from a blood sample. The quick test is performed with a
fingerprick blood sample. GastroPanel
®
is suitable for diagnosing
atrophic gastritis and Helicobacter pylori infections, as well as for
assessing the risk of stomach cancer. The GastroPanel
®
test deter-
mines the levels of type I and II Pepsinogens, Gastrin-17, and antibody
levels for Helicobacter pylori found in the blood. The tests are based
on enzyme-linked immunosorbent assays (ELISA).
ACETIUM
®
LOZENGE
QUIT SMOKING
WITHOUT NICOTINE
10
BIOHIT Annual Report 2021
Biohit in Brief CEO’s Review Strategy Corporate Governance Financial Statements
Corporate Governance
Statement 2021
INTRODUCTION
Biohit Oyj has prepared this Corporate Govern-
ance Statement based on Section 54 of the Finn-
ish Corporate Governance Code for listed
companies issued by the Securities Market Asso-
ciation. The company will publish separate renu-
meration report for the financial year 2021 for
governing bodies according to new shareholders
right directive. The existing renumeration policy
and information on the renumeration to the rest of
the management team the company publishes on
its website www.biohit.fi/investors.
The Board of Directors reviewed the renumera-
tion report.
The Report of the Board of Directors, the Audi-
tor’s Report, and the full Corporate Governance
Statement, the renumeration policy and the rest
of the management team renumeration are avail-
able at www.biohit.fi/investors.
RULES OBSERVED BY BIOHIT
Biohit Oyj is a Finnish public limited company
whose series B shares are listed on Nasdaq Hel-
sinki in the Small cap/Healthcare group. Biohit
Group (hereinafter referred to as “Biohit”) com-
prises the parent company, Biohit Oyj, and its
foreign subsidiaries, which primarily focus on
sales and marketing for Biohit Oyj’s products.
Biohit is headquartered in Helsinki.
Biohit’s governance complies with applicable
legislation, standards and recommendations
concerning public listed companies, the regula-
tions of Nasdaq Helsinki Ltd, and Biohit Oyj’s
Articles of Association. Biohit Oyj has adminis-
tered its affairs in compliance with the corporate
governance code for Finnish listed companies
2021, and this Statement has been prepared in
accordance with the code. The Corporate Govern-
ance Code is available at
www.cgfinland.fi.
One of the members of the six-person Board
of Directors is independent of the company, so
the company does not fulfil recommendation
number 10 stating that the majority of the mem-
bers of the Board of Directors must be independ-
ent of the company. The company deviates from
the recommendation because the current Board
composition has the best available competence
to lead the company on its existing strategy.
Biohit’s Board of Directors is one of the best in
its size according to the Nordic Business Diver-
sity Index, which measures Board diversity in
Finland, Sweden, and Denmark through four
different variables: age, gender, education back-
ground and nationality.
The company strives to comply with high inter-
national standards of corporate governance and
the key principles of corporate governance among
Finnish listed companies.
BIOHIT’S ADMINISTRATIVE BODIES IN
2021
The highest decision-making power at Biohit Oyj
is exercised by the company’s shareholders at the
Annual General Meeting. The company’s Board of
Directors supervises the administration and
organisation of the company and the Group’s
earnings trends. The President & CEO is respon-
sible for operative management and is assisted by
the Management Team.
Annual General Meeting
In 2021, Biohit Oyj held its Annual General Meet-
ing on 23 June 2021 in Helsinki. 7,585,133 shares
and 63,787,133 votes were represented at the
meeting, corresponding to 50.41% of all the
shares in the company and 89.11% of the votes.
The meeting was attended by one of the six mem-
bers of the Board of Directors, the President &
CEO, and the principal auditor.
Board of Directors
The Board of Directors, which comprises 5–7
members elected by the Annual General Meeting,
is responsible for the administration and appro-
priate organisation of Biohit’s business opera-
tions. Proposals concerning membership of the
Board of Directors are prepared by the Board of
Directors. Biohit has defined the principles apply-
ing to diversity within the Board of Directors in
accordance with recommendation 9 of the corpo-
rate governance code. Biohit’s objective is for both
sexes to be represented on the company’s Board
of Directors. In line with this objective, the Board
of Directors had members of both sexes.
The Board of Directors elects a chairman from
amongst its members.
Board members’ terms of office run from the
date of their election by the AGM until the end of
the next AGM.
The Board’s areas of responsibility are stated in
the written rules of procedure approved by the
Board. They are as follows:
• Increasing shareholder value
• Ensuring the appropriate organisation of
accounting and financial management
• Approving Biohit Oyj’s financial statements,
consolidated financial statements and the
Report of the Board of Directors for the most
recent financial period
• Approving the half year financial report annually
for the period ending at the end of June
• Deciding on Biohit’s business plan, budget, and
investment plan
• Deciding on Biohit’s financing and risk
management policies
• Approving the remuneration and incentive
schemes for senior managers
• Appointing the President & CEO
• Deciding on Biohit’s strategy, organisational
structure, investments, and other wide-
reaching and significant issues
11
BIOHIT Annual Report 2021
Biohit in Brief CEO’s Review Strategy Corporate Governance Financial Statements
The Board’s decision-making is based on reports
prepared by the company’s operative management
on the operational development of the Group and its
business units.
The Chairman is responsible for convening Board
meetings and arranging the work of the Board. The
Board convenes 5–12 times per year, usually meet-
ing once every month or once every two months, and
the meeting schedule for the entire term is con-
firmed in advance. When necessary, Board meetings
are held more frequently or by teleconference.
Board of Directors in 2021
Until the Annual General Meeting held on 23 June
2021, the following seven people were on the Board
of Directors: Osmo Suovaniemi (chairman), Eero
Lehti, Liu Feng, Franco Aiolfi, Lea Paloheimo, Matti
Härkönen and Timo Joensuu. At the Annual General
Meeting on 23 June 2021, Osmo Suovaniemi, Eero
Lehti, Liu Feng, Franco Aiolfi, Matti Härkönen and
Lea Paloheimo were re-elected to the Board of
Directors to serve until the end of the Annual Gen-
eral Meeting in 2022. The Board of Directors elected
Eero Lehti as its chairman.
Biohit Oyj’s Board of Directors convened 9 times
in 2021 (7 times in 2020). The average attendance
was 92 per cent (93 per cent)
.
Biohit Oyj’s Board of Directors 31 Dec 2021
Eero Lehti (b. 1944) MSc (Soc. Sci.), holder of the
Finnish honorary title of “kauppaneuvos”,
Honorary Doctor of Economics
• Chairman of the Board and member since 2009
• Non-Independent of the major shareholders
and of the company
• Member of Parliament between 2007-2019
• Founder of Taloustutkimus Oy and the
Chairman of its Board
• Attended 8 Board meetings in 2021
• Direct shareholding: series B shares: 2,000
Osmo Suovaniemi (b. 1943), professor h.c., MD,
PhD
• Member of the Board since 1988 and Chairman
2011-2021
• Non-independent of major shareholders and of
the company
• Founder of Biohit and its former President &
CEO
• Attended 9 Board meetings in 2021
• Direct shareholding: series A shares: 2,018,310;
series B shares: 0
Franco Aiolfi (b. 1947) Degree in Pharmacy
awarded by the University of Urbino
• Member of the Board since 2013
• Independent of the major shareholders but
non-independent of the company
• Attended 9 Board meetings in 2021
• Direct shareholding: no Biohit shares
• Indirect shareholding: Majority owner of
BioBrick S.p.A. 31.12.2021. BioBrick S.p.A.
owned 92,807 series B shares in 31.12.2021
Matti Härkönen (b. 1933) emeritus professor, MD,
PhD
• Member of the Board since 2017
• Non-independent of major shareholders and of
the company
• Doctor of Medicine and Surgery (MD, PhD) and
Emeritus Professor of Clinical Chemistry at the
University of Helsinki
• Serves as scientific advisor to Biohit Oyj
• Attended 9 Board meetings in 2021
• Direct shareholding: series A shares: 57,200;
series B shares: 267,965
• Indirect shareholding via Oy Tech Know Ltd, a
company under his control: series A shares:
24,990; series B shares: 43,600
Liu Feng (b. 1972) General Manager of Hefei
Medicine Co., Ltd, Owner of Biohit Healthcare
Hefei
• Member of the Board since 2018
• Non-independent of the major shareholders
and of the company
• Special researcher at the Counselor’s Office of
Anhui Provincial People’s Government
• The vice chairman of the Chinese National
Early Gastrointestinal-Cancer Prevention &
Treatment Center
• Alliance member of the council of the China
Health Promotion Foundation
• Attended 6 Board meetings in 2021
• Indirect shareholding via Biohit Healthcare
(Hefei) Co., Ltd.: series A shares: 850,000, B
shares: 4,095,415
Lea Paloheimo (b. 1951) PhD (clinical
biochemistry), hospital chemist
• Member of the Board since 2019
• Independent of the major shareholders but
non-independent of the company
• Employed by Biohit Oyj during 2001-2019,
recently working as a Production and Product
Development Director and Business
Development Director.
• Attended 9 Board meetings in 2021
• Direct shareholding: series B shares: 7,000
Board committees
The Board of Directors have assessed that the
scope of the Biohit Oyj’s business does not require
the appointment of a separate Audit Committee,
and consequently no separate committees have
been appointed to increase the efficiency of the
Board.
President & CEO
The President & CEO is responsible for the day-
to-day management of the company in
accordance with the instructions and regulations
issued by the Board of Directors. The President &
CEO of the parent company is elected by the
Board and acts as Group President. He also
ensures the appropriate organisation and legality
of the company’s accounting and asset
management. The terms of employment of the
President & CEO are based on a written contract
that is approved by the Board of Directors. The
President & CEO cannot be elected Chairman of
the Board. During the financial period Semi
Korpela MSc Econ. (until 17.5.2021), Professor
Osmo Suovaniemi (18.5.-31.8.2021) and Päivi
Siltala MSc (starting 1.9.2021).
Päivi Siltala (b. 1974) MSc
• CEO starting 1.9.2021
• Previously: Sales Director at Johnson &
Johnson and Cook Medical Endoscopy.
Business Development Director at Pentax
Medical
• No direct shareholding
• With Biohit Oyj since 2021 and
previosly 2008–2010
Osmo Suovaniemi, b. 1943 MD, PhD
• Direct shareholding: series A shares: 2,018,310;
series B shares: 0
Semi Korpela, b. 1970 MSc (Econ)
• Direct shareholding: series B shares: 12
12
BIOHIT Annual Report 2021
Biohit in Brief CEO’s Review Strategy Corporate Governance Financial Statements
Group Management Team
The composition and areas of responsibility of the
Group’s Management Team were as follows: Päivi
Siltala (President & CEO), Jussi Hahtela (finance,
ICT, HR), Suvi Elomaa (production) Minna Mäki
(R&D and production), Ilari Patrakka (sales and
marketing) and Daniela Söderström (quality and
registration).
Jussi Hahtela (b. 1973) MSSc
• Finance, HR, ICT
• With Biohit Oyj since 2021
• Previously: Chief strategist and Head of FM/MM
Sales Finland, Nordea Markets
• No direct shareholding
Suvi Elomaa (b. 1985) Biotechnology and food
engineer
• Production Director
• With Biohit Oyj since 2013
• Previously: Project engineer at the Institute of
Biomedicine, Department of Physiology at
University of Turku
• No direct shareholding
Minna Mäki (b. 1969) Ph.D. (Molecular
microbiology)
• R&D and Production Director
• With Biohit Oyj since 2018
• Previously: At Orion Diagnostica Oyj. Before
that, Product Development Director at Mobidiag
Ltd and researcher at the University of Helsinki.
• No direct shareholding
Ilari Patrakka (b. 1980) MSc (Econ.)
• Sales and Marketing Director
• With Biohit Oyj since 2012
• Previously: retail sales channel manager at
Marioff Corporation Oy, marketing and export
manager at Gasmet Technologies Oy, sales
manager at Gasmet Technologies (Asia) Ltd.
• Direct shareholding: series B shares: 4,116
Daniela Söderström (b. 1987) MSc (Tech.)
• Quality and Regulatory Affairs Director
• With Biohit Oyj in the field of quality
management since 2014.
• Direct shareholding: series B shares: 30,000
Management of subsidiaries
The Managing Directors of the subsidiaries are
responsible for the management of subsidiary
operations and report to the President & CEO of
the parent company. The subsidiaries are
responsible for the sales and marketing of Biohit’s
products in their market areas. The managers of
subsidiaries operate under the management and
supervision of Biohit’s President & CEO. In 2021,
the Managing Directors of Biohit’s subsidiaries
were: Graham Johnson (United Kingdom) and
Franco Aiolfi (Italy). The personal details and
shareholdings of Biohit Oyj’s Board of Directors
and operative management are available at
www.biohit.fi/investors.
Decision-making procedure concerning
remuneration
The renumeration policy and the rest of the
management team renumeration are available at
www.biohit.fi/investors.
Remuneration of members of the Board of
Directors
The Annual General Meeting approves the fees of
Biohit Oyj’s Board of Directors. The remuneration
paid to the other members of Biohit Oyj’s Board of
Directors is decided by the company’s Board of
Directors in accordance with the company’s rules
on related-party transactions, which are
described on section ”related-party transactions”.
13
BIOHIT Annual Report 2021
Biohit in Brief CEO’s Review Strategy Corporate Governance Financial Statements
President & CEO and other company
management
The Board approves the President & CEO’s remu-
neration and terms of employment. The severance
payment is not included in the President & CEO’s
terms of employment.
The Board approves the remuneration and
terms of employment of members of the Manage-
ment Team. Biohit Oyj’s Board of Directors
approves the principles of the incentive schemes
for Management Team members and the Presi-
dent & CEO.
The President & CEO approves the salaries and
profit-based incentives of subsidiaries’ Managing
Directors in accordance with the instructions
provided by Biohit’s Board of Directors. Prof-
it-based incentives are dependent on sales and
profitability trends for each unit.
Pension plans
No other pension arrangements, beyond those
mandated by law, have been made with the Man-
aging Directors of Group companies.
MAIN CHARACTERISTICS OF INTERNAL
CONTROL OF THE FINANCIAL REPORTING
PROCESS AND RISK MANAGEMENT
Biohit’s internal control is responsible for ensur-
ing that the Group carries out its business opera-
tions within the framework of current regulations
and legislation and in accordance with the
instructions of the Board of Directors. Internal
control seeks to ensure that the Group operates
with maximum efficiency and that efforts are
made at various levels of the organisation to
achieve the objectives set in the strategy approved
by the Board of Directors. Risk management is
geared towards supporting the achievement of
these objectives by anticipating and managing
business-related risks
Control environment
Biohit’s business operations and administration
aim to realise the company’s values, of which the
most important is to promote health and wellbe-
ing through innovation. Biohit will continue to
focus on its diagnostics business and products
that bind acetaldehyde – the areas where the
company conducts global operations in manufac-
turing, sales and marketing.
Biohit’s control environment is defined by the
Board of Directors, which, as the highest adminis-
trative body, is responsible for organising internal
control. The President & CEO is responsible for
maintaining the efficiency of the control environ-
ment and the functionality of internal control.
Biohit’s financial department is responsible for
the functionality of financial reporting as well as
the interpretation and application of financial
statement standards in line with the separately
approved instructions.
Risk assessment
In the assessment of risks related to financial
reporting, Biohit’s objective is to identify the major
risks associated with the Group’s business opera-
tions and environment. The cost-effective man-
agement and monitoring of these risks will then
ensure that the company’s strategic and opera-
tional targets can be reached as intended.
The Board of Directors carries the main respon-
sibility for risk assessment and monitoring the
implementation of risk management. The President
& CEO works with the parent company’s operative
management and subsidiaries’ managers to ensure
that the Group’s risk management is duly arranged.
The parent company’s 17 operative management is
responsible for identifying and managing the risks
involved within each business area, while the sub-
sidiaries’ Management Teams are responsible for
those in their own market areas.
Risk management is one of the areas covered
by Biohit’s internal control processes, which
regularly monitor the risks associated with the
company’s business operations, identify any
changes and, if necessary, take appropriate action
to hedge against them. Risk management focuses
on ensuring the continuity of business operations
and preventing financial misconduct.
Control measures
Internal control measures are integrated into the
Group’s general business management and
reporting process. The subsidiaries report to
Group Management on business and earnings
trends and the most significant deviations on a
monthly and quarterly basis. The Group’s Man-
agement Team reports to the Board of Directors
on the overall development of business; these two
bodies, together with the President & CEO, decide
on overall corporate strategies and procedures
guiding the operations of the Group.
The subsidiaries’ Boards follow business devel-
opments and ensure that the parent company’s
approved instructions and guidelines are followed.
As a rule, the Boards of Directors of the subsidi-
aries meet monthly. Board work in the subsidiar-
ies is based on financial reports and the written
monthly and annual reports drawn up by subsidi-
ary management.
Biohit’s business control is carried out in
accordance with the management system
described above. The company provides the report-
ing systems necessary for business and financial
management. The financial department of the
parent company provides instructions for drawing
up annual and interim financial statements and
prepares the consolidated financial statements.
The parent company’s finance department
retains central control of funding and administra-
tive matters within the framework of the instruc-
tions provided by the Board of Directors and the
President & CEO and is also responsible for the
management of interest and exchange rate risks.
The Managing Directors of the subsidiaries
ensure that the subsidiaries’ reporting is carried
out in accordance with the instructions given by
the Group’s Management Team.
The parent company’s administration depart-
ment controls and provides instructions on Group-
level personnel policies and any agreements
made within the Group.
Disclosure policy
Biohit aims to provide all its stakeholders with
information about the company’s operations in a
proactive, consistent and timely manner. The com-
pany seeks to take the special requirements and
interests of all its stakeholders into account in its
communications in order to increase confidence
in the company and thereby promote its business
operations. Biohit’s Board of Directors has
approved an information release policy with a view
to ensuring the accuracy and reliability of any
information released. The policy also specifies
who is responsible for communications in differ-
ent situations.
Biohit’s financial department regularly provides
information on processes related to financial
administration reporting. This ensures the real-
time availability of data, which is a prerequisite for
efficient internal control.
Financial administration guidelines and the
company’s information release policy aim to
ensure the promptness and comprehensiveness
of communications and the release of information
required for internal control purposes.
Monitoring
The efficiency of internal controls on financial
reporting is overseen by the Board of Directors,
14
BIOHIT Annual Report 2021
Biohit in Brief CEO’s Review Strategy Corporate Governance Financial Statements
the President & CEO, Management Team mem-
bers, and the Managing Directors of subsidiaries.
Control focuses on following weekly and monthly
financial reports and forecasts and analysing any
deviations from business plans. Monitoring is
performed at all Board and Management Team
meetings where reports are reviewed. It is sup-
ported by regular contact between Group Man-
agement and the company’s auditor, and analysis
of any deviations, which occurs at least once per
quarter.
The audit frameworks for the Group’s subsidi-
aries and key audit areas are jointly defined by
the Group’s financial management and the chief
auditor. Biohit has not appointed a separately
organised function for internal auditing purposes,
but Biohit’s financial department has responsibil-
ity to implement it in practise.
The Group has internal control reporting sys-
tems required for financial management and
monitoring business development. The reporting
systems produce monthly financial data, so that
financial management can ensure compliance
with the parent company’s approved instructions
on matters such as authorisation.
The Group’s auditor and the auditors of each
subsidiary evaluate the effectiveness of the inter-
nal control system in connection with the exter-
nal audit.
AUDIT 2021
The auditor elected by the AGM is responsible for
Biohit’s statutory audit. According to the Articles
of Association, the company must have one audit-
ing body approved by the Central Chamber of
Commerce. The 2021 Annual General Meeting
re-elected auditing firm PricewaterhouseCoopers
Oy as the company’s auditor for a one-year term,
with Tiina Puukkoniemi, Authorised Public
Accountant, as chief auditor.
Auditor and auditor’s fees
The 2021 Annual General Meeting decided to pay
auditor’s fees in accordance with the auditor’s
invoice. The Group’s invoiced auditors’ fees for
the 2021 financial period totalled EUR 88,300
(EUR 105,000 in 2020). In addition to this, Price-
waterhouseCoopers Oy was paid a total of EUR 0
for other services (EUR 0 in 2020).
RELATEDPARTY TRANSACTIONS
The company keeps a list of its related parties,
and it regularly engages in transactions with
some of these parties. These transactions are
related to the company’s ordinary business activi-
ties, they are appropriate in terms of the compa-
ny’s operations and they are executed on ordinary
market terms. The company’s financial manage-
ment monitors and supervises related-party
transactions as part of the company’s normal
reporting and supervision practices. Relevant
transactions between the company and its related
parties are reported annually in the notes to the
company’s consolidated financial statements. The
company’s Board of Directors makes all relevant
decisions concerning related-party transactions.
Decision-making is based on particularly thor-
ough preparation and appropriate reports, state-
ments and estimates. Preparation of
related-party transactions, decision-making and
approval have been arranged to take account of
disqualification rules and appropriate deci-
sion-making entities.
Biohit Oyj’s Board of Directors made following
decision on 2021 related party transactions
1. As part of his work as the head of scientific
advisory board, Osmo Suovaniemi’s
compensation will be the same as in 2020,
when his compensation amounted to 200,000
EUR
2. As part of his work as the managing director
of Biohit Healthcare S.r.I, Franco Aiolfi will be
paid a fixed fee of 36,000 EUR in 2021 (36,000
EUR in 2020)
3. BioAir S.p.A. which delivers finance, quality,
and IT services to Biohit Healthcare S.r.I will
be paid 69,000 EUR in 2021
4. The members of the scientific advisory board
will be paid 85 EUR per hour for the work
outside the scientific advisory board
5. Oy Tech Know Ltd., company controlled by
Matti Härkönen, is paid same consulting fee
in 2021, 48,000 EUR, as in 2020
INSIDERS
Biohit applies the Guidelines for Insiders
approved by Nasdaq Helsinki Ltd, as well as any
relevant amendments.
Biohit’s President & CEO is responsible for
insider control. He ensures that people who
handle insider information are aware of insider
regulations and adhere to trading restrictions.
Insiders are not allowed to trade Biohit Oyj secu-
rities for 30 days before the publication of the
company’s financial statement bulletin and
interim reports. Insiders participating in projects
are not allowed to trade shares in Biohit before
an announcement has been made of the continu-
ation or discontinuation of a project.
Information on the shareholdings of Biohit’s
insiders and their trading activity is available on
Biohit’s website at www.biohit.fi/investors.
15
BIOHIT Annual Report 2021
Biohit in Brief CEO’s Review Strategy Corporate Governance Financial Statements
Information for Shareholders
GENERAL MEETING OF
SHAREHOLDERS
Biohit Oyj’s Annual General Meeting has
been planned for Wednesday 15 June 2022
in Helsinki, Finland. The Board of Directors
will call the General Meeting.
BOARD OF DIRECTORS’ PROPOSAL
REGARDING THE DISTRIBUTION OF
PROFITS
On 31 December 2021, the parent compa-
ny’s distributable assets (unrestricted
equity) amounted to EUR 4,195,824.36,
including the loss for the financial period of
EUR 1,592,724.36. The Board of Directors
proposes to the Annual General Meeting
that no dividend be distributed by the com-
pany for the most recent financial period.
SHARES
Total number of shares: 15,045,593
(15,045,593 in 2020)
Series A shares (20 votes per share):
2,975,500 (2,975,500 in 2020)
Series B shares (1 vote per share):
12,070,093 (12,070,093 in 2020)
Biohit Oyj’s series B shares are listed in the
Nasdaq Helsinki Ltd Small Cap group. The
shares are traded under the symbol BIOBV.
More detailed information about Biohit Oyj’s
shares is provided in the notes to the consolidated
financial statements and on the company’s web-
site at www.biohithealthcare.com/investors.
FINANCIAL COMMUNICATIONS
The financial reviews and other stock exchange
releases published by Biohit are available on the
company’s website at www.biohithealthcare.com/
investors. You can also subscribe to receive finan-
cial communications by email using the subscrip-
tion form on the website.
PUBLICATION DATES FOR FINANCIAL
REPORTS IN 2022
Wednesday 10 August 2022: Interim report, Janu-
ary–June (H1).
SILENT PERIOD
Biohit observes a silent period of 30 days before
results are published. During this period, Biohit’s
management and other personnel will not provide
information about the company’s financial posi-
tion or marketrelated comments, nor will they
meet with representatives from equity markets or
the financial media. However, if an event that
requires immediate publication takes place dur
ing the silent period, Biohit will publish informa-
tion without delay in accordance with disclosure
regulations. In such cases, the company is able to
comment on the event.
16
BIOHIT Annual Report 2021
Biohit in Brief CEO’s Review Strategy Corporate Governance Financial Statements
Board of Directors
OSMO SUOVANIEMI
b. 1943
professor h.c., MD, PhD
Member of the Board since 1988 and Chairman 2011-2021
Non-independent of major shareholders and of the company
Other relevant experience:
• The founder and previous President & CEO of Biohit Oyj
• The founder, main shareholder, chairman, and CEO of
Labsystems Oyj and Eflab Oy
• Around 70 patents in Finland and several hundreds abroad.
• A board member, vice-chairman, and chairman of the General
Industry Group in Finland in 1978–1986
• A board member of the Confederation of Finnish Industry in
1986
• A member of the Academy of Technical Sciences from 2003
EERO LEHTI
b. 1944
MSc (Soc. Sci.),
holder of the Finnish honorary title of “kauppaneuvos”,
member of parliament until 2019
Chairman of the Board and member since 2009
Non-Independent of the major shareholders
and of the company
Other relevant experience:
• Member of Parliament
• Founder and Chairman of Taloustutkimus Oy
• Chairman and main owner of Suomen Lehtiyhtymä Oy
• Chairman of Fennia, Henki-Fennia, Eila Kaisla Oy
• A board member of the TEKES
• Chairman of Kerava Municipal Board
FRANCO AIOLFI
b. 1947
Degree in Pharmacy awarded by the
University of Urbino
Member of the Board since 2013
Independent of the major shareholders
but non-independent of the company
Other relevant experience:
• Managing Director of BioAir S.p.A. in 31.12.2020 and
majority owner through Arsfin Consult Srl
17
BIOHIT Annual Report 2021
Biohit in Brief CEO’s Review Strategy Corporate Governance Financial Statements
LIU FENG
b. 1972
General Manager of Hefei Medicine Co., Ltd
Member of the Board since 2018
Non-independent of the major shareholders
and of the company
Other relevant experience:
• Special researcher at the Counselor’s Office of Anhui
Provincial People’s Government
• The vice chairman of the Chinese National Early
GastrointestinalCancer Prevention & Treatment Center
Alliance
• Member of the council of the China Health Promotion
Foundation.
• In 2013, Liu Feng and his companies and Biohit Oyj
established a joint venture Biohit Healthcare (Hefei) Co., Ltd
MATTI HÄRKÖNEN
b. 1933
emeritus professor, MD, PhD
Member of the Board since 2017
Non-independent of major shareholders
and of the company
Other relevant experience:
• Emeritus Professor of Clinical Chemistry at the
University of Helsinki
• Doctor of Medicine and Surgery MD, PhD)
• Medical Officer at Yhtyneet Laboratoriot Oy
• About 280 scientific publications
• Responsible for the clinical trials and related
development work at Biohit Oyj
• Acts as a scientific advisor to Biohit Oyj
LEA PALOHEIMO
b. 1951
PhD (clinical biochemistry), hospital chemist
Member of the Board since 2019
Independent of the major shareholders but non-
independent of the company
Other relevant experience:
• With Biohit Oyj during the years 2001-2019.
Production and Product Development Director,
Business Development Director
18
BIOHIT Annual Report 2021
Biohit in Brief CEO’s Review Strategy Corporate Governance Financial Statements
Group Management Team
MINNA MÄKI b 1969
Ph.D. (Molecular microbiology,
R&D and Production Director
With Biohit Oyj since 2018.
SUVI ELOMAA b 1985
Biotechnology and food engineer,
Production Director
With Biohit Oyj since 2013.
PÄIVI SILTALA b 1974
MSc, CEO
With Biohit Oyj since 2021 and
previosly 2008–2010.
DANIELA SÖDERSTRÖM b 1987
MSc (Tech.), Quality and Regulatory Affairs
Director
With Biohit Oyj since 2014.
ILARI PATRAKKA b 1980
MSc (Econ.), Sales and Marketing Director
With Biohit Oyj since 2012.
JUSSI HAHTELA b1973
MSSc, Finance, HR, ICT
With Biohit Oyj since 2021.
For more information on the members of the
Group Management Team, see page 12.
From left to right: Minna Mäki, Suvi Elomaa, Päivi Siltala, Daniela Söderström, Ilari Patrakka and Jussi Hahtela.
19
BIOHIT Annual Report 2021
Biohit in Brief CEO’s Review Strategy Corporate Governance Financial Statements
Financial statements
TABLE OF CONTENTS
REPORT BY THE BOARD OF DIRECTORS ……………………20
CONSOLIDATED FINANCIAL STATEMENTS
*
………………24
Consolidated Comprehensive Income Statement
*
……24
Consolidated Balance Sheet
*
……………………………………25
Statement of Changes in Consolidated
Shareholders’ Equity
*
………………………………………………27
Consolidated Cash Flow Statement
*
…………………………28
NOTES TO THE PARENT COMPANY’S FINANCIAL
STATEMENTS
*
……………………………………………………………30
KEY INDICATORS ………………………………………………………50
SHARES AND SHAREHOLDERS …………………………………52
FORMULAE FOR CALCULATING KEY INDICATORS ……54
PARENT COMPANY’S INCOME STATEMENT FAS
*
……55
BOARD OF DIRECTOR’S PROPOSAL
REGARDING THE DISTRIBUTION OF PROFITS
*
…………65
AUDITOR’S REPORT ……………………………………………………66
*part of the financial statements
20
BIOHIT Annual Report 2021
Biohit in Brief CEO’s Review Strategy Corporate Governance Financial Statements
Biohit’s revenue grew 31.4% from previous year. Solid balance sheet creates
good conditions to business development and utilizing of products’
commercial potential. Biohit’s equity ratio was 76.3% at the end of financial
year (80.8%). Company’s financial assets totalled EUR 4.6 million (EUR 5.3
million)
BIOHIT GROUP KEY FIGURES
1–12/2021 1–12/2020
Revenue (MEUR) 9.4 7.1
EBITDA (MEUR) 0.5 -1.2
Operative EBITDA (MEUR) 0.5 -1.2
Operating profit/loss (MEUR)* -1.5 -3.2
Profit/loss before taxes (MEUR) -1.3 -3.3
Profit/loss for the period (MEUR) -1.5 -3.3
Average number of personnel 44 45
Number of personnel at the end of the period 41 46
Equity ratio (%) 76.3% 80.8%
Earnings per share (EUR). Undiluted -0.10 -0.22
Earnings per share (EUR). Diluted -0.10 -0.22
Shareholders' equity per share (EUR) 0.49 0.58
Average number of shares during the period 15,045,593 15,045,593
Number of shares at the end of the period 15,045,593 15,045,593
* In 2017 we capitalized the patent regarding divestment of Biohit Healthcare (Hefei) Co. Ltd. which is depreciated EUR 1.5 million
annually until end of 2021.
SUMMARY
REPORT BY THE BOARD
OF DIRECTORS 2021
• Revenue EUR 9.4 million (EUR 7.1 million)
• Revenue grew by 31.4% compared to 2020
• Operative EBITDA EUR +0.5 million (EUR -1.2 million)
• Cash at the end of the period EUR 1.1 million (EUR 1.0 million)
• ROE -18.7% (-28.5%)
• Fair value of Genetic Analysis AS investment EUR 0.9
million (EUR 0.8 million 31 December 2020)
• Revenue from international operations 97.5% (96.1%) of total revenue
• Equity ratio 76.3% (80.8%)
21
BIOHIT Annual Report 2021
Biohit in Brief CEO’s Review Strategy Corporate Governance Financial Statements
REPORTING
Biohit’s product portfolio consists of diagnostic tests, analysis
systems, products binding carcinogenic acetaldehyde into a
harmless compound, monoclonal antibodies, as well as laboratory
operations for research and development. The entire product and
service portfolio is reported under a single segment.
REVENUE AND EBIT
Revenue grew by 31.4% from 2020. Revenue from international
operations was 97.5% (96.1%) of total revenue. EBIT was EUR -1.5
million (EUR -3.2 million).
Consolidated revenue and operating profit
MEUR 2021 2020
Revenue MEUR 9.4 7.1
Operating income MEUR -1.5 -3.2
ALTERNATIVE PERFORMANCE MEASURES
Bridge calculation of operative EBITDA
€ 1,000 2021 2020
Operating profit/loss -1,480 -3,174
Depreciation and amortization 1,988 1,997
IFRS 2 Share based payments 17 -
Operative EBITDA 524 -1,178
BALANCE SHEET, FINANCING AND
OPERATIONAL CONTINUITY
On the 31 December 2021 the balance sheet totalled EUR 9.6
million (EUR 10.8 million 31 Dec 2020). At the end of the reporting
period our equity ratio stood at 76,3% (80.8% 31 Dec 2020).
The balance sheet has decreased mainly due to China patents
amortization by EUR 1.5 million.
Biohit Oyj has a stable financing position. On the 31 December
2021 company’s financial assets totalled EUR 4.6 million (EUR 5.3
million) which does not include Genetic Analysis AS shares.
The company has managed to keep its working capital on a good
level and the management believes that working capital will cover
the operations for the next 12 months and the company is not
dependent on external financing to be able to guarantee the
continuity of its operations. Cash flow from operating activities was
EUR -0.4 million during the review period and EUR -0.0 million
during the second half of the year. Company’s management
assessment is that company’s ability to continue its operations is
good and there are no indications towards events or circumstances
that alone or together might give a significant reason to doubt the
organisation’s ability to continue its operations.
INVESTMENTS
Gross investments during the the 1-12/2021 reporting period
totalled EUR 0.0 million (EUR 0.0 million).
PERSONNEL
During the review period the Biohit Group employed on average 44
(45) people of whom 35 (36) were employed by the parent company
and 9 (9) by the subsidiaries.
SHORTTERM RISKS AND UNCERTAINTY FACTORS
Biohit’s key risks are related to prolongation of the coronavirus
pandemic, the success of product registrations and the selection
and development of new market areas and distribution channels.
Rising inflation and especially higher cargo tariffs are a thread to
Biohit’s competitiveness. Global component shortage is also a risk
factor.
The diagnostic industry is heavily regulated, and this may have
an effect on Biohit’s sales. The duration of the product registration
process is different in each market area. For this reason, it is not
possible to accurately assess the time taken for the authorities to
handle registrations and for product sales to begin.
It is also critical in the short-term to implement the changes in
Biohit’s product portfolio and processes according to new IVDR EU
regulation, so that the sales of the existing products can continue.
When investing liquid assets, the objective is to gain a return on
investment with a low risk of equity loss. The investment portfolio
consists of deposits, investment funds and corporate loans. A
fundamental aspect in portfolio management is sufficient
diversification across different asset classes, investment
instruments and counterparties. The investment portfolio is
subject to equity risk that is managed by diversification and
allocation decisions. The portfolio is also subject to interest rate
risk, which is managed by adjusting the duration of the portfolio. In
addition, general instability in the financial markets impacts
negatively on the value of the investment portfolio.
The Group’s investment in listed Genetic Analysis AS is subject
to changes in share price and EUR/NOK foreign exchange rate.
Biohit’s customer base is widely diversified, with the exception of
certain GastroPanel
®
products sales in China, which currently
represents a major single business for Biohit. Otherwise the
company is not significantly dependent on individual customers or
project deliveries.
Balance sheet and sales of the Biohit’s UK subsidiary are in GBP.
As a result, Biohit is exposed to risk of GBP weakening. Otherwise,
most of the company’s business is conducted in EUR and the
indirect effects of currency exchange rate fluctuations are
considered insignificant.
OUTLOOK FOR 2022
Biohit expects its 2022 profitability to improve comparing with 2021
(2021: EUR -1.5 million).
The prolonged COVID-19 casts a shadow as it stresses
healthcare resources and limits the demand for other diagnostics.
More information on the risks can be found in the section “short-
term risks and uncertainty factors”.
MAIN EVENTS IN THE FINACIAL YEAR
Revenue growth
Biohit’s revenue grew to EUR 9.4 million (2020: EUR 7.1 million,
growth 31.4%). EBITDA was EUR +0.5 million. Growth from
previous year was EUR 1.6 million. Bottom line was still in minus,
but this was almost entirely caused by the depreciation from China
patents. These depreciations have been carried out since 2017 and
they ended as planned in 2021. Compared to the previous year,
fixed costs decreased by EUR 0.1 million due to the business
development and streamlining measures.
A settlement with Biohit Healthcare (Hefei) Co. Ltd in a dispute
relating to patent licensing agreement contributed positively to H2
earnings. Actualized royalty payments were bigger than provisions.
In H1/2021 Biohit was granted funding for two R&D projects by
the European Union and Business Finland. The total amount of
these grant fundings is EUR 0.9 million, of which EUR 0.2 million
was deferred as a revenue to the reporting period. State Treasury
22
BIOHIT Annual Report 2021
Biohit in Brief CEO’s Review Strategy Corporate Governance Financial Statements
of Finland granted Biohit COVID-19 business cost support worth
EUR 0.2 million for inflexible costs. Centre for Economic
Development, Transport and the Environment decided to grant
Biohit Oyj EUR 0.2 million support for corporate development, this
support had no financial impact on the reporting period.
Biohit owns 5.71% of the Norwegian Genetic Analysis AS.
Genetic Analysis AS listed on October 1, 2021 in the Swedish
Spotlights Stock Market exchange. After the listing, the fair value
of the Genetic Analysis can be determined using public market
prices.
Expanding distribution network and CE
mark for GastroPanel
®
Quick Test
GastroPanel
®
quick test is the further development of the unique
Biohit GastroPanel examination which is the most important
product for us in terms of revenue. GastroPanel quick test is based
on immunoassay method detecting GastroPanel biomarkers from
EDTA-plasma or finger prick blood. In August 2021 we received CE
mark for the plasma version and we will extend the CE mark of the
GastroPanel quick test to also include finger-prick blood samples.
The COVID-19 pandemic has challenged the clinical research
projects, but we are confident to finalize the studies soon.
The global need in health care is evident for reliable quick tests
intended for diagnosing Helicobacter pylori infection, atrophic
gastritis and cancer risk from patients with dyspeptic symptoms.
Biohit has actively widened the coverage of its sales activities in
the global markets. During the year 2021 we have signed four
remarkable distribution agreements for GastroPanel in South
Africa and Malaysia and Acetium lozenge, nicotine free smoking
cessation method, in Chile and Switzerland.
New CEO
The Board of Directors of Biohit Oyj appointed MA Päivi Siltala the
CEO of the company starting September 1, 2021. Siltala joined
Biohit from Johnson & Johnson where she was Sales Director.
Besides Biohit and Johnson & Johnson, Siltala has worked in
leading sales and business development positions at Pentax
Medical and Cook Medical Endoscopy.
RESEARCH AND DEVELOPMENT AND CLINICAL STUDIES
R&D operations focus on innovations, as well as product
development and further improved usability. Biohit also employs
external experts and subcontractors in its R&D operations.
Development expenditure has not been capitalized. Research
and development expenditure during the 1-12/2021 reporting
period amounted to EUR 1.2 million (EUR 1.0 million) of which the
second half-year accounted for EUR 0.5 million (EUR 0.5 million).
In August Biohit launched CE-marked GastroPanel® quick test.
The Quick test system comprises an immunological test and
dedicated GP Reader device which interprets the result. The Quick
test enables first-line diagnosis and screening of dyspeptic
patients easier than ever before.
Next we will extend the CE mark of the GastroPanel quick test to
include finger-prick blood samples. Clinical performance studies
for finger-prick samples were on hold due to the COVID-19
pandemic. Clinical studies are now up and running again and
without any new obstacles the finger-prick version is expected to
be CE-marked by the end of May 2022.
The development of ColonView, screening test intended for
detection of fecal occult blood (FOB) in stool samples, have
continued in 2021.
FINNACIAL REPORTING
Biohit Oyj publishes financial reviews twice a year. In 2022 Biohit
will publish the half-year financial report for period January - June
2022 (H1) at 9:30 am on Wednesday 10 August 2022.
MAJOR EVENTS AFTER THE CLOSE
OF THE REVIEW PERIOD
Biohit Oyj has settled the dispute concerning
a breach of the patent license agreement
Biohit Oyj’s shareholder Biohit HealthCare (Hefei) Co. Ltd is the
exclusive distributor of Biohit Oyj’s certain Gastropanel products in
China. In this connection, a dispute has arisen between the
companies regarding the application of the license agreement
between the companies. In order to resolve these and certain other
controversies and claims related to the license agreement, Biohit
Oyj has submitted an application to the Arbitration Institute of the
Finland Chamber of Commerce to initiate arbitration proceedings
in May 2021.
Counterparties have reached an agreement in the dispute on
February 8, 2022. As a result, arbitration procedure will be ended
by a cancellation request if certain preconditions are fulfilled within
the set period of time.
The company’s management is not aware of any other material
events since the balance sheet date.
GOVERNMENT
Annual General Meeting in 2021
AGM decided on June 23, 2021 as suggested by the Board of
Directors, that no dividend will be paid on the financial year 2020.
The AGM resolved that six (6) members are elected to the Board of
Directors and that professor h.c., MD, PhD Osmo Suovaniemi,
Commercial Counsellor Eero Lehti, CEO Franco Aiolfi, emeritus
professor, MD, PhD Matti Härkönen, PhD Lea Paloheimo and CEO
Liu Feng are elected as members of the Board of Directors until
the end of the next AGM. AGM decided to choose
PricewaterhouseCoopers as an audit firm.
Biohit Oyj’s Management Team
The members of Biohit’s Management Team are: CEO Päivi Siltala,
CFO Jussi Hahtela, Production Director Suvi Elomaa, Research
and Development Director Minna Mäki, Sales and Marketing
Director Ilari Patrakka and Quality and Regulatory Affairs Director
Daniela Söderström.
SHARES AND SHAREHOLDERS
Biohit Oyj’s number of shares is 15,045,593 (15,045,593), of which
2,975,500 (2,975,500) are Series A shares and 12,070,093
(12,070,093) are Series B shares. The Series B shares are quoted
on NASDAQ Helsinki in the Small cap/Healthcare group under the
code BIOBV.
BIOBV/NASDAQ OMX Helsinki
1-12/2021 1-12/2020
High (EUR) 2.54 4.30
Low (EUR) 1.82 1.90
23
BIOHIT Annual Report 2021
Biohit in Brief CEO’s Review Strategy Corporate Governance Financial Statements
Average (EUR) 2.11 2.56
Latest (EUR) 1.84 2.48
Turnover (EUR) 8,892,806 14,153,206
Turnover volume 4,213,424 5,518,054
Shareholders
At the end of the reporting period on 31 December 2021 the
company had 7,669 shareholders (7,513 on 31 December 2020).
Private households held 59.2% (63.3%), companies 5.3% (7.5%)
and public sector organisations 0.0% (0.0%). Foreign ownership or
nominee registrations accounted for 33.2% (29.2%) of shares.
Further information on the shares, major shareholders and
management shareholdings is available on the company’s website.
BOARD’S PROPOSAL FOR DISTRIBUTIONS OF PROFIT
The parent company’s distributable funds (unrestricted equity) on
31 December 2021 are EUR 4,195,824.36 of which the period net
loss is EUR 1,592,724.36. The Board of Directors proposes to the
Annual General Meeting that no dividend be paid for the fiscal year.
AGM in 2022
Biohit Oyj’s Annual General Meeting has been planned for
Wednesday 15th of June 2022. The Board of Directors will call the
General Meeting at a later date.
Corporate Governance Statement
Biohit Oyj will release a separate Corporate Government Statement
in its internet site: https://www.biohithealthcare.com/en/biohits-
corporate-governance-statements/
Helsinki 14 February 2022
Biohit Oyj
Board of Directors
24
BIOHIT Annual Report 2021
Biohit in Brief CEO’s Review Strategy Corporate Governance Financial Statements
€ 1,000 Note
1 Jan–31 Dec
2021
1 Jan.–31 Dec
2020
Revenue 3 9,361 7,123
Change in inventories of finished and unfinished products -305 144
Other operating income 5 258 19
Materials and services 6 -3,141 -3,309
Expences arising from employment benefts 7 -3,450 -3,063
Other operating expenses 8 -2,215 -2,091
EBITDA 508 -1,178
Depreciation and amortization 10 -1,988 -1,997
Operating profit/loss -1,480 -3,174
Financial income 11 209 83
Financial expenses 11 -33 -171
Profit/loss before taxes -1,305 -3,261
Income taxes 12 -195 -51
Profit/loss for the financial period -1,500 -3,313
Other items of comprehensive income
Items that may later be reclassified through profit and loss
Translation differences 12 -5
Items that will not be reclassified through profit and loss
Changes in the fair value of equity instruments measured at fair value through other comprehensive income 74 -2,560
Total comprehensive income for the period -1,414 -5,877
Distribution of profit/loss for the financial period
To the owners of the parent company -1,500 -3,313
Total -1,500 -3,313
Distribution of comprehensive income for the financial period
To the owners of the parent company -1,414 -5,877
Total -1,414 -5,877
Earnings per share calculated from earnings attributable to the owners of the parent company
Undiluted earnings per share (EUR) 13 -0.10 -0.22
Diluted earnings per share (EUR) 13 -0.10 -0.22
Consolidated Comprehensive Income Statement
25
BIOHIT Annual Report 2021
Biohit in Brief CEO’s Review Strategy Corporate Governance Financial Statements
Consolidated Balance Sheet
€ 1,000 Note 31 Dec 2021 31 Dec 2020
ASSETS
Non-current assets
Intangible assets 14 137 1,763
Property, plant and equipment 15 201 269
Right-of-use assets 15, 16 219 371
Other non-current financial assets 17 58 58
Deferred tax assets 19 14 17
Total non-current assets 629 2,478
Current assets
Inventories 20 750 903
Trade and other receivables 17, 21 2,720 1,317
Other current financial assets 17 4,413 5,041
Cash and cash equivalents 17, 18, 22 1,102 1,038
Total current assets 8,984 8,299
Total assets 9,613 10,777
26
BIOHIT Annual Report 2021
Biohit in Brief CEO’s Review Strategy Corporate Governance Financial Statements
€ 1,000 Note 31 Dec 2021 31 Dec 2020
SHAREHOLDERS’ EQUITY AND LIABILITIES
Shareholders’ equity
Share capital 23 2,350 2,350
Fair value reserve 23 -1,092 -1,165
Invested unrestricted equity fund 23, 24 5,138 5,138
Translation differences -76 -88
Retained earnings 979 2,468
Shareholders’ equity attributable to shareholders of the parent company 7,300 8,703
Total shareholders’ equity 7,300 8,703
Long-term liabilities
Lease liabilities 16, 17, 25 155 125
Deferred tax liabilities 19, 26 2 3
Other liabilities 17,18,26 7 6
Total long-term liabilities 164 134
Short-term liabilities
Trade payables 17, 26 577 612
Tax liabilities 17, 26 180 31
Short-term interest-bearing liabilities 16, 17, 25 66 256
Other liabiliteis 26 1,324 1,040
Total short-term liabilities 2,149 1,940
Total shareholders’ equity and liabilities 9,613 10,777
27
BIOHIT Annual Report 2021
Biohit in Brief CEO’s Review Strategy Corporate Governance Financial Statements
Shareholders’ equity attributable to shareholders of the parent company
€ 1,000 Share capital
Invested
unrestricted
equity fund
Translation
differences
Fair value
reserve
Retained
earnigns
Total
shareholders’
equity
Shareholders’ equity 1 January 2021 2,350 5,138 -88 -1,165 2,468 8,703
Share-based payments - - - - 17 17
Adjustments of translation differences - - - - -5 -5
Total comprehensive income for the period - - 12 74 -1,500 -1,414
Shareholders’ equity 31 December 2021 2,350 5,138 -76 -1,092 979 7,300
Shareholders’ equity attributable to shareholders of the parent company
€ 1,000 Share capital
Invested
unrestricted
equity fund
Translation
differences
Fair value
reserve
Retained
earnigns
Total
shareholders’
equity
Shareholders’ equity 1 January 2020 2,350 5,138 -84 1,395 5,780 14,580
Total comprehensive income for the period - - -5 -2,560 -3,313 -5,877
Shareholders’ equity 31 December 2020 2,350 5,138 -88 -1,165 2,468 8,703
Statement of Changes in Consolidated
Shareholders’ Equity
28
BIOHIT Annual Report 2021
Biohit in Brief CEO’s Review Strategy Corporate Governance Financial Statements
€ 1,000 Note 2021 2020
Cash flow from operating activities
Profit/loss for the financial period -1,500 -3,313
Adjustments to profit for the financial period
Business activies with no payment transactions -12 11
Depreciation and impairment 10 1,988 1,997
Unrealised exchange rate gains and losses -3 -
Financial income and expenses -193 87
Income taxes 12 195 51
Total adjustments to income for the financial period 1,976 2,146
Change in working captial
Increase (-)/ decrease (+) in short-term interest-free trade receivables -1,395 1,545
Increase (-)/ decrease (+) in inventories 161 97
Increase (+)/ decrease (-) in short-term interest-free liabilities 213 -344
Total change in working capital -1,021 1,298
Interest paid -25 -103
Interest received 120 98
Realised exchange rate gains and losses 24 -10
Income tax paid -18 -142
Net cash flow from operating acitivies -444 -25
Consolidated Cash Flow Statement
29
BIOHIT Annual Report 2021
Biohit in Brief CEO’s Review Strategy Corporate Governance Financial Statements
€ 1,000 Note 2021 2020
Cash flow from investments
Investments in tangible and intangible assets -33 -15
Income from disposal of tangiable and intangible assets 20 -
Investments in funds and deposits -1,592 -1,557
Profit from the sale of investments in funds and deposits 2,365 1,537
Net cash flow from investments 760 -35
Cash flow from financial acitivies
Repayment of lease liabilities -266 -222
Net cash flow from financial activities -266 -222
Change in financial assets 50 -282
Cash and cash equivalents at the beguinning of the period 1,038 1,325
Effects of changes in exchange rates 13 -5
Cash and cash equivalents at the end of the period 22 1,102 1,038
30
BIOHIT Annual Report 2021
Biohit in Brief CEO’s Review Strategy Corporate Governance Financial Statements
1 BASIC INFORMATION ON THE COMPANY
A copy of the consolidated financial statements is available on
the website, www.biohit.fi, and at the headquarters of the Group’s
parent company at Laippatie 1, Helsinki , Finland.
for publication on February 16th 2022. In accordance with the
Finnish Limited Liability Companies Act, shareholders have the
opportunity to approve or reject the financial statements at the
Annual General Meeting, which is to be held after the financial
statements have been published. At the Annual General Meeting, it
is also possible for a decision to be made to alter the financial
statements.
2 ACCOUNTING PRINCIPLES
Accounting principles
These financial statements have been prepared in accordance with
the International Financial Reporting Standards (IFRS) endorsed by
the European Union. The IAS and IFRS standards that were valid
on 31 December 2021 have been followed, as well as SIC and IFRIC
interpretations. The IFRS refer to standards and interpretations
thereof approved for application in the EU in compliance with the
proceedings stipulated in Regulation (EC) 1606/2002, as referred to
in the Finnish Accounting Act and subsequent regulations. The
notes to the consolidated financial statements also comply with
Finnish accounting and corporate legislation.
The consolidated financial statements have been prepared in
compliance with the principle of operational continuity. Despite its
loss-making financial periods, the company has succeeded in
keeping its working capital at a good level and the company
believes that it is sufficient to cover the next 12 months of
operations. The company is not dependent on external financing to
guarantee operational continuity. In the assessment of the
company’s senior management, the company’s capacity to
continue operating is good, and there are no foreseeable events or
conditions that could occur individually or in combination to give
major cause to doubt the company’s ability to continue operating.
The consolidated financial statements have been prepared on
the basis of acquisition cost with the exception of equity
investments recognised at fair value through other comprehensive
income and financial assets and liabilities recognised at fair value
through profit or loss. The financial statements are presented in
thousands of euros. The figures presented in the financial
statements are rounded from precise figures, so the combined
total of individual figures may differ from the total sum presented.
Indicators have been calculated using precise values.
The preparation of IFRS-compliant financial statements requires
the Group management to make certain estimations and
judgments when applying the Group’s accounting policies.
Information on judgements that the management has made when
applying the Group’s accounting principles and that have the most
significant effect on the figures presented in the financial
statements are presented under ”Accounting policies calling for
judgements by the management and key sources of estimation
uncertainty”.
Presentation method
The Group’s income statement is presented as a single calculation
in which the share of the income accounted for by the Group’s
ongoing operations is presented first and income due to
discontinued operations is then presented on a single line. In the
2020 and 2021 financial periods Biohit had no discontinued
operation to present.
Consolidation principles
The consolidated financial statements include the parent company,
which the Group exercises control. The Group has a controlling
interest in a company if, by being involved in the company, it is
exposed to fluctuating returns or is entitled to such fluctuating
returns and it is able to influence these returns by exercising its
control over the company.
Mutual shareholdings of Group companies have been eliminated
using the acquisition cost model. Acquisition costs include
transferred assets at fair value, generated or assumed liabilities
and equity-based instruments that are issued. Acquired
subsidiaries are consolidated from the moment that the Group
gains control over them and divested subsidiaries are consolidated
until this control ends. All internal Group business transactions,
receivables, liabilities, unrealised profits, and internal profit
distribution are eliminated when preparing the consolidated
financial statements. Unrealised losses are not eliminated if the
loss results from impairment. The distribution of profits for the
financial period to the parent company’s owners and minority
interest-holders is presented in the income statement, and the
minority interest-holders’ share of equity is presented as a
separate item in the balance sheet under equity. The minority
interest-holders’ share of accumulated losses is recognized in the
consolidated financial statements up to the amount of the
investment. The Group has no associated companies or minority
shareholders.
Subsidiaries
Subsidiaries are consolidated into the financial statements from
the moment that the Group gains control over them until this
control ends. The consolidated financial statements have been
prepared using the acquisition-cost method. The Group’s share of
assets, liabilities, and contingent liabilities on the date of
Notes to the Parent Company’s Financial Statements
31
BIOHIT Annual Report 2021
Biohit in Brief CEO’s Review Strategy Corporate Governance Financial Statements
acquisition is recognised at fair value and the amount in excess of
the fair-value acquisition cost is recognised as goodwill. If the
acquisition cost of a subsidiary is less than the value of the net
assets on the date of acquisition, the difference is recognised in the
income statement. Internal Group business transactions,
receivables, liabilities, and unrealised profits from internal sales are
eliminated in the consolidated financial statements. Unrealised
losses are also eliminated unless an internal business transaction
demonstrates that an asset has become impaired. The share of a
subsidiary owned by minority interest-holders is presented in the
consolidated balance sheet under equity, separately from
shareholders’ equity. The accounting principles applied by
subsidiaries have been adapted to correspond to the Group’s
principles. On 31 December 2021, the company had no goodwill on
its balance sheet.
Translating items denominated in foreign currencies
The profit and financial position of the Group’s units are measured
in the currency of the main operating region of the unit in question.
The consolidated financial statements are presented in euro, which
is the functional and presentation currency of the Group’s parent
company.
Foreign currency business transactions are recorded in the
functional currency at the exchange rate on the date of transaction.
Monetary receivables and liabilities are translated at the exchange
rate on the closing date of the financial period. Non-monetary
foreign currency items have been translated into the functional
currency at the exchange rates on the transaction date. Any
exchange differences arising from translation are recognised in the
income statement. Any exchange differences arising from the
translation of accounts receivable and accounts payable within the
Group are recognised as financial items, while corresponding
external items are treated as sales or purchase adjustment items.
The income statements of foreign subsidiaries have been translated
into euro at the average exchange rate for the financial period and
the balance sheets have been translated at the exchange rate on
the closing date of the financial period. The exchange difference
resulting from translating income statement items using the
average exchange rate and balance sheet items at the exchange
rate on the closing date of the financial period has been recognised
as a separate item under translation differences in equity. Exchange
differences from monetary items calculated as net investments
made in foreign subsidiaries are recognised as translation
differences.
Business segments
Biohit’s product portfolio consists of diagnostic tests, analysis
systems, products that bind carcinogenic acetaldehyde into
harmless compounds, monoclonal antibodies, and service
laboratory operations. The company classifies its entire product and
service portfolio into one segment.
Segment information is provided to the most senior operative
decision-making body as part of internal reporting in a consistent
manner. The Group’s Management Team is the most senior
operative decision-making body. It is responsible for allocating
resources to business segments.
Revenue recognition:
The Group applies IFRS 15 Revenue from contracts with customers.
The new standard establishes a five-step model for recognizing
revenue from contracts with customers.
Revenue is recognised on a gross basis, as Biohit acts as a
principal towards customers. The transaction price is estimated
separately for each contract at the amount of consideration that
Biohit is expected to be entitled to in exchange of the goods or
services transferred. The determination of the transaction price is
normally straightforward, as Biohit’s contracts include no variable
consideration such as retrospective discounts. Biohit applies the
practical expedient and therefore does not recognise a significant
financing component, i.e. does not adjust the promised
consideration for time value of money when the time between the
delivery of the promised good or service to the customer and the
payment by the customer is less than one year.
Some distribution agreements include the right to return the
goods. In this case, Biohit recognises revenue at the amount that it
expects to be entitled to and recognises a refund liability within
advance payments (Note 26) as well as an asset reflecting the right
to the returned goods in tangible assets in the balance sheet (Note
20). At the end of each reporting period, Biohit updates its estimates
relating to the sales involving a right to return and adjusts revenue,
cost of goods sold and the related refund liability and asset
accordingly.
Revenue for each good or service as well as royalty from license-
based business is recognised as a distinct performance obligation,
as those are separately identifiable and Biohit’s customers can
benefit from them individually. Revenue from goods sold is
recognised at a point of time when control over them is transferred
to the customer in accordance with the commercial terms of
delivery, i.e. when the goods leave the warehouse in accordance with
“ex-works”. For laboratory services, Biohit considers that control is
transferred to the customer when the results of an analysis are
delivered to the customer, and revenue is recognised at a point of
time. Revenue from licence-based contracts is recognised based on
a so-called subsequent sale, i.e. on the basis of revenue generated
from the sales of the licenced goods by the customer or on the
basis of the number of goods sold. Where Biohit is unable to receive
from the customer the information regarding the amount of sales or
the number of goods sold that forms the basis for royalty income,
royalty income is estimated based on historical data. In the financial
year 2021, royalty income is based on information submitted by the
customers.
Biohit has a contractual obligation to withdraw defective goods
from the market and replace them with new products without a
separate compensation. Costs relating to the withdrawal are
accounted for in accordance with IAS 37 Provisions, contingent
liabilities, and contingent assets. The amount of costs relating to
goods withdrawn has not been material in Biohit’s business.
Biohit recognises a contract asset when the right to a consideration
is not unconditional. The asset is recognised within sales
receivables when the right to a consideration is unconditional, i.e.
when only passage of time is required before payment of the
consideration is due. A contract liability is recognised for payments
received from customers for which no goods or services have yet
been delivered by Biohit.
Biohit has not incurred any significant costs to obtain the
contracts, such as sales commissions. Biohit applies a practical
expedient and recognises the incremental costs of obtaining a
contract as an expense as incurred if the amortisation period for the
related asset would be one year or less.
Biohit applies the practical expedient and does not disclose
32
BIOHIT Annual Report 2021
Biohit in Brief CEO’s Review Strategy Corporate Governance Financial Statements
information about partly or completely unsatisfied performance
obligations that relate to contracts with a duration one year or less.
Biohit’s contracts with a duration of more than one year consist of
distribution agreements that are framework contracts by nature
and do not meet the criteria in IFRS 15 for the existence of a
contract without specific purchase orders for quantities to be
delivered. In this case, future sales relating to distribution
agreements are not accounted for as unsatisfied performance
obligations, and no transaction price is allocated to them.
Public grants
Public grants are recognized according to the IAS20-standard.
Public grants are recognized as fair value when it reasonably
certain that they will be granted and that the company fulfils the
requirements for them. Public grants are accrued and recognised
in the profit and loss statement for the financial period in which
the right to receive the grant is fulfilled based on actual costs.
Product development grants e.g., Business Finland, are recognizes
as Other operating income. Cost support e.g. The State Treasury’s
business cost support is recognized as Other operating costs
deductibles.
Estimates made relating to revenue recognition
Biohit uses management’s estimates when recognising revenue
from contracts with customers including a right of return.
Management estimates the extent to which the right of return will
be exercised, and revenue is recognised only for the products
which, according to management’s estimate, are very likely not to
be returned. Management’s estimates are based on historical
return rates or where historical data is not available, on estimates
regarding future returns based on unsold goods included in the
customer’s inventory and their expiry dates. The amount of these
contracts in Biohit’s business is minimal.
Property, plant, and equipment
Property, plant, and equipment are recognised at original
acquisition cost, less accumulated depreciation, and impairments.
Acquisition cost includes the direct costs arising from acquisition.
Costs that arise subsequently are included in the book value of the
asset or recognised as separate assets only if it is likely that the
future financial benefit associated with the asset will benefit the
Group and the acquisition cost of the asset can be reliably
determined. Other repair and maintenance costs are recognised
through profit or loss in the period during which they have
materialised.
Straight-line depreciation is applied to assets according to the
estimated useful life. No depreciation is made on land.
The estimated useful lives are as follows:
Machinery and equipment: 3–10 years
The residual value and the useful life of assets are checked in
every financial statement and, if necessary, adjusted to represent
changes that have occurred in the expectations of financial benefit.
Sales gains and losses accumulated from the disposal or transfer
of tangible fixed assets are included in other operating income or
expenses.
IFRS 16 Leases
Biohit implements the IFRS 16 lease standard. According to the
standard almost all leases are recognised on the balance sheet by
lessee as the distinction between operating and finance leases is
removed.
Under the new standard, lessee recognises a right-of-use asset
(the right to use the leased item) and a lease liability to pay rentals.
The standard includes optional recognition exemptions for short-
term leases (12 months or less) and leases for which
theunderlying assetis of low value. Biohit has decided to apply the
optional exemptions and recognises these expenses as straight-
line basis over the period of the lease.
According to IFRS 16 -standard, the lessee’s lease period is the
period during which the lease cannot be terminated. Also, a
potential extension or termination option should be considered if
the use of such option is estimated to be reasonably certain. The
lease term for ongoing contracts is based on estimate by Biohit’s
management. Management regularly estimates the length of those
leases.
The lessee should value the lease agreement by discounting the
future lease payments to the present value at the inception of the
contract. The internal interest rate implicit in the lease is not easily
available which is why the future minimum lease payments are
discounted using Biohit’s incremental borrowing rate. According to
the standard, the incremental borrowing rate is defined as the
interest that the lessee would have to pay when borrowing for a
similar term and with similar security to obtain an asset of an
equivalent value to the right-of-use asset in similar economic
environment. Biohit has determined the incremental borrowing
rate for leases based on the debt-based financing offers received
from the 3rdparty. Biohit has applied a single discount rate to a
portfolio of leases with similar characteristics.
INTANGIBLE ASSETS
Research and development expenses
Research expenditure is recognised as an expense in the balance
sheet. Development expenditure related to designing new and
more advanced products is capitalised in the balance sheet as an
intangible asset when the product can be technically realised and
commercially exploited, and the product is expected to generate a
future financial benefit. Development expenditure that has
previously been recognised as an expense cannot be capitalised at
a later date. Depreciation is booked for an asset from the time it is
ready for use. No development expenditure was capitalised on the
balance sheet on 31 December 2021.
Other intangible assets
Intangible assets are only entered in the balance sheet if the
acquisition cost of the asset can be reliably determined and if it is
likely that the expected financial benefit from the asset will benefit
the company. Other intangible assets with a limited useful life are
entered in the balance sheet at original acquisition cost, and costs
are booked in the income statement based on straight-line
depreciation over the course of the known or estimated useful life
of the asset. The Group has no intangible assets with indefinite
useful lives.
The depreciation periods are as follows:
Patents: 4–10 years
IT software: 3 years
Other intangible assets: 5–10 years
33
BIOHIT Annual Report 2021
Biohit in Brief CEO’s Review Strategy Corporate Governance Financial Statements
Impairments of tangible and intangible assets
On the closing day of each financial period, the Group assesses
whether there are indications of impairment in the value of a
particular asset. If there are such indications, the recoverable
amount from the said asset is estimated. Additionally, the
recoverable amount is estimated annually for goodwill, regardless
of whether there is any indication of impairment. The need for
impairment is reviewed at the level of cash-generating units, that
is, the lowest unit level that is largely independent of other units,
and whose cash flow can be separated from other cash flows. The
discount rate used is the interest rate that is determined before
taxes and that describes the market’s view of the time value of
money and the risks incorporated in the tested asset.
The recoverable amount is the asset’s fair value, less costs
arising from transfer or a higher utility value. Value in use is the
estimated future net cash flow from the asset or cash-generating
unit, which is discounted to its present value. Impairment loss is
recognised if the book value of the asset is higher than the
recoverable amount. Impairment loss is recognised immediately in
the income statement. If the impairment loss is allocated to a
cash-generating unit, it is first allocated to reduce the goodwill of
the cash-generating unit and then to reduce the other assets of
the unit pro rata. The impairment loss is cancelled if there is a
change in the conditions and the recoverable amount from the
asset has changed since the impairment loss was booked.
However, the impairment loss may not be reversed in excess of
what the asset’s book value would be without the recognition of the
impairment loss. Impairment losses recognised for goodwill are
never reversed.
Inventories
Inventories are measured at acquisition cost or net realisable
value, whichever is lower. The acquisition cost is determined using
the FIFO method. The acquisition cost for finished and unfinished
products consists of raw materials, direct labour costs, other
direct costs, and the appropriate share of manufacturing-related
variable overheads and fixed overheads at a normal level of
operations. The net realisable value is the estimated selling price
in the ordinary course of business, less the estimated costs for
completing the product and costs related to sales
Pension obligations
In Group companies, pension cover is arranged in accordance with
the pension legislation and practices of the country in question.
The pension arrangements are defined-contribution plans. The
payments related to defined-contribution pension plans are
recognised as costs in the financial period in which they arise.
Share-based payments
The Group has incentive plans where payments are made in the
form of equity instruments. The benefits granted under the plans
are recognised at fair value on the date on which they were granted
and entered as costs evenly throughout the period during which
they were earned. The effect of the plans on profit or loss is
presented under costs of employee benefits.
The cost determined on the date on which the options were
granted is based on the Group’s estimate of the number of options
for which rights are presumed to arise at the end of the incentive-
earning period. The Group updates the presumption of the final
number of options on the final day of every reporting period.
Changes in estimates are treated through profit or loss. The fair
value of option plans is defined on the basis of the Black-Scholes
option pricing model. Terms that are not market-based, such as
profitability and specific growth targets, are not taken into
consideration when determining the fair value of options. Instead,
they affect the estimate of the final number of options.
When option rights are exercised, the assets obtained from
share subscriptions are entered into the invested unrestricted
equity fund in accordance with the terms of the plan.
Provisions
A provision is entered when the Group has, due to a past event, a
legal or factual obligation, and the obligation is likely to materialise
and the sum of the obligation can be reliably estimated. The
amount to be recognised as a provision corresponds to the best
estimate of the costs required to meet existing obligations on the
closing date of the financial period. If the time value of money has
a material impact, the amount of the provision is recognised as the
present value of anticipated expenses.
Taxes based on taxable income for the
period and deferred taxes
The tax expense in the income statement consists of the current
tax expense and deferred tax. The amount of tax based on the
taxable profit for the period is calculated from the taxable profit
based on the applicable tax rate in each country. The tax is
adjusted by possible taxes related to previous periods. Deferred
taxes are calculated from all temporary differences between the
book value and tax base. The biggest temporary differences arise
from the depreciation of property, plant and equipment, deferred
tax assets and internal margins on inventory.
No deferred tax is recognised for non-deductible goodwill
impairment or for the undistributed profits of subsidiaries if the
temporary difference is not likely to dissolve in the foreseeable
future.
Deferred tax is calculated using the tax rates enacted by the
balance sheet date. Deferred tax assets are recognised to the
amount for which it is likely that taxable profit will be generated in
the future against which the temporary difference can be utilised.
Financial Assets
Group’s financial assets are classified in the following
measurement categories: amortized cost, fair value through other
comprehensive income and fair value through profit or loss. The
classification depends on used business model for managing the
financial assets and the contractual terms of the cash flows.
Assets are classified as current assets, except for maturities over
12 months after balance sheet date, which are classified as non-
current assets. Purchases and sales of financial assets are
recognized on the settlement date. Financial assets are
derecognized when the rights to receive cash flows from the
investments have expired or have been transferred and the Group
has transferred substantially all risks and rewards of ownership.
Amortized cost category consists of cash and cash equivalents,
trade receivables and loan receivables where the business model
is to hold the asset to collect the contractual cash flows. Financial
assets recognized at amortized cost are valued using the effective
interest method.
Assets at fair value through profit or loss consist of interest or
equity funds or investments into listed bonds. All gains or losses of
34
BIOHIT Annual Report 2021
Biohit in Brief CEO’s Review Strategy Corporate Governance Financial Statements
fair value changes investments in the category is included in
financial income and expenses.
Assets at fair value fair value through other comprehensive
income consists of equity investments to Genetic Analysis AS
shares. Dividends from equity investments are recognized at profit
and loss statement. Genetic Analysis AS listed 1.10.2021 on the
Spotlight Stock Market in Sweden. Despite the Swedish trading
location, the Genetic Analysis AS share price is quoted in Norwe-
gian Krone.
Financial Liabilities
Group’s financial liabilities are classified as amortized cost and
measured at fair value net of transaction cost at settlement date.
Financial liabilities are subsequently measured at amortized cost
using the effective interest method. Financial liabilities at amor-
tized cost consist from loans from financial institutions. Financial
liabilities are included in non-current liabilities, except for items
with maturities less than 12 months after the balance sheet date,
which are included in current liabilities. A financial liability is
derecognized when the related obligation is discharged, cancelled
or expires. The group does not have any derivative liabilities.
The fair values of other interest-bearing liabilities at amortized
cost are determined by using the discounted cash flow method
employing market interest rates at the balance sheet date.
Impairment
The credit loss is recognized based on individual assessment of
receivable. The simplified expected credit loss model is applied for
trade receivables. The impairment process is based on historical
credit loss experience combined with current conditions and for-
ward looking macroeconomic analysis. Realised loss levels are
adjusted based on history, so that they represent the current and
future information and macroeconomic factors, that influence the
customers’ ability to make the payments for receivables. Financial
items based on trade receivables and contracts are recognized off
the balance sheet as final credit loss., when it is not plausible to
expect to receive payment e.g., in the process of bankruptcy.
The impairment or credit loss is recognized in the consolidated
statement of income within other expenses.
Maturity analyses for trade receivables, movement in allowance
account and general provisioning matrix is presented at note 28
under section credit risk. The Other financial assets at amortized
cost consist of cash at banks.
Concept of operating profit and loss
IAS 1 Presentation of Financial Statements does not define the
concept of operating profit. The Group has defined it as follows:
operating profit or loss is a net total that can be calculated by
adding other operating income to net sales, subtracting purchase
expenses adjusted by the change in the stock of finished and unfin-
ished products as well as expenses caused by production for own
use, subtracting expenses from employee benefits, depreciation,
and potential impairment losses, as well as other operating
expenses. All other items, including discontinued operations, are
presented beneath operating profit or loss. Exchange differences
and changes in the fair value of derivatives are included in operat-
ing profit or loss providing they arise from business-related items.
Otherwise, they are recognised as financial items. Exchange differ-
ences related to the Group’s internal receivables and liabilities are
recognised as financial items.
Accounting policies calling for judgements by the
management and key sources of estimation uncertainty
When preparing the financial statements, the management must
make assessments and assumptions concerning the future, and
the outcome may deviate considerably from the original assess-
ments and assumptions. In addition, discretion must be used in
applying the accounting policies. Although the estimates are based
on the most recent information available, the realised values may
differ from these estimates. The most important areas in which
estimates, and discretion are used are described below.
Impairment testing
The Group conducts impairment tests as required on intangible
assets. It also assesses any indication of impairment in accord-
ance with the aforementioned accounting policies. The recoverable
amounts of cash-generating units are measured based on value-
in-use calculations. Preparing these calculations requires the use
of estimates.
Deferred tax assets
Deferred tax assets for unused tax losses and temporary differ-
ences regarding recognised deferred tax assets are estimated by
the Group at least once per year to determine the likelihood of the
company in question generating sufficient taxable income before
the unused tax losses expire.
Measurement of assets at fair value fair value
through other comprehensive income where
senior managers’ judgement is required
After being listed on 1.10.2021 the Genetic Analysis AS share price
is based on the stock quote, and as follows does not require the
senior managers’ judgement anymore. Before being listed, the
input data for the valuation of Genetic Analysis AS consisted of
transactions involving the company’s shares on market terms
between third parties. If there were no third-party transactions the
assessment was based on the discounted cash-flow model based
on the budgets by the management of Genetic Analysis AS.
Application of new or amended IFRS
standards and IFRIC interpretations
Biohit will begin applying new or amended IFRS standards and
interpretations as of the date on which they enter into force or
when they are approved for adoption in the EU. The consolidated
financial statements were prepared in compliance with the same
principles used in 2020.
In 2021 no new relevant standards or interpretations were
adopted.
35
BIOHIT Annual Report 2021
Biohit in Brief CEO’s Review Strategy Corporate Governance Financial Statements
3 REVENUE AND SEGMENT INFORMATION
The company’s product portfolio consists of diagnostic tests, products that bind acetaldehyde
and monoclonal antibodies. The company classifies its entire product portfolio into one segment.
REVENUE BY MARKET AREA
€ 1,000 2021 2020
Finland 238 277
Europe, Other 4,286 3,640
North and South America 282 190
Asia 3,614 2,429
Other Countries 941 587
Revenue from contracts with customers total 9,361 7,123
€ 1,000 31 Dec 2021 31 Dec 2020
Contract Assets - 200
Trade receivables 2,260 868
Contract assets and receivables total 2,260 1,068
€ 1,000 31 Dec 2021 31 Dec 2020
Contract liabilities 50 0
Contract liabilities total 50 0
The items included in contract liabilities at the beginning of the period have been recognised as
revenue during the financial year.
4 ACQUIRED BUSINESSES
No new businesses were acquired in the 2020 and 2021 financial periods.
5 OTHER OPERATING INCOME
€ 1,000 2021 2020
Subsidies 238 18
Capital gain from property, plant and equipment 20 -
Others - 0
Total 258 19
The majority of Biohit’s revenue is generated from the diagnostic products.
The majority of Biohit’s revenue is generated from distributor agreements. Biohit’s customers, i.e. the
distributors, buy and resell the products. Biohit has no post-sales rights or obligations relating to the
control over the products, except for a right of return relating to some distribution agreements. The
goods that are sold include several various tests for diagnostics of diseases in the gastrointestinal tract,
such as celiac quick test, lactose intolerance test, Vitamin D test, GastroPanel
®
test for the first-line
diagnosis of dyspepsia measured on simple blood test. Furthermore, the product portfolio includes
Acetium
®
lozenge and Acetium
®
capsule, which are acetaldehyde-binding products sold under the
trademark Acetium.
In licencing agreements, Biohit transfers licensed immaterial rights to a customer, and the customer
both produces and sells the products. Licencing agreements cover both diagnostic products and
Acetium products.
Biohit also has contracts that include both a distribution agreement and a licensing agreement. In
this case, Biohit sells to the customer finished products and raw materials needed for production and,
in addition, receives a royalty fee based on the sale of the product. Revenue from the sale of finished
products, raw materials and royalty income from licences are recognised as separate performance
obligations.
Biohit provides laboratory services, such as GastroPanel
®
tests, for customers. Biohit analyses the
sample collected from the customer and delivers the results of the analysis to the customer or to a
company. The proportion of service contracts of Biohit’s revenue is insignificant.
Contract assets and liabilities:
Biohit recognises revenue at a point of time when goods and services are delivered. The payment terms
in Biohit’s contracts with customers vary from a payment to be made one month in advance to payment
in 60 days.
A contract liability is recognised for payments received where the goods or services have not yet been
delivered. This is the case, among others, with countries outside Europe and Asia, where as a result of
a higher credit risk relating to customers, an advance payment is received, on the average, one month
before the delivery of the goods. The timing difference between the receipt of the advance payment by
Biohit and the delivery of the products or the results of a service does not exceed one year.
36
BIOHIT Annual Report 2021
Biohit in Brief CEO’s Review Strategy Corporate Governance Financial Statements
6 MATERIALS AND SERVICES
€ 1,000 2021 2020
Materials, supplies and goods 2,038 2,310
External manufacturing services 1,104 999
Total 3,141 3,309
7 EXPENSES ARISING FROM EMPLOYMENT BENEFITS
€ 1,000 2021 2020
Salaries 2,916 2,635
Pension expenses – defined-contribution plans 431 354
Options and share bonuses realised and paid in shares 17 -
Other personnel expenses 86 75
Total 3,450 3,063
Average number of Group employees in the financial period 2021 2020
Group total 44 45
Details of the employment benefits enjoyed by senior managers are presented in note 28
(related-party transactions).
8 OTHER OPERATING EXPENCES
€ 1,000 2021 2020
Travel expenses and other personnel expenses 203 139
Rents and maintenance expenses 107 90
Sales and marketing expenses 511 593
Other external services 1,242 1,026
Other operating expenses 151 243
Total 2,215 2,091
Other operating expenses include research and development expenses of EUR 1,166 thousand
(EUR 1,043 thousand).
9 AUDITORS’ FEES
€ 1,000 2021 2020
Companies belonging to the PricewaterhouseCoopers chain
Auditors' fees 88 105
Total fees paid to the auditor 88 105
37
BIOHIT Annual Report 2021
Biohit in Brief CEO’s Review Strategy Corporate Governance Financial Statements
10 DEPRECIATION AND IMPAIRMENT
€ 1,000 2021 2020
Intangible assets 1,626 1,638
Right-of-use assets 258 213
Plant and equipment 105 146
Total 1,988 1,997
11 FINANCIAL INCOME AND EXPENSES
€ 1,000 2021 2020
Financial income
Exchange rate gains from financial assets and liabilities 25 -
Net loss on investments recognised at fair value through
profit or loss 69 90
Other financial income 114 -6
Total 209 83
Financial expences
Interest expenses on financial liabilities -9 -14
Net loss on investments recognised at fair value through
profit or loss -2 -5
Exchange rate losses from financial assets and liabilities -23 -151
Other financial expences -33 -171
Total 175 -87
12 INCOME TAXES
Direct taxes
€ 1,000 2021 2020
Tax based on taxable income for the financial period -64 -31
Withholding tax liabilities -131 -19
Change in deferred taxes -1 -2
Total Direct taxes -195 -51
Reconciliation of tax expenses on the income statement
€ 1,000 2021 2020
Profit before taxers -1,305 -3,261
Taxes calculated at domestic rates 20% 261 652
Effect of differing tax bases applying to foreign subsidiaries -64 -31
Tax-free income and non-deductible expenses 11 -15
Non-recognised deferred tax assets from taxable loss -403 -658
Taxes on the income statement -195 -51
13 EARNINGS PER SHARE
Undiluted earnings per share are calculated by dividing the profit attributable to shareholders
of the parent company in the financial period by the weighted average number of shares in
circulation during the financial period.
2021 2020
Profit for the period attributable to the owners of the parent
company (EUR thousand) -1,500 -3,313
Average number of shares, undiluted 15,045,593 15,045,593
Average number of shares, diluted 15,045,593 15,045,593
Earnings per share, undiluted (EUR) -0.10 -0.22
Earnings per share, diluted (EUR) -0.10 -0.22
38
BIOHIT Annual Report 2021
Biohit in Brief CEO’s Review Strategy Corporate Governance Financial Statements
14 INTANGIBLE ASSETS
2021
€ 1,000
Intangible
rights Total
Acquisition cost 1 January 2021 8,986 8,986
Acquisition cost 31 December 2021 8,986 8,986
Accumulated depreciation and impairment
1 January 2021 -7,223 -7,223
Depreciation -1,626 -1,626
Accumulated depreciation and impairment
31 December 2021 -8,849 -8,849
Book value 1 January 2021 1,763 1,763
Book value 31 December 2021 137 137
2020
€ 1,000
Intangible
rights Total
Acquisition cost 1 January 2020 8,986 8,986
Acquisition cost 31 December 2020 8,986 8,986
Accumulated depreciation and impairment
1 January 2020 -5,585 -5,585
Depreciation -1,638 -1,638
Accumulated depreciation and impairment
31 December 2020 -7,223 -7,223
Book value 1 January 2020 3,401 3,401
Book value 31 December 2020 1,763 1,763
Intangible rights consist of patents.
15 TANGIBLE ASSETS
2021
€ 1,000
Right-of-use
assets
Plant and
equipment Total
Acquisition cost 1 January 2021 811 1,697 2,508
Increases 286 37 322
Decreases -180 - -180
Acquisition cost 31 December 2021 917 1,733 2,650
Accumulated depreciation and impairment
1 January 2021 -440 -1,428 -1,868
Depreciation -258 -105 -362
Accumulated depreciation and impairment
31 December 2021 -698 -1,532 -2,230
Book value 1 January 2021 371 269 640
Book value 31 December 2021 219 201 420
2020
€ 1,000
Right-of-use
assets
Plant and
equipment Total
Acquisition cost 1 January 2020 499 1,682 2,181
Increases 312 15 327
Acquisition cost 31 December 2020 811 1,697 2,508
Accumulated depreciation and impairment
1 January 2020 -216 -1,293 -1,509
Depreciation -224 -135 -359
Accumulated depreciation and impairment
31 December 2020 -440 -1,428 -1,868
Book value 1 January 2020 283 389 672
Book value 31 December 2020 371 269 640
39
BIOHIT Annual Report 2021
Biohit in Brief CEO’s Review Strategy Corporate Governance Financial Statements
16 LEASES
Below stated information is based on the leasing contracts where the Biohit Group is the lessee.
The Group has committed to a lease that has yet to begun. The lease begins on 1.1.2022, the
duration is 5 years and is worth 744 thousand euros in total. The previous lease has been paid in
full 31.12.2021.
Right-of-use assets
€ 1,000 31 Dec 2021 31 Dec 2020
Buildings 78 285
Equipment 14 36
Vehicles 127 50
219 371
Lease liabilities
€ 1,000 31 Dec 2021 31 Dec 2020
Current 66 256
Non-current 155 125
222 381
Depreciation charge of right-of-use assets
€ 1,000 31 Dec 2021 31 Dec 2020
Buildings 206 179
Equipment 22 19
Vehicles 29 26
258 224
Interest expense (included in finance costs) 6 11
The Group leases mainly company cars and premises. Rental contracts are typically made for fixed
periods of 12 months to 5 years but may have extension options.
Assets and liabilities arising from a lease are initially measured on a present value basis. Lease
liabilities include the net present value of the following lease payments:
- fixed payments
- variable lease payment that are based on an index or a rate, initially measured
using the index or rate as at the commencement date
- the exercise price of a purchase option if the group is reasonably certain to exercise that option
Lease payments to be made under reasonably certain extension options are also included in the
measurement of the liability.
According to the standard, the incremental borrowing rate is defined as the interest that the
lessee would have to pay when borrowing for a similar term and with similar security to obtain an
asset of an equivalent value to the right-of-use asset in similar economic environment. Biohit has
determined the incremental borrowing rate for leases based on the debt based financing offers
received fromthe 3rd party. Biohit has applied a single discount rate to a portfolio of leases with
similar characteristics.
The Group is exposed to potential future increases in variable lease payments based on an index or
rate, which are not included in the lease liability until they take effect. When adjustments to lease
payments based on an index or rate take effect, the lease liability is reassesed nd adjusted against
the right-of-use asset.
Lease payments are allocated between principal and finance cost. The finance cost is charged
to profit or loss over the lease period so as to produce a constant periodic rate of interest on the
remaining balance of the liability for each period.
The standard includes optional recognition exemptions for short-term leases (12 months or less)
and leases for which the underlying asset is of low value. Biohit has decided to apply the optional
exemptions and recognises these expenses as straight-line basis over the period of the lease.
According to IFRS 16 -standard, the lessee’s lease period is the period during which the lease
cannot be terminated. Also, a potential extension or termination option should be considered, if the
use of such option is estimated to be reasonable certain. The lease term for ongoing contracts is
based on estimate by Biohit’s management. Management regularly estimates the length of those
leases.
40
BIOHIT Annual Report 2021
Biohit in Brief CEO’s Review Strategy Corporate Governance Financial Statements
17 FINANCIAL ASSETS AND LIABILITIES BY CATEGORY
The Group categorised its financial assets and liabilities into
the following categories on 31 December 2021:
Amortized cost
€ 1,000
Fair value through
profit and loss
€ 1,000
Fair value
through OCI
€ 1,000
Hierarchical
level
Non-current assets
Other non-current assets 58 - - Level 2
Current assets
Other current financial assets - 1,117 - Level 1
Other current financial assets - - 889 Level 1
Other current financial assets - 2,407 - Level 2
Trade receivables 2,260 - -
Other receivables 460 - -
Cash and cash equivalents 1,102 - -
The Group categorised its financial assets and liabilities into
the following categories on 31 December 2020*:
Amortized cost
€ 1,000
Fair value through
profit and loss
€ 1,000
Fair value
through OCI
€ 1,000
Hierarchical
level
Non-current assets
Other non-current assets 58 - - Level 2
Current assets
Other current financial assets
- 2,090 - Level 1
Other current financial assets
- 2,034 - Level 2
Other current financial assets
- 101 - Level 3
Other current financial assets
- - 816 Level 3
Trade receivables
868 - -
Other receivables
449 - -
Cash and cash equivalents 1,038 - -
* In 2020 level 3 included shares and a single corporate loan of Genetic Analysis AS, which listed 1.10.2021.
The company has classified the hierarchies of financial assets according to the availability of data on market terms and other price data.
The fair values on level 1 of the hierarchy are based on the quoted (unadjusted) prices of identical assets or liabilities on active markets. The group has mainly used valuations provided by its asset management
partner as a source of price data for determining the fair value of these instruments, and the company has verified that the price data represents genuine, frequent market transactions involving the instruments in
question.
In significant part, the fair values of level 2 instruments are based on other input data than the quoted prices included in level 1, although this data can be obtained for the assets or liabilities in question either directly
(as a price) or indirectly (as a derivative of the price). The Group uses generally accepted valuation models to determine the fair values of these instruments, and the input data for these models are based in significant
part on observable market data.
The level in the fair value hierarchy at which a certain item measured at fair value is classified overall is determined on the basis of the significant input data on the lowest level with regard to the entire item measured
at fair value. The significance of input data is evaluated in its entirety in relation to the item valued at fair value
The original book value of other receivables corresponds to their fair value because the effect of discounting is negligible in view of the maturity of the receivables.
41
BIOHIT Annual Report 2021
Biohit in Brief CEO’s Review Strategy Corporate Governance Financial Statements
Financial liabilities by category
Book value Fair value Book value Fair value
€ 1,000 2021 2021 2020 2020
Long-term financial liabilities valued at amortised cost
Other liabilities 7 7 6 6
Leasing liabilities 155 155 125 125
Total 162 162 131 131
Short-term financial liabilities valued at amortised cost
Trade receivables 577 577 612 612
Tax liabilities 180 180 31 31
Leasing liabilities 66 66 256 256
Other liabilities 1,324 1,324 1,040 1,040
Total 2,149 2,149 1,940 1,940
Total financial liabilities 2,311 2,311 2,071 2,071
The original book value of accounts payable and other interest-free liabilities corresponds to their fair value because the effect of discounting is negligible in view of the maturity of the liabilities.
18 NET LIABILITIES
€ 1,000 2021 2020
Cash and cash equivalents 1,102 1,038
Other investments 3,523 4,225
Non-current liabilities -7 -6
Lease liabilities -222 -381
Net liabilities 4,396 4,875
Liquid assets and other financial assets 4,625 5,263
Gross liabilities - fixed interest -229 -387
Net liabilities 4,396 4,875
Other investments are short-term money market investments that are traded on active markets and that are measured at fair value through profit and loss.
42
BIOHIT Annual Report 2021
Biohit in Brief CEO’s Review Strategy Corporate Governance Financial Statements
19 DEFERRED TAXES
Deferred tax asset
€ 1,000 1 Jan 2021
Recognised
through profit and
loss
Recognised under
other items of
comprehensive
income
Businesses
purchased/sold 31 Dec 2021
Internal inventory margin 9 -2 - - 8
Other items 7 -1 - - 6
Total 17 -3 - - 14
Deferred tax liabilities
€ 1,000 1 Jan 2021
Recognised
through profit and
loss
Recognised under
other items of
comprehensive
income
Businesses
purchased/sold 31 Dec 2021
Capitalisation of tangible assets 3 -1 - - 2
Financial securities measured via the fair value reserve 0 - - - 0
Total 3 -1 - - 2
Deferred tax assets
€ 1,000
1 Jan 2020
Recognised
through profit and
loss
Recognised under
other items of
comprehensive
income
Businesses
purchased/sold 31 Dec 2020
Internal inventory margin 11 -2 - - 9
Other items 17 -1 - -9 7
Total 28 -3 - -9 17
Deferred tax liabilities
€ 1,000
1 Jan 2020
Recognised
through profit and
loss
Recognised under
other items of
comprehensive
income
Businesses
purchased/sold 31 Dec 2020
Capitalisation of tangible assets 3 - - 0 3
Financial securities measured via the fair value reserve 349 - -349 - 0
Total 352 - -349 0 3
Due to the negative fair value change of Genetic Analysis AS the deferred tax liabilities has been removed from the 2020 balance sheet and deferred tax income hasn’t been recognized as the based on the
managements estimate the requirements were not met.
The Group has tax-deductible losses of EUR23.1million for the periods from 2011 to 2021 for which no deferred tax assets have been recognised. EUR22.7million of the loss is in Finland (2021:
EUR0.4million, 2020: EUR2.2million, 2011-2019: EUR20.1million) and EUR0.4million is in Italy. The losses for 2021 are yet to be confirmed. The losses expire in 10 years in Finland.
43
BIOHIT Annual Report 2021
Biohit in Brief CEO’s Review Strategy Corporate Governance Financial Statements
20 INVENTORIES
€ 1,000 2021 2020
Materials and supplies 352 369
Work in progress 27 14
Finished products/goods 371 521
Total inventories 750 903
21 TRADE AND OTHER RECEIVABLES
Long-term receivables
€ 1,000 2021 2020
Long-term interest-free receivables 15 18
Total 15 18
Short-term receivables
€ 1,000 2021 2020
Trade receivables 2,260 868
Accrued income 434 415
Other receivables 27 34
Total 2,720 1,317
The age analysis of the trade receivables is presented in note 27
22 CASH AND CASH EQUIVALENTS
€ 1,000 2021 2020
Cash and cash equivalents 1,102 1,038
23 NOTES RELATED TO SHAREHOLDERS’ EQUITY
Biohit Oyj’s share capital is EUR2,350,350.81 (EUR2,350,350.81) and there are 15,045,593
(15,045,593) shares, of which 2,975,500 (2,975,500) belong to Series A and 12,070,093 (12,070,093)
belong to Series B. Series B is listed on the stock exchange.
The shares have no nominal value. Shares in Series A and B differ from each other in that each
Series A share entitles its holder to twenty (20) votes at general meetings, while each Series
B share carries one (1) vote. The dividend paid for Series B shares is, however, two (2) per cent
of the nominal value higher than that paid for Series A shares. When this regulation is applied,
the nominal value of the shares is taken to be EUR 0.17, which was the nominal value of the
company’s shares when it decided to discontinue using nominal values for shares.
The shareholders’ equity has been paid in full.
Description of shareholders’ equity funds:
The translation differences reserve includes the translation differences arising when the financial
statements of foreign subsidiaries and joint ventures are translated into euros.
The invested unrestricted equity fund includes other investments similar to shareholders’ equity
and the subscription prices of shares insofar as no specific decision is taken to recognise these
under shareholders’ equity.
The fair value reserve consists of Genetic Analysis AS stocks. Dividends on equity investments
are recognised in the income statement.
44
BIOHIT Annual Report 2021
Biohit in Brief CEO’s Review Strategy Corporate Governance Financial Statements
24 SHAREBASED PAYMENTS
Share-based payments
During the financial period 2021 Biohit Oyj established an option programme within the
framework of the share-based incentive scheme. In accordance with the terms of the option
programme, options are granted without cash payment, but a subscription price is set for the
shares. The key terms and conditions of the incentive scheme are shown in the table below.
I 2021 II 2021
Scheme Types A, B, C, D, E Types A, B, C, D
Nature of the scheme Share options Share options
Date of granting 7 December 2021 7 December 2021
Number of instruments granted 440,000 440,000
Subscription price EUR 1.00 EUR 2.00
Share price at the time of granting EUR 1.93 EUR 1.93
Period of validity (years) 6.24 6.24
Realisation In shares In shares
For series I 2021 the share subscription is 1.3.2023-1.3.2028 and for series II 2021 1.2.2024-
1.3.2028. The right to exercise shares requires the fulfillment of specifically determined profit
objectives.
If a option rights holders employment ends for whatever reason, they are obligated to return
those option rights whose subscription period has not begun when the employment or
management position ceases to the Company.
Options in circulation
Number of options 2021 2020
Options granted during the financial period 880,000 -
Options in circulation at the end of the financial period 880,000 -
Determining fair value
The Group uses the Black Scholes model to determine the fair value of its option schemes.
Presumptions used to determine fair value during the 2021 financial period
Scheme I 2021 II 2021
Anticipated volatility 36.4% 36.4%
Anticipated average period of validity of options on the issue date (years) 6.24 6.24
Risk-free rate (%) 0.00% 0.00%
Fair value of the instrument defined on the date of issue (EUR) 1.09 0.65
The amount recognised as expenses is included in note 7 (”Expenses arising from employment
benefits”)
45
BIOHIT Annual Report 2021
Biohit in Brief CEO’s Review Strategy Corporate Governance Financial Statements
27 MANAGEMENT OF FINANCING RISKS
Biohit’s management of financing risks focuses on analysing and minimising the following
financing risks:
Exchange rate risk
Exchange rate risks are associated with international business activities. When calculated
using comparable currencies, Biohit’s net revenue not materially different to the reported
values. Overall, exchange rate changes did not significant affect the company’s profitability
in the last financial period. The company’s sales are primarily denominated in euros and the
company does not have any exchange rate hedging.
Sensitivity analysis in accordance with IFRS 7 for exchange rate changes
2021
€ 1,000 GBP
Non-current liabilities
Trade and other receivables 409
Current liabilities
Interest-free liabilities -342
Open position 67
Net position 67
The receivables and liabilities above include external receivables and liabilites of Biohit
Healthcare Ltd and Biohit Oyj’s internal receivables from Biohit Healthcare Ltd.
If the euro strengtens 10% compared to the pound, the positive effect of the net position on
Biohit’s profit and loss statement is EUR 10 thousand.
If the euro weakens 10% compared to the pound, the negative effect of the net position on
Biohit’s profit and loss statement is EUR 10 thousand.
2020
€ 1,000 GBP
Non-current liabilities
Trade and other receivables 390
Current liabilities
Interest-free liabilities -262
Open position 128
Net position 128
The net position includes financial assets denominated in foreign currencies, as well as
receivables and liabilities to Group companies and external parties translated into euros at the
exchange rate on the final day of the reporting period.
25 INTERESTBEARING LIABILITIES
Balance sheet values of interest-bearing liabilities
€ 1,000 2021 2020
Non-current interest-bearing liabilities
Lease liabilities 155 125
Total interest-bearing non-current liabilities 155 125
Current interest-bearing liabilities
Lease liabilities 66 256
Total interest-bearing current liabilities 66 256
Total interest-bearing current liabilities 222 381
The fair values of financial liabilities are presented in note 17.
Covenants connected to long-term loans
There are no special covenants attached to the company’s non-current financial lease liabilities.
Subordinated loans
The company has no subordinated loans.
26 TRADE PAYABLES AND OTHER LIABILITIES
Non-current interest-free liabilities
€ 1,000 2021 2020
Deferred tax liabilities 2 3
Other non-current liabilities 7 6
Total 9 9
Current interest-free liabilities
€ 1,000 2021 2020
Trade payables 577 612
Other payables 53 -
Advances received 50 0
Tax liabilities 180 2
Accurrals and deferred income 1,272 1,069
Total 2,132 1,683
Total interest-free liabilities 2,141 1,692
The most substantial item included in accruals and deferred income is the deferral of
employment benefits 605 thousand euros (445 thousand euros).
46
BIOHIT Annual Report 2021
Biohit in Brief CEO’s Review Strategy Corporate Governance Financial Statements
Interest rate risk
Interest rate changes have a minor effect on Biohit’s earnings. For this reason, the Group did
not use any separate hedging against this risk in the financial period.
Liquidity risk
Liquidity risk management aims to safeguard the Group’s finances under all circumstances.
The Group’s current financial assets on the balance sheet date amounted to EUR 4.6 million
(EUR 5.3 million). The company also holds shares in Genetic Analysis AS worth EUR 0.9 million
(EUR 0.8 million). The aim of the investment activities related to the company’s current liquid
assets is to achieve profit at very low risk of capital loss
The Group’s equity ratio was 76,3% (80,8%)
Analysis of the maturities of financial liabilities in 2021
€ 1,000 ‹ 1 year 1–5 years › 5 years Total
Accounts payable and other
interest-free liabilities 577 - - 577
Lease contracts 66 155 - 222
Total 644 155 - 799
Analysis of the maturities of financial liabilities in
2020
€ 1,000 ‹ 1 year 1–5 years › 5 years Total
Accounts payable and other
interest-free liabilities 612 - - 612
Lease contracts 256 125 - 381
Total 869 125 - 994
Commodity risk
The company is not using derivatives to hedge against commodity risks because the company
is not exposed to commodity risks by virtue of the nature of its business
Credit and counterparty risk
The business units are responsible for the credit risks connected to their trade receivables,
and they have evaluated the risk of credit losses for each customer.. Biohit’s customer base
primarily consists of solvent companies. As such, Biohit’s risk of credit losses cannot be
considered significant. The company has not used credit insurance. The majority of customer
relationships are long-term in nature and business relations are active, so the company will
become aware of changes in customers’ creditworthiness at an early stage.
The investment portfolio consists of direct corporate bond loans, structured products,
corporate loan funds, money market funds and cash in bank accounts. Some of the products
in the investment portfolio are listed, while others are not. Sufficient diversification of
investments between asset categories, investment instruments and counterparties is
essential. The company uses at least two partners in its investment activities. Approximately
31% of the investment portfolio is cash and investment-grade investments. 51% of the portfolio
is invested in high-yield and non-rated instruments. 18% is invested in equity funds.
On 31 December 2021, trade receivables totalled EUR 2.3 million (EUR 0.9 million). The
majority of the trade receivable balance is due to be paid by Biohit HealthCare (Hefei) Co. Ltd.
The maximum amount of credit risk is the book value of the trade receivables.
47
BIOHIT Annual Report 2021
Biohit in Brief CEO’s Review Strategy Corporate Governance Financial Statements
Age distribution of trade receivables
€ 1,000 2021 Impairment loss Net 2021 2020 Impairment loss Net 2020
Not yet at maturity 2,087 -2 2,085 492 0 492
Less than 30 days overdue 83 -1 82 101 0 101
30–60 days overdue 40 0 39 16 0 16
61–90 days overdue 29 -1 28 6 0 6
More than 90 days overdue 26 -1 25 289 -36 253
Total 2,264 -4 2,260 904 -36 868
EUR 5 thousand was recognised in credit losses for 2021, but simultaniously 19 thousand of previously recognized credit losses were returned.
EUR 36 thousand was recognised in credit losses for 2020.
Capital structure management
The equity ratio – an indicator of the company’s capital structure – is calculated by dividing the Group’s equity by the balance sheet total less advances received. The result of this calculation is then multiplied
by one hundred.
Equity ratio
€ 1,000 2021 2020
Total shareholders' equity 7,300 8,703
Balance sheet total 9,613 10,777
Advances received -50 0
Equity ratio 76.3% 80.8%
48
BIOHIT Annual Report 2021
Biohit in Brief CEO’s Review Strategy Corporate Governance Financial Statements
28 RELATEDPARTY TRANSACTIONS
Parties are considered to be related parties if one of the parties is able to exercise control or
considerable influence over the other’s decision-making related to finances and business.
The Group’s related parties include the members of the Board of Directors and the Group
Management Team, as well as the President & CEO.
Salaries and other short-term employment benefits
€ 1,000 2021 2020
Parent company
Management teams 455 451
President & CEO 187 232
Members of the scientific advisory board 197 206
Osmo Suovaniemi has been employed by the company as a member of the scientific advisory
board by the Board of Directors’ decision. The compensation, including fringe benefits, is
EUR197 thousand (EUR206thousand)
€ 1,000 2021 2020
Subsidiaries
Managing Directors 128 115
Board of Directors’ remuneration
€ 1,000 2021 2020
Parent company
Eero Lehti Chairman 11 9
Franco Aiolfi Member 11 14
Liu Feng Member 12 9
Matti Härkönen Member 15 9
Timo Joensuu Member 12 2
Lea Paloheimo Member 15 9
Osmo Suovaniemi Member 15 9
Total board remuneration 90 60
Liu Feng is the owner of Biohit HealthCare (Hefei) Co. Ltd, and he exercises control over the
company.
On 31 December 2021, the members of the Board of Directors and President & CEO owned
a total of 2,950,500 Series A shares and 4,545,980 Series B shares, either directly or through
companies under their control. These correspond to 49.8% of all of the shares in the company
and 88.8% of all of the votes.
The Group’s parent company and subsidiaries
Parent company: Biohit Oyj, Finland
Group
ownership
Biohit Healthcare Ltd, United Kingdom 100%
Biohit Healthcare S.r.l., Italy 100%
Sales of goods and services to related party companies
€ 1,000 2021 2020
Sales of goods
Biohit HealthCare (Hefei) Co. Ltd 2,150 1,920
Sales of services
Biohit HealthCare (Hefei) Co. Ltd 1,300 200
Total 3,450 2,120
Other operating expenses
€ 1,000 2021 2020
Consultancy, administration and logistics fees (companies under
the control of members of the Board of Directors)
BioBrick S.p.A., Franco Aiolfi 69 -
BioAir S.p.A., Franco Aiolfi 13 69
Eurobrick, Franco Aiolfi - 25
Oy Tech Know Ltd, Matti Härkönen 48 48
Total 130 142
49
BIOHIT Annual Report 2021
Biohit in Brief CEO’s Review Strategy Corporate Governance Financial Statements
29 COLLATERAL AND CONTINGENT LIABILITIES
€ 1,000 2021 2020
Collateral pledged on the company's own behalf
Guarantees 4 4
Total collateral and contingent liabilities 4 4
30 EVENTS AFTER THE FINANCIAL PERIOD
Biohit has settled the dispute concerning a breach of the patent license agreement
Biohit Oyj’s (“Biohit”) shareholder Biohit HealthCare (Hefei) Co. Ltd (”Hefei”) acts as the
exclusive distributor of Biohit’s certain GastroPanel products in China. Earlier, there has been
a dispute between the companies regarding the application of the patent license agreement
pertaining to the distribution cooperation. In order to resolve the dispute and some other
controversies and claims related to the agreement between the parties. Biohit has submitted
an application for the initiation of arbitration proceedings to the Arbitration Institute of the
Finland Chamber of Commerce in May 2021.
The parties reached a settlement on February 8, 2022 due to which the arbitration proceedings
between the parties has been terminated with a withdrawal of the submission.
The parties have also agreed on new multiannual distribution agreement for certain
GastroPanel products in China. This agreement will stabilize Biohit’s outlook for the upcoming
years.
The company’s management is not aware of other material events since the balance sheet
date.
50
BIOHIT Annual Report 2021
Biohit in Brief CEO’s Review Strategy Corporate Governance Financial Statements
1 INDICATORS OF FINANCIAL TRENDS
IFRS IFRS IFRS IFRS IFRS
2017 2018 2019 2020 2021
Revenue 1,000 € 8,979 9,931 10,052 7,123 9,361
Change in revenue % 9.6% 10.6% 1.2% -29.1% 31.4%
Operating profit/loss 1,000 € 6,356 –1,965 –1,412 -3,174 -1,480
Proportion of revenue (%) 70.8% –19.8% –14,0% -44,6% -15,8%
Profit/loss before extraordinary items and taxes 1,000 € 6,405 –2,024 –1,227 -3,261 -1,305
Proportion of revenue (%) 71.3% –20.4% –12.2% -45.8% -13.9%
Profit/loss before taxes 1,000 € 6,405 –2,024 –1,227 -3,261 -1,305
Proportion of revenue (%) 71.3% –20.4% –12.2% -45.8% -13.9%
Return on equity (%) 43.9% –12.9% –9.3% -28.5% -18.7%
Return on investments (%) 46.3% –10.9% –8.0% -25.8% -15.3%
Equity ratio (%) 91.3% 89.2% 83.9% 80.8% 76.3%
IInvestments in fixed assets 1,000 € 7,232 13 48 15 37
Proportion of revenue (%) 80.6% 0.1% 0.5% 0.2% 0.4%
Research and development expenditure 1,000 € 1,209 1,290 1,232 1,043 1,166
Proportion of revenue (%) 13.5% 13.0% 12.3% 14.6% 12.5%
Balance sheet total 1,000 € 18,895 17,887 17,372 10,777 9,613
Average number of personnel 51 50 46 45 44
Key Indicators
51
BIOHIT Annual Report 2021
Biohit in Brief CEO’s Review Strategy Corporate Governance Financial Statements
2 SHARESPECIFIC INDICATORS
IFRS IFRS IFRS IFRS IFRS
2017 2018 2019 2020 2021
Earnings per share, undiluted (EUR) 0.42 -0.14 -0.09 -0.22 -0.10
Shareholders’ equity attributable to the owners
of the parent company (EUR per share)” 1.16 1.06 0.97 0.58 0.49
Price-to-earnings ratio (P/E) 9.0 -21.1 -37.3 -11.3 -18.5
Dividend per share
Repayment of capital per share
Dividend payout ratio (%)
Effective dividend yield (%) 0.00 0.00 0.00 0.00 0.00
Series B share price trend (EUR)
- average 5.44 4.37 2.99 2.56 2.11
- low 3.74 2.94 2.10 1.90 1.82
- high 6.85 6.20 3.70 4.30 2.54
- price 31 December 3.77 2.96 3.36 2.48 1.84
Market capitalisation EUR 1,000
presuming the same market value for
Series A shares as for Series B shares) 56,123 44,258 50,553 37,313 27,609
Turnover of Series B shares (thousands) 3,302 8,616 3,362 5,518 4,213
- proportion of the total (%) 27.7% 71.9% 27.9% 45.7% 34.9%
Average ex-rights adjusted number of hares 14,764,411 14,901,904 15,005,253 15,045,593 15,045,593
taking into consideration the diluting effect
of options and convertible bonds 14,943,161 15,015,256 15,005,253 15,045,593 15,045,593
Ex-rights adjusted number of
shares at the end of the financial period 14,886,843 14,952,041 15,045,593 15,045,593 15,045,593
- taking into consideration the diluting effect of
options and convertible bonds 15,065,593 15,065,593 15,045,593 15,045,593 15,045,593
The company has had options that had a dilutive effect in previous financial years. As the company was loss making, no
dilutive effect has been presented.
52
BIOHIT Annual Report 2021
Biohit in Brief CEO’s Review Strategy Corporate Governance Financial Statements
2 SHAREHOLDINGS BY OWNER GROUP 31 DECEMBER 2021
Number of
owners
Number of
shares
Series A shares shares % shares %
1. Companies 2 22.2 874,990 29.4
2. Households 7 77.8 2,100,510 70.6
Shares on the waiting list 0.0
Total number of Series A shares 9 100.0 2,975,500 100.0
Number
of owners
shares
Number
of shares
shares
Series B shares % shares %
1. Households 7,412 96.8 6,804,750 56.4
2. Financial and insurance institutions 11 0.1 351,353 2.9
3. Companies and housing companies 196 2.6 -85,319 -0.7
4. Non-profit organisations 7 0.1 3,261 0.0
5. Public corporations 0.0 0.0
6. Nominees and foreign owners 34 0.4 4,990,456 41.3
In joint and clearing accounts 0.0 5,592 0.0
Total number of Series B shares 7,660 100.0 12,070,093 100.0
Total number of Series A and Series B
shares 7,669 15,045,593
Number of
owners
Number of
shares
Series A shares shares % shares %
1–1,000 0 0.0 0 0.0
1,001–10,000 5 55.6 25,000 0.8
10,001–100,000 2 22.2 82,190 2.8
More than 100,001 2 22.2 2,868,310 96.4
Total number of Series A shares 9 100.0 2,975,500 100.0
Number of
owners
Number of
shares
Series B shares shares % shares %
1–1,000 6,579 85.9 1,633,754 13.5
1,001–10,000 962 12.6 2,733,872 22.6
10,001–100,000 115 1.5 2,851,109 23.6
More than 100,001 4 0.1 4,845,766 40.1
Shares in joint and clearing accounts 0.0 5,592 0.0
Total number of Series B shares 7,660 100.0 12,070,093 100.0
Total number of Series A and Series B
shares 7,669 15,045,593
Shares and Shareholders
Volume/day, share Share price, €
1 FINAL MARKET VALUES OF SHARES
6
5
4
3
2
1
250 000
200 000
150 000
100 000
50 000
0
01/21 02/21 03/21 04/21 05/21 06/21 07/21 08/21 09/21 10/21 11/21 12/21
53
BIOHIT Annual Report 2021
Biohit in Brief CEO’s Review Strategy Corporate Governance Financial Statements
Largest registered shareholders 31 December 2021
10 largest owners in terms of the number
of shares
Series A
shares
Series B
shares
Total
number of
shares %
Biohit Healthcare (Hefei) Co., Ltd. 850,000 4,095,415 4,945,415 32.9
Suovaniemi Osmo Antero 2,018,310 0 2,018,310 13.4
Härkönen Matti 57,200 267,965 325,165 2.2
Oy Etra Invest Ab 175,000 175,000 1.2
Interlab Oy 130,000 130,000 0.9
Suovaniemi Vesa Jukka Markku 85,353 85,353 0.6
Syrjälä Pekka 79,150 79,150 0.5
Jaakkola Sami Juhani 76,600 76,600 0.5
Ruusila Ari Tapio 70,000 70,000 0.5
Oy Tech Know Ltd 24,990 43,600 68,590 0.5
10 largest owners in terms of the number
of votes
Series A
shares
Series B
shares
Total
number of
shares %
Suovaniemi Osmo Antero 2,018,310 0 40,366,200 56.4
Biohit Healthcare (Hefei) Co., Ltd. 850,000 4,095,415 21,095,415 29.5
Härkönen Matti 57,200 267,965 1,411,965 2.0
Oy Tech Know Ltd 24,990 43,600 543,400 0.8
Luostarinen Reijo 10,000 14,460 214,460 0.3
Oy Etra Invest Ab 175,000 175,000 0.2
Interlab Oy 130,000 130,000 0.2
Suovaniemi Vesa Jukka Markku 85,353 85,353 0.1
Syrjälä Pekka 79,150 79,150 0.1
Jaakkola Sami Juhani 76,600 76,600 0.1
Senior management ownership 31 December 2021
On 31 December 2021, the members of the Board of Directors and President & CEO owned a total
of 2,950,500 Series A shares and 4,638,787 Series B shares, either directly or through companies
under their control. These correspond to 50.4 per cent of all of the shares in the company and
88.9 per cent of all of the votes.
54
BIOHIT Annual Report 2021
Biohit in Brief CEO’s Review Strategy Corporate Governance Financial Statements
Return on equity, %
profit/loss for the financial period
× 100
shareholders’ equity (average for the year)
Return on investments, %
profit before appropriations and taxes + interest and other financial expenses
× 100
shareholders’ equity + interest-bearing liabilities (average for the year)
Equity ratio, %
shareholders’ equity on the balance sheet
× 100
balance sheet total – advances received
Earnings per share (EUR)
profit/loss for the financia period
average number of ex-rights shares during the period
Shareholders’ equity per share
(EUR)
shareholders’ equity on the balance sheet
number of shares on the balance sheet date
Dividend per share
dividend distributed for the financial period
number of shares on the balance sheet date
Dividend payout ratio, %
dividend per share
× 100
earnings per share
Effective dividend yield , %
dividend per share
× 100
last transaction rate in the financial period
Price-to-earnings ratio (P/E)
last transaction rate in the financial period
earnings per share
Formulae for Calculating Key Indicators
The new instructions issued by the European Securities and Markets
Authority (ESMA) on Alternative Performance Measures (APMs) took effect
for the 2016 financial period. In conjunction with the transition to an income
statement model based on expense types, Biohit will present APMs to
describe the financial development of its business and improve comparability
between different periods. APMs should not be considered substitutes for
the key indicators specified in the IFRS norms for financial statements. The
operational key indicators have been adjusted for certain measurement
items that do not constitute part of ordinary business activities or that do not
affect cash flow during the period but that affect comparability. The items
that affect comparability and the APMs used by Biohit Oyj are defined as
follows:
Items that affect comparability:
Certain business transactions that do not constitute part of ordinary
business activities or measurement items that do not affect cash flow but
that have a significant effect on the income statement for the period have
been adjusted for items that affect comparability. This items arise through
non-recurring transactions such as:
- Asset impariments
- Asset sales or purchases
- Expense entries for benefits in accordance with IFRS 2
In addition, Biohit Oyj presents the following APMs:
(EBITDA), EUR =
operating profit + depreciation and impairment
Operative EBITDA, EUR =
operating profit + depreciation, impairment - items affecting comparability
Free cash flow (FCF), EUR =
Cash flow from operating activities - Investments and tangible and intangible
assets
55
BIOHIT Annual Report 2021
Biohit in Brief CEO’s Review Strategy Corporate Governance Financial Statements
€ 1,000 Note 1.1. – 31 Dec 2021 1.1. – 31 Dec 2020
Revenue 2 6,361 4,619
Change in inventories of finished and unfinished products -221 69
Other operating income 3 598 162
Materials and services 4 -1,836 -2,090
Expenses arising from employment benefts 5 -2,844 -2,475
Other operating expenses 6 -2,031 -1,866
EBITDA 28 -1,580
Depreciation and amortization 7 -1,658 -1,695
Operating profit/loss -1,629 -3,276
Financial income and expences 9 167 -56
Profit/loss before taxes -1,462 -3,331
Withholding taxes 10 -131 -19
Profit/loss for the financial period -1,593 -3,350
Parent Company’s Income Statement (FAS)
56
BIOHIT Annual Report 2021
Biohit in Brief CEO’s Review Strategy Corporate Governance Financial Statements
€ 1,000 Note 31 Dec 2021 31 Dec 2020
Assets
Non-current assets
Intangible assets 11 42 1,597
Tangible assets 12 221 289
Investments
Shares in Group companies 13 31 31
Other investments 13 2 2
Total fixed assets 296 1,918
Current assets
Inventories 14 548 632
Long-term receivables 15 57 57
Short-term receivables 15 2,463 1,225
Financial securities 16 4,386 5,029
Cash at bank and in hand 17 528 636
Total current assets 7,982 7,579
Total assets 8,278 9,496
Parent Company’s Balance Sheet (FAS)
€ 1,000 Note 31 Dec 2021 31 Dec 2020
Assets
Liabilities and shareholders’ equity
Share capital 18 2,350 2,350
Fair value reserve 18 -1,092 -1,165
Invested unrestricted equity found 18 4,042 4,042
Retained earnings 18 3,028 6,378
Profit/loss for the financial period 18 -1,593 -3,350
Total shareholders’ equity 6,736 8,256
Liabilities
Long-term liabilities 19 - 8
Short-term liabilities 21 1,542 1,233
Total liabilities 1,542 1,241
Total liabilties and shareholders’ equity 8,278 9,496
57
BIOHIT Annual Report 2021
Biohit in Brief CEO’s Review Strategy Corporate Governance Financial Statements
€ 1,000 Note 2021 2020
Cash flow from operating activities:
Profit/loss before appropriations and taxes -1,462 -3,331
Adjustments:
Planned depreciation 1,658 1,695
Unrealised exchange rate gains and losses -3 5
Other income and expenses unconnected to payment -66 62
Financial income and expenses -167 56
Change in working capital:
Increase (-)/decrease (+) in short-term interest-free trade receivables -1,183 1,538
Increase (-)/decrease (+) in inventories 84 151
Increase (+)/decrease (-) in short-term interest-free liabilities 183 -434
Interest paid and payments on other operating financial expenses -23 -90
Dividends received 1 -
Income and interest received from business activities 133 111
Paid direct taxes - -80
Cash flow from operating activities -847 -318
Cash flow from investments:
Investments in tangible and intangible assets -31 -7
Investments in other instruments -1,577 -1,557
Revenue from disposal of other investments 2,365 1,537
Cash flow from investments 757 -27
Cash flow from financing activities:
Repayment of long-term loans -17 -17
Cash flow from financing activities -17 -17
Increase (+)/decrease (-) in cash and cash equivalents -107 -363
Cash and cash equivalents at the beginning of the period 636 998
Cash and cash equivalents at the end of the period 17 528 636
Parent Company’s Cash Flow Statement
58
BIOHIT Annual Report 2021
Biohit in Brief CEO’s Review Strategy Corporate Governance Financial Statements
Notes to the Parent Company’s
Financial Statements
1 ACCOUNTING PRINCIPLES
When preparing the financial statements in accordance with good accounting practices, the company’s
senior managers are called upon to make estimates and assumptions that affect the content of the
financial statements. The outcomes may differ from these estimates.
The parent company’s financial statements have been prepared in accordance with the Finnish
Accounting Act.
The financial statements present figures in thousands of euros based on the original values of business
transactions, with the exception of financial securities, a component of current assets, which are
measured at fair value..
Valuation of property, plant and equipment
Property, plant and equipment are recognised on the balance sheet at acquisition cost, less received
contributions, planned depreciation and
Property, plant and equipment are recognised on the balance sheet at acquisition cost, less received
contributions, planned depreciation and impairments. Planned depreciation is calculated using a
straight-line model based on the useful life of the asset
The planned depreciation periods are as follows:
Intangible rights 3–10 years
Other long-term expenses 5–10 years
Plant and equipment 3–10 years.
Valuation on inventories
Inventories are presented in accordance with the FIFO principle at acquisition cost or replacement cost
or likely sale price, whichever is lower.
The acquisition cost of inventories includes variable costs as well as the allotted proportion of the fixed
expenses of purchasing and manufacturing.
Valuation of financial securities
Financial securities, which belong to current assets, are measured at fair value in accordance with
section 5.2a§ of the Finnish Accounting Act. The fair fair value of investments is determined based
on price quotations on active markets, i.e., the buy quotation on the closing date of the financial
period. Unrealised profits and losses due to changes in the fair value of money market investments
are recognised in the income statement under financial income and expenses in accordance with the
Group’s updated accounting policies.
Investments recognised via the fair value reserve consist solely of the equity investment in the unlisted
shares in Genetic Anallysis AS. Genetic Analysis AS was listed on the Spotlight Stock Market in
Stockholm on1 October 2021. Despite being traded in Sweden, the Genetic Analysis AS shares are
listed in Norweigian krone. The valuation is consistant with the accounting principles of the Group. .
Research and development expenditure
Research expenses are recognised as annual expenses in the year in which they were incurred..
Principle for revenue recognition
When calculating net sales, indirect sales taxes and discounts are deducted from sales revenues. Sales
of work performances are recognised when they are handed over. .
Maintenance and repairs
Maintenance and repair expenses are recognised as expenses for the financial. period
Pensions
The company’s statutory pension cover and any applicable additional benefits is insured by a pension
insurance company. Pension expenses are recognised on the basis of work performed by employees
during working hours. .
Deferred taxes
No deferred taxes have been recognised on the balance sheet. In accordance with general guidelines
issued by the Accounting Board on 12 September 2006, the amounts of deferred taxes that must be
entered into the balance sheet are presented in the notes, along with the amounts of tax liabilities and
assets that should not be entered into the balance sheet because they are unlikely to be realised. .
Items denominated in foreign currencies
Receivables and liabilities in foreign currencies have been translated into euros at the exchange rate
quoted by the European Central Bank on the balance sheet date. Translation differences have been
recognised through profit and loss.
59
BIOHIT Annual Report 2021
Biohit in Brief CEO’s Review Strategy Corporate Governance Financial Statements
2 REVENUE BY BUSINESS SECTOR
€ 1,000 2021 2020
Diagnostics 6,361 4,619
Total 6,361 4,619
REVENUE BY MARKET AREA
€ 1,000 2021 2020
Finland 238 277
Europe, other 1,290 1,132
North and South America 280 190
Asia 3,612 2,433
Other countries 941 587
Total 6,361 4,619
3 OTHER OPERATING INCOME
€ 1,000 2021 2020
From Group companies 340 162
Grants 238 -
Gains from sales of fixed assets 20 -
Total 592 162
4 MATERIALS AND SERVICES
€ 1,000 2021 2020
Purchases during the financial period 1,972 1,870
Change in inventories -137 220
Total materials and supplies 1,836 2,090
Total materials and services 1,836 2,090
5 PERSONNEL EXPENSES AND NUMBER OF PERSONNEL
€ 1,000 2021 2020
Salaries 2,421 2,141
Pension expenses 373 294
Other personnel expenses 49 40
Total personnel expenses 2,844 2,475
In the financial period, the parent company employed
an average of 2021 2020
Office personnel 35 36
Average number of personnel 35 36
Number of personnel at the end of the financial period 32 36
6 MATERIALS AND SERVICES
€ 1,000 2021 2020
Travel expenses and other personnel expenses 168 120
Rents and maintenance expenses 304 258
Sales and marketing expenses 405 374
Other external services 992 751
Change in value of trade receivables -66 62
Other operating expenses 228 301
Total 2,031 1,866
7 DEPRECIATION AND IMPAIRMENT
€ 1,000 2021 2020
Intangible assets 1,554 1,567
Plant and equipment 103 129
Total 1,658 1,695
8 AUDITORS’ FEES
€ 1,000 2021 2020
Companies belonging to the
PricewaterhouseCoopers chain
Auditors’ fees 65 75
Total fees paid to the auditor 65 75
60
BIOHIT Annual Report 2021
Biohit in Brief CEO’s Review Strategy Corporate Governance Financial Statements
9 FINANCIAL INCOME AND EXPENSES
€ 1,000 2021 2020
Dividend income
From Group companies 1 1
Total dividend income 1 1
Other interest and financial income
From Group companies 6 6
From others 184 89
Other interest and financial income 190 95
Total financial income 191 96
Interest expenses and other financial expenses
To others -23 -152
Total financial expenses -23 -152
Total financial income and expenses 167 -56
Financial income and expenses include foreign exchange
gains/losses (net) -1 -1
The items above operating profit include foreign exchange losses/gains (net) or EUR 24
thousand (EUR -16 thousand)
10 INCOME TAXES
€ 1,000 2021 2020
Withholding tax -131 19
Total -131 19
11 INTANGIBLE ASSETS
2021
€ 1,000
Intangible
rights Total
Acquisition cost at the beginning of the financial
period 7,942 7,942
Acquisition cost at the end of the financial period 7,942 7,942
Accumulated depreciation and impairment in the
financial period -6,345 -6,345
Depreciation and impairment in the financial
period -1,554 -1,554
Accumulated depreciation at the end of the
financial period -7,899 -7,899
Book value at the beginning of the financial period 1,597 1,597
Book value at the end of the financial period 42 42
2020
€ 1,000
Intangible
rights Total
Acquisition cost at the beginning of the financial
period 7,942 7,942
Acquisition cost at the end of the financial period 7,942 7,942
Accumulated depreciation and impairment in the
financial period -4,778 -4,778
Depreciation and impairment in the financial
period -1,567 -1,567
Accumulated depreciation at the end of the
financial period -6,345 -6,345
Book value at the beginning of the financial period 3,163 3,163
Book value at the end of the financial period 1,597 1,597
61
BIOHIT Annual Report 2021
Biohit in Brief CEO’s Review Strategy Corporate Governance Financial Statements
12 TANGIBLE ASSETS
2021
€ 1,000
Plant and
equipment Total
Acquisition cost at the beginning of the financial
period 1,566 1,566
Increases 36 36
Acquisition cost at the end of the financial period 1,602 1,602
Accumulated depreciation and impairment in the
financial period -1,278 -1,278
Depreciation in the financial period -103 -103
Accumulated depreciation at the end of the
financial period -1,381 -1,381
Book value at the beginning of the financial period 289 289
Book value at the end of the financial period 221 221
2020
€ 1,000
Plant and
equipment Total
Acquisition cost at the beginning of the financial
period 1,559 1,559
Increases 7 7
Acquisition cost at the end of the financial period 1,566 1,566
Accumulated depreciation and impairment in the
financial period -1,149 -1,149
Depreciation in the financial period -129 -129
Accumulated depreciation at the end of the
financial period -1,278 -1,278
Book value at the beginning of the financial period 410 410
Book value at the end of the financial period 289 289
14 INVENTORIES
€ 1,000 2021 2020
Materials and supplies 351 368
Work in progress 27 14
Finished products/goods 169 250
Total inventories 548 632
13 INVESTMENTS
Shares 2021
€ 1,000
Group
companies Others Total
Book value at the beginning of the financial period 31 2 32
Book value at the end of the financial period 31 2 32
Shares 2020
€ 1,000
Group
companies Others Total
Book value at the beginning of the financial period 31 2 32
Book value at the end of the financial period 31 2 32
62
BIOHIT Annual Report 2021
Biohit in Brief CEO’s Review Strategy Corporate Governance Financial Statements
15 RECEIVABLES
€ 1,000 2021 2020
Long-term receivables
Loan receivables 57 57
Total non-current receivables 57 57
Short-term receivables
Receivables from Group companies
Trade receivables 128 186
Loan receivables 255 255
Accured income - 6
Other receivables
Trade receivables 1,660 369
Other receivables 225 144
Accured income 195 264
Total curret receivables 2,463 1,225
16 FINANCIAL SECURITIES
Assets measured at fair value
€ 1,000 2021 Level 1 Level 2
Traded securities and
investment to Genetic
Analysis AS 4,386 2 ,006 2,380
* Genetic Analysis AS 889 thousand euros on level 1
Assets measured at fair value
€ 1,000 2020 Level 1 Level 2 Level 3
Traded securities and
investment to unlisted
company * 5 ,029 2,090 2,022 917
* Genetic Analysis AS 816 thousand euros and one corporate loans 101 thousand euros on level 3
Financial securities consist of fixed-income investments, corporate loans and money market
investments.
The hierarchy levels are described in the Group’s note 17.
63
BIOHIT Annual Report 2021
Biohit in Brief CEO’s Review Strategy Corporate Governance Financial Statements
Calculation of distributable equity 31 December 2021 2020
Retained earnings 3,028 6,378
Profit/loss for the financial period -1,593 -3,350
Invested unrestricted equity fund 4,042 4,042
Fair value reserve -1,092 -1,165
Government granted cost support -190 -
Total 4,196 5,905
2021 2020
Parent company’s share capital
structure shares
%
of shares
%
of votes shares
Series A shares (20 votes per
share) 2,975,500 19.8 83.1 2,975,500
Series B shares (1 vote per share) 12,070,093 80.2 16.9 12,070,093
Total 15,045,593 100.0 100.0 15,045,593
The company’s share capital is EUR 2,350,350.81. The company does not hold any of its
own shares. Based on a resolution of the AGM held on 16 September 2020, the Board of the
company is authorised to decide on the issue of shares and to issue the special rights referred
to in Chapter 10 of the Limited Liability Companies Act so that the maximum number of new
Series B shares to be issued pursuant to the special rights is 3,000,000, which corresponds
to approximately 24.9% of all of the company’s Series B shares. In 2021, the company issued
shares options for 880 000 new shares.
19 LONGTERM LIABILITIES
€ 1,000 2021 2020
Loans from financial institutions - 8
Total - 8
17 CASH AND CASH EQUIVALENTS
€ 1,000 2021 2020
Cash in hand and at bank 528 636
18 SHAREHOLDERS’ EQUITY
€ 1,000 2021 2020
Share capital 1 January 2,350 2,350
Share capital 31 December 2,350 2,350
Fair value reserve 1 January -1,165 1,395
Increases 74 -
Decreases - -2,560
Fair value reserve 31 December -1,092 -1,165
Invested unrestricted equity fund 1 January 4,042 4,042
Invested unrestricted equity fund 31 December 4,042 4,042
Retained earnings 1 January 3,028 6,378
Retained earnings 31 December 3,028 6,378
Reported profit/loss for the financial period -1,593 -3,350
Total shareholders’ equity 6,736 8,256
Shares and voting rights
Biohit’s shares are divided into Series A and Series B shares. The series from each other in
that each Series A share entitles its holder to twenty (20) votes at general meetings, while
each Series B share carries one (1) vote. The dividend The dividend paid for Series B shares is,
however, two (2) per cent of the nominal value higher than that paid for Series A shares. When
this regulation is applied, the nominal value of the shares is taken to be EUR 0.17, which was
the nominal value of the company’s shares when it decided to discontinue using nominal values
for shares.
64
BIOHIT Annual Report 2021
Biohit in Brief CEO’s Review Strategy Corporate Governance Financial Statements
20 DEFERRED TAX ASSETS AND LIABILITIES
Deferred tax liabilities
There are no deferred tax liabilities.
Deferred tax assets
The tax-deductable losses have not been noted in the balance sheet. Including the confirmed
losses for the 2021 financial period, there is a total of EUR22.6million loss in Finland (2021:
EUR0.4million, 2020: EUR2.2million, 2011–2019: EUR20.1million). The losses for the
financial period 2021 have not been confirmed.
21 SHORTTERM LIABILITIES
€ 1,000 2021 2020
Loans from financial institutions, current proportion 8 17
Advances received 50 0
Trade payables 358 470
Accruals and deferred income 804 586
Other liabilities 323 159
Total short-term liabilities 1,542 1,233
The significant items of accruals and deferred income are salary-related deferred items valued
at EUR 605 thousand (EUR 445 thousand).
22 PLEDGES, CONTINGENT LIABILITIES AND OTHER LIABILITIES
€ 1,000 2021 2020
Debts for which mortgages have been pledged
The company has not pledged any collateral.
Leasing commitments
Payable in the next financial period 24 19
Payable later 62 16
Total 87 36
Rental commitments
Payable in the next financial period 90 174
Payable later 724 -
Total 814 174
Other contingent liabilities
Guarantees 4 4
Leasing and rental fees mainly consist of fixed-term leasing and rental agreements lasting
longer than one year.
Contingent liabilities on behalf of Group companies
The company has no contingent liabilities on behalf of Group companies.
65
BIOHIT Annual Report 2021
Biohit in Brief CEO’s Review Strategy Corporate Governance Financial Statements
Board of Director’s Proposal Regarding
the Distribution of Profits
On 31 December 2021, the parent company’s distributable assets (unrestricted equity) amounted to EUR 4,195,824.36, including the loss for the financial period of EUR 1,592,724.36. The Board of
Directors proposes to the Annual General Meeting that the company distribute no divided for the last financial year and that the profit for the financial year be transferred to retained earnings.
Helsinki, 14 February 2022
Eero Lehti Franco Aiolfi Liu Feng
Chairman of the Board of Directors Member of the Board of Directors Member of the Board of Directors
Matti Härkönen Lea Paloheimo Osmo Suovaniemi
Member of the Board of Directors Member of the Board of Directors Member of the Board of Directors
Päivi Siltala
President & CEO
Auditor’s statement
A statement has been issued today on the completed audit.
Helsinki, 15 February 2022
PricewaterhouseCoopers Oy
Firm of auditors
Tiina Puukkoniemi
Authorised Public Accountant
66
BIOHIT Annual Report 2021
Biohit in Brief CEO’s Review Strategy Corporate Governance Financial Statements
Auditor’s Report (translation of the Finnish Original)
To the Annual General Meeting of Biohit Oyj
Report on the Audit of the
Financial Statements
OPINION
In our opinion
• the consolidated financial statements give a true and fair view of the group’s financial position and
financial performance and cash flows in accordance with International Financial Reporting Standards
(IFRS) as adopted by the EU
• the financial statements give a true and fair view of the parent company’s financial performance and
financial position in accordance with the laws and regulations governing the preparation of the
financial statements in Finland and comply with statutory requirements.
Our opinion is consistent with the additional report to the Board of Directors.
What we have audited
We have audited the financial statements of Biohit Oyj (business identity code 0703582-0) for the year
ended 31 December 2021. The financial statements comprise:
• the consolidated balance sheet, consolidated comprehensive income statement, statement of
changes in consolidated shareholders’ equity, consolidated cash flow statement, and notes to the
consolidated financial statements, including a summary of significant accounting policies
• the parent company’s balance sheet, income statement, statement of cash flows and notes.
BASIS FOR OPINION
We conducted our audit in accordance with good auditing practice in Finland. Our responsibilities under
good auditing practice are further described in the Auditor’s Responsibilities for the Audit of the
Financial Statements section of our report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our opinion.
Independence
We are independent of the parent company and of the group companies in accordance with the ethical
requirements that are applicable in Finland and are relevant to our audit, and we have fulfilled our other
ethical responsibilities in accordance with these requirements.
To the best of our knowledge and belief, the non-audit services that we have provided to the parent
company and to the group companies are in accordance with the applicable law and regulations in
Finland and we have not provided non-audit services that are prohibited under Article 5(1) of Regulation
(EU) No 537/2014. The non-audit services that we have provided are disclosed in note 2.9 to the Financial
Statements.
OUR AUDIT APPROACH
Overview
Materiality:
• Overall group materiality: € 85 thousand
Audit scope:
• E In addition to the parent company, our group scope consists of two
foreign subsidiaries.
Key audit matter:
• Cut-off of Revenue recognition
• Settlement of the patent license agreement dispute with Biohit
HealthCare (Hefei) Co. Ltd.
As part of designing our audit, we determined materiality and assessed the risks of material
misstatement in the financial statements. In particular, we considered where management made
subjective judgements; for example, in respect of significant accounting estimates that involved making
assumptions and considering future events that are inherently uncertain.
MATERIALITY
AUDIT SCOPE
KEY AUDIT
MATTER
67
BIOHIT Annual Report 2021
Biohit in Brief CEO’s Review Strategy Corporate Governance Financial Statements
Materiality
The scope of our audit was influenced by our application of materiality. An audit is designed to obtain
reasonable assurance whether the financial statements are free from material misstatement.
Misstatements may arise due to fraud or error. They are considered material if individually or in
aggregate, they could reasonably be expected to influence the economic decisions of users taken on the
basis of the financial statements.
Based on our professional judgement, we determined certain quantitative thresholds for materiality,
including the overall group materiality for the consolidated financial statements as set out in the table
below. These, together with qualitative considerations, helped us to determine the scope of our audit
and the nature, timing and extent of our audit procedures and to evaluate the effect of misstatements on
the financial statements as a whole.
Overall group materiality € 85 thousand (€ 110 thousand in 2020)
How we determined it We used total assets as benchmark and 1% rule of thumb to deter-
mine overall group materiality.
Rationale for the materiality
benchmark applied
Biohit group’s business has been clearly loss making . Based on
our assessment the total assets provide a more solid base for
determining the materiality than the commonly used income state-
ment based benchmarks.
How we tailored our group audit scope
We tailored the scope of our audit, taking into account the structure of the group, the accounting
processes and controls, and the industry in which the group operates. Biohit Oyj is a Finnish
biotechnology company operating on global markets, which has foreign subsidiaries in Great Britain and
Italy.
We determined the type of work that needed to be performed at group companies. This work was
performed by the group audit team. Audit was performed for the parent company and for Biohit
Healthcare Ltd, UK. For the Italian subsidiary, we performed selected audit procedures on specified
account balances as well as analytical procedures. In addition, we performed audit procedures on the
group level.
By performing the procedures above, we have obtained sufficient and appropriate evidence regarding
the financial information of the Group as a whole to provide a basis for our opinion on the consolidated
financial statements.
KEY AUDIT MATTERS
Key audit matters are those matters that, in our professional judgment, were of most significance in our
audit of the financial statements of the current period. These matters were addressed in the context of
our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not
provide a separate opinion on these matters.
As in all of our audits, we also addressed the risk of management override of internal controls,
including among other matters consideration of whether there was evidence of bias that represented a
risk of material misstatement due to fraud.
68
BIOHIT Annual Report 2021
Biohit in Brief CEO’s Review Strategy Corporate Governance Financial Statements
Key audit matter in the audit of the group How our audit addressed the key audit matter
CUTOFF OF REVENUE RECOGNITION
Refer to the financial statements accounting principles and the financial statements note 2.3 Net
sales and segment information
Biohit Oyj is a Finnish Biotechnology company operating on global markets. Biohit’s product portfolio
consists of diagnostic tests, analysis systems, products that bind carcinogen acetaldehyde in mono-
clonal antibodies and service laboratory operations. The Group’s revenue is predominately generated
from distribution agreements signed with several distributors who then sell the products further to
healthcare operators.
Revenue from distribution agreement-based product sales is recognized at a point of time when
the control has transferred to a distributor in accordance with delivery terms.
We determined cut-off of revenue recognition as an audit focus area, as there is a risk that revenue
in the financial statements is recognized in an incorrect period due to either errors or fraud.
We gained an understanding of the revenue recognition process and we performed substantive audit
procedures to ensure revenue is recorded in the correct period. Our substantive audit procedures
included:
• testing a sample of selected distribution agreements in order to ensure the correctness of revenue
recognition criteria applied
• testing revenue transaction that occurred close to the year end
• testing certain revenue related balances recognised in the balance sheet
• testing a sample of revenue transactions occurred during the year
• testing the basis for revenue recognition cut-off for selected manual journal entries posted in
revenue accounts
69
BIOHIT Annual Report 2021
Biohit in Brief CEO’s Review Strategy Corporate Governance Financial Statements
Key audit matter in the audit of the group How our audit addressed the key audit matter
SETTLEMENT OF THE PATENT LICENSE AGREEMENT DISPUTE
WITH BIOHIT HEALTHCARE HEFEI CO. LTD.
Refer to the financial statements accounting principles and the financial statements note 2.3, Net
sales and segment information, note 2.28 Related party transactions, note 2.30 Subsequent events
Biohit Oyj’s shareholder and related party Biohit HealthCare (Hefei) Co. Ltd is the exclusive distrib-
utor of Biohit Oyj’s Gastropanel products in China. There has been a dispute between the companies
regarding the application of the patent license agreement pertaining to the distribution cooperation.
Biohit HealthCare (Hefei) Co. Ltd has not paid royalties to Biohit Oyj in accordance with the distribu-
tion and licensing agreements.
The parties have reached a settlement on February 8, 2022 due to which the arbitration proceed-
ings between the parties will be terminated with a withdrawal of the submission, provided that cer-
tain conditions are met within the agreed timeframe.
This is an adjusting event after the reporting period, due to which the Company has changed their
previously estimated royalty sales amounts to the agreed amounts and recognized 1,3 m€ royalty rev-
enue in 2021.
As part of the settlement, Hefei has pledged 1.5 million of its Biohit class B shares to Biohit as a
security for its payment obligations under, i.a., the new distribution agreement.
We determined the settlement relating to the dispute with Biohit HealthCare (Hefei) Co. as a key
audit matter due to the significance of the transaction and due to the estimation uncertainty relating
to it.
We obtained understanding of the impact of the patent license settlement to royalty revenue amount
and related balance sheet items. Our substantive audit procedures included following procedures:
• We read the Distribution agreement signed 8 February 2022, which confirm 2020 and 2021 royalty
revenue, recorded in 2021 turnover. For 2020 turnover, only the difference between previously
recorded and based on February 8, 2022 agreed amount has been recorded in 2021 turnover.
• We assessed that the settlement was an adjusting event after reporting period, due to which 2021
financial statements were adjusted.
• We reconciled the agreed royalties based on new Distribution agreement to the accounting records
and financial statements and ensured those were correctly accounted for.
• We reviewed the disclosure notes about the settlement and royalty revenue.
• We obtained evidence that Hefei has transferred their pledged 1.5 million of its Biohit class B
shares to Biohit to a book-entry account in Finland, as a security for its payment obligations.
• We read legal correspondence between Biohit and their legal counsels and obtained external
confirmations from legal counsels relating to the arbitration.
• As auditors we obtained a direct confirmation from Hefei where they confirmed 2021 revenue and
their liability to Biohit.
• We obtained understanding of subsequent events in the dispute until the date when the financial
statements are authorised for issue and until our audit opinion date.
The above-mentioned Key audit matter “Settlement of the patent license agreement dispute with Biohit HealthCare (Hefei) Co. Ltd. “ is also a key audit matters with respect to our audit of the parent com-
pany financial statements. Our audit procedures were aligned with the ones presented above
There are no significant risks of material misstatement referred to in Article 10(2c) of Regulation (EU) No 537/2014 with respect to the consolidated financial statements or the parent company financial
statements.
RESPONSIBILITIES OF THE BOARD OF DIRECTORS AND THE MANAGING DIRECTOR FOR THE FINANCIAL STATEMENTS
The Board of Directors and the Managing Director are responsible for the preparation of consolidated financial statements that give a true and fair view in accordance with International Financial Reporting Standards
(IFRS) as adopted by the EU, and of financial statements that give a true and fair view in accordance with the laws and regulations governing the preparation of financial statements in Finland and comply with statutory
requirements. The Board of Directors and the Managing Director are also responsible for such internal control as they determine is necessary to enable the preparation of financial statements that are free from
material misstatement, whether due to fraud or error.
In preparing the financial statements, the Board of Directors and the Managing Director are responsible for assessing the parent company’s and the group’s ability to continue as a going concern, disclosing, as
applicable, matters relating to going concern and using the going concern basis of accounting. The financial statements are prepared using the going concern basis of accounting unless there is an intention to liqui-
date the parent company or the group or to cease operations, or there is no realistic alternative but to do so.
70
BIOHIT Annual Report 2021
Biohit in Brief CEO’s Review Strategy Corporate Governance Financial Statements
AUDITOR’S RESPONSIBILITIES FOR THE AUDIT OF THE FINANCIAL STATEMENTS
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with good auditing practice will always detect a material misstatement
when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users
taken on the basis of these financial statements.
As part of an audit in accordance with good auditing practice, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence
that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve
collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit 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 parent company’s or the group’s internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
• Conclude on the appropriateness of the Board of Directors’ and the Managing Director’s use of the going concern basis of accounting and based on the audit evidence obtained, whether a material
uncertainty exists related to events or conditions that may cast significant doubt on the parent company’s or the group’s ability to continue as a going concern. If we conclude that a material uncertainty
exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are
based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the parent company or the group to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events so
that the financial statements give a true and fair view.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the group to express an opinion on the consolidated financial statements. We are
responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in inter-
nal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and
other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements of the current period and are
therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we deter-
mine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
71
BIOHIT Annual Report 2021
Biohit in Brief CEO’s Review Strategy Corporate Governance Financial Statements
Other Reporting Requirements
APPOINTMENT
We were first appointed as auditors by the annual general meeting on 14 April 2014. Our appointment
represents a total period of uninterrupted engagement of 8 years.
OTHER INFORMATION
The Board of Directors and the Managing Director are responsible for the other information. The other
information comprises the report of the Board of Directors and the information included in the Annual
Report, but does not include the financial statements and our auditor’s report thereon. We have
obtained the report of the Board of Directors prior to the date of this auditor’s report and the Annual
Report is expected to be made available to us after that date.
Our opinion on the financial statements does not cover the other information.
In connection with our audit of the financial statements, our responsibility is to read the other informa-
tion identified above and, in doing so, consider whether the other information is materially inconsistent
with the financial statements or our knowledge obtained in the audit, or otherwise appears to be mate-
rially misstated. With respect to the report of the Board of Directors, our responsibility also includes
considering whether the report of the Board of Directors has been prepared in accordance with the
applicable laws and regulations.
In our opinion
• the information in the report of the Board of Directors is consistent with the information in the
financial statements
• the report of the Board of Directors has been prepared in accordance with the applicable laws and
regulations.
If, based on the work we have performed on the other information that we obtained prior to the date of
this auditor’s report, we conclude that there is a material misstatement of this other information, we are
required to report that fact. We have nothing to report in this regard.
Helsinki, 15 February 2022
PricewaterhouseCoopers Oy
Authorised Public Accountants
Tiina Puukkoniemi
Authorised Public Accountant (KHT)
