Financial statements 2021 1
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Financial statements 2021 2
Financial statements 2021 3
Reg. no. 611.522
Business ID: 0997039-6
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Contents
Report of the Board of Directors
Key indicators
Principles for calculating the key indicators
Information on shares, shareholders and options
Consolidated financial statements (IFRS)
Consolidated statement of comprehensive income
Consolidated balance sheet
Consolidated cash flow statement
16
Calculation of changes in consolidated shareholders’ equity 17
Notes to the consolidated financial statements 18
Parent company’s financial statements (FAS)
Parent company’s income statement 43
Parent company’s balance sheet 44
Parent company’s cash flow statement 45
Calculation of changes in the parent company’s
shareholders’ equity 46
Notes on the parent company 48
Signatures to the financial statements
and report of the Board of Directors 53
Auditor’s report 55
Financial statements 2021 4
Report of the Board of Directors for 1
Summary of the financial period
2021 fi nancial period (comparable fi gures for 2020 in parentheses):
• Turnover: EUR 18.5 million (EUR 20.5 million), decrease of
9.8%.
• EBITDA: EUR -1.8 million (EUR -2.0 million), -9.6% of turnover
(-9.9%).
• EBIT: EUR -5.3 million (EUR -9.1 million), -28.8% of turnover
(-44.2%).
• Net income*: EUR -5.8 million (EUR -11.9 million), -31.4% of
turnover (-58.1%).
• Earnings per share (diluted and undiluted): -0.01 (EUR -0.02).
• Cash fl ow from operations: EUR -3.7 million (EUR -1.3 million).
• Number of employees at the end of the fi nancial period: 165 (182),
decrease of 9.3%.
* EBIT and net income for the fi nancial period include a goodwill
impairment charge of EUR -1.4 million (EUR -3.7 million).
Business
We aim to expand internationally and profi tably by designing new
concepts, services and technology solutions for digitalising indus-
tries. Our innovative services offer Digitalist Group a competitive
advantage in markets where companies have increasingly identifi ed
a positive customer experience as a key source of competitive ad-
vantage. Digitalist Group’s largest customers include Honda, Spoti-
fy, Posti, Electrolux and TetraPak.
Our Branding service develops customers’ brands, marketing and
customer experiences. Our design services include digital, mobile
and web design, as well as service and industrial design. The servic-
es range from planning strategy and user research to visual and inter-
active design, prototype design and usability studies. In technology
services, we have robust expertise in developing creative software
solutions with respect to hardware, embedded systems and software.
One of the key tools in our operational and user experience offer-
ing is the LeanLab customer collaboration platform. This software
solution provides the opportunity to build customer understanding
and engage in joint development with customers and personnel. We
offer digital services for open-source environments (Drupal), and
we are the leading web design and integration expert in Sweden. Our
main customers in Sweden are municipalities, government agencies
and NGOs that have chosen an open source strategy.
The Group’s head offi ce is in Helsinki . The Group has studios and
signifi cant business operations in Finland, Sweden (Stockholm) and
Canada (Vancouver). We bring together the expertise we need from
our studios in different countries for each client project.
Year 2021
This was the second year on which the COVID-19 pandemic had a
major impact. Turnover in 2021 was EUR 18.5 million, down from
EUR 20.5 million in 2020. The positive development of EBITDA in
the fi nancial period was due to operational effi ciency improvements,
cost reductions and the divestment of Ticknovate Ltd. Most of the
decrease in turnover occurred in the fi rst quarter of the year. The
Group has invested in its key customers in line with its strategy, and
this is expected to have a positive impact on sales trends. Our main
priority for 2022 is to increase turnover.
The Group has boosted the effi ciency of its operations, and this
is expected to improve Group profi tability in the future. Operating
expenses decreased to EUR 2.4 million in the fi nancial period. Ra-
tionalising the cost structure will be the key to our success, and we
are making major efforts to reduce fi xed costs while seeking new
and more effi cient ways of serving our customers and expanding our
business. Over the past year, we have also restructured our manage-
ment, helping to reduce costs and enable more effi cient operational
management. We believe that the impact of these measures will be-
come apparent in the coming quarters.
The Group’s fi nancial position remained tight during the 2021
fi nancial period. The Group’s liquidity was improved during the fi -
nancial period by rearranging the repayment periods on related-par-
ty loans and changing them into convertible bonds and equity loans.
The repayment periods of loans from fi nancial institutions were ex-
tended by negotiation. The company has agreed to increase its credit
line with a fi nancier by EUR 2 million. The divestment of Tickno-
vate Ltd, which took place in the second half of the year, improved
the company's liquidity.
We have continued to creates a competitive advantage for our cus-
tomers by combining brand strategy, a good customer experience,
design and technology to ensure continued business success for our
customers. Our branding, design and technology capabilities are the
key factors we need to implement customer experience change pro-
jects successfully.
During the fi nancial period, we identifi ed a demand in the market
for the LeanLab customer collaboration platform, which is one of
the tools in our operational and user experience offering. We en-
deavour to further strengthen its growth potential as SaaS business.
We span off the LeanLab business into a wholly-owned subsidiary
named LeanLab Oy with the aim of supporting the LeanLab Oy’s
focus on developing the SaaS business.
In Sweden, our offering of open-source technology has been
strong. In December 2021, we concluded a signifi cant EUR 1.8 mil-
lion agreement with a public-sector organisation in Sweden for the
provision of design and development services. The agreement will
underpin Digitalist Group’s growth in Sweden and support its aim of
Financial statements 2021 5
operating as a strategic partner in digitalisation. During the fi nancial
period, we also increased our offering of open-source technology in
Finland.
Increasing turnover, improving profi tability and enhancing the
effi ciency of operating models remain key goals for 2022. We still
have much to improve, but we believe that we are on the right path,
and we are beginning 2022 with an organisation that is ready to tack-
le the challenge ahead of it and achieve change.
During the year under review, Digitalist Group employed an av-
erage of 172 experts representing over 20 different nationalities in
four different countries. Digitalist’s values – people-orientation and
equal opportunity, collaboration, continuous learning and client suc-
cess – were realised effectively over the past year amid new oper-
ating methods and virtual meetings. Our Group and our customers
have adapted to new operating methods. Remote meetings and digi-
tal tools have strengthen our ability to work across borders in teams
with members from our various studios and support our customers
in inspiring projects.
General meeting of 20 April 2021 and Board of
Directors’ authorisations
Digitalist Group Plc’s Annual General Meeting, which was held on
20 April 2021, adopted the fi nancial statements for the fi nancial year
that ended on 31 December 2020 and discharged the members of
the Board of Directors and the CEO from liability for the fi nancial
period that ended on 31 December 2020. As proposed by the Board
of Directors, the Annual General Meeting decided not to pay a div-
idend for 2020.
The Annual General Meeting decided that the Board of Directors
would have six members. Paul Ehrnrooth, Andreas Rosenlew, Esa
Matikainen, Peter Eriksson, Maria Olofsson and Johan Almquist
were elected as members of the Board of Directors.
The Annual General Meeting decided to pay the following emol-
uments to members of the Board of Directors: chair of the Board:
EUR 40,000/year and EUR 500/meeting, deputy chair: EUR 30,000/
year and EUR 250/meeting, other Board members: EUR 20,000/
year and EUR 250/meeting. The fee for meetings of the Board’s
committees is EUR 500/meeting for the chair and EUR 250/meeting
for the members. The company has had no committees since the
general meeting on 14 April 2020.
KPMG Oy Ab, a fi rm of auditors, was elected as the company’s
auditor. The auditor with principle responsibility nominated by the
audit fi rm is Miika Karkulahti, Authorised Public Accountant. The
decision was taken to pay the auditor’s fee in accordance with a
reasonable invoice.
The Annual General Meeting authorised the Board of Directors
to decide on a paid share issue, as well as the issue of options and
other special rights entitling their holders to shares as referred to in
chapter 10, section 1 of the Limited Liability Companies Act, or a
combination of all or some of the foregoing on one or more occa-
sions, subject to the following conditions:
The maximum number of new shares that may be issued pursuant
to the authorisation is 325,511,370, which corresponded to 50 per
cent of all the shares in the company when the notice of the Annual
General Meeting was sent. The Board of Directors was authorised
to decide on all the terms and conditions of share issues and special
rights entitling their holders to shares within the limits of the fore-
going authorisation, such as the condition that the subscription price
may be paid in cash or by offsetting the value against the subscrib-
er’s outstanding receivables from the company.
The Board of Directors is entitled to decide to recognise the sub-
scription price either as an increase in the share capital or in the
invested unrestricted equity fund, either in whole in part.
Shares and special rights entitling their holders to shares may
also be issued in a directed issue in deviation from the shareholders’
pre-emptive rights if there is a weighty fi nancial reason to do so
in accordance with the Limited Liability Companies Act. In such a
case, the authorisation may be exercised in order to fi nance corpo-
rate acquisitions or other investments in the company’s business,
to maintain and increase the Group’s solvency or to implement its
incentive scheme.
The authorisation is valid until the 2022 Annual General Meeting
or 30 June 2022, whichever is fi rst.
Authorisation of the Board of Directors to decide on the acquisi-
tion of treasury shares:
The Annual General Meeting authorised the Board of Directors
to decide on the purchase or distress of a maximum of 65,102,000
treasury shares using the company’s distributable assets. The max-
imum number of shares corresponded to approximately 10 per cent
of all the shares in the company when the notice of the Annual Gen-
eral Meeting was published. The purchase may take place on one or
more occasions. The purchase price of the shares may be no more
than the highest price paid for the shares in public trading at the
time of purchase. When treasury shares are purchased, ordinary de-
rivative contracts, share lending or other contracts may be made in
capital markets as provided by the laws and regulations. The author-
isation entitles the Board of Directors to decide on the purchase of
shares in proportions other than the holdings of the existing share-
holders (directed acquisition).
Shares may be purchased for use in executing corporate acqui-
sitions or other arrangements as part of the company’s business, to
improve the company’s fi nancial structure, or otherwise for onward
conveyance or cancellation.
The authorisation includes the right of the Board of Directors to
decide on all other matters related to the purchase of shares. The
authorisation is valid until the 2022 Annual General Meeting or 30
June 2022, whichever is fi rst.
The minutes of the Annual General Meeting and the decisions
made are on the company’s website at https://investor.digitalist-
group.com/fi /investor/governance/annual-general-meeting
Offices
Our offi ces are located in our primary markets of Finland, Sweden
and Canada. All our offi ces are staffed by technology and design
experts as well as a local sales organisation.
Financial statements 2021 6
Segments
Digitalist Group reports its business in a single segment.
Turnover
The Group’s turnover for the period totalled EUR 18.5 million
(EUR 20.5 million), which is -9.8% less than in the previous year.
The uncertainty among customers due to the COVID-19 pandemic
was refl ected in turnover. Turnover outside Finland accounted for
the majority of the Group’s turnover in the fi nancial period, standing
at 77% (74%).
Earnings
EBITDA for the fi nancial period was EUR -1.8 million (EUR -2.0 mil-
lion), EBIT was EUR -5.3 million (EUR -9.1 million), and earn-
ings before taxes were EUR -5.8 million (EUR -12.1 million). The
positive development of EBITDA in the fi nancial period was due
to operational effi ciency improvements, cost reductions and the di-
vestment of Ticknovate Ltd. The foreign exchange gains recognised
on balance sheet items had a signifi cant effect on fi nancial items,
which amounted to EUR -0.5 million (EUR -3.2 million). Earnings
for the fi nancial period came to EUR -5.8 million (EUR -11.9 mil-
lion), earnings per share were EUR -0.01 (EUR -0.02), and cash fl ow
from operations per share was EUR -0.01 (EUR -0.00). Net income
for the fi nancial period and the comparison period were affected by
a goodwill impairment charge of EUR -1.4 million (EUR -3.7 mil-
lion).
Return on equity
The Group’s shareholders’ equity was EUR -24.6 million
(EUR -16.7 million), of which EUR 0.5 million (EUR 1.3 million)
is attributable to minority interests. Return on equity (ROE) was
negative. Return on investment (ROI) was -54.4 (-75.9) per cent.
The negative change in the Group’s shareholders’ equity in the
fi nancial period was mainly attributable the operating loss and a
goodwill impairment charge of EUR -1.4 million (EUR -3.7 mil-
lion).
Investments
Investments during the fi nancial period totalled EUR 0.0 million
(EUR 0.6 million). No development expenses were capitalised in
the fi nancial period. At the end of the review period, research and
development expenses capitalised on the balance sheet totalled
EUR 0.0 million (EUR 0.7 million). The capitalised development
expenditure for 2020 was related to the development of the Tickno-
vate product. The capitalised development expenditure was sold to
Ticknovate Ltd in conjunction with the divestment.
Balance sheet and financing
The balance sheet total was EUR 14.1 million (EUR 19.6 million).
The decrease in the balance sheet total was mainly due to the good-
will impairment charge, the divestment of Ticknovate Ltd and lower
trade receivables due to the decrease in turnover. Shareholders' equi-
ty amounted to EUR -24.6 million (EUR -16.7 million). The solven-
cy ratio was -174.1% (-84.9%). At the end of the period, the Group’s
liquid assets totalled EUR 1.0 million (EUR 1.0 million). The share-
holders’ equity of the Group’s parent company was EUR 2.2 mil-
lion (EUR 6.1 million), taking into consideration the conversion of
EUR 10.2 million of convertible bonds into equity loans.
At the end of the fi nancial period, the Group’s balance sheet rec-
ognised EUR 10.7 million(EUR 8.9 million) in loans from fi nancial
institutions, including the overdrafts in use. In addition, the com-
pany has loans from its main owners. On 31 December 2021, the
Group’s interest-bearing liabilities amounted to EUR 32.7 million
(EUR 28.1 million), of which related-party loans amounted to EUR
20.5 million (EUR 17.9 million). The loan agreements made with
related-party companies in the fi nancial period are shown under re-
lated-party transactions.
The Group’s fi nancial position remained tight during the 2021
fi nancial period. The Group has boosted the effi ciency of its oper-
ations, and this is expected to improve Group profi tability in the
future. Operating expenses decreased to EUR 2.4 million in the re-
view period. The Group has invested in its key customers in line
with its strategy, and this is expected to have a positive impact on
sales trends.
The Group’s liquidity was improved during the review period by
rearranging the repayment periods on related-party loans and chang-
ing them into convertible bonds and equity loans. The repayment
periods of loans from fi nancial institutions were extended by ne-
gotiation. The company has agreed to increase its credit line with a
fi nancier by EUR 2 million. The divestment in the second half of the
year improved the company's liquidity.
Cash flow
The Group’s cash fl ow from operating activities during the review
period was EUR -3.7 million (EUR -1.3 million), a change of EUR
-2.4 million. Cash fl ow from operations was af
fected by a change
in working capital due to reduced turnover
. Cash fl ow from invest-
ments was affected by the EUR 2.6 million divestment of Tickno-
vate Ltd.
In order to reduce the rate of turnover of trade receivables, the
Group sells some of its trade receivables from Finnish customers.
Trade receivables worth EUR 3.0 million (EUR 4.7 million) were
sold during the fi nancial period.
Goodwill
On 31 December 2021, the consolidated balance sheet recognised
EUR 5.2 million (EUR 7.5 million) in goodwill. The company test-
ed its goodwill in accordance with IAS 36 as at 30 June 2021 and
recognised an impairment charge of EUR -0.5 million. In connec-
Financial statements 2021 7
tion with the divestment of Ticknovate Ltd, which took place on 31
August 2021, EUR -0.8 million was allocated against the profi t from
the sale. The company tested its goodwill on 31 December 2021 and
recognised an impairment of EUR -0.9 million.
Personnel
The average number of employees during the fi nancial period was
172 (208), and the Group had 165 (182) employees at the end of
the period. At the end of the fi nancial period, 57 (69) of the Group’s
personnel were employed in the companies in Finland and 108 (113)
were employed in the companies abroad.
Shares and share capital
Trading volume and price
During the fi nancial period, the highest price of the company’s
shares was EUR 0.05 (EUR 0.05), the lowest price was EUR 0.03
(EUR 0.03), and the closing price on 31 December 2021 was
EUR 0.03 (EUR 0.04). The average share price in the fi nancial
period was EUR 0.04 (EUR 0.03). During the fi nancial period,
94,311,641 (61,748,234) shares were traded, corresponding to 14.5
(9.5) per cent of the number of shares in circulation at the end of
the period. Market capitalisation at the closing share price on 31
December 2021 was EUR 20,832,728 (EUR 23,436,819).
Share capital
The company’s registered share capital at the beginning of the fi nan-
cial period was EUR 585,394.16, and there were 651,022,746 shares.
At the end of the period, the share capital was EUR 585,394.16,
and there were 651,022,746 shares. The company has one class of
shares. At the end of the fi nancial period, the company held a total of
7,664,943 shares (7,664,943), which is 1.2% of all shares.
Option schemes 2019 and 2021
The company's Board of Directors stated that the undistributed op-
tions from the 2019 option scheme have lapsed. Of the options in-
cluded in the 2019 stock option scheme, a total of 3,580,500 options
belonging to the 2019A1 and 2019A2 series were granted. These
options enable the subscription of a maximum of 3,580,500 new
shares in the company in accordance with the conditions of the op-
tion scheme.
On 25 January 2021, Digitalist Group Plc’s Board of Directors de-
cided on the granting of options based on the authorisation conferred
by the Annual General Meeting of 14 April 2020. The options are
labelled 2021A1, 2021A2, 2021B1, 2021B2 and 2021C1. A maxi-
mum total of 60,000,000 options can be issued, and they entitle their
holders to subscribe for a maximum of 60,000,000 new shares in
the company.
The theoretical market value of the options allocated by the end
of the fi nancial period is approximately EUR 1.0 million, which will
be recognised as expenditure in accordance with IFRS 2 from 2021
to 2025. A total of EUR 0.2 million of the expenditure item will be
allocated to 2021. There will be no cash-fl ow effect from the ex-
pense. Descriptions of the option programmes are on the company's
website at https://digitalist.global.
Shareholders
The number of shareholders on 31 December 2021 was 5,128
(4,309). Private individuals owned 9.66 (8.79) per cent and entities
held 80.82 (90.76) per cent. Foreign nationals or entities held 9.51
(9.50) per cent of the shares. Nominee-registered shares accounted
for 2.82 (3.36) per cent of the total.
Related-party transactions
Financing arrangements with related parties
Convertible bonds 30 March 2021
On 30 March 2021, Digitalist Group Plc’s Board of Directors decid-
ed to direct a convertible bond to Turret Oy Ab (“Convertible Bond
2021/1”) and a convertible bond to Holdix Oy Ab (“Convertible
Bond 2021/2”) and related special rights for subscription by Turret
and Holdix in accordance with chapter 10, section 1(2) of the Lim-
ited Liability Companies Act and the conditions of the agreements
applying to the bonds. The convertible bonds were directed on the
basis of authorisation granted by the Annual General Meeting of
14 April 2020 in derogation from the precedence of existing share-
holders in the company. Convertible Bond 2021/1 and Convertible
Bond 2021/2 have a total sum of EUR 1 million. According to the
conditions attached to the bonds, the bonds may be converted into
a maximum of 33,333,332 new shares in Digitalist Group Plc. The
conditions of the convertible bonds are available on the company's
website at https://investor.digitalistgroup.com/fi /investor/releases.
The company announced the details of the convertible bonds on 30
March 2021 and published a stock exchange release on the manage-
ment's transactions on 1 April 2021.
Convertible bonds 20 April 2021
Digitalist Group Plc’s Annual General Meeting of 20 April 2021
decided to direct a convertible bond to Turret Oy Ab (“Convertible
Bond 2021/3”) and a convertible bond to Holdix Oy Ab (“Converti-
ble Bond 2021/4”) and related special rights for subscription by Tur-
ret Oy Ab and Holdix Oy Ab in accordance with chapter 10, section
1(2) of the Limited Liability Companies Act and the conditions of
the agreements applying to the bonds. The convertible bonds were
directed in derogation from the precedence of existing shareholders
in the company. Turret Oy Ab has subscribed and paid for Convert-
ible Bond 2021/3 and the related special rights in full in accordance
with the terms and conditions. Holdix Oy Ab has subscribed and
paid for Convertible Bond 2021/4 and the related special rights in
full in accordance with the terms and conditions.
The convertible bonds are due to mature on 30 June 2024 and
will offset previous receivables from the company as specifi ed in
the terms and conditions for Turret Oy Ab and Holdix Oy Ab. Con-
Financial statements 2021 8
vertible Bond 2021/3 and Convertible Bond 2021/4 have a total
sum of EUR 1 million. According to the conditions attached to the
bonds, the bonds may be converted into a maximum of 635,725,754
new shares in Digitalist Group Plc. The conditions of the converti-
ble bonds are available on the company's website at https://investor.
digitalistgroup.com/fi /investor/releases. The company announced
the details of the convertible bonds and published a stock exchange
release on the management's transactions on 20 April 2021.
Increase in the Group account’s credit limit 23 June 2021
Digitalist Group Plc made an agreement with Nordea Bank Plc
to increase the credit limit on the company's Group account by
EUR 2 million. The credit limit is secured by an absolute suretyship
issued by Turret Oy Ab and Holdix Oy Ab.
Subordinated loan 30 December 2021
The Board of Directors has decided to exercise the right granted to
Digitalist Group Plc by its principal owner and convert the convert-
ible bonds numbered 1–15 into converted bonds and change their
nominal capital, a total of EUR 9,757,987.80 and the unpaid inter-
est on the converted bonds in accordance with the terms and condi-
tions of the convertible bond, into a subordinated loan that complies
with the provisions of chapter 12, sections 1 and 2 of the Limited
Liability Companies Act, with the terms and conditions remaining
otherwise unchanged. The conditions of the subordinated loan are
described in more detail in Digitalist Group Plc's notes.
Changes in the Group structure
On 27 August 2021, Digitalist Group announced the divestment of
its stake in Ticknovate Ltd. Digitalist UK Limited, which belongs to
Digitalist Group, owned 65% of the shares in Ticknovate. The share
transaction was executed by selling all the Ticknovate shares held by
the Group to Turret Oy Ab. Turret Oy Ab is Digitalist Group Plc’s
largest shareholder. The purchase price was EUR 2.6 million, and
it was paid in cash. The share transaction took place on 31 August
2021. The parties to the share transaction will agree on the possi-
ble additional transaction price, estimated at between EUR 0 and
EUR 0.4 million, depending on the growth in Ticknovate’s value by
31 December 2023. The company entered into the arrangement to
increase the fl exibility of its fi nancing and focus on its core business.
Ticknovate and Digitalist Group will continue to work together on
market terms after the share transaction.
On 1 October 2021, the Group’s subsidiary, Digitalist Finland
Oy, span off the LeanLab business into a wholly-owned subsidiary
named LeanLab Oy. The purpose of this arrangement is to support
LeanLab Oy in its focus on developing a SaaS business.
Events since the financial period
23 March 2022
The Board decided to exercise the right granted to Digitalist Group
Plc by Holdix Oy Ab and convert three-quarters of the Convertible
Bonds into Converted Bonds and to convert the capital thereof, al-
together EUR 4,545,827.70, and the unpaid interest on the capital
of the Converted Bonds set out in the Terms of the convertible bond
into a capital loan meeting the requirements of chapter 12, sections
1 and 2 of the Limited Liability Companies Act, with the terms oth-
erwise remaining the same, where applicable.
Digitalist Group Plc has made an agreement with Turret Oy Ab on
a loan amounting to EUR 500,000. The loan was granted on market
terms, and it will fall due on 30 April 2023. Turret Oy Ab is the larg-
est shareholder of Digitalist Group.
Digitalist Group has agreed to implement the following arrange-
ment (the “Arrangement”) regarding Yangi AB, registered in Swe-
den. Digitalist Group's Swedish subsidiary, Grow AB, will subscribe
for a total of 11,111 shares in Yangi AB at a total subscription price
of SEK 5,000,000. To increase fi nancial fl exibility, Grow AB will
then sell a total of 7,778 Yangi AB shares to Turret Oy Ab for a total
purchase price of SEK 6,300,000.
Risk management and short-term
uncertainties
The objectives of Digitalist Group Plc’s risk management are to en-
sure the undisrupted continuity and development of the company’s
operations, support the achievement of the company’s business ob-
jectives and increase the company's value. For more details about
the organisation of risk management, processes and identifi ed risks,
see the company’s website at https://digitalist.global.
The Group’s made a loss despite the effi ciency improvement
measures. However, the effi ciency improvement measures from
2019 to 2021 have created a more sustainable cost structure for the
future. The company’s loss-making performance directly affects
its working capital and the suffi ciency of its fi nancing. This risk is
managed by maintaining the capacity to use different fi nancing solu-
tions. The company endeavours to continuously assess and monitor
the amount of fi nancing the business requires in order to ensure that
the company has the necessary liquid assets to fi nance its operations
and repay its loans. Any disruptions in the fi nancial arrangements
would weaken Digitalist Group's fi nancial position.
The COVID-19 pandemic continued in 2021, and the restrictive
measures put into place to prevent the spread of the disease contin-
ued to affect the businesses of the company's customers, thereby
reducing the number of projects and orders among some customers.
This was refl ected in the development of turnover.
At present, the Group is dependent on external fi nancing, which
has mainly been obtained from related-party companies and fi nan-
cial institutions. Digitalist Group’s ability to fi nance its operations
and reduce the amount of its debt depends on several factors, such
as the cash fl ow from operations and the availability of debt and
equity fi nancing, and there is no certainty that such fi nancing will
be available in the future. Similarly, there can be no certainty that
Digitalist Group will be able to obtain additional debt or refi nance
its current debt on acceptable terms, if at all. In early 2021, the com-
pany rearranged its short-term loans with both the main owner and
a fi nancial institution. The rearranged loans have become the com-
pany’s non-current liabilities, thereby lightening the loan repayment
obligations for the near future.
Financial statements 2021 9
A signifi cant share of the Group’s turnover comes from its 20
largest customers. Any changes to key customer accounts could
have a substantial impact on Digitalist Group’s operations, earning
potential and fi nancial position. If one of Digitalist Group's largest
customers decided to switch to a competing company or drastically
altered its operating model, the chances of fi nding customer vol-
umes to replace the shortfall in the near term would be limited.
The Group's business consists mainly of individual customer
agreements, which are often relatively short-term. In addition, some
of the project contracts have fi xed or target prices. The length of
delivery contracts makes it diffi cult to reliably estimate the longer-
term development of the Group's business operations, earnings and
fi nancial position. With regard to fi xed-price projects, it is essential
to be able to estimate the workload and/or contractual risks of the
project correctly in order to ensure an adequate level of profi tability.
The aforementioned matters related to customer agreements could
cause unforeseen fl uctuations in turnover and, thereby, in profi ta-
bility.
Irrespective of the market situation, there is a shortage of certain
experts in the Group’s business sector. Furthermore, the aggressive
recruitment policies in the Group’s business sector may increase the
risk of personnel moving to competitors. There are no guarantees
that the company will be able to retain its current personnel and
recruit new employees to sustain growth. If Digitalist Group loses
its current personnel, it would be more diffi cult to complete existing
projects and acquire new ones. This could have an adverse impact
on Digitalist Group's business, earnings and fi nancial position.
Part of the Group's turnover is invoiced in currencies other than
the euro. The risk associated with changes in exchange rates is man-
aged in various ways, including net positioning and currency hedg-
ing contracts. In 2021 and 2020, the Group had no hedging contracts.
The Group has no business activities in Russia or Ukraine. The
political and military situation in Russia and Ukraine may affect the
business activities of some of the Group’s customers, thereby indi-
rectly affecting the Group’s business. If the situation becomes more
strained or expands, it could affect business in Finland and the EU in
general, but these impacts are currently diffi cult to estimate.
The Group’s balance sheet contains goodwill that is subject to
write-down risk in the event that the Group's future yield expec-
tations decrease due to internal or external factors. The goodwill
is tested for impairment every six months and whenever the need
arises.
Corporate governance
Digitalist Group Plc is governed in accordance with the Finnish
Limited Liability Companies Act (624/2006, including amend-
ments), Securities Markets Act (746/2012, including amendments),
the Market Abuse Regulation (EU) No 596/2014 (MAR), Nasdaq
Helsinki Ltd’s rules and regulations for listed companies, and Digi-
talist Group Plc’s Articles of Association. In addition, the company
complies with the Corporate Governance Code 2020 with respect to
the recommendations that took effect on 1 January 2020. The Cor-
porate Governance Statement, which listed companies are required
to publish under the Corporate Governance Code, was appended to
the review by the Board of Directors, published on 31 March 2022.
The report is available on the company’s website. Insider guidelines
in accordance with the MAR ((EU) No. 596/2014) were published
as a separate appendix to the review by the Board of Directors in
September 2018. The report is available on the company’s website.
Parent company
and 2020. The operating profi t was EUR -2.4 million (EUR -3.9 mil-
lion). Earnings for the fi nancial period were EUR -14.1 million
(EUR -11.1 million). Earnings for the fi nancial period were affected
by impairment charges related to shares in subsidiaries in a total
of EUR 10.2 million (EUR 6.5 million), as well as an impairment
charge on the Group's trade receivables amounting to EUR 0.5 mil-
lion (EUR 1.5 million).
The balance sheet total was EUR 26.3 million (EUR 34.5 mil-
lion). Shareholders' equity amounted to EUR -8.0 million
(EUR 6.1 million). The shareholders’ equity of was EUR 2.2 mil-
lion (EUR 6.1 million), taking into consideration the conversion of
EUR 10.2 million of convertible bonds into equity loans.
The solvency ratio was 8.30% (17.7%). At the end of the peri-
od, the parent company’s liquid assets totalled EUR 0.00 million
(EUR 0.06 million).
The average number of employees during the fi nancial period was
2 (2), and the Group had 2 (2) employees at the end of the period. Sal-
aries and bonuses amounted to EUR 0.7 million (EUR 0.7 million),
pension expenses were EUR 0.1 million (EUR 0.1 million), and oth-
er personnel add-on costs were EUR 0.0 million (EUR 0.0 million).
Personnel expenses totalled EUR 0.8 million (EUR 0.8 million),
which was approximately 31.0% of operating expenses (17.7%).
Cash fl ow from operating activities in the fi nancial period amount-
ed to EUR -2.6 million (EUR -2.1 million).
Future prospects
In 2022, turnover and EBITDA are expected to develop positively
compared to 2021.
Proposal by the board of directors to
the annual general meeting
The Board of Directors of Digitalist Group Plc proposes to the An-
nual General Meeting that the distributable funds be retained in
shareholders' equity and that no dividend be distributed to share-
holders for the 2021 fi nancial period. On 31 December 2021, the
parent company had distributable assets of EUR -8,792,473.
Digitalist Group Plc’s Annual General Meeting will be held in
Helsinki on Tuesday 26 April 2022.
Key indicators for the group
IFRS
IFRS
IFRS
IFRS
IFRS
1 Jan–31 Dec 2021
1 Jan–31 Dec 2020
1 Jan–31 Dec 2019
1 Jan–31 Dec 2018
1 Jan–31 Dec 2017
Turnover (EUR thousand) 18 482 20 487 27 401 24 737 20 000
Turnover (% change) -9,8 % -25.2% 10,8 % 23,7 % 31,1 %
EBITDA (* (EUR thousand) -1 778 -2 021 -3 716 -4 845 -3 985
% of turnover -9,6 % -9.9% -13,6 % -19,6 % -19,9 %
Operating profit/loss (EUR thousand) -5 315 -9 059 -14 087 -6 432 -4 899
% of turnover -28,8 % -44.2% -51,4 % -26,0 % -24,5 %
Profit/loss before taxes (EUR thousand) -5 794 -12 057 -14 998 -7 063 -7 173
% of turnover -31,4 % -59% -54,7 % -28,6 % -35,9 %
Balance sheet total (EUR thousand) 14 120 19 645 26 280 32 222 25 027
Return on equity (%) (* neg. neg. neg. neg. neg.
Return on capital employed (%) (* -54,4 % -75.9% -69,4 % -28,3 % -36,5 %
Interest-bearing liabilities
32 669 28 075 26 866 16 299 11 483
Financial assets, cash and cash
984
1 008
787
314
1 366
equivalents (EUR thousand)
Net gearing (* -128,9 % -162.2% -313,4 % 227,2 % 184,8 %
Equity ratio (* -174,1 % -84.9% -31,7 % 21,8 % 21,9 %
Investments, EUR thousands* 48 28 1 847 7 363 7 035
% of turnover 7,8 % 2,9 % 6,7 % 29,8 % 35,2 %
Financial statements 2021 10
Average number of personnel 172 208 261 258 203
Number of personnel at the end of the
financial period
165 182 246 270 240
* Investments do not include leases in accordance with IFRS 16. The comparison figure for 2020 has been adjusted accordingly
Key indicators per share
1 Jan–31 Dec 2021 1 Jan–31 Dec 2020 1 Jan–31 Dec 2019 1 Jan–31 Dec 2018 1 Jan–31 Dec 2017
Earnings per share (EUR), diluted
(EUR) and (**
-0,01 -0.02 -0,02 -0,01 -0,02
Earnings per share (EUR), undiluted
(EUR) (**
-0,01 -0.02 -0,02 -0,01 -0,02
Price-to-earnings ratio (** neg. neg. neg. neg. neg.
Closing price (EUR) 0,03 0.04 0,05 0,05 0,07
Average number of shares adjusted for
share issues (**
651,022,746 651,022,746 651 022 746 609 376 504 384 459 880
Number of shares at the end of the
financial period
651,022,746 651,022,746 651 022 746 651 022 746 553 824 346
Average number of shares adjusted for
the dilution effect (**
1 015 830 193 1 108 794 366,00 651 022 746 609 376 504 384 459 880
Dividend/share (%) 0.00% 0.00% 0,00 % 0,00 % 0,00 %
Dividend/share (EUR) 0.00% 0.00% 0,00 0,00 0,00
Effective dividend yield (%) 0.00% 0.00% 0,00 % 0,00 % 0,00 %
Shareholders’ equity/share (EUR) -0,04 -0.03 -0,01 0,01 0,01
*) Digitalist Group presents alternative key indicators to supplement its consolidated financial statements, which are prepared in accordance
with IFRS standards. The purpose of these indicators is to measure growth and describe the financial performance of the company’s
**) The number of shares and the key indicators per share were affected by the acquisitions of Interquest Oy and NodeOne AB in 2017
and Grow Group in 2018, as well as the conversion of the convertible bond loan and directed share issues.
operations. The Group has applied the European Securities and Markets Authority (ESMA) guidelines on alternative performance measures,
which took effect on 3 July 2016.
Return on equity (%)
2021 2020 2019 2018 2017
Profit before taxes -5 794 -12 057 -14 998 -7 063 -7 173
Financial expenses -2 000 -3 219 -1 994 -1 364 -2 555
Balance sheet total Q4 2017 25 027
Balance sheet total Q4 2018 32 222
Balance sheet total Q4 2019 26 280
Balance sheet total Q4 2020 19 645
Balance sheet total Q4 2021 14 120
Non-interest-bearing liabilities Q4 2017 8 071
Non-interest-bearing liabilities Q4 2018 8 911
Non-interest-bearing liabilities Q4 2019 7 735
Non-interest-bearing liabilities Q4 2020 8 256
Non-interest-bearing liabilities Q4 2021 6 036
Return on equity (%) -54,4 % -75.9% -69,4 % -28,3 % -36,5 %
Principles for calculating the key indicators
EBITDA =
Earnings before interest, taxes and depreciation
Return on equity =
Profit/loss for the financial period
Shareholders’ equity (average over the year)
x 100
Return on capital employed =
(Profit before taxes + financial expenses)
Financial statements 2021 11
Return on capital employed =
(Profit before taxes + financial expenses)
Balance sheet total – non-interest-bearing liabilities (average over the year)
x 100
Equity ratio (%) =
Total shareholders' equity
Balance sheet total – advances received
x 100
Net gearing =
Interest-bearing liabilities – liquid assets
Total shareholders' equity
Diluted earnings per
Profit/loss for the financial period attributable to the owners of the parent company
share =
Average number of shares during the year, adjusted for
share issues and the effects of dilution
Shareholders’ equity per share =
Parent company's shareholders' equity
Number of shares on the balance sheet date
Dividend yield
Dividend paid for the financial period
Profit/loss for the financial period
Price-to-earnings ratio =
Share price at the end of the financial period
Diluted earnings per share
Effective dividend yield =
Dividend per share
Share price at the end of the financial period
x 100
Dilution effect =
Number of shares of the company plus the number of options allocated –
Number of treasury shares to be obtained at the option subscription price,
priced at the volume-weighted average price for the period
Information on shares, shareholders and options
SHARES
Share capital and shares
Digitalist Group Plc’s share capital was EUR 585,394.16 on 31 December 2021.
The total number of shares in the company was 651,022,746 on 31 December 2021.
STOCK EXCHANGE QUOTATIONS
Digitalist Group Oyj is listed on Nasdaq OMX Helsinki.
The company has one class of shares: DIGIGR.
2021
2020
Subscription price of shares on flotation 1 October 1999 5,75 5,75 EUR
Highest quotation for shares during the financial period 0,05 0,05 EUR
Lowest quotation for shares during the financial period 0,03 0,03 EUR
Share price 31 Dec 0,03 0,04 EUR
Market capitalisation 31 Dec 20 832 728 23 436 819 EUR
Share trading volume 1 Jan – 31 Dec 94 311 641 61 748 234 shares
Total trading volume in euros 3 846 745 2 026 636 EUR
Average price 1 Jan – 31 Dec (* 0,04 0,03 EUR
Share trading volume (% of the total number of shares) 31 Dec (* 14,5 % 9,5 %
Weighted number of shares adjusted for the share issue 31 Dec 651 022 746 651 022 746 shares
Number of shares adjusted for the dilution effect 31 Dec 1 015 830 193 1 108 794 366 shares
Financial statements 2021 12
Number of shares adjusted for the dilution effect 31 Dec
1 015 830 193
1 108 794 366
shares
Number of shares 31 Dec 651 022 746 651 022 746 shares
Information on shares, shareholders and options
OWNERSHIP OF SHARES
Proportion of
Number of
Number of shares
shares (%)
holders
Individuals
62 913 716
9,66 %
5 000
Institutions
569 736 226
87,51 %
128
Nominee-registered shares
18 372 804
2,82 %
Total
651 022 746
100,00 %
5 128
Institutional holdings
Companies
394 139 231
60,54 %
Financial and insurance institutions
174 055 457
26,74 %
Public corporations
1 514 478
0,23 %
Non-profit organisations
502
0,00 %
Foreign countries
26 558
0,00 %
Total
569 736 226
87,51 %
of which nominee-registered shares
18 372 804
2,82 %
LARGEST SHAREHOLDERS
Number of shares
Proportion of shares (%)
Turret Oy Ab
305 237 039
46,89 %
Holdix Oy Ab
164 358 406
25,25 %
Rosebloom Ventures Ab
44 427 665
6,82 %
Elmtwig Holding Ab
12 901 841
1,98 %
Digitalist Group Plc
7 664 943
1,18 %
Nordea Bank Abp
7 218 382
1,11 %
Niclas Engsäll Ab
5 402 363
0,83 %
Rome Advisors Oy
4 687 666
0,72 %
Österlund Jori Ville Ferdinand
4 549 962
0,70 %
Financial statements 2021 13
Österlund Jori Ville Ferdinand
4 549 962
0,70 %
Elsa Victorin Ab
4 508 421
0,69 %
Sjöblom Katri Pauliina
4 003 381
0,61 %
Karisma-Invest Oy
2 588 557
0,40 %
Hämäläinen Kari Heikki Kristian
1 750 000
0,27 %
Fennia Life Insurance Company Ltd
1 671 931
0,26 %
4capes Oy
1 630 000
0,25 %
Liselotte Tingvall Holding Ab
1 517 196
0,23 %
Elo Mutual Pension Insurance Company
1 514 478
0,23 %
Rapeli Marko Teo Mikael
1 367 895
0,21 %
Suihkonen Raisa Maria
1 322 145
0,20 %
Laaksonen Lars
1 240 000
0,19 %
Others
71 460 475
10,98 %
Total
651 022 746
100,00 %
DISTRIBUTION OF OWNERSHIP
Proportion of
Proportion of
Shares
shares (%)
Shares
shares (%)
1–100 shares
826
16,11 %
37 972
0,01 %
101–1,000 shares
1 566
30,54 %
838 908
0,13 %
1,001–10,000 shares
1 914
37,32 %
8 012 739
1,23 %
10,001–100,000 shares
705
13,75 %
21 106 110
3,24 %
100,001–1,000,000 shares
92
1,79 %
22 465 503
3,45 %
Over 1,000,000 shares
25
0,49 %
598 561 514
91,94 %
Total
5 128
100,00 %
651 022 746
100,00 %
MANAGEMENT SHAREHOLDINGS AND OPTIONS
Number
Holding 2021
of votes (%)
Holding 2020
362 566 545 55,69 % 349 664 704
14 912 819 2,29 % 1 627 500
Shares owned by the CEO and members of the
Board of Directors
Options held by the CEO and members of the Board
of Directors
Consolidated income statement (IFRS)
EUR thousand
Note
1 Jan–31 Dec 2021
1 Jan–31 Dec 2020
Turnover
2.4
Other operating income
5
Materials and services
6
-3 246
-3 110
Expenses from employee benefits
7
-15 177
-16 589
Depreciation
9
-2 156
-3 337
Impairment of goodwill
9,13
-1 382
-3 700
Other operating expenses
25
-3 679
-4 633
Total expenses
-25 641
-31 369
Operating profit
-5 315
-9 059
Financial income
Financial expenses
-2 000
-3 219
Total financial income and expenses
11
-479
-2 998
Profit before taxes
-5 794
-12 057
Income taxes
12
-5
Profit/loss for the financial period
-5 799
-
Distribution
Owners of the parent company
-5 797
-11 820
Non-controlling interests
-2
-73
Financial statements 2021 14
Consolidated statement of comprehensive income (IFRS)
EUR thousand
1 Jan–31 Dec 2021
1 Jan–31 Dec 2020
Profit/loss for the financial period
-5 799
-11 893
Other items of comprehensive income
Translation difference
-1 559
Total comprehensive income for the financial period
-7 358
-10 397
Comprehensive income distribution for the financial period:
Owners of the parent company
-7 343
-10 339
Non-controlling interests
-15
-58
Earnings per share EUR (diluted and undiluted)
-0,01
-0,02
Consolidated balance sheet (IFRS)
EUR thousand
ASSETS
Non-current assets
Note
31 December 2021
Goodwill
13
Other intangible assets
13
Tangible assets
14
Other investments
14
Long-term loan receivables
24
Deferred tax asset
15
Total non-current assets
Current assets
Trade receivables
4.16
Other receivables
16
Cash and cash equivalents
17
Total current assets
TOTAL ASSETS
SHAREHOLDERS' EQUITY AND LIABILITIES
Note
31 December 2021
31 Dec 2020
Financial statements 2021 15
31 December 2020
Note
31 December 2021
31 Dec 2020
Shareholders’ equity
Parent company's shareholders' equity
Share capital
18
Share premium account
18
Invested unrestricted equity fund
18
Retained earnings
-93 069
-79 830
Profit/loss for the financial period
-5 797
-11 893
Total equity attributable to the owners of the parent company
-25 091
-17 948
Total shareholders’ equity attributable to non-controlling interests
Total shareholders' equity
-24 585
-16 686
Non-current liabilities
Financial liabilities
21
Deferred tax liabilities
15.20
Total non-current liabilities
Current liabilities
Accounts payable
22
Financial liabilities
20,21,22
Tax liabilities based on the taxable income for the period
22
Other liabilities
22
Total current liabilities
TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES
Consolidated cash flow statement
EUR thousand
Cash flow from operations
Note
1 Jan–31 Dec 2021
1 Jan–31 Dec 2020
Earnings before taxes in the period
-5 794
-12 057
Adjustments to cash flow from operations
Other income and expenses with no payment transactions
-1 146
Depreciation and impairment
9
Unrealised foreign exchange gains and losses
-1 397
Other adjustments
Financial income and expenses
11
Cash flow financing before changes in working capital, interest and taxes
-2 856
-2 188
Change in working capital
23
-811
Interest received
11
Interest paid
11
-64
-9
Taxes paid
12
-12
Net cash flow from operations
-3 730
-1 305
Cash flow from investments
Sales of subsidiaries net of cash acquired 3 2 565
13,14 -48 -248
Investment grants received 0 333
Sales of property, plant and equipment 14 6 0
Sales of financial assets recognised at fair value through profit or loss 0 0
Net cash flow from investments 2 523 85
Cash flow before financial items
-1 206
-1 220
Cash flow from financing activities
Investments in tangible and intangible assets
Financial statements 2021 16
Cash flow from financing activities
Purchase of treasury shares
-215
Transactions with non-controlling interests
Drawdown of long-term loans
20.21
Repayment of long-term loans
20.21
-380
-53
Drawdown of short-term loans
21
Repayment of short-term loans
21
Costs of acquiring equity
Payments received for share subscriptions
Interest and other charges for financial expenses
-416
-409
Repayment of lease liabilities
-826
-1 266
Net cash flow from financing
Change in cash and cash equivalents
-24
Cash and cash equivalents at the beginning of the financial period
17
Cash and cash equivalents at the end of the financial period
17
Calculation of changes in consolidated shareholders’ equity
EUR thousand
Share
capital
Share
premium
fund
Invested
unre-
stricted
equity
fund
Translation
differences
Retained
earnings Total
Share
attributable
to non-
controlling
interests
Total
share-
holders'
equity
Shareholders’ equity 1 Jan 2020
-129
-82 182
-8 321
-8 321
Transfers between equity items
-290
Profit/loss for the financial period
-11 820
-11 820
-73
-11 893
Translation difference
Total comprehensive income for the financial period
-10 339
Purchase of treasury shares
-214
-214
-214
Transactions with owners
Shareholders’ equity 31 Dec 2020
-92 786
-17 948
-16 686
EUR thousand
Share
capital
Share
premium
fund
Invested
unre-
stricted
equity
fund
Translation
differences
Retained
earnings Total
Share
attributable
to non-
controlling
interests
Total
share-
holders'
equity
Shareholders’ equity 1 Jan 2021
Transactions with non-controlling
interests
Share-based remuneration
Financial statements 2021 17
Shareholders’ equity 1 Jan 2021
585
219
Transfers between equity items
-332
Profit/loss for the financial period
-5 797
-5 797
-2
-5 799
Translation difference
-1 546
-1 546
-14
-1 559
Total comprehensive income for the financial period
-7 343
Purchase of treasury shares
Transactions with owners
-333 -333 -409 -742
Shareholders’ equity 31 Dec 2021
-484
-98 384
-25 091
-24 585
Transactions with non-controlling
interests
Share-based remuneration
Financial statements 2021 18
1. ACCOUNTING PRINCIPLES BEHIND
THE CONSOLIDATED FINANCIAL
STATEMENTS
Basic information about the Group
Digitalist Group Plc is a Finnish public limited liability company
established under Finnish law and domiciled in Helsinki. The shares
of the parent company, Digitalist Group Plc, have been listed on the
NASDAQ OMX Helsinki stock exchange since 1999.
Copies of the consolidated fi nancial statements are available on
the company’s website at www.digitalist.global or at the parent com-
pany’s offi ce at Pohjoisesplanadi 35 Aa, Helsinki, Finland.
Digitalist Group is a creative technology company. The company
seeks, designs, formulates and implements functional user experi-
ences and sustainable software solutions based on internet, cloud or
mobile technologies. Our clients are among the leading companies
in their sectors around the world. We design comprehensive digital
solutions for our clients to enhance their competitiveness and pro-
ductivity and provide them with added value and customer loyalty.
We are a group of researchers, designers, developers, engineers
and strategists in Finland, Sweden and Canada.
Approval by the Board of Directors
The Board of Directors has approved the fi nancial statements for
publication on 31 March 2022. In accordance with the Finnish Com-
panies Act, shareholders have the opportunity to accept or reject the
fi nancial statement at an Annual General Meeting to be held after
the statement has been published. The Annual General Meeting may
also decide to amend the fi nancial statements.
Basis of preparation
Digitalist Group’s consolidated fi nancial statements have been
prepared in accordance with the International Financial Reporting
Standards (IFRS) following the IAS and IFRS standards in effect
on 31 December 2021, as well as the SIC and IFRIC interpretations.
“International standards” refers to the standards and related inter-
pretations approved for application in the EU in compliance with
the procedure stipulated in Regulation (EC) 1606/2002, as referred
to in the Finnish Accounting Act and subsequent regulations. The
notes to the consolidated fi nancial statements also conform to the
Finnish accounting and company legislation that supplements the
IFRS standards.
The consolidated fi nancial statements are presented in thousands
of euros, and the parent company’s fi nancial statements are present-
ed to the nearest euro, unless otherwise stated. The fi gures are based
on original acquisition costs, with the exception of fi nancial assets
recognised at fair value through profi t or loss.
Business continuity
The fi nancial statements were prepared on the principle of the com-
pany as a going concern. The assumption of business continuity is
based on the management’s assessment and the following:
The Group’s fi nancial position remained tight during the 2021
fi nancial period. The Group has boosted the effi ciency of its oper-
ations, and this is expected to improve Group profi tability in the
future. Operating expenses decreased to EUR 2.4 million in the re-
view period. The Group has invested in its key customers in line
with its strategy, and this is expected to have a positive impact on
sales trends.
The Group’s liquidity was improved during the review period by
rearranging the repayment periods on related-party loans and chang-
ing them into convertible bonds and equity loans. The repayment
periods of loans from fi nancial institutions were extended by ne-
gotiation. The company has agreed to increase its credit line with a
fi nancier by EUR 2 million. The divestment in the second half of the
year improved the company's liquidity.
When the fi nancial statements were published, the company ex-
pected its working capital to be suffi cient to cover its requirements
over the next 12 months based on support provided by the main
owners as needed.
New and amended standards applied in the most
recent financial period
Digitalist Group has applied the IASB's new standards, amendments
and interpretations that apply for the fi rst time in reporting periods
beginning on 1 January 2021. The new and amended standards and
interpretations did not have a signifi cant impact on the Group’s earn-
ings, fi nancial position or fi nancial statements.
Principles of consolidation
The consolidated fi nancial statements include the parent company,
Digitalist Group Plc, and all of the subsidiaries in which the parent
company holds more than 50% of the voting rights conveyed by
the shares or over which the parent company otherwise exercises
control.
Mutual shareholdings within the Group have been eliminated us-
ing the acquisition method. Acquired subsidiaries are consolidated
from the moment that the Group gains control over them, and divest-
ed subsidiaries are consolidated until this control ends.
All intra-Group business transactions, receivables, liabilities and
unrealised profi ts, as well as internal profi t distribution, are eliminat-
ed when preparing the consolidated fi nancial statements. The assets
and liabilities of an acquired company are measured at fair value at
the time of acquisition, and the difference between the acquisition
price and the fair value of the net assets is goodwill.
Changes in the Group structure
On 27 August 2021, Digitalist Group announced the divestment of
its stake in Ticknovate Ltd. Digitalist UK Limited, which belongs to
Digitalist Group, owned 65% of the shares in Ticknovate. The share
transaction was executed by selling all the Ticknovate shares held by
the Group to Turret Oy Ab. Turret Oy Ab is Digitalist Group Plc’s
largest shareholder. The purchase price was EUR 2.6 million, and
it was paid in cash. The share transaction took place on 31 August
2021. The parties to the share transaction will agree on the possi-
ble additional transaction price, estimated at between EUR 0 and
Financial statements 2021 19
EUR 0.4 million, depending on the growth in Ticknovate’s value by
31 December 2023. The company entered into the arrangement to
increase the fl exibility of its fi nancing and focus on its core business.
Ticknovate and Digitalist Group will continue to work together on
market terms after the share transaction.
On 1 October 2021, the Group’s subsidiary, Digitalist Finland
Oy, span off the LeanLab business into a wholly-owned subsidiary
named LeanLab Oy. The purpose of this arrangement is to support
LeanLab Oy in its focus on developing a SaaS business.
The Group’s subsidiary, Digitalist Sweden Ab, established a whol-
ly-owned subsidiary named Digitalist Open Tech Ab on 22 Novem-
ber 2021. The new company will begin operating in March 2022.
Segment Reporting
Digitalist Group reports its business in a single segment.
Items denominated in foreign currencies
The profi t and fi nancial position of Group units are determined using
the currency of the main operating region of the unit in question
(“functional currency”). The consolidated fi nancial statements are
presented in euros, which is the functional and presentation currency
of the Group's parent company.
Transactions denominated in foreign currencies are recognised at
the exchange rates at the date of transaction. Monetary items denom-
inated in foreign currencies are converted into the operating curren-
cy using the exchange rates on the balance sheet date. Non-monetary
items that are denominated in foreign currencies and are measured
at fair value are converted into the operating currency using the ex-
change rates on the valuation date. Otherwise, non-monetary items
are measured at the exchange rate on the transaction date.
Gains and losses arising from transactions in foreign currencies
and from the conversion of monetary items are recognised under
fi nancial items in the income statement. Exchange rate gains and
losses from business operations are included in the corresponding
items above operating profi t.
The income and expense items in the income statements of for-
eign Group companies are converted into euros using the average
exchange rate in the month concerned, and the balance sheets are
converted using the exchange rates on the balance sheet dates. The
conversion of income and comprehensive income for the fi nancial
period at different exchange rates in the income statement, the state-
ment of comprehensive income, and the balance sheet gives rise to a
translation difference recognised in shareholders’ equity in the bal-
ance sheet. Changes to the translation difference are recognised in
other items of comprehensive income.
Goodwill
Goodwill corresponds to the proportion of the acquisition cost that
exceeds the Group’s share of the net fair value of the identifi able
assets, liabilities and contingent liabilities on the date of acquisition.
Goodwill is allocated to the cash-fl ow-generating unit, and it is
not depreciated. Goodwill is tested for impairment every six months
and whenever an occurrence or change in conditions indicates that
the recognised value may not be recoverable.
Other intangible assets
The intangible assets acquired through business combinations are
capitalised in the balance sheet at fair value at the time of acquisi-
tion. The intangible assets recognised in conjunction with the con-
solidation of the Group’s businesses relate to clients and agreements
where the useful life is known.
Other intangible assets are entered in the balance sheet at acqui-
sition cost if the acquisition cost of the asset can be reliably deter-
mined and if it is probable that the expected future benefi t from the
asset will benefi t the Group.
Intangible assets with a limited useful life are recognised in the in-
come statement as expenses through profi t or loss based on straight-
line depreciation during their known or estimated useful life.
The Group has no other intangible assets with indefi nite useful
lives.
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 activated 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 fi nancial
benefi t that covers the expenditure. Intangible assets are measured
at acquisition cost less depreciation and impairment. Capitalised de-
velopment expenditure has a useful life of 3–4 years, and the capital-
ised costs are recognised as expenses via straight-line depreciation.
Development expenditure that has previously been recognised as
an expense cannot be capitalised at a later date.
Tangible fixed assets
Machinery and equipment constitute the majority of the tangible as-
sets. These items are valued in the balance sheet at acquisition cost
less accumulated depreciation and any impairment.
Gains or losses arising from the sale or disposal of tangible assets
are recognised in the income statement.
Depreciation methods used by the Group
Intangible assets acquired 3–10 years of straight-
through business combinations line depreciation
Intangible rights 3–4 years of straight-
line
depreciation
Intangible assets created internally 3–4 years of straight-
line
depreciation
Other tangible assets 3–5 years of straight-
line
depreciation
Machinery and equipment 3–5 years of straight-
line
depreciation
Machinery acquired on lease 3–5 years of straight-
line depreciation
Intangible assets acquired on lease
3–5 years of straight-
line
depreciation
Financial statements 2021 20
Government grants
Government grants are recognised as a deduction in the book values
of other intangible assets when it is reasonably certain that they will
be received and that the Group meets the criteria for receiving a
grant. Grants are recognised as income in the form of lower depre-
ciation during the useful life of the asset. Grants that are awarded in
compensation for expenses already incurred are recognised through
profi t or loss in the fi nancial period in which the right to the grant
arose. Such grants are presented as adjustments to other operating
income or expenses. Section 5 of the notes provides details on the
values of grants.
Impairment of tangible and intangible assets
On each balance sheet date, the Group estimates whether there are
indications of impairment in the value of a particular asset. If such
an indication is found, the recoverable amount of cash for the asset
in question is estimated. Additionally, the recoverable amount is es-
timated for goodwill annually and every six months, irrespective of
whether there is any indication of impairment. The value tests are
conducted for each cash-fl ow-generating unit.
The recoverable amount is the asset’s fair value less the costs of
selling it or its value in use, whichever is greater. The value in use is
the estimated future net cash fl ow from the asset or cash-generating
unit, which is discounted to its present value. The discount rate is
a rate before tax that describes the market’s perception of the time
value of money and the specifi c risks associated with the asset.
An impairment loss is recognised if the balance sheet value ex-
ceeds the recoverable amount. Impairment losses are recognised in
the income statement. The useful lives of depreciated assets are reas-
sessed in conjunction with the recognition of an impairment loss. An
impairment loss that is recognised for an asset other than goodwill
is reversed if there has been a change in the estimates used to deter-
mine the amount recoverable from the asset. However, the impair-
ment loss may not be reversed to an amount that is more than the
asset’s book value without any impairment loss. Impairment losses
recognised for goodwill are never reversed.
Lease agreements
On the fi rst day of validity of the lease agreement, the lessee recog-
nises a right-of-use asset and a lease liability for the agreement. The
lessee recognises interests expenses on the liability and depreciation
on the asset item throughout the term of the lease.
The right-of-use asset is initially valued at acquisition cost. This
corresponds to the original amount of the lease liability, which is
adjusted by prepaid lease payments, lease incentives, direct costs
in the initial phase, and the estimated costs that the lessee incurs in
restoring the underlying asset to the condition required by the terms
of the lease agreement.
The lease liability is originally recognised at the present value of
the unpaid lease payments when the lease begins, discounted at the
internal interest rate of the lease or, if this cannot be determined, at
the lessee’s incremental borrowing rate. Lease liabilities are meas-
ured at amortised cost using the effective interest rate method. The
lease payments included in the lease liability are fi xed or variable
payments that are tied to an index or interest rate. Options for ex-
tended periods are included in the term of the lease if it is reasonably
certain that they will be used. In addition, the lessee reassesses the
amount of the lease liability in the event of certain changes (such
as changes in the lease period or changes in the lease payments due
to index adjustments). The Group uses the practical relief allowed
by IFRS 16 whereby agreements with a lease period of less than
12 months or assets with a value of no more than approximately
USD 5,000 are not recognised in the balance sheet. These agree-
ments are recognised in the income statement as fi xed expenses
throughout the term of the lease.
The Group has adopted IFRS 16 with a modifi ed retrospective
approach whereby the comparison data is not adjusted. Instead, the
accounting principles for the comparison data in accordance with
the previous IAS 17 are as follows: Lease agreements for tangible
fi xed assets where the Group accrues a material proportion of the
risks and rewards of ownership are classifi ed as fi nance leases and
recognised in the balance sheet at the start of the lease period at the
fair value of the leased asset or at the present value of the minimum
lease payments, whichever is lower. Assets acquired under fi nance
leases are depreciated over the useful life of the asset or the term of
the lease, whichever is shorter. Lease payments are dividing appor-
tioned between a fi nancial expense and a reduction in liability over
the lease period, so that the interest rate for the outstanding liability
remains constant in each fi nancial period. Leases where the lessor
retains the risks and rewards of ownership are treated as other lease
agreements. The lease payments that must be made on other lease
agreements are recognised as equal sums of expenses in the income
statement over the term of the lease.
The Group does not act as a lessor.
Financial assets and liabilities
The Group’s fi nancial assets are classifi ed in the following catego-
ries based on the Group’s business model for managing fi nancial
assets and their contractual cash fl ow characteristics: fi nancial assets
recognised at fair value through profi t or loss and fi nancial assets
recognised at amortised cost. Financial assets are originally recog-
nised in the accounts at fair value. Transaction costs are included in
the original book value of fi nancial assets if the item is not valued at
fair value through profi t or loss. All purchases and sales of fi nancial
assets are booked on the day of the transaction.
Financial assets are derecognised when the Group has lost the
contractual right to receive the cash fl ows or when it has substantial-
ly transferred the risks and rewards of ownership of the asset outside
the Group. Note 24 presents the principles for determining the fair
values of fi nancial assets and liabilities.
Financial assets and liabilities recognised at fair value through
profit or loss
The Group categorises interest rate swap contracts as measured at
fair value through profi t or loss, and they are included in the balance
sheet under current assets or liabilities. Fair value adjustments are
recognised in the income statement as fi nancial income or expenses.
The fair values of the contracts have been calculated by discount-
ing the future cash fl ows. The contracts are presented in the balance
Financial statements 2021 21
sheet under fi nancial assets or liabilities and are acquired for hedg-
ing purposes. The company does not apply hedge accounting.
Financial assets valued at amortised cost
Financial assets where the intention of the business model is to retain
the asset until maturity in order to collect the contractual cash fl ows
are recognised at amortised cost in the fi nancial assets category. The
cash fl ows from these items consist solely of capital and the interest
on the outstanding capital. After initial recognition, these items are
valued at amortised cost using the effective interest method. They
are included in the balance sheet under current and non-current as-
sets. This category includes trade and other receivables and other
investments, which include unlisted golf shares.
Trade receivables are recognised at the original value. The Group
recognises expected credit losses as a decrease in the asset item
recognised at amortised cost under fi nancial assets. Expected credit
losses are estimated using the simplifi ed approach provided under
IFRS 9, where credit losses are recognised in an amount correspond-
ing to the expected credit losses throughout the entire period of va-
lidity. The Group applies the simplifi ed approach to trade receiva-
bles recognised at amortised cost and asset items based on customer
agreements in accordance with IFRS 15. Expected credit losses are
recognised using a provision matrix. Expected credit losses from
trade receivables and asset items based on customer agreements are
estimated on the basis of historical data concerning credit losses and
an estimate of the outlook for the future. Expected credit losses are
recognised in the income statement item “Other operating expens-
es”.
Cash and cash equivalents
Cash and cash equivalents consist of cash and bank deposits that can
be withdrawn on demand.
Financial liabilities
Financial liabilities are originally recognised in the accounts at their
original value, which corresponds to the amount of consideration
received. Transaction costs are included in the original book val-
ues of fi nancial liabilities. Financial liabilities, with the exception
of derivative liabilities, are subsequently valued at amortised cost
using the effective interest rate method. Financial liabilities are in-
cluded in current and non-current liabilities. Borrowing costs are
recognised as interest expenses in the fi nancial period in which they
are incurred.
Pension schemes
At present, the Group only uses defi ned-contribution pension
schemes. The contributions paid under these schemes are recognised
as expenses in the balance sheet for the fi nancial period in which
they are incurred.
The Group has no legal or constructive obligation to make addi-
tional payments if the recipient of the payments is unable to pay the
pension benefi ts in question.
Share-based payments
The Group has incentive schemes where payments are made in the
form of equity instruments. The benefi ts awarded under the schemes
are recognised at fair value on the date on which they were granted
and entered as costs in the income statement evenly throughout the
period during which they were earned. The effect of the schemes on
profi t and loss is presented in the income statement under expenses
incurred from employee benefi ts.
The cost determined on the date on which the options were grant-
ed 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-earn-
ing period. The Group updates the presumption of the fi nal number
of options on every balance sheet date. Changes in the estimates
are recognised in the income statement. The fair value of the op-
tion schemes is determined on the basis of the Black-Scholes option
pricing model.
When options are exercised, the monetary payments received on
the basis of share subscriptions, adjusted for any transaction costs,
are recognised in shareholders’ equity. The funds received from
share subscriptions, adjusted for any transaction costs, are recog-
nised in shareholders’ equity and the invested unrestricted equity
fund in accordance with the terms and conditions of the scheme.
Income taxes
The accrual-based taxes corresponding to the earnings of the Group
companies in the fi nancial period are recognised under taxes in the
consolidated income statement based on the taxable income calcu-
lated according to the local tax regulations applying to each com-
pany, along with adjustments to taxes in prior fi nancial periods and
changes in deferred taxes.
Deferred taxes are calculated from the temporary differences be-
tween the book value and tax base. However, no deferred tax liabili-
ty is recognised in the case of an asset or liability that was originally
intended to be entered into the accounts, and if the case does not
concern a business combination, and the recognition of such an asset
or liability does not affect the accounting result or taxable income
on the date when the transaction was executed. No deferred tax is
booked for non-deductible goodwill, and no deferred tax is booked
for the undistributed profi ts of subsidiaries if the difference is not
likely to be unwound in the foreseeable future.
Deferred tax is calculated using the tax rates prevailing on the
balance sheet date.
Deferred tax assets are recognised in the amount for which it is
likely that taxable income will be generated in the future against
which the temporary difference can be utilised.
Shareholders’ equity, dividends and treasury shares
The dividend proposed by the Board of Directors is not recognised
in the fi nancial statements. Instead, the dividend is recognised when
it is approved by the Annual General Meeting.
Digitalist Group Plc’s treasury shares total 7,664,943. The amount
paid for the shares is recognised as a deduction in unrestricted eq-
uity.
Financial statements 2021 22
Turnover and recognition principles
Turnover are recorded in the amount that the Group expects to be
entitled to receive in exchange for providing the promised servic-
es to the client, with the exception of amounts collected on behalf
of third parties, such as indirect taxes. Discounts are taken into ac-
count when determining the amount of consideration when the sale
is booked.
Turnover consists entirely of service provision. The Group enters
a sale as income when it transfers control over the service to the cli-
ent. The sale is entered as income over time when the client receives
and uses the service as the Group provides it. The income received
from short-term services is recognised when the service is rendered
or in equal instalments over the term of the agreement when the
work is carried out.
The degree of completion is determined for each project by ex-
amining the number of working hours done by the review date as a
proportion of the estimated total number of hours. If it is likely that
the total cost of a project will exceed the total income, the expected
loss is recognised immediately as an expense.
Interest and dividend income
Interest income is recognised using the effective interest method,
and dividend income is recognised when the right to a dividend aris-
es.
Other operating income
Other operating income includes gains from the sale of assets and
other income unrelated to the sale of work performances, such as
government grants received.
Accounting principles requiring management
discretion and main uncertainty factors relating to
estimates
The preparation of the fi nancial statements requires the senior man-
agement to make estimates and assumptions that affect the amounts
of the company’s assets, liabilities, income and expenses recognised
in the fi nancial statements, as well as the amounts presented in the
notes under contingent assets and liabilities. Although these esti-
mates are based on the management’s best understanding of current
events and actions, the actual outcomes may differ from the esti-
mates.
The senior management of the Group exercises discretion when
making decisions about the choice of accounting principles for the
fi nancial statements and how they are applied. This particularly af-
fects cases where the IFRS norms in force contain alternative recog-
nition, measurement or presentation procedures. The main estimates
and assumptions related to the fi nancial statements concern impair-
ment testing, using deferred tax assets, determining the allocation
and depreciation periods for corporate acquisitions, and capitalising
development expenditure.
Uncertainties related to estimates
The estimates made when the fi nancial statements were prepared
are based on the senior management’s best insight on the balance
sheet date. The estimates are affected by prior experience, as well as
assumptions about the future that are deemed the most likely on the
balance sheet date and are related to factors such as expected devel-
opments in the Group’s fi nancial operating environment with regard
to sales and cost levels. The Group regularly monitors the realisation
of estimates and assumptions, as well as changes in the underlying
factors, by working with the business units and using various in-
ternal and external data sources. Any changes in the estimates and
assumptions are entered into the accounts in the fi nancial period in
which the estimate or assumption is corrected and in all subsequent
fi nancial periods.
The key assumptions about the future and the main uncertainties
related to the estimates on the balance sheet date that give rise to a
substantial risk of material changes in the book values of the Group’s
assets and liabilities in the next fi nancial period are presented below.
The Group’s senior management considers these parts of the fi nan-
cial statements to be the most relevant, as the accounting principles
governing these areas are the most complex from the Group’s per-
spective, and the application of the principles requires the greatest
use of the most signifi cant estimates and assumptions for purposes
such as the valuation of assets. Furthermore, any changes in the as-
sumptions and estimates used in these areas of the fi nancial state-
ments are expected to have the greatest impact.
Impairment testing
The Group tests goodwill for impairment every six months, and
it assesses any indication of impairment in accordance with the
aforementioned accounting principles. The recoverable amounts of
cash-fl ow-generating units are determined using calculations based
on their value in use. Preparing these calculations requires the use
of estimates.
Note 13 provides further information on impairment testing.
Allocation of transaction prices and determination of
depreciation periods
Tangible assets are depreciated over their useful lives, which are
based on estimates by the senior management, taking into consider-
ation the depreciation principles applying in the Group. Intangible
assets acquired in business combinations are recognised separately
from goodwill at fair value on the acquisition date if they can be
identifi ed. When the Group has acquired businesses, it has mainly
acquired technology, order books and customer agreements.
Capitalisation of development expenditure
The Group recognises product development expenditure in the bal-
ance sheet when the prerequisites for capitalisation are fulfi lled. The
senior management regularly assesses the fulfi lment of develop-
ment expenditure and the progress made on product development
projects. At the end of the fi nancial period, the consolidated balance
sheet had no capitalised development expenditure.
Deferred tax assets recognised for losses
The Group has no deferred tax assets in its balance sheet as a result
of tax losses.
2. Segment information
One customer accounted for 8.4% of turnover.
Geographical information
The Group operates on two continents: Europe and North America.
Sales revenues from external customers are defined according to the IFRS provisions.
2021
(EUR thousand)
Income Non-current assets
Europe 16 983 8 817
of which Finland 3 783 1 746
North America 1 104 8
Other countries 395 0
Group total 18 482 8 825
2020
(EUR thousand)
Income Non-current assets
Europe 18 743 12 450
of which Finland 5 293 9 637
North America 1 744 19
Group total
20 487
12 469
The supreme operational decision-making organ is the Board of Directors, to which the business is reported in one operational and reporting
segment.
The share of turnover from customers among the related parties was 0.8% in the financial period.
The turnover for the geographical areas are presented according to the locations of customers, and the assets are presented
according to the location of the assets.
Financial statements 2021 23
Group total
20 487
12 469
3. Businesses operations acquired and sold
2021 financial period
Acquired business operations
No business operations were acquired during the 2021 financial period.
Divested businesses
Digitalist UK Limited, part of Digitalist Group, divested its subsidiary Ticknovate Limited on 31 August 2021.
The company owned 65% of the shares in Ticknovate. The share transaction was executed by selling all the Ticknovate
shares held by the company to Turret Oy Ab (related-party) In connection with the sale, Digitalist Group recognised a
capital gain of EUR 1.3 million in other operating income. Cahsflow impact of this transaction was EUR 2.6 million.
2020 financial period
No business operations were acquired during the 2020 financial period.
4. Turnover
The table below shows the amounts of assets and liabilities based on trade receivables and customer agreements
at the end of the reporting period.
EUR thousand 2021 2020 2020
Turnover service revenues
18 482
20 487
20 487
From short-term customer agreements, capitalised over time
18 313
20 259
20 259
From longer-term customer agreements, capitalised according to the
degree of completion
169 228 228
2021 2020 2020
Trade receivables
3 733
5 387
5 387
Asset items based on customer agreements
0
0
0
Liabilities based on customer agreements
0
0
0
5. Other operating income
EUR thousand
2021
2020
Contractual compensation
0
787
Businesses sold
1 280
Government grants*
470
947
Other items
93
89
Total
1 843
1 823
* The government grants consist mainly of COVID-19 operating grants awarded by states.
The Group did not receive any public grants for product development projects in the financial period (2020: EUR 321,000)
6. Materials and services
EUR thousand
2021
2020
2020
Materials
-413
-436
-436
The Group’s asset items based on customer agreements consist of the Group’s receivables that had not yet been invoiced to customers on
the reporting date. The asset items based on agreements are transferred to trade receivables when there is an unconditional right to the
receivable. The liabilities based on customer agreements mainly consist of advances received from customers. Note 16 presents more
information on trade receivables. The performance obligations that were outstanding at the end of the reporting period but will be fulfilled in
the coming year were 0 (2020: 0)
Financial statements 2021
24
Materials
-413
-436
-436
Services
-2 833
-2 674
-2 674
Total
-3 246
-3 110
-3 110
7. Expenses from employee benefits
EUR thousand
2021
2020
2020
Salaries and bonuses of the CEO and the Board of Directors
-552
-458
-458
Options (CEO and Board of Directors)
-53
-1
-1
Salaries and bonuses
-10 682
-12 356
-12 356
Options
-148
-24
-24
Total
-11 435
-12 839
-12 839
Pension expenses – defined contribution schemes
-1 525
-1 571
-1 571
Other personnel expenses
-2 217
-2 179
-2 179
Personnel expenses in the income statement
-15 177
-16 589
-16 589
Related-party transactions: note 29.
8. Personnel
Average number of employees
2021
2020
2020
Experts
142
165
165
Administrative and sales personnel
30
43
43
Total
172
208
208
- of whom working abroad
110
138
138
Personnel at the end of the financial period
2021
2020
2020
Experts
139
148
148
Administrative and sales personnel
26
34
34
Total
165
182
182
- of whom working abroad
108
118
118
9. Depreciation and impairment
EUR thousand
2021
2020
2020
l
0
Depreciation
Depreciation of intangible assets acquired in business combinations
-1 045
-1 120
-1 120
Depreciation of intangible assets
-188
-924
-924
Depreciation of right-of-use assets
-826
-1 155
-1 155
Depreciation of tangible fixed assets
-97
-138
-138
Impairment
Goodwill
-1 382
-3 700
-3 700
Impairment
Goodwill
-1 382
-3 700
-3 700
Total depreciation and impairment
-3 538
-7 037
-7 037
The company has a goodwill impairment charge of EUR 1.4 million (2020: EUR 3.7 million). See note 13.
10. Other operating expenses
EUR thousand
2021
2020
Personnel-related expenses
-244
-222
Office charges
-258
-134
IT hardware and maintenance costs
-967
-1 074
Travel expenses
-75
-153
Marketing and sales promotion
-171
-62
Credit losses
-65
-341
Other operating expenses
-1 899
-2 647
Total
-3 679
-4 633
The income statement does not include the research and development expenses recognised as costs in 2021 or 2020.
Auditor’s fees
EUR thousand 2021 2020
KPMG companies
Auditing fees -116 -119
Other statutory assignments
Tax advice -12
Other services -2
Total -116 -133
11. Financial income and expenses
EUR thousand
2021
2020
Exchange rate gains
1 470
211
Other financial income
52
10
Financial statements 2021 25
Other financial income
52
10
Total financial income
1 521
221
Interest expenses from liabilities recognised at amortised cost
-1 510
-1 349
Changes in the value of financial assets recognised at fair value through profit or loss
- interest rate derivatives
13
-23
Exchange rate losses
-60
-1 622
Interest on lease liabilities
-11
-37
Other financial expenses
-432
-188
Total financial expenses
-2 000
-3 219
Total financial income and expenses
-479
-2 998
12. Income taxes
Income taxes in the income statement
EUR thousand
2021
2020
Taxes for the financial period
-146
13
Taxes for previous financial periods
-89
-53
Deferred taxes
230
203
Total
-5
163
Reconciliation of the Group’s tax rate with the Finnish tax rate
EUR thousand
2021
2020
Profit before taxes
-5 794
-12 057
Tax expenses at the Finnish tax rate
1 159
2 411
Other non-deductible items
588
-740
Taxes for previous financial periods
-89
-53
Different tax rates of foreign subsidiaries
29
258
Unrecognised deferred tax asset for losses
-1 748
-1 583
Others
56
-130
Group taxes
-5
163
Note 15 provides further information on deferred tax assets and liabilities and tax losses.
Intangible assets 2021
EUR thousand Goodwill
Develop-
ment
expenditure
Intangible
rights
Intangible
assets
Ongoing
research and
development
projects Total
Acquisition cost 1 Jan 2021
18 685
993
8 401
14 169
4 519
46 767
Increases
0
Decreases
-804
69
-4 519
-5 254
Transfers between balance sheet items
-913
-913
Changes in exchange rates
-134
2
-102
-234
Acquisition cost 31 Dec 2021
17 747
148
8 403
14 067
0
40 365
Accumulated depreciation and impairment 1 Jan 2021
-11 200
-248
-8 316
-12 258
-4 519
-36 541
Depreciation for the financial period
-122
-61
-1 049
-1 233
Accumulated depreciation on decreases and transfers
237
4 519
4 756
Impairment for the financial period
-1 382
-1 382
Changes in exchange rates
-16
-2
74
57
-12 582 -149 -8 379 -13 233 0 -34 342
Book value 1 Jan 2021
7 485
745
85
1 911
0
10 226
Book value 31 Dec 2021
5 165
0
24
835
0
6 023
Intangible assets 2020
EUR thousand Goodwill
Develop-
ment
expenditure
Intangible
rights
Intangible
assets
Ongoing
research and
development
projects Total
Acquisition cost 1 Jan 2020
18 434
8 228
13 933
5 896
46 491
13. Intangible assets
Accumulated depreciation and impairment
31 Dec 2021
Financial statements 2021 26
Acquisition cost 1 Jan 2020
18 434
8 228
13 933
5 896
46 491
Increases
201
20
221
Decreases
-321
-27
-348
Transfers between balance sheet items
1 377
-1 377
0
Changes in exchange rates
251
-63
-1
216
403
Acquisition cost 31 Dec 2020
18 685
993
8 401
14 169
4 519
46 767
Accumulated depreciation and impairment 1 Jan 2020 -7 500 -7 658 -10 976 -4 519 -30 653
Depreciation for the financial period -251 -674 -1 120 -2 045
Accumulated depreciation on decreases and transfers 16 16
Impairment for the financial period -3 700 -3 700
Changes in exchange rates
3
0
-162
-159
-11 200 -248 -8 316 -12 258 -4 519 -36 541
Book value 1 Jan 2020 10 934 0 570 2 957 1 377 15 838
Book value 31 Dec 2020 7 485 745 85 1 911 0 10 226
Other intangible assets include the intangible assets arising from corporate acquisitions. At the end of the financial period, the undepreciated
residual value of intangible assets was EUR 817 thousand (EUR 1,890 thousand).
Accumulated depreciation and impairment
31 Dec 2020
Goodwill impairment testing
Goodwill has been allocated to the following cash-flow-generating units:
EUR thousand
One
Digitalist
Group
Total
Goodwill 1 Jan 2021
7 485
7 485
Translation differences
-134
-134
Share allocated to mergers and acquisitions
-804
-804
Impairment
-1 382
-1 382
Goodwill 31 Dec 2021
5 165
5 165
Goodwill 1 Jan 2020
10 934
10 934
Translation differences
251
251
Impairment
-3 700
-3 700
The cash flow forecasts are discounted using the weighted average cost of capital before taxes. The discount rate was calculated on the basis
of an estimate of the Group’s yield requirement for shareholders’ equity and the Group’s cost of new liabilities during the financial statements,
plus the risk premium. The discount rate is 11% (13%).
The goodwill is allocated to one cash-generating unit.
At the end of the financial period, the balance sheet contained goodwill amounting to EUR 5.2 million (EUR 7.5 million). The company tested
its goodwill in accordance with IAS 36 and its accounting policies twice during the financial period. The company recorded impairment
charges of EUR 0.5 million on 30 June 2021 and EUR 0.9 million on 31 December 2021. In connection with the divestment of Ticknovate Ltd,
which took place on 31 August 2021, EUR 0.8 million of goodwill was allocated against the profit from the sale.
A negative change in significant individual assumptions used in the calculations would necessitate an additional goodwill impairment charge.
The amount of money that can be collected from cash-flow-generating units is based on the value in use of the asset concerned. Goodwill is
tested for impairment by comparing the value in use to the book value. The first-year cash flow forecasts are based on budgets approved by
the senior management. The present values for the four-year forecasting period thereafter are determined using the following assumptions
based on the discretion of the senior management: In the testing conducted on 31 December 2021, the cash flow forecasting period consisted
of the forecast for the period from 2022 to 2025. During the 2022–2025 forecasting period, average growth of 21 per cent is expected to be
achieved as digitalisation spreads to an increasing share of business life. The testing calculations used an operating profit margin of
approximately 4% for the terminal period. Growth in the terminal period was assumed to be 1%.
Financial statements 2021 27
Impairment
-3 700
-3 700
Goodwill 31 Dec 2020
7 485
7 485
Principal assumptions used for goodwill testing
2021
2020
Length of the forecasting period
4
4
Average annual increase in turnover
21 %
20 %
Growth factor for cash flows after the forecasting period
1 %
1 %
Discount rate
11 %
13 %
14. Tangible assets and right-of-use assets
Tangible assets 2021
EUR thousand
Right-of-use
assets*
Machinery
and
equipment
Other
tangible
assets
Tangible
assets not
subject to
depreciation
Other
investments Total
Acquisition cost 1 Jan 2021 2 628 11 633 145 27 3 14 436
Increases 1 396 42 6 1 444
Depreciation and transfers -716 139 -158 -1 -736
Changes in exchange rates 0 3 7 -1 10
Acquisition cost 31 Dec 2021 3 308 11 818 0 26 2 15 154
Accumulated depreciation 1 Jan 2021 -1 670 -11 517 -133 0 0 -13 320
Depreciation for the financial period -826 -72 -25 -923
Accumulated depreciation on
decreases
716 -147 158 728
Changes in exchange rates 1 -10 1 -8
Accumulated depreciation 31 Dec 2021 -1 779 -11 745 0 1 0 -13 523
Book value 1 Jan 2021
958
116 12 27 3 1 116
Book value 31 Dec 2021 1 529 73 0 27 2 1 631
Tangible assets 2020
EUR thousand
Tangible
assets not
subject to
depreciation
Acquisition cost 1 Jan 2020 4 319 11 709 158 26 2 16 214
Increases 347 27 1 375
Depreciation and transfers -2 060 -100 -7 -2 167
Changes in exchange rates
22
-3
-6
1
14
Total
Right-of-use
assets*
Other
tangible
assets
Other
investments
Machinery
and
equipment
Financial statements 2021 28
Changes in exchange rates
22
-3
-6
1
14
Acquisition cost 31 Dec 2020 2 628 11 633 145 27 3 14 436
Accumulated depreciation 1 Jan 2020 -1 646 -11 419 -97 0 -13 162
Depreciation for the financial period -1 155 -94 -44 -1 293
Accumulated depreciation on
decreases and transfers
1 156 3 1 159
Changes in exchange rates -25 -4 5 -24
Accumulated depreciation 31 Dec 2020 -1 670 -11 517 -133 0 0 -13 320
Book value 1 Jan 2020
2 673
290 61 26 2 3 052
Book value 31 Dec 2020 958 116 12 27 3 1 116
* The Group’s right-of-use assets consist mainly of office leases
15. Deferred tax assets and liabilities
1.1.2021
Recognised
in income
statement
Translation
differences
Businesses
sold
31.12.2021
469 -240 -13 -47 168
Other items
2 -2 0 0
Total
471 -242 -13 -47 168
Breakdown of deferred tax liabilities 2020
EUR thousand 1.1.2020
Recognised
in income
statement
Translation
differences
Acquired
transactions
31.12.2020
670 -203 2 469
Other items
2 2
Total
672 -203 2 0 471
Confirmed tax losses
EUR million
expires 2022
7,46
expires 2023
11,01
expires 2024
5,87
expires 2025
7,44
expires 2026
4,54
expires 2027
1,59
expires 2028
2,52
expires 2029
3,09
expires 2030
5,76
Breakdown of deferred tax liabilities 2021
EUR thousand
Recognition of intangible assets at fair value
Recognition of intangible assets at fair value
Financial statements 2021 29
expires 2030
5,76
later
4,78
Total
49,27
The Group’s balance sheet does not contain any deferred tax assets recognised for taxable losses.
1.1.2021
Recognised
in income
statement
Translation
differences
Acquired
transactions
31.12.2021
Other items
41
-1 40
Total
41
-1
0
0
40
1.1.2020
Recognised
in income
statement
Translation
differences
Acquired
transactions
31.12.2020
Other items
0
41 41
Total
0
41
0
0
41
Breakdown of deferred tax assets 2021
EUR thousand
Breakdown of deferred tax assets 2020
EUR thousand
16. Trade and other receivables
Current receivables 2021 2020
Trade receivables 3 733 5 387
Other receivables 579 781
Total 4 312 6 168
Other receivables 2021 2020
Other receivables 203 422
Prepayments and accrued income 376 359
Total 579 781
Age distribution of trade receivables 2021 Impairment Net 2021
Not due 3 207 0 3 207
Due in 1–30 days 287 0 287
Due in 31–60 days 124 0 124
Due in 61–90 days 73 0 73
Due in 91–180 days 9 0 9
Due in more than 180 days 32 0 32
Total 3 733 0 3 733
Age distribution of trade receivables 2020 Impairment Net 2020
Not due 3 971 0 3 971
Due in 1–30 days 994 0 994
Due in 31–60 days 89 0 89
Due in 61–90 days 107 0 107
Due in 91–180 days
163
0
163
Financial statements 2021 30
Due in 91–180 days
163
0
163
Due in more than 180 days 383 -320 63
Total 5 707 -320 5 387
Financial assets do not include overdue items.
Credit losses of EUR 65 thousand (2020: credit losses of EUR 341 thousand) were recognised in the financial period.
Note 24 presents the criteria for assessing the fair values of receivables.
Credit risk management is a key part of the Group’s risk management. The Group’s 20 largest customers account for 54% of its
customer invoicing. The largest customers are telecommunications, information technology, banking and insurance companies
operating in Finland and abroad, as well as companies operating in public administration. The euro and Swedish krona are the
invoicing currencies for most of the customers in these groups. The receivables are not estimated to include any significant
concentrations of credit risk. The largest Nordic banks are the counterparties to external financial transactions.
In order to shorten the turnaround time of trade receivables, the Group had EUR 0.3 million (2020: 0.2 million) of sold trade receivables
in its balance sheet on the balance sheet date (31 December 2021), and these were assigned to financing companies in early 2022.
The trade receivables sold during the financial period amounted to EUR 3.0 million (2020: EUR 4.7 million).
17. CASH AND CASH EQUIVALENTS
EUR thousand 2021 2020 2020
Cash and cash equivalents 984 1 008 1 008
Cash and cash equivalents consist of bank deposits in current accounts.
18. Shareholders’ equity
Number of
shares
Share capital
(EUR)
Share
premium
fund (EUR)
Invested
unrestricted equity
fund (EUR) Total (EUR)
1.1.2021 651 022 746 585 219 72 971 73 775
Changes - - - - -
31.12.2021 651 022 746 585 219 72 971 73 775
Number of
shares
Share capital
(EUR)
Share
premium
fund (EUR)
Invested
unrestricted equity
fund (EUR) Total (EUR)
1.1.2020 651 022 746 585 219 73 186 73 990
Changes - - - -215 -215
31.12.2020 651 022 746 585 219 72 971 73 775
The following section describes the shareholders’ equity funds:
Financial statements 2021 31
Share premium account
Invested unrestricted equity fund
19. PROVISIONS
Digitalist Group Plc did not recognise any provisions in 2021 or 2020.
In the cases where decisions were made concerning options while the old Limited Liability Companies Act (29 September 1978/734)
was in effect, the cash payments received for share subscriptions based on options were recognised in the share capital and the share
premium fund in accordance with the terms and conditions of the scheme, less transaction costs.
The invested unrestricted equity fund includes other equity-type investments and the subscription price of shares to the extent that it is
not entered in shareholders' equity under a specific decision. The payments received for share subscriptions executed on the basis of
option schemes decided upon since the new Limited Liability Companies Act (21 July 2006/624) entered into force (on 1 September
2006) are recognised in full in the invested unrestricted equity fund.
20. Non-current liabilities
Other loans
Convertible
bond loans
Deferred
tax liabilities
Lease
liabilities Total
Non-current liabilities 1 Jan 2021
2 688
9 209
471
145
12 513
Change in the financial period
9 713
1 104
-303
819
11 334
Non-current liabilities 31 Dec 2021
12 401
10 314
168
964
23 846
Other loans
Convertible
bond loans
Deferred
tax liabilities
Financial
leasing
liabilities Total
Non-current liabilities 1 Jan 2020
2 871
8 568
672
1 412
13 523
Change in the financial period
-183
641
-201
-1 267
-1 010
Non-current liabilities 31 Dec 2020
2 688
9 209
471
145
12 513
Note 24 presents the criteria for assessing the fair values of liabilities.
21. Financial liabilities
Non-current financial liabilities
EUR thousand
2021
2020
Convertible bond loan 10 314 9 209
Loans from financial institutions 2 232 2 688
Equity loans from related parties 10 169
Lease liabilities 963
145
Non-current financial liabilities
23 677
12 042
Current financial liabilities
EUR thousand
2021
2020
Convertible bond loan
0
8 672
Loans from financial institutions
8 419
6 541
Equity loans from related parties
0
0
Lease liabilities
572
820
EUR thousand
EUR thousand
Financial statements 2021 32
Lease liabilities
572
820
Financial liabilities recognised at fair value through profit or loss
1
0
0
Current financial liabilities
8 992
16 033
¹ The financial liabilities recognised at fair value through profit or loss are derivatives.
This item is included in other liabilities in the balance sheet.
Note 24 presents the criteria for assessing the fair values of financial liabilities.
Total loans 31 Dec 2021
23 943
Repayments 2022
1 229
Repayments 2023
961
Repayments 2024
21 391
Repayments 2025
362
The average interest on interest-bearing loans in the financial period was 5.2%.
2021
Interest-bearing liabilities 1 Jan 2021
28 075
Monetary changes in interest-bearing liabilities in the financial period
2 423
Non-monetary changes:
Increase in IFRS 16 lease liability
570
Convertible bonds and offsetting interest as loans:
1 601
Capitalisation of interest accrued on convertible bonds
1 601
Offsetting of interest accrued on convertible bonds as equity loans
-10 169
Increase in the equity loan
10 169
Interest-bearing liabilities 31 Dec 2021
32 669
2020
Interest-bearing liabilities 1 Jan 2020
26 866
Monetary changes in interest-bearing liabilities in the financial period
3 192
Non-monetary changes:
Increase in IFRS 16 lease liability
-1 983
Interest-bearing liabilities 31 Dec 2020
28 075
Repayment programme according to the loan agreements for interest-bearing loans on 31 December 2021 (does not include overdraft facilities
of EUR 7.2 million, which are included in current loans from financial institutions).
Changes in interest-bearing liabilities during the financial period
(EUR thousand)
Changes in interest-bearing liabilities during the financial period
(EUR thousand)
Interest-bearing liabilities 31 Dec 2020
28 075
0
22. Current liabilities
Current liabilities
EUR thousand 2021 2020
Accounts payable 1 348 1 524
Tax liabilities 119 -21
Loans from financial institutions 8 419 6 541
Other loans
Lease liabilities 572 820
Convertible bonds 0 8 672
Other liabilities 1 566 2 481
Accrued expenses and deferred income 2 835 3 801
Total 14 860 23 818
Other liabilities
EUR thousand 2021 2020
Withholding tax liabilities 253 279
Social security contribution liabilities 370 407
VAT liabilities 824 1 688
Other liabilities 119 107
Other liabilities, total 1 566 2 481
Accrued expenses and deferred income
EUR thousand 2021 2020
Accrued employee expenses 1 150 1 618
Interest accruals 1 079 1 158
Other accrued expenses and deferred income 606 1 025
Total accrued expenses and deferred income 2 835 3 801
Financial statements 2021
33
23. Cash flow statement
EUR thousand 2021 2020
Change in working capital -812 661
Change in trade receivables and other receivables 1 103 94
Change in accounts payable and other liabilities -1 915 567
24. Book values and fair values of financial assets and liabilities
Financial assets and liabilities recognised at fair value through profit or loss
Financial assets valued at amortised cost
After being recognised at acquisition cost, loans and other receivables are valued at amortised cost using the effective interest rate method.
Financial assets recognised at amortised cost include financial assets for which the aim of the business model is to hold the assets until
maturity in order to collect the contractual cash flows. The cash flows from these items consist exclusively of principal and interest on the
outstanding principal. They are included in the balance sheet under current and non-current assets.
Impairment charges are recognised if there is objective evidence of the impairment of individual items.
Significant financial difficulties of the debtor, likelihood of bankruptcy, payment defaults or substantial payment delays are signs of the
impairment of receivables. Impairment losses are recognised as costs in the income statement item “Other expenses”.
The Group’s loans from financial institutions and from related parties are valued at amortised cost.
The Group classifies interest rate swap contracts and other investments at fair value through profit or loss, and they are included in the
balance sheet under current assets or liabilities. Fair value adjustments are recognised in the income statement as financial income or
expenses. The fair values of the contracts have been calculated by discounting the future cash flows. The contracts are presented in the
balance sheet under financial assets or liabilities and are acquired for hedging purposes. The company does not apply hedge accounting.
Trade receivables are recognised at the original value. The Group recognises expected credit losses as a decrease in the asset item
recognised at amortised cost under financial assets. Expected credit losses are estimated using the simplified approach provided under
IFRS 9, where credit losses are recognised in an amount corresponding to the expected credit losses throughout the entire period of
validity. The Group applies the simplified approach to trade receivables recognised at amortised cost and asset items based on customer
agreements in accordance with IFRS 15. Expected credit losses are recognised using a provision matrix. Expected credit losses from trade
receivables and asset items based on customer agreements are estimated on the basis of historical data concerning credit losses and an
estimate of the outlook for the future. Expected credit losses are recognised in the income statement item “Other operating expenses”.
The Group’s loans from financial institutions and from related parties are valued at amortised cost.
Criteria for determining fair value
Trade and other receivables
The original value correspond to the fair value of trade receivables and other receivables, as the payment periods are short,
so discounting has no material effect. Note 16 presents the age distribution of trade receivables.
Other liabilities
Other liabilities (accounts payable and other non-interest-bearing liabilities) are recognised in the balance sheet at their original
value, which corresponds to their fair value because the effect of discounting is immaterial in view of the maturity of the liabilities.
Nominal values of derivative contracts (EUR thousand)
Interest rate swap contracts 2021 2020
Due within 1 year
Maturing within 1–5 years 2 000 2 000
Total 2 000 2 000
Fair value -10 -23
All interest rate swap contracts are categorised at level 2.
Financial assets and liabilities
Financial assets
EUR thousand
2021 2020
Financial assets valued at amortised cost
Trade and other receivables 4 312 6 171
Cash and cash equivalents
984
1 008
The fair value of financial instruments that are not traded on active markets is determined using valuation methods. These valuation
methods use as much observable market data as possible, whenever it is available, and rely as little as possible on company-specific
estimates. If all of the significant input data required to determine the fair value of an instrument is observable, the instrument is at level 2.
Financial statements 2021
34
Cash and cash equivalents 984 1 008
Financial assets recognised at fair value through profit or loss
Loan receivables 1 132 1 085
Total 6 428 8 264
Financial liabilities
EUR thousand
2021
2020
Financial liabilities valued at amortised cost
Accounts payable and other liabilities 5 878 7 762
Loans 32 669 28 075
Derivative instruments -10 23
For hedging
Recognised at fair value through profit or loss
Total 38 537 35 860
25. Earnings per share:
2021 2020
Earnings for the financial period attributed to owners of the parent company (EUR thousand) -5 797 -11 820
Average number of shares during the financial period adjusted for share issues 651 022 746 651 022 746
Earnings per share (EUR) -0,01 -0,02
Number of shares diluted by share issues
average during the period 1 015 830 193 1 108 794 366
Diluted earnings per share (EUR) -0,01 -0,02
Impact of adjustments for share issues and dilution 364 807 447 457 771 620
26. Board of directors’ proposal for the use of distributable assets
The Board of Directors of Digitalist Group Plc proposes to the Annual General Meeting that the distributable assets be retained in shareholders'
equity and that no dividend be distributed to shareholders for the 2021 financial period.
On 31 December 2021, the parent company’s distributable assets amounted to EUR -8,792,474.80.
Financial statements 2021 35
27. Group companies
Name
Group's
ownership
Domicile
Digitalist Finland Ltd
100 %
Finland, Helsinki
Digitalist Canada Ltd. 100 % Canada, Vancouver
Ixonos Estonia OÜ 100 % Estonia, Tallinn
Ixonos Germany GmbH 100 % Germany, Berlin
Ixonos Slovakia s.r.o. 100 % Slovakia, Kosice
Digitalist USA Ltd. 100 % USA, San Francisco
Digitalist UK Ltd. 100 % United Kingdom, London
Crescent, Inc. 100 % USA, San Francisco
Digitalist Singapore Pte Ltd. 100 % Singapore, Singapore
Digitalist Sweden AB 70 % Sweden, Stockholm
Grow AB 100 % Sweden, Stockholm
Grow Finland Oy* 100 % Finland, Helsinki
LeanLab Oy 100 % Finland, Helsinki
Digitalist Open Tech Oy 70 % Finland, Helsinki
Changes in the Group structure 2021
During the financial period, the Group established the subsidiaries LeanLab Oy and Digitalist Open Tech Oy.
The Group's 65% shareholding in Ticknovate Ltd was sold in August 2021.
* The process of dissolving Grow Finland Oy is still underway.
Financial statements 2021 36
28. Related-party transactions
Digitalist Group Plc’s related parties include the members of the Board of Directors, the CEO and the members of the Group’s Management Team.
Turret Oy and Holdix Oy are also related parties.
Salaries, bonuses and other short-term employee benefits
EUR thousand 2021 2020
Petteri Poutiainen, CEO (until 28 June 2021) 300 300
Magnus Leijonborg (since 28 June 2021) 70
Board of Directors
Matikainen Esa (Chair since 20 April 2021) 47 36
Rosenlew Andreas (Deputy Chair since 20 April 2021) 41 51
Ehrnrooth Paul 26 25
Eriksson Peter 26 25
Olofsson Maria (since 14 April 2020) 26 16
Johan Almquist (since 20 April 2021) 18 0
Pylkäs Pekka (until 14 April 2020) 0 8
Rosendahl Jaana (until 14 April 2020) 0 8
Tolvanen Ville (from 2 April 2019 to 14 April 2020) 0 7
Liljeblad Anders (until 14 April 2020) 0 8
Management Team (excluding the CEO) 655 768
Total salaries and bonuses paid to the related parties 1 207 1 251
The salaries and bonuses paid to the related parties are presented on an accrual basis.
In 2021, the members of the Board of Directors, the CEO and the Management Team held a total of 14,912,819 options
(2020: 3,580,500). The total fair value of the options is EUR 366 thousand (2020: EUR 129 thousand).
2021 2020
CEO 3 460 819 0
Board of Directors (* 362 566 545 349 664 704
Management Team 0 12 901 841
Total 366 027 364 362 566 545
At the end of the financial period, the company held 7,664,943 treasury shares.
Petteri Poutiainen’s pension arrangements were the normal arrangements in accordance with the Finnish Employees Pensions Act, and the CEO
also had a voluntary supplementary pension scheme, into which a payment of EUR 8,500 was made in 2021 (2020: EUR 8,500).
Magnus Leijonborg’s pension arrangements are the normal arrangements under Swedish pension legislation, and the CEO also has
a voluntary supplementary pension scheme with an annual contribution of EUR 3,600.
Related-party loans
Convertible bonds 30 March 2021
*) Turret Oy Ab, a related party, holds 305,237,039 shares, which account for 46.89% of the total
The CEO’s notice period is 6 months if the company gives notice and 6 months if the CEO gives notice.
The CEO’s notice period was 9 months for the company and 6 months for the CEO. Digitalist Group Plc’s Board of Directors and Petteri
Poutiainen agreed that he would step down from the position of CEO on 28 June 2021. Magnus Leijonborg was appointed CEO.
Number of shares held by the members of the Board of Directors,
the CEO and the Management Team
On 30 March 2021, Digitalist Group Plc’s Board of Directors decided to direct a convertible bond to Turret Oy Ab (“Convertible Bond 2021/1”)
and a convertible bond to Holdix Oy Ab (“Convertible Bond 2021/2”) and related special rights for subscription by Turret and Holdix in
accordance with chapter 10, section 1(2) of the Limited Liability Companies Act and the conditions of the agreements applying to the bonds.
The convertible bonds were directed on the basis of authorisation granted by the Annual General Meeting of 14 April 2020 in derogation from
the precedence of existing shareholders in the company. Convertible Bond 2021/1 and Convertible Bond 2021/2 have a total sum of
EUR 1 million. According to the conditions attached to the bonds, the bonds may be converted into a maximum of 33,333,332 new shares in
Financial statements 2021 37
Convertible bonds 20 April 2021
Increase in the Group account’s credit limit 23 June 2021
Subordinated loan 30 December 2021
EUR 1 million. According to the conditions attached to the bonds, the bonds may be converted into a maximum of 33,333,332 new shares in
Digitalist Group Plc. The terms and conditions of the convertible bonds are on the company’s website at
https://investor.digitalistgroup.com/fi/investor/releases. The company announced the details of the convertible bonds on 30 March 2021 and
published a stock exchange release on the management's transactions on 1 April 2021.
Digitalist Group Plc’s Annual General Meeting of 20 April 2021 decided to direct a convertible bond to Turret Oy Ab (“Convertible Bond
2021/3”) and a convertible bond to Holdix Oy Ab (“Convertible Bond 2021/4”) and related special rights for subscription by Turret Oy Ab and
Holdix Oy Ab in accordance with chapter 10, section 1(2) of the Limited Liability Companies Act and the conditions of the agreements
applying to the bonds. The convertible bonds were directed in derogation from the precedence of existing shareholders in the company.
Turret Oy Ab has subscribed and paid for Convertible Bond 2021/3 and the related special rights in full in accordance with the terms and
conditions. Holdix Oy Ab has subscribed and paid for Convertible Bond 2021/4 and the related special rights in full in accordance with the
terms and conditions.
The convertible bonds are due to mature on 30 June 2024 and will offset previous receivables from the company as specified in the terms
and conditions for Turret Oy Ab and Holdix Oy Ab. Convertible Bond 2021/3 and Convertible Bond 2021/4 have a total sum of EUR 1 million.
According to the conditions attached to the bonds, the bonds may be converted into a maximum of 635,725,754 new shares in Digitalist
Group Plc. The conditions of the convertible bonds are available on the company's website at
https://investor.digitalistgroup.com/fi/investor/releases. The company announced the details of the convertible bonds and published a stock
exchange release on the management's transactions on 20 April 2021.
The Board of Directors has decided to exercise the right granted to Digitalist Group Plc by its principal owner and convert the convertible
bonds numbered 1–15 into converted bonds and change their nominal capital, a total of EUR 9,757,987.80 and the unpaid interest on the
converted bonds in accordance with the terms and conditions of the convertible bond, into a subordinated loan that complies with the
provisions of chapter 12, sections 1 and 2 of the Limited Liability Companies Act, with the terms and conditions remaining otherwise
unchanged.
Digitalist Group Plc made an agreement with Nordea Bank Plc to increase the credit limit on the company's Group account by EUR 2 million.
The credit limit is secured by an absolute suretyship issued by Turret Oy Ab and Holdix Oy Ab.
Financial statements 2021 38
29. Share-based payments
2021 option programme
On 25 January 2021, Digitalist Group Plc’s Board of Directors decided on the granting of options based on the authorisation conferred by the
Annual General Meeting of 14 April 2020.
The options will be issued free of charge, as decided by the Board of Directors, to key personnel em-
ployed by or recruited to companies within Digitalist Group Plc to secure their commitment and motivation.
Options can be issued to the company's wholly-owned subsidiaries if they are not issued to members of the Group's personnel. Subsidiaries
cannot subscribe for shares on the basis of options.
The options will be subscribed with the identifi ers 2021A1, 2021A2, 2021B1, 2021B2 and 2021C1. A maximum total of 60,000,000 options can
be issued, and they entitle their holders to subscribe for a maximum of 60,000,000 new shares in the company. The Board of Directors may
decide on special additional terms and conditions for receiving options and on the reassignment of options that are subsequently returned to
the company.
Each option entitles its holder to subscribe for one new share in Digitalist Group. On 25 January 2021, the total number of shares that can be
subscribed on the basis of the options represented approximately 9.21 per cent of all the shares and votes in the company, leading to a dilution
effect of approximately 8.44 per cent.
The subscription period for the 2021A1 and 2021B1 options begins on 1 January 2024 and ends on 31 December 2024. The subscription period
for the 2021A2, 2021B2 and 2021C1 options begins on 1 January 2026 and ends on 31 December 2026.
The subscription price of shares subscribed under the 2021A1 and 2021A2 options will be the weighted average price of Digitalist Group Plc
shares traded on Nasdaq Helsinki Ltd’s Helsinki Stock Exchange between 1 October 2020 and 31 December 2020.
The subscription price of shares subscribed under the 2021B1 and 2021B2 options will be the weighted average price of Digitalist Group Plc
shares traded on Nasdaq Helsinki Ltd’s Helsinki Stock Exchange between 1 October 2021 and 31 December 2021.
The subscription price of shares subscribed under the 2021C1 options will be the weighted average price of Digitalist Group Plc shares traded
on Nasdaq Helsinki Ltd’s Helsinki Stock Exchange between 1 October 2022 and 31 December 2022.
The subscription price of shares subscribed under the options will be reduced by factors such as dividends paid, and it may otherwise be adjust-
ed in accordance with the terms. However, the subscription price of each share will be at least EUR 0.01 in any case.
The full terms and conditions of the option scheme are on the company’s website at https://investor.digitalistgroup.com/fi /investor/shares/op-
tion-schemes.
The theoretical market value of the incentive scheme is approximately EUR 1.0 million, and this sum will be recognised as an expense according
to IFRS 2 from 2021 to 2025. There will be no cash-fl ow effect from the expense.
The theoretical market value of the share options was calculated using the Black & Scholes method.
2019 option programme
On 27 August 2019, the Annual General Meeting of Digitalist Group Plc decided to issue options on the basis of the authorisation granted on 2
April 2019.
The options will be issued free of charge, as decided by the Board of Directors, to key personnel employed by or recruited to companies within
Digitalist Group Plc to secure their commitment and motivation. Options can be issued to the company's wholly-owned subsidiaries if they are
not issued to members of the Group's personnel. Subsidiaries cannot subscribe for shares on the basis of options.
The options will be subscribed with the identifi
ers 2019A1, 2019A2, 2019B1, 2019B2, 2019C1 and 2019C2.
A maximum total of 19,530,000 op-
tions can be issued, and they entitle their holders to subscribe for a maximum of 19,530,000 new shares in the company. The Board of Directors
may decide on special additional terms and conditions for receiving options and on the reassignment of options that are subsequently returned
to the company.
Each option entitles its holder to subscribe for one new share in Digitalist Group. On 27 August 2019, the total number of shares that can be
subscribed on the basis of the options represented approximately 3 per cent of all the shares and votes in the company, leading to a dilution
effect of approximately 3 per cent.
The subscription period for the 2019A1, 2019B1 and 2019C1 options begins on 31 December 2021 and ends on 31 December 2023. The sub-
scription period for the 2019A2, 2019B2 and 2019C2 options begins on 31 December 2022 and ends on 31 December 2023.
The subscription price for the shares subscribed under the options is EUR 0.06. The subscription price will be reduced by factors such as
dividends paid, and it may otherwise be adjusted in accordance with the terms. However, the subscription price of each share will be at least
EUR 0.01 in any case.
The full terms of the option scheme are available on the company’s website at https://investor.digitalistgroup.com/fi /investor/shares/op-
tion-schemes.
The theoretical market value of the incentive scheme is approximately EUR 25 thousand, and this sum will be recognised as an expense accord-
ing to IFRS 2 from 2019 to 2022. There will be no cash-fl ow effect from the expense.
The theoretical market value of the share options was calculated using the Black & Scholes method.
Key assumptions used to determine the fair value of options
Stock Option Program 2019A1 2019A2 2021A1 2021A2
Grant date 27.8.2019 27.8.2019 13.4.2021 13.4.2021
Number on the date of issue 1 790 250 1 790 250 19 225 000 19 225 000
Subscription price 0,06 0,06 0,03 0,03
Validity 31.12.2023 31.12.2023 31.12.2024 31.12.2024
Share price on the date of issue 0,05 0,05 0,05 0,05
Number of persons on the date of issue 3 3 25 25
Changes in 2021:
Granted options 0 0 0 0
Lapsed options 0 0 0 0
Number of options 31 Dec 2021 1 790 250 1 790 250 19 225 000 19 225 000
Volatility 76 % 76 % 49 % 49 %
Dividend yield 0 % 0 % 0 % 0 %
Share price 31 Dec 2020 0,04 0,04
Share price 31 Dec 2021 0,03 0,03 0,03 0,03
On 25 January 2021, the company’s Board of Directors stated that the undistributed options belonging to the 2019 option scheme had
lapsed. A total of 3,580,500 options were granted under the 2019A1 and 2019A2 series of the company’s 2019 option scheme. A
maximum of 3,580,500 new shares in the company may be subscribed on the basis of these options and in accordance with the
conditions of the option scheme.
Financial statements 2021 39
30. Contingent liabilities
The mortgages guarantee a total of EUR 10,176,862 in loans from financial institutions and additional financing from credit limits.
31. Events since the financial period
32. Financial risk management
Digitalist Group Plc has made an agreement with Turret Oy Ab on a loan amounting to EUR 500,000. The loan was granted on market
terms, and it will fall due on 30 April 2023. Turret Oy Ab is the largest shareholder of Digitalist Group.
Digitalist Group has agreed to implement the following arrangement (the “Arrangement”) regarding Yangi AB, registered in Sweden.
Digitalist Group's Swedish subsidiary, Grow AB, will subscribe for a total of 11,111 shares in Yangi AB at a total subscription price of
SEK 5,000,000. To increase financial flexibility, Grow AB will then sell a total of 7,778 Yangi AB shares to Turret Oy Ab for a total
purchase price of SEK 6,300,000.
The company is exposed to several financing risks in its normal course of business. The purpose of financial risk management is to
minimise the adverse effects of changes in financial markets on the company’s earnings. Digitalist Group’s main financial risks are
capital adequacy and interest rate risks.
Digitalist Group’s long-term financing has been arranged with two main financiers. The company may later decide to arrange a share
issue. If the economy were to enter an exceptionally long-term recession, it would likely increase Digitalist Group’s financial expenses in
On 31 December 2021, the Group had nine corporate mortgages of EUR 1,000,000, one of EUR 800,000, one of EUR 55,000, two of
EUR 50,000, and one of EUR 45,000 to guarantee its loans from financial institutions, credit limits, leases and other liabilities. The total
amount in corporate mortgages is EUR 10,000,000.
23 March 2022
The Board decided to exercise the right granted to Digitalist Group Plc by Holdix Oy Ab and convert three-quarters of the Convertible
Bonds into Converted Bonds and to convert the capital thereof, altogether EUR 4,545,827.70, and the unpaid interest on the capital of
the Converted Bonds set out in the Terms of the convertible bond into a capital loan meeting the requirements of chapter 12, sections 1
and 2 of the Limited Liability Companies Act, with the terms otherwise remaining the same, where applicable.
Financial statements 2021 40
Interest rate
Loans from financial institutions:
issue. If the economy were to enter an exceptionally long-term recession, it would likely increase Digitalist Group’s financial expenses in
relation to the Group’s operating income because, during a general recession, Digitalist Group’s earning capacity and cash flow from
operations can be expected to decrease. The aforementioned matters may also weaken the availability of external financing for Digitalist
Group and the Group’s financial position.
The parent company’s financing function is responsible for implementing risk management. It is tasked with identifying, assessing and
hedging against financial risks in collaboration with the business units.
The company’s income and cash flow from operations are largely independent of fluctuations in market rates. The company is exposed
to cash flow interest rate risk through a loan portfolio consisting of short-term and long-term variable-rate loans. With regard to interest
rate risk, the company’s risk management aims to minimise the adverse effects caused by changes in interest rates on the company’s
earnings. The company implements interest rate risk management using various interest rate instruments for hedging. The company has
interest rate swap contracts applying to a total of EUR 2.0 million of loans from financial institutions. The company has used interest rate
swap contracts to convert variable interest rates into fixed rates with an additional margin of 0.92 per cent.
On 31 December 2021, the company had a total of EUR 8.7 million (2020: EUR 7.2 million) of unhedged, variable-rate loans from financial
institutions, consisting of the overdraft facilities available on the balance sheet date in 2021 and variable-rate loans from financial
institutions. The average interest rate on loans from financial institutions in 2021 was 3.9 per cent (2020: 2.3 per cent). If the interest rate
were to rise by one percentage point, the annual interest expenses on the company’s variable-rate loans from financial institutions would
increase by approximately EUR 87 thousand. The realisation of interest rate risks would limit the company’s access to external financing
and weaken its financial position.
Related-party loans:
EUR thousand Number
Average interest
rate (%)
Sensitivity to
interest
Loans from financial institutions
31.12.2021 10 652 3,85 -87
31.12.2020 9 229 2,31 -72
Other loans
31.12.2021 20 482 6,00 -205
31.12.2020 17 881 6,00 -179
On 31 December 2021, 31 per cent (2020: 29 per cent) of the company’s loans from financial institutions had variable interest
rates. This figure includes the overdraft facilities in use.
The Group’s related-party loans have fixed rates of interest.
On 31 December 2021, the company had a total of EUR 20.5 million (2020: EUR 17.9 million) in other unhedged loan principal,
which consisted entirely of fixed-rate related-party loans. The average interest rate on related-party loans in 2021 was
6.0 per cent (2020: 6.0 per cent). If the interest rate were to rise by one percentage point, the annual interest expenses on these
loans would increase by approximately EUR 205 thousand. Note 28 presents the related-party loans in more detail.
Interest rate risk on loans from financial institutions if the interest rate were to rise by one percentage point over the
next year
The calculation takes into account the interest rate hedging of the loans.
The company does not apply hedge accounting in accordance with IFRS 9. The changes in the fair values of derivatives acquired for
hedging purposes are recognised through profit or loss in the financial income and expenses group. The fair value of derivative
instruments recognised through profit or loss amounted to EUR 13,000 from 1 January to 31 December 2021 and EUR 23,000 in the
financial period that ended on 31 December 2020. Due to the effect of hedging on profit and loss, financial income and expenses may
vary from one financial period to another. If the interest rate were to rise by one percentage point, it would have a positive effect of
EUR 20 thousand on the fair value of the company’s derivative position as it stood on 31 December 2021 (2020: EUR 20 thousand). The
sensitivity analysis did not take into account the impact of taxes.
Financial statements 2021 41
EUR thousand
31.12.2021
Balance sheet value
Cash flow
Under 1 year
1–5 years
Over 5 years
Loans from financial institutions
3 461
3 575
1 339
2 236
0
Overdrafts
7 191
7 191
7 191
0
0
Convertible bonds
10 314
12 142
0
12 142
0
Equity loans from related parties
10 169
11 643
0
11 643
0
Lease liabilities IFRS 16
1 535
1 556
575
981
Accounts payable
1 348
1 348
1 348
0
0
EUR thousand
31.12.2020
Balance sheet value
Cash flow
Under 1 year
1–5 years
Over 5 years
Loans from financial institutions
3 716
3 835
759
3 076
Overdrafts 5 513 5 513 5 513
Convertible bonds 17 881 19 475 9 437 10 038
Equity loans from related parties
Lease liabilities IFRS 16 965 950 805 146
Accounts payable
1 525
1 525
1 525
Liquidity risk
The objective of the company's liquidity risk management is to ensure sufficient liquid assets to finance the business operations and
repay outstanding loans. The company strives to continuously assess and monitor the amount of financing required by its business
operations in order to achieve the aforementioned objective. The company’s cash and cash equivalents on 31 December 2021
consisted almost entirely of funds in bank accounts. The Group’s financial management function continuously monitors the company's
liquidity and adequacy of financing. Any disruption in the cash flow of the core business would weaken the company's financial position.
When the financial statements were published, the company expected its working capital to be sufficient to cover its requirements over
the next 12 months based on support provided by the main owners as needed.
Maturity of financial liabilities and interest on loans
EUR 7.8 million ooff tthhee rreevvoollvviinngg ccrreeddiitt ffaacciilliittyy wwaass iinn uussee aatt tthhee eenndd ooff tthhee ffiinnaanncciiaall ppeerriioodd EEUURR 77..22 mmiilllliioonn..
0
0
0
0
0
0
Currency risk
2021 2020
1 000
€
CAD
GBP
SEK
USD
SGD
CAD
GBP
SEK
USD
SGD
Current assets
Other financial assets
57
26
769
0
65
50
400
446
61
Trade receivables and
other receivables
166
260
3 144
0
0
378
1010
3 628
27
0
Current liabilities
Non-interest-bearing liabilities
90
82
2 277
43
11
146
204
2 757
113
10
Open position
133
204
1 635
-43
54
282
1 206
1 318
-86
51
2021 2020
1 000
€
CAD
GBP
SEK
USD
SGD
CAD
GBP
SEK
USD
SGD
Impact on earnings before taxes
7
10
82
-2
3
14
60
66
-4
3
The parent company’s operating currency is the euro. The assets and liabilities denominated in foreign currencies converted into
euros at the exchange rates on the last day of the reporting period are as follows:
The table below shows the sensitivity analysis of the translation risk for the Canadian dollar, pound sterling, Swedish krone, Singaporean
dollar and US dollar. The sensitivity analysis measures the effect of five-per-cent changes in exchange rates on the assets and liabilities
denominated in foreign currencies on the final day of the reporting period. The sensitivity analysis does not include net investments in
foreign units.
Capital management
The Group’s capital management aims to achieve an optimal capital structure to support the business by ensuring normal operating
conditions and increasing shareholder value with the aim of generating the best possible return. An optimal capital structure also
guarantees lower capital costs.
The capital structure is affected by factors such as dividends and share issues. The Group may change and adjust the dividends paid to
Financial statements 2021 42
EUR thousand 2021
2020
Interest-bearing liabilities -32 669 -28 075
Cash and cash equivalents 984 1 008
Interest-bearing net liabilities -31 685 -27 067
Total shareholders' equity -24 585 -16 686
Net gearing as a proportion of shareholders’ equity (%) 128,9 % 162,2 %
The capital structure is affected by factors such as dividends and share issues. The Group may change and adjust the dividends paid to
shareholders or the equity returned to them or the number of new shares issued, or it may decide to sell off assets in order to reduce
liabilities.
The Group’s net gearing ratios on 31 December 2021 and 31 December 2020 were as follows:
Parent company’s income statement (FAS)
EUR
1 Jan–31 Dec 2021
1 Jan–31 Dec 2020
Other operating income
97 498
570 452
Materials and services
Materials, goods and supplies
0
-3 641
Total materials and services
0
-3 641
Personnel expenses
Salaries and bonuses
-680 140
-701 639
Social security expenses
Pension expenses
-92 575
-72 699
Other social security expenses
-15 955
-10 999
Total social security expenses
-108 530
-83 698
Total personnel expenses
-788 671
-785 337
Depreciation and impairment
Depreciation of tangible and intangible assets
-75 337
-594 818
Total depreciation and impairment
-75 337
-594 818
Other operating expenses
-1 682 399
-3 052 092
Total expenses
-2 546 407
-4 435 888
Operating profit
-2 448 909
-3 865 436
Financial income and expenses
Interest and financial income
Income from shares in Group companies
0
99 804
Financial statements 2021 43
Income from shares in Group companies
0
99 804
Income from other investments in fixed assets
0
680 967
Interest income
244 438
187 627
Other financial income
133 785
66 091
Total interest and financial income
378 222
1 034 489
Interest and other financial expenses
Interest expenses
-1 461 234
-1 256 598
Other financial expenses
-366 383
-464 212
Impairment of fixed asset investments
-10 189 406
-6 515 486
Total interest and financial expenses
-12 017 023
-8 236 296
Total financial income and expenses
-11 638 801
-7 201 807
Profit/loss for the financial period
-14 087 710
-11 067 243
Parent company balance sheet (FAS)
EUR
31.12.2021
31.12.2020
ASSETS
NON-CURRENT ASSETS
Intangible assets
Intangible rights
23 791
85 124
Total intangible assets
23 791
85 124
Tangible assets
Machinery and equipment
6 404
15 935
Other tangible assets
11 477
11 477
Total tangible assets
17 881
27 413
Investments
Shares in Group companies
18 229 844
21 165 102
Other shares
1 953
1 953
Total investments
18 231 797
21 167 055
TOTAL NON-CURRENT ASSETS
18 273 469
21 279 592
CURRENT ASSETS
Non-current receivables
Loan receivables
6 563 040
2 291 153
Total non-current receivables
6 563 040
2 291 153
Current receivables
Trade receivables
1 062 106
4 264 211
Prepayments and accrued income
169 169
873 694
Other receivables
189 528
5 721 750
Total current receivables
1 420 803
10 859 655
Financial statements 2021 44
Total current receivables
1 420 803
10 859 655
Cash and cash equivalents
Cash in hand and at bank
2 102
60 597
TOTAL CURRENT ASSETS
7 985 945
13 211 406
TOTAL ASSETS
26 259 414
34 490 998
31.12.2021
31.12.2020
LIABILITIES AND SHAREHOLDERS' EQUITY
SHAREHOLDERS’ EQUITY
Share capital
585 394
585 394
Share premium account
218 725
218 725
Invested unrestricted equity fund
74 431 644
74 431 644
Retained earnings
-69 136 407
-58 069 164
Profit/loss for the financial period
-14 087 710
-11 067 243
TOTAL SHAREHOLDERS' EQUITY -7 988 354 6 099 356
LIABILITIES
Non-current liabilities
Subordinated loans
10 168 625
0
Convertible bond loan
10 313 766
9 209 368
Total non-current liabilities
20 482 392
9 209 368
Current liabilities
Convertible bond loan
0
8 671 932
Financial liabilities
7 190 445
5 440 851
Accounts payable
1 235 553
1 988 993
Other current liabilities
3 859 914
1 653 098
Accrued expenses and deferred income
1 479 464
1 427 400
Total current liabilities
13 765 377
19 182 274
TOTAL LIABILITIES
34 247 768
28 391 642
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
26 259 414
34 490 998
Parent company’s cash flow statement
EUR
Cash flow from operations 1 Jan–31 Dec 2021 1 Jan–31 Dec 2020
Profit/loss for the financial period -14 087 710,19 -11 067 242,77
Adjustments to cash flow from operations
Planned depreciation 75 337,37 594 818,00
Impairment of fixed assets 0,00 6 515 486,00
Unrealised foreign exchange gains and losses 113 907,12 -83 707,00
Other income and expenses not involving cash 471 919,87 1 498 520,52
Financial income and expenses 11 638 800,84 686 321,00
Other adjustments
Cash flow before change in working capital -1 787 744,99 -1 855 804,25
Change in working capital -741 050,55 -208 569,00
Interest received from operations 14,36 0,00
Interest paid and other financial expenses from operations -28 766,69 0,00
Taxes paid 0,00 0,00
Net cash flow from operations -2 557 547,87 -2 064 373,25
Cash flow from investments
Impairment of shares in subsidiaries 0,00 0,00
Acquisition of subsidiaries net of cash acquired 0,00 0,00
Investments in tangible and intangible assets -4 720,00 -111 356,00
Income from disposal of tangible and intangible assets 247,22 1 714,00
Intra-Group loans issued 0,00 0,00
Interest income from investments 0,00 17 275,00
Dividends from investments 0,00 99 804,00
Capital gains from other investments
0,00
297 306,00
Financial statements 2021 45
Capital gains from other investments
0,00
297 306,00
Repayment of intra-Group loans 0,00 0,00
Total cash flow from investments -4 472,78 304 743,00
Cash flow before financial items -2 562 020,65 -1 759 630,25
Cash flow from financing activities
Purchase of own shares 0,00 -214 618,00
Drawdown of long-term loans 1 000 000,00 1 000 000,00
Repayment of long-term loans 0,00 0,00
Drawdown of short-term loans 1 749 594,31 1 163 703,00
Repayment of short-term loans 0,00 0,00
Interest and other charges for financial expenses -246 069,04 -178 796,20
Payments received for share subscriptions 0,00 0,00
Net cash flow from financing 2 503 525,27 1 770 288,80
Change in cash and cash equivalents -58 495,38 10 658,55
Cash and cash equivalents at the beginning of the financial period 60 597,34 49 942,00
Cash and cash equivalents at the end of the financial period 2 101,97 60 597,00
Calculation of changes in the parent company’s shareholders’ equity
EUR
Share capital
Share
premium fund
Invested
unrestricted
equity fund
Retained
earnings
Total
Shareholders’ equity 1 Jan 2020
585 394
218 725
74 431 644
-57 854 546
17 381 217
Purchase of treasury shares -214 618 -214 618
Profit/loss for the financial period
0
0
0
-11 067 243
-11 067 243
Shareholders’ equity 31 Dec 2020
585 394
218 725
74 431 644
-69 136 407
6 099 356
Shareholders’ equity 1 Jan 2021
585 394
218 725
74 431 644
-69 136 407
6 099 356
Purchase of treasury shares
0
0
Profit/loss for the financial period
0
0
0
-14 087 710
-14 087 710
Shareholders’ equity 31 Dec 2021 585 394 218 725 74 431 644 -83 224 117 -7 988 354
Distributable unrestricted shareholders’ equity
31.12.2021
31.12.2020
Calculation of distributable shareholders' equity
Invested unrestricted equity fund
74 431 644
74 431 644
Retained earnings
-69 136 407
-58 069 164
Profit/loss for the financial period
-14 087 710
-11 067 243
Distributable unrestricted shareholders’ equity -8 792 473 5 295 237
Statement on equity items in accordance with chapter 20, section 23(2) of the Limited Liability Companies Act
31.12.2021 31.12.2020
Shareholders' equity 31 Dec -7 988 354 6 099 356
Subordinated loan 10 168 625 0
Shareholders’ equity in accordance with chapter 20, section 23 of the Limited Liability
Financial statements 2021 46
2 180 271 6 099 356
Notes on the equity loan
The company has EUR 10,168,625.40 in equity loans from its related parties. The loan period is 3 years, maturing on 30 June 2024.
The loan interest rate is 6%. In the event that the company goes into administration or bankruptcy, the principal and interest on the
loan will be repaid with a lower priority than other debts. The principal may otherwise be returned and interest paid only to the extent
that the company’s unrestricted equity and all outstanding subordinated loans at the time of payment exceed the loss confirmed on
the company’s balance sheet for the last complete financial period or the loss included on the balance sheet of more recent financial
statements. No collateral is pledged for the payment of principal or interest. If interest cannot be paid, it will be transferred for
payment on the basis of the first financial statements that indicate it can be paid. Unrecognised interest of EUR 0 has accrued on
the loan as an unpaid expense.
Shareholders’ equity in accordance with chapter 20, section 23 of the Limited Liability
Companies Act
Principles applied in preparing the financial statements
Tangible and intangible assets
Tangible and intangible assets are recognised on the balance sheet at acquisition cost less
planned depreciation. Depreciation is calculated as of the month when the asset was taken into use.
The depreciation periods are as follows:
Machinery and equipment 25% reducing balance depreciation or 3–5 years of straight-line depreciation
Intangible rights 3–5 years of straight-line depreciation
Other long-term expenditure 3–5 years of straight-line depreciation
Investments
Investments in fixed assets are valued at acquisition cost or likely recoverable value, whichever is lower.
The valuations of shares in subsidiaries on the balance sheet date of 31 December 2021 are based on long-term forecasts
and calculations prepared at Group level.
Valuation of financial instruments
Derivatives
Derivative contracts are valued individually on the principle of prudence at value on the balance sheet date. The negative difference
between the value of derivative contracts on the date they were made and on the balance sheet date is recognised
as an expense in the financial period. There were no outstanding derivative contracts at the end of the financial period.
Pensions
Digitalist Group Plc’s financial statements have been prepared in accordance with the principles of Finnish accounting legislation.
Financial statements 2021 47
Pensions
The pension plans of the parent company are managed by external pension companies.
Pension expenditure is recognised as an expense in the year during which it is incurred.
Items denominated in foreign currencies
The notes on the parent company round the figures to the nearest euro unless otherwise stated.
Receivables and liabilities denominated in foreign currencies have been translated into euros at the exchange rate on the
balance sheet date.
Notes to the parent company’s income statement
EUR
OTHER OPERATING INCOME 2021 2020
Administrative service charges
97 256
568 738
Other items
242
1 714
Total 97 498 570 452
NOTES CONCERNING PERSONNEL AND MEMBERS OF CORPORATE BODIES
Average number of employees of the parent company in the financial period
2
2
Employees of the parent company at the end of the financial period
2
2
Personnel expenses
Salaries and bonuses of senior managers and the Board of Directors
-680 140
-701 639
Pension expenses
-92 575
-72 699
Other personnel expenses
-15 955
-10 999
Total
-788 671
-785 337
OTHER OPERATING EXPENSES
2021
2020
Petteri Poutiainen’s notice period was 9 months for the company and 6 months for the CEO. Digitalist Group Plc’s Board
of Directors and the CEO agreed that he would step down from the position of CEO on 28 June 2021. Magnus Leijonborg
was appointed CEO.
The CEO's pension arrangements are the normal arrangements in accordance with the Finnish Employees Pensions Act,
and the CEO also has a voluntary supplementary pension scheme, into which a payment of EUR 8,500 was made in
2021 (2020: EUR 8,500).
Financial statements 2021 48
OTHER OPERATING EXPENSES
2021
2020
Administrative services
-878 131
-969 704
IT expenses
-177 226
-209 671
Administrative expenses
-86 381
-101 006
Impairment of intra-Group trade receivables
-471 920
-1 498 521
Others
-68 742
-273 191
Total
-1 682 399
-3 052 092
Auditor’s fees
2021
2020
KPMG Oy Ab
Auditing fees
-72 000
-72 500
Other statutory assignments
0
0
Tax advice
0
-2 000
Other services
0
0
Total auditors' fees
-72 000
-74 500
DEPRECIATION AND IMPAIRMENT
Planned depreciation
Depreciation of intangible rights
-61 333
-576 197
Depreciation of tangible assets
-14 004
-18 622
Total
-75 337
-594 818
FINANCIAL INCOME AND EXPENSES
Interest and financial income
Income from shares in Group companies
0
99 804
Income from other investments in fixed assets
0
680 967
From Group companies
244 438
187 627
From others
133 785
66 091
Total
378 222
1 034 489
Interest and other financial expenses
To Group companies
-72 873
-25 827
To others
-1 754 744
-1 694 983
Impairment of fixed asset investments *)
-10 189 406
-6 515 486
Total
-12 017 023
-8 236 296
*) On the basis of long-term forecasts and calculations, impairment charges were recognised for the 2021 financial period
in a total amount of EUR 10.1 million on the acquisition cost of Digitalist Finland Oy’s shares in Grow Ab, and an
impairment charge of EUR 0.1 million was recognised on the acquisition costs of shares in Digitalist Usa Ltd, Digitalist
impairment charge of EUR 0.1 million was recognised on the acquisition costs of shares in Digitalist Usa Ltd, Digitalist
UK Ltd and Ixonos Slovakia s.r.o.
Notes on members of corporate bodies
EUR
Salaries and bonuses 2021 2020
Petteri Poutiainen, CEO (until 28 June 2021) 300 240 300 240
Magnus Leijonborg (since 28 June 2021) *
Board of Directors
Matikainen Esa (Chair since 20 April 2021) 46 694 35 750
Rosenlew Andreas (Deputy Chair since 20 April 2021) 40 806 50 500
Ehrnrooth Paul 25 750 24 750
Eriksson, Peter 26 000 24 750
Olofsson Maria (since 14 April 2020) 26 000 16 000
Almquist Johan (since 20 April 2021) 17 639
Pylkäs Pekka (until 14 April 2020) 7 853
Rosendahl Jaana (14 April 2020) 7 853
Tolvanen Ville (from 2 April 2019 to 14 April 2020) 6 833
Liljeblad Anders (until 14 April 2020) 7 833
Total salaries and bonuses paid to governing bodies **) 483 129 482 362
*) Since 28 June 2021, the CEO’s salary has been categorised as a fee for administrative expenses
**) Includes fringe benefits
Salaries and bonuses are presented on an accrual basis.
The CEO has a voluntary supplementary pension scheme (see section 29 of the notes on the Group for more details).
Financial statements 2021 49
Notes to the parent company’s balance sheet
EUR
ASSETS
Intangible assets
2021
2020
Other long-term expenditure
Acquisition cost at the beginning of the financial period
350 000
350 000
Acquisition cost at the end of the financial period
350 000
350 000
Accumulated depreciation
-264 876
-197 987
Depreciation during the period
-61 333
-66 889
Accumulated depreciation at the end of the period
-326 209
-264 876
Acquisition cost at the end of the financial period
23 791
85 124
Intangible rights
Acquisition cost at the beginning of the financial period
2 124 235
2 012 879
Increases during the period
0
111 356
Acquisition cost at the end of the financial period
2 124 235
2 124 235
Accumulated depreciation
-2 124 236
-1 614 928
Depreciation during the period
0
-509 308
Accumulated depreciation at the end of the period
-2 124 236
-2 124 236
Acquisition cost at the end of the financial period
0
0
Tangible assets
2021
2020
Machinery and devices
Acquisition cost at the beginning of the financial period
861 093
870 175
Increases during the period
4 720
0
Financial statements 2021 50
Increases during the period
4 720
0
Decrease during the period
-247
-9 082
Acquisition cost at the end of the financial period
865 566
861 093
Accumulated depreciation
-845 157
-826 535
Depreciation during the period
-14 004
-18 622
Accumulated depreciation at the end of the period
-859 161
-845 157
Acquisition cost at the end of the financial period
6 404
15 935
Other tangible assets
Acquisition cost at the beginning of the financial period
11 477
11 477
Acquisition cost at the end of the financial period
11 477
11 477
2021
2020
Investments
Shares in Group companies
Acquisition cost at the beginning of the financial period
21 165 101,59
26 070 991,00
Increases during the period
7 254 148,12
2 515 485,91
Decrease during the period
0,00
-905 889,41
Impairment *
-10 189 406,11
-6 515 485,91
Acquisition cost at the end of the financial period
18 229 843,60
21 165 101,59
Other shares and interests
Acquisition cost at the beginning of the financial period
1 953
1 953
Acquisition cost at the end of the financial period
1 953
1 953
*) Impairment charges on the acquisition costs of shares in Digitalist Finland Oy, Grow AB, Digitalist USA Ltd,
Digitalist UK Ltd and Ixonos Slovakia s.r.o.
Ownership of other companies
Company Country City
Parent
company's
ownership
Digitalist Finland Ltd Finland Helsinki 100 %
Digitalist Sweden AB Sweden Stockholm 70 %
Ixonos Estonia OÜ Estonia Tallinn 100 %
Ixonos Germany GmbH Germany Berlin 100 %
Ixonos Slovakia s.r.o. Slovakia Kosice 100 %
Digitalist Canada Ltd Canada Vancouver 100 %
Digitalist USA Ltd. USA San Francisco 100 %
Digitalist UK Ltd United Kingdom London 100 %
Digitalist Singapore Pte Ltd Singapore Singapore 100 %
Grow AB Sweden Stockholm 100 %
NON-CURRENT RECEIVABLES
Receivables from Group companies 2021 2020
Subordinated loan receivables 5 232 880 1 000 000
Other loan receivables 1 330 160 1 291 153
Total 6 563 040 2 291 153
CURRENT RECEIVABLES
Receivables from Group companies 2021 2020
Trade receivables 1 021 117 4 231 394
Loan receivables 147 421 5 693 889
Prepayments and accrued income
76 096
811 001
Financial statements 2021 51
Prepayments and accrued income
76 096
811 001
Total 1 244 634 10 736 283
Receivables from other companies
Trade receivables 40 989 32 818
Other receivables 42 107 27 862
Prepayments and accrued income 93 073 62 693
Total 176 170 123 373
Total current receivables 1 420 803 10 859 656
Prepayments, accrued income and other receivables 2021 2020
Deferred charges 93 073 61 787
Rent guarantees 0 0
Value-added tax receivables 0 0
Others 0 906
Total 93 073 62 693
Notes to the parent company’s balance sheet
LIABILITIES AND SHAREHOLDERS' EQUITY
Financial statements 2021 52
NON-CURRENT LIABILITIES
Liabilities to others
2021
2020
Subordinated loans 10 168 625 0
Convertible bond loan 10 313 766 9 209 368
Total
20 482 392
9 209 368
Non-current liabilities
20 482 392
9 209 368
CURRENT LIABILITIES
Liabilities to Group companies
Accounts payable 841 226 1 272 838
Loans and liabilities on Group account 1 592 786 1 575 827
Other liabilities 2 236 237 183
Accrued expenses and deferred income 62 366 45 371
Total
4 732 615
2 894 220
Liabilities to others
Convertible bond loan 0 8 671 932
Financial liabilities 7 190 445 5 440 851
Accounts payable 394 327 716 155
Other current liabilities 30 891 77 088
Accrued expenses and deferred income 1 417 097 1 382 028
Total
9 032 761
16 288 054
Total current liabilities
13 765 377
19 182 274
Accrued expenses and deferred income
2021
2020
Provision for holiday pay 66 437 79 727
Interest accruals 1 052 311 1 124 371
Salaries and social security expenses 116 175 28 577
Trading deficits 182 174 149 354
Others 0 0
Total
1 417 097
1 382 028
GUARANTEES AND CONTINGENT LIABILITIES
GUARANTEES AND CONTINGENT LIABILITIES
Liabilities secured by guarantees
2021
2020
Loans from financial institutions 7 190 445 5 277 148
Corporate mortgages 9 800 000 9 800 000
Other loans 20 482 392 6 086 311
Corporate mortgages 0 3 500 000
Total liabilities 27 672 837 11 363 459
Total corporate mortgages 9 800 000 13 300 000
Leasing liabilities
2021
2020
Leasing liabilities, 12 months 0 0
Leasing liabilities, more than 12 months 0 0
Total leasing liabilities 0 0
Rental liabilities
2021
2020
Rental liabilities, 12 months 0 0
Total rental liabilities 0 0
Securities and guarantees pledged
on behalf of Group companies
2021
2020
Other guarantees 6 065 587 2 233 673
Magnus Leijonborg
Esa Matikainen
CEO
Chair of the Board of Directors
Andreas Rosenlew
Paul Ehrnrooth
Deputy chair of the Board of Directors
Board member
Peter Eriksson
Maria Olofsson
Board member
Board member
Johan Almquist
Board member
Miika Karkulahti
Authorised Public Accountant
Signatures to the financial statements and report of the Board of Directors
Helsinki / 2022
Auditors' Note
An auditor's report has today been issued on the audit performed.
Helsinki / 2022
KPMG Oy
Auditing Company
Financial statements 2021 54
KPMG Oy Ab
Töölönlahdenkatu 3 A
PO Box 1037
00101 Helsinki, FINLAND
Telephone +358 20 760 3000
www.kpmg.fi
KPMG Oy Ab, a Finnish limited liability company and a member firm of the KPMG network of independent
member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity.
Business ID 1805485-9
Domicile Helsinki
This document is an English translation of the Finnish auditor’s report. Only the Finnish version of the report is legally binding.
Auditor’s Report
To the Annual General Meeting of Digitalist Group Plc
Report on the Audit of the Financial Statements
Opinion
We have audited the financial statements of Digitalist Group Plc (business identity code 0997039-6) for the
year ended 31 December 2021. The financial statements comprise the consolidated balance sheet, income
statement, statement of comprehensive income, statement of changes in equity, statement of cash flow and
notes, including a summary of significant accounting policies, as well as the parent company’s balance sheet,
income statement, cash flow statement and notes.
In our opinion
— the consolidated financial statements give a true and fair view of the group’s financial position, 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 financial
statements in Finland and comply with statutory requirements.
Our opinion is consistent with the additional report submitted to the Board of Directors.
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 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.
In our best knowledge and understanding, the non-audit services that we have provided to the parent
company and group companies are in compliance with laws and regulations applicable in Finland regarding
these services, and we have not provided any prohibited non-audit services referred to in Article 5(1) of
regulation (EU) 537/2014. The non-audit services that we have provided have been disclosed in note 10 to
the consolidated financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
Materiality
The scope of our audit was influenced by our application of materiality. The materiality is determined based
on our professional judgement and is used to determine the nature, timing and extent of our audit procedures
and to evaluate the effect of identified misstatements on the financial statements as a whole. The level of
materiality we set is based on our assessment of the magnitude of misstatements that, individually or in
aggregate, could reasonably be expected to have influence on the economic decisions of the users of the
financial statements. We have also taken into account misstatements and/or possible misstatements that in
our opinion are material for qualitative reasons for the users of the financial statements.
Digitalist Group Plc
Auditor’s Report
for the year ended 31 December 2021
2
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. The significant risks of material misstatement referred to in the EU Regulation No
537/2014 point (c) of Article 10(2) are included in the description of key audit matters below.
We have also addressed the risk of management override of internal controls. This includes consideration of
whether there was evidence of management bias that represented a risk of material misstatement due to
fraud.
THE KEY AUDIT MATTER
HOW THE MATTER WAS ADDRESSED IN THE
AUDIT
Group’s liquidity and financing arrangements carried out in current financial year (refer to
Accounting policies for the consolidated financial statements and notes 21 and 32 to the
consolidated financial statements)
— The financial statements have been
prepared on a going concern basis. At the
time of publication of the financial
statements, the company expects its
working capital to be sufficient to cover its
requirements over the next 12 months
based on the support provided by the main
owner as needed.
— The Group has generated losses in recent
years, cash flow from operating activities
has been negative and liquidity tight. The
Group has carried out several
arrangements to strengthen its financial
position, create a more sustainable cost
structure, and secure liquidity.
— In accordance with note 32, the financial
liabilities and interests falling due within
next 12 months totaled EUR 1.3 million at
the financial year-end.
— To assess the sufficiency of financing we
analyzed the business plans and cash flow
estimates prepared by the company.
— We inspected the financing arrangements
carried out during the financial year 2021
and their accounting treatment.
Furthermore, we assessed the impacts of
the financing arrangements agreed with the
main owner.
— As part of our year-end audit procedures,
we assessed the accuracy of classification
of financial liabilities, and considered the
adequacy and appropriateness of the
disclosures provided on the financial status
in the consolidated financial statements.
Digitalist Group Plc
Auditor’s Report
for the year ended 31 December 2021
3
Valuation of goodwill and other intangible assets (refer to the consolidated balance sheet,
accounting policies for the consolidated financial statements and note 13 to the
consolidated financial statements)
— As at 31 December 2021 the goodwill
balance was in aggregate EUR 5.2 million
after the impairment of goodwill EUR 1.4
million recognized in the financial year
2021. This represents approximately 37
percent of the consolidated total assets.
Other intangible assets totaled EUR 0.9
million comprising other intangible assets of
EUR 0.8 million at the financial year-end.
Consequently, goodwill and other intangible
assets are the most significant individual
items in the consolidated balance sheet.
— Goodwill is not amortized but is tested at
least annually for impairment. In the
financial year 2021 the Group prepared
goodwill impairment tests on a biannual
basis. Other intangible assets are amortized
over their useful lives.
— Preparation of impairment tests and
determining the useful lives of other
intangible assets require management to
make judgements and use assumptions.
Valuations prepared to support the carrying
amount of goodwill and other intangible
assets are highly dependent on the Group’s
future financial performance.
— We evaluated the company’s estimation
process and analyzed the assumptions
used in the impairment tests for the
previous year by comparing to actual
performance in respect of turnover and
profitability.
— Furthermore, we involved KPMG valuation
specialists when analyzing the
reasonableness of the assumptions
underlying the goodwill impairment tests,
and the technical accuracy of the
impairment model.
— We assessed the useful lives applied on
intangible assets.
— As part of our year-end audit, we
considered the adequacy and
appropriateness of the disclosures provided
on goodwill and impairment tests in the
consolidated financial statements.
Valuation of subsidiary shares and intercompany receivables in the parent company´s
balance sheet (refer to parent company balance sheet, accounting policies for the financial
statements and notes)
— The carrying value of the subsidiary shares
in the parent company Digitalist Group Plc´s
balance sheet amounted to EUR 18.2
million after the impairment of EUR 10.2
million recorded as at 31 December 2021.
Furthermore, the parent company´s intra-
group receivables amounted to EUR 7.8
million after the impairment loss of EUR 0.5
million recognized at the financial year-end,
— We evaluated the basis for the impairment
recorded in the financial statements and
analyzed the valuation principles of
subsidiary shares and intra-group
receivables.
Digitalist Group Plc
Auditor’s Report
for the year ended 31 December 2021
4
and intra-group liabilities EUR 4.7 million as
at 31 December 2021.
— Valuation of subsidiary shares and intra-
group receivables are highly dependent on
the Group´s profitability in the future and the
business model.
Valuation of trade receivables (refer to Accounting policies for the consolidated financial
statements and notes 4 and 16 to the consolidated financial statements)
— Trade receivables, amounting to EUR 3.7
million as at 31 December 2021 constitute a
significant item in the consolidated balance
sheet. Regardless of the fact that there are
no significant credit losses incurred in the
past, there is a valuation risk associated
with trade receivables.
— We evaluated monitoring routines for trade
receivables and tested the effectiveness of
the key internal controls. We also analyzed
trade receivables to identify any trade
receivables potentially impaired.
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 liquidate
the parent company or the group or cease operations, or there is no realistic alternative but to do so.
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 the
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
Digitalist Group Plc
Auditor’s Report
for the year ended 31 December 2021
5
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 internal 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 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 determine 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.
Other Reporting Requirements
Information on our audit engagement
We were first appointed as auditors by the Annual General Meeting on 2 April 2014, and 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. We have obtained the report of the Board of
Digitalist Group Plc
Auditor’s Report
for the year ended 31 December 2021
6
Directors prior to the date of this auditor’s report. 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 information
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 materially 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 and 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, 31 March 2022
KPMG OY AB
MIIKA KARKULAHTI
Authorized Public Accountant, KHT