ANNUAL REPORT
2021
QPR SOFTWARE
ANNUAL REPORT 2021 2
TABLE OF CONTENTS
ANNUAL REPORT 2021
OUR PURPOSE, STRATEGY AND MARKETS
OUR PURPOSE IS TO HELP ORGANIZATIONS REACH THEIR FULL
OPERATIONAL POTENTIAL
QPR’s purpose is to help customers achieve more with less. We help our customers drive process and
business transparency, ensure that their operations are run as required and designed, and create
actionable intelligence where modern AI meets thought leadership.
We do so by innovating, developing, and delivering software for analyzing, monitoring, and modeling
organizations’ operations. To ensure maximum customer value, we also offer a wide range of
complementary consulting services. By providing organizations with the technologies and methods to
transform the invisible into visible and the unknown into manageable, they are empowered to reach
long-lasting, continuous results.
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ANNUAL REPORT 2021 4
OUR STRATEGY AND STRATEGIC
TARGETS
According to our renewed strategy for 2022 –
2026, we will strongly invest in the international
growth of the process mining SaaS (Software
as a Service) business. We seek growth through
a focused strategy where spearhead offerings
in selected process mining solution areas are
to be defined and packaged. Moreover, we are
building new strategic partnerships and alliances
to achieve a scalable go-to-market model,
extend our own offering, and enhance customer
value through technology and implementation
partners. We will also increase our marketing and
sales investments, especially in Northern and
Central Europe as well as the UK.
Our comprehensive offering in process mining
will be further developed based on customer
and market insights, especially with increased AI,
Machine Learning, and task mining capabilities.
Our offering will drive intelligent automation in
our customers’ processes and operations and
secure their delivery of sustainable value and
desired business outcomes.
Our position in the Middle East is strong and we
aim to use this stronghold to expand our regional
offering to process mining. We focus on fostering
the continued success in license sales and the
steadily growing recurring software maintenance
revenue, while simultaneously using our process
mining solution as a growth engine to boost
recurring SaaS revenue.
Consulting will continue to be a key element of
QPR’s offering, and our aim is to move towards
tool-agnostic services. The consulting business
is expected to grow steadily throughout the
strategy period thanks to our data-to-value
concept. This service integrates process
modeling capabilities with our excellence in
process mining and insight discovery, which
together secure customer value realization
through capabilities, such as intelligent
automation.
With our new strategy, we move from generic
strategies for individual products and services
towards a holistic offering that is harmonized
from beginning to end: from scalable SaaS
products to value delivery and continuous
services. Our data-to-value concept is unique
and supported by a scalable go-to-market
strategy and value realization model, which
are implemented through a mix of in-
house capabilities and an extended partner
ecosystem. Our own newly structured functional
organization enables us to rapidly turn growth
investments into focused actions.
Our key strategic target for the strategy period is
to increase investments into our SaaS business
in order to gradually accelerate growth and
achieve a CAGR of over 30% in our SaaS business.
Compared to 2021, the target for the next two
years is to more than double the annual recurring
SaaS revenue from process mining. The high
growth ambition for our SaaS business means
that at the end of the strategy period, the clear
majority of the Company’s revenue is recurring
SaaS revenue.
Our secondary target is to grow the Company’s
annual net sales at a high single-digit percentage
throughout the strategy period. After the initial
growth investment, we aim to remain EBITDA-
positive throughout the strategy period and
reach positive operating profit by the end of
2024.
THE CURRENT STATE OF OUR
MARKETS
The process mining market has continued
its rapid growth. According to several market
research companies and industry analysts, the
size of the global process mining market in 2021
was around EUR 500 – 550 million. The market
size is expected to keep growing at 40 – 50%
in the upcoming years. Additionally, a large
complementary market exists for process mining
related consulting and services.
The process and enterprise architecture
modeling market has continued to grow steadily,
with an estimated CAGR of 4 – 5%.
The software market for strategic corporate
performance management is mature and
continues to grow steadily.
ANNUAL REPORT 2021
REVIEW BY THE CEO
In 2021, QPR Software celebrated its 30th
anniversary as a pioneer and leader in its
industry. For more than three decades, QPR
has been leading in the innovation of software
solutions and services that have generated
tangible process insights for customers around
the world. As companies continue their digital
transformation and automation journeys, we are
here to help them create actionable intelligence
to reach their full operational potential.
Although the negative effects of the COVID-19
pandemic were still felt during 2021, our SaaS
businesses exhibited clear growth (+19%) and
consulting net sales developed positively
throughout the year (+7%). Our SaaS deals include
major process mining software agreements with
an international pharmaceutical company and
a European chemical company. Among others,
the Finnish service integrator for health and social
services organizations and municipalities, Istekki
Oy, chose QPR as their service provider for the
management, modeling, and planning of enterprise
architecture and information management.
We continued to invest in process mining
software development, as well as sales resources
and sales channels. By enhancing task mining
functionalities and focusing on scalable SaaS
solutions, we help our customers to take
an activity-based approach to improve and
automate their business processes, even in
organizations with substantial amounts of data.
Investing in machine learning capabilities and
developing solutions for predicting process flows
opens new business opportunities to generate
continuous and sustainable customer value.
Moreover, Information Services Group’s (ISG)
acknowledgment of QPR as a Leader in Process
Discovery and Mining is a strong indicator that
our process mining technology and tool, QPR
ProcessAnalyzer, is well aligned with the market’s
needs. The “ISG Provider Lens™ Intelligent
Automation – Solutions and Services 2021 in the
Nordics” report highlights that QPR is a force to
be reckoned with. Despite the growing process
mining market being highly competitive, QPR
catches praise for its comprehensive solution and
machine learning capabilities.
In order to change our organizational structure
to enable effective investments in growth and
operational scalability, we underwent company-
wide co-operation negotiations at the turn of the
year. We aim to strengthen our position in the
eyes of our customers as a software company
that combines scalable SaaS solutions with skilled
consulting in process modeling and mining. The
new organization began operating in its new
functional structure as of February 1st, 2022.
In the future, QPR is aiming for stronger growth
and has updated its strategy to reflect new
growth targets. A key component of the renewed
strategy is our process mining SaaS offering, in
which we will strongly invest to achieving high
international growth. Growth is made possible
by strategically focusing on building scalable
solutions in carefully selected process mining
solution areas where customer needs meet
high customer value. This scalability is enabled
through active collaboration with strategic go-
to-market partners, technology alliances, and
further investment into marketing, sales, and
product development capabilities. The new
strategy for 2022 – 2026 was communicated to
the market on March 10th, 2022.
The exceptional circumstances caused by the
pandemic and other uncertainty in the European
business climate continue to affect our new
customer acquisition in early 2022. However,
there are signs of customer decision-making
in software procurement returning to normal.
Digital transformation in both public and private
sectors, as well as the internationally growing
demand for process mining, provide QPR with a
favorable environment for growth.
I would like to thank all our customers, partners,
personnel, and shareholders for your valuable
contribution and collaboration in 2021. We look
forward to exploring new growth and value creation
opportunities with you in 2022 and beyond.
Jussi Vasama
CEO
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ANNUAL REPORT 2021 6
BOARD OF DIRECTORS
QPR Software elected all new board members at the Annual General Meeting held on March 25, 2021.
It was decided at the Annual General Meeting that the Board of Directors consists of four members.
Elected board members are Pertti Ervi, Matti Heikkonen, Antti Koskela, and Jukka Tapaninen. The
Board elected Pertti Ervi as the Chairman of the Board.
With the new composition of the Board, QPR Software’s Board holds extensive, in-depth
strategic expertise. Furthermore, the new Board is experienced in the technology sector as well as
software development, growth, and internationalization.
In the financial year 2021, QPR Software Plc’s Board of Directors convened 21 times. The average
attendance rate of board members was 100%.
ANNUAL REPORT 2021
About
Chairman of the Board since March 2021.
Independent of the Company and its significant shareholders.
Key experience
Independent management consultant and professional board
member.
Computer 2000 AG, Co-CEO 1995 – 2000.
Computer 2000 Finland Oy, Founding Member and Managing
Director 1983 – 1995.
Extensive experience in serving on the Board of several Finnish
publicly listed technology and growth companies.
Key positions of trust
Member and Chairman of the Board, Chairman of the Audit
Committee, F-Secure Oyj, 2003 – present
Member and Chairman of the Board, Efecte Oyj, 2008 – present
Chairman of the Board, Mintly Oy, 2017 – 2022
Member of the Board, Pointsharp Holding AB, 2021 – present
Member and Chairman of the Board, Teleste Oyj, 2009 – 2020
Member and Chairman of the Board, Comptel Oyj, 2011 – 2017
Pertti Ervi did not hold shares of QPR Software Plc on December 31,
2021.
PERTTI
ERVI
b. 1957,
engineer
About
Member of the Board since March 2021.
Independent of the Company and its significant shareholders.
Key experience
F-Secure Oyj, Executive Vice President and Chief Product Officer,
2021 – present
Elisa Oyj, Vice President, Business Development, 2020 – 2021
Nokia Software, CDO and Vice President, 2018 – 2020
Comptel, CTO and Executive Vice President, 2011 – 2017
Nokia Siemens Networks, various managerial positions, 2007 – 2011
Nokia Networks, various managerial positions, 1999 – 2007
Antti Koskela did not hold shares of QPR Software Plc on December
31, 2021.
ANTTI
KOSKELA
b. 1971,
Master of Science
in Technology
MEMBERS OF THE BOARD OF DIRECTORS
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ANNUAL REPORT 2021 8
About
Member of the Board since March 2021.
Independent of the Company and its significant shareholders.
Key experience
Aiforia Technologies, CEO, 2020 – present
Pegasystems, VP and Managing Director EMEA, APAC and Japan,
2016 – 2020
SAP, Vice President Global/EMEA, 2005 – 2016
Basware, SVP and General Manager, 2002 – 2005
Stonesoft Inc, CEO Americas, 2000 – 2002
HP, Regional and Global managerial roles, Sales and Business
Development, 1995 – 2000
Key positions of trust
Vice Chairman of the Board, Aiforia Oy, 2015 – 2020
Member of the Board, WeVision Oy, 2014 – present
Member of the Board, Meshworks Wireless Oy, 2011 – present
Chairman of the Board, Addoro Ab, 2014 – 2017 (acquisition)
Member of the Board, Findity Ab, 2013 – 2016
Member of the Board, VeliQ B.V., 2015
Jukka Tapaninen did not hold shares of QPR Software Plc on
December 31, 2021
JUKKA
TAPANINEN
s. 1963,
Master of Science
in Economics
About
Member of the Board since March 2021.
Independent of the Company and its significant shareholders.
Key experience
Enreach for Enterprises, CEO, 2021 – present
Benemen Oy, CEO, 2018 – 2021
Questback AS, EVP Global Operations, 2010 – 2018
Digium Oy, CEO, 2007 – 2010
Nokia, various managerial positions, 2004 – 2007
Various CEO and managerial positions in the software industry,
1998 – 2004
Key positions of trust
Chairman of the Board, Benemen Oy, 2017 – 2018
Member of the Board and Audit Committee, F-Secure Oyj, 2013 – 2019
Member and Chairman of the Board, Mobile Wellness Solutions
MWS Oy, 2015 – 2019
Member and Chairman of the Board, The Finnish Software and
E-business Association, 2004 – 2017
Member of the Board, Ixonos Oyj, 2011 – 2015
Matti Heikkonen did not hold shares of QPR Software Plc on
December 31, 2021.
MATTI
HEIKKONEN
b. 1976,
Master of Science
in Technology
ANNUAL REPORT 2021
EXECUTIVE MANAGEMENT TEAM
Responsibilities
As CEO of QPR Software, Jussi Vasama is responsible for managing
the operations of the Company in accordance with the instructions
and decisions issued by the Board of Directors. Furthermore,
he provides the Board and its members with the information
necessary to carry out the functions of the Board of Directors. As
the CEO, he is responsible for leading the Company’s operations,
managing sales and partnerships, human resources, as well as
preparing issues for decision by the Board.
Experience
Jussi Vasama has over 20 years of experience in global consulting
and the software industry. Since 2007, Vasama served Basware
Corporation in various roles within sales, professional services,
and customer support i.e., Country Manager of Finland. His latest
position at Basware was Chief Customer Officer. Furthermore, he
was a member of the Executive Management Team, overseeing
Professional Services and Customer Success, as well as global
customer support, leading an international organization of nearly
600 people. Prior to Basware, Vasama worked as a management
consultant at Vectia Ltd for 7 years.
In addition to international growth businesses, Vasama is
experienced in operating in cloud and SaaS environments,
and developing, innovating, and leading a variety of global
transformation projects, such as building a partner ecosystem.
Information
Chief Executive Officer
since Oct. 2021
Member of the
Executive Management
Team since Oct. 2021
Master’s degree in
Industrial Engineering and
Management
JUSSI
VASAMA
b. 1974
Area of responsibility
Matti Erkheikki is in charge of Process Mining and Channel
Business.
Experience
Matti Erkheikki has worked for QPR Software since February
2002, starting out as a consultant, delivering software projects
both domestically and internationally. In 2005, he started as the
Business Development Manager, and in 2006, as the Regional Vice
President of North America in QPR’s U.S. subsidiary. From 2007 to
2014, he was responsible for QPR’s business operations in Finland
and between 2012 and 2014, also for the global OEM Business. Prior
to his current position, Erkheikki worked as SVP for the process
mining & strategy management business since January 2017.
Erkheikki has also been responsible for selling and delivering SAP
solutions in the Finnish market.
MATTI
ERKHEIKKI
b. 1978
Information
Director of Strategy,
Partnerships, and Alliances
Member of the
Executive Management
Team since Jul. 2007
Master’s degree in
Industrial Engineering and
Management
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ANNUAL REPORT 2021 10
Area of responsibility
Tero Aspinen is responsible for the development and sales of
performance management solutions globally, as well as for QPR’s
business in the Middle East market.
Experience
Tero Aspinen has served QPR Software in various roles since 2008.
He has been involved in more than a hundred customer cases
where organizations have implemented QPR’s solutions. Prior to
his current role, Aspinen was the Vice President for Middle East and
Performance Management Solutions (2017 – 2022).
TERO
ASPINEN
b. 1985
Area of responsibility
Päivi Vahvelainen is responsible for finance and administration at
QPR Software. Additionally, she is responsible for holding QPR’s
insider register and monitoring compliance with insider guidelines,
as well as coordinating and reporting on the Company’s internal
controls and risk management.
Experience
Päivi Vahvelainen worked as the Chief Financial Officer at QPR from
May 2014 to June 2015, and November 2009 to January 2013; and
as Acting Chief Financial Officer at QPR from May 2008 to August
2009. Before joining QPR, she worked as the CFO at Holiday Club
Resorts Oy. In addition, she has held several financial management
leadership positions at Sonera Corporation, Sanitec Oyj, and Oy
Gustav Paulig Ab.
PÄIVI
VAHVELAINEN
b. 1959
Information
VP Middle East Business
Member of the
Executive Management
Team since Jan. 2017
Master’s degree in
Industrial Engineering and
Management
Information
Chief Financial Officer
Member of the
Executive Management
Team since Nov. 2020.
Graduate from
Commercial Institute and
has a degree from the
Institute of Marketing.
ANNUAL REPORT 2021
Area of responsibility
Pekka Keskiivari is responsible for QPR’s software product portfolio,
product strategy, product development, product management,
cloud services, and customer care services.
Experience
Prior to joining QPR, Keskiivari worked as Chief Technology Officer
for Diktamen Oy from 2014 to 2019, as well as for CRF Health from
2006 to 2014. Between the years of 1996 and 2006, Keskiivari held
various management and executive positions at Sonera Corporation
in the area of product development and management. Prior to
this, he worked for Neste in various roles ranging from software
development to ICT services.
PEKKA
KESKIIVARI
b. 1964
Area of responsibility
Sanna Salo is responsible for marketing, communications, and
brand management at QPR Software.
Experience
Sanna Salo has previously worked as Director of Marketing and
Communications for the B2B digital marketing solutions provider,
Fonecta Oy. Prior to that, she worked for IBM Finland for almost ten
years in various marketing management positions both in Finland
as well as in Nordic countries.
SANNA
SALO
b. 1977
Information
Chief Technology Officer
Member of the
Executive Management
Team since Mar. 2019
Master of Science in
Engineering
Information
Chief Marketing Officer
Member of the
Executive Management
Team since Feb. 2022
Master of Science in
Economics
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ANNUAL REPORT 2021 12
Area of responsibility
Samuel Rinnetmäki is in charge of QPR Software’s consulting
business.
Experience
Samuel Rinnetmäki has previously worked for the Company’s
consulting business as a consultant and manager for several years.
Prior to that, he worked for more than 14 years at the Finnish
Centre for Pensions, where he held various expert and managerial
positions.
Furthermore, Rinnemäki has held multiple roles – from a developer
to a board member – in various software and consulting companies.
SAMUEL
RINNETMÄKI
b. 1976
Information
Director of Consulting
Member of the
Executive Management
Team since Feb. 2022
Master’s Degree in
Engineering
ANNUAL REPORT 2021
REPORT OF THE BOARD OF DIRECTORS
SUMMARY OF THE FULL YEAR 2021
SaaS business grew by 19 %.
Net sales amounted to EUR 9,140 thousand (2020: 8,971).
EBITDA was EUR 241 thousand (248).
Operating result (EBIT) was EUR -1,248 thousand (-936).
Result before taxes was EUR -1,356 thousand (-952).
Result for the period was EUR -1,356 thousand (-812).
Earnings per share was EUR -0.113 (-0.068).
Operating result was weakened by write-downs worth EUR 373 thousand made in connection
with preparing financial statements.
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ANNUAL REPORT 2021 14
BUSINESS OPERATIONS
QPR’s purpose is to help customers achieve
more with less – to drive process and business
transparency, ensure their compliance, and
create actionable intelligence for sustainable
outcomes. We innovate, develop, and sell
software for analyzing, monitoring, and modeling
organizations’ operations while adding value
to customers’ existing knowledge capital. In
addition, we offer our customers a wide range of
consulting services.
QPR Software reports one business segment,
Organizational Development of organizations. In
addition to this, the Company reports revenue
from products and services as follows: Software
licenses, Renewable software licenses, Software
maintenance services, Cloud services, and
Consulting.
Recurring revenue reported by the Company
consists of Software maintenance services and
SaaS net sales. In addition to these, recurring
revenue also includes Renewable software
licenses. The Company aims to increasingly focus
on continuous services, particularly in developing
its Software-as-a-Service (SaaS) business.
Software licenses are sold to customers for
perpetual use or for an agreed, limited period.
Renewable software licenses are sold to
customers as a user right with an indefinite-
term contract. These contracts are automatically
renewed at the end of the agreed period, usually
one year, unless the agreement is terminated
within notice period. Renewable license revenue
is recognized at one point in time, in the
beginning of the invoicing period.
The geographical areas reported are Finland,
the rest of Europe (including Russia and Turkey),
and the rest of the world. Net sales are reported
according to the location of the customer’s
headquarters.
NET SALES
Net sales between January and December
amounted to EUR 9,140 thousand (8,971) and
increased by 2%. Recurring revenue represented
44% of net sales (47).
The development of net sales was twofold.
Consulting net sales, including expert services
related to software deliveries, increased by 7%
compared to 2020. The consulting business
grew both in Finland and the Middle East.
SaaS services, which are key to developing
our software business, clearly increased, while
net sales deriving from one-time license
fees decreased. Although the SaaS business
developed favorably, the transition reduced the
net sales of the entire software business. The
acquisition of new customers in the software
business was affected by the exceptional
operating environment. This led customers to
postpone their software purchase decisions due
to both the uncertainty of their own outlook as
well as the exceptional circumstances.
The lengthening of the sales cycle with an
increase in customers’ requests for quotation
in the second half of the year led to an increase
in the number of outstanding offers towards
the end of the year. In particular, the number
of outstanding offers for SaaS increased at the
turn of the year when contrasted with to the
comparison period. The demand for consulting
services is strong, and so is the number of
outstanding offers.
Currency exchange rates had a negative
impact on software maintenance net sales, as
a significant part of them are invoiced in U.S.
dollars. Some maintenance customers also
switched to our SaaS services. From January
to December, our SaaS net sales increased by
19%, despite the temporary service breaks and
discounts that were granted to customers that
were hit hard by the COVID-19 pandemic.
Net sales in Finland decreased by 2% and
increased 6% internationally, which resulted in a
2% increase in the Group’s net sales. 50% (52) of
the Group’s net sales derived from Finland, 29%
(28) from the rest of Europe (including Russia
and Turkey), and 21% (20) from the rest of the
world.
ANNUAL REPORT 2021
FINANCIAL PERFORMANCE
The Group’s EBITDA amounted to EUR 241
thousand (248) and operating result (EBIT)
to EUR -1,248 thousand (-936). Financial
performance was affected by the decline in one-
time software licenses sold and the investments
in growing business areas. Strategic investments
in growing business areas were continued, which
increased personnel and sales costs. To ensure
long-term growth, QPR continued to invest in
marketing and sales in European key markets,
United Kingdom and France. Operating result
was weakened by the write-downs of goodwill
and the balance sheet value of capitalized
product development expenses. The Group’s
expenses were higher than in the previous year
(8%).
The Group´s fixed costs for the reporting period
were EUR 9,281 thousand (8,585). Employee
expenses accounted for 74% (77), or EUR 6,824
thousand (6,649), of fixed costs. Credit losses
and credit loss reserves, included in fixed costs,
increased slightly and were EUR 129 thousand
(100).
The result before taxes was EUR -1,356 thousand
(-952) and the result for the period was EUR -1,356
thousand (-812). No tax assets were recognized
in the income statement for the financial year.
Earnings per share (fully diluted) were EUR -0.113
(-0.068).
Net sales by product group
The Group’s net sales are generated by software and consulting businesses and are divided as follows:
Group, IFRS Change
EUR in thousands 2021 2020 %
Software licenses 1,317 1,344 -2
Renewable software licences 797 900 -11
Software maintenance services 2,034 2,195 -7
SaaS 1,283 1,081 19
Consulting 3,709 3,452 7
Total 9,140 8,971 2
Net sales by geographic area
Geographical areas reported are Finland, the rest of Europe (including Russia and Turkey), and the rest
of the world.
Net sales are reported according to the customer’s location.
Group, IFRS Change
EUR in thousands 2021 2020 %
Finland 4,614 4,718 -2
Europe, including Russia and Turkey 2,689 2,474 9
Rest of the world 1,837 1,780 3
Total 9,140 8,971 2
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ANNUAL REPORT 2021 16
FINANCE AND INVESTMENTS
Cash flow from operating activities in the
reporting period from January to December
totaled EUR 692 thousand (334). When compared
to 2020, the change in the cash flow from
operating activities was caused by changes in
working capital.
Net financial expenses were EUR 108 thousand
(16) and included currency exchange rate losses
of EUR 12 thousand (0). Expenses included a
one-time guarantee payment related to a closed
project. The payment was made in January 2021.
Investments totaled EUR 942 thousand (1,210).
Investments were mainly related to product
development.
The Group’s financial position is fair. Cash and
cash equivalents at the end of the reporting
period were EUR 441 thousand (185), in addition
to which, the Group has access to other short-
term financial instruments worth EUR 0.5 million.
At the end of the period, the Group had a short-
term bank loan of EUR 1,500 thousand and no
long-term interest-bearing bank loans.
The gearing ratio was 288.5% (38). At the end
of the reporting period, the equity ratio was
8.3% (35). The Group’s key figures are shown in
enclosure 33 of the financial statement.
PRODUCT DEVELOPMENT
QPR innovates and develops software products
that analyze, measure, and model organization’s
operations. The Company develops the following
software products: QPR ProcessAnalyzer, QPR
BusinessPortal, QPR EnterpriseArchitect, QPR
ProcessDesigner, and QPR Metrics. Product
development expenses were directed to ensure
further development and competitiveness
of the Company’s spearhead product, QPR
ProcessAnalyzer.
In the financial year 2021, product development
expenses were EUR 2,115 thousand (2,050), and
equal 23% (23) of net sales. Product development
expenses worth EUR 856 thousand (825) were
capitalized, and EUR 731 thousand (733) worth of
capitalized product development expenses were
amortized. Capitalized product development
expenses are amortized over a period of four
years.
PERSONNEL
At the end of the financial year, the Group
employed a total of 82 persons (88). The average
number of personnel during the year 2021 was 80
(86).
The average age of employees was 42.7 (42.3)
years. Women account for 25% (20) of employees,
and men for 75% (80). Of all personnel, 19%
(18) work in sales and marketing, 42% (44) in
consulting and customer care, 31% (29) in product
development, and 8% (8) in administration.
For incentive purposes, the Company has a
bonus program that covers all employees. Short-
term remuneration of the top management
consists of salary, fringe benefits, and a possible
annual bonus, mainly based on the net sales
performance of the Group and business units.
Furthermore, in 2019, the Company adopted a
key employee stock option plan.
In 2021, the maximum annual bonus for
members of the Executive Management Team,
including the CEO, was 40% of the annual base
salary. A bonus totaling EUR 53 thousand (13) will
be paid to the Executive Management Team for
2021.
ANNUAL REPORT 2021
10
12
14
16
18
20
22
24
26
28
0
300
600
900
1,200
1,500
1,800
2,100
2,400
2,700
2017 2018 2019 2020 2021
% of net sales
(line)
EUR thousands
(bars)
Product development expenditure
0
10
20
30
40
50
60
70
80
90
100
2017 2018 2019 2020 2021
Average number of personnel
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ANNUAL REPORT 2021 18
STOCK OPTION PLAN
The Board of Directors of QPR Software Plc
decided in a meeting held on January 29, 2019,
to launch a new key employee stock option
plan, based on the authorization granted at the
Annual General Meeting. The purpose of the
stock options is to encourage key employees to
work for increasing the shareholder value in the
long-term and to retain the key employees at the
Company.
The maximum number of stock options issued
is 910,000, and they entitle their owners to
subscribe for a maximum of 910,000 new or
existing shares held by the Company. The stock
options are issued gratuitously. 437,000 stock
options are marked with the symbol 2019A, and
473,000 are marked with the symbol 2019B. The
subscription period for stock options marked
2019A will be January 1, 2022, to January 31, 2023;
and for stock options marked 2019B, January 1,
2023, to January 31, 2024.
The number of shares subscribed by exercising
stock options corresponds to a maximum of
6.81% of the Company’s shares and votes after
possible share subscriptions, if new shares are
issued in the share subscription. As a result of
the share subscriptions with stock options, the
number of the Company’s shares may increase
by a maximum of 910,000 shares, if new shares
are issued in the share subscription. The share
subscription price for stock options marked
2019A is EUR 1.70 per share, which corresponded
to the market price of the Company’s share at
the time of launching the option plan. The share
subscription price for stock options marked
2019B is EUR 2.55 per share, which is 50% higher
than the market price of the Company’s share.
The P&L costs of this stock option plan are
estimated to be approximately EUR 144 thousand
in total.
STRATEGY
We innovate, develop, and sell software and
related services for analyzing, monitoring, and
modeling organizations’ operations. In addition,
we offer customers consulting services for
operational improvement and for managing
digital transformation and change.
We will further accelerate product development
by increasing the number of resources in
a controlled manner and by using external
partners to enhance the flexibility of our
product development capacity. In software
development, we place special focus on
excellent user experience and the scalability
of our product portfolio as part of our SaaS
offering. In our product development, we focus
on meeting customer challenges, especially in
streamlining, improving, and automating key
business processes and operations in digitalizing
environments. We especially focus on process
mining and the related process reporting and
automation.
We aim for strong international growth in the
next few years, especially in software products
offered as SaaS. To achieve this goal, we are
investing in international marketing, sales, a
scalable product portfolio, and continuous
services in selected focus areas of the process
mining business.
We are also actively seeking strategic
partnerships to strengthen our international
software sales as well as product and service
development.
The company has prepared a new strategy,
which will be announced in a separate release in
March 2022. In the same release, the company
will present its long-term financial targets.
SHARE CAPITAL, SHAREHOLDERS,
AND SHARES
The Company’s share capital at the end of
the year 2021 was EUR 1,359,090 divided into
12,444,863 shares.
The Company has one share class. Each share
has one vote and an equal right to dividend. The
book counter value of the share is EUR 0.11. The
Company’s shares are included in the Finnish
book-entry securities system managed by
Euroclear Finland Oy.
At the end of the year, the Company had a total
of 1,509 shareholders (1,240). During the year,
trading in the Company’s shares amounted to
EUR 6,255 thousand (2,825), which is an average
of EUR 24,823 per trading day (11,212).
Trading in shares totaled 3,323,915 shares
(1,403,426). Turnover in shares corresponds to
27.7% (11.7) of the total shares outstanding and
the average price was EUR 1.88 per share (2.01).
The highest closing price of the year was EUR
2.38 (2.50) and the lowest EUR 1.48 (1.60).
At the end of the year, the total market value
of the Company’s outstanding shares was EUR
22,178 thousand at the closing price of EUR 1.85.
In November 2021, QPR Software received a
ANNUAL REPORT 2021
notification from Umo Capital Oy pursuant to
Chapter 9, Section 5 of the Finnish Securities
Markets Act (SMA), stating that its direct holding
of the shares and votes in QPR Software has
decreased to less than ten (10) percent.
Major shareholders of QPR Software Plc, December 31, 2021 *
Registered shareholders No. of shares % of shares and votes
Oy Fincorp Ab 1,802,994 14.49
Leskinen, Vesa-Pekka: 1,326,570 10.66
Leskinen, Vesa-Pekka 851,400 6.84
Kauppamainos Oy 475,170 3.82
Umo Capital Oy 971,900 7.81
AC Invest Oy 904,242 7.27
Pelkonen, Jouko Antero: 774,400 6.22
Pohjolan Rahoitus Oy 774,000 6.22
Pelkonen, Jouko Antero 400 0.00
Siilasmaa Risto Kalevi 604,000 4.85
Lamy Oy 553,249 4.45
Junkkonen, Kari Juhani 512,016 4.11
QPR Software Oyj 457,009 3.67
Laakso, Janne Juhani 408,232 3.28
Piekkola, Asko 310,438 2.49
Leskinen, Veli-Mikko 232,530 1.87
Kempe, Anna Carita 120,000 0.96
Kempe, Pia Pauliina 70,000 0.56
Puranen, Tommi Petteri 60,225 0.48
Becker, Kai-Erik Wilhelm 52,494 0.42
Hirvilammi, Hannu Esa 50,000 0.40
Kauppilan Turki Oy 38,112 0.31
Kaski Marko Petter 37,975 0.31
Investment Fund Nordea Nordic Small Cap 37,334 0.30
20 largest, total 9,323,320 74.92
Other shareholders 3,121,543 25.08
TOTAL 12,444,863 100.00
* excluding nominee registered shareholders
19
ANNUAL REPORT 2021 20
Distribution of shareholding by size, December 31, 2021
Shareholders: Shares and votes:
Number of shares Number % Number %
1 – 500 993 65.8 135,241 1.1
501 – 1,000 204 13.5 167,498 1.3
1,001 – 5,000 222 14.7 541,910 4.4
5,001 – 10,000 33 2.2 253,024 2.0
10,001 – 50,000 39 2.6 854,028 6.9
50,001 – 100,000 3 0.2 182,719 1.5
100,001 – 1,700,000 15,0 1.0 10,310,443 82.8
Total 1,509 100 12,444,863 100
of which nominee-registered 7 1,389,164 11.2
Distribution of shareholding by sector, December 31, 2021
Shareholders: Shares and votes:
Sector Number % Number %
Private companies 46 3.0 3,760,770 30.2
Financial and insurance institutions 7 0.5 3,737,116 30.0
Households 1,445 95.8 4,863,312 39.1
Non-profit organizations 2 0.1 30,001 0.2
European Union 4 0.3 46,625 0.4
Other countries 5 0.3 7,039 0.1
Total 1,509 100 12,444,863 100
of which nominee-registered 7 1,389,164 11.2
ANNUAL REPORT 2021
OWN SHARES
In 2021, the Company did not repurchase any of its
own shares publicly traded on Nasdaq Helsinki (0).
At the end of the year, the Company held
457,009 of its own shares with a total nominal
value of EUR 50,271 and a total purchase price of
EUR 439,307. The shares held by the Company
(treasury shares) represent 3.7% of the Company’s
share capital and votes.
At the Annual General Meeting held on March
25, 2021, the Board of Directors were authorized
to decide on the conveyance of the Company’s
own shares (share issue) either in one or several
occasions. The share issue can be carried out
as a share issue against payment or without, as
determined by the Board of Directors.
GOVERNANCE
QPR Software Plc’s (QPR’s) management
practices reflect sound corporate governance
and high ethical principles. They comply with
the regulatory rules related to the management
of public companies, such as the Finnish
Companies Act, the Market Abuse Regulation,
and the Securities Markets Act. Also, QPR’s
Articles of Association, as well as the Finnish
Corporate Governance Code (effective as of
January 1, 2020) and the Guidelines for Insiders
QPR Software shareholding by insiders and closely related persons,
December 31, 2021
Name and position
Number of
shares
By
controlled
entities
By closely
related
persons *)
Stock
options
2019 A 2019 B
Pertti Ervi, Chairman of the Board 0 0 0 0 0
Matti Heikkonen, Member of the Board 0 0 0 0 0
Antti Koskela, Member of the Board 0 0 0 0 0
Juka Tapaninen, Member of the Board 0 0 0 0 0
Miika Karkulahti, Principal Auditor 0 0 0 0 0
Jussi Vasama, Chief Executive Officer 0 0 0 130,000 135,000
Insiders by definition
Tero Aspinen,
VP, Executive Management Team 0 0 0 30,000 33,000
Matti Erkheikki,
SVP, Executive Management Team 0 0 2,000 65,000 65,000
Päivi Vahvelainen,
CFO, Executive Management Team 0 0 0 50,000 50,000
Harri Ruuska,
SVP, Executive Management Team 0 0 0 50,000 50,000
Pekka Keskiivari,
SVP, Executive Management Team 1,450 0 0 50,000 50,000
* Shares held by spouses and persons under guardianship
Insider ownership in total 1,450 0 2,000 375,000 383,000
21
ANNUAL REPORT 2021 22
(effective as of January 1, 2021) maintained by
the Finnish Securities Market Association, are
incorporated, as described on the Company’s
investor pages.
QPR Software has issued a separate Corporate
Governance Statement for 2021.
The Company’s management practices as
well as the Corporate Governance Statement
are available on the investor section of the
Company’s website (www.qpr.com/investors).
The investor pages also contain information
on the management of the insider register,
major shareholders, the Articles of Association,
the Charter of the Board, internal control and
internal audit procedures, presentations of Board
members and the Executive Management Team,
a summary of the Company’s Disclosure Policy,
and all press and stock exchange releases issued
during the financial year.
ANNUAL GENERAL MEETING
In March 2021, QPR’s Board of Directors issued a
notice to convene the Annual General Meeting
on Thursday March 25, 2021. The Board resolved
to organize the meeting with exceptional
practices based on the temporary legislation
approved by the Finnish Parliament. To prevent
the spreading of the COVID-19 pandemic, the
Annual General Meeting was held without
the shareholders being present. Shareholders
were given the possibility to participate and
exercise their rights in the meeting by way
of proxy representation, and by submitting
counterproposals and questions in advance.
The Board’s proposal that no dividend is to be
paid for the financial year 2020 was approved at
the Annual General Meeting. The Annual General
Meeting made an advisory decision on the
Remuneration Policy and decided to support the
proposed Remuneration Policy.
It was decided at the Annual General Meeting
that the Board of Directors will consist of four
(4) members and the elected members are
Pertti Ervi, Matti Heikkonen, Antti Koskela, and
Jukka Tapaninen. The term of office ends at the
close of the next Annual General Meeting. At
its organizing meeting, the Board of Directors
elected Pertti Ervi as the Chairman of the Board.
Once again, the Authorized Public Accountants,
KPMG Oy Ab, were elected at the Annual General
Meeting as QPR Software’s auditor with Miika
Karkulahti, Authorized Public Accountant, as
principal auditor. The auditor’s term of office
ends at the close of the next Annual General
Meeting.
The Board of Directors were authorized at
the Annual General Meeting to decide on the
conveyance of the Company’s own shares (share
issue) either in one or several occasions. The
share issue can be carried out as a share issue
against payment or without, as determined by
the Board of Directors.
A stock exchange release was issued on March
25, 2021, detailing all authorizations given to the
Board of Directors as well as all decisions made
at QPR Software Plc’s Annual General Meeting.
The release can be found in the investor section
of the Company’s website (https://www.qpr.com/
company/investors#stock-exchange).
MANAGEMENT AND AUDITORS
The Executive Management Team (EMT) of
QPR Software Plc consisted of Chief Executive
Officer Jari Jaakkola (Chairman until September
30, 2021), Chief Executive Officer Jussi Vasama
(Chairman as of October 1, 2021), VP Middle
East business and performance management
solutions Tero Aspinen, SVP Process Mining
and Strategy Management Matti Erkheikki, SVP
Products and Technology Pekka Keskiivari, Chief
Financial Officer Päivi Vahvelainen, and SVP
Operational Development Business Harri Ruuska.
Authorized Public Accountants, KPMG Oy Ab,
served as QPR Software Plc’s auditors, with Miika
Karkulahti, Authorized Public Accountant, as the
principal auditor.
SHARES HELD BY THE BOARD AND
CEO
On December 31, 2021, QPR Software Plc’s board
members, the Chief Executive Officer, and
persons and entities closely related to them
did not hold any shares in QPR Software Pc
(December 31, 2020: 12.66%). The amounts include
own holdings, holdings of spouses, persons
under guardianship, and controlled entities.
AUTHORIZATION OF THE BOARD OF
DIRECTORS
At QPR Software Plc’s Annual General Meeting
held on March 25, 2021, the Board of Directors
were authorized to decide on the conveyance of
ANNUAL REPORT 2021
the Company’s own shares (share issue) either in
one or several occasions. The share issue can be
carried out as a share issue against payment or
without, as determined by the Board of Directors.
The authorization also includes the right to issue
special rights, as defined in Chapter 10 Section 1
of the Companies Act, which entitle the holder to
receive the company’s own shares in return for
payment.
The stock exchange release issued on March
25, 2021, details all authorizations given to
QPR Software Plc’s Board of Directors at the
Annual General Meeting. The release can be
found in the investor section of the Company’s
website (https://www.qpr.com/company/
investors#annual-general-meeting).
INTERNAL CONTROL
The Group’s internal control and risk
management aim to ensure that the Group
operates efficiently and effectively, distributes
reliable information, complies with regulations
and operational principles, reaches its strategic
goals, reacts to changes in the market and
operational environment, and ensures continuity
of its business.
It is the duty of the Board of Directors to monitor
the appropriateness, effectiveness and efficiency
of risk management and internal control within
the Group. A risk management report covering
the risks described in the Risk Management
section is presented to the Board every quarter
with quarterly results.
The Board assesses the risks based on the
threat they pose to shareholders. The Board
also oversees that the Company has defined
operating principles for internal control and
that the Company monitors the effectiveness of
controls.
RISK MANAGEMENT
The Group’s CFO is responsible for coordinating
and reporting on the Group’s internal controls
and risk management. The Group’s risk
management is driven by the requirements
arising from legislation, shareholder expectations
regarding business objectives, as well as the
expectations from customers, personnel, and
other important stakeholders.
QPR’s risk management aims to systematically
and comprehensively identify the risks related
to its operations and to ensure that risks are
managed and considered in decision making.
Risk management responsibilities are integrated
throughout the organization. Risk management
is developed by continuously improving the
Company’s operational processes.
The principle of materiality is used as the basis for
identifying risks: the realization of monitored risks
must have a material effect on the Company’s
business operations.
QPR Software has identified the following three
groups of risks related to its operations: risks
related to business operations, risks related to
information and products, and risks related to
financing. Property, operational, and liability risks
are covered by way of insurance.
QPR Software Plc’s Management System was
awarded the ISO 9001:2015 quality certificate
covering all of the Company’s activities, which are
audited annually by an external evaluator.
RISKS RELATED TO BUSINESS
OPERATIONS
The following risks are related to QPR Software’s
business operations:
Country risk
Risk is measured by assessing the potential loss
of country-specific revenue. Risk is managed
by continuously gathering market information
and diversifying business across geographical
markets and industries.
Customer risk
Risk is measured in terms of software
maintenance customer churn and the share of
overdue accounts receivable in total receivables
(%). Risk is managed by taking good care of
every customer and reseller, as well as by actively
following up on accounts receivable.
Personnel risk
Risk is measured in terms of personnel churn.
Risk is managed through skilled recruitment,
professional management practices, and by
providing opportunities for job rotation as well as
learning and growth.
Legal risk
Risk is measured by comparing the cumulative
euro-value of all open legal disputes with
annual net sales (%). Risk is managed with good
knowledge of contract law and standard terms,
and by conducting business activities that are
both ethical and in line with Company values.
23
ANNUAL REPORT 2021 24
QPR’s country and customer risks are mitigated
by conducting business in more than 50
countries, in both public and private sectors, as
well as in several different industries.
Reasonable credit risk concerning individual
business partners is characteristic to any
international business. QPR seeks to limit this risk
by continuously monitoring standard payment
terms, receivables, and credit limits.
The value of trade receivables over 60 days past
due was 17% (22) of total trade receivables at the
end of the quarter.
RISKS RELATED TO INFORMATION
AND PRODUCTS
QPR Software has identified the following three
risks related to information and products:
Risk related to products
Risk is managed by ensuring that the Company’s
offering remains competitive by differentiating
from competitors through the strengths of
its content and products. The Company seeks
to ensure the security of its products by using
automatic malware prevention.
Intellectual Property Rights
The Company’s Intellectual Property Rights (IPR)
are protected by the confidentiality of the source
code, its secure storage, and selected patent
applications.
In the process mining business, the Company has
adopted a more active IPR strategy. As a result,
QPR filed patent applications for five separate
inventions in Finland and the USA in 2012. The
inventions relate to automated business process
discovery based on processing event data. In
April 2015, QPR announced that the U.S. Patent
and Trademark Office has granted a patent as
a result of the applications. In May 2016, QPR
informed that the U.S. Patent and Trademark
Office granted an additional patent to its process
mining technology.
In addition, the Company uses contract
management and internal training to ensure that
third-party IPRs are not used in QPR products
without permission. The Company has a legal
expenses insurance.
Information and security risks
QPR Software regularly monitors and mitigates
information security risks in its operations and
reports to the Board of Directors. We use both
governance practices as well as technology to
improve the security of our systems. To mitigate
information security risks, we have adopted data
and vendor governance models, conducted
annual audits of our partners, and organized
relevant in-house training to improve security
awareness. There have not been any significant
changes in QPR’s information and product
related risks in 2021.
In November, QPR Software was awarded with
the ISO 27001 Information Security Certification
for the design, marketing, and delivery of
software services and solutions.
The international ISO 27001 standard contains
requirements for establishing, implementing,
maintaining, and continually improving an
information security management system.
The information security management system
preserves the confidentiality, integrity, and
availability of information by applying a risk
management process and gives confidence
to interested parties that risks are adequately
managed. QPR Software’s ISO 27001 certificate
was issued after the completion of a formal audit
performed by Bureau Veritas, an independent
and accredited certification body active in 140
countries with more than 78,000 employees.
RISKS RELATED TO FINANCING
QPR Software has identified the following two
financing risks:
Currencies
Foreign currency risk is measured by calculating
the share of all non-euro receivables in total
receivables, or the share of an individual non-
euro currency in total receivables (%). The risk
is managed by using the euro as the primary
invoicing currency and by currency hedging in
accordance with the Company’s hedging policy.
The company constantly monitors how the open
positions of the biggest invoicing currencies
develop. At the end of the financial year, the
Company had not hedged its foreign currency
(non-euro) trade receivables. Approximately 75%
of the Group’s trade receivables were in euro at
the end of the financial year (68).
Short-term cash flow
The risk is measured based on the forecasted
cash flow. The risk is managed by actively
monitoring the forecast and effectively collecting
overdue receivables.
The risks related to the Company’s financial
position are mitigated by recurring revenue
representing a relatively large share of net sales.
ANNUAL REPORT 2021
The management of financial risks in 2021 is
described in more detail in Note 30.
LEGAL DISPUTES
In 2021 and 2020, the Company did not have any
legal disputes.
OUTLOOK FOR 2022
The exceptional circumstances caused by the
COVID-19 pandemic continue to affect new
customer acquisition in early 2022. However,
there are signs of customer decision making
normalizing in the procurement of Process
Mining software. Based on the growing number
of outstanding offers, recurring customer
revenue, and consulting booking levels, QPR
expects its net sales to grow in 2022 (2021: EUR
9,140 thousand) supported by strong growth in
SaaS revenue. However, due to a single software
license deal of about EUR 0.5 million recognized
in the first quarter of 2021, we expect the first
quarter net sales and results of 2022 to fall short
when compared year on year.
THE BOARD OF DIRECTORS’
PROPOSAL ON DIVIDEND
At the end of the financial year 2021, the
distributable funds of the parent company were
EUR -177,736 thousand. The Board of Directors
will propose at the Annual General Meeting that
no dividend is to be paid for the financial year
2021.
There have not been any material changes in the
Company’s financial position after the end of the
financial year.
EVENTS AFTER THE REPORTING
PERIOD
At the end of the financial year on December
28, 2021, the Company announced that it would
start company-wide co-operation negotiations
in Finland in accordance with the Finnish Co-
operation Act. The goal was to change the
Company’s organizational structure to enable
effectively executing investment aiming at the
Company’s growth and operational scalability.
The Company announced the end of the
negotiations on January 20, 2022. As a result
of the negotiations, the organization will
start operating based on its new functional
structure as of February 1, 2022. The negotiations
concerned 81 people and resulted in a decision to
terminate the employment of a total of three (3)
people and to create eight (8) new positions. The
company estimates that the non-recurring costs
related to the restructuring of operations may
amount to a maximum of EUR 100,000. Non-
recurring costs will be recognized in first quarter
results.
In the beginning of the year, the Company
renegotiated a revolving credit facility (EUR 1.5
million) with Nordea. The agreement was signed
in February 2022.
On February 14, 2022, the Company announced
a profit warning due to the reassessment of a
major project’s revenue recognition made in
connection with preparing financial statements,
as well as write-downs related to the goodwill of
Nobultec Oy, acquired in 2011, and the balance
sheet value of capitalized product development
expenses.
25
ANNUAL REPORT 2021 26
FINANCIAL STATEMENTS
2021
QPR SOFTWARE
ANNUAL REPORT 2021 27
Consolidated Comprehensive Income Statement, IFRS
(EUR 1,000) Note 2021 2020
Net sales 3 9,140 8,971
Other operating income 4 0 100
Materials and services 6 1,106 1,422
Employee benefit expenses 7 6,824 6,649
Depreciation and amortization 9 1,489 1,183
Other operating expenses 10 968 753
Total expenses 10,388 10,007
Operating Result -1,248 -936
Financial income 11 3 27
Financial expenses 11 -111 -43
Financial items, net -108 -16
Result before tax -1,356 -952
Income taxes 12 0 140
Result for the financial year -1,356 -812
Other items in comprehensive income that may be reclassified subsequently to profit or loss:
Exchange differences on translating foreign operations 0 -2
Other items in comprehensive income, net of tax 0 -2
Total comprehensive income for the financial year -1,356 -814
Earnings per share, EUR
Undiluted, EUR 13 -0.113 -0.068
Diluted, EUR 13 -0.113 -0.068
ANNUAL REPORT 2021 28
Consolidated Balance Sheet, IFRS
(EUR 1,000) Note 2021 2020
ASSETS
Non-current assets
Capitalized product development expenses 14 1,704 1,801
Other intangible assets 14 8 9
Goodwill 15 358 513
Tangible assets 16 319 387
Other investments 17 5 5
Deferred tax assets 19 273 273
Total non-current assets 2,666 2,986
Current assets
Trade and other receivables 20 2,694 2,901
Cash and cash equivalents 21 441 185
Total current assets 3,135 3,086
Total assets 5,800 6,072
EQUITY AND LIABILITIES
Equity
Share capital 23 1,359 1,359
Other funds 21 21
Treasury shares -439 -439
Translation difference -68 -69
Invested non-restricted equity fund 5 5
Retained earnings -448 881
Equity attributable to shareholders of the parent company 430 1,759
Current liabilities
Trade and other payables 25 3,689 3,366
Interest-bearing liabilities 24 1,682 947
Total current liabilities 5,370 4,313
Total liabilities 5,370 4,313
Total equity and liabilities 5,800 6,072
ANNUAL REPORT 2021 29
Consolidated Cash Flow Statement, IFRS
(EUR 1,000) Note 2021 2020
Cash flow from operating activities
Result for the period -1,356 -812
Adjustments for the result
Depreciation 1,489 1,183
Other adjustments 27 29 -49
Changes in working capital:
Increase (-)/decrease (+) in short-term non-interest bearing
receivables 390 165
Increase (+)/decrease (-) in short-term non-interest bearing
liabilities 323 -120
Interest expense and other financial expenses paid -164 -40
Interest income and other financial income received 3 27
Taxes paid -22 -21
Net cash flow from operating activities 692 334
Cash flow from investing activities
Acquisition of tangible assets -83 -158
Capitalized development expenses -856 -825
Acquisition of other intangible assets -3 -115
Net cash flow from in investing activities -942 -1,098
Cash flow from financing activities
Proceeds from borrowings 24 1,500 700
Repayments of borrowings 24 -991 -761
Net cash used in financing activities 509 -61
Change in cash and cash equivalents 258 -825
Cash and cash equivalents at the beginning of year 185 1,035
Effect of exchange rate differences -2 -25
Cash and cash equivalents at the end of year 21 441 185
ANNUAL REPORT 2021 30
Parent Company Income Statement, FAS
(EUR) Note 2021 2020
Net sales 3 8,705,482 8,417,451
Other operating income 4 607,195 660,179
Material and services 6 2,743,535 2,934,511
Personnel expenses 7 4,933,338 4,780,583
Depreciation and amortization 9 156,563 168,718
Other operating expenses 10 1,915,889 1,716,654
Total expenses 9,749,326 9,600,466
Operating result -436,649 -522,836
Financial income and expenses 11 -146,387 49,010
Result before appropriations and taxes -583,036 -473,826
Result before taxes -583,036 -473,826
Income taxes 12 0 79,314
Result for the financial year -583,036 -394,512
ANNUAL REPORT 2021 31
Parent Company Balance Sheet, FAS
(EUR) Note 2021 2020
ASSETS
Non-current assets
Intangible assets 14 190,526 259,085
Tangible assets 16 171,030 175,580
Investments in group companies 17 3,581,263 3,581,263
Other investments 17 4,562 4,562
Total non-current assets 3,947,381 4,020,490
Current assets
Non-current receivables 18,19 225,000 391,817
Current receivables 20 2,700,517 2,770,827
Cash and cash equivalents 21 384,421 65,640
Total current assets 3,309,938 3,228,284
TOTAL ASSETS 7,257,319 7,248,774
EQUITY AND LIABILITIES
Equity
Share capital 23 1,359,090 1,359,090
Invested unrestricted equity fund 5,347 5,347
Retained earnings 839,261 1,400,518
Treasury shares -439,307 -439,307
Result for the financial year -583,036 -394,512
Total equity 1,181,355 1,931,136
Liabilities
Current liabilities 24,25 6,075,964 5,317,638
Total liabilities 6,075,964 5,317,638
TOTAL EQUITY AND LIABILITIES 7,257,319 7,248,774
ANNUAL REPORT 2021 32
Parent Company Cash Flow Statement, FAS
(EUR) 2021 2020
Cash flow from operations
Operating result -436,649 -522,836
Adjustment for the period:
Depreciation and amortization 156,563 168,718
Financial items, net -146,387 -14,402
Taxes paid - -
Cash flows before change in working capital -426,473 -368,520
Change in working capital
Increase (-) / decrease (+) in current receivables 445,577 -173,998
Increase (-) / decrease (+) in current liabilities 408,589 -174,598
Change in long-term receivables, non-interest bearing - 120,686
Change in net working capital 854,166 -227,910
Net cash from operating activities 427,694 -596,430
Cash flows from investing activities
Investments in intangible assets - -2,505
Purchases of tangible assets -83,454 -157,571
Investments in subsidiary shares - -111
Investments in subsidiary loans granted -825,530 -303,329
Net cash used in investing activities -908,983 -463,516
Cash flows from financing activities
Proceeds from current loans and borrowings 1,500,000 700,000
Repayments of short-term borrowings -700,000 -500,000
Dividends paid 71 70
Cash flows from financing activities 800,071 200,070
Change in cash and cash equivalents 318,781 -859,876
Cash and cash equivalents at the beginning of the year 65,639 925,515
Cash and cash equivalents at the end of the year 384,421 65,639
ANNUAL REPORT 2021 33
Statements of Changes in Equity
Consolidated statement of changes in equity, IFRS
(EUR 1,000)
Share
capital
Other
funds
Translation
differences
Treasury
shares
Invested
unre-
stricted
equity fund
Retained
earnings
Equity
attributable
to share-
holders of
the parent
company
Equity Dec 31, 2019 1,359 21 -66 -439 5 1,882 2,762
New IFRS standards,
cloud service
investments -245 -245
Adjusted equity
Dec 31, 2019 1,359 21 -66 -439 5 1,637 2,517
Dividends paid 0 0
Stock option scheme 56 56
Comprehensive income -3 -812 -814
Equity Dec 31, 2020 1,359 21 -69 -439 5 881 1,759
Dividends paid 0 0
Stock option scheme 26 26
Comprehensive income 0 -1,356 -1,356
Equity Dec 31, 2021 1,359 21 -68 -439 5 -449 430
ANNUAL REPORT 2021 34
Parent company statement of changes in shareholders’ equity, FAS
Restricted equity Unrestricted equity
(EUR)
Number of
shares
Share
capital
Treasury
shares
Invested
unrestricted
equity fund
Retained
earnings
Total
unrestricted
equity
Total
equity
Equity Jan 1, 2020 12,444,863 1,359,090 -439,307 5,347 1,400,447 966,487 2,325,577
Dividends paid 70 70 70
Result for the year -394,512 -394,512 -394,512
Equity Dec 31, 2020 12,444,863 1,359,090 -439,307 5,347 1,006,005 572,046 1,931,136
Dividends paid 0 71 71
Deferred taxes for
previous financial years* -166,817 -166,817
Result for the year 0 -583,036 -583,036
Equity Dec 31, 2021 12,444,863 1,359,090 -439,307 5,347 1,006,005 -177,735 1,181,355
*deffered tax, change of the accounting principle.
ANNUAL REPORT 2021 35
NOTES TO FINANCIAL STATEMENTS
COMPANY INFORMATION
QPR offers services and software tools for
architecture. The Group’s parent company, QPR
Software Plc (company ID 0832693-7), is a public
limited liability company incorporated in Finland.
The parent company is domiciled in Helsinki and
its registered office is located at Huopalahdentie
parent company, QPR Software Plc , have been
listed on the Helsinki Stock Exchange since 2002.
A copy of the Consolidated Financial Statements
is available on the Internet at www.qpr.com or at
QPR Software Plc, Huopalahdentie 24, Helsinki,
approved the financial statements for publication
on February 15, 2022. Shareholders have the
right to approve or reject financial statements in
the Annual General Meeting, or decide to revise
them.
1. ACCOUNTING PRINCIPLES
FOR CONSOLIDATED FINANCIAL
STATEMENT
Basis of preparation
Statements have been prepared in accordance
with the International Financial Reporting
Standards (IFRS) and take into account the IAS
and IFRS standards, as well as SIC and IFRIC
interpretations, valid as of December 31, 2021. In
the Finnish accounting legislation, International
Financial Reporting Standards refer to standards
and interpretations accepted to be followed
in the European Union in accordance with
Regulation (EC) No 1606/2002.
The financial statements have been prepared
using the historical cost convention, unless
otherwise disclosed in the accounting principles
below. The Consolidated Financial Statements
are presented in Euro, which is the functional
currency of the parent company. Financial
statements are presented in thousands of Euros.
All presented figures are rounded, which means
that the sum of individual amounts may differ
from the total presented. Key figures have been
calculated using exact amounts.
New accounting principles, which have
been applied in the financial year ending on
December 31, 2021.
Configuration or Customization Costs in a Cloud
Computing Arrangement – IAS 38 Intangible
Assets (effective immediately)
The agenda decision issued by the IFRS
Interpretations Committee in April 2021 clarifies
how a customer accounts for costs of configuring
or customizing the supplier’s application
software in a Software as a Service (SaaS)
arrangement. The agenda decision addresses
whether the company that purchased the service
can recognize an intangible asset in its balance
sheet and, if not, how the configuration or
customization costs are accounted for. Agenda
decisions are expected to be applied as soon as
possible after their publication.
QPR adopted the standard, and retrospectively
changed its accounting practices for cloud
computing arrangements in 2019 so that EUR
309,664.81 was transferred to equity in the
beginning of 2020 and depreciation for 2020 was
adjusted by EUR 65,075.97 (see Note 14).
New and amended standards and
interpretations adopted in 2021
From the beginning of 2021, the Group has
applied the following new and revised standards
and interpretations.
The following new and revised standards and
interpretations did not have a significant impact
on the consolidated financial statements.
COVID-19 Related Rent Concessions beyond
June 30, 2021 – Amendments to IFRS 16 Leases
(effective starting from April 1, 2021 on financial
years beginning on or after January 1, 2021).
Lessees can elect to account for rent concessions
as if they were not lease modifications,
provided that rent concessions occur as a direct
consequence of the COVID-19 pandemic and the
defined criteria are met.
Consolidation principles
The Consolidated Financial Statements include
the parent company, QPR Software Plc, and the
subsidiaries it controls. Regarding subsidiaries,
parent company control is based on full
ownership of the share capital or a majority
holding. The Company did not own shares in
ANNUAL REPORT 2021 36
joint ventures or associated companies in 2021
and 2020.
Subsidiaries acquired during the financial
period are consolidated from the date on
which control is obtained, and divestments are
included until the date on which control ceases.
Intragroup shareholdings are eliminated using
the acquisition cost method. Intercompany
business transactions, receivables, liabilities,
unrealized profits, as well as intragroup profit
distribution, are eliminated in the Consolidated
Financial Statements. The profit for the financial
year applicable to non-controlling interests
is presented separately in the consolidated
comprehensive income statement, and the share
of the non-controlling interest in shareholders’
equity is presented separately in the consolidated
balance sheet. The Group’s subsidiaries did not
have any non-controlling interests in 2021 and
2020.
Continuity of operations
The Consolidated Financial Statements have
been prepared in accordance with the principle
of continuity, considering the renewed EUR 1.5
million revolving credit facility until 2023 from
Nordea, which was presented in the events after
the reporting period.
Foreign currency translation
The functional currency of foreign subsidiaries’ is
the local bookkeeping currency.
Transactions denominated in foreign currency
have been translated into the group reporting
currency using the exchange rate valid on the
transaction date. Monetary items have been
converted into the group reporting currency
using the exchange rate on the closing date, and
non-monetary items using the exchange rate on
the transaction date. The exchange gains and
losses from business operations are included
in operating profit, and the exchange gains
and losses from financial assets or liabilities are
included in financial income and expenses.
The income statements of foreign subsidiaries
are translated into Euro using the average
exchange rates for the year, and the balance
sheets are translated using the exchange
rates on the balance sheet date. Translation
differences arising from the elimination of
foreign subsidiaries and the translation of equity
items accumulated after the acquisition are
entered in other comprehensive income. Foreign
currency gains and losses from monetary items
that are part of the net investment in a foreign
unit are recognized in other comprehensive
income.
Revenue recognition
Net sales include the normal sales income from
the Group’s business operations, deducted
by sales related taxes and granted discounts.
When calculating net sales, they are adjusted to
account for exchange rate differences.
Revenue is recognized when (or as) the control of
goods or services are transferred to a customer
either over time or at a point in time.
The consolidated net sales consist of software
license sales, software maintenance services,
cloud (SaaS) services and consulting. In relation
to its resellers, the Company acts as a principal
and records in its net sales the revenue from
the software sales of the resellers to the end
customers, and records in its costs the reseller
commission.
Software license revenue is recognized at a point
in time, when (or as) a company transfers control
of license or user right to a customer.
Limited term license performance obligations
are license and maintenance, and revenue is
recognized as the performance obligation if
fulfilled, either at a point in time or over time,
during the agreement period.
Software license revenue arising under a contract
of indefinite duration and invoiced upfront for
the invoicing period is recognized in accordance
with its performance obligations which are
license, maintenance, and cloud (SaaS) services.
License part of the revenue is recognized at a
point in time, in the beginning of each invoicing
period, however not earlier than delivery is
performed. Maintenance part as well as cloud
services in total are recognized over time, evenly
during the contract period.
Software maintenance services covering software
updates and customer support is recognized
over time, evenly during the agreement period.
Cloud services (SaaS) in totality are recognized
over time, as the performance obligation is the
service rendered over time.
Revenues from consulting services are
recognized as services are rendered, when (or as)
control of the services have been transferred to
the customer.
The Group uses payment terms typical for each
market, including domestic terms, which are
typically shorter that international terms.
Other operating income
Other operating income includes income that
ANNUAL REPORT 2021 37
is not related to the parent company’s core
business. Public subsidies are recorded in other
operating income, except when they are related
to investments, in which case they are deducted
from the acquisition cost of the asset.
Pension plans
The Group’s pension scheme is a defined
contribution plan managed by a pension
insurance company. The expenses are recognized
in the comprehensive income statement in the
financial period that the contribution relates to.
The Group does not have a legal or constructive
liability to pay additional contributions in case
of non-performance by the pension insurance
company.
Share-based payments
The Group has adopted a new option plan for key
persons as of beginning of the year 2019. In the
Group incentive plan payments are made in the
form of equity instruments. The benefits granted
under the plans are recognized at fair value
on the date on which they were granted and
entered as costs evenly throughout the period
during which they were earned. The effect of the
plans on profit or loss is presented under costs of
employee benefits.
The cost determined on the date on which the
options were granted is based on the Group
estimate of the number of options for which
rights are presumed to arise at the end of the
incentive earning period. The Group updates the
presumption of the final number of options on
the final day of every reporting period. Changes
in estimates are treated through profit or loss.
The fair value of the option plan is defined based
on the Black-Scholes pricing model. Terms
that are not market based, such as profitability
and specific growth targets, are not taken into
consideration when determining the fair value
of options. Instead, they affect the estimate of
the final number of options. When option rights
are exercised, the assets obtained from share
subscriptions are entered into the invested
unrestricted equity fund in accordance with the
terms of the plan.
Operating profit
IAS 1 “Presentation of Financial Statements” does
not define the concept of operating profit. The
Group uses the following definition of operating
profit: operating profit is the sum of net sales and
other operating income, less the cost of materials
and services, expenses for employee benefits,
other operating expenses, as well as depreciation,
amortization and impairment losses of tangible
and intangible assets. Exchange rate differences
arising from working capital items are included
in operating profit, whereas exchange rate
differences arising from financial assets and
liabilities are included in financial income and
expenses.
Impairment
At each annual closing, the Group reviews
asset items for any indication of impairment
losses. If there are such indications, the amount
recoverable from the said asset item is assessed.
The recoverable amount of tangible and
intangible assets is the higher of the asset item’s
fair value less the cost arising from disposal
and its value in use. The recoverable amount
of financial assets is either the fair value or the
present value of expected future cash flows
discounted at the original effective interest
rate. An impairment loss is recognized in the
comprehensive income statement when the
carrying amount is greater than the recoverable
amount.
Goodwill is not amortized but its recoverable
amount is estimated annually or more frequently
if circumstances indicate that the value may
be impaired. Such estimate is prepared at least
at each annual closing. For such purposes,
goodwill is allocated to cash-generating
units. An impairment loss is recognized in
the consolidated comprehensive income
statement, if the impairment test shows that
the carrying amount of goodwill exceeds its
recoverable amount. In this case the goodwill
is recorded at its recoverable amount. After
the initial recognition, goodwill is valued at
original acquisition cost, less impairment losses
recognized. Impairment losses on goodwill
cannot be reversed.
Income taxes
The tax expense in the comprehensive income
statement consists of tax based on taxable
income for the financial year and deferred tax.
Tax based on taxable income for the financial
year is calculated on the basis of taxable income
and the tax rate valid in each country. Income
taxes are charged to income, except when they
are related to items recorded in equity or other
items in comprehensive income, in which case
the tax expense is adjusted to such items.
Deferred taxes are calculated based on
temporary differences between the book
value and tax value of an asset or liability item.
Deferred taxes are calculated at tax rates enacted
by the balance sheet date.
A deferred tax asset is recognized in the amount
that it is probable that future taxable income
will be generated against which the temporary
ANNUAL REPORT 2021 38
difference can be utilized. Deferred tax liabilities
are recognized in the balance sheet in full.
Intangible assets
Goodwill arising from business acquisitions
represents the excess of the cost of an
acquisition, amount of non-controlling interests,
and previously owned equity interests, over
the fair value of the net assets of the acquired
company. Goodwill is valued at the original
acquisition cost minus impairment losses.
Expenditures for research are recognized as
expenses. Product development expenditures
leading to new products or new features are
capitalized and amortized during their useful life.
Amortization starts when the product version
has been released. Maintenance, reparations,
and minor revisions are directly recorded as
expenses. The useful life of capitalized product
development expenditures is 4 years, during
which time the capitalized expenditures are
amortized using the straight-line method.
Other intangible assets include, for example,
patents and IT systems. They are amortized on a
straight-line basis over their useful life, which is
2–5 years.
Tangible assets
The balance sheet values of tangible assets
are based on original acquisition cost minus
accumulated depreciation and impairment
losses. Depreciation is calculated using the
straight-line method and is based on the
estimated useful life of the asset.
The Group didn’t capitalize any borrowing costs
in 2021 and 2020.
Useful lifetimes of tangible assets:
Machinery and equipment 3 – 7 years
IT machinery and equipment 2 – 5 years
Lease agreements
As of January 1, 2019, the Group has adopted
the IFRS 16 standard on leases. According to
the standard, a contract is or contains a lease
if the Group has a right to control the use of an
identified asset for a certain period of time in
exchange for consideration. When determining
the non-cancellable period, the Group assesses
the probability of exercising extension and
termination options by considering all relevant
facts and circumstances.
Lease payments are divided into liabilities and
financial expenses. Financial expenses are
recognized in the income statement for the lease
period. The right-of-use asset is depreciated
using the straight-line method over the asset’s
useful life or lease term, if shorter than useful life.
Lease liabilities are discounted at the average
loan interest rate of the year.
When future lease payments are revised
due to changes in an index rate or the terms
of the lease, the right-of-use asset and the
corresponding lease liability is revalued to reflect
these changes.
The Group has applied the exemption of not
recognizing short-term leases and leases of low-
value assets in the balance sheet and continues
to treat them as operating leases.
The Group mainly leases offices for business
use. Leases are typically either fixed-term
agreements, which may be renewable, or
indefinite term, which usually require less than
a year’s notice. For leases for less than 12 months
and for low-value assets, the Group continues to
treat them as operating leases.
Financial assets and liabilities
The Group’s financial assets are classified
into the following measurement categories:
financial assets at fair value through profit or
loss and financial assets at amortized cost. The
classification of financial assets is based on the
purpose of the acquisition (business model for
managing the asset) that is determined upon
initial recognition. Transaction costs are included
in the original carrying amount of a financial
asset when the item is not measured at fair value
through profit or loss. Purchases and sales of
financial assets are recorded on the trade date.
Items recognized at amortized cost comprise
trade receivables.
Financial liabilities are initially recognized at
fair value minus the transaction costs that are
directly attributable to the acquisition or issue
of the financial liability. Subsequently financial
liabilities, except for derivative liabilities, are
measured at amortized cost using the effective
interest rate (EIR) method. Financial liabilities
may include both non-current and current
liabilities and they can be interest-bearing or
non-interest-bearing.
Financial assets and liabilities measured
at fair value are presented in accordance
with the hierarchy levels based on fair value
measurement. Levels 1, 2 and 3 are based on the
source of information used in the measurement.
On level 1, fair values are based on public quotes.
On level 2, fair values are based on quoted
market rates and prices, discounted cash flows,
ANNUAL REPORT 2021 39
and valuation models (options). For assets and
liabilities classified on level 3, there is no reliable
market information source, and therefore, the
fair values of these instruments are not based on
market information.
To measure expected credit losses of trade
receivables from customers, the Group uses a
simplified approach, where the loss allowance
is measured based on an allowance matrix
and recognized at an amount equal to lifetime
expected credit losses. Expected credit losses
are measured based on historical information
on previous credit losses, and also the available
information on future economic conditions is
included in the model.
Derivative contracts
Derivative contracts are initially recognized at fair
value on the date on which the Group becomes
party to the contract and are subsequently
measured at fair value. The Group has no
derivative contracts in 2021 and 2020.
Cash and cash equivalents
Cash and cash equivalents include cash and cash
equivalents which are highly liquid and have a
maturity of no more than three months from the
date of acquisition.
Treasury shares
The repurchase of own shares as well as the
related direct costs are recorded as deductions in
equity.
Provisions
A provision is recognized when the Group has a
legal or constructive obligation as a result of an
action, the outflow of resources required to settle
the obligation is probable, and a reliable estimate
of the amount can be made.
A restructuring provision is recognized when a
detailed and appropriate plan has been prepared
and the company has begun to implement
the plan or has announced that it will do so.
Restructuring provisions are based on the
management’s best estimate of the expenses
to be incurred e.g., from employee termination
payments.
A provision for a loss-making agreement is
recognized when unavoidable expenditure
required to fulfill the obligations exceeds the
benefits obtainable from the agreement.
Accounting principles that require
management consideration, and essential
factors of uncertainty related to management
estimates
The preparation of financial statements
according to IFRS requires management to
make estimates and assumptions that affect
the reported assets and liabilities on the balance
sheet, as well as the financial year’s income and
expenses. In addition, professional judgment is
required in applying accounting principles. Since
the estimates and assumptions are based on the
business outlook at the close of the financial year,
they include risks and uncertainties. Estimates
and assumptions may not be realized.
Where applicable, management has considered
the effects of COVID-19 in its estimates.
Learn more about the key areas that required
management consideration:
Share-based payments and option schemes
(Note 8)
Product development expenditure (Note 14)
Goodwill (Note 15)
Deferred tax (Note 19)
Trade receivables (Note 20)
Leases (Note 29)
Financial risk management (Note 31)
Adoption of new or revised IFRS standards
The Group has not yet adopted the following
already published new or amended standards
and interpretations. The Group will adopt them
immediately after the standard or interpretation
is effective or, when applicable, at the beginning
of the next financial year. (*= On December
31, 2021, the standard in question was not yet
approved for adoption in EU)
Management is currently assessing the impact
of the following new or revised standards and
interpretations on the Consolidated Financial
Statements.
Amendments to IAS 37 Provisions, Contingent
Liabilities and Contingent Assets – Onerous
Contracts – Costs of Fulfilling a Contract*
(effective for financial years beginning on or after
January 1, 2022)
The amendments clarify that when a provision
is made for an onerous contract based on
inevitable expenses, the cost of fulfilling the
contract shall include direct incremental costs, as
well as an allocation of other direct costs incurred
Annual Improvements to IFRS Standards
2018–2020 cycle* (effective for financial years
beginning on or after January 1, 2022)
The objective of the Annual Improvements
ANNUAL REPORT 2021 40
process is to collect smaller non-urgent
improvements to the standards into a single
collection implemented once a year. The
improvements have clarified the following
standards:
IFRS 9 Financial Instruments – Fees in the ’10
per cent’ Test for Derecognition of Financial
Liabilities: The amendment clarifies that – for
the purpose of performing the ’10 per cent
test’ for derecognition of financial liabilities – in
determining those fees paid net of fees received,
a borrower includes only fees paid or received
between the borrower and the lender, including
fees paid or received by either the borrower or
lender on the other’s behalf.
IFRS 16 Leases, example 13: The amendment
removes from example the Lessor’s
reimbursement for payments related to leasehold
improvements, as the example was unclear as
to whether the reimbursement would meet the
definition of a lease incentive.
Reference to the Conceptual Framework –
Amendments to IFRS 3 Business Combinations
(effective for financial years beginning on or after
January 1, 2022)
The amendment updates the reference in IFRS
3 and contains a reference to the clarifications
provided in the amendments.
Classification of Liabilities as Current or Non-
current – Amendments to IAS 1 Presentation of
Financial Statements * (effective for financial
years beginning on or after January 1, 2023, early
adoption is permitted)
Amendments aim to harmonize the way IAS 1 is
applied in practice and to clarify the classification
of liabilities as current or non-current.
Disclosure of Accounting Policies – Amendments
to IAS 1 Presentation of Financial Statements and
IFRS Practice Statement 2 Making Materiality
Judgements * (effective for financial years
beginning on or after January 1, 2023, early
adoption is permitted)
The amendments clarify the application of
materiality in deciding which accounting policies
to disclose.
Definition of Accounting Estimates –
Amendments to IAS 8 Accounting Policies,
Changes in Accounting Estimates and Errors *
(effective for financial years beginning on or after
January 1, 2023, early adoption is permitted)
Amendments clarify how entities should
distinguish changes between accounting
principles and accounting estimates and
focus on developing and clarifying accounting
estimates.
Deferred Tax related to Assets and Liabilities
Arising from a Single Transaction – Amendments
to IAS 12 Income Taxes * (effective for financial
years beginning on or after January 1, 2023)
Amendments narrowed the scope of the
recognition exemption and clarify that it no
longer applies to transactions, such as leases for
the lessee and decommissioning obligations,
that give rise to equal taxable and deductible
temporary differences.
Sale or Contribution of Assets between an
Investor and its Associate or Joint Venture –
Amendments to IFRS 10 Consolidated Financial
Statements and IAS 28 Investments in Associates
and Joint Ventures * (voluntary adoption is
allowed, entry into force postponed for the time
being)
Amendments eliminate the conflict between
current guidance on consolidation and equity
method accounting and require that a full
gain should be recognized when transferred
assets constitute a business as defined in IFRS 3
Business Combinations.
Other new and revised standards and
interpretations are not expected to have an effect
on the Consolidated Financial Statements when
they become effective.
ANNUAL REPORT 2021 41
ACCOUNTING PRINCIPLES OF
PARENT COMPANY FINANCIAL
STATEMENTS
Financial statements of the parent company,
QPR Software Plc, have been prepared in
accordance with Finnish Accounting Standards
(FAS), which differ in certain respects from
the international standards (IFRS) used in the
Consolidated Financial Statements.
Financial statements have been prepared using
historical cost convention, unless otherwise
disclosed in the accounting principles below.
The parent company financial statements are
presented in Euro. All figures are rounded, which
means that the sum of individual amounts may
differ from the total presented. Key figures have
been calculated using exact amounts.
Foreign currency translation
Transactions denominated in foreign currency
are translated using the exchange rate
on the transaction date. At the end of the
reporting period, financial assets and liabilities
denominated in foreign currency are valued at
balance sheet date. Exchange rate differences
arising from foreign currency business
transactions are recorded in their corresponding
income statement accounts above operating
profit; and the net exchange rate differences
arising from financial items are recorded in
financial income or expenses.
Revenue recognition
The parent company applies the same principles
of revenue recognition as the Group. The Group’s
principles of revenue recognition are introduced
in Note 1, page 36.
Other operating income
Other operating income includes income that
is not related to the parent company’s core
business. Public subsidies are included in other
operating income, except when they are related
to investments, in which case they are deducted
from the acquisition cost of the asset.
Pension plans
The employees’ statutory pension plan is
managed by a pension insurance company.
Statutory pension contributions are stated in the
income statement as an expense in the year of
their accrual.
Research and development expenditure
Research costs are expensed as incurred.
Expenses related to the introduction of new
technology, or the development of a new
product are capitalized and amortized over the
useful life of 4 years. When determining the
duration of useful economic life, the technology’s
eventual obsolescence and the product’s typical
life cycle are considered. Amortization begins
when the product becomes commercially viable.
Maintenance costs and minor improvements to
existing products are expensed. Grants received
for product development are recognized in the
income statement for the periods in which the
corresponding expenses are incurred.
Intangible assets
Intangible assets are reported at original
acquisition cost minus accumulated
amortization and impartment losses, if any.
Public subsidies used to acquire an intangible
asset are deducted from the asset’s acquisition
cost and reduce asset amortization in the income
statement. The expected useful lifetime of an
intangible asset ranges from 2 – 5 years.
Tangible assets
Tangible assets are stated in the balance sheet
at original acquisition cost minus accumulated
depreciation and impartment losses. The
economic life of a tangible asset ranges from
2 – 7 years.
Investments
The shares the parent company holds in
subsidiaries and other entities are valued at
original acquisition cost or at fair value, if lower.
Provisions
A provision is recognized when the parent
company has a legal or constructive obligation
as a result of an action, an outflow of resources
required to settle the obligation is probable, and
a reliable estimate of the amount can be made.
Leasing
Lease payments are treated as expenses during
rental period.
ANNUAL REPORT 2021 42
2. SEGMENT INFORMATION
QPR Software reports on one operating segment: Operational development of organizations. In addition
to this, the Company reports net sales from products and services as follows: Software license sales,
Renewable software license sales, Software maintenance services, Cloud services, and Consulting.
Recurring revenue reported by the Group consists of software maintenance services and cloud services
as well as of renewable software licenses. They are based on long-term, indefinite, or multiyear contracts,
and are generally invoiced annually in advance.
The accounting and valuation principles for the segments are the same as in the Consolidated Financial
Statements.
Group (EUR 1,000) 2021 2020
Net sales by operating segment
Operational development of organizations 9,140 8,971
Total net sales 9,140 8,971
3. NET SALES
Net sales by product group
The Group’s net sales derive from software and consulting businesses are broken down as follows:
Group, IFRS Parent company, FAS
(EUR 1,000) (EUR)
2021 2020 2021 2020
Software licenses 1,317 1,344 1,232,970 1,303,706
Renewable software licenses 797 900 461,473 576,922
Software maintenance services 2,034 2,195 1,790,424 2,028,270
Cloud services 1,283 1,081 1,511,399 1,057,022
Consulting services 3,710 3,452 3,709,216 3,451,532
Total net sales 9,140 8,971 8,705,482 8,417,451
Net sales by geographic area
The geographical areas reported are Finland , the rest of Europe (including Russia and Turkey), and the
rest of the world. Net sales are reported according to the customer’s location.
Finland 4,614 4,718 4,620,337 4,717,542
Europe incl. Russia and Turkey 2,689 2,474 2,352,278 2,001,304
Rest of the world 1,837 1,780 1,732,867 1,698,605
Total net sales 9,140 8,971 8,705,482 8,417,451
Balance sheet items based on customer agreements are presented in Note 22.
ANNUAL REPORT 2021 43
4. OTHER OPERATING INCOME
Group, IFRS Parent company, FAS
(EUR 1,000) (EUR)
2021 2020 2021 2020
Grants and subsidies - 100 - 99,962
Other items - - 607,195 560,217
Total 0 100 607,195 660,179
In 2020, grants include a EUR 100 thousand public grand from Business Finland.
The other items include intra-group service charges from the parent company.
5. ACQUIRED BUSINESS OPERATIONS, PARENT COMPANY
A subsidiary, QPR Software Limited, was established in the UK in 2020. In 2021, no business acquisitions
were made.
6. MATERIALS AND SERVICES
Group, IFRS Parent company, FAS
(EUR 1,000) (EUR)
2021 2020 2021 2020
Materials and services 1,106 1,422 2,743,535 2,934,511
Materials and services include mainly commissions and localization fees charged by the reseller network,
as well as consultancy subcontracting.
Materials and services of the parent company include intra-group license fees in addition to the above-
mentioned expenses.
7. EMPLOYEES AND RELATED PARTIES
Group, IFRS Parent company, FAS
(EUR 1,000) (EUR)
2021 2020 2021 2020
Wages and salaries 5,691 5,648 4,107,826 4,055,644
Pension expenses - defined contribution plans 947 818 687,897 582,632
Other personnel expenses 185 183 137,615 142,308
Total 6,824 6,649 4,933,338 4,780,583
Average number of employees during the year 80 86 54 57
ANNUAL REPORT 2021 44
Related parties
The Group and the parent company’s related parties include members of the parent company’s Board
of Directors and the Executive Management Team, including the Chief Executive Officer, their spouses,
domestic partners, children and dependents, spouses’ or domestic partners’ children and dependents, as
well as entities controlled by any such related party.
The Group does not have any loans, commitments or guarantees granted to or received from related
parties. The Group has not had business transactions with related parties in 2021 and 2020.
Related parties to the parent company also include subsidiaries in the Group. The list of Group
companies is presented in Note 17. Shares in subsidiaries and other entities. Transactions between the
parent company and other Group companies, as well as intra-Group receivables, liabilities, commitments,
and guarantees are included as total amounts in the notes for the parent company financial statements.
Salaries, bonuses, fringe benefits and change in vacation bonus and bonus accruals for management
The Group has determined management to include members of the Board of Directors and the
Executive Management Team, including the Chief Executive Officer.
Group, IFRS Parent company, FAS
(EUR 1,000) (EUR)
2021 2020 2021 2020
Salaries and other short-term benefits:
Members of the Board of Directors 89 76 88,759 75,704
Chief Executive Officer Jari Jaakkola 159 192 158,694 192,136
Chief Executive Officer Jussi Vasama 76 0 75,939 0
Executive Management Team 600 589 599,629 588,681
Total 923 857 923,021 856,521
Parent company, FAS
(EUR)
2021 2020
Board fees by member:
Ervi Pertti, Chairman of the Board 28,482 0
Heikkonen Matti 14,241 0
Koskela Antti 14,241 0
Tapaninen Jukka 14,241 0
Leskinen Vesa-Pekka, Chairman of the Board, until March 25, 2021 5,851 25,232
Piela Topi, until March 25, 2021 3,901 16,824
Rajala Jarmo, until March 25, 2021 3,901 16,824
Vainio Salla, until March 25, 2021 3,901 16,824
Total 88,759 75,704
ANNUAL REPORT 2021 45
It was decided at the Annual General Meeting
of QPR Software Plc held on March 25, 2021, that
the Chairman of the Board is paid a monthly
remuneration of EUR 3,090 (2020: 2,102) and other
members of the Board are paid EUR 1,545 each
(2020: 1,402). No separate meeting fees are paid.
The Company does not have any exceptional
pension arrangements for the CEO. Pension
expenses, based on the CEO’s salary and bonuses
and the Finnish pension legislation, amounted to
EUR 38 thousand in 2021 (2020: EUR 26 thousand).
The notice period for the CEO is four (4) months.
Compensation upon termination is equivalent
to six (6) months’ salary during the first year and
eight (8) months’ salary after the first year. Other
members of the Group’s Executive Management
Team do not enjoy special benefits related to the
termination of their contracts.
In 2021, the maximum annual bonus for members
of the Executive Management Team, including
the CEO, was 40% of the annual base salary. The
CEO, who started in October 2021, was paid a fixed
target salary. The bonus scheme for members
of the Executive Management Team was based
on the development of the Group’s net sales and
the net sales and new sales of the business units
in 2021. For the financial year 2021, about EUR 53
thousand (2020: EUR 13 thousand) will be paid to
the Executive Management Team, including the
CEO.
8 . SHARE BASED PAYMENTS
Option scheme
In the beginning of 2019, the Group adopted a
new option plan for key employees. The stock
options are intended to form part of the Group’s
incentive and commitment program for key
employees. The purpose of the stock options is to
encourage key employees to work for increasing
the shareholder value in the long term, and to
retain key employees at the Company.
The maximum number of stock options issued is
910,000, and they entitle their owners to subscribe
for a maximum of 910,000 new or existing shares
held by the Company. The stock options are
issued gratuitously. 437,000 stock options are
marked with the symbol 2019A, and 473,000 are
marked with the symbol 2019B.
The number of shares subscribed by exercising
stock options corresponds to a maximum of
6.81% of the Company’s shares and votes after
possible share subscriptions, if new shares are
issued in the share subscription. As a result of
the share subscriptions with stock options, the
number of the Company’s shares may increase by
a maximum of 910,000 shares, if new shares are
issued in the share subscription.
The share subscription price for stock options
marked 2019A is EUR 1.70 per share, which
corresponded to the market price of the
Company’s share at the time of launching the
option plan. The share subscription price for
stock options marked 2019B is EUR 2.55 per
share, which is 50% higher than the market price
of the Company’s share. The share subscription
price will be credited to the reserve for the
company’s invested unrestricted equity. The share
subscription price will be deducted by the amount
of dividends and distribution of assets paid.
The subscription period for stock options marked
2019A will be January 1, 2022 – January 31, 2023;
and for stock options marked 2019B January 1,
2023 – January 31, 2024.
The theoretical market value of one stock option
2019A is approximately EUR 0.31 per stock option
and of one stock option 2019B, approximately EUR
0.11 per stock option. The theoretical market value
of stock options 2019 is approximately EUR 187,500
in total. The theoretical market value of one stock
option has been calculated using the Black &
Scholes stock option pricing model by taking into
account the share subscription price of a stock
option and the following input factors: share price
EUR 1.70, risk free interest rate 0%, the time to
maturity of stock options approximately 4 years
and 5 years, and volatility approximately 22%.
A member of the Executive Management Team
participating in the stock option plan must
increase their share ownership in the company
with the net profit received through the stock
options. They must invest half of the net profit
received through the stock options in the
Company’s shares until their share ownership in
the company corresponds to the value of their
annual gross salary. The share ownership must be
maintained at such level for the duration of their
employment or service.
The target group of the stock option plan includes
in total less than 15 key employees and managerial
persons. The 2019 terms and conditions of the
stock options are available on the Company’s
website: www.qpr.com/investors.
ANNUAL REPORT 2021 46
Stock option schemes and
subscription period
Stock options
granted/
outstanding at end
of the year
Returned/
exercised/
expired
Un-
distributed
One option
entitles to
purchases
shares
Share
subscription
price
2019A 1.1.2022 – 31.1.2023 437,000 2,000 0 1 1.70
2019B 1.1.2023 – 31.1.2024 473,000 30,000 0 1 2.55
Total 910,000 32,000 0
9. DEPRECIATION AND AMORTIZATION
Group, IFRS Parent company, FAS
(EUR 1,000) (EUR)
2021 2020 2021 2020
Intangible assets 1,112 817 68,559 96,731
Tangible assets
Machinery and equipment 88 72 88,004 71,987
Right-of-use assets, buildings 289 294 - -
Total 1,489 1,183 156,563 168,718
Write-downs on assets worth EUR 372 thousand were booked in 2021. No write-downs on assets were
booked in 2020.
10. OTHER OPERATING EXPENSES
Group, IFRS Parent company, FAS
(EUR 1,000) (EUR)
2021 2020 2021 2020
Non-statutory indirect employee costs 137 138 98,474 96,702
Premises 57 53 346,155 313,138
Travel expenses 32 28 28,412 23,107
Marketing and other sales promotion 153 136 153,190 136,018
Computers and software 435 427 427,037 410,440
External services 616 492 591,037 458,004
Doubtful receivables and bad debts 129 100 129,165 94,061
Capitalized product development expenses -750 -825 - -
Other expenses 158 204 142,419 185,185
Total 968 753 1,915,889 1,716,654
ANNUAL REPORT 2021 47
Other expenses include fees paid to the Company’s auditor as follows:
Auditing 32 44 27,045 40,771
Tax consulting - - - -
Other services 3 - 3,151 -
Total 35 44 30,197 40,771
The non-audit services performed by the statutory auditor KPMG Oy Ab during 2021 amounted to EUR
3,151 (2020: EUR 0).
The management and administrative service fees charged by the parent company are reported in
other operating income, not as deductions in the other services.
Product development expenses incurred during the year
Expenses recognized in profit or loss 1,365 1,225 237,393 252,164
Capitalized expenses 750 825 0 0
Total 2,115 2,050 237,393 252,164
Product development expenses mainly consist of personnel expenses. Recognized expenses do not
include amortization. The amortization of capitalized product development expenses is presented in
Note 14.
Group, IFRS Parent company, FAS
(EUR 1,000) (EUR)
(EUR 1,000) 2021 2020 2021 2020
Group, IFRS Parent company, FAS
(EUR 1,000) (EUR)
(EUR 1,000) 2021 2020 2021 2020
ANNUAL REPORT 2021 48
Group, IFRS Parent company, FAS
(EUR 1,000) (EUR)
2021 2020 2021 2020
Interest income from loans and other
receivables 0 2 130 5,997
Interest expenses from loans -14 -7 -14,333 -6,181
Other financial income and expenses -81 -12 -69,562 -10,192
Exchange rate differences -12 -0 -62,622 59,386
Total -108 -16 -146,387 49,010
Exchange rate differences in profit and loss
Exchange rate differences included in net sales -23 -95 -25,373 -90,457
Exchange rate gains in financial income 3 24 1,454 65,160
Exchange rate losses in financial expenses -15 -25 -64,076 -5,774
Total -36 -95 -87,995 -31,070
11. FINANCIAL INCOME AND EXPENSES
Recognized in profit or loss
12. INCOME TAXES
Recognized in profit or loss
Group, IFRS Parent company, FAS
(EUR 1,000) (EUR)
2021 2020 2021 2020
Current tax expense 1 -169 0 -107,384
Tax expense from previous years -1 29 0 28,070
Withholding tax - - - -
Total 0 -140 0 -79,314
ANNUAL REPORT 2021 49
Reconciliation between the income tax expense in the comprehensive income statement and the tax
expense calculated at the applicable corporate tax rate in Finland (20% in 2021 and 2020):
Group, IFRS
(EUR 1,000) 2021 2020
Result before tax -1,356 -952
Income tax calculated at the Finnish
corporate tax rate 271 190
Effect of different tax rates in foreign subsidiaries -5 -4
Effect of IFRS 16 19 -31
Other items -1 -16
Impact of change in Finnish witholding tax 0 0
Unrecognized deffered tax -284 -
Tax expense in the comprehensive income statement -0 140
13. EARNINGS PER SHARE
Undiluted earnings per share are calculated by dividing the result for the period attributable to
shareholders of the parent company by the weighted average number of shares outstanding during the
financial year.
Group, IFRS
(EUR 1,000) 2021 2020
Result for the period attributable to shareholders of the parent company
(EUR thousand) 1,356 -813
Number of shares outstanding (1,000 pcs) 11,988 11,988
Earnings per share (EUR/share)
Undiluted and diluted -0.113 -0.068
In the beginning of 2019, the Company adopted a new key employee share option scheme. In 2021 and
2020, the stock option scheme did not have a dilutive effect.
ANNUAL REPORT 2021 50
14. INTANGIBLE ASSETS
Group (EUR 1,000), IFRS
Computer
software*)
Other
intangible
assets
Capitalized
product
development Total
Book value Jan 1, 2020* 6 132 1,709 1,846
Increases and decreases 0 -113 825 712
Amortization for the period -2 -17 -734 -753
Acquisition cost Dec 31, 2020 1,061 2,596 7,507 11,164
Accum. amortization and write-downs
Dec 31, 2020 -1,054 -2,594 -5,706 -9,355
Book value Jan 1, 2021 7 2 1,801 1,809
Increases and decreases 3 0 856 859
Write-downs in 2021 0 0 -218 -218
Amortization for the period -3 -1 -735 -739
Acquisition cost Dec 31, 2021 1,064 2,596 8,363 12,023
Accum. amortization and write-downs
Dec 31, 2021 -1,057 -2,595 -6,659 -10,312
Book value Dec 31, 2021 7 1 1,704 1,711
*Impact of new IFRS amendments, an adjustment of EUR 245 thousand made to equity for SaaS
investments.
Parent company (EUR), FAS
Book value Jan 1, 2020 197,819 131,644 23,848 353,312
Increases 114,825 - - 114,825
Decreases - -112,320 - -112,320
Amortization for the period -64,546 -17,036 -15,149 -96,731
Acquisition cost Dec 31, 2020 1,331,427 1,552,592 365,293 3,249,312
Accum. amortization and write-downs
Dec 31, 2020 -1,083,330 -1,550,304 -356,594 -2,990,226
Book value Jan 1, 2021 248,098 2,288 8,699 259,087
Increases 0 0 0 0
Decreases 0 0 0 0
Amortization for the period -63,799 -1,281 -3,479 -68,559
Acquisition cost Dec 31, 2021 1,331,427 1,552,592 365,293 3,249,312
Accum. amortization and write-downs
Dec 31, 2021 -1,147,128 -1,551,585 -360,073 -3,058,785
Book value Dec 31, 2021 184,299 1,007 5,219 190,526
ANNUAL REPORT 2021 51
15. GOODWILL
Group (EUR 1,000) 2021 2020
Acquisition cost Jan 1 513 513
Write-downs -155 -
Acquisition cost Dec 31 358 513
Book value Dec 31 358 513
Goodwill arises from the acquisition of Nobultec Ltd in 2011 and it has been allocated to the Process
Mining (formerly known as Process Intelligence) business unit.
Goodwill has been tested for impairment in the last quarter of 2021 and the discount rate used was 11.14%
(2020: 11.1) before taxes. A EUR 155 thousand write-down was booked on goodwill.
The recoverable amount evaluated in the impairment test is based on the 2022 forecast and on
subsequent development assessed in line with strategy. Key variables used in the calculations are the
growth rates of net sales, expenses, and EBITDA. The growth of net sales has been determined by taking
into account the company’s actual performance, market position, and growth potential in market.
The net sales growth of the Process Mining business unit is planned to be roughly in line with the
Company’s strategic target for the planned period. The recoverable amount based on cash flows for the
next five years is about EUR 1.4 million.
ANNUAL REPORT 2021 52
Group (EUR 1,000), IFRS
Machinery and
equipment
Right-of-use
assets:
buildings
Book value Jan 1, 2020 90 281
Increases 158 224
Depreciation for the period -72 -294
Acquisition cost Dec 31, 2020 2,083 786
Accum. depreciation and write-downs Dec 31, 2020 -1,906 -575
Book value Jan 1, 2021 176 211
Increases 83 226
Depreciation for the period -88 -289
Acquisition cost Dec 31, 2021 2,166 1,012
Accum. depreciation and write-downs Dec 31, 2021 -1,994 -864
Book value Dec 31, 2021 171 148*
Parent company (EUR), FAS
Book value Jan 1, 2020 89,995
Increases 157,571
Depreciation for the period -71,987
Acquisition cost Dec 31, 2020 2,042,609
Accum. depreciation and write-downs Dec 31, 2020 -1,867,029
Book value Jan 1, 2021 175,580
Increases 83,454
Depreciation for the period -88,004
Acquisition cost Dec 31, 2020 2,126,063
Accum. depreciation and write-downs Dec 31, 2020 -1,955,033
Book value Dec 31, 2021 171,030
*) Right-of-use assets Note 28 Leases
16. TANGIBLE AND RIGHT-OF-USE ASSETS
ANNUAL REPORT 2021 53
17. SHARES IN SUBSIDIARIES AND OTHER ENTITIES
The parent company of the Group is QPR Software Plc.
Parent company
Subsidiaries Domicile 2021 2020
Owned directly by the parent company:
QPR CIS Oy Helsinki, Finland 100% 100%
QPR Software AB Stockholm, Sweden 100% 100%
QPR Services Oy Helsinki, Finland 100% 100%
QPR Software Inc. San Jose, CA, USA 100% 100%
QPR Software Limited* London, UK 100% 100%
*established June 2, 2020
Parent company
(EUR)
Shares in subsidiaries 2021 2020
Acquisition cost Jan 1 3,581,263 3,581,152
Increases 0 111
Acquisition cost Dec 31 3,581,263 3,581,263
Book value Dec 31 3,581,263 3,581,263
Other shares
Acquisition cost Jan 1 4,562 4,562
Acquisition cost Dec 31 4,562 4,562
Book value Dec 31 4,562 4,562
Total book value of shares Dec 31 3,585,825 3,585,825
ANNUAL REPORT 2021 54
Group, IFRS Parent company, FAS
(EUR 1,000) (EUR)
2021 2020 2021 2020
Jan 1 273 136 166,817 87,503
Recorded in comprehensive income - 137 - -
Recorded in income statement - - - 79,314
Recorded in equity - - -166,817 -
Dec 31 273 273 0 166,817
18. LONG-TERM RECEIVABLES
Group, IFRS Parent company, FAS
(EUR 1,000) (EUR)
2021 2020 2021 2020
Receivables from the Group companies - - 225,000 225,000
Breakdown of the parent company’s receivables
from Group companies:
QPR CIS Oy - - 225,000 225,000
Total - - 225,000 225,000
19. DEFERRED TAX ASSETS AND LIABILITIES
Deferred tax assets, based on tax-loss carryforwards, have changed as follows:
A deferred tax asset of EUR 273 thousand has been recognized in the balance sheet for confirmed and
probable unused losses of the Group’s Finnish Companies. Management estimates that deferred tax
losses will be available by 2027. The profit forecasts used in the evaluation come from the 2022 budget
and 2023 – 2026 strategy figures.
In 2021, no tax receivables have been booked due to the principle of precaution.
ANNUAL REPORT 2021 55
20. TRADE AND OTHER RECEIVABLES
Group, IFRS Parent company, FAS
(EUR 1,000) (EUR)
2021 2020 2021 2020
Trade receivables 2,006 2,564 1,828,467 2,522,485
Credit loss provision -45 -53 -44,715 -53,170
Accrued income and prepaid expenses 163 40 137,939 37,083
Other receivables 570 350 393,274 254,146
Current receivables from Group companies - - 385,551 10,284
Total 2,694 2,901 2,700,517 2,770,827
Geographical breakdown of trade receivables:
Finland 828 1,151 828,213 1,151,055
Other European countries 667 604 543,725 591,117
Countries outside Europe 511 809 456,529 780,313
Total 2,006 2,564 1,828,467 2,522,485
Currency breakdown of trade receivables:
Group, IFRS Parent company, FAS
(EUR 1,000) (EUR 1,000)
(EUR 1,000) 2021 % 2020 %
EUR (Euro) 1,505 75.0 1,749 68.2
USD (U.S. Dollar) 290 14.5 677 26.4
SEK (Swedish Krona) 45 2.2 33 1.3
ZAR (South African Rand) 13 0.7 88 3.4
JPY (Japanese Yen) 13 0.6 13 0.5
GBP (Pound Sterling) 42 2.1 2 0.1
RUB (Russian Ruble) 2 0.1 1 0.0
AED (United Arab Emirates Dirham) 96 4.8 0 0.0
Total 2,006 100 2,564 100.0
Age analysis of trade receivables:
Not due 1,605 80.0 1,822 71.1
0 - 90 days overdue 291 14.5 299 11.7
90 - 180 days overdue 14 0.7 6 0.2
More than 180 days overdue 96 4.8 436 17.0
Total 2,006 100 2,564 100
ANNUAL REPORT 2021 56
Fair value of trade receivables: The initial book value of trade receivables equals fair value because the
effect of discounting is not material considering maturity.
Credit losses and provision of credit losses:
The Group recognizes expected credit loss provision based on the age of the trade receivable as well as
experience.
Group, IFRS
Credit loss expectation
based on trade receivables
2021, EUR 1,000
Credit loss expectation
based on age of trade
receivables, %
Not due 0 0.0
0 - 60 days overdue 1 0.5
60 - 120 days overdue 0 1.0
120 - 180 days overdue 0 2.0
>180 days overdue 10 10.0
Total 12
In addition to the maturity-based matrix for trade receivables, in 2021, the Company has recognized a
provision for credit losses worth EUR 33 thousand (2020: 53) based on experience.
Credit losses of EUR 129 thousand (2020: 100) on trade receivables have been recognized in the Group’s
result.
Breakdown of the parent company’s accrued income and prepaid expenses:
Parent company, FAS
(EUR)
2021 2020
Accrued income 34,925 33,310
Prepaid expenses 103,014 3,772
Total 137,939 37,083
Breakdown of the parent company’s receivables from Group companies:
Parent company, FAS
(EUR)
2021 2020
QPR Services Oy 385,551 -
QPR CIS Oy - 10,284
Total 385,551 10,284
ANNUAL REPORT 2021 57
21. CASH AND CASH EQUIVALENTS
Group, IFRS Parent company, FAS
(EUR 1,000) (EUR)
2021 2020 2021 2020
Bank accounts 441 185 384,421 65,640
Total 441 185 384,421 65,640
The parent company has a revolving credit facility of EUR 1.5 million with Nordea for short-term financing
needs. The funds were used at the end of 2021: EUR 1.5 million (at the end of 2020: EUR 0.7 million). The
agreement for the revolving credit facility was renewed in February 2022.
The Group has a revolving credit facility of EUR 0.5 million, out of which EUR 0 was used at the end of
2021 (2020: 0).
22. BALANCE SHEET ITEMS RELATED TO CUSTOMER CONTRACTS
Group, IFRS Parent company, FAS
(EUR 1,000) (EUR)
2021 2020 2021 2020
Trade receivables 1,961 2,510 1,783,752 2,469,315
Contract assets 303 295 302,796 294,685
Contract liabilities -627 -527 -540,538 -492,535
Contract assets are items for which performance obligations have already been fulfilled, but the
customers have not yet been invoiced. In QPR Software, contract assets are usually related to consulting
services, which are invoiced after the performance obligations have been fulfilled.
Contract liabilities, on the contrary, are items which have already been invoiced, but for which
performance obligations have not yet been entirely fulfilled. In QPR Software, contract liabilities are
usually related to maintenance or SaaS fees, which are invoiced in advance and are recognized as
revenue over the duration of the contract period.
23. SHAREHOLDERS’ EQUITY
The Company has one series of shares and the maximum value of share capital is EUR 1,359 thousand.
All issued shares have been paid in full. In 2021 and 2020, the total amount of shares issued was
12,444,863.
Other funds
Includes the reserve fund of the subsidiary QPR Software AB.
Treasury shares
Treasury shares include the purchase price of shares repurchased by the Group.
Capitalized product development expenses
Capitalized product development expenses include those product development expenses activated in
the parent company balance sheet. In according with the Finnish accounting legislation, these must be
deducted when calculating distributable funds.
ANNUAL REPORT 2021 58
Calculation of distributable funds
Parent company, FAS
EUR
2021 2020
Retained earnings 1,006,006 1,400,447
Result for the period -583,036 -394,512
Deferred taxes for previous financial years -166,817 -
Dividends paid 71 70
Treasury shares -439,307 -439,307
Invested unrestricted equity fund 5,347 5,347
Activated product development expenses - -
Distributable funds -177,736 572,046
24. OTHER NON-CURRENT LIABILITIES AND INTREREST-BEARING LOANS
Current interest-bearing loans
Group, IFRS Parent company, FAS
(EUR 1,000) (EUR)
2021 2020 2021 2020
Loans from banks, next year repayment 1,500 700 1,500,000 700,000
Lease liabilities 182 247 - -
Total 1,682 947 1,500,000 700,000
Interest-bearing loans consist of a 1.1% fixed-interest short-term bank loan.
The Group has a EUR 0.5 million revolving credit facility at its disposal, of which EUR 0 was in use at the
end of 2021 (2020: 0).
The parent company has a EUR 1.5 million revolving credit facility agreement at its disposal, of which EUR
1.5 million was in use at the end of 2020. The agreement for the revolving credit facility was renewed in
February 2022.
The carrying amount of liabilities do not materially deviate from their fair value due to the short
maturities of the instruments.
ANNUAL REPORT 2021 59
Repayment schedule of right-of-use liabilities
Group, IFRS
(EUR 1,000)
2021 2020
Nominal
interest
rate Maturity
Nominal
value Book value
Nominal
value Book value
Lease liabilities 2.00%
2020-
2021 182 182 247 247
Interest-bearing right-of-use
liabilities 182 182 247 247
25. TRADE PAYABLES AND OTHER LIABILITIES
Group, IFRS Parent company, FAS
(EUR 1,000) (EUR)
2021 2020 2021 2020
Trade payables 196 216 180,449 196,801
Accrued expenses and prepaid income 2,293 2,305 1,977,046 1,999,903
Advances received 627 527 540,538 492,535
Other liabilities 572 318 463,163 63,368
Current liabilities to Group companies - - 1,414,769 1,865,032
Total 3,689 3,366 4,575,964 4,617,638
The amount of trade payables in foreign currencies was low in 2021 and 2020.
The carrying amount of trade payables and other liabilities do not materially deviate from their fair
value due to the short maturities of the instruments.
Breakdown of the parent company’s accrued expenses and prepaid income:
Parent company, FAS
(EUR)
2021 2020
Holiday pay, including social costs 607,495 705,839
Bonuses, including social costs 164,472 138,818
Prepaid income 1,151,259 1,128,926
Other accrued expenses 53,820 26,320
Total 1,977,046 1,999,903
ANNUAL REPORT 2021 60
26. CLASSIFICATION OF FINANCIAL ASSETS AND LIABILITIES
The table discloses carrying amounts of financial assets and financial liabilities. The fair value hierarchy
level for equity investments measured at fair value is 3. The carrying amount of other financial assets
and financial liabilities is a reasonable estimate of their fair value. The financial assets and liabilities are
classified in accordance with IFRS 9.
December 31, 2021 Book value
Note
At fair value through
profit or loss
Recognised at
amortised cost Total
FINANCIAL ASSETS
Financial assets measured at fair value
Equity investments 17 5 5
Total 5 5
Financial assets not measured at fair value
Trade and other receivables 20 1,961 1,961
Cash and cash equivalents 21 441 441
Total 2,402 2,402
FINANCIAL LIABILITIES
Financial liabilities not measured at fair value
Bank borrowings 24 1,500 1,500
Right-of-use liabilities 24 182 182
Trade payables 25 196 196
Total 1,878 1,878
Breakdown of the parent company’s liabilities to Group companies:
Parent company, FAS
(EUR)
2021 2020
QPR Services Oy 0 523,190
QPR CIS Oy 16,313 0
QPR Software AB 664,531 661,915
QPR Software Inc 730,268 678,108
QPR Software Limited 3,656 1,818
Total 1,414,769 1,865,032
ANNUAL REPORT 2021 61
27. ADJUSTMENTS TO THE CASH FLOW FROM OPERATING ACTIVITIES
Group, IFRS
(EUR 1,000)
2021 2020
Corporate taxes 0 -140
Other items 29 92
Total 29 -49
28. COMMITMENTS AND CONTINGENT LIABILITIES
Group, IFRS Parent company, FAS
(EUR 1,000) (EUR)
2021 2020 2021 2020
Business mortgage (held by the company) 2,386 2,387 2,337,288 2,337,288
Lease liabilities and rental commitments
Maturing within one year 23 7 181,020 236,946
Maturing during in 1-5 years 23 7 22,974 14,688
Total 2,432 2,401 2,541,282 2,588,922
Rental commitments include office rental agreements:
Rental agreement (January 1, 2017), valid for the time being. The notice period is 6 months.
Rental agreement (December 1, 2018), valid for the time being. The notice period is 6 months.
Security deposits totaling EUR 13 thousand are included in other current receivables in the balance sheet.
The Group and the parent company had no derivative contracts in the end of the financial years 2021 and
2020.
ANNUAL REPORT 2021 62
29. LEASE AGREEMENTS
Leases in the Balance Sheet
Group, IFRS Group, IFRS
(EUR 1,000) (EUR 1,000)
Dec 31, 2021 Dec 31, 2020
Assets
Non-current assets
Right-of use assets, buildings 148 212
Total 148 212
Equity and liabilities
Lease liabilities, current 182 247
Total 182 247
Leases in the Income Statement
1 – 12 2021 1 – 12 2020
Expenses related to short term leases and low value asset leases 0 -10
Depreciation of right-of-use assets -289 -294
Interest expenses -5 -4
Total -295 -308
The total cash outflow for leases in 2021 was EUR 295 thousand (2020: 262).
30. FINANCIAL RISK MANAGEMENT
The International business operations of QPR Group are exposed to risks typical in normal international
transactions. Financial risk management aims to secure sufficient financing cost-effectively and to
monitor, and when necessary, to mitigate the materializing risks. Risk management is a centralized
responsibility of the Group’s financing function and the CEO. The general risk management policies
are approved by the QPR Software Plc Board of Directors. The Board is also responsible for supervising
the adequacy, appropriateness, and effectiveness of the Group’s risk management
Foreign exchange risk
The main sales currency for the Group is Euro and most purchases are made in Euros.
The majority of trade receivables is in Euros (EUR). During the financial year, the most significant
invoicing currencies after EUR were the U.S. Dollar (USD), the United Arab Emirates Dirham (AED), and
the Swedish Krona (SEK). If the value of USD, AED, and SEK against EUR were to decrease by 10%, and
the share of currencies were to remain on the same level, the value of trade receivables would decrease
by EUR 43 thousand, equaling 2.1% of the total value of all trade receivables. Correspondingly, if the
value of all non-EUR invoicing currencies were to decrease by 10%, the value of trade receivables would
ANNUAL REPORT 2021 63
decrease by EUR 50 thousand. A breakdown of trade receivables by currency is presented in Note 20
In accordance with the foreign exchange risk policy approved by the Board of Directors, the Company
may engage in foreign currency hedging. The purpose of currency hedging is to reduce the
uncertainty brought by exchange rates and to minimize the adverse impact of exchange rate changes
to the Group’s cash flow, financial results, and equity. Management regularly reviews the Company’s
foreign exchange risks, taking into account the hedging costs. At the end of 2021 and 2020, the
Company did not have any hedging instruments
Interest rate risk
The impact of interest rate changes on the Group result is insignificant and the Group did not take any
hedging measures during the financial year.
Liquidity risk
Liquidity risk is defined as financial distress or extraordinarily high financing costs due to the shortage
of liquid funds in a situation where business conditions unexpectedly deteriorate and require
financing.
The purpose of liquidity risk management is to maintain sufficient liquidity and to ensure that funds
are continuously available to finance business operations quickly enough. QPR maintains sufficient
liquidity through efficient cash management and deposits. The Group’s interest-bearing loans do not
include any covenants.
In the beginning of the year, the Company renegotiated a revolving credit facility (EUR 1.5 million) with
Nordea. The agreement was signed in February 2022.
Maturity schedule of liabilities (amounts are undiscounted):
Group, IFRS
(EUR 1,000) Book value 0 – 6 months 7 – 12 months
Trade and other payables 196 196 0
Bank borrowings, revolving credit facility 1,500 1,500 0
Lease liabilities (IFRS16) 182 182 0
Total 1,878 1,878 0
Operative credit risk
The Group’s international business operations are by their nature exposed to reasonable credit risk
related to individual partners. However, the Group’s customer base and reseller network is broad and
spread over several market areas. Thus, the Group’s trade receivables are collected from a large number
of resellers and customers in several market areas, and according to management’s estimate there
are no concentrations of reseller, customer, or geographical risks. In addition, the continuous and
active monitoring of receivables and credit limits aim to mitigate the Group’s credit risks. The Group’s
maximum credit risk corresponds to the book value of trade receivables. The impact of COVID-19 on
credit losses in 2021 has been minor. Additional information on the Group’s trade receivables is presented
in Note 20.
ANNUAL REPORT 2021 64
31. CAPITAL MANAGEMENT
Group, IFRS
(EUR 1,000) 2021 2020
Cash and cash equivalents 441 185
Net liabilities 1,241 762
Shareholders’ equity 430 1,759
Gearing, % 288.5 38.0
Equity ratio, % 8.3 34.6
Total balance sheet 5,800 6,317
The development of the Group’s capital structure is monitored, in particular, through gearing and
equity ratio.
32. EVENTS AFTER THE REPORTING PERIOD
At the end of the financial year on December 28, 2021, the Company announced that it would start
company-wide co-operation negotiations in Finland in accordance with the Finnish Co-operation
Act. The goal was to change the Company’s organizational structure to enable effectively executing
investment aiming at the Company’s growth and operational scalability.
The Company announced the end of the negotiations on January 20, 2022. As a result of the
negotiations, the organization will start operating based on its new functional structure as of February
1, 2022. The negotiations concerned 81 people and resulted in a decision to terminate the employment
of a total of three (3) people and to create eight (8) new positions. The company estimates that the
non-recurring costs related to the restructuring of operations may amount to a maximum of EUR
100,000. Non-recurring costs will be recognized in first quarter results.
In the beginning of the year, the Company renegotiated a revolving credit facility (EUR 1.5 million) with
Nordea. The agreement was signed in February 2022.
On February 14, 2022, the Company announced a profit warning due to the reassessment of a major
project’s revenue recognition made in connection with preparing financial statements, as well as
write-downs related to the goodwill of Nobultec Oy, acquired in 2011, and the balance sheet value of
capitalized product development expenses.
ANNUAL REPORT 2021 65
33. KEY FIGURES OF THE GROUP 2019–2021
Group, IFRS
(EUR 1,000) 2021 2020* 2019
Net sales 9,140 8,971 9,513
Growth of net sales, % 1.9 -5.7 -5.3
Operating result -1,248 -936 -213
% of net sales -13.7 -10.4 -2.2
Profit or loss before tax -1,356 -952 -240
% of net sales -14.8 -10.6 -2.5
Result for the period -1,356 -812 -161
% of net sales -14.8 -9.0 -1.7
Return on equity, % -111.4 -34.1 -5.7
Return on investments, % -49.3 -28.0 -5.9
Cash and cash equivalents 441 185 1,035
Net liabilities 1,241 762 -251
Equity 430 1,759 2,762
Gearing, % 288.5 38.0 -9.1
Equity ratio, % 8.3 34.6 44.5
Total balance sheet 5,800 6,317 7,007
Investment in intangible and
tangible assets 924 1,210 1,156
% of net sales 10.1 13.5 12.2
Research and development expenses 2,115 2,050 2,293
% of net sales 23.1 22.9 24.1
Personnel average for period 80 86 82
Personnel at the beginning of period 88 83 84
Personnel at the end of period 80 88 83
*Adjusted key figures
ANNUAL REPORT 2021 66
34. PER-SHARE KEY FIGURES 2019–2021
Group, IFRS
2021 2020 2019
Earnings per share, EUR -0.113 -0.068 -0.013
Equity per share, EUR 0.035 0.161 0.222
Dividend per share *, EUR 0.000 0.000 0.000
Dividend as % of result 0.0 0.0 0.0
Effective dividend yield, % 0.0 0.0 0.0
Price/earnings ratio (P/E) -16.4 -33.1 -173.7
Development of share price
Average price, EUR 1.97 2.01 2.04
Lowest closing price, EUR 1.48 1.70 1.65
Highest closing price, EUR 2.38 2.50 2.48
Closing price on Dec 31, EUR 1.85 2.24 2.34
Market capitalization on Dec 31, EUR 1,000 22,178 26,853 28,052
Development of trading volume
Number of shares traded, 1,000 pcs 3,324 1,403 1,091
% of all shares 27.7 11.7 9.1
Number of shares on Dec 31, 1,000 pcs 12,445 12,445 12,445
Average number of shares outstanding 11,988 11,988 11,988
*) 2021: The Board of Director’s proposal in the Annual General Meeting.
35. RECONCILIATION OF ALTERNATIVE KEY FIGURES
2021 2020
Equity ratio, %
Total Equity 430 1,759
balance sheet total 5,800 6,317
Advances received 627 527
Total equity x 100 8.3 % 34.6 %
Balance sheet total - advances received
ANNUAL REPORT 2021 67
SIGNATURES OF BOARD OF DIRECTORS’
AND FINANCIAL STATEMENTS
Helsinki, Finland, March 16, 2022
QPR Software Plc
Board of Directors
Pertti Ervi
Chairman of the Board
Antti Koskela
Board member
Jussi Vasama
Chief Executive Officer
AUDITOR’S NOTE
An auditor’s report concerning the performed audit has been given today.
Helsinki, Finland, February 28, 2022
KPMG Oy Ab
Authorized Public Accountants
Miika Karkulahti
Authorized Public Accountant
Matti Heikkonen
Board member
Jukka Tapaninen
Board member
ANNUAL REPORT 2021 68
Definition of Key Indicators
Return on equity (ROE), %:
Result for the period x 100
Shareholders’ equity (average)
Return on investment (ROI), %:
Result before taxes + interest and other financial expenses x 100
Balance sheet total – non-interest bearing liabilities (average)
Equity ratio, %:
Total equity x 100
Balance sheet total – advances received
Gearing:
Interest-bearing liabilities – cash and cash equivalents
Gearing, %:
(Interest-bearing liabilities - cash and cash equivalents) x 100
Total equity
Earnings per share, euro:
Result for period
Weighted average number of shares outstanding during the year
Equity per share, euro:
Equity attributable to shareholders of the parent company
Number of shares outstanding at the end of the year
Dividend per share, euro:
Total dividend paid
Number of shares outstanding at the end of the year
Dividend per result, %:
Dividend per share x 100
Earnings per share
Effective dividend yield, %:
Dividend per share x 100
Share price at the end of the year
Price/earnings ratio (P/E):
Share price at the end of the year
Earnings per share
ANNUAL REPORT 2021 69
Alternative performance measures
The Group reports certain performance measures that are not based on IFRS (i.e. alternative performance
measures). Alternative performance measures are used to provide relevant information to interested
parties and improve comparability of reporting periods. Alternative performance measures may not be
considered as a substitute for measures of performance in accordance with IFRS. Definitions for
alternative measures can be found under the title ”Definition of key indicators”.
Market capitalization:
Total number of shares outstanding x share price at the end of the year
Turnover of shares, % of all shares:
Number of shares traded x 100
Average number of shares outstanding during the year
ANNUAL REPORT 2021 70
AUDITOR’S REPORT
TO THE ANNUAL GENERAL MEETING OF QPR SOFTWARE PLC
REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS
Opinion
We have audited the financial statements of QPR Software Plc (business identity code 0832693-7) for
the year ended December 31, 2021. The financial statements comprise the consolidated balance sheet,
statement of comprehensive income, statement of changes in equity, statement of cash flows and
notes, including a summary of significant accounting policies, as well as the parent company’s balance
sheet, income statement, statement of cash flows 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.
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
ANNUAL REPORT 2021 71
key audit matters below.
THE KEY AUDIT MATTER
HOW THE MATTER WAS ADDRESSED IN
THE AUDIT
Revenue recognition and valuation of trade receivables - Refer to Accounting principles for the
consolidated financial statements and notes 2,3 and 20
The consolidated net sales consist of software
license sales, software maintenance services,
cloud (SaaS) services and consulting services.
Revenue is recognized when (or as) the control of
the service is transferred to the customer, which
may be over time or at a point in time.
Application of revenue recognition principles
requires management judgement especially in
identifying separate performance obligations,
determining stand-alone selling price as well as
in analyzing terms and conditions of the contract
to determine the appropriate timing to recognize
revenue.
The revenue recognition principles and their
consistent application have a significant impact
on the net sales and profitability as reported
by QPR Software Plc. Therefore, the revenue
recognition is one of the key areas that our audit
is focused on.
Trade receivables were in total EUR 2.0 million as
at December 31, 2021 representing a significant
part of the balance sheet. Regardless the
fact that there are no significant credit losses
incurred in the past, there may be valuation risk
associated with trade receivables. Due to the
significance of the carrying amount and over
180 days past due receivables amounting to EUR
0.1 million at the balance sheet date December
31, 2021, the valuation and monitoring of trade
receivables is one of the key areas that our audit
is focused on.
Our audit procedures included, among others:
We evaluated the revenue recognition
principles by reference to applicable financial
reporting standards and contract terms.
Our audit procedures included testing
of key controls designed to ensure the
completeness and accuracy of net sales.
We completed detailed testing
procedures over revenue contracts that we
selected based on size, timing and complexity.
In respect of selected contracts, we assessed
the identification of performance obligations,
tested the accuracy of invoicing and compared
revenue transactions recorded with contractual
terms and traced them to supporting evidence of
delivery.
We evaluated the monitoring routines for
trade receivables and tested the effectiveness of
the key internal controls. We also analyzed the
trade receivables and compared the receivables
to the confirmation letters received from the
selected third parties. We also followed up the
payments received after year-end 2021 in respect
of selected trade receivables.
In addition, we assessed the adequacy
and accuracy of disclosures related to revenue
recognition and trade receivables in the
consolidated financial statements.
ANNUAL REPORT 2021 72
Valuation of capitalised product development costs and valuation of goodwill (Refer to
Accounting principles for the consolidated financial statements and notes 9, 10, 14 and 15)
Group companies develop software and
consulting service products to be used by their
customers. The total product development
costs capitalized amounted to EUR 0.8 million
in the financial year. The capitalized product
development costs are amortized over four years
on a straight-line basis. After the impairment loss
of EUR 0.2 million recorded at the year-end 2021
the carrying amount of the capitalized product
development costs, EUR 1.7 million, represents
396 percent of the consolidated equity.
Goodwill amounts to EUR 0.4 million after the
EUR 0.2 million impairment loss recorded on
December 31, 2021 and represents 83 percent of
the consolidated equity.
Goodwill and capitalized product development
costs are tested at least annually for impairment.
Due to the significant carrying amount and
management judgment involved in determining
recoverable amounts and useful lives, the
valuation of capitalized product development
costs is one of the key areas that our audit is
focused on.
Our audit procedures included, among others:
We evaluated the appropriateness of the
capitalization principles, tested the accuracy of
cost calculations and assessed the amortization
periods and amortization methods used.
We evaluated testing calculations
prepared by management and the
reasonableness of the underlying assumptions,
and assessed the forecasts prepared by
management by comparing the actual results
with the original forecasts.
Furthermore, we considered the
adequacy and appropriateness of the Group’s
notes in respect of goodwill, testing calculations
and intangible assets.
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 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 Financial Statements
Our objectives are to obtain reasonable assurance on 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 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 scepticism throughout the audit. We also:
ANNUAL REPORT 2021 73
Identify and assess the risks of material misstatement of the financial statements, whether
due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting
a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may
involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion
on the effectiveness of the parent company’s or the group’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by management.
Conclude on the appropriateness of the Board of Directors’ and the Managing Director’s
use of the going concern basis of accounting and based on the audit evidence obtained, whether
a material uncertainty exists related to events or conditions that may cast significant doubt on the
parent company’s or the group’s ability to continue as a going concern. If we conclude that a material
uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in
the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions
are based on the audit evidence obtained up to the date of our auditor’s report. However, future events
or conditions may cause the parent company or the group to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the financial statements, including
the disclosures, and whether the financial statements represent the underlying transactions and
events so that the financial statements give a true and fair view.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities
or business activities within the group to express an opinion on the consolidated financial statements.
We are responsible for the direction, supervision and performance of the group audit. We remain solely
responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned
scope and timing of the audit and significant audit findings, including any significant deficiencies in
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 have been the auditors appointed by the Annual General Meeting since 2006, and our
appointment represents a total period of uninterrupted engagement of 16 years.
Other Information
The Board of Directors and the Managing Director are responsible for the other information. The other
information comprises the report of the Board of Directors and the information included in the Annual
Report, but does not include the financial statements and our auditor’s report thereon. We have
obtained the report of the Board of Directors prior to the date of this auditor’s report, and the Annual
Report is expected to be made available to us after that date. Our opinion on the financial statements
ANNUAL REPORT 2021 74
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.
Other opinions
We support the adoption of the financial statements. The proposal by the Board of Directors regarding
the treatment of distributable funds is in compliance with the Limited Liability Companies Act. We
support that the Board of Directors of the parent company and the Managing Director be discharged
from liability for the financial period audited by us.
Helsinki, February 28, 2022
KPMG OY AB
MIIKA KARKULAHTI
Authorized Public Accountant, KHT
NOTE! This document is an English translation of the Finnish auditor’s report. Only the Finnish version
of the report is legally binding.
ANNUAL REPORT 2021
INFORMATION FOR SHAREHOLDERS
QPR SOFTWARE OYJ:N OSAKE
The share of QPR Software Plc
The share of QPR Software Plc is quoted on the
main list of Nasdaq Helsinki, in the Information
technology sector, Small Cap segment. Trading
started on March 8, 2002
Trading code: QPR1V
ISIN code: FI0009008668
Annual General Meeting
The Annual General Meeting will be held on
Wednesday April 6, 2022, starting at 1:00 p.m. at
the Company’s headquarters Huopalahdentie 24,
00350 Helsinki, Finland.
In order to prevent the spread of the Covid-19
pandemic, the Annual General Meeting will
be organized so that the shareholders or their
proxy representatives cannot be present at the
meeting venue. Shareholders can participate in
the meeting and use their shareholder rights in
connection with the General Meeting by voting
in advance (either personally or through a proxy
representative), by submitting counterproposals
in advance and by asking questions in
advance in the manner described below. Proxy
representatives must also vote in advance in the
manner described below.
Each shareholder who is registered on the record
date of the General Meeting, on March 25, 2022,
in the Company’s shareholders’ register held by
Euroclear Finland Oy, has the right to participate
in the General Meeting. A shareholder, whose
shares are registered on the shareholder’s
personal Finnish book-entry account, is registered
in the Company’s shareholders’ register.
Instructions for holders of nominee-registered
shares are set out below under Section “Holders
of nominee-registered shares”.
Registration for the General Meeting and
advance voting will begin on March 22, 2022 at
9.00 a.m. (EET). A shareholder who is registered
in the Company’s shareholders’ register and who
wishes to participate in the General Meeting,
must register for the General Meeting and vote in
advance no later than by March 30, 2022 at 4.00
p.m. (EEST), by which time the votes must have
been received.
A shareholder whose shares are registered on the
shareholder’s Finnish book-entry account can
register and vote in advance on certain matters
on the agenda of the General Meeting from
March 22, 2022 at 9.00 a.m. (EET) until March 30,
2022 at 4.00 p.m. (EEST) by the following means:
a. through The Company’s website at www.
qpr.com
Online registration and voting in advance
require that the shareholders or their statutory
representatives or proxy representatives use
strong electronic authentication either by
Finnish or Swedish bank ID or mobile certificate.
b. by mail or email
A shareholder may send the advance voting form
available on the Company’s website to Innovatics
Oy by email at agm@innovatics.fi or by regular
mail to Innovatics Oy, Yhtiökokous/QPR Software
Oyj, Ratamestarinkatu 13 A, FI-00520 Helsinki.
If the shareholder participates in the General
Meeting by sending the votes in advance to
Innovatics Oy, the submission of the advance
votes before the end of the registration and
advance voting period, i.e. before March 30, 2022
at 4.00 p.m. (EET) constitutes registration for the
General Meeting, provided that the shareholder’s
message includes the information requested on
the advance voting form required for registration.
The advance voting form and instructions
relating to the advance voting will be available
on the Company’s website at www.qpr.com no
later than on March 22, 2022 at 9.00 a.m. (EET).
Additional information on the registration
and advance voting is available during the
registration period by telephone at +358 10 2818
909 on business days during 9:00 a.m. until 12:00
noon and from 1:00 p.m. until 4:00 p.m.
If a shareholder participates in the General
Meeting by voting in advance in accordance
with the applicable instructions before the expiry
of the registration and advance voting period,
this constitutes due registration for the General
Meeting, provided that all information required
for registration and advance voting is duly
provided. No other notification of participation is
required for the General Meeting.
In connection with the registration, a shareholder
or a proxy representative is required to provide
the requested personal information, such as the
75
ANNUAL REPORT 2021 76
name, date of birth, business ID and contact
details of the shareholder. The personal data
given to QPR Software or to Innovatics Oy by
shareholders and proxy representatives is only
used in connection with the Annual General
Meeting and with the processing of related
necessary registrations.
Proxy representative and powers of attorney
A shareholder may participate and make use of
his or her rights as a shareholder at the General
Meeting by proxy.
Also, the proxy representative must vote in
advance in the manner set out in this notice.
Proxy representatives must use strong electronic
authentication when registering for the meeting
and voting in advance online, after which they
can register and vote in advance on behalf of the
shareholder they represent.
A proxy representative shall produce a dated
proxy document or otherwise in a reliable
manner demonstrate his/her right to represent
the shareholder at the Annual General
Meeting. Statutory right of representation
may be demonstrated by using the suomi.
fi e-Authorisations service which is in use
in the online registration service. Should a
shareholder participate in the meeting by means
of several proxy representatives representing
the shareholder with shares in different book-
entry accounts, the shares by which each proxy
representative represents the shareholder shall
be identified in connection with the registration
for the Annual General Meeting.
Templates for a Power of Attorney as well as for
instructions to vote are available on the website
of the Company www.qpr.com no later than as
from March 22, 2022 onwards. Possible proxy
documents shall be delivered primarily as an
attachment in connection with the electronic
registration and advance voting or alternatively
by email to agm@innovatics.fi or as originals by
regular mail to the address Ratamestarinkatu
13 A FI-00520 Helsinki before the end of the
registration and advance voting period, i.e. before
March 30, 2022 at 4.00 p.m. (EET), by which time
the proxy documents must have been received.
If a shareholder delivers a proxy to the Company
in accordance with the applicable instructions
before the expiry of the registration and advance
voting period, this constitutes due registration for
the General Meeting, provided that all required
information is included in the proxy documents.
Further information will also be available on the
Company’s website at www.qpr.com.
Holders of nominee registered shares
A holder of nominee registered shares has the
right to participate in the General Meeting by
virtue of such shares, based on which he/she on
the record date of the Annual General Meeting,
i.e. on March 25, 2022, would be entitled to be
registered in the shareholders’ register of the
Company held by Euroclear Finland Oy. The
right to participate in the General Meeting
requires, in addition, that the shareholder on
the basis of such shares has been registered
into the temporary shareholders’ register held
by Euroclear Finland Oy at the latest by April
1, 2022, at 10:00 a.m. (EEST). With regard to
nominee-registered shares, this constitutes due
registration for the General Meeting.
A holder of nominee registered shares is
advised to request without delay all necessary
instructions regarding the temporary registration
in the shareholder’s register of the Company,
the issuing of proxy documents and registration
for the General Meeting from his/her custodian
bank. The account management organization
of the custodian bank has to register a holder
of nominee registered shares, who wants to
participate in the General Meeting, into the
temporary shareholders’ register of the Company
within the registration period applicable to
nominee-registere d shares. The account
management organization of the custodian
bank shall also take care of the voting in advance
on behalf of the holders of nominee-registered
shares within the registration period applicable
to nominee-registered shares, i.e. by April 1, 2022
at 10.00 a.m. (EEST) at the latest.
Further information is available on the website of
the Company www.qpr.com.
Dividend
The Board proposes to the Annual General
Meeting that no dividend be paid for the
financial year ended on December 31, 2021.
Financial information in 2022
In 2022, QPR Software Plc will publish its financial
information as follows:
Interim Report Jan-Mar/2021: Friday, April
22, 2022
Half-year Financial Report Jan-Jun/2021:
August 3, 2022
Interim Report Jan-Sep/2021: Friday,
October 21, 2022
The interim reports and all stock exchange
bulletins of QPR Software Plc are available on the
Investor pages of the Company’s Internet pages
(www.qpr.com/Investors).
ANNUAL REPORT 2021
CONTACT
INFORMATION
QPR Software Plc
Domicile: Helsinki (Finland)
Business ID: 0832693-7
Official address:
Huopalahdentie 24,
00350 HELSINKI, Finland
Head Office
Huopalahdentie 24,
00350 HELSINKI
Tel: +358 (0)290 001 150
Oulun Office
Kiviharjunlenkki 1 C
90220 OULU
Tel: +358 (0)290 001 150
Company website
www.qpr.com
77
KPMG Oy Ab
Töölönlahdenkatu 3 A
PL 1037
00101 HELSINKI
Puhelin 020 760 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.
Y-tunnus 1805485-9
DomicileKotipaikka Helsinki
Independent Auditor’s Reasonable Assurance Report
on QPR Software Plc’s ESEF Financial Statements
To the Board of Directors of QPR Software Plc
We have undertaken a reasonable assurance engagement on the iXBRL marking up of the consolidated
financial statements for the year ended 31 December, 2021, included in the QPR Software Plc’s digital files
[7437003V4S76KM56UW70-2021-12-31-en.zip] prepared in accordance with the requirements of Article 4 of
EU Delegated Regulation 2018/815 (ESEF RTS).
The Responsibility of the Board of Directors and Managing Director
The Board of Directors and Managing Director are responsible for preparing the report of the Board of
Directors and financial statements (ESEF financial statements) that comply with the requirements of ESEF
RTS. This responsibility includes:
— preparation of ESEF financial statements in XHTML format in accordance with Article 3 of the ESEF
RTS
— marking up the consolidated financial statements included in the ESEF financial statements with
iXBRL tags in accordance with Article 4 of the ESEF RTS; and
— ensuring consistency between ESEF financial statements and audited financial statements.
The Board of Directors and the Managing Director are also responsible for such internal control as they deem
necessary to prepare the ESEF financial statements in accordance with the requirements of the ESEF RTS.
Auditor’s Independence and Quality Control
We are independent of the company in accordance with the ethical requirements applicable in Finland, which
apply to the engagement we have performed, and we have fulfilled our other ethical obligations in accordance
with these requirements.
The auditor applies International Standard on Quality Control 1 and accordingly maintains a comprehensive
system of quality control including documented policies and procedures regarding compliance with ethical
requirements, professional standards and applicable legal and regulatory requirements.
Auditor’s Responsibility
In accordance with the Engagement Letter our responsibility is to express an opinion on whether the marking
up of the consolidated financial statements included in the ESEF financial statements comply in all material
respects with the Article 4 of the ESEF RTS. We conducted our reasonable assurance engagement in
accordance with International Standard on Assurance Engagements 3000.
The engagement involves procedures to obtain evidence whether;
— the consolidated financial statements included in the ESEF financial statements are, in all material
respects, marked up with iXBRL tags in accordance with Article 4 of the ESEF RTS, and;
— the ESEF financial statements and the audited financial statements are consistent with each other.
The nature, timing and the extent of procedures selected depend on practitioner’s judgement. This includes
the assessment of the risks of material departures from the requirements set out in the ESEF RTS, whether
due to fraud or error.
We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
QPR Software Plc
Independent Auditor’s Reasonable Assurance Report on
ESEF Financial Statements
16 March, 2022
2
Opinion
In our opinion, the consolidated financial statements included in the ESEF financial statements of QPR
Software Plc identified as [7437003V4S76KM56UW70-2021-12-31-en.zip] for the year ended 31 December,
2021 are marked up, in all material respects, in compliance with the ESEF Regulatory Technical Standard.
Our audit opinion relating to the consolidated financial statements of QPR Software Plc for the year ended 31
December, 2021 is set out in our Auditor’s Report dated 28
February, 2022. In this report, we do not express
an audit opinion, review conclusion or any other assurance conclusion on the consolidated financial
statements.
Helsinki 16 March, 2022
KPMG OY AB
Miika Karkulahti
Authorised Public Accountant, KHT