1
QPR Software
Annual Report
2022
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TABLE OF CONTENTS
3 Our purpose, strategy and markets
6 Review by the CEO
9 Board of Directors
11 Executive Management Team
16 Report of the Board of Directors
30 Financial Statements
40 Notes to Financial Statements
84 Signatures of Board of Directors and Financial Statements
86 Auditor’s Report
93 Information for Shareholders
94 Contact Information
Our purpose, strategy and
markets
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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 modelling
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.
OUR STRATEGY AND STRATEGIC
TARGETS
According to our 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 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 also invest in marketing and sales, especially
in Northern and Central Europe as well as in the
UK. Our comprehensive offering in process mining
will be further developed based on customer and
market insights, especially with increased AI and
Machine Learning capabilities to drive process and
decision intelligence. Our offering will drive intelligent
automation of our customers’ business processes and
operations and secure their delivery of sustainable
value and desired business outcomes.
Our existing customers and partners in the Middle East
provide us with the opportunity to expand our regional
offering to process mining. We focus on fostering
continued success in license sales and the steadily
growing recurring software maintenance revenue in
this market, while simultaneously using our process
mining solution as a growth engine to boost recurring
SaaS revenue.
Consulting services are a key element of QPR’s
offering. 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 and successful
solution adoption into the customer organization.
Our consulting offering is further supported by tool-
agnostic consulting service offerings.
With our strategy, instead of individual products and
services, we move towards a more comprehensive,
end-to-end harmonized offering: from scalable SaaS
products to value delivery and continuous services.
Our data-to-value concept is unique and is supported
by a scalable go-to-market strategy, implemented
through a combination of in-house capabilities and
an expanded ecosystem of partners and alliances. Our
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own lean functional organization enables us to rapidly
turn growth investments into focused actions.
Our key strategic target for the strategy period is to
accelerate SaaS growth and achieve a CAGR of over
30% in our SaaS business. In addition, our target is to
more than double the annual recurring SaaS revenue
from process mining by the end of 2024. The high
growth ambition for our SaaS business means that
at the end of the strategy period in 2026, most 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.
THE CURRENT STATE OF OUR
MARKETS
The process mining market is continuing rapid growth.
According to several market research companies and
industry analysts, the process mining software market
size reached an impressive USD 627 million in 2021 and
is anticipated to increase from USD 933 million to USD
15 million by 2029.
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.
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REVIEW BY THE CEO
The year 2022 was a year of change and renewal
for QPR and it included successes on many fronts.
For already more than three decades QPR Software
has been leading innovation in software solutions
and services that have produced concrete and deep
understanding of processes for our customers around
the world. As companies continue their transformation,
automation, and digitization paths, we are here to
help them to operate at their full potential through
intelligent technology.
I am satisfied with the Company's fourth quarter
growth. SaaS (Software as a Service) revenue grew
significantly, by 53%, compared to the comparison
period, mainly due to the significant agreement
signed with a leading international pharmaceutical
company at the end of December to expand their
SaaS process mining solution. The turnover increased
compared to the fourth quarter of 2021, while the
operating profit remained unchanged, if the write-
down of 2021 is not taken into account. The consulting
turnover was also slightly higher than during the
comparison period (+2%).
I’m also pleased that the SaaS business showed clear
growth (+35%) throughout the year 2022, which is in
line with the company’s strategy. In addition to closing
deals with the SaaS subscription model with new
customers, we successfully transitioned some existing
customers into the SaaS model while simultaneously
expanding the business value (+45%).
Net sales in 2022 fell short of the last year (-14%).
EBITDA and operating profit decreased clearly
compared with 2021. The most significant factors were
the decrease in perpetual licenses and challenges with
the Middle East software delivery projects that were
sold during previous years. The revenue of renewable
software licenses decreased (-27%) which, however,
is in line with our transition to SaaS business. Also,
following Russia’s attack on Ukraine in February 2022,
we exited Russian market. Regarding the acquisition of
new customers, the general economic uncertainty has
partly postponed customers' decision making and the
launch of new tenders.
Consulting revenues were below the previous
year primarily due to the previously mentioned
difficulties with certain Middle East software delivery
projects, which will be completed in the beginning
of the second quarter of 2023. The company had
to reassess the timing of revenue and invoicing of
several contracts related to software delivery projects
concluded in 2020 and early 2021, as well as the project
profitability, which weakened the consulting revenues
and software maintenance revenues significantly in
2022.
The projects in question are fixed-price
implementations of software solutions in the
application area of strategy and performance
management for public administration customers
in the Middle East. Primarily because of this, on
September 7, 2022, the company published a profit
warning, as the revenue and operating profit were
estimated to clearly fall short of the key figures
reported for 2021. On September 20, 2022, QPR
announced its plan to start change negotiations.
The change negotiations were completed on 7
November 2022. As a result of the negotiations, QPR
aims to achieve significant annual cost savings.
The intention of change negotiations was to
adjust operations, improve the profitability of the
business, and enhance the implementation of the
company's strategy. The company is consolidating its
organizational structure in such a way that it enables
more efficient implementation of growth investments.
In addition, the company has implemented and
initiated significant measures to improve cost
efficiency and to minimize the effects of the general
rise in cost levels in all operations. The company has
also initiated measures to find outsourcing partners
for customer deliveries of software solutions in
the application area of strategy and performance
management.
In March 2022, we published the company's new
growth strategy. Adhering to the renewed strategy for
2022 – 2026, the company focuses on the international
growth of the process mining SaaS business. The
strategy enables growth through investments that are
scalable and targeted at selected application areas of
process mining. Additionally, the company builds new
strategic partnerships to extend its offering. Consulting
is also a key part of QPR's offering. QPR provides
professional advice, guidance, and actionable solutions
to businesses experiencing issues that they are unable
to solve internally.
We have taken important steps in implementing the
new strategy during the past year. The year 2022 was
also significant due to renewed sales and marketing
activities, the creation of significant new partnerships,
and the development of our global ecosystem. I am
very happy about the oversubscription of QPR's rights
issue in May-June and the great interest of investors in
the implementation of our company's growth strategy.
QPR is fortunate to have owners and shareholders who
have shown us their unwavering support, particularly
during 2022, by investing in our transformation.
During the year, we succeeded in launching
ground-breaking new process mining solutions
to the market. In May 2022, we announced a new
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production version of QPR's process mining software
QPR ProcessAnalyzer, which offers our customers
the opportunity to improve operations and find
cost savings by combining a deep understanding
of business processes with real-time process
transparency. The solution uses the market-
leading Snowflake Data Cloud technology. QPR
ProcessAnalyzer is the first and only process mining
solution that runs natively on the Snowflake data
cloud. QPR is globally the first and currently the only
Powered by Snowflake process mining -partner.
At the end of the third quarter, together with our
partner Tietoevry, QPR announced a new process
mining solution, SAP S/4HANA Vectorial. SAP
S/4HANA Vectorial is designed for customers and
SAP and business -analysts as a tool for S/4HANA
transformation projects. Such projects are currently
of high relevance for organizations around the world.
QPR and Tietoevry have combined modern technology
with the SAP transformation experience of top experts
to create a solution that gives organizations much-
needed support in difficult digital transformation
projects. I believe this is a significant solution
that stands out from our competitors in ensuring
successful implementation of ERP and IT system
projects in the international market.
In the second half of the year, QPR succeeded
to close a significant contract to expand process
mining SaaS cooperation with a leading international
pharmaceutical company. We also delivered a process
modeling SaaS -solution for a global specialty chemical
pioneer. These are examples of our commercial
successes. Furthermore, I am also grateful for
the success, commitment, and dedication of our
consultants in numerous successful projects for our
domestic and international customers.
In 2023, QPR continues to implement its strategy
to ensure continuous, international growth of the
process mining SaaS business. As part of the defined
measures, the company focuses its operations even
more strongly on research and development of
innovative process mining solutions and on ensuring
the efficiency of sales, marketing, and partner
business.
The exceptional circumstances caused by raised
interest rates, inflation, rising geopolitical risks, and a
market downturn in Europe continue to affect new
customer acquisition, companies' investments, and
prolong their decision-making in early 2023.
Supported by the existing contract base and
forecasted growth in SaaS (Software as a Service)
revenue, QPR expects the SaaS revenue growth to be
above 35% and estimates its net sales to increase (2022:
7,823 thousand euros) in 2023.
The company expects notable EBITDA improvement
leading to level of break even in the 2023 financial year.
I want to warmly thank all our customers, partners,
personnel and shareholders for your valuable
contribution and cooperation in 2022.
We look forward to exploring new growth and value
creation opportunities with you in 2023 and beyond.
Heikki Veijola
Chief Executive Officer
Board of Directors and
Executive Management Team
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BOARD OF DIRECTORS
The Board of Directors oversees the company’s
management and organizes the operations
as appropriate. The Board validates the
principles concerning the company’s strategy,
organization, accounting, and financial control
and appoints the company’s CEO. The Board's
work is determined by the Board's rules of
procedure, which e.g. to determine the matters
requiring consideration by the Board. The CEO is
responsible for executing the company’s strategy
and managing current matters in accordance
with the instructions and regulations issued by
the Board.
QPR Software Plc's general meeting elected
the board members at the annual general
meeting on April 6, 2022. In the meeting, it was
decided that the Board of Directors consists of
four members. The elected board members are
Pertti Ervi, Matti Heikkonen, Antti Koskela, and
Jukka Tapaninen. The Board elected Pertti Ervi
as the Chairman of the Board. The Board did not
form committees due to the small scope of the
business and the size of the Board.
QPR's Board members have broad, deep, and
strategic expertise and strong experience in the
technology sector as well as software business
development, growth, and internationalization.
About
• Chairman of the Board since March 2021.
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.
Key positions of trust
• Chairman of the Board, F-Secure Oyj, 2022 – present
• Member of the Board, WithSecure 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
• Chairman of the Board, Stonesoft Oyj, 2004 – 2007
MEMBERS OF THE BOARD OF DIRECTORS
Pertti Ervi
Chairman
of the Board
b. 1957, engineer
Antti Koskela
Member of the Board
b. 1971
Master of Science in
Technology
About
• Member of the Board since March 2021.
Key experience
• WithSecure 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
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About
• Member of the Board since March 2021.
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
MEMBERS OF THE BOARD OF DIRECTORS
Matti Heikkonen
Member of the Board
b. 1976
Master of Science in
Technology
Jukka Tapaninen
Member of the Board
b. 1963
Master of Science in
Economics
About
• Member of the Board since March 2021.
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
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Matti Erkheikki
Chief of Products and Alliances
b. 1978
Master’s Degree in Industrial
Engineering and Management
EXECUTIVE MANAGEMENT TEAM
Heikki Veijola
CEO
b. 1970
Master of Science in Economics
About
• The Company’s CEO since March 2023
• Member of the Executive Management Team since March 2023
Area of Responsibility
Heikki Veijola started as the CEO of QPR Software Oyj on March
1, 2023. As the CEO of QPR Software, Heikki Veijola is responsible
for managing the running administration of the Company in
accordance with the instructions and regulations issued by the
Board of Directors. Veijola is also responsible for representing
the Company, its operational management, sales and partner
operations, human resources, and preparation of decisions and
implementation thereof that belong to the Board of Directors.
Experience
Veijola has most recently served as Enreach Oy’s Director
of Strategic Partnerships and a member of the executive
management team, being responsible for business operations
in the Microsoft and Salesforce ecosystems as well as for
cooperation with system integrators, consultants, and other
strategic partnerships, especially in Northern Europe. Before
this, Veijola was the Sales Director of Enreach Oy.
Veijola has strong experience in building and renewing sales,
international growth, partner ecosystems, and cloud- and SaaS
(Software as a Service) businesses. During his career, Veijola has
also worked for 11 years in Finland's largest marketing group
Salomaa Group as a CEO of KASKI Agency, and advertising
agency Adsek Oy, leading the companies through two industry
transformations.
Education
Veijola has a master's degree in Economics (M.Sc., Turku
School of Economics and Business Administration) majoring in
International Marketing.
About
• Member of the Executive Management Team since August
2022
Area of responsibility
Kerkelä-Hiltunen is responsible for QPR Software's finance
and administration, including external and internal reporting,
monitoring and managing the financial performance of the
business, capital allocation and procurement. She also oversees
investor relations, compliance with the Insider Trading Manual,
coordination of risk management and treasury functions.
Experience
Kerkelä-Hiltunen has more than 20 years of solid expertise in
finance and management, as well as a wealth of knowledge in
the fields of telecom, technology and manufacturing industries
in business-to-business, and consulting. Before joining QPR,
she was in charge of the Deloitte Finance and Performance
Energy, Resources and Industrial clients portfolio, business
finance offering as well as regional CFO program coordination.
Prior to joining Deloitte, Mervi had a lengthy career at Nokia
where she held a variety of global financial management
positions, including Head of Finance Transformation and
Group Functions, Finance Process Owner, Head of Business
Reporting, and ss the CFO and Chair of the Board of the Indian
mobile phone factory and company.
Education:
Mervi holds a Master's degree in Economics from the University
of Oulu and has also completed the Finance Executive program
at Aalto Executive Education and the Good Board Member
(HHJ) training.
About
• Member of the Executive Management Team since July
2007
Area of Responsibility
Matti Erkheikki is the head of QPR's product management
unit and is responsible for QPR's products and the vision
and strategy of the product portfolio. It is on Erkheikki's
responsibility that the Company's products and their
characteristics are in line with the organization's goals and
that the product portfolio is constantly developed and
improved in accordance with the needs of customers and
target groups.
Experience
Erkheikki has been employed by QPR since 2002, first as
a consultant, participating in QPR's delivery projects both
domestically and internationally. In 2005, Erkheikki worked
as the company's development manager, and in 2006 as
the regional manager responsible for the USA and Canada
operations in California at QPR's American subsidiary. In the
years 2007–2014, he as responsible for QPR's Finnish business
and in the years 2012–2014 also for the global OEM business.
Prior to his current position, since January 2015, he has held
the role of Business Director, responsible for QPR's process
mining and strategy management operations internationally.
Education
Erkheikki holds a master's degree in industrial engineering
and management.
Mervi Kerkelä-Hiltunen
CFO
b. 1975
Master of Science in Economics
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Sanna Salo
CMO
b. 1977
Master of Science in Economics
EXECUTIVE MANAGEMENT TEAM
Tero Aspinen
VP, Middle-East Business
b. 1985
Master’s Degree in Industrial
Engineering and Management
About
• Member of the Executive Management Team since January
2017
Area of Responsibility
Tero Aspinen is responsible for the development and sales
of Performance Management solutions globally and 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, Mr. Aspinen worked
as Vice President for Middle East Business and Performance
Management Solutions (2017–2022).
Education
Aspinen holds a Master’s degree in Industrial Engineering
and Management.
About
• Member of the Executive Management Team since March
2019
Area of Responsibility
Pekka Keskiivari is responsible for QPR’s software product
development, cloud service development and production,
and customer care services.
Experience
Pekka Keskiivari has over 25 years of experience in software
development and ICT services. Prior to joining QPR, he
worked as Chief Technology Officer for Diktamen Oy in
2014–2019 and CRF Health in 2006–2014. Before this, Keskiivari
held various management and executive positions at
Sonera Corporation in the area of Product Development and
Management during 1996–2006. Prior to this, he worked for
Neste Oyj in various roles in software development and ICT
services.
Education
Pekka Keskiivari has a Master’s degree in Engineering from
Helsinki University of Technology as well as having done
postgraduate studies at MIT and Aalto University.
Tiedot:
• Member of the Executive Management Team since
February 2022
Area of Responsibility
Sanna Salo is responsible for the strategy, planning,
development, and implementation of QPR Software's
brand, marketing, communication, and stock exchange
communication.
Experience
Salo has more than 20 years of experience of B2B business in
the IT industry through various positions in sales, marketing,
and communication. Before starting at QPR, Salo worked as
the Marketing and Communications Director of B2B digital
marketing solutions provider Fonecta Oy. Before Fonecta,
Salo worked for ten years at International Business Machines
Corporation (IBM), holding various management positions in
marketing both in Finland and in the Nordic countries. Before
this, Salo worked for nine years at Atea Finland Oy in a range
of marketing, communication, and sales positions.
Education
Salo has a Master's degree in Economics (M.Sc., Turku
School of Economics and Business Administration)
majoring in marketing. Salo also has a Bachelor of Business
Administrarion (B.Sc.) degree in international business from
Häme University of Applied Sciences.
Pekka Keskiivari
CTO
b. 1964
Master of Science in Engineering
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Johanna Lähde
Director, People and Culture
b. 1970
Bachelor of Social Sciences
EXECUTIVE MANAGEMENT TEAM
Teemu Lehto
VP, Consulting
b. 1970
Doctor of Science (Technology)
About
• Member of the Executive Management Team since March
2023
Area of Responsibility
Teemu Lehto is responsible for QPR Software's consulting
business.
Experience
Teemu Lehto has worked in management and expert
positions at QPR Software for over 20 years. During his
long career at QPR, Lehto has been responsible for the
consulting business, marketing and communication, product
development, as well as sales and partnerships.
Before joining QPR, Lehto worked as CEO of Planway Oy,
as the development manager of ICL Data Oy, and as the
product development manager of ViSolutions Oy. He has also
previously worked as a software engineer at Nokia Research
Center and Systeemikonsultit Oy.
Education
Lehto holds a Doctoral degree in Technology.
About
• Member of the Executive Management Team since June
2022
Area of Responsibility
Eric Allart is responsible for QPR Software's global sales,
customer relations and all operations related to revenue
growth.
Experience
Eric has strong experience in promoting the growth of sales
of business software and software services (Software as a
Service). He has helped grow several mid-sized ERP, CRM, and
Supply Management innovators into market leaders. Before
moving to QPR, Allart worked at Signavio, where he lead the
growth of the EMEA South market business into one of the
company's most profitable regions.
Education
Eric Allart is graduate of IPAG Business School, Finance Major.
Abotu
• Member of the Executive Management Team since August
2022
Area of Responsibility
Johanna Lähde is responsible for providing HR strategic
and operational leadership across the organization. Lähde
is also responsible for the personnel development as well as
the Company's operating methods and customer-oriented
operating culture.
Experience
Lähde is experienced in successful human resource
management and business transformation in growth
companies. Before joining QPR, Lähde was responsible
of talent development and learning and development
methodologies at Sofigate.
Additionally, Lähde has worked as HR Director and HR
Manager in various ICT companies like Fujitsu and Headstart
for over 20 years.
Education
Johanna Lähde has a Bachelor's degree in Social Sciences.
Eric Allart
CRO
b. 1963
Graduate of IPAG Business School
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QPR Software
Board Review
and Financial
Statement 2022
15
TABLE OF CONTENTS
16 Report of the Board of Directors
30 Financial Statements
40 Notes to Consolidated and Parent Company Financial Statements
84 Signing of the Annual Accounts and the Review of the Board of Directors 2022
Report of the Board of Directors
17
SUMMARY OF THE FULL YEAR
2022
• SaaS software business grew +35%
• Net sales amounted to EUR 7,823 thousand and
decreased 14% (January-December 2021: 9,140)
• EBITDA amounted to EUR -1,753 thousand (241)
• Operating result (EBIT) amounted to EUR -2,770
thousand (-1,248)
• Result before taxes was EUR -2,864 thousand (-1,356)
• Result for the period was EUR -2,868 thousand
(-1,356)
• Earnings per share was EUR -0.202 (-0.113)
• The write-downs of 373 thousand euros made in
connection with the financial statements weakened
the operating income
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 the notice. Renewable license revenue is
recognized at one point in time, in the beginning of
the invoicing period, yet at the earliest on the delivery.
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. The company
has closed its business and partnerships in Russia for
the time being.
NET SALES
Net sales between January and December amounted
to EUR 7,823 thousand (9,140). Recurring revenue
accounted for 53% (45) of net sales.
Group net sales in Finland decreased by 11%, the rest
of Europe increased by 2% and the rest of the world
decreased by 48%. The decline in Finland is related
to fluctuation of demand with the public sector and
decrease in the rest of the world is primarily due to
Middle East projects. Growth in Europe is in line with
our internationalization strategy. Of the net sales, 53%
(50) derived from Finland, 35% (29) from the rest of
Europe (including Turkey), and 12% (20) from the rest of
the world.
During the year 2022, the company strategy was
revised to bring SaaS sales into focus. Throughout the
year 2022, SaaS business grew by 35%, with net new
customer acquisition and expansion of existing SaaS
agreements as well as through transitioning from
license and maintenance invoicing model. Along
with the transition, recurring contract revenues were
on average expanded by 45%. The share of recurring
revenue has developed in a direction in line with the
strategy and the share of revenue has increased by 8%
from the comparison period. License revenue declined
compared to the comparison year due to the adverse
impact of transitioning to a SaaS model, and to a
larger extent due to the challenges with Middle East
contracts made in 2020-2021, and to a lesser extent
due to Russian business closure and foreign currency
impact.
Consulting net sales was EUR 3,139 thousand (3,709)
where the decrease was due to Middle East project
challenges and fluctuations in the demand of the
Finnish public administration customers.
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NET SALES BY PRODUCT GROUP
The Group’s net sales derive from software and consulting businesses are broken down as follows:
Group, IFRS Change
(EUR 1,000) %
2022 2021 2022
Software licenses 560 1,317 -57
Renewable software licenses 583 797 -27
Software maintenance services 1,803 2,034 -11
Cloud services 1,738 1,283 35
Consulting services 3,139 3,710 -15
Total net sales 7,823 9,140 -14
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. The company has closed its business and
partnerships in Russia for the time being.
Finland 4,126 4,614 -11
Europe incl. Russia and Turkey 2,745 2,689 2
Rest of the world 953 1,837 -48
Total net sales 7,823 9,140 -14
Group, IFRS Change
(EUR 1 000) %
2022 2021 2022
19
FINANCIAL PERFORMANCE
The Group's EBITDA was -1,753 thousand euros (241)
and the operating result was -2,770 thousand euros
(-1,248). The operating result was weakened by the
decreased revenue due to the timing of the Middle
East project's monetization, the absence of significant
new license sales, and the higher operating expenses.
The group's expenses were 8% higher than the
comparison period due to significant subcontracting
costs for projects in the Middle East, as well as
investments in product development, marketing, and
international sales in line with the SaaS business focus
of the strategy.
In summary, the Middle East contracts concluded
in 2020 and early 2021 have affected the company's
profitability and cash flow in 2021 compared to 2022
with higher license income, higher subcontracting
costs in 2022, and partly by committing QPR's
resources to non-billable work in these projects
instead of other client projects. According to the
latest estimates, the projects will be completed in the
beginning of the second quarter of 2023.
As a result of the change negotiations which ended
7 November 2022 the company aims for significant
annual savings. The intent of the change negotiations
was to adjust operations, improve the profitability of
the business, and enhance the implementation of the
company's strategy. The company is consolidating its
organizational structure in such a way that it enables
more efficient implementation of growth investments.
In addition, the company has implemented and
initiated significant measures to improve cost
efficiency and to minimize the effects of the general
rise in cost levels in all operations. The company has
also initiated measures to find outsourcing partners
for customer deliveries of software solutions in
the application area of strategy and performance
management.
The result for the review period was -2,868 thousand
euros (-1,356) and the profit per share was -0.202 euros
(-0.113) per share.
FINANCE AND INVESTMENTS
Cash flow from operations in the review period, was
-1,798 thousand euros (692). The change in operating
cash flow compared to 2021 was due to operating
loss and changes in working capital. In practical
terms, Middle East projects caused the majority of the
change in operating cash flow, along with operative
investments in internationalization and R&D.
Net financial expenses were 62 thousand euros (108),
and they included exchange rate losses of 20 thousand
euros (12). In 2021, the costs include a one-time
guaranteed payment related to the completed project,
which the company paid in January 2021.
The investments were 1,353 thousand euros (942), and
they were mainly product development investments.
Net cash from financing activities was 2,726 thousand
euros primarily from the rights issue.
The Group's financial position is fair. At the end of the
review period, the Group's cash assets were EUR 17
thousand (441), with 3,452 thousand (2,694) current
receivables. Out of the receivables, 82% are in euros
and most invoices were not due (69%). The share
of overdue receivables between 1-30 days was 23%,
between 30-60 days 6%, and over 60 days was 3% of
the total amount of current receivables. The company
has changed the invoicing cycle and improved the
efficiency of its collections. In addition, the Group has
other short-term cash resources of 1 million Euros
available, which will decrease to 500,000 euros at the
end of February 2023. At the end of the review period,
the group had 1,500 thousand euros of short-term
bank loans.
The financial statement has been prepared on the
Going Concern principle. QPR Software entered
into a new financing agreement of 1.5 million euros
with its main financing bank on 24 January 2023.
This financing agreement replaces and refinances
the company's current loan and prepares for future
growth-supporting working capital needs. The new
loan has a three-year loan term and matures on
January 31, 2026.
In accordance with the financing agreement, the first
installment of EUR 0.5 million is due on January 31,
2024. After this, installments of EUR 0.5 million are due
every year in January. The company will withdraw the
loan in April 2023 and convert it into the current and
long-term interest-bearing loan.
Net debt in relation to equity (Gearing) was 465% (289)
and the equity ratio was 7.4% (8.3). The net debt ratio
and the equity ratio were affected by the decrease
in equity and cash resources, as well as a lease
agreement made on November 1, 2022 for the 5.5-year
period related to the head office premises, where the
annual rental costs are significantly lower.
20
PRODUCT DEVELOPMENT
QPR innovates and develops software products
that analyze, measure, and model operations in
organizations. The Company develops the following
software products: QPR ProcessAnalyzer, QPR
EnterpriseArchitect, QPR ProcessDesigner, and QPR
Metrics.
Product development expenses for the full year were
2,674 thousand euros (2,115) and product development
expenses were capitalized in the balance sheet in
the amount of 1,336 thousand euros (750). Product
development depreciation of 660 thousand euros
(953) was recorded. In 2021 there was a 218 thousand
euros R&D asset write-off. The amortization period
for capitalized product development expenses is four
years.
PERSONNEL
At the end of the financial year, the Group employed
a total of 85 people (82). The average number of
personnel during the year 2022 was 81 (80).
The average age of employees was 44 (42.7) years.
Women account for 26% (25) of employees, and men
for 74% (75). Of all personnel, 17% (19) work in sales
and marketing, 44% (42) in consulting and customer
care, 30% (31) in product development, and 9% (8) in
administration.
Personnel expenses were EUR 7,241 thousand (6,824).
Salaries and remunerations accounted for EUR 5,995
thousand (5,691)
For incentive purposes, the company has a bonus
program covering the entire personnel. The top
management's short-term remuneration consists
of monetary salary, fringe benefits and a possible
annual bonus, mainly determined by the turnover
development of the group and profit units. In addition,
the company has an option program for key personnel.
STRUCTURAL CHANGE IN THE
GROUP
QPR Software Plc established a branch in France
during 2022.
STOCK OPTION PLAN
The Board of Directors of QPR Software Plc decided
in a meeting held on August 15, 2022, to launch a
new key employee stock option plan, based on the
authorization granted at the Annual General Meeting.
QPR Software is operating with 2019A, 2019B and 2022
stock option plans intending to use these as part of the
Group's incentive and commitment program for the
key employees. The purpose of the stock options is to
encourage the key employees to work on a long-term
basis to increase the shareholder value and retain the
key employees at the company. The stock options are
issued gratuitously.
The option plan 2019 A and B provides for the issuance
of up to 910,000 options and option plan 2022
maximum 489,542 options. Each option entitles its
holder to subscribe for one share.
Out of the 2019 stock option plan, 437,000 options are
marked with the symbol 2019A and 473,000 options
are marked with the symbol 2019B. The subscription
period for stock options marked 2019 A is January
1,2022 - January 31, 2023 and for stock options marked
2019B January 1,2023 - January 31,2024.
The allocated number of shares, subscribed by
exercising 2019 stock options issued corresponds
to a maximum total of 3.8 per cent of all shares and
votes of the shares in the company after the potential
share subscriptions, if new shares are issued in the
share subscription. After the share subscriptions with
allocated stock options, the number of the company’s
shares may be increased by a maximum total of
638,000 shares, if new shares are issued in the share
subscription.
The share subscription price for stock options 2019A is
EUR 1.70 per share, which corresponds to the market
price of the company’s share at the time of issuance.
The share subscription price for stock options 2019B is
EUR 2.55 per share, which corresponded to the market
price of the company’s share with an addition of 50 per
cent at the time of issuance. The theoretical market
value of stock options 2019 is approximately EUR 83
thousand in total. On December 31, 2022, out of stock
option plan 2019 A, no subscription has been made.
The stock option plan 2022 is marked with the symbol
2022. The Share subscription period with the Stock
Options shall be 15 June 2025 - 31 May 2027. The number
of shares for the stock option plan 2022, subscribed by
exercising stock options corresponds to a maximum of
2.9% 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 489,542 shares, if new shares
are issued in the share subscription.
21
The share subscription price for stock options 2022 is
EUR 0.85 per share, which corresponds to the market
price of the company’s share at the time of issuance.
The theoretical market value of stock option 2022 is
approximately EUR 88 thousand in total.
The terms and conditions of the stock option plans
for 2019 and 2022 are available on the company’s
webpage www.qpr.com/company/investors.
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 a 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, 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 published its new growth strategy
(2022-2026) in March 2022. The stock exchange release
related to the announcement of the new strategy can
be found on the Company's website in the Investors'
section.
THE PARENT COMPANY’S
FINANCIAL PERFORMANCE AND
POSITION
Parent company Net Sales was EUR 7,234,554 and
it declined 16% from the comparable period (2021:
8,705,482). The decline in Net Sales was due to lower
license and consulting sales partly netted of by higher
SaaS revenue. The Parent company’s operative loss
was -33% of net sales and it was EUR -2,375,022 (2021:
-436,649, 5%). In addition to the decrease of net sales,
the change in operating result was due to higher
expenses for internationalization, marketing, as well
as costs related to Middle East project. Return for own
equity declined to -180 % (2021: -49%) and the own
equity ratio was 18% (2021: 16%).
SHARE CAPITAL,
SHAREHOLDERS, AND SHARES
The Company’s share capital at the end of the year
2022 was EUR 1,359,090 divided into 16,455,321 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 1,747
shareholders (1,509). During the year, trading in the
Company’s shares amounted to EUR 2,315 thousand
(6,255), which is an average of EUR 9,187 per trading
day (24,823).
Trading in shares was on total 2,263,135 shares
(3,323,915). Turnover in shares corresponds to 14.1%
(27.7) of the total shares outstanding and the average
price was EUR 1.02 per share (1.88). The highest closing
price of the year was EUR 1.86 (2.38) and the lowest
EUR 0.53 (1.48).
At the end of the year, the total market value of
the Company’s outstanding shares was EUR 8,983
thousand at the closing price of EUR 0.56. Additional
information presented in Note 34.
On 23 February 2022, QPR Software received a flagging
notice from Oy Finncorp Ab pursuant to Chapter
9, Section 5 of the Securities Markets Act (AML),
according to which its direct share ownership of the
total number of shares and votes in QPR Software Plc
had increased to more than fifteen (15) percent.
On March 21, 2022, the Company received a flagging
notification pursuant to Chapter 9, Section 5 of the
Securities Markets Act (AML), according to which
Pohjolan Rahoitus Oy's direct share ownership of the
total number of shares and votes in QPR Software Plc
had decreased to less than five (5) percent.
22
Major shareholders of QPR Software Plc, December 30, 2022
Registered shareholders No. Shares
% of shares and
votes
OY FINCORP AB 2,910,339 18
LESKINEN VESA-PEKKA ILMARI: 1,768,759 11
LESKINEN VESA-PEKKA ILMARI 1,135,200 7
KAUPPAMAINOS OY 633,559 4
UMO CAPITAL OY 971,900 6
AC INVEST OY 904,242 5
SIILASMAA RISTO KALEVI 805,333 5
LAAKSO JANNE JUHANI 652,924 4
PELKONEN JOUKO ANTERO: 560,800 4
POHJOLAN RAHOITUS OY 560,400 3
PELKONEN JOUKO ANTERO 400 0
LAMY OY 553,249 3
JUNKKONEN KARI JUHANI 520,824 3
PIEKKOLA ASKO 413,917 3
QPR SOFTWARE OYJ 413,487 3
OY TALCOM AB 394,432 2
LESKINEN VELI-MIKKO ILMARI 310,040 2
TRADEIRA OY 204,842 1
KEMPE PIA PAULINA 143,333 1
OY CATA-HOLDING AB 100,000 1
HIRVILAMMI HANNU ESA 66,666 0
NORDCENTERIN NUORISOVALMENNUKSEN EDISTÄMISSÄÄTIÖ 66,666 0
KEMPE ANNA CARITA 60,000 0
VASAMA JUSSI SAMULI 58,380 0
20 largest shareholders, total 11,880,133 72
Other shareholders, total 4,575,188 28
TOTAL 16,455,321 100
*exclude nominee registered shareholders
23
Distribution of shareholding by size, December 30, 2022
Shareholders Shares and votes
Number of Shares Number % Number %
1–500 1,121 64.2 151,347 0.9
501–1,000 217 12.4 169,657 1.0
1,001–5,000 277 15.9 626,174 3.8
5,001–10,000 53 3.0 369,562 2.2
10,001–50,000 54 3.1 1,247,398 7.6
50,001–100,000 8 0.5 542,080 3.3
100,001–1,700,000 17 1.0 13,349,103 81
TOAL 1,747 100 16,455,321 100
of which nominee registered 7 1,973,633 12
Distribution of shareholding by sector, December 30, 2022
Shareholder Shares and votes
Sector Number % Number %
Private companies 48 2.7 4,465,303 27.1
Financial and insurance institutions 7 0.4 5,425,873 33.0
Households 1,681 96.2 6,388,847 38.8
Non profit organizations 2 0 66,667 0.4
European union 4 0 101,526 0.6
Other countries 5 0.2 7,105 0.04
TOTAL 1,747 100 16,455,321 100
of which nominee registered 7 1,973,677 12.0
24
QPR Software shareholding by insiders and closely related persons, December 30, 2022
Options
Name and position
Number of
shares
By controlled
entities
By closely related
persons *)
2019 A 2019 B 2022
Pertti Ervi, Chairman of the Board 45,358
Matti Heikkonen, Member of the Board 9,067 40,922
Antti Koskela, Member of the Board 27,527
Jukka Tapaninen, Member of the Board 17,556
Miika Karkulahti, responsible auditor
Jussi Vasama, CEO 58,380 130,000 135,000 97,908
Insiders by definition
Eric Allart, EMT member 87,058 48,954
Tero Aspinen, EMT member 30,000 33,000 36,716
Matti Erkheikki, EMT member 2,000 65,000 65,000 48,954
Mervi Kerkelä-Hiltunen, EMT member 5,121 36,716
Pekka Keskiivari, EMT member 2,565 22,000 45,000 36,716
Johanna Lähde, EMT member 36,716
Samuel Rinnetmäki, EMT member 3,000 36,716
Sanna Salo ,EMT member 5,121 7,350 36,716
* Shares held by spouces and persons under guardianship
Insider ownership, TOTAL 260,753 40,922 9,350 247,000 278,000 416,112
25
OWN SHARES
QPR Software Plc’s 4,010,458 new shares issued in the
rights offering 27.5.-10.6.2022 have been registered with
the trade register maintained by the Finnish Patent
and Registration Office on 17.6.2022.
After the registration of the new shares, the total
number of shares in the Company is 16,455,321, which
of the Company held 413,487 as own shares with a
total nominal value of EUR 45,484 and a total purchase
price of EUR 405,726. The shares held by the Company
(treasury shares) represent 2.5% of the Company’s
share capital and votes.
GOVERNANCE
QPR Software Plc’s (QPR) 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.
A separate report has been issued on QPR Software's
corporate governance system for 2022, which was
published along with annual report on 16 March 2022.
The company's management principles and an
explanation of the corporate governance system
can be read in the investor section of the company's
website.
The investor pages also contain a report on insider
governance, information on the largest owners, the
articles of association, the board's rules of procedure,
a report on internal control and audit, introductions
of the board of directors and the management team,
a summary of the company's disclosure policy, and
the company's press releases published during the
financial year.
ANNUAL GENERAL MEETING
The Company's Board of Directors decided in March
2022 to convene the annual general meeting on
Thursday, April 6, 2022. The board decided on the
extraordinary meeting procedure based on the
temporary legislation approved by the parliament. In
order to limit the spread of the Covid-19 pandemic, the
annual general meeting was organized without the
personal presence of the shareholders at the meeting
place. Shareholders had the opportunity to participate
in the meeting and exercise their rights only through
a proxy and by presenting counterproposals and
questions in advance. The minutes of the general
meeting have been available since April 20, 2022, on
the company's website in the investors section.
QPR Software Plc's Annual General Meeting confirmed
the Company's financial statements for 2021 and
granted discharge to the Board members and Chief
Executive Officer. The General Meeting decided that
no dividend will be distributed based on the balance
sheet to be confirmed for the fiscal year that ended 31
December 2021. The general meeting confirmed the
company’s remuneration report for 2021 and decided
to establish a shareholders’ nomination committee for
the company and confirmed its rules of procedure, in
accordance with the board’s proposals. The general
meeting decided to authorize the Board to decide on
the issue of shares and the granting of special rights
entitling to shares, as well as the acquisition of own
shares.
The General meeting decided that the number of
board members will be four (4). Pertti Ervi, Matti
Heikkonen, Antti Koskela and Jukka Tapaninen were
re-elected as Board members. The term of office of the
board members lasts until the end of the next Annual
General Meeting. At the organizational meeting of the
Board, the Board re-elected Pertti Ervin as chairman.
Furthermore, the General Meeting decided that the
auditor of QPR Software Plc is the auditing company
KPMG Oy Ab, with KHT Miika Karkulahti as the
principal auditor. The auditor’s term of office ends at
the end of the next Annual General Meeting.
The Annual General Meeting authorized the Board
of Directors to decide on the issuance of new shares
and the transfer of the Company’s own shares (share
issuance) in one or more installments. The share issue
can be carried out as a paid or free issue under the
terms set by the board.
In addition, the Annual General Meeting decided on
the establishment of the shareholders’ nomination
committee. According to the situation in October 2022,
the company’s three largest shareholders each had
the right to nominate one member. If the shareholder
does not use his naming right, the right is transferred
to the next largest shareholder. Roger Kempe, Erkki
Myllärniemi, and Eero Leskinen were elected to the
nomination committee of QPR shareholders.
A stock exchange release about all the authorizations
and other decisions given to the Board of Directors of
QPR Software Plc by the Annual General Meeting has
been issued on stock exchange release on April 19, 2022.
26
The release can be found in the investor section of the
Company's website: www.qpr.com/company/investors
MANAGEMENT AND AUDITORS
Jussi Vasama was the CEO of QPR Software Plc in the
2022 fiscal year.
The other members of the management team were:
• Eric Allart, the company's director responsible for
global sales (from June 1, 2022)
• Director responsible for Middle East business and
performance management solutions, Tero Aspinen
• Matti Erkheikki, director responsible for strategy,
partners and alliances
• Director responsible for technology and products,
Pekka Keskiivari
• Director responsible for consulting business, Samuel
Rinnetmäki (from 7 February 2022)
• Director responsible for marketing, communication,
and brand, Sanna Salo (from 7 February 2022)
• The company's CFO was Päivi Vahvelainen until 4
August 2022, and after that Mervi Kerkelä-Hiltunen
• Director responsible for Personnel and Corporate
Culture, Johanna Lähde (from 1 August 2022)
During the accounting period, the auditing firm KPMG
Oy Ab acted as the actual auditor of QPR Software Plc,
and the principal auditor was Miika Karkulahti, KHT.
Shared held by the Board and CEO
QPR Software Oyj's board members and CEO and
their close associates owned 311,025 QPR Software
Oyj shares on December 31, 2022, which corresponds
to 1.9% of the company's shares and voting power
(31.12.2021: 0).
The number of shares include their own, spouse's,
guardians' and controlling entities' holdings.
Authorization of the Board of Directors
QPR Software Plc's annual general meeting held on
April 6, 2022 authorized the issuance of new shares
by the board of QPR Software Plc and the transfer of
company shares held by the company (share issue) in
one or more installments.
The share issue can be carried out as a paid or
free issue under the terms set by the board. The
authorization also includes the right to grant special
rights referred to in Chapter 10, Section 1 of the Limited
Liability Companies Act, which entitle to receive
own shares held by the company against payment.
Based on the authorization, a maximum of 4,500,000
new shares can be issued in a share issue and/or
with special rights, and a maximum of 700,000 of
the Company's own shares can be transferred. The
authorization includes the right to deviate from the
shareholders' pre-emptive right. The authorization is
valid until the next annual general meeting.
The terms of all authorizations given to the board of
directors of QPR Software Plc by the Annual General
Meeting can be read in full in the stock exchange
release published by the company on April 19, 2022.
The release can be found in the investor section of the
Company’s website.
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.
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.
27
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 as well as considering movements in
geopolitical environment.
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 and other risks
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.
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 3% (17) of total trade receivables at the end of the
period.
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 legal expense insurance.
Information and security risks
QPR Software regularly monitors and mitigates
28
information security risks in its operations and reports
to the Board of Directors. The Company uses both
governance practices as well as technology to improve
the security of their systems. To mitigate information
security risks, the Company has 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 August 2022, QPR Software was awarded 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 82% of the Group’s trade
receivables were in euro at the end of the financial year
(75).
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. The
Group's financial position is fair due to performance of
the period. This financial statement has been prepared
according to Going Concern -principle considering
efficiency improvement measures, operating forecast
as well as the re-financing agreement the company
made in January 2023. The management of financial
risks in 2022 is described in more detail in Note 30.
LEGAL DISPUTES
In 2021 and 2022, the Company did not have any legal
disputes.
OUTLOOK FOR 2023
The exceptional circumstances caused by increased
interest rate, inflation, rising geopolitical risks, and a
market downturn in Europe continue to affect new
customer acquisition, companies' investments, and
prolong decision-making in early 2023.
Supported by the existing contract base and
forecasted growth in SaaS (Software as a Service)
revenue, QPR expects the SaaS revenue growth to be
above 35% and estimates its net sales to increase (2022:
7,823 thousand euros) in 2023.
The company expects notable EBITDA improvement
leading to a level of break even in the 2023 financial
year. EBITDA was -1,753 thousand euros in 2022.
THE BOARD OF DIRECTORS’
PROPOSAL ON DIVIDEND
At the end of the financial year 2022, the distributable
funds of the parent company were EUR 311,418. The
Board of Directors will propose at the Annual General
Meeting that no dividend is to be paid for the financial
year 2022.
There have not been any material changes in the
Company’s financial position after the end of the
financial year.
29
EVENTS AFTER THE REPORTING
PERIOD
New financing agreement
QPR Software entered into a new financing agreement
of 1.5 million euros with its main financing bank on 24
January 2023. This financing agreement replaces and
refinances the company's current loan and prepares
for future growth-supporting working capital needs.
The new loan has a three-year loan term and matures
on January 31, 2026.
In accordance with the financing agreement, the first
installment of EUR 0.5 million is due on January 31,
2024. After this, installments of EUR 0.5 million are due
every year in January. The company will withdraw the
loan in April 2023 and convert it into the current and
long-term interest-bearing loan.
The covenants of the loan are based on the company's
EBITDA and equity ratio. The EBITDA of the covenants
is tested every six months and the equity ratio annually
according to the status on the last day of the year.
New CEO to start in the position on March 1, 2023
On 20 December 2022, QPR Software Plc’s CEO Jussi
Vasama announced his resignation in order to assume
a new position outside of QPR.
QPR Software Plc’s Board of Directors appointed
Heikki Veijola (born 1970) as the company's new CEO
on 2 January 2023. Veijola will start in the position on
March 1, 2023.
Veijola has a master's degree in Economics
(M.Sc., Turku School of Economics and Business
Administration) majoring in International Marketing.
Veijola has most recently served as Enreach Oy’s
Director of Strategic Partnerships and member of the
executive management team, being responsible for
business operations in the Microsoft and Salesforce
-ecosystems as well as for cooperation with system
integrators, consultants, and other strategic
partnerships, especially in Northern Europe. Before
this, Veijola was the Sales Director of Enreach Oy.
Financial Statements
31
(EUR 1,000) Note 2022 2021
Net sales 3 7,823 9,140
Other operating income 4 4 0
Materials and services 6 1,552 1,106
Employee benefit expenses 7 7,214 6,824
Depreciation and amortization 9 1,017 1,489
Other operating expenses 10 814 968
Total expenses 10,597 10,388
Operating Result -2,770 -1,248
Financial income 11 4 3
Financial expenses 11 -66 -111
Financial items, net -62 -108
Provisions 25 -33 -
Result before tax -2,864 -1,356
Income taxes 12 -3 0
Result for the financial year -2,868 -1,356
Other items in comprehensive income that may be reclassified subsequently to profit or loss:
Exchange differences on translating foreign operations -2 0
Other items in comprehensive income, net of tax -2 0
Total comprehensive income for the financial year -2,870 -1,356
Earnings per share, EUR
Undiluted, EUR 13 -0.202 -0.113
Diluted, EUR 13 -0.202 -0.113
CONSOLIDATED
COMPREHENSIVE INCOME
STATEMENT, IFRS
32
CONSOLIDATED BALANCE
SHEET, IFRS (1/2)
(EUR 1,000) Note 2022 2021
ASSETS
Non-current assets
Capitalized product development expenses 14 2,380 1,704
Other intangible assets 14 31 8
Goodwill 15 358 358
Tangible assets 16 171 171
Other investments 17 5 5
Right-of-use assets 16 756 148
Deferred tax assets 19 273 273
Total non-current assets 3,973 2,666
Current assets
Trade and other receivables 20 3,452 2,694
Cash and cash equivalents 21 17 441
Total current assets 3,469 3,135
Total assets 7,442 5,800
33
CONSOLIDATED BALANCE
SHEET, IFRS (2/2)
EQUITY AND LIABILITIES
Equity
Share capital 23 1,359 1,359
Other funds 21 21
Treasury shares -406 -439
Translation difference -66 -68
Invested non-restricted equity fund 23 2,943 5
Retained earnings -3,364 -448
Equity attributable to shareholders of the parent company 487 430
Non-current liabilities
Interest-bearing lease liabilities 609 -
Deferred tax liabilities 19 0 0
Total non-current liabilities 609 0
Current liabilities
Interest-bearing lease liabilities 149 182
Provisions 25 33 -
Trade and other payables 25 4,644 3,689
Interest-bearing liabilities 24 1,521 1,500
Total current liabilities 6,346 5,370
Total liabilities 6,955 5,370
Total equity and liabilities 7,442 5,800
(EUR 1,000) Note 2022 2021
34
CONSOLIDATED CASH FLOW
STATEMENT, IFRS
(EUR 1,000) Note 2022 2021
Cash flow from operating activities
Result for the period -2,868 -1,356
Adjustments for the result
Depreciation 1,017 1,489
Other adjustments 27 -143 29
Changes in working capital:
Increase (-)/decrease (+) in short-term non-interest bearing receivables -680 390
Increase (+)/decrease (-) in short-term non-interest bearing liabilities* 988 323
Interest expense and other financial expenses paid -58 -164
Interest income and other financial income received 0 3
Taxes paid -21 -22
Net cash flow from operating activities -1,765 692
Cash flow from investing activities
Acquisition of tangible assets -111 -83
Capitalized development expenses -1,209 -856
Acquisition of other intangible assets -35 -3
Net cash flow from in investing activities -1,355 -942
Cash flow from financing activities
Proceeds from borrowings 24 1,521 1,500
Repayments of borrowings 24 -1,500 -700
Payment of lease liabilities -266 -291
Share issue, net 23 2,937 -
Net cash used in financing activities 2,693 509
Change in cash and cash equivalents -427 258
Cash and cash equivalents at the beginning of year 441 185
Effect of exchange rate differences 3 -2
Cash and cash equivalents at the end of year 21 17 441
*Includes non-interest bearing liabilities related to Investments EUR 127 thousand
35
PARENT COMPANY INCOME
STATEMENT, FAS
(EUR) Note 2022 2021
Net sales 3 7,234,554 8,705,482
Other operating income 4 693,716 607,195
Material and services 6 2,511,492 2,743,535
Personnel expenses 7 5,306,728 4,933,338
Depreciation and amortization 9 185,842 156,563
Other operating expenses 10 2,299,231 1,915,889
Total expenses 10,303,292 9,749,326
Operating result -2,375,022 -436,649
Financial income and expenses 11 -600,190 -146,387
Result before appropriations and taxes -2,975,212 -583,036
Appropriations 25 -32,628 -
Result before taxes -3,007,840 -583,036
Income taxes 12 0 0
Result for the financial year -3,007,840 -583,036
36
PARENT COMPANY
BALANCE SHEET, FAS
(EUR) Note 2022 2021
ASSETS
Non-current assets
Intangible assets 14 150,426 190,526
Tangible assets 16 170,866 171,030
Investments in group companies 17 3,581,261 3,581,263
Other investments 17 4,562 4,562
Total non-current assets 3,907,115 3,947,381
Current assets
Non-current receivables 18,19 225,000 225,000
Current receivables 20 5,111,014 2,700,517
Cash and cash equivalents 21 938 384,421
Total current assets 5,336,952 3,309,938
Total assets 9,244,067 7,257,319
EQUITY AND LIABILITIES
Equity
Share capital 23 1,359,090 1,359,090
Invested unrestricted equity fund 23 3,454,341 5,347
Retained earnings 270,643 839,261
Treasury shares -405,726 -439,307
Result for the financial year -3,007,840 -583,036
Total equity 1,670,507 1,181,355
Provisions 32,628 -
Liabilities
Current liabilities 24,25 7,540,932 6,075,964
Total liabilities 7,540,932 6,075,964
Total equity and liabilities 9,244,067 7,257,319
37
PARENT COMPANY CASH
FLOW STATEMENT, FAS
(EUR) 2022 2021
Cash flow from operations
Operating result -2,375,022 -436,649
Adjustment for the period:
Depreciation and amortization 185,842 156,563
Non-cash transactions 35,199 -
Financial items, net -42,031 -146,387
Cash flows before change in working capital -2,196,012 -426,473
Change in working capital
Increase (-) / decrease (+) in current receivables -875,913 445,577
Increase (-) / decrease (+) in current liabilities* 1,061,813 408,589
Change in net working capital 185,900 854,166
Net cash from operating activities -2,010,112 427,693
Cash flows from investing activities
Investments in intangible assets -34,534 -
Purchases of tangible assets -111,043 -83,454
Investments in subsidiary loans granted -1,185,942 -825,530
Net cash used in investing activities -1,331,519 -908,983
Cash flows from financing activities
Proceeds from current loans and borrowings 1,520,756 1,500,000
Repayments of short-term borrowings -1,500,000 -700,000
Proceeds from share issuance 2,937,392 -
Cash flows from financing activities 2,958,148 800,000
Change in cash and cash equivalents -383,483 318,710
Cash and cash equivalents at the beginning of the year 384,421 65,639
Cash and cash equivalents at the end of the year 938 384,421
38
STATEMENTS OF CHANGES
IN EQUITY
Consolidated statement of
changes in equity, IFRS
(EUR 1,000)
Share
capital
Other
funds
Translation
differences
Treasury
shares
Invested
unrestricted
equity fund
Retained
earnings
Equity attributable
to shareholders
of the parent
company
Equity Dec 31, 2020 1,359 21 -69 -439 5 881 1,758
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 -448 430
Disposal of own shares 34 34
Stock option scheme -47 -47
Share issue ,net 2,937 2,937
Comprehensive income -2 -2,868 -2,870
Equity Dec 31, 2022 1,359 21 -66 -406 2,943 -3,364 487
39
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, 2021 12,444,863 1,359,090 -439,307 5,347 1,006,005 572,046 1,931,136
Dividends paid 71 71 71
Deferred taxes for previous financial years* -166,817 -166,817 -166,817
Result for the year -583,036 -583,036 -583,036
Equity Jan 1, 2022 12,444,863 1,359,090 -439,307 5,347 256,223 -177,735 1,181,355
Right issue 3,448,994 3,448,994 3,448,994
Treasury share price difference 14,418 14,418 14,418
Disposal of own shares 33,581 33,581 33,581
Result for the year -3,007,840 -3,007,840 -3,007,840
Equity Dec 31, 2022 16,455,321 1,359,090 -405,726 3,454,341 -2,737,199 311,418 1,670,508
*deffered tax, change of the accounting principle.
Notes to Financial Statements
41
COMPANY INFORMATION
QPR offers services and software tools for developing
business processes and enterprise 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 24, 00350 Helsinki, Finland . The
shares of the 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, Finland .
the financial statements for publication on February 9,
2023. 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
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, in force on December
31, 2022. 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 and amended standards and interpretations
adopted in 2022
From the beginning of 2022, the Group has applied
the following new and revised standards and
interpretations.
Onerous Contracts – Costs of Contingent Liabilities
and Contingent Assets Fulfilling a Contract -
Amendments to IAS 37 Provisions, (effective for
financial years beginning on or after January 1, 2022)
The amendment specifies the recognition of direct
additional costs related to provisions for loss-making
contracts and other expenses allocated to them as part
of the provision.
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 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.
Property, Plant and Equipment — Proceeds before
Intended Use – Amendments to IAS 16 Tangible
Assets (effective for financial years beginning on or
after January 1, 2022)
According to the changes, revenue from the sale
of products arising from the use of an unfinished
tangible asset and related manufacturing costs should
be recognized in profit or loss.
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.
Consolidation principles
The Consolidated Financial Statements include
the parent company, QPR Software Plc, and the
42
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 joint ventures or associated
companies in 2022 and 2021.
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 2022 and 2021.
Continuity of operations
The Consolidated Financial Statements have
been prepared in accordance with the principle of
continuity. The company concluded a long-term
refinancing agreement at the beginning of 2023.
Additional information in the note 30.
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 rights 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. The 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. The 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 are 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 has been transferred to the customer.
The Group uses payment terms typical for each
market, including domestic terms, which are typically
shorter than international terms.
Other operating income
Other operating income includes income that is not
related to the parent company’s core business. Public
43
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.
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.
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 an option plan for key persons
as of beginning of the year 2019 and expanded it
with a new plan in 2022. 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 the 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 an 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
44
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, in accordance with IAS 12, that future
taxable income will be generated against which the
temporary 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.
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 2022
and 2021.
Useful lifetimes of tangible assets:
Machinery and equipment 3 – 7 years
IT machinery and equipment 2 – 5 years
Lease agreements
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 for 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. 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 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, 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,
45
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 2022 and 2021.
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 our 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.
In the assessments that require the discretion of
the management, the management has taken into
account in the valuation the factors causing general
uncertainties such as the war in Europe, inflation
and the general uncertainties affecting economic
development.
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, 2022,
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.
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.
46
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 influence the Consolidated
Financial Statements when they become effective.
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 42.
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.
47
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 the
rental period.
48
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) 2022 2021
Net sales by operating segment
Operational development of organizations 7,823 9,140
Total net sales 7,823 9,140
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 1,000)
2022 2021 2022 2021
Software licenses 560 1,317 512 1,233
Renewable software licenses 583 797 343 461
Software maintenance services 1,803 2,034 1,562 1,790
Cloud services 1,738 1,283 1,679 1,511
Consulting services 3,139 3,710 3,139 3,709
Total net sales 7,823 9,140 7,235 8,705
49
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. The company has closed its business and
partnerships in Russia for the time being.
Finland 4,126 4,614 4,126 4,620
Europe incl. Russia and Turkey 2,745 2,689 2,241 2,352
Rest of the world 953 1,837 868 1,733
Total net sales 7,823 9,140 7,235 8,705
Balance sheet items based on customer agreements are presented in Note 22.
4. OTHER OPERATING INCOME
Group, IFRS Parent company, FAS
(EUR 1,000) (EUR 1,000)
2022 2021 2022 2021
Other items 4 - 694 607
Total 4 - 694 607
The other items included intra-group service charges from the parent company.
5. ACQUIRED BUSINESS OPERATIONS
The branch in France was established under QPR Software Plc in 2022.
Group, IFRS Parent company, FAS
(EUR 1,000) (EUR 1,000)
2022 2021 2022 2021
50
6. MATERIALS AND SERVICES
Group, IFRS Parent company, FAS
(EUR 1,000) (EUR 1,000)
2022 2021 2022 2021
Materials and services 1,552 1,106 2,511 2,744
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 1,000)
2022 2021 2022 2021
Wages and salaries 5,995 5,691 4,414 4,108
Pension expenses - defined contribution plans 1,008 947 729 688
Other personnel expenses 211 185 164 138
Total 7,214 6,824 5,307 4,933
Average number of employees during the year 81 80 56 54
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 2022 and 2021.
51
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 1,000)
2022 2021 2022 2021
Salaries and other short-term benefits:
Members of the Board of Directors 113 89 113 89
Chief Executive Officer Jari Jaakkola 0 159 0 159
Chief Executive Officer Jussi Vasama 219 76 219 76
Executive Management Team 969 600 969 600
Total 1,301 923 1,301 923
Parent company, FAS
(EUR 1,000)
2022 2021
Board fees by member:
Ervi Pertti, Chairman of the Board 43 28
Heikkonen Matti 23 14
Koskela Antti 23 14
Tapaninen Jukka 23 14
Leskinen Vesa-Pekka, Chairman of the Board, until March 25, 2021 0 6
Piela Topi, until March 25, 2021 0 4
Rajala Jarmo, until March 25, 2021 0 4
Vainio Salla, until March 25, 2021 0 4
Total 113 89
52
QPR Software Plc's Annual General meeting held
on April 6th, 2022, resolved that EUR 45,000 annual
fee (2021: 37,080) shall be paid for the Chairman of
the Board of Directors and EUR 25,000 (2021: 18,540)
annual fee shall be paid for the other members
of the Board of Directors. Approximately 40% of
the remuneration to the members of the Board of
Directors will be paid in the company’s shares and 60%
in cash, and the shares will be granted as soon as it is
possible after the next Annual General Meeting when
insider rules allow it. No separate meeting fees are
paid.
The Company does not have any exceptional pension
arrangements for the CEO. Pension expenses accrued,
based on the CEO's salary and bonuses and the
Finnish pension legislation, amounted to EUR 38
thousand in 2022 (2021: EUR 38 thousand).
The period of notice for the CEO is four (4) months.
Compensation on termination is equivalent to six
(6) month's salary. Other members of the Group's
Executive Management Team do not enjoy special
benefits related to termination of their contract.
In 2022, the maximum annual bonus of Executive
Management Team, including the CEO, was 50% of the
annual base salary. The bonus scheme for members of
the Executive Management Team was based on a set
of KPI's including development of the Group net sales,
new sales and development of non-financial KPI’s.
For the financial year 2022 about EUR 12 thousand
(2021: EUR 53 thousand) will be paid to the executive
management team, including the CEO.
8. SHARE BASED PAYMENTS
Option scheme
QPR Software is operating with 2019A, 2019B and 2022
option plans intending to use these as part of the
Group's incentive and commitment program for the
key employees. The purpose of the stock options is to
encourage the key employees to work on a long-term
basis to increase the shareholder value and retain the
key employees at the company. The stock options are
issued gratuitously.
The option plan 2019 A and B provides for the
issuance of up to 910,000 options and option plan
2022 maximum 489,542 options. Each option entitles
its holder to subscribe for one share. The option plan
participants can execute their reward during a one or
two-year subscription period following each vesting
period through either subscribing for shares or selling
options. The option plan participants generally lose the
right to their reward if their employment terminates
during the vesting period.
Out of the 2019 stock option plan, 437,000 options are
marked with the symbol 2019A and 473,000 options
are marked with the symbol 2019B. The subscription
period for stock options marked 2019 A is January
1,2022-January 31, 2023 and for stock options marked
2019B January 1,2023-January 31,2024
The allocated number of shares, subscribed by
exercising 2019 stock options issued corresponds
to a maximum total of 3.8 per cent of all shares and
votes of the shares in the company after the potential
share subscriptions, if new shares are issued in the
share subscription. After the share subscriptions with
allocated stock options, the number of the company’s
shares may be increased by a maximum total of
638,000 shares, if new shares are issued in the share
subscription.
The share subscription price for stock options 2019A
is EUR 1.70 per share, which was corresponding to the
market price of the company’s share at the time of
issuance. The share subscription price for stock options
2019B is EUR 2.55 per share, which corresponded to the
market price of the company’s share with an addition
of 50 per cent at the time of issuance. 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 initial theoretical market value for Stock Option plan
2019 related to 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 considering
the share subscription price of a stock option and with
the following input factors: share price EUR 1.70, risk
free interest rate 0 per cent, times to maturities of
stock options approximately 4 years and approximately
5 years and volatility approximately 22 per cent. On
December 31, 2022, out of stock option plan 2019 A, no
subscription has been made.
A member of the Executive Management Team
participating in the stock option plan must increase
his or her share ownership in the company with the
net profit received through the stock options. He or
she must invest half of the net profit received through
the stock options in the company’s shares until his or
her share ownership in the company corresponds to
the value of his or her annual gross salary. The share
ownership must be maintained at such a level as long as his or her employment or service is in force.
The Board of Directors resolved on the 2019 A and B stock option plans by virtue of an authorization granted
by the company’s Annual General Meeting of Shareholders held on 12 April 2018. The target group of the stock
option plan includes in total less than 15 key employees and persons belonging to the management. The terms
and conditions of the stock options 2019 available on the company’s webpage: www.qpr.com/company/investors
The stock option plan 2022 are marked with the symbol 2022. The Share subscription period with the Stock
Options shall be 15 June 2025 - 31 May 2027.
The number of shares for the stock option plan 2022, subscribed by exercising stock options corresponds to a
maximum of 2.9% 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 489,542 shares, if new shares are issued in the share subscription.
The share subscription price for stock options 2022 is EUR 0.85 per share, which was corresponding to the market
price of the company’s share at the time of issuance. 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 theoretical market value of one stock option 2022 is approximately EUR 0.22 per stock option. The theoretical
market value of stock options 2022 is approximately EUR 87,700 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 with the following input factors: share price EUR 0.85, risk free interest rate
0.88 per cent, times to maturities of stock options approximately 4.8 years volatility approximately 27 per cent.
The Board of Directors resolved on the 2022 stock option plans by virtue of an authorization granted by the
company’s Annual General Meeting of Shareholders held on 6 April 2022. The target group of the stock option
plan includes in total less than 10 key employees and persons belonging to the management.
The terms and conditions of the stock options 2022 available on the company’s webpage: www.qpr.com/
company/investors
One option
Stock options granted /
entitles to
Share
Stock option schemes and
outstanding at end of the
Returned/exercised/
Un-
purchases
subscription
subscription period
year
expired
distributed
shares
price
2019A 1.1.2022–31.1.2023 315,000 122,000 0 1 1.70
2019B 1.1.2023–31.1.2024 273,000 150,000 0 1 2.55
2022 15.6.2025–31.5.2027 416,112 73,430 1 0.85
Total 1,004,112 272,000 73,430
53
54
9. DEPRECIATION AND AMORTIZATION
Group, IFRS Parent company, FAS
(EUR 1,000) (EUR 1,000)
2022 2021 2022 2021
Intangible assets 671 1,112 75 69
Tangible assets
Machinery and equipment 111 88 111 88
Right-of-use assets, buildings 235 289 - -
Total 1,017 1,489 186 157
No write-downs on assets were booked in 2022 (2021: EUR 372 thousand). The write-downs in 2021 are related to
product development activations EUR 218 thousand and goodwill EUR 155 thousand.
10. OTHER OPERATING EXPENSES
Group, IFRS Parent company, FAS
(EUR 1,000) (EUR 1,000)
(EUR 1,000) 2022 2021 2022 2021
Non-statutory indirect employee costs 191 137 148 98
Premises 25 57 291 346
Travel expenses 44 32 39 28
Marketing and other sales promotion 279 153 279 153
Computers and software 528 435 510 427
External services 807 616 778 591
Doubtful receivables and bad debts 58 129 46 129
Capitalized product development expenses -1,321 -750 - -
Other expenses 202 158 208 142
Total 814 968 2,299 1,916
55
The non-audit services performed by the statutory auditor KPMG OY AB during 2022 was EUR 5 thousand
Other expenses include fees paid to the Company’s auditor as follows:
Auditing 66 32 59 27
Other services 5 3 5 3
Total 71 35 65 30
The non-audit services performed by the statutory auditor KPMG OY AB during 2022 was EUR 5 thousand
(2021:3).
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 1,353 1,365 119 237
Capitalized expenses 1,321 750 - -
Total 2,674 2,115 119 237
Product development expenses mainly consist of external services and personnel expenses. Recognized
expenses do not include amortization. The amortization of capitalized product development expenses is
presented in Note 14.
56
11 . FINANCIAL INCOME AND EXPENSES
Recognized in profit or loss
Group, IFRS Parent company, FAS
(EUR 1,000) (EUR 1,000)
2022 2021 2022 2021
Interest income from loans and other receivables 0 0 0 0
Interest expenses from loans -21 -14 -21 -14
Other financial income and expenses -25 -81 -526 -70
Exchange rate differences -16 -12 -54 -63
Total -62 -108 -600 -146
Exchange rate differences in profit and loss
Exchange rate differences included in net sales -10 -23 -13 -25
Exchange rate gains in financial income 4 3 2 1
Exchange rate losses in financial expenses -20 -15 -55 -64
Total -26 -36 -66 -88
Other Financial income and expenses in parent company include right issue costs worth of EUR 512 thousand
according to FAS. According to IAS32 group is presented right issuance as net value.
57
12. INCOME TAXES
Recognized in profit or loss
Group, IFRS Parent company, FAS
(EUR 1,000) (EUR 1,000)
2022 2021 2022 2021
Current tax expense 0 1 0 0
Tax expense from previous years 3 -1 0 0
Total 3 0 0 0
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 2022 and 2021).
The Group did not recognize deferred tax assets of EUR 722 thousand in 2022 nor in EUR 284 thousand in 2021.
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 from the previous years. Total recognized and unrecognized
deferred tax assets in the end of 2022 was EUR 1,279 thousand.
Note 19 describes more extensively the criteria for assessing deferred tax assets.
Group, IFRS
(EUR 1,000) 2022 2021
Result before tax -2,864 -1,356
Income tax calculated at the Finnish corporate tax rate 573 271
Effect of different tax rates in foreign subsidiaries -1 -5
Effect of IFRS 15 and IFRS 16 40 19
Other items -7 -1
Withholding tax 12 -
Deferred tax of right issue costs 102 -
Unrecognized deferred tax -722 -284
Tax expense in the comprehensive income statement -3 -0
58
13. EARNINGS PER SHARE
Undiluted earnings per share are calculated by dividing total comprehensive income attributable to shareholders
of the parent company by the weighted average number of shares outstanding during the financial year.
Group, IFRS
(EUR 1,000) 2022 2021
Total comprehensive income attributable to shareholders of the parent
company (EUR thousand) -2,870 -1,356
Number of shares outstanding (1,000 pcs) 14,187 11,988
Earnings per share (EUR/share)
Undiluted and diluted -0.202 -0.113
The Group is operating share option schemes, Stock option plan 2019 and 2022. In 2022 and 2021, the stock
option scheme did not have a dilutive effect. The Group arranges successful right issuance in 2022 with 4,010,458
new shares. Total outstanding shares on December 31, 2022 was 16,041,834.
59
14. INTANGIBLE ASSETS
Group (EUR 1,000), IFRS
Computer
software
Other
intangible
assets
Capitalized
product
development Total
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 Jan 1, 2022 7 1 1,704 1,711
Increases and decreases 0 35 1,336 1,371
Amortization for the period -4 -7 -660 -671
Acquisition cost Dec 31, 2022 1,064 2,630 9,699 13,394
Accum. amortization and write-downs Dec 31, 2022 -1,061 -2,603 -7,319 -10,983
Book value Dec 31, 2022 3 28 2,380 2,411
R&D assets (EUR 1710 thousand) and unfinished product development projects (EUR 670 thousand), which have
not yet commercialized and respectively started depreciations, are tested at the end of each financial period or
at any event if there is indication of impairment on any asset for the four (4) year period.
QPR has in the reporting period tested R&D assets for impairment at 31.12.2022. The recoverable amount from
the cash generating unit is determined based on value in-use calculations. The calculations are prepared
following the discounted cash flow method using the management approved estimates driven from budget for
the following year and subsequent development derived from the strategic plans. Terminal year value has been
defined based on the long-term strategic plans taking average cash flows of the period. Cash flows beyond the
5-year period are calculated using the terminal value method. The terminal growth rate of 1.0% percent (1.0%)
used in projections is based on management’s assessment on conservative long-term growth. Key driver for the
valuation is the revenue growth based on the Group’s performance and future strategic growth plans, market
position as well as the potential in key markets. The applied discount rate is the weighted average pre-tax cost of
capital (WACC). The components of the WACC are risk-free rate, market risk premium, company specific factor,
and industry specific beta, cost of debt and debt/equity ratio. The WACC of 11.28% percent (11.14 %) has been
used in the calculations. As a result of the impairment test, no impairment loss for the CGU was recognized for
the financial period ended 31.12.2021. Based on testing performed in 2022, no need was found for recognizing
impairment losses: a clear margin was left for each tested unit.
60
Accounting estimates and management's judgements
The management uses significant estimates and judgement when determining whether there are indications
of impairment of R&D assets. Management judgement has also been used when defining the amount of cash
generating units and taken into account software business area and related consulting recoverable amounts.
The cash flow projections are based on budgets and financial estimates approved by management covering
a 5-year period. Cash flow forecasts are based on QPR’s existing business structure, actual results and the
management’s best estimates on future sales, cost and EBITDA development, general market conditions, growth
potential on the market as well as economical uncertainties. Management has considered in the estimates
the impact of decided structural changes in all business areas to improve performance. Management tests
the impacts of changes in significant estimates used in forecasts by sensitivity analyses. According to Group
level sensitivity analyses for R&D assets, there will be need for write-downs, if the operating profit decreases
by 15 percentage units or the discount rate increases by 14 percentage units compared to values used in the
calculations and without considering potential adjustments to the cost level.
Parent company (EUR 1,000), FAS
Computer
software
Other
intangible
assets
Capitalized
product
development Total
Book value Jan 1, 2021 248 2 9 259
Increases 0 0 0 0
Decreases 0 0 0 0
Amortization for the period -64 -1 -3 -69
Acquisition cost Dec 31, 2021 1,331 1,553 365 3,249
Accum. amortization and write-downs Dec 31, 2021 -1,147 -1,552 -360 -3,059
Book value Jan 1, 2022 184 1 5 191
Increases 0 35 0 35
Decreases 0 0 0 0
Amortization for the period -64 -7 -3 -75
Acquisition cost Dec 31, 2022 1,331 1,587 365 3,284
Accum. amortization and write-downs Dec 31, 2022 -1,211 -1,559 -364 -3,134
Book value Dec 31, 2022 121 28 2 150
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15. LIIKEARVO
Group (EUR 1,000) 2022 2021
Acquisition cost Jan 1 358 513
Write-downs 0 -155
Acquisition cost Dec 31 358 358
Book value Dec 31 358 358
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.
QPR has in the reporting period tested goodwill for impairment at 31.12.2022. The recoverable amount from
the cash generating unit is determined based on value in-use calculations. The calculations are prepared
following the discounted cash flow method using the management approved estimates driven from budget
for the following year and subsequent development derived from the strategic plans. Terminal year value
has been defined based on the long-term strategic plans. Cash flows beyond the 5-year period are calculated
using the terminal value method. The terminal growth rate of 1.0% percent (1.0%) used in projections is based
on management’s assessment on conservative long-term growth. Key driver for the valuation is the revenue
growth based on the Process Mining business area’s performance and future strategic growth plans, market
position as well as the potential in key markets. The applied discount rate is the weighted average pre-tax cost
of capital (WACC). The components of the WACC are risk-free rate, market risk premium, company specific
factor, and industry specific beta, cost of debt and debt/equity ratio. The WACC of 11.28% percent (11.14 %) has
been used in the calculations. As a result of the impairment test, no impairment loss for the CGU was recognized
for the financial period ended 31.12.2022. When assessing the recoverable amounts of cash generating unit,
management believes that no reasonably possible change in any of the key variables used would lead to a
situation where the recoverable amount of the unit would fall below their carrying amount. Considering that,
QPR does not present any sensitivity analyses regarding impairment test.
Accounting estimates and management's judgements
The management uses significant estimates and judgement when determining whether there are indications
of impairment of goodwill. Management judgement has also been used when defining the amount of cash
generating units and considered Process Mining software business area and related consulting recoverable cash
flows, as well as recoverable cash flows from common functions. The cash flow projections are based on budgets
and financial estimates approved by management covering a 5-year period. Cash flow forecasts are based on
QPR’s existing business structure, actual results and the management’s best estimates on future Net Sales, cost
development, general market conditions and growth potential on the market as well as economic uncertainties.
Management has considered decided structural changes impacting to all business areas for improving
performance as well as realized last quarter growth drivers. Management tests the impacts of changes in
significant estimates used in forecasts by sensitivity analyses.
62
16. TANGIBLE AND RIGHT-OF-USE ASSETS
Group (EUR 1,000), IFRS
Machinery and
equipment
Right-of-use
assets: buildings
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 Jan 1, 2022 171 148
Increases 111 842
Depreciation for the period -111 -235
Acquisition cost Dec 31, 2022 2,277 1,854
Accum. depreciation and write-downs Dec 31, 2022 -2,105 -1,099
Book value Dec 31, 2022 171 756*)
The Group entered on November 1, 2022 into the 5.5 years lease agreement for head quarter office premises
with substantially lower annual lease expenses. According to agreement, the Group has a possibility to move to
landloard’s other facilities in case the changes require so. Lease liabilities have been calculated according to the
5.5 years lease period, which substantially increased the Right of Use assets against the comparable period.
63
Parent company (EUR 1.000), FAS Machinery and equipment
Book value Jan 1, 2021 176
Increases 83
Depreciation for the period -88
Acquisition cost Dec 31, 2021 2,126
Accum. depreciation and write-downs Dec 31, 2021 -1,955
Book value Jan 1, 2022 171
Increases 111
Depreciation for the period -111
Acquisition cost Dec 31, 2022 2,237
Accum. depreciation and write-downs Dec 31, 2022 -2,066
Book value Dec 31, 2022 171
17. SHARES IN SUBSIDIARIES AND OTHER ENTITIES
The parent company of the Group is QPR Software Plc.
Subsidiaries Domicile 2022 2021
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%
*) Right-of-use assets Note 28 Leases
64
Parent company
(EUR 1,000)
Shares in subsidiaries 2022 2021
Acquisition cost Jan 1 3,581 3,581
Increases 0 0
Acquisition cost Dec 31 3,581 3,581
Book value Dec 31 3,581 3,581
Other shares
Acquisition cost Jan 1 5 5
Acquisition cost Dec 31 5 5
Book value Dec 31 5 5
Total book value of shares Dec 31 3,586 3,586
18. LONG-TERM RECEIVABLES
Group, IFRS Parent company, FAS
(EUR 1,000) (EUR 1,000)
2022 2021 2022 2021
Receivables from the Group companies - - 225 225
Breakdown of the Parent company’s receivables from Group companies: - -
QPR CIS Oy - - 225 225
Total - - 225 225
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19. DEFERRED TAX ASSETS AND LIABILITIES
Deferred tax assets, based on tax-loss carryforwards, have changed as follows:
Group, IFRS Parent company, FAS
(EUR 1,000) (EUR 1,000)
2022 2021 2022 2021
Jan 1 273 273 0 167
Recorded in equity - - 0 -167
Dec 31 273 273 0 0
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. These tax assets company will most likely be able to utilize
before the end of the utilization period by 2030.
The company has not recognized deferred tax assets in 2021 and 2022 according to the principle of precaution.
Unbooked deferred tax assets for the loss in 2022 amount to EUR 722 thousand and in 2021 EUR 284 thousand,
Deferred tax assets recognized and unrecognized total of EUR 1,279 thousand.
At 31 December 2022, QPR concluded based on its assessment that it is not probable for result year 2022 that it
will be able to utilize the unused tax losses, unused tax credits and deductible temporary differences in Finland
in the foreseeable future. This assessment was done primarily based on the historical performance. In 2022, QPR
generated accounting and taxable loss. This conclusion is based on the weighting of objective negative evidence
against more subjective positive evidence. The primary factors in this weighting were the more objective record
of a pattern of financial performance compared to the more inherently subjective expectations regarding future
financial performance in Finland. QPR continues to assess the realizability of deferred tax assets including in
particular its actual profitability and may re-recognize deferred tax assets related to Finland where a clear pattern
of tax profitability can be established. Finnish unrecognized and recognized deferred tax assets expires in ten
years from the time those arose, starting from year 2026 until 2032 and are available against future Finnish tax
liabilities.
66
20. TRADE AND OTHER RECEIVABLES
Group, IFRS Parent company, FAS
(EUR 1,000) (EUR 1,000)
2022 2021 2022 2021
Trade receivables 2,831 2,006 2,775 1,828
Credit loss provision -3 -45 -3 -45
Accrued income and prepaid expenses 380 163 369 138
Other receivables 242 570 63 393
Current receivables from Group companies - - 1,907 386
Total 3,449 2,694 5,111 2,701
Geographical breakdown of trade receivables:
Finland 1,172 828 1,172 828
Other European countries 1,162 667 1,146 544
Countries outside Europe 497 511 457 457
Total 2,831 2,006 2,775 1,828
Group, IFRS
(EUR 1,000) 2022 % 2021 %
EUR (Euro) 2,316 81.8 1,505 75.0
USD (U.S. Dollar) 240 8.5 290 14.5
SEK (Swedish Krona) 33 1.2 45 2.2
ZAR (South African Rand) 6 0.2 13 0.7
JPY (Japanese Yen) 16 0.6 13 0.6
GBP (Pound Sterling) 23 0.8 42 2.1
RUB (Russian Ruble) 0 0.0 2 0.1
AED (United Arab Emirates dirham) 196 6.9 96 4.8
Total 2,831 100 2,006 100.0
Currency breakdown of trade receivables:
Age analysis of trade receivables:
Fair value of trade receivables:
Not due 1,940 68.5 1,605 80.0
0 - 90 days overdue 825 29.1 291 14.5
90 - 180 days overdue 47 1.7 14 0.7
More than 180 days overdue 20 0.7 96 4.8
Total 2,831 100 2,006 100
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
Credit loss
expectation
expectance based
Trade receivables
based on trade
on age trade
receivables 2022,
receivables,%
EUR 1,000
Not due 1,940 0 0.0
0 - 60 days overdue 815 4 0.5
60 - 120 days overdue 11 0 1.0
120 - 180 days overdue 45 1 2.0
>180 days overdue 20 2 10.0
Total 2,831 7
In addition to the maturity-based matrix for trade receivables, in 2022, the Company has not recognized
additional provisions for credit losses based on experience (2021: 33).
Credit losses of EUR 36 thousand (2021: 129) on trade receivables have been recognized in the Group’s result.
67
68
Breakdown of the parent company’s accrued income and prepaid expenses:
Parent company, FAS
(EUR 1,000)
2022 2021
Accrued income 32 35
Prepaid expenses 330 103
Total 363 138
Breakdown of the parent company’s receivables from Group companies:
Parent company, FAS
(EUR 1,000)
2022 2021
QPR Services Oy 1,907 386
Total 1,907 386
21. CASH AND CASH EQUIVALENTS
Group, IFRS Parent company, FAS
(EUR 1,000) (EUR 1,000)
2022 2021 2022 2021
Bank accounts 17 441 1 384
Total 17 441 1 384
Additional information about Company’s financial position in notes 25.
69
22. BALANCE SHEET ITEMS RELATED TO CUSTOMER CONTRACTS
Group, IFRS Parent company, FAS
(EUR 1,000) (EUR 1,000)
2022 2021 2022 2021
Trade receivables 2,831 1,961 2,775 1,784
Contract assets 33 303 33 303
Contract liabilities -885 -627 -860 -541
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. The Company arranged right issuance in 2022 increasing the number of shares to
16,455,321 (2021: 12,444,863).
Other funds
Includes the reserve fund in subsidiary QPR Software AB.
Treasury shares
Treasury shares include the purchase price of shares repurchased by the Group.
Invested unrestricted equity fund
Invested unrestricted equity fund includes proceedings from the right issuance arranged in the second quarter
of 2022. Along with the right issuance 4,010,458 new shares were registered. According to Finnish accounting
standards, invested unrestricted equity funds are reported into gross value.
70
Calculation of the distributable funds
Parent company, FAS
(EUR)
2022
Retained earnings 270,643
Result for the period -3,007,840
Deferred taxes for previous financial years -
Dividends paid -
Treasury shares -405,727
Invested unrestricted equity fund 3,454,341
Activated product development expenses -
Distributable funds 311,418
24. OTHER NON-CURRENT LIABILITIES AND INTEREST-BEARING
Non-current liabilities Group Parent company
(EUR 1,000) (EUR 1,000)
(EUR 1,000) 2022 2021 2022 2021
Non-current Lease liabilities 609 - - -
Total 609 - - -
Current interest-bearing loans
Group, IFRS Parent company, FAS
(EUR 1,000) (EUR 1,000)
2022 2021 2022 2021
Loans from banks, next year repayment 1,521 1,500 1,521 1,500
Lease libilities 149 182 - -
Total 1,670 1,682 1,521 1,500
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Interest-bearing loans consist of a 1.05% fixed-interest short-term bank loan.
The Group has a EUR 1.0 million credit limit at its disposal, of which EUR 21 thousand was in use at the end of
2022 (2021: 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 2022. The agreement for the revolving credit facility was renewed in February
2022 and transformed into a long-term loan on January 24, 2023, maturing in 2026.
The carrying amount of liabilities do not materially deviate from their fair value due to the short maturities of the
instruments.
Repayment schedule of right-of-use liabilities
Group, IFRS
(EUR 1,000)
2022 2021
Nominal
interest
rate Maturity
Nominal
value Book value
Nominal
value Book value
Lease liabilities 4,3 % 2022-2027 824 758 182 182
Interest-bearing right-of-use liabilities 824 758 182 182
The Group entered on November 1, 2022 into a lease contract for new headquarter office premises for 5.5 years,
with the possibility to change the office premises with the landloard’s other facilities. In addition, the Group has
lease liabilities related to the Oulu office premises and parking plots.
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25. TRADE PAYABLES AND OTHER LIABILITIES
Group, IFRS Parent company, FAS
(EUR 1,000) (EUR 1,000)
2022 2021 2022 2021
Provisions for liabilities and charges - - 33 -
Provisions 33 - - -
Trade payables 499 196 458 180
Accrued expenses and prepaid income 2,598 2,293 2,339 1,977
Advances received 885 627 860 541
Other liabilities 661 572 571 463
Current liabilities to Group companies - - 1,793 1,415
Total 4,676 3,689 6,053 4,576
The initial carrying amount of trade payables and other liabilities corresponds to the fair value because the effect
of discounting is not material considering the maturity of the item. The amount of trade payables in foreign
currencies was low, 1%, in 2022 and 2021.
QPR has recognized a provision for the estimated restructuring cost following management's approval of the
publication of the detailed restructuring plan. The provision applies to expenses related to the reorganization
of personnel published 20 September 2022 and as a result to costs related to the termination of the lease of
premises. On 31 December 2022 the provision was EUR 33 thousand. Cash flows related to the restructuring are
expected to materialize over the next six (6) months.
This provision is reported in QPR Software Plc under provisions for liabilities and charges, and in the Group under
provisions.
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Breakdown of the parent company’s accrued expenses and prepaid income:
Parent company, FAS
(EUR 1,000)
2022 2021
Holiday pay, including social costs 575 607
Bonuses, including social costs 136 164
Prepaid income 1,508 1,151
Other accrued expenses 119 54
Total 2,339 1,977
Breakdown of the parent company’s liabilities to Group companies:
Parent company, FAS
(EUR 1,000)
2022 2021
QPR Services Oy 0 0
QPR CIS Oy 24 16
QPR Software AB 1,017 665
QPR Software Inc 750 730
QPR Software Limited 2 4
Total 1,793 1,415
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, 2022 Book value
At fair value
Recognised
through
at amortised
Note
profit or loss
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 0 3,452 3,452
Cash and cash equivalents 21 0 17 17
Total 3,469 3,469
Financial liabilities
Financial liabilities not measured at fair value
Bank borrowings 24 0 1,521 1,521
Right-of-use liabilities 24 0 758 758
Trade payables and other liabilities 25 0 4,676 4,676
Total 6,955 6,955
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75
27. ADJUSTMENTS TO THE CASH FLOW FROM OPERATING ACTIVITIES
Group, IFRS
(EUR 1,000)
2022 2021
Other items -173 29
Total -173 29
Other items include Stock option program IFRS2 adjustments and accounts payable related to investments.
28. COMMITMENTS AND CONTINGENT LIABILITIES
Group, IFRS Parent company, FAS
(EUR 1,000) (EUR 1,000)
2022 2021 2022 2021
Business mortgage 2,382 2,386 2,337 2,337
Lease liabilities and rental commitments
Maturing within one year 47 23 226 181
Maturing during in 1-5 years 80 23 749 23
Total 2,509 2,432 3,313 2,541
Rental commitments include following agreements:
GROUP (IFRS)
Business mortgages are given as guarantee for Nordea towards RCF loan value EUR 1,500 thousand.
Rental guarantees totaling EUR 14 thousand are included in other current receivables in the balance sheet.
Rental agreements related office and IT equipment as well as car lease agreements
PARENT (FAS)
76
Business mortgages are given as guarantee for Nordea towards RCF loan value EUR 1,500 thousand.
Rental guarantees totaling EUR 13 thousand are included in other current receivables in the balance sheet.
Rental agreements related office and IT equipment as well as car lease agreements.
The Group entered a 5.5-year lease agreement, with substantially lower monthly rent. The agreement enables
transferring the contract to the other landlord’s facilities after 3 years.
The Group and the parent company had no derivative contracts in the end of financial years 2022 and 2021.
29. LEASE AGREEMENTS
Leases in the Balance Sheet
Group, IFRS Group, IFRS
(EUR 1,000) (EUR 1,000)
Dec 31, 2022 Dec 31, 2021
Assets
Non-current assets
Right-of use assets, buildings 756 148
Total 756 148
Lease liabilities, non-current 609 -
Lease liabilities, current 149 182
Total 758 182
Right-of-use assets and lease liabilities are related to the 5.5-year lease agreement signed by the company on
1.11.2022 for the office premises of the head office. The agreement allows for a move to other premises offered
by the landlord after three (3) years. In addition, the company has rental liabilities for Oulu premises and parking
spaces. According to the concluded agreement, the annual rent of the company decreases. Note 28 describes
the maturity of the agreement.
77
Leases in the Income Statement
1-12 2022 1-12 2021
Depreciation of right-of-use assets -235 -289
Interest expenses -8 -5
Total -243 -295
The total cash outflow for leases in 2022 was EUR 266 thousand (2021: 295).
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), 82%. 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 47 thousand, equaling 1.7%
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 decrease by EUR 48 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 2022 and 2021, 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. As an event after the reporting period, the interest rate on the financing
agreement signed in January 2023 is tied to the 12 month euribor.
78
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 were not bind under covenants
as per 31.12.2023. The group converted it's loan in January 2023 to the long term and bind under covenants,
measured against EBITDA and own equity ratio. EBITDA based performance measure is tested bi-annually and
own equity ratio annually in the end of year. The credit limit will be repaid in instalments of 500 thousand on
31.1.2024, 31.1.2025, and 31.1.2026. These financial statements have been prepared on a going concern basis, taking
into account the efficiency measures taken, the business forecast, and the financing agreement renewed by the
company in January 2023.
Maturity distribution of financial liabilities (figures are undiscounted):
31.12.2022
Group, IFRS
(EUR 1,000) Book value 0–6 months 7–12 months
beyond 12
months
Trade and other payables 499 499 0 0
Bank borrowings, revolving credit facility 1,521 1,521 0 0
Lease liabilities (IFRS16) 758 85 63 609
Total 2,778 2,105 63 609
Group, IFRS
(EUR 1,000) Book value 0–6 months 7–12 months
beyond 12
months
Trade and other payables 196 196 0 0
Bank borrowings, revolving credit facility 1,500 1,500 0 0
Lease liabilities (IFRS16) 182 182 0 0
Total 1,878 1,878 0 0
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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. Additional information on the Group’s trade receivables is presented in Note 20.
31. CAPITAL MANAGEMENT
Group (EUR 1,000), IFRS 2022 2021
Cash and cash equivalents 17 441
Net liabilities 2,262 1,241
Shareholders’ equity 487 430
Gearing, % 464.9 288.5
Equity ratio, % 7.4 8.3
Total balance sheet 7,442 5,800
The development of Group's capital structure is monitored, in particular, through gearing and equity ratio.
32. EVENTS AFTER THE REPORTING PERIOD
New financing agreement
QPR Software entered into a new financing agreement of 1.5 million euros with its main financing bank on
24 January 2023. This financing agreement replaces and refinances the company's current loan and prepares
for future growth-supporting working capital needs. The new loan has a three-year loan term and matures on
January 31, 2026.
In accordance with the financing agreement, the first installment of EUR 0.5 million is due on January 31, 2024.
After this, installments of EUR 0.5 million are due every year in January. The company will withdraw the loan in
April 2023 and convert it into the current interest-bearing loan.
80
The covenants of the loan are based on the company's EBITDA and equity ratio. The EBITDA of the covenants is
tested every six months and the equity ratio annually according to the status on the last day of the year.
New CEO to start in the position on March 1, 2023
On 20 December 2022, QPR Software Plc’s CEO Jussi Vasama announced his resignation in order to assume a
new position outside of QPR.
QPR Software Plc’s Board of Directors appointed Heikki Veijola (born 1970) as the company's new CEO on 2
January 2023. Veijola will start in the position on March 1, 2023.
Veijola has a master's degree in Economics (M.Sc., Turku School of Economics and Business Administration)
majoring in International Marketing.
Veijola has most recently served as Enreach Oy’s Director of Strategic Partnerships and member of the executive
management team, being responsible for business operations in the Microsoft and Salesforce -ecosystems
as well as for cooperation with system integrators, consultants, and other strategic partnerships, especially in
Northern Europe. Before this, Veijola was the Sales Director of Enreach Oy.
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33. KEY FIGURES OF THE GROUP 2021–2022
Group, IFRS
(EUR 1,000) 2022 2021 2020
Net sales 7,823 9,140 8,971
Growth of net sales, % -14.4 1.9 -5.7
Operating result -2,770 -1,248 -936
% of net sales -35.4 -13.7 -10.4
Result or loss before tax -2,864 -1,356 -952
% of net sales -36.6 -14.8 -10.6
Result for the period -2,868 -1,356 -812
% of net sales -36.7 -14.8 -9.0
Return on equity, % -625.7 -111.4 -34.1
Return of investments, % -120.3 -49.3 -28.0
Cash and cash equivalents 17 441 185
Net liabilities 2,262 1,241 762
Equity 487 430 1,759
Gearing, % 464.9 288.5 38.0
Equity ratio, % 7.4 8.3 34.6
Total balance sheet 7,442 5,800 6,317
Investment in intangible and tangible assets 2,324 924 1,210
% of net sales 29.7 10.1 13.5
Research and development expenses 2,674 2,115 2,050
% of net sales 34.2 23.1 22.9
Personnel average for period 81 80 86
Personnel at the beginning of period 80 88 83
Personnel at the end of period 85 80 88
82
34. PER-SHARE KEY FIGURES 2021–2022
Group, IFRS
(EUR 1,000) 2022 2021 2020
Diluted/Undiluted Earnings per share, EUR -0.202 -0.113 -0.068
Equity per share, EUR 0.030 0.035 0.161
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) -2.8 -16.4 -33.1
Development of share price
Average price, EUR 1.02 1.97 2.01
Lowest closing price, EUR 0.50 1.48 1.70
Highest closing price, EUR 1.89 2.38 2.50
Closing price on Dec 31, EUR 0.56 1.85 2.24
Market capitalization on Dec 31, EUR 1,000 8,983 22,178 26,853
Development of trading volume
Number of shares traded, 1,000 pcs 2,263 3,324 1,403
% of all shares 14.1 27.7 11.7
Number of shares on Dec 31, 1,000 pcs 16,455 12,445 12,445
Average number of shares outstanding 16,042 11,988 11,988
83
35. RECONCILIATION OF ALTERNATIVE KEY FIGURES
2022 2021
Equity ratio, %
Total Equity 487 430
balance sheet total 7,442 5,800
Advances received 885 627
Total equity x 100 7.4 % 8.3 %
Balance sheet total - advances received
84
SIGNATURES OF BOARD
OF DIRECTORS’ AND
FINANCIAL STATEMENTS
Helsinki, Finland, February 9, 2023
QPR Software Plc
Board of Directors
Pertti Ervi
Chairman of the Board
Matti Heikkonen
Board member
Antti Koskela
Board member
Jukka Tapaninen
Board member
Jussi Vasama
Chief Executive Officer
AUDITOR’S NOTE
An auditor’s report concerning the performed audit
has been given today.
Helsinki, Finland, March 2, 2023
KPMG Oy Ab
Authorized Public Accountants
Mika Karkulahti
Authorized Public Accountant
85
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
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
Alternative key figures
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 for key indicators”.
Auditor's Report
87
TO THE ANNUAL GENERAL
MEETING OF QPR SOFTWARE PLC
Report of 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 31 December, 2022. 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 key audit matters below.
We have also addressed the risk of management
override of internal controls. This includes
consideration of whether there was evidence of
management bias that represented a risk of material
misstatement due to fraud.
88
THE KEY AUDIT MATTER
— The financial statements have been prepared
according to a Going Concern -principle considering
the efficiency improvement measures, operating
forecast as well as the re-financing agreement the
company made in January 2023.
— The Group has generated losses in recent
years, cash flow from operating activities has been
negative and liquidity tight. The Group has initiated
the efficiency improvement measures to strengthen
its financial position, create a more sustainable cost
structure, and secure liquidity.
— Current liabilities at the end of December 2022
amounts in total EUR 6.3 million. In accordance with
note 30, the financial liabilities falling due within next
12 months totaled EUR 2.2 million, containing revolving
credit facility EUR 1.5 million falling due in 2023. After
the reporting period company entered into a new
financing agreement of EUR 1.5 million, which replaces
and refinances the loan falling due.
Group’s liquidity and financing arrangements (refer to Accounting policies for the consolidated financial
statements, subsequent events and notes 25 and 30 to the consolidated financial statements)
HOW THE MATTER WAS ADDRESSED IN THE AUDIT
Our audit procedures included, among others:
— To assess the sufficiency of financing we have
analyzed the business plans and cash flow estimates
prepared by the company
— We inspected the financing arrangements
carried out during the financial year 2022 and
subsequent to financial statements date December 31,
2022.
— As a part of our year-end audit procedures,
we assessed the accuracy of classification of
financial liabilities, and considered the adequacy
and appropriateness of the disclosures provided on
the financial status in the consolidated financial
statements.
.
89
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 development expenditures are
capitalized in the consolidated financial balance sheet
to the extent that they meet the capitalization criteria
set out in the relevant accounting standard (IAS
38) and are assessed to contribute future economic
benefits. The assessment may change even in a rather
short term, e.g as a result of technical development.
— The total product development costs
capitalized in the financial year amounted to EUR 1.3
million. The capitalized product development costs are
amortized over four years on a straight-line basis. The
capitalized product development costs at the year-end
2022 amounts to EUR 2.4 million, of which EUR 0.4
million were unfinished product development projects.
Capitalized product development costs represent 489
percent of the consolidated equity.
— Goodwill amounts to EUR 0.4 million at te end
of December 31, 2022 and represents 74 percent of the
consolidated equity.
— Goodwill and capitalized product development
costs are tested at least annually for impairment.
— Management makes several estimates of
assumptions used in the impairment calculations.
The future cash flow projections require management
judgement in regard e.g sales growth, profitability,
terminal growth and discount rates applied.
— Due to the significant carrying amount and
management judgment involved in determining
recoverable amounts and useful lifetime, 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 have assessed the appropriateness of the
capitalization process and the amortization period of
development expenditures and considered whether
the development costs capitalized during the year
had met the capitalization criteria under the relevant
accounting standard.
— We have assessed the appropriateness of the
impairment test carried out for the goodwill in the
consolidated financial statements.
— Our audit procedures on the impairment
testing included, among others, the following: We have
evaluated the future cash flow estimates for future
financial periods and the key assumptions used in the
impairment tests, such as sales growth, profitability
and terminal growth.
— Furthermore, we considered the adequacy
and appropriateness of the Group's notes in respect of
goodwill, testing calculations and intangible assets.
90
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 2.8 million
as at December 31, 2022 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 of the
trade receivables, 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 2022 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.
91
Responsibilities of the Board of Directors and the
Managing Director for the Financial Statements
The Board of Directors and the Managing Director
are responsible for the preparation of consolidated
financial statements that give a true and fair view in
accordance with International Financial Reporting
Standards (IFRS) as adopted by the EU, and of
financial statements that give a true and fair view in
accordance with the laws and regulations governing
the preparation of financial statements in Finland
and comply with statutory requirements. The Board
of Directors and the Managing Director are also
responsible for such internal control as they determine
is necessary to enable the preparation of financial
statements that are free from material misstatement,
whether due to fraud or error.
In preparing the financial statements, the Board of
Directors and the Managing Director are responsible
for assessing the parent company’s and the group’s
ability to continue as a going concern, disclosing,
as applicable, matters relating to going concern
and using the going concern basis of accounting.
The financial statements are prepared using the
going concern basis of accounting unless there is an
intention to liquidate the parent company or the group
or cease operations, or there is no realistic alternative
but to do so.
Auditor’s Responsibilities for the Audit of the
Financial Statements
Our objectives are to obtain reasonable assurance
about whether the financial statements as a whole
are free from material misstatement, whether due
to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high
level of assurance, but is not a guarantee that an
audit conducted in accordance with good auditing
practice will always detect a material misstatement
when it exists. Misstatements can arise from fraud or
error and are considered material if, individually or in
the aggregate, they could reasonably be expected to
influence the economic decisions of users taken on the
basis of the financial statements.
As part of an audit in accordance with good auditing
practice, we exercise professional judgment and
maintain professional skepticism throughout the
audit. We also:
— Identify and assess the risks of material
misstatement of the financial statements, whether
due to fraud or error, design and perform audit
procedures responsive to those risks, and obtain audit
evidence that 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.
92
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 17 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.
Our opinion on the financial statements does not
cover the other information.
In connection with our audit of the financial
statements, our responsibility is to read the other
information 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, we conclude
that there is a material misstatement of the other
information, we are required to report that fact. We
have nothing to report in this regard.
Helsinki, March 2 2023
KPMG OY AB
MIIKA KARKULAHTI
Authorized Public Accountant, KHT
93
INFORMATION FOR
SHAREHOLDERS
THE SHARE OF QPR
SOFTWARE PLC
ANNUAL GENERAL MEETING
The share of QPR Software Plc is quoted on the
main list of the Nasdaq Helsinki, in the Information
technology sector, Small Cap segment. Trading started
on March 8, 2002.
Trading code
QPR1V
ISIN code
FI0009008668
The Annual General Meeting will be held on May
3, 2023 starting at 2.30 p.m. at the Company’s
headquarters Huopalahdentie 24, 00350 Helsinki,
Finland.
A shareholder of the Company that has been entered
into the Company’s shareholders’ register maintained
by Euroclear Finland Ltd on April 20, 2023 has the right
to participate in the General Meeting.
The shareholder willing to participate in the Annual
General Meeting shall inform the Company of the
participation on April 27, 2023, at 10.00 a.m. at the
latest, on the Company’s website www.qpr.com, in
writing to the address Innovatics Oy, Yhtiökokous
/ QPR Software Oyj, Ratamestarinkatu 13 A, 00520
Helsinki, or by email to the address agm@innovatics.fi.
The letter or message of participation shall be at
the destination prior to the expiry of the registration
period. The possible proxies are asked to be delivered
in connection with the registration to the address set
forth above.
A holder of nominee registered shares has the right to
participate in the Annual General Meeting by virtue of
such shares, based on which he/she on the record date
of the Annual General Meeting, i.e. on May 3, 2023, and
would be entitled to be registered in the shareholders’
register of the Company held by Euroclear Finland Ltd.
The right to participate in the Annual 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 Ltd at
the latest by April 27, 2023 by 10:00 a.m. (Finnish time).
As regards nominee registered shares this constitutes
due registration for the Annual 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 Annual
General Meeting from his/her custodian bank. The
account management organization of the custodian
bank must register a holder of nominee registered
shares, who wants to participate in the Annual General
Meeting, into the temporary shareholders’ register of
the Company at the latest by April 27, 2023 by 10:00
a.m. (Finnish time), as mentioned above.
CHANGES OF ADDRESSES
If the address of a shareholder changes, we request
you to contact the custodian bank holding the
shareholder’s book-entry account.
FINANCIAL INFORMATION IN
2023
QPR will publish three interim reports in 2023:
• Interim report January–March 2023 on Wednesday 3
May 2023
• Half-year financial report January-June 2023 on Friday
21 July 2023
• Interim report January-September 2023 on Friday 20
October 2023
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/
company/investors).
94
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: 0290 001 150
Oulu Office
Kiviharjunlenkki 1 C
90220 OULU
Tel: 0290 001 150
Customer Care
Tel: 0290 001 156
customer[email protected]
Company website
www.qpr.com
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 in respect of whether the consolidated financial
statements for the year ended 31 December, 2022 included in the digital financial statements
7437003V4S76KM56UW70-2022-12-31-en.zip of QPR Software Plc (Business ID 0832693-7) have been
marked up with iXBRL markups 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 primary statements and the notes to the consolidated financial statements, and the
company identification data 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 Management
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 responsibilities in
accordance with these requirements.
The auditor applies International Standard on Quality Management ISQM 1, which requires the firm to design,
implement and operate a system of quality management including policies or procedures regarding
compliance with ethical requirements, professional standards and applicable legal and regulations
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 primary statements of 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;
— whether the notes to the consolidated financial statements and the company identification data included
in the ESEF financial statements data, have been marked up, in all material respects, with iXBRL tags in
accordance with Article 4 of the ESEF RTS; and
QPR Software Plc
Independent
Auditor’s Reasonable Assurance Report
on
ESEF Financial Statements
17 March, 2023
2
— whether 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.
Opinion
In our opinion, the primary statements of the consolidated financial statements, the notes to the consolidated
financial statements and the company identification data included in the ESEF financial statements of QPR
Software Plc identified as 7437003V4S76KM56UW70-2022-12-31-en.zip for the year ended 31 December,
2022 are, in all material respects, marked up in compliance with the ESEF Regulatory Technical Standard.
Our audit opinion on the audit of the consolidated financial statements of QPR Software Plc for the year ended
31 December, 2022 is set out in our Auditor’s Report dated 2 March, 2023. In this report, we do not express
any audit opinion or other assurance conclusion on the consolidated financial statements.
Helsinki 17 March, 2023
KPMG OY AB
Miika Karkulahti
Authorised Public Accountant, KHT