Untitled

Contents

Solteq in Brief

3

CEO’s Review

5

Corporate Governance Statement

6

Remuneration Report

17

Report of the Board of Directors

21

Key Figures

33

Financial Statements

37

Auditor’s Report

94

Statement of Non-Financial Information

101

Annual Report 2020

3

Solteq in Brief

Solteq is a provider of IT services and software solutions specializing in the

digitalization of business and industry-specific software. The key sectors in which

the Company has long-term experience are retail, manufacturing, utilities, and

services. The Company employs over 650 professionals with offices in Finland,

Sweden, Norway, Denmark, Poland and the UK, with a customer base throughout

Europe.

Annual Report 2020

4

“The growth was fueled by Solteq Software’s

Utilities business and the digital business and

commerce solutions of Solteq Digital."

Interim CEO, CFO Kari Lehtosalo

Annual Report 2020

5

A Year of Profitable Growth

Solteq Group’s revenue for 2021 was EUR 69.1 million, an increase of 14.2 percent from the previous year.

The growth was mainly organic. Profitability of the international subsidiaries improved significantly,

particularly in Denmark. The revenue from the international subsidiaries accounted for 22.3 percent of the

Group’s revenue. Solteq Software segment accounted for just over a third and Solteq Digital segment less

than two-thirds of the Group’s revenue. The growth was fueled by Solteq Software’s Utilities business and

the digital business and commerce solutions of Solteq Digital.

The Group’s year-on-year profitability improved significantly. EBITDA increased by 18.2 percent, to EUR

12.3 million. Operating profit was EUR 7.1 million, up by 33.1 percent from the previous year. The operating

profit margin was 10.3 percent.

For both segments, the year was a time for growth and internationalization. Solteq Software clearly

exceeded its annual target of over 20 percent growth in revenue and invested in the internationalization and

software development of its Utilities and Retail businesses. The segment’s result was affected by increases

in subcontracting expenses and general costs. Solteq Digital developed positively during the year, and

growth was particularly strong in digital business and commerce solutions in the Nordic market.

Investments in the Company’s product development amounted to EUR 2.8 million.

The COVID-19 pandemic continued throughout the year. The impact on business remained minor and

mainly affected customer projects in the travel, service, and leisure sectors. The organization’s operational

capacity and the safety of its stakeholders were ensured by measures adopted already the previous year.

Solteq Group’s business outlook remains stable both in Finland and internationally. The segments are

expected to continue their upward trend, driven by the more versatile and international offering of Solteq

Software’s Utilities business and the digital expert services provided by Solteq Digital. The Company

continues its investments in internationalization and the product development of Utilities business with

focus on the first half of 2022. The digital reality is affecting everyone. Keeping up with the latest

developments is therefore on the current and future agendas of companies of different sizes and in various

sectors.

Kari Lehtosalo

Interim CEO, CFO

Annual Report 2021

6

Corporate Governance Statement

Annual Report 2021

7

Investor Information

Annual General Meeting

Solteq Plc ‘s Annual General Meeting will be held on Thursday March 24, 2022, at 12 p.m. Due to the COVID-

19 pandemic, the Board of Directors has resolved on exceptional meeting procedures based on the

temporary act (375/2021) that came into force on May 8, 2021. The shareholders of the Company and their

proxy representatives may participate in the meeting and exercise their shareholder rights only by voting

in advance and by presenting counterproposals and questions in advance. It is not possible to participate

in the Annual General Meeting at the meeting venue and the meeting is not streamed live.

Solteq’s Financial Reporting in 2022

• Interim Report 1–3/2022 on April 28, 2022, at 8:00 a.m.

• Half Year Financial Report 1–6/2022 on August 11, 2022, at 8:00 a.m.

• Interim Report 1–9/2022 on October 27, 2022, at 8:00 a.m.

Stock Exchange Bulletins 2021

Oct 28, 2021

Solteq Plc: Solteq Plc’s Financial Reporting and Annual General Meeting in 2022

Oct 28, 2021

Solteq Plc: Solteq Plc’s Interim Report January 1 – September 30, 2021

Oct 1, 2021

Solteq Plc: Solteq Plc's CEO Leaves His Position in January 2022

Aug 17, 2021

Solteq Plc: Solteq Plc - Managers' Transactions

Aug 17, 2021

Solteq Plc: Solteq Plc - Managers' Transactions

Aug 12, 2021

Solteq Plc: Solteq Plc’s Half-Year Report January 1 – June 30, 2021

Aug 3, 2021

Solteq Plc: Notice pursuant to Chapter 9, Section 5 of the Finnish Securities Market Act

Jun 1, 2021

Solteq Plc: Correction to the Managers' Transactions notification

May 17, 2021

Solteq Plc: Change in the Board of Directors

May 14, 2021

Solteq Plc: Notice pursuant to Chapter 9, Section 5 of the Finnish Securities Market Act

May 14, 2021

Solteq Plc: Solteq Plc - Managers' Transactions

May 12, 2021

Solteq Plc Notice pursuant to Chapter 9, Section 5 of the Finnish Securities Market Act

May 12, 2021

Solteq Plc: Sentica has sold its shareholding in Solteq Plc

Apr 29, 2021

Solteq Plc: Solteq Plc’s Interim Report January 1 – March 31, 2021

Apr 27, 2021

Solteq Plc: Solteq Plc revises upwards its operating profit guidance for 2021

Apr 26, 2021

Solteq Plc: Sentica plans to reduce its ownership in Solteq Plc

Mar 30, 2021

Solteq Plc: Decisions of the Annual General Meeting 2021 and the Board meeting held after the Annual General

Meeting

Mar 18, 2021

Solteq Plc: New shares in Solteq Plc registered into the trade register

Mar 10, 2021

Solteq Plc: Solteq Plc: Correction to the notice to Annual General Meeting 2021

Mar 9, 2021

Solteq Plc: Notice to Solteq Plc’s Annual General Meeting 2021

Mar 9, 2021

Solteq Plc: Solteq Plc’s Annual Report 2020 has been published

Mar 1, 2021

Solteq Plc Solteq Plc acquires Partiture’s professional services business specialized in the utilities sector

Feb 25, 2021

Solteq Plc: Solteq Plc’s Financial Statements Bulletin January 1 – December 31, 2020

Annual Report 2021

8

Corporate Governance Statement

Corporate Governance Statement has been drafted in compliance with the Finnish Companies Act and the

Finnish Securities Markets Act valid on the date of publication. The Statement is issued as a separate report

and a reference to this statement is made in the Report of the Board of Directors.

General Principles

Solteq Plc is a public limited company registered in Finland and its head office is in Vantaa. By the end of

the financial year, Solteq Group consists of the parent company Solteq Plc and its four foreign subsidiaries,

which have four additional subsidiaries.

Decision-making and governance at Solteq comply with the Company’s Articles of Association, the Finnish

Companies Act and other applicable legislation. In addition, the Company complies with the Securities

Market Association’s Corporate Governance Code (Corporate Governance Code is available at cgfinland.fi)

as well as the Nasdaq Helsinki Ltd Guidelines for Insiders. The foreign subsidiaries comply with local

legislation.

Duties of the Governing Bodies

The Annual General Meeting of shareholders, the Board of Directors, and the CEO oversee the management

of Solteq Group and their tasks are determined in accordance with the Finnish Companies Act. The CEO

oversees group-level operative activity, assisted by the Group’s Executive Team.

Annual General Meeting

The Annual General Meeting is the highest governing body of the Company. The Annual General Meeting

is held once a year on a date determined by the Board of Directors, within six months of the end of the

financial year. Extraordinary Annual General Meetings may be held during the year, if necessary. In

accordance with the Articles of Association, Annual General Meetings are held in Vantaa, Finland, which is

where the Company’s registered head office is located. A notice to the Annual General Meeting of

shareholders and the agenda of the meeting are published in at least one Finnish national daily newspaper

and as a stock exchange bulletin as well as on the Company’s website.

The Annual General Meeting decides on the following matters:

• approval of the income statement and balance sheet,

• measures to be taken regarding the profit or loss shown on the approved balance sheet,

• discharging the members of the Board of Directors and the CEO from liability,

• number of Board members and their appointment,

• election of auditors,

• remuneration of the Board of Directors and auditors, and

• other matters specified in the notice to the Annual General Meeting.

Board of Directors

The Board of Directors of Solteq Plc is responsible for the Company’s management and the appropriate

organization of its operations. The Board of Directors is responsible for the duties specified in the Articles

of Association and the Finnish Companies Act. The main duties of the Board of Directors include confirming

the Company’s strategy and budget, making decisions on financing agreements and decisions on the

purchase and sale of significant assets. The Board of Directors monitors the Company’s financial

performance by means of monthly reports and other information provided to the Board by the Company’s

management.

Annual Report 2021

9

The duties and responsibilities of the Board of Directors are defined primarily by the Articles of Association

and the Finnish Companies Act. The Board of Directors annually ratifies a written charter that specifies the

meeting procedure of the Board of Directors and its duties.

In accordance with the charter, the duties of the Board of Directors are to:

• steer the Company’s operations in such a way as to maximize long-term added value to the assets

invested in the Company, while taking the Company’s various stakeholder groups into consideration,

• approve the incentive systems of the CEO and other management personnel,

• appoint and dismiss the CEO and decide on the terms of the CEO’s service contract,

• confirm the strategy, business objectives and annual budget and supervise their implementation,

• approve significant financing agreements and the purchases and sales of significant assets,

• review and approve interim reports and financial statements,

• review and approve mergers, acquisitions and corporate restructuring arrangements with total value

exceeding EUR 500 thousand and exceptional balance sheet items of more than EUR 100 thousand that

are not part of the Company’s regular business operations,

• review all contracts, agreements, and business transactions with the owners of the Company and the

Executive Team with their related parties, and with companies in which Solteq Plc holds a controlling

interest,

• approve the Company’s structural changes and confirm the organization of the Company based on the

CEO’s proposal,

• appoint the members of the Company’s senior management who report to the CEO, based on the CEO’s

proposal, and decide on the remuneration principles of the members of the Executive Team,

• regularly assess its own operations and collaboration with the management, and

• deal with other matters that the Chairman of the Board and the CEO have agreed to be dealt with by the

Board of Directors or matters that are otherwise within the decision-making power of the Board of

Directors based on the Companies Act, other legislation, the Company’s Articles of Association and other

applicable rules and regulations.

The special duties of the Chairman of the Board of Directors are to:

• steer the work of the Board of Directors in a manner that ensures that the Board attends to its duties as

efficiently and appropriately as possible,

• maintain regular contact with the CEO between Board meetings to monitor the operations of the Company,

• if necessary, maintain regular contact with other Board members between Board meetings,

• if necessary, maintain regular contact with the Company’s shareholders and other stakeholders, and

• bear responsibility for the planning and assessment of the activities of the Board of Directors and the

assessment of the CEO.

In accordance with the Articles of Association, Solteq’s Board of Directors has a minimum of five and a

maximum of seven regular members. The Board members are elected by the Annual General Meeting for

one term of office at a time. The term of office begins at the end of Annual General Meeting that elects the

Board of Directors and expires at the end of the first Annual General Meeting following the election. The

Articles of Association places no restrictions on the power of the Annual General Meeting to elect members

of the Board of Directors. The Board of Directors elects a chairman from among its members and the Board

of Directors is deemed to have quorum when more than half of its members are in attendance. In addition

to matters to be resolved, the Board of Directors is provided with up-to-date information on the Group’s

operations, financial standing and risks in its meetings. The Board of Directors meets 12–14 times per year

according to an agreed schedule, in addition to which the Board of Directors is convened when necessary.

Minutes are kept for all meetings.

Annual Report 2021

10

The Annual General Meeting 2021 elected six (6) members to Solteq’s Board of Directors: Markku Pietilä

(Chairman), Aarne Aktan, Lotta Kopra, Katariina Segerståhl, Panu Porkka and Mika Uotila. On May 17, 2021,

the Company announced the resignation of Mika Uotila, a member of Board of Directors. After the

resignation, Solteq Plc’s Board of Directors consisted of five members. The Board of Directors met 11 times

during the year and had an attendance rate of 100 percent.

The Board’s Diversity Principles

The purpose of the Board of Director’s diversity policy is to define the objectives and methods for achieving

appropriate diversity for the Board of Directors and promoting the collective effectiveness of the Board’s

activities.

Diversity of the Board of Directors supports the Company’s business operations and development.

Diversity of the knowhow, experience and opinions of the Board members promotes the ability to have an

open-minded approach to innovative ideas and the ability to support and challenge the Company’s

operative management. Adequate diversity promotes open discussion and independent decision-making.

Diversity also promotes good corporate governance, efficient supervision of the Company’s directors and

executives, as well as succession planning.

The objective is that the Board of Directors has broad knowhow, experience, perspectives, and knowledge

of Solteq and its stakeholders, which enables the Board of Directors to perform its tasks effectively,

particularly with respect to strategy and risk management. A further objective is for the gender that is the

minority to represent at least 1/3 of the Board of Directors.

The Company’s current Board of Directors is compliant with the diversity objectives. The Board members

represent diverse industry and market knowhow as well as a variety of professional and academic

backgrounds. During January 1 May 17, 2021, the Board of Directors was composed of four men and two

women, and of three men and two women during May 18 - December 31, 2021.

The Audit Committee of the Board of Directors

The Audit Committee monitors the Group’s profit performance, budget preparation principles, budgeting,

financing situation, and risk management. The Audit Committee’s duties are to:

• monitor the Company’s financial and financing situation,

• monitor the Company’s financial statements reporting process,

• supervise the Company’s financial reporting and merger and acquisition processes,

• monitor the efficiency of the Company’s internal control as well as any internal auditing and risk

management systems,

• review the Company’s corporate governance statement, including the description of the main features of

the control and risk management systems related to the financial reporting process,

• monitor the financial statements and statutory audits of the consolidated financial statements,

• assess the independence of the statutory auditor or audit firm,

• assess the audit firm’s provision of related services,

• prepare a proposal for the election of the auditor,

• maintain contact with the auditor and review the reports prepared by the auditor for the Audit Committee,

and

• assess compliance with laws and regulations.

The Audit Committee consists of three members. The Board of Directors elects the members and the

Chairman of the Audit Committee from among its members.

Annual Report 2021

11

The members of the Committee shall have the qualifications required for performing the tasks of the

Committee, and at least one member shall have expertise in accounting or auditing.

The Company’s CEO and CFO present the matters to the Audit Committee. The Audit Committee may use

external experts and advisors if necessary.

The Chairman of the Audit Committee prepares the agendas for the Committee’s meetings and decides on

the items to be included in the agenda based on discussions with the management of the Company. The

CFO or another person appointed by the Audit Committee acts as secretary of the Committee.

The minutes of the Committee meetings are made available to the Board of Directors. The Chairman of the

Committee also reports to the Board of Directors on significant observations.

The members of the Committee are paid a fee determined by the Annual General Meeting.

The members of the Audit Committee must be independent of the Company and at least one of the

members must be independent of the Company’s significant shareholders.

Solteq Plc’s Board of Directors has an Audit Committee whose members were Aarne Aktan, Markku Pietilä

and Lotta Kopra during January 1 - March 30, 2021. After the Annual General Meeting, the Audit Committee

members were Aarne Aktan, Markku Pietilä, and Katarina Segerståhl. The Chairman of the Committee is

Aarne Aktan. All members of the Audit Committee are independent of the Company. Aarne Aktan, Lotta

Kopra, and Katarina Segerståhl are independent of significant shareholders.

During the financial year 2021, the members of the Audit Committee were paid a fee for attending

Committee meetings. The fee was determined by the Annual General Meeting.

CEO

The Board of Directors appoints the CEO. The CEO oversees the management of the Company’s business

operations and governance in accordance with the Articles of Association, the Finnish Companies Act, and

the instructions issued by the Board of Directors. The CEO is assisted by the Executive Team in the

management of the Group. Olli Väätäinen served as the Company’s CEO during January 1 – December 31,

2021.

Executive Team

The Executive Team assists the CEO in the operative management of the Company, prepares matters dealt

by the Board of Directors and the CEO, and plans and monitors the operations of the business units. The

Executive Team regularly convenes each month. The CEO is the Chairman of the Executive Team.

During January 1–December 31, 2021, the members of the Executive Team were Olli Väätäinen (Chairman

and Solteq Software), Matti Djateu (Marketing and PR), Kirsi Jalasaho (People and Culture), Kari Lehtosalo

(Finance and IR), and Juha Rokkanen (Solteq Digital).

Internal Audit

The Group does not have a separate internal audit organization. The practical implementation of internal

auditing is the responsibility of the financial department, and it is monitored by the Audit Committee

appointed by the Board of Directors. The objective is to ensure the consistency of administrative practices

and accounting principles.

Annual Report 2021

12

External Audit

Solteq Plc has one auditor. If the auditor is not accredited as Authorized Public Accountant, the Company

shall additionally have one deputy auditor. The auditors are elected until further notice. The primary

function of external auditing is to verify that the financial statements provide accurate and adequate

information about Solteq Group’s result and financial position for the financial period. The Auditors also

report to the Audit Committee and, if needed, to the Board of Directors on the ongoing auditing of

administration and operations.

KPMG Oy Ab, Authorized Public Accountants, was re-elected as auditors, with Petri Sammalisto, APA,

acting as the Chief Auditor.

Solteq Group’s audit fees in 2021 amounted to EUR 141 thousand, fees for certificates and statements to

EUR 10 thousand, and other professional services amounted to EUR 57 thousand. The audit fees paid to the

Parent Company’s auditor, KPMG Oy Ab, for 2021 were EUR 97 thousand, fees for certificates and

statements to EUR 10 thousand, and fees for other professional services amounted to EUR 57 thousand.

Shares Held by the Management

According to the shareholding register maintained by Euroclear Finland Oy, the governing bodies held

Solteq Plc shares as following on December 31, 2021:

• the members of the Board held 15,000 Solteq Plc shares,

• Chairman of the Board Markku Pietilä held 15,000 Solteq Plc shares,

• CEO Olli Väätäinen held 313,178 Solteq Plc shares, and

• the members of the Executive Team, excluding the CEO, held 91,503 Solteq Plc shares.

Internal Control and Risk Management Systems Associated with Financial Reporting

The ultimate responsibility for accounting and financial administration lies with Solteq Plc’s Board of

Directors. The Board is responsible for internal control, and the CEO is responsible for the practical

organization and monitoring of the control system. The steering and monitoring of business operations is

based on a reporting and business planning system that covers the entire Group. The CEO and CFO deliver

monthly reports regarding the Group’s financial situation and development at Board and Executive Team

meetings.

Risk Management System

The Group’s risk management is guided by legal requirements, business goals set by the Company’s

shareholders as well as the expectations of other stakeholders. Risk management aims to identify and

acknowledge the risks involved in the Company’s operations as well as to make sure that the risks are

appropriately managed when making business decisions. The Company’s risk management supports the

achievement of strategic goals and ensures the continuity of business operations.

Solteq takes risks according to its strategy and objectives. The Company is not willing to take risks that

might compromise the continuity of operations, have significant negative impact on the Company’s

operations or might be uncontrollable. Risks are divided into operational, personnel, financing, legal, and

financial risks. In the process of risk management, the goal is to identify and assess the risks, after which a

risk-specific plan is drawn up and concrete action is taken. Such actions may include, for example, avoiding

the risk, mitigating the risk by various means, or transferring the risk by means of insurance or agreements.

Annual Report 2021

13

When necessary, the Board of Directors will be provided reports on any material changes and new

significant risks identified in the process of risk management.

In 2021, the main risks reported to the Board of Directors were related to the direct and indirect effects of

the COVID-19 pandemic, managing changes in the financial and balance sheet structure, timing and pricing

of revenue-based transactions, changes in general costs, availability of labor and materials, development

and commercialization of the Company's own products, and the capability to manage large-scale contracts

and customer deliveries.

The most important risks and uncertainties for the Company's business are regularly monitored by the

Board of Directors and the Executive Team. In addition, the Company has an Audit Committee established

by the Board of Directors.

Control Environment

The goal of Solteq’s internal control is to support the implementation of the Group’s strategy and ensure

compliance with regulations. The system is based on group-level policies, guidelines and processes and

controls of business operations and support processes. The operating culture is built by the steering and

control of the Company’s operations by the Board of Directors, the management methods of the Company’s

management, the Company’s organizational structure and management system, the effective utilization of

a global information system as well as the employees’ competence.

The financial department operating under the CFO is responsible for the general control function in financial

reporting. The operations are steered by the Board of Directors’ Audit Committee. The Group applies the

International Financial Reporting Standards (IFRS).

Risk Assessment in Financial Reporting

The aim of financial reporting is to ensure that assets and liabilities belong to the Company; all rights and

liabilities of the Company are presented in the financial statements; items in the financial statements have

been classified, disclosed and described correctly; assets, liabilities, income and expenditure are entered

in the financial statements at the correct amounts; all the transactions during the reporting period are

included in the accounts; transactions entered in the accounts are factual transactions; and that the assets

have been secured. The risk management process includes the annual identification and analysis of risks

related to financial reporting. In addition, the aim is to analyze and report all new risks immediately after

they have been identified. Considering the nature and extent of the Group’s business operations, the most

significant risks associated with the reliability of financial reporting are associated with revenue

recognition, the identification of credit loss risks, the capitalization of product development expenses,

impairment testing of assets (including goodwill, capitalized product development expenses and

unfinished projects) and deferred taxes.

Control Functions

The correctness and reliability of financial reporting are ensured through compliance with the Group’s

guidelines. Controls that ensure the correctness of financial reporting include controls related to

accounting transactions, controls related to the selection of — and compliance with — the accounting

principles, information system controls, and fraud controls.

Revenue recognition is based on the existence of obligatory sales documentation. Goodwill is tested for

impairment during the last quarter of the year. Indications of impairment are also monitored on a continuous

basis. Information systems support compliance with the Group’s approval authorizations.

Annual Report 2021

14

Personnel expenses account for a majority of Solteq’s expenditure. Actual and forecasted personnel

expenses are monitored, and the forecasts are regularly updated at a very detailed level. The results of

business operations and achievement of annual targets are assessed monthly in Executive Team and Board

meetings. Monthly reporting at the management and Board level includes both actual and forecast data

compared to the targets and the actual results of previous periods.

In line with its strategy, Solteq has complemented its organic growth by making targeted acquisitions.

Through making acquisitions, the Company aims to observe due diligence and utilize its internal and

external competence in the planning phase (e.g., due diligence) and in the integration phase.

Investor Communications and Financial Reporting

Solteq’s Disclosure Policy defines the practices followed in the Company’s investor communications. The

Disclosure Policy is compliant with EU and Finnish legislation, Nasdaq Helsinki’s rules and guidelines for

insiders, and the guidelines and regulations of the Finnish Financial Supervisory Authority and other

authorities. Disclosure Policy is available on the Company’s website.

Timeliness, simultaneousness, continuity, and transparency are the principles guiding financial reporting.

The purpose of these principles is to ensure that all market stakeholders have simultaneous access to

sufficient and correct information about the Company, its operations, goals, strategy, and financial

situation, to determine the fair value of Solteq Plc’s shares and listed financial instruments.

Monitoring

Monitoring refers to the process of assessing Solteq’s internal control system and its performance in the

long term. Solteq also continuously monitors its operations through various assessments, such as internal

audits and external audits. Solteq’s management monitors internal control as part of routine management

work. The business management is responsible for ensuring that all operations comply with applicable laws

and regulations. The financial department monitors compliance with the financial reporting process and

control. The financial department also monitors the correctness of external and internal financial reporting.

The Board of Directors assesses and ensures the appropriateness and effectiveness of Solteq’s internal

control and risk management. Solteq’s internal control is also assessed by the Company’s auditor. The

external auditor verifies the correctness of external financial reporting. Performed as part of continuous

auditing process, auditing is focused on typical controls that ensure the correctness of financial reporting.

The most significant observations and recommendations of the audit process according to the auditing

plan are reported to the Board of Directors.

Insider Administration

Solteq Plc complies with the Guidelines for Insiders issued by Nasdaq Helsinki Ltd, which took effect on

January 1, 2021. Pursuant to the Market Abuse Regulation (MAR), the persons discharging managerial

responsibilities within the Company comprise the members of the Board of Directors and the Executive

Team as well as certain other persons whose duties satisfy the criteria for being a person discharging

managerial responsibilities. Persons discharging managerial responsibilities are prohibited from all trading

in Solteq Plc’s securities for a period of 30 days before the date of publication of financial information

bulletins. Persons discharging managerial responsibilities and their closely associated persons must report

all their business transactions related to the Company’s securities to the Company and the Financial

Supervisory Authority. The Company is required to publish the information as a stock exchange bulletin.

Parties with access to specific insider information are entered in project-specific insider lists. Project-

specific insiders are prohibited from all trading in the Company’s securities during the time they are entered

in the list of insiders.

Annual Report 2021

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Board of Directors on December 31, 2021

Katarina Segerståhl

Year of birth: 1981

Education: PhD, Information

Systems

Primary Occupation: Chief

Strategy Officer (CSO), Aava

Health Services

Key work experience: Chief

Strategy Officer (CSO), Aava

Medical / Aho Group; Head of

Strategic Design, Tieto Finland

Oy.

Member of the Board of Directors

since: 2019

Independent of the Company and

its significant shareholders.

Lotta Kopra

Year of birth:

1980

Education:

M.Sc. (Econ.)

Primary occupation:

CCO,

Spinnova Oy

Key work experience:

Founding

partner, Magenta Advisory Oy;

Member of the Board of Directors,

eQ Oyj

Member of the Board of Directors

since:

2018

Independent of the Company and its

significant shareholders.

Panu Porkka

Year of birth:

1977

Education:

The Finnish

Matriculation Examination

Primary Occupation:

CEO,

Verkkokauppa.com Oyj

Key work experience:

CEO,

Suomalainen Kirjakauppa Oy;

Sales Director, Tokmanni Oy

Member of the Board of Directors

since:

2019

Independent of the Company and

its significant shareholders.

Aarne Aktan

Year of birth:

1973

Education:

B.Sc. (Econ.)

Primary occupation:

CEO, Synlab

Oy

Key work experience:

CEO,

Pihlajalinna Plc; CEO, Talentum Oyj;

Executive positions, Quartal Oy

Member of the Board of Directors

since:

2015

Independent of the Company and its

significant shareholders.

Markku Pietilä

Chairman of the Board

Year of birth:

1957

Education:

M.Sc. (Tech.), MBA

Primary occupation:

Board

Professional

Key work experience:

CEO,

Kymiring Oy; Chairman of the

Board, Profiz Business Solutions

Oy; Management duties,

Componenta Oyj

Member of the Board of Directors

since:

2008

Independent of the Company.

Annual Report 2021

16

Executive Team on December 31, 2021

Matti Djateu

Year of birth:

1975

Education:

–

Primary occupation:

CDO, Solteq Plc

Key work experience:

Head of Digital & PR, Scotch & Soda (2015–2017); Consultant,

Peuple Bavard (2014–2015); Creative Director, Dentsu Aegis Network (2011–2014)

Member of the Executive Team since:

June 16, 2017

Key concurrent positions of trust:

–

Kari Lehtosalo

Year of birth:

1972

Education:

MBA

Main occupation:

CFO, Solteq Plc

Essential work experience:

CFO, IBM (2013-2019); Finance and Business

Development leadership positions, IBM (2001-2012)

Member of the Executive team since:

September 23, 2019

Key concurrent positions of trust:

-

Kirsi Jalasaho

Year of birth:

1974

Education:

M.Sc. (Econ.)

Primary occupation:

Vice President, People, Culture, Solteq Plc

Key work experience:

Vice President, Marketing and IR, Solteq Plc (2015–2017);

Chief Financial Officer (CFO), Descom Group Oy (2012–2015)

Member of the Executive Team since:

April 3, 2017

Key concurrent positions of trust:

Board member, Jyväs-Parkki Oy; member of the

Central Finland regional board, Technology Industries of Finland

Juha Rokkanen

Year of birth:

1969

Education:

BBA

Primary occupation:

EVP, Solteq Digital

Key work experience:

CEO, inPulse Works (2016–2017); Managing Director,

Innofactor Finland (2013–2015); Managing Director, atBusiness Oy, (2006 –

2013); Sales Director, WM-Data Novo Oyj (2003–2006)

Member of the Executive Team since:

June 12, 2017

Key concurrent positions of trust:

Member of the Board of Directors, The Finnish

Software and E-business Association

Olli Väätäinen

Year of birth:

1966

Education:

M.Sc. (Econ.)

Primary occupation:

CEO, Solteq Plc

Key work experience:

COO, Kotipizza Group Oyj (2015-2017), Senior Advisor,

Sentica Partners Oy (2003-2017)

Member of the Executive Team since:

April 1, 2017

Key concurrent positions of trust:

–

Annual Report 2021

17

Remuneration Report

Annual Report 2021

18

Remuneration Principles

Remuneration report contains information on the remuneration of Solteq Plc's Board of Directors and CEO

for the period between January 1 and December 31, 2021. The report has been prepared in accordance with

the recommendations on Corporate Governance Code 2020 and the requirements of the Finnish Securities

Markets Act and Limited Liability Companies Act.

The remuneration of Solteq Plc’s governing bodies is based on the remuneration policy, which was

determined at the Annual General Meeting held on June 10, 2020. The remuneration policy shall be applied

until the Annual General Meeting in 2024, unless the Board of Directors decides to present it to the Annual

General Meeting earlier. The remuneration policy is available on the Company's website.

In 2021, the Company's remuneration policy was implemented accordingly, and no exceptions were made.

This remuneration report contains essential information on the remuneration paid and due to the

Company's Board of Directors and CEO for the financial year 2021.

The remuneration report will be presented at the Annual General Meeting in 2022. The remuneration report

is also published on the Company’s annual report and invitation to the Annual General Meeting as well as

on the Company website.

Solteq’s Performance and Remuneration Development

The following compares the development of the Company's result and the average salary of its employees

with the remuneration of Board of Directors and CEO over the past five years.

The remuneration of the Board of Directors is based on monthly remuneration and a remuneration paid per

meeting, which are decided by the Annual General Meeting. The latest increase to the amount of the

monthly remuneration paid to the Board of Directors was decided in the Annual General Meeting 2017. The

monthly remuneration paid to a member of the Board of Directors was increased by EUR 300 to EUR 1,500

and the monthly remuneration paid to the Chairman by EUR 1,800 to EUR 3,000. The fee paid per meeting

has been EUR 500.

In 2021, the CEO's remuneration has consisted of the fixed fee based on the CEO’s contract. During the

financial years 2020 and 2021, the CEO had no performance-based or other short- or long-term incentive

schemes. During the financial year 2016, a new stock option scheme and a share-based incentive scheme

were adopted for the key employees of the Company. The subscription period ended on December 31, 2019.

No shares were subscribed during the subscription period. During the year 2017, the Company’s CEO

changed, and figures represent compensations paid for both CEOs during the year 2017

Annual Report 2021

19

** The comparison figures for 2017 have been retroactively adjusted according to the IFRS 15 standard. The Company’s CEO

changed in 2017.

Remuneration of the Board of Directors in 2021

The Annual General Meeting decides on the remuneration paid to the Board of Directors. In accordance with

the decisions made in the 2020 and 2021 Annual General Meetings, the Chairman of the Board has been

paid a monthly fee of EUR 3,000, other Board members have been paid a monthly fee of EUR 1,500. All

Board members have been paid a meeting fee of EUR 500 for Board and Committee meetings. Board

members' travel expenses have been compensated in accordance with the Company's applicable travel

guidelines.

Remuneration paid and due to the Company's Board of Directors for the financial year 2021.

TEUR

Annual Remuneration

Meeting Remuneration

Total Remuneration

Pietilä Markku (Chairman of the Board)

36

9

45

Aktan Aarne

18

9

27

Kopra Lotta

18

6

24

Porkka Panu

18

6

24

Segerståhl Katarina

18

8

26

Uotila Mika (Jan 1 - May 17, 2021)

8

2

10

Total

116

39

154

The meeting fees also include the fees paid for Committee meetings.

0%

50%

100%

150%

200%

250%

300%

350%

2017** 2018 2019 2020 2021

Development of Key Figures

Revenue Operating Profit CEO Board of Directors Solteq Group Employee

Annual Report 2021

20

CEO’s Remuneration in 2021

The Board of Directors decides on the terms and conditions of the CEO’s service agreement and decides on the

remuneration of the CEO in accordance with the remuneration policy. The CEO was paid a fixed remuneration (a

fixed part) in accordance with the CEO’s service agreement. In 2021, the CEO did not have any performance-

based or other short or long-term incentive schemes (possible variable part) in addition to the basic salary.

Remuneration paid and due to the CEO for the financial year 2021:

TEUR

Fixed Annual Remuneration

Total

Väätäinen Olli

313

The remuneration paid to the CEO includes taxable fringe benefits.

Other key terms:

• The CEO’s notice period is 4 months.

• No severance pay is stipulated by the CEO’s contract.

In accordance with the Remuneration Policy, the Board of Director’s may decide changes to the

remuneration of the CEO and deputy CEO. The remuneration paid may consist of a fixed remuneration,

fringe benefits, and short and long-term incentive schemes.

Annual Report 2021

21

Report of the Board of Directors

Annual Report 2021

22

Table of Contents

Report of the Board of Directors

23

Consolidated financial statements

37

Consolidated statement of comprehensive income

38

Consolidated statement of financial position

39

Consolidated cash flow statement

40

Consolidated statement of changes in equity

41

Notes to consolidated financial statements

42

1. GENERAL INFORMATION

42

1.1 Group information

42

1.2 Basis of preparation

42

1.3 New and amended standards applied in financial year

42

1.4 Management judgement and use of estimates

43

2. FINANCIAL RESULT

43

2.1 Segment reporting

43

2.2 Revenue from contracts with customers

44

2.3 Employee benefit expenses

47

2.4 Other income and expenses

48

2.5 Research and development costs

49

2.6 Financial income and expenses

49

2.7 Income taxes

50

2.8 Earnings per share

52

2.9 Adjustments to cash flow from business operations

52

3. TANGIBLE AND INTANGIBLE ASSETS

52

3.1 Tangible assets

52

3.2 Right-of-use assets

53

3.3 Intangible assets

55

3.4 Depreciation, amortization, and impairment

59

4. OPERATIONAL ASSETS AND LIABILITIES

59

4.1 Trade and other receivables

59

4.2 Inventories

60

4.3 Trade and other payables

60

4.4 Provisions

60

5. CAPITAL STRUCTURE AND FINANCIAL ITEMS

61

5.1 Financial risk management and capital management

61

5.2 Financial assets and liabilities

62

5.3 Other investments

65

5.4 Cash and cash equivalents

65

5.5 Equity

65

5.6 Conditional debts and liabilities

67

6. OTHER NOTES

67

6.1 Consolidation principles and group companies

67

6.2 Related party transactions

68

6.3 Business combinations

69

6.4 Impact of the COVID-19 pandemic on financial reporting

70

6.5 Events after the balance sheet date

70

PARENT COMPANY FINANCIAL STATEMENTS

72

Parent Company's statement of comprehensive income

72

Parent Company's statement of financial position

73

Parent Company's cash flow statement

74

Parent Company's statement of changes in equity

75

Notes to Solteq Plc financial statements

76

Proposal for distribution of profits

92

Signatures to the report of the Board of directors and the financial statements

93

Auditor's report