Untitled

REPORT OF THE BOARD OF DIRECTORS AND FINANCIAL STATEMENTS

REPORT OF THE

BOARD OF DIRECTORS

Part of report of the the Board of Directors

Report of the Board of Directors

Business model and operating environment

Megatrends

Our operating environment is in a state of constant flux

– cities are getting denser, climate change is accelerat-

ing, and increasing digitalisation is reshaping the world

around us.

Denser cities

Finland’s population is ageing as a result of both in-

creased life expectancy and a rapid decline in the birth

rate. This will change the outlook for regions that were

previously forecast to be growth centres. Only the larg-

est cities – Helsinki, Tampere and Turku – are expected

to see substantial growth by 2040.

More than 70% of Finns live in urban areas, in which

80% of our GDP is generated. More and more of us want

to live in cities, as urban life is perceived to be easier

thanks to the availability of jobs, services and public

transport.

The need to mitigate climate change and adopt

more energy-efficient lifestyles is also steering us to-

wards denser housing. New construction and renovation

offer us the opportunity to develop our urban structure

in a more sustainable direction, for example, by choosing

renewable energy for properties. New construction and

renovation will also meet the new spatial requirements

of denser cities, such as the need for hybrid offices

and more versatile homes that has been created by an

increase in remote working.

Local nature and green areas will be more important

than ever in denser cities. Diverse urban nature, such as

parks or garden decks, increases residents’ well-being

and helps to maintain biodiversity in denser urban areas.

Cities are growing and developing near good transport

connections. Public transport, combined with walking

and cycling, enables smooth and ecological daily life in

urban areas.

Finland’s rate of urbanisation is expected to rise

from 73 per cent in 2020 to 79 per cent in 2050. We

need to find homes for everyone in the city, and the best

solution is often new and supplementary construction.

Accelerating climate change

The physical impacts of climate change and a scarcity

of natural resources can be seen throughout the world.

It is clear that mitigating and adapting to climate change

requires action to be taken in the construction and real

estate sector. Properties must be sustainable from many

perspectives – from people’s well-being, energy effi-

ciency and the circular economy to the retention of their

economic value.

The construction and real estate sector is responsi-

ble for 35 per cent of Finland’s energy consumption, and

the majority of emissions from buildings are generated

by consumption during occupancy. There is, therefore,

a great need to improve energy efficiency and harness

renewable energy. New construction enables new ways

MEGATRENDS

SUPPORT THE

IMPLEMENTATION

OF OUR STRATEGY

of recycling and storing energy. Comprehensive regional

solutions also help to optimise overall energy manage-

ment.

The circular economy is another effective means of

curbing the climatic impacts of construction. Choosing

low-emission or recycled building materials can reduce

the carbon footprint of a building. However, the growing

market for renovation is bringing existing building stock

closer to a sustainable level.

Climate change is causing an increase in extreme

weather conditions and phenomena. Storm-related wind

damage in Finland is predicted to increase as the climate

warms, because the frost season will be shorter and pre-

cipitation will increasingly be in the form of rain rather

than snow. Preparing for extreme conditions will require

the construction sector to take action, in order to guar-

antee the long-term preservation of property values.

Increasing digitalisation

Digitalisation continues to evolve, reshaping both society

in general and the construction and real estate sector.

Digitalisation creates opportunities and provides solu-

tions for the construction industry: from project plan-

ning to streamlining the construction process, and from

renewable practices to property services while buildings

are occupied.

Data collection and utilisation are growing rapidly.

By continuously collecting data, we can obtain a re-

WE PLAN OUR

FUTURE TAKIGN INTO

ACCOUNT DENSER

CITIES, ACCELERATING

CLIMATE CHANGE

AND INCREASING

DIGITALISATION

Part of report of the the Board of Directors

al-time situational picture during the design, construc-

tion and occupancy stages of a building’s lifecycle. For

example, data about indoor conditions can be collected

with the aid of sensors while a property is occupied.

This data can then be used to control and optimise both

indoor conditions and energy consumption.

Digitalisation provides solutions for things such as

scheduling and information flow, which makes project

management more efficient and helps to streamline the

construction process. For example, building information

models promote information flow throughout the project,

and can be used to view plans, calculate quantities, and

inspect and illustrate plans.

The solutions brought by digitalisation have

increased the use of various services in our daily lives

– services that improve housing, mobility and premises

usage. For example, the sharing economy has become

more widespread as a result of digitalisation: if you

live in the city, you no longer need your own car, bike

or e-scooter, as a variety of apps makes it easy to use

shared vehicles.

Markets

The Finnish economy saw brisk growth in early 2022 as

the coronavirus pandemic loosened its grip. Russia’s war

against Ukraine weakened the outlook for the economy

and the good growth of the Finnish economy slackened

towards the end of the year. The Finnish economy grew

by 1.9 per cent in 2022 and is forecast to contract by 0.5

per cent in 2023. However, the mild recession is ex-

pected to remain brief, with the economy recovering to

growth of 1.1 per cent in 2024. (Source: Bank of Finland)

The energy crisis triggered by Russia’s war of

aggression and broad-based inflation caused consumer

prices to soar in 2022. Year-on-year change in con-

sumer prices was 9.1 per cent in December and average

inflation in 2022 amounted to 7.1 per cent. Private con-

sumption grew in 2022, but inflation and rising interest

rates will cut into private consumption in the next few

years. The labour market was in good shape in 2022.

The weakening economy poses a challenge to the labour

market and it is expected that the unemployment rate

will rise temporarily. (Source: Bank of Finland)

Consumer confidence plummeted immediately

when Russia invaded Ukraine. The balance figure for the

consumer confidence indicator was -18.5 in December,

while it was -1.7 in January 2022. The figure for De-

cember is the worst recorded in the 1995–2022 period.

Consumers’ views on the Finnish economy and their own

finances are gloomy – they are especially worried about

high inflation. (Source: Statistics Finland)

Urbanisation in Finland has maintained demand for

both housing and business construction, especially in

growth centres. The number of building permits began

to decline at the end of 2021, and the outbreak of war in

early spring 2022 further weakened the outlook for con-

struction. The robust order backlog for 2021 maintained

growth in construction in 2022. However, construction

is expected to decline by 2–5 per cent in 2023. (Source:

Confederation of Finnish Construction Industries RT and

Forecon)

Russia’s war of aggression and the consequent

Russian sanctions and ending of Ukrainian material

deliveries caused problems with the availability of cer-

tain materials and increases in the prices of materials

in spring 2022. As the Russian supply of natural gas to

Europe declined in the summer and finally ceased, the

price of energy rose substantially in Finland and the rest

of Europe, causing additional pressures on rising material

prices. Towards the end of 2022, the rate of growth in

material costs slowed down and the availability problems

lessened.

In 2022, the intentions of households to buy a resi-

dential unit declined significantly due to reasons such as

higher interest rates and weaker purchasing power. The

pace of housing construction slowed down from its 2021

peak, and approximately 41,000 units were started up in

2022. It is expected that around 34-36,000 residential

units will be started in 2023. Business construction con-

tinued to grow in 2022, driven by industrial and energy in-

vestments. However, uncertainty and high costs hamper

tender operations, and business construction will begin

to decline this year. (Source: Confederation of Finnish

Construction Industries RT and Forecon)

2022 got off to a strong start in the Finnish real

estate market, with a wide variety of trading in differ-

ent sectors. Russia’s war against Ukraine, accelerating

inflation and rising interest rates muted sales of real

estate and contributed to the growth in yield require-

ments in all segments. Trading volumes are expected to

keep slackening in early 2023. Investors will most likely

remain primarily interested in targets with strong cash

flows, such as housing and public services premises.

(Source: KTI)

Value creation

SRV’s operations have significant and lasting impacts on

surrounding society. The greatest impact comes from

the buildings and infrastructure that SRV builds, as they

will last for decades if not centuries. Sustainable design

and implementation therefore have a fundamental im-

pact on mitigating and adapting to climate change.

Part of report of the the Board of Directors

SRV serves customers in matters such as the

choice of construction site, site development, man-

agement of land use, specifying space needs, project

budgeting and acquiring funding.

SRV’s management system

SRV’s management system describes ways of working

at SRV, and our value creation model is built around it.

The model is based on interviews with customers, inves-

tors, financiers, policy-makers and influencers.

SRV’s goal is to be a sought-after partner with

whom meaningful, value-creating projects can be

implemented more extensively within our society. Our

management system can be used as a tool when moving

operations between units and functions. It takes into

account all kinds of capital (social, financial, human,

intellectual and natural) and presents a broad range of

inputs, outputs and impacts to our stakeholders.

The way in which SRV creates value for its stake-

holders is encapsulated in our customer promise – “By

listening, we build wisely” – and how we put it into

practice. The promise includes “I always ask first”, which

describes our principle of listening to the needs of our

stakeholders. We are continuously providing internal

training on how to work in accordance with our custom-

er promise, and we measure our success in this area

with customer satisfaction surveys.

Our capital

Capital management is an essential element of project

value formation. The most important types of capital at

SRV are social, financial, human, intellectual and natural

capital.

The key areas of our social capital are personnel,

stakeholder relationships with cities, investors and the

local environment, our employer image and partner-

ships, and ethical principles.

Our financial capital consists of our own and

external financing, plus our holdings. In the context of

financial capital, manufactured capital refers to capital

created by people.

With respect to human capital, the following as-

pects are particularly important: customer expertise,

interaction, design and zoning expertise, management

of the supplier pool and management expertise. The

most important types of intellectual capital are our

management system, the SRV Network Register, our

references, brand, corporate culture, concepts and

operating models.

We utilise natural capital through, for example,

land use and natural raw materials.

Our output and impact

The positive impacts of SRV’s business are sustainable

living environments that can adapt to change, stand

the test of time, and retain their value.

A safe working environment is a prerequisite for

our business, and we cooperate with all parties in the

value chain to promote a good safety culture.

We offer long-term partnerships, and work with

our partners in accordance with our values and Code

of Conduct.

SRV’s lifecycle-wise strategy takes a firm stand on

the role that business plays in mitigating and adapting

to climate change. In addition to reducing emissions

from our construction sites and own energy procure-

ment, we are committed to offsetting any resulting

emissions with climate action.

BY LISTENING,

WE BUILD WISELY

Part of report of the the Board of Directors

IMPACTS

• Value creation and value

preservation

INVESTING

CAPITALS

SRV MODEL OUTPUTS

Media

Industry

associations

Authorities

Decision

makers

Share-

holders

Investors

Board of

Directors

Corporate

Executives

Local

communities

Partners

Value for customers:

• Lifecycle-wise concepts

• Residential services

• High-quality products and services

• Energy and lifecycle services

Value for suppliers and partners:

• Long-term partnerships, ethical business

• Responsible procurement procedures

Value for investors:

• Fullfilling ESG requirements

• Responsible financing

• Dividends and appreciation

Value for personnel:

• Safe working environment and occupational health

services

• Competence development

• Sense of community, personnel well-being

• Equality and prevention of work-related

exploitation

• Inclusiveness in action

• Employments

Value for society:

• Sustainable and comfortable build environment

• Combating the grey economy and financial crime

• Employment

• Tax fo ot pr in t

Value for environment:

• Climate change mitigation and adaptation

• Protecting biodiversity

• Circular economy solutions

• Use of construction materials

• Emissions, waste, noise, dust and vibration

Value creation model

HOSPITALS

NEIGHBOURHOODS

HOUSES

SERVICES

SCHOOLS

SERVICES

Human and

intangible capital

• SRV brand and culture

• SRV values

• Ways of working and

principles

• Customers

• SRV Model

Natural capital

• Energy

• Construction materials

Social capital

• Committed and professional

personnel 874 employees

31.12.22

• Stakeholder relations and

partnerships

• Employer image

Financial and

manufactured capital

• Equity and debt capital

• Plot reserves and other

ownerships

Part of report of the the Board of Directors

Segment reporting

SRV’s business is divided into the Construction

segment and the Investments segment.

The Construction segment covers all of SRV’s construc-

tion activities including the capital and plots required

for developer-contracted housing production. It is SRV’s

intention to develop, build and sell these plots to a faster

schedule than those we report on in the Investments

segment. Construction encompasses housing construc-

tion, business construction, infrastructure construction,

project development, technical units and procurement,

as well as internal services. Operationally, Construction

is divided into four business units:

1) Regional Units,

2) Housing, Helsinki Metropolitan Area,

3) Business Premises, Helsinki Metropolitan Area and

4) construction within Operations in Russia and Estonia,

in which construction projects are no longer ongoing

or planned.

The Investments segment encompasses both

complete and incomplete sites in which the company is

a long-term investor. Plots that SRV will develop itself,

and whose expected profits will be generated through

development and long-term ownership, are also reported

on under Investments. The Investments segment focuses

on the management and realisation of the Group’s real

estate investments; the creation and ownership of new

joint investment structures; and the operation of prop-

erties. Previously, the bulk of the Investments segment’s

capital employed was committed in Russia. These invest-

ments were almost entirely written down in April 2022. In

November 2022, SRV sold its holding in the Okhta Mall

shopping centre in St Petersburg. Following this sale, SRV

Personnel by segment at end of period

1–12/

2022

1–12/

2021

Percentage of

Group personnel

Construction 770 801 88.1

Investments 41 83 4.7

Other operations and

eliminations 63 60 7.2

Group, total 874 944 100.0

Construction

EUR million

1−12/

2022

1−12/

2021 Change Change, %

Revenue 746.3 930.1 -183.9 -19.8

Business construction 427.3 581.4 -154.1 -26.5

Housing construction 319.0 348.8 -29.7 -8.5

Operating profit 23.3 14.1 9.1 64.9

Operating profit, % 3.1 1.5

Capital employed 212.4 195.8 16.6 8.5

Return on investment, % 11.5 5.1 6.4 125.1

Order backlog

838.8 872.3 -33.5 -3.8

Business construction 684.0 508.3 175.7 34.6

Housing construction 154.7 364.0 -209.2 -57.5

Group, total

838.8 872.3 -33.5 -3.8

sold order backlog 747.8 798.2 -50.5 -6.3

unsold order backlog 91.0 74.0 17.0 22.9

sold order backlog, % 89.2 91.5

unsold order backlog, % 10.8 8.5

The Group’s order backlog consists of the Construction business.

is a co-owner in two Russian shopping centres through

associated companies. In addition, SRV owns one plot in

Russia. The company is actively continuing to engage in

negotiations aiming at the sale of its remaining Russian

assets in order to completely exit its business there.

Other operations and eliminations includes the

parent company’s (SRV Group Plc) strategic project de-

velopment, finance and financing, HR, legal affairs, com-

munications and marketing, information management,

business development, strategy and risk management.

Group eliminations are also included in this unit.

Construction

SRV provides efficient, top-quality and end-to-end

project management contracting and construction

services for both its own and its customers’ devel-

opment projects. This segment focuses on housing,

business and infrastructure construction in selected

urban growth centres in Finland, as per the company’s

strategy. It is also responsible for sales of develop-

er-contracted housing projects, services for residents,

leasing of premises in business development projects,

and the lifecycle maintenance of business properties.

One of Construction’s main objectives is to enhance

the profitability of SRV’s business, taking lifecycle-wise

construction into consideration, and provide an excel-

lent customer experience as a professional in project

management and production implementation. Oper-

ations are built on the SRV Approach, which is based

on in-depth understanding of customer needs and a

transparent cooperative operating model. The SRV

Approach also revolves around the efficient implemen-

tation of projects in collaboration with our extensive

network of professional partners.

250

500

750

1,000

319

348.8

427.3

581.4

Change in revenue,

business premises:

-26.5%

Change in revenue,

housing construction:

-8.5%

Total change in revenue:

-19.8%

Revenue, Construction (EUR million)

Data Table

Legend Value A Value B

2021

581.4 348.8

2022

427.3 319.0

Business premises

Housing construction

2021

2022

319.0

2021

2022

23.3

14.1

Data Table

Legend Value

2021

14.1

2022

23.3

Operating profit, Construction (EUR million)

Part of report of the the Board of Directors

January-December 2022

Construction’s revenue declined to EUR 746.3 million

(930.1 1-12/2021). Revenue declined in both housing and

business construction. The decline in housing construc-

tion was affected particularly by the recognition of the

Redi Loisto tower building as income in the compari-

son period. Revenue from business construction was

down particularly in development projects, in which the

revenue for the comparison period was increased by the

construction of the Tampere Arena.

Construction’s operating profit rose to EUR 23.3

(14.1) million. The Construction segment’s operating profit

improved in both housing and business construction.

The higher volume of housing contracting carried out as

development projects contributed to growth in hous-

ing construction. The margin in business construction

improved in spite of the decline in volume. In addition, the

comparison period was burdened by the losses of the

Tam pe re Are na p roj ec t .

Construction’s order backlog stood at EUR 838.8

(872.3) million and 89.2 (91.5) per cent of the order back-

log has been sold. New agreements valued at EUR 624.6

(588.6) million were recognised in the order backlog in

January–December.

Construction’s capital employed totalled EUR 212.4

million (195.8 12/2021).

Housing construction

In accordance with SRV’s strategy, the company’s

housing construction mainly consists of residential

development projects and developer-contracted hous-

ing projects in Finland’s strongest growth centres, and

particularly in the Helsinki Metropolitan Area. In addition,

SRV selectively carries out housing construction projects

Housing construction, Group

units

1–12/

2022

1–12/

2021

Change,

units

Housing sales 272 1,313 -1,041

developer contracting 32 409 -377

sold to investors 240 904 -664

Developer contracting

start-ups 85 195 -110

completed 210 368 -158

recognised as income 196 453 -257

completed and unsold 23 9 14

Under construction 1360 2,085 -725

contracts 0 0 0

negotiated contracts 105 227 -122

sold to investors 1170 1,648 -478

developer contracting 85 210 -125

sold 2 166 -164

unsold 83 44 39

sold, % 2.4 79

unsold, % 97.6 21

Order backlog, housing construction

(EUR million) 12/2022 12/2021

Change,

EUR million

Change,

Contracts and negotiated contracts 74.6 251.1 -176.5 -70.3

Under construction, sold 0.8 38.8 -38.0 -98.0

Under construction, unsold 73.9 71.2 2.7 3.8

Completed and unsold developer contracting 5.4 2.8 2.6 91.1

Housing construction, total 154.7 364.0 -209.2 -57.5

The Group’s largest developer-contracted housing projects under construction in Finland

Project name Location

Completion

(estimate) Units Sold For sale

Kokardi Helsinki Q1/2024 62 2 60

for external clients. A developer-contracted residential

project is a project that is developed by SRV and which

has not been sold when construction begins. SRV bears

the risks involved in both the sale and construction of

such projects, which are recognised as income when the

project has been completed and as the units are sold.

A residential development project is a project that is

developed by SRV, but which is sold to an investor before

construction begins. SRV bears the construction risks in

such projects, which are recognised as income according

to the percentage of completion. Construction contracts

are construction projects that are launched by other

parties but implemented by SRV. They are recognised as

Data Table

Legend Value

2021

34.0

2022

154.7

Change in order backlog, housing construction: -57.5%

Order backlog, housing construction

(EUR million)

At the period-end.

100

200

300

400

2021

2022

154.7

364.0

THE THIRD

RESIDENTIAL TOWER

IN KALASATAMA,

HELSINKI, LUMO ONE,

WAS COMPLETED IN

SUMMER 2022

Part of report of the the Board of Directors

income on the basis of the percentage of completion or

as set out in the agreement.

January-December 2022

Revenue from housing construction decreased to EUR

319.0 (348.8) million due to the lower volume of devel-

opment projects. The volume of development projects

has grown, while the volume of developer-contracted

housing projects has declined due to the recognition of

the Redi Loisto tower building as income in the compar-

ison period. 210 (368) developer-contracted residential

units were completed during the review period, and 196

(453) were recognised as income during the period. The

order backlog for housing construction stood at EUR

154.7 (364.0) million.

Housing under construction and under development

At the end of December, SRV had a total of 1,360 (2,085)

residential units under construction in Finland, mostly

in growth centres. There were 85 (210) developer-con-

tracted residential units under construction. SRV began

the construction of 85 new developer-contracted

residential units in Pasila, Helsinki, and Aviapolis, Vantaa

during the review period.

Developer-contracted residential units are only rec-

ognised as income on completion, and only to the extent

that they have been sold, after an average construction

period of about 18 months. At the end of December, a

total of 1,170 (1,648) units were under construction for in-

vestors, mainly in Helsinki, Espoo, Vantaa and Tampere.

The eight tower buildings being built in Kalasatama,

Helsinki comprise the largest construction project in

SRV’s history. The construction of the third residential

tower, Lumo One (previously called Kompassi), began in

The largest ongoing housing projects in Finland, investor projects and housing contracting

Project name Location Developer

Completion

level, %*

Completion

(estimate)

Haltiantie 14 Vantaa Kojamo 80 Q1/2023

Kalevan Klaffi

Tampere

Pro ry, PAM ry,

JHL ry 89 Q1/2023

Kalevan Vitriini

Tampere

Pro ry, PAM ry,

JHL ry 91 Q1/2023

Aleksinniitty Kerava DWS 82 Q1/2023

Höyrypilli & Vihellys Helsinki Kojamo 62 Q3/2023

Pohjantytär Helsinki DWS 69 Q3/2023

Haltiantien Pekko

Vantaa

Suomen

Asuntoneuvoja 51 Q4/2023

Ainonkannel Helsinki Kojamo 70 Q4/2023

Visio Helsinki Patrizia 63 Q1/2024

* Situation at 31 December 2022

The largest ongoing business construction projects

Project name Location Project type

Completion

level, %*

Completion

(estimate)

DEVELOPMENT PROJECTS 84 Q1/2023

Warasto Finland Lieto Lieto Retail

Wood City Office II Helsinki Office 14 Q2/2024

BUSINESS PREMISES

HUS Jorvi, basic renovation of operating theatres Espoo Public 98 Q1/2023

Basic renovation of the Finnish National Theatre Helsinki Public 79 Q2/2023

Lamminrahka school centre Kangasala Public 53 Q2/2023

Helsinki Upper Secondary School of Languages and

Upper Secondary School for Adults Helsinki Public 70 Q3/2023

Kotka Event Centre Kotka Public 76 Q3/2023

Matinkylä upper secondary school Espoo Public 42 Q4/2023

Wintteri Uusikaupunki Uusikaupun-ki Public 23 Q1/2025

Oulu Central Police Station and Prison Oulu Public 4 Q4/2025

Vantaa Main Police Station and Prison Vantaa Public 2 Q3/2024

HUS Jorvi, new ward building Espoo Public 1 Q4/2025

* Situation at 31 December 2022

* The value of individual contracts has not been made public.

Part of report of the the Board of Directors

April 2020 for Kojamo. It was completed in August 2022.

The project was handed over to the client in phases in

summer 2022 – floors 1–13 in June and floors 14–31 in

August. In December 2021, SRV signed a EUR 101 million

agreement with PATRIZIA to build Visio, the fourth tower

building in Kalasatama. Construction was started and

the project was entered in the order backlog in the first

quarter of 2022. Visio reached its rooftop height in Sep-

tember 2022.

SRV focuses on residential project development

in urban growth centres. SRV is currently developing

housing construction projects in areas such as Kiven-

lahti, Espoonlahti, Kaitaa, Vermonniitty, Säterinkallio and

Keilaniemi in Espoo and Lapinmäentie and Jätkäsaari in

Helsinki.

Completed residential units, developer contracting

In January-December, 210 (368) residential units were

completed in Pitäjänmäki and Pasila in Helsinki, Louhela

in Vantaa, Kaleva in Tampere and the centre of Kaarina.

At the end of December, 23 (9) completed apartments

remained unsold. A total of 32 (409) developer-con-

tracted residential units were sold during January–

December.

In January-December, 196 (453) developer-con-

tracted residential units were recognised as income,

generating total revenue of EUR 48.4 (161.3) million.

Business and infrastructure construction

In accordance with SRV’s strategy, the company’s busi-

ness construction mainly consists of project manage-

ment contracts and alliance projects for external clients,

lifecycle projects, and SRV’s own development projects.

In addition to the basic profit margin, alliance projects

offer the potential for extra earnings if the targets set for

Business and infrastructure projects under

construction and under development

Major ongoing business and infrastructure construction

projects include the Helsinki Airport’s Terminal 2 exten-

sion and alteration project, which is being implemented

under an alliance model and has progressed to its final

phase, the basic renovation of the Finnish National The-

atre and the operating theatres at HUS Jorvi Hospital,

and the Matinkylä upper secondary school in Espoo. SRV

is also currently carrying out the Culture Barracks basic

renovation in Helsinki. In addition, SRV is currently build-

ing WithSecure’s new headquarters in Helsinki, a fibre

mill for Woodspin in Jyväskylä, the Wintteri education

and wellness campus in Uusikaupunki, the Lamminrahka

school centre in Kangasala, the Helsinki Upper Second-

ary School of Natural Sciences, the Hovirinta school in

Kaarina, business premises for Senate Properties, the

Oulu Central Police Station and Prison, a basic renova-

tion project for Lahti City Hall, the Satama Arena event

centre in Kotka, a multipurpose hall for Rauma Marine

Constructions and the Helsinki Upper Secondary School

of Languages, which is being implemented as a lifecycle

project.

SRV’s project development is developing a diverse

range of business premises, such as offices, hotels,

logistics centres and retail premises in Finland’s strong-

est urban centres. Examples of major projects currently

under development in the Greater Helsinki area include

the Horisontti office tower in Kalasatama, Tower A (aka

Pohjola Building) on Lapinmäentie, the Pressi office

and logistics area in Vantaankoski, the metro centre in

Kivenlahti, and Bunkkeri in Jätkäsaari. Bunkkeri is being

planned to be turned into a 13-storey landmark with

versatile sports facilities, a swimming pool, and about

300 apartments.

Data Table

Legend Value

2021

508.3

2022

84

Change in order backlog, business premises: 34.6%

Order backlog, business premises

(EUR million)

At the period-end.

250

500

750

2021

2022

684.0

508.3

HELSINKI AIRPORT'S

TERMINAL 2 EXTENTION

AND ALTERATION PROJECT

PROGRESSED TO ITS FINAL

PHASE

the project are achieved. Project management contracts

are based either on a target price and guaranteed max-

imum price or a target budget. Like alliance projects,

they offer the potential for extra earnings. In lifecycle

projects, SRV is responsible for both the construction of

the building and, for a separate service charge, also the

property’s maintenance for an agreed service period.

A business development project is a project that is de-

veloped by SRV, but which is sold to an investor before

construction begins. SRV bears the risks involved in both

the construction and leasing of such projects.

January-December 2022

Revenue from business construction decreased to EUR

427.3 (581.4) million and the order backlog grew to EUR

684.0 (508.3) million. This was because large projects

completed at the end of last year were removed from the

order backlog.

Part of report of the the Board of Directors

Completed business and infrastructure projects

In January-December, SRV completed the basic

renovation of Snellmania in Kruununhaka, Helsinki for

Helsinki University Properties, the Pressi B Building for

Julius Tallberg Real Estate Corporation in Vantaankoski,

Vantaa, the Jousenkaari School in Espoo, new premises

for the Radiation and Nuclear Safety Authority (STUK)

in Vantaa, the Siuntio education and wellness cam-

pus, which was implemented as a lifecycle project, the

Espoonlahti metro station, concrete structures for a fuel

field at the bioheating plant in Vuosaari, the Kirkkonum-

mi wellness centre, HUS Bridge Hospital in Helsinki, and

the new Espoo Courthouse in Otaniemi.

Investments

SRV’s investments focus on the management and

realisation of the Group’s real estate investments; the

creation and ownership of new joint investment struc-

tures; and the operation of selected properties. Invest-

ments’ key objectives are to increase SRV’s financing

capacity with the aid of joint financing structures;

harness the value chains created by projects more

extensively through longer-term ownership; diversify

capital risk; and generate positive cash flow over the

longer term. Previously, the bulk of the Investments

segment’s capital employed was committed in Russia.

These investments were almost entirely written down

in April 2022.

January-December 2022

Investments’ revenue was EUR 9.9 (6.8) million.

Investments’ operative operating profit amounted

to EUR 0.5 (-4.6) million, affected by capital gains from

the sale of a commercial centre in Porvoo.

Investments’ operating profit was EUR -109.3 (-11.6)

million. Operating profit was impacted by substantial

write-downs of assets in Russia and the Fennovoima

holding, which had a total impact of EUR -92.5 million.

After the write-downs, the total value of SRV’s holdings in

Russia amounts to EUR 3.0 million. In addition, operating

profit was affected by the net impact of the change in the

exchange rate of the rouble, which was recognised prior

to the asset write-downs and amounted to EUR 7.3 (1.5)

million. The exchange rate impact, which largely had no

effect on cash flow, was caused by the valuation of the eu-

ro-denominated loans of Russian associated companies

Capital employed

EUR million 31.12.2022 31.12.2021

Okhta Mall, shopping centre

(sold 11/22) 0.0 69.3

Pearl Plaza, shopping centre 0.0 20.0

Other, Russia 3.0 52.1

Fennovoima 0.0 13.3

Tampere Central Deck and Arena 7.9 10.1

Plots and other holdings 0.0 2.4

Total 10.9 167.3

SRV has written down the balance sheet values of all of

its Russian shopping centres and other investments, and

most of its plots held in inventories. After the write-downs,

capital employed largely consists of investments in Finnish

subsidiaries, joint ventures and associated companies;

loans issued; accrued income from associated companies;

and their impairment and expense entries.

Investments

EUR million

1–12/

2022

1–12/

2021

change,

EUR million

change,

Revenue 9.9 6.8 3.1 46.1

Operative operating profit 0.5 -4.6 5.1

Operating profit -109.3 -11.6 -97.8

Capital employed 10.9 167.3 -156.4 -93.5

Return on investment, % -118.3 -16.4 -110.2

Data Table

Legend Operatiivinen

Liikevoitto

liikevoitto

2021

4. 11.

2022

0.5 109.3

Operative operating profit

and operating profit,

Investments (EUR million)

Operative operating profit is determined by deducting the calculated

currency exchange differences included in financial items in Russian

operations and their potential hedging impacts from operating profit.

Operative operating profit

Operating profit

-120

-100

-80

-60

-40

-20

2021

2022

-109.3

0.5

–4.6

–11.6

120

160

200

2021

2022

10.9

167.3

Data Table

Legend Value

2021

167.3

2022

10.9

Change from 2021: -93.5 %

Capital employed

2021

2022

9.9

6.8

Data Table

Legend Value

2021

.8

2022

9.9

Change from 2021: 46.1%

Revenue, Investments (EUR million)

Part of report of the the Board of Directors

SRV’s written-down shopping centre holdings in Russia on 31 December 2022

Project Holding, % Opened Floor area (m2)

Occupancy rate

12/2022, %

Pearl Plaza, shopping centre,

St Petersburg

SRV 50

Shanghai Industrial

Investment Company 50 August 2013

Gross floor area

96,000

Leasable area 48,000

Lease agreements

98.6

4Daily, shopping centre,

Moscow Vicus 26

SRV 19

Blagosostoyanie 55 April 2017

Gross floor area

52,000

Leasable area

25,500

Lease agreements

83.8

In November 2022, SRV and its Finnish co-investors sold their holdings in Jupiter Realty 1 B.V., the company that owns the Okhta Mall

shopping centre in St Petersburg.

Land reserves 31 December 2022

Land reserves Business construction Housing construction Investments Total

Unbuilt land areas,

land acquisition

commitments and rented

plots

Building rights

, 1,000 m² 105 174 173

452

Land development

agreements

Building rights

, 1,000 m² 55 187 0 242

Building rights also include the estimated building rights/construction volume of unzoned land reserves and land areas covered by agreements in

projects that are wholly or partly owned by SRV.

Consists of building rights on a plot in Russia. SRV does not plan to build on this plot.

in roubles, currency hedging expenses and changes in the

market value of currency hedges. Operating profit was

improved in July–September by the sale of a plot in Rus-

sia valued at EUR 1.8 million. The plot had been previously

written down during the review period. In November 2022,

SRV sold its holding in the Okhta Mall shopping centre

in Russia for EUR 4.3 million. Profits from the disposal of

assets in Russia totalled EUR 6.3 million. The transaction

had no impact on operative operating profit. In addition,

an impairment of EUR -2.3 million was recognised on the

Ta mp er e Ce nt ra l De ck a nd A re na i nve s tm en t in Q 4.

Capital employed totalled EUR 10.9 million (167.3

12/2021). Capital employed decreased due to write-

downs of Russia-related investments. The amount of

capital employed remaining in Russia was EUR 3.0 mil-

lion. The remainder of capital employed mainly compris-

es investments in the Tampere Central Deck and Arena

project.

The return on investment was -118.3 (-16.4) per cent.

Return on investment was impacted primarily by write-

downs of assets in Russia.

Progress in SRV’s exit from Russian operations and

holdings

When Russia invaded Ukraine in February, SRV decid-

ed to exit its businesses and holdings in Russia on an

accelerated schedule. In April, due to the impairment

of Russian business functions as a result of the coun-

try’s invasion of Ukraine and the consequent economic

sanctions, SRV wrote down the balance sheet values of

practically all of its shopping centres and other holdings

in Russia and its holding in Fennovoima. The company

announced an extensive action programme to restruc-

ture its balance sheet in order to bolster equity. The

overall arrangement consisted of the partial repurchase

of previously issued notes and the amendment of the

terms of the remaining notes to convert them to hybrid

bonds, the conversion of old hybrid bonds to shares,

the extension of our revolving credit facility and project

financing facility, and a rights issue. This action pro-

gramme was successfully completed in June–July. As a

result of this financing arrangement, SRV’s equity ratio

exceeded its pre-war level and the company is now prac-

tically net debt-free.

In November, SRV and its Finnish co-investors sold

their holdings in Jupiter Realty 1 B.V., the company that

owns the Okhta Mall shopping centre in St Petersburg, to

the Cyprus-based property investor Geomare Invest-

ments Limited. After this divestment, SRV is a co-in-

vestor in two Russian shopping centre projects – Pearl

Plaza and 4Daily – through its associated companies. In

addition, SRV owns one plot in Russia. SRV is actively

continuing to engage in negotiations aiming at the sale of

its remaining Russian assets.

Other holdings

SRV owns 5 per cent of Tampere Arena and has an 8.33

per cent holding in other Tampere Central Deck and

Arena projects. The commercial property SRV owned

at Ratsumestarinkatu 6 in Porvoo was sold during the

second quarter.

Part of report of the the Board of Directors

OWN PERSONNEL

Safety and wellbeing at work,

training and development, good

corporate spirit, strong reputation,

ethically sound behaviour, financial

performance and stability

INDUSTRY

ASSOCIATIONS

Promoting industry interests,

preparing for future legislation

CUSTOMERS

Customer experience, qual-

ity, tailor-made solutions,

flexibility, ease and safety of

buying, predictability, inno-

vations, location, services,

return on investment, brand

and reputation, ecological

viewpoints, ethically sound

behaviour, financial perfor-

mance and stability

BOARD OF DIRECTORS,

CORPORATE EXECUTIVE

TEAM

Share value development, building and

protecting brand and reputation, risk

management, financial performance

and stability

PARTNERS

Trustworthiness, fair

competition, good

reputation, interest-

ing projects, financial

performance and

stability

MEDIA

Interesting topics, openness and

transparency, short response time,

providing information and answers to

questions, proactive communication

AUTHORITIES,

DECISION

Facts, background

information, expertise,

efficiency, quality,

ethically sound

behaviour, addressing

societal challenges

SHAREHOLDERS

Share value development, building

and protecting brand and reputation,

risk management, ESG requirements,

financial performance and stability

LOCAL

COMMUNITIES,

NEIGHBOURHOODS

Being fair neighbours, low

impact on everyday lives of

communities, staying within

pre-agreed schedules, mini-

mising heavy traffic, danger,

disturbance, noise, providing

timely and accurate informa-

tion, well-organised site and

surroundings, functioning

walkways and driveways

NON-GOVERNMENTAL

ORGANISATIONS,

GENERAL PUBLIC

Facts, background information, exper-

tise, common interest, addressing soci-

etal challenges, openness and trans-

parency, ethically sound behaviour

STAKEHOLDERS'S EXPECTATIONS

Stakeholder cooperation

SRV’s business has significant social impacts. It is

increasingly important for stakeholders that, in addition

to seeking profit, companies also have objectives with

a positive social impact. We have identified our most

significant stakeholders and their expectations of SRV.

During the year, we kept our shareholders and in-

stitutional investors informed by way of interim reports,

stock exchange releases and investor news, and also

through our website at www.srv.fi/en/investors. SRV

Group Plc’s Annual General Meeting 2022 was held on

28 March 2022 and an Extraordinary General Meeting

was held on 30 May 2022. SRV’s representatives were

also in contact with investors, media representatives

and analysts via remote interim report events. Investors’

sustainability-related inquiries concerned issues such

as taxonomy alignment and the concrete implementa-

tion of project responsibility at construction site level.

During the year, we provided media representatives

with information about many issues related to our pro-

jects and the construction industry in general, and we

also actively contacted the media to highlight the social

impact of our projects.

We continued to systematically listen to our cus-

tomers throughout the year at regular meetings, meet-

ings held as part of project processes, and through our

standard customer satisfaction surveys. The customer

experience appears in our strategy as a major theme

alongside lifecycle wisdom; and our customer promise

– “By listening, we build wisely” – combines our lifecy-

cle-wise strategy with our asking- and listening-based

operating model. In 2022, we focused on strengthening

WE DEVELOP OUR

OPERATIONS THROUGH

REGULAR STAKEHOLDER

COOPERATION

Part of report of the the Board of Directors

the sector. SRV’s management regularly meets with a

number of city boards.

We take our neighbours into consideration by

providing information about the impacts of construction

sites, such as changes to traffic arrangements or work

phases that may cause noise. In 2022, for example, we

also organised a separate safety briefing for students at

a school adjacent to the construction site for the Wint-

teri education and well-being centre.

We actively cooperate with educational institutions

and students. In 2022, we launched a working life coop-

eration agreement with Metropolia University of Applied

Sciences, and signed a letter of intent to join the wood

construction development programme run by Novia

University of Applied Sciences. We also participated in

trade fairs and events organised by student associa-

tions, and enabled visits to our construction sites.

We organised a total of seven events for our own

personnel during the year. Webcasts on topical issues

were also produced for personnel. In addition to events

aimed at all personnel, each unit held quarterly, monthly

and weekly meetings in accordance with our manage-

ment processes.

WE WANT AS

MANY PEOPLE,

AS POSSIBLE

TO HAVE THE

OPPORTUNITY

TO INFLUENCE

FOR FUTURE

WE BUILD

internal awareness of our customer promise within SRV

with the aim of including it as a guideline in everything

we do.

We listen extensively to our stakeholders, and give

both urban residents and industry operators the oppor-

tunity to share their views on sustainable construction.

Since 2021, we have offered people the opportunity to

join a digital forum called Trailblazers, so that as many

people as possible can influence the kind of future we

are building. During 2022, our Trailblazers shared their

views on yard design, the offices of the future, sustaina-

ble homes, and well-being at the office.

SRV’s Youth Panel started up in 2020, and its mem-

bers consist of young people with an interest in urban

development and future construction. The Youth Panel

convened three times in 2022. The topics discussed in-

cluded lifecycle wisdom, sustainable housing solutions,

and job opportunities in the construction sector.

We met with subcontractors and suppliers dur-

ing bilateral negotiations on topics such as preventing

labour exploitation and promoting sustainable practices

in the sector. A Safety Day was held for SRV’s key part-

ners in the construction of business premises, the aim

of which was to increase awareness and trust between

different operators in order to promote a good safety

culture.

We are in regular contact with the management of

land use and zoning units in a number of cities, and we

also met with them regularly in 2022 to discuss topi-

cal issues. We held separate discussions with permit

authorities concerning a number of projects. We were

active participants in a variety of market dialogues

and city-organised briefings and events. We were also

involved in influencing development and policymaking,

such as legislative amendments and regulations, within

Part of report of the the Board of Directors

Strategy implementation

SRV’s strategy for 2021–2024:

Building a lifecycle-wise reality

In February 2021, SRV announced its new strategy and

long-term financial objectives for 2021–2024. SRV’s

strategy aims to develop a long-term competitive advan-

tage, provide an excellent customer experience, tap into

opportunities for lifecycle services, improve profitability

and reduce indebtedness.

The strategy responds to the major challenges

in our operating environment – accelerating climate

change and continuing urban growth and high-density

development. Our aim is to listen to our customers

and other stakeholders, and carry out lifecycle-wise

construction so that sustainable construction will cre-

ate security for years and generations to come. SRV’s

strategy is based on developing the built environment

so that the entire lifecycle is taken into account. We

call this concept “lifecycle wisdom”. It means that we

always optimise users’ well-being and the environ-

mental footprint and costs of a building over the long

term.

The company has a strategic spearhead pro-

gramme that brings lifecycle wisdom to everything we

build. This provides the company’s customers with safe

and sustainable solutions for long-term value creation,

renews SRV's way of working, and paves the way for the

future of the entire industry.

In addition to its spearhead programme, SRV is

improving its profitability, reducing its indebtedness and

enhancing its customer experience through three strate-

gic programmes:

• Streamlining operations throughout the

construction chain

• Leading market position in the commercial

premises market

• Housing construction at the forefront of

profitability

Strategic development programmes 2022

In 2022, our development work continued in line with our

strategic programmes.

Spearhead programme: Value through lifecycle-wise

construction

Our systematic development of lifecycle wisdom contin-

ued in 2022, and our construction had positive impacts

with respect to everything from people and the environ-

ment to economic value creation. All of our construction

sites became emission-free during the year. We contin-

ued to develop our lifecycle-wise concepts and project

implementation, and renewed our reporting to comply

with the taxonomy system.

SRV’s construction sites have been emission-free

since the beginning of 2022. This is a significant step in

our journey towards a lifecycle-wise future. This decision

covers all of the company’s construction sites, and was

the first commitment of such broad scope in the con-

struction sector All of the electricity used on SRV’s sites

is carbon-neutral, that is, renewable or emission-free

energy. We will always use carbon-neutral heating when-

ever it is available. We are, however, unable to eliminate

all of our emissions. In order achieve net-zero emissions,

we plant a number of trees equivalent to the remaining

emissions to serve as a carbon sink. We reduced our

emissions by 75% during the year and planted trees

equivalent to 5,000 tCO

of emissions.

We developed and clarified our lifecycle wisdom

concept by standardising our most value-adding solu-

tions. The best solutions were identified by listening to

our customers, weighing up environmental benefits using

lifecycle assessments, and examining lifecycle costs to

determine a solution’s impact on economic value. Our

updated lifecycle wisdom concept was widely adopted,

and all projects planned during 2022 used this concept.

Lifecycle wisdom will therefore be broadly visible in

SRV’s upcoming output.

Our concept involves sites with good locations,

smooth transport connections, local services and an

energy class A rating. Renewable energy production

should also be included whenever possible. Geothermal

heat and solar power are utilised at most of our sites.

Solutions that promote people’s well-being also play an

important role. They can be seen in things such as com-

fortable indoor conditions, a good amount of light, and a

green living environment. Green living environments also

promote biodiversity. Ease of living has not been forgot-

ten in sustainable everyday life: we have made it easy to

sort waste and favour sustainable mobility, and have also

introduced sharing economy services to our buildings.

We safeguard a property’s economic value with the

aid of environmental certificates, adaptability and ser-

viceability. In addition to clarifying and standardising our

concept, we looked far into the future and envisioned the

lifecycle-wise buildings of the future.

LIFECYCLE-WISE

CONSTRUCTION

CREATES SECURITY

FOR YEARS

AND GENERATIONS

TO COME

Part of report of the the Board of Directors

Streamlining operations throughout

the construction chain

In 2022, we continued our systematic work to improve

the efficiency of our projects. Our diverse range of de-

velopment measures have been effective, and we have

succeeded in raising the controllability of our projects

and the margin of many projects. Through efficient

procurement and design management, we have been

able to avoid any significant market-based increases in

construction costs.

We introduced takt time at selected sites during the

year. Takt time speeds up the completion of work phas-

es and provides us with a continuous situational picture

of how construction is progressing. We also continued

to develop our risk management. Our risk management

processes were renewed in order to provide even great-

er support for our strategy and internal audit.

We expanded the use of building information models

throughout the Group. During the year, we developed the

BIM tools and manuals used on construction sites to aid

quantity calculation and the scheduling of technical build-

ing services. We also introduced new digital situational

pictures to support deviation management in projects.

Monitoring real-time situational pictures of projects gives

us an understanding of each project’s status and enables

us to address any deviations. These changes have ena-

bled us to improve the controllability of our projects.

Leading market position in the commercial

premises market

In 2022, we continued our systematic efforts to achieve

a leading position in the business premises market. We

managed to win a number of important projects in both

the public and private sectors.

We created and progressed with new practices for

our collaborative operating model, the SRV Model. We

also integrated the SRV Model more closely into the pro-

cess for our own development projects. We developed

our commercial operations in a number of ways. Our

tendering activities were made more consistent in terms

of their content, processes and materials, and we also

trained our personnel in commercialism.

We productised lifecycle wisdom concepts for

offices, logistics buildings and schools. In particular, we

developed a carbon-neutral energy system, made build-

ings more easily adaptable for different purposes, and

improved the durability of buildings. Our lifecycle-wise

office generates up to 60% fewer emissions than a typi-

cal office building.

We also invested in understanding our customers

– and thereby in our customer experience – in all of our

projects. We trained personnel in a number of projects to

act in accordance with our customer promise.

Housing construction at the forefront of profitability

Our goal is to increase the profitability of housing con-

struction by streamlining our operations. During 2022,

we continued to develop project management and steer-

ing in housing construction. We renewed our guidance on

project profitability during the construction phase, and

tightened our selection criteria for projects. We also de-

veloped a monthly forecasting and reporting model for

our projects, so as to provide a better situational picture

of ongoing projects.

We progressed with our housing concept, focus-

ing on sustainable everyday life. Our housing concept

includes multipurpose spaces, easy waste sorting into

seven fractions, and sustainable materials. Our homes

also have item lending banks to encourage the sharing

economy. The concept also allows renewable energy to

be purchased as a service, so that housing companies

will not be burdened by the need to invest in and main-

tain equipment. All of our new lifecycle-wise homes have

an energy class A rating and generate about 50% fewer

emissions than a typical residential building.

We developed our warranty process by intensi-

fying the monitoring, forecasting and reporting of our

warranty operations. In 2002, our projects were mainly

handed over as zero-error handovers. By investing in the

handover phase, we have created a good foundation for

successful warranty operations over the coming years.

We continued our work to enhance cooperation on

design, procurement and accounting. Our procurement

category management model was refined, and contin-

uous improvements in procurement have enabled us to

manage our costs in a challenging market situation.

We updated our strategy and set new financial objec-

tives on 2 February 2023. Read more on our website at

www.srv.fi/en/srv-company/srv-as-a-company/strategy.

OUR COLLABORATIVE

OPERATING MODEL

IS CALLED SRV MODEL

Part of report of the the Board of Directors

Outlook for 2023

During 2023, SRV's revenue and result will be affect-

ed by several factors in addition to general economic

trends, such as: the timing and amount of income rec-

ognition for SRV's own projects, which are recognised

as income upon delivery; the margin of the order back-

log and its development; the start-up of new contracts

and development projects; the war that Russia started

against Ukraine, including its related direct and indirect

effects, such as material costs and the availability of

materials and labour; and changes in demand. Higher

interest rates and inflation have a negative impact on

demand for housing and business premises among

consumers and investors, and thus pose uncertainty

with respect to the estimated start-ups of new projects.

Economic development

Financial year 1 January – 31 December

2022 in brief:

• Revenue amounted to EUR 770.1 million (932.6

1–12/2021).

• Operative operating profit amounted to EUR 18.9

(5.3) million.

• Operating profit was EUR -76.4 (-1.7) million;

write-downs of assets in Russia and the

Fennovoima holding, the dissolution of profit

margin eliminations, and the weakening of the

rouble had a total impact of EUR -92.5 million.

• The result before taxes was EUR -79.1 (-20.3)

million. Write-downs and the weakening of the

rouble had an impact of EUR -132.7 million and

the financial arrangements an impact of EUR

38.6 million.

• Cash flow from operating and investment

activities totalled EUR -8.0 (76.2) million.

• The comprehensive restructuring of financing

carried out during the second quarter significantly

strengthened equity and reduced net interest-

bearing debt. Equity ratio rose to 36.3 (27.4) per

cent and gearing declined to 55.1 (103.0) per cent.

Excluding the impact of IFRS 16, the equity ratio

was 48.2 (32.8) per cent and gearing was -7.5 (47.5)

per cent. The equity ratio in accordance with the

loan covenant calculation was 48.2 per cent.

• At period-end, the order backlog stood at EUR

838.8 (872.3) million. New agreements valued

at EUR 624.6 (588.6) million were signed in

January–December. The sold share of the order

backlog was 89.2 (91.5) per cent.

• Earnings per share were EUR -6.62 (2.29).

The share issues carried out during the review

period, the effect of the subscription price of the

new shares and the 40:1 reverse share split in

July have been taken into consideration in the

calculation of the key figure.

Financial objectives

In 2022, SRV’s strategy and all of its operations were

guided by the 2021–2024 strategic financial objectives

that were approved in February 2021:

• Operative operating profit: 6 per cent by the end of

the period.

• Gearing excluding the impact of IFRS 16: 40-60 per

cent by the end of the period.

• As the company gradually reduces its indebtedness,

SRV expects that it will pay dividends in accordance

with its dividend policy no earlier than for the 1

January–31 December 2023 financial year. The

longer-term objective is to distribute dividends

of 30-50 per cent of the annual result, taking into

account the capital needs of business operations.

Revenue in 2023 will mainly be generated by cooper-

ative contracting as well as development projects sold

to investors. At the beginning of the year, the order

backlog will focus strongly on cooperative contracting,

which involves fewer risks but lower margins, due to

which the largest share of earnings in 2023 is expected

to be generated in the latter part of the year. In 2023,

the share of revenue accounted for by developer-con-

tracted housing production will remain small.

• Consolidated revenue for 2023 is expected to

decrease compared to 2022 (revenue in 2022: EUR

770.1 million).

• Operative operating profit is expected to be positive,

but lower than the operative operating profit for 2022

(operative operating profit in 2022: EUR 18.9 million).

We updated our strategy and set new financial objec-

tives on 2 February 2023. Read more on our website at

www.srv.fi/en/srv-company/srv-as-a-company/strategy.

Part of report of the the Board of Directors

Group key figures

IFRS, EUR million 1−12/2022 1−12/2021 Change Change, %

Equity ratio, % 36.3 27.4

Equity ratio, %, excl. IFRS 16

48.2 32.8

Net interest-bearing debt 80.5 170.0 -89.5 -52.6

Net interest-bearing debt, excl. IFRS 16

-11.5 81.0 -92.4 -114.2

Net gearing ratio, % 55.1 103.0

Net gearing ratio, %, excl. IFRS 16

-7.5 47.5

Return on investment, % -7.8 -0.6

Capital employed 272.0 403.0 -131.0 -32.5

Construction 212.4 195.8 16.6 8.5

Investments 10.9 167.3 -156.4 -93.5

Other operations and eliminations 48.7 40.0 8.7 21.8

Capital employed, excl. IFRS 16

186.4 319.4 -133.0 -41.6

Return on equity, % -50.0 -11.5

Earnings per share, EUR

-6.6 -2.3 -4.3 187.8

Share price at end of period

3.80 14.8 -11.0 -74.3

Weighted number of shares at end of period, millions

13.2 9.4

The figure has been adjusted to remove the impacts of IFRS 16.

The key figure has been adjusted for the share issue and the reverse share split in July 2022.

Group key figures

IFRS, EUR million 1−12/2022 1−12/2021 Change Change, %

Revenue 770.1 932.6 -162.5 -17.4

Construction 746.3 930.1 -183.9 -19.8

Investments 9.9 6.8 3.1 46.1

Other operations and

eliminations 13.8 -4.4 18.2

Operative operating profit

18.9 5.3 13.6 256.9

Construction 23.3 14.1 9.1 64.8

Investments 0.5 -4.6 5.1

Other operations and

eliminations -4.9 -4.3 -0.6

Operative operating profit, % 2.5 0.6

Operating profit -76.4 -1.7 -74.7

Construction 23.3 14.1 9.1 64.8

Investments -109.3 -11.6 -97.8

Other operations and

elimina-tions 9.7 -4.3 13.9

Operating profit, % -9.9 -0.2

Financial income and expenses, total -2.7 -18.6 16.0

Profit before taxes -79.1 -20.3 -58.7

Net profit for the period -85.7 -19.9 -65.8

Net profit for the period, % -11.1 -2.1 -9.0

Order backlog (unrecognised)

838.8 872.3 -33.5 -3.8

New agreements 624.6 588.6 35.9 6.1

The Group’s order backlog consists of the Construction business.

Part of report of the the Board of Directors

January-December 2022

• The Group’s revenue declined by 17.4 per cent

to EUR 770.1 million (932.6 1−12/2021). Revenue

included the positive effect of the dissolution of a

profit margin elimination in construction operations

amounting to EUR 14.5 million as a result of write-

downs of assets in Russia and the Fennovoima

holding. Revenue from both business and housing

construction was down.

• The Group’s operative operating profit improved

and amounted to EUR 18.9 (5.3) million. Operative

operating profit totalled EUR 23.3 (14.1) million

for the Construction segment and EUR 0.5 (-4.6)

million for the Investments segment. The operative

operating profit of the Construction segment

improved in both housing and business construction.

The higher volume of housing contracting carried

out as development projects contributed to growth

in housing construction. The margin in business

construction improved in spite of the decline in

volume. The comparison period was burdened

by the losses of the Tampere Arena project. The

operative operating profit of the Investments

segment was improved by capital gains from the

sale of a commercial centre in Porvoo.

• The Group’s operating profit was EUR -76.4 (-1.7)

million. Operating profit was impacted by, for instance,

substantial write-downs of assets in Russia and the

Fennovoima holding, the dissolution of profit margin

eliminations and changes in the exchange rate of the

rouble, which had a total impact of EUR -92.5 million.

The effects of write-downs and changes in exchange

rates are reported in the Investments segment and the

effects of the dissolution of profit margin eliminations

in the other operations and eliminations unit.

• Financial income and expenses amounted to EUR

-2.7 (-18.6) million. Net financial expenses included

EUR -41.7 million in write-downs of shareholder

loans used to finance Russian-associated

companies, and exchange rate differences

amounting to EUR 1.5 million arising from the

conversion of subsidiary and associated company

loans, which did not have an impact on cash flow.

Financial income included proceeds of EUR 17.1

million from the difference between the price paid

for repurchased notes and their carrying amount.

The terms of the remaining notes were amended

to convert them into hybrid bonds and the change

in their fair value yielded financial income of

EUR 22.9 million. Dividend and interest income

amounted to EUR 1.4 (3.0) million, interest paid on

derivatives and fair value changes amounted to

EUR 8.2 (1.3) million, and interest expenses were

EUR -5.7 (-11.0) million, of which EUR 0.1 (0.5) million

was capitalised as of the beginning of the year. In

addition, financial expenses included EUR -4.5

(-5.2) million in interest on lease agreement debts

under IFRS 16. The financing arrangements caused

expenses of EUR 4.4 million, of which EUR 3.5

million were recognised directly as a reduction in

equity and EUR 0.9 million as financial expenses.

• The Group's profit before taxes totalled EUR -79.1

(-20.3) million.

• Cash flow from operating activities was EUR -10.1

(68.9) million and cash flow from investment

activities was EUR 2.1 (7.2) million. EUR 15.7 million in

repayments on the 2020 VAT payment arrangement

had a negative impact on cash flow from operating

activities. The taxes included in the payment

arrangement were fully paid in the review period.

48.2%

EQUITY RATIO

(WITHOUT IFRS 16)

770.1

EUR MILLION

REVENUE

18.9

EUR MILLION

OPERATIVE OPERATING PROFIT

838.8

EUR MILLION

ORDER BACKLOG 31 DEC 2022

• The equity ratio was 36.3 (27.4) per cent and

gearing was 55.1 (103.0) per cent. Excluding the

impact of IFRS 16, the equity ratio was 48.2 (32.8)

per cent and gearing was -7.5 (47.5) per cent. The

equity ratio in accordance with the loan covenant

calculation was 48.2 (34.3) per cent. In the first

quarter, equity ratio and gearing weakened steeply

because the company wrote down the balance

sheet values of practically all of its holdings in

Russia and the Fennovoima holding. The financing

arrangement carried out during the second quarter

in turn improved the equity ratio and gearing to

stronger levels than before Russia invaded Ukraine.

OUR OPERATIVE

OPERATING PROFIT

IMPROVED IN

CHALLENGING MARKET

SITUATION

Part of report of the the Board of Directors

• At period-end, the Group’s order backlog stood

at EUR 838.8 (872.3) million. New agreements

valued at EUR 624.6 (588.6) million were signed

in January–December. The most significant new

projects were the new ward building at Jorvi

Hospital, the fourth tower building comprising

240 residential units and daycare facilities in

Kalasatama, Helsinki for PATRIZIA, the Wintteri

education and wellness campus in Uusikaupunki,

the Wood City II headquarters being built for

WithSecure, the Oulu Central Police Station and

Prison, and the Eastern Uusimaa Main Police

Station and Prison. In addition, the developer-

contracted housing project Kokardi was started up

in Pasila, Helsinki during the review period. The sold

share of the order backlog was 89.2 (91.5) per cent.

• In addition, SRV has announced won projects

valued at about EUR 1.2 billion that have not yet

been entered into the order backlog. These

include the Laakso Joint Hospital in Helsinki,

the Sammontalo Building in Lappeenranta, the

extension of the National Museum of Finland in

Helsinki and housing projects for Kojamo. Most

of the revenue from projects is generated by

contracts carried out under project management

or alliance models.

• The Group's earnings per share were EUR -6.62

(-2.29). The share issues carried out during the

review period, the effect of the subscription price

of the new shares and the 40:1 reverse share split

in July have been taken into consideration in the

calculation of the key figure and its comparison data.

367

733

1,100

2018

2019

2020

2021

2022

770.1

932.6

975.5

1,060.9

959.7

Data Table

Legend Value

2018

.7

2019

16.

2020

7.

2021

3.6

2022

770.1

Change from 2020: -17.4%

Revenue (EUR million)

Data Table

Legend Value

2018

.

2019

1.

2020

.6

2021

7.

2022

3.3

Change from 2021: 8.9 percentage points

Equity ratio (%)

2018

2019

2020

2021

2022

36.3

27. 4

22.6

21.2

28.5

-120

-90

-60

-30

2018

2019

2020

2021

2022

Data Table

Legend Operatiivinen

Liikevoitto

liikevoitto

2018

. 1.

2019

1.6 3.

2020

1. 1.

2021

.3 1.7

2022

18.9 7.4

Operative operating profit

and operating profit (EUR million)

SRV changed the definition of operative operating profit in order to

improve comparability and transparency in reporting in 2021. Operative

operating profit excludes exchange rate gains and losses of associated

companies and joint ventures as well as income and expenses from

currency hedging and other items affecting comparability from IFRS

operating profit.

Operative operating profit Operating profit

−20.0

−19.8

1.6

–93.0

15.8

1.5

18.9

-7 6. 4

5.3

−1.7

500

1,000

1,500

2,000

2018

2019

2020

2021

2022

838.8

872.3

1,153.4

1,344.2

1,816.0

Data Table

Legend Value

2018

116.

2019

13.

2020

113.

2021

7.3

2022

3.

Change from 2021: -3.8%

Order backlog

(EUR million)

At the period-end.

OUR ORDER BACKLOG

STRENGTHENED

TOWARDS THE END OF

THE YEAR

Part of report of the the Board of Directors

Financing and financial position

SRV carried out the comprehensive restructuring of

financing as planned in June during the first half of

2022 due to the impairments of assets in Russia and

the holding in Fennovoima as a result of Russia’s war

against Ukraine and the related economic sanctions.

These impairments had a substantial impact on SRV’s

shareholders’ equity and equity ratio, and restructuring

sought to counteract the effects of these impairments

by substantially strengthening equity and reducing net

interest-bearing debt.

The restructuring of financing in June consisted of the

following measures:

(i) A rights issue of about EUR 34.8 million for the

shareholders of the company. The issue was fully

subscribed.

(ii) The company’s EUR 100 million senior unsecured

callable fixed-rate notes (of which EUR 21.1 million

was outstanding on 31 Dec. 2022) and EUR 75

million senior unsecured callable fixed-rate notes

(of which EUR 36.0 million was outstanding on 31

Dec. 2022) were converted into hybrid and con-

vertible bonds by means of a written procedure.

Conversion into convertible bonds was executed

by amending the terms and conditions of the notes

with the inclusion of a special right to convert the

notes into shares pursuant to the Companies Act

if the company does not redeem them before 30

June 2026. The notes were measured at fair value,

which was 60 per cent of their nominal value when

the terms and conditions were amended. EUR 34.3

million of the hybrid and convertible bonds with a

nominal value of EUR 57.1 million were recognised

in the balance sheet as equity instruments and the

difference between their nominal value and carrying

amount, EUR 22.8 million, was recognised as other

financial income. During the written procedure on

the amendment of the terms and conditions, the

company made a voluntary tender offer to the

noteholders at a price of 60 per cent of the nominal

value. In the tender offer, notes with a total nominal

value of EUR 42.7 million were purchased for EUR

25.6 million.

(iii) The terms and conditions of the EUR 45.0 million

hybrid bonds the company issued on 22 March 2016

(with an outstanding principal of EUR 11.8 million)

and the EUR 58.4 million hybrid bonds the company

issued on 23 May 2019 (with an outstanding prin-

cipal of EUR 3.6 million) were amended in a written

procedure such that 55 per cent of the principal of

the notes was written down and the remainder was

converted to shares in a directed share issue with

a subscription price of EUR 0.10 per share. 98.3

per cent of the outstanding principal of the hybrid

bonds issued on 22 March 2016 and 100 per cent of

the outstanding principal of the hybrid bonds issued

on 23 May 2019 were used to subscribe for shares in

the directed issue. The unconverted nominal value

of the hybrid bonds was written down entirely.

(iv) With the syndicate banks, the company agreed on

the extension of its revolving credit facility and pro-

ject financing facility by 12 months and certain other

amendments to the agreement on the revolving

credit facility and project financing facility.

Net interest-bearing debt totalled EUR 80.5 million

(170.0 12/2021) at the end of the review period. Net

interest-bearing debt saw a year-on-year decrease of

EUR 89.5 million. Excluding the impact of IFRS 16, net

interest-bearing debt totalled EUR -11.5 (81.0) million,

representing a decrease of EUR 89.5 million on the com-

parison period. Housing corporation loans accounted

for EUR 7.4 (18.1) million of the interest-bearing debt. The

amount of net interest-bearing debt was significantly im-

pacted by the rights issue in June and the partial repur-

chase of notes and their conversion into hybrid bonds.

At the end of the review period, the company’s eq-

uity ratio (excluding the impact of IFRS 16) was 48.2 per

cent (32.8 12/2021) and gearing (excluding the impact of

IFRS 16) was -7.5 per cent (47.5 12/2021). The equity ratio

calculated as per the covenants of financing agreements

IFRS

EUR million 1–12/2022 1–12/2021 Change, %

Equity ratio, % 36.3 27.4 32.9

Equity ratio, %, excl. IFRS 16

48.2 32.8 47.0

Net gearing ratio, % 55.1 103.0 -46.5

Net gearing ratio, %, excl. IFRS 16

-7.5 47.5 -115.8

Shareholders’ equity 146.2 165.1 -11.4

Capital employed 272.0 403.0 -32.5

Net interest-bearing debt 80.5 170.0 -52.6

Net interest-bearing debt, excl. IFRS 16

-11.5 81.0 -114.2

Interest-bearing debt 125.8 238.0 -47.1

of which short-term

12.4 22.5 -44.6

of which long-term 113.4 215.5 -47.4

Interest-bearing debt, excl. IFRS 16

33.8 149.0 -77.3

Cash and cash equivalents 45.3 68.0 -33.4

Unused committed revolving credit facilities and overdraft facilities 20.0 30.0 33.3

Unused project loans that can be drawn imme-diately 0.6 2.1 -75.9

The figure has been adjusted to remove the impacts of IFRS 16.

Part of report of the the Board of Directors

was 48.2 per cent, as the covenant calculation took into

account the recognition of income from developer-con-

tracted projects on the basis of percentage of com-

pletion. The aforementioned financing arrangements

carried out in June had a significant impact on the equity

ratio and gearing.

At the end of the review period, EUR 10 million of

the company’s EUR 30 million revolving credit facility

was withdrawn and EUR 20 million was unused. EUR

35.8 million of the company’s EUR 40.0 million commit-

ted project financing facility was unused at the end of

the review period. In addition, the company’s EUR 63.0

million non-committed project financing facility was

entirely unused at the end of the review period. As part

of the aforementioned restructuring of financing, the due

date of the revolving credit facility and project financing

facility was extended to April 2024.

At the end of the period, the Group’s financing re-

serves totalled EUR 65.9 million (100.1 12/2021), consist-

ing of unused project loans (EUR 0.6 million), an undrawn

revolving credit facility (EUR 20.0 million) and cash and

cash equivalents (EUR 45.3 million). Financing reserves

were affected by EUR -8.03 (76.2) million in cash flow

from operating activities and investments, EUR -15.3

(-105.4) million in cash flow from financing activities, and

a decrease in undrawn project loans.

The financial covenants of SRV’s financing agree-

ments are equity ratio, gearing, minimum operating

margin, minimum cash, and certain other restrictions.

The covenant levels of these financing agreements are

determined on the basis of the accounting principles in

force when the loan agreements were signed. Recogni-

tion of income on the basis of percentage of completion

in developer contracting projects and the inclusion of

capital loans into equity are taken into consideration in

the calculation of the equity ratio covenant. The loan

agreements also contain some other deviations from

traditional covenant calculation methods. The main

covenants of the financing agreements are presented in

note 29 to the 2022 Annual Review.

SRV's investment commitments totalled EUR 19.6

(21.1) million at the end of the review period, and con-

sisted of investments in Fennovoima and the Tampere

Central Deck and Arena project.

SRV is exposed to changes in the exchange rate of

the rouble through its Russian subsidiaries, associated

companies and joint ventures. The weakening rouble

led to translation differences of EUR -4.3 million (1.8

1-12/2021), which impacted both shareholders' equity

and the comprehensive result for the period. In addition

to currency exchange rate gains with no cash flow im-

pact amounting to EUR 1.5 (1.9) million in financial income

and expenses, the Group also entered similarly derived

currency exchange rate gains of EUR 7.3 (1.6) million with

no cash flow impact under the profit accounted for by

associated companies, which are due primarily to the

weaker rouble exchange rate. The total impact on equity

before the recognition of impairment was EUR 8.8 mil-

lion. As a result of write-downs of Russian holdings, the

currency risk position has decreased considerably. The

remaining position is presented in note 12 to this interim

report.

Due to its holdings in Russia, the company has

accumulated translation differences totalling EUR -14.9

million directly in equity through the comprehensive

income statement. The negative translation difference

accrued upon disposal of the holdings will later be rec-

ognised as an expense in the income statement with an

impact on operating profit, but without an effect on the

total amount of equity or operative operating profit.

THANKS TO THE

SUCCESSFUL FINANCING

ARRANGEMENT, WE ARE

A PRACTICALLY NET

DEBT-FREE COMPANY

Part of report of the the Board of Directors

Non-financial performance in 2022

Sustainability management and

governance model

Sustainability management

SRV’s Board of Directors is responsible for managing

sustainability. The Board regularly discusses sustainabil-

ity issues and decides on the company’s long-term goals.

The responsibility for sustainability work lies with SRV’s

Corporate Executive Team under the leadership of the

President & CEO. Operational management of sustain-

ability efforts is the responsibility of the Senior Vice

President, Development. The following sections provide

more detailed descriptions of our management practic-

es in different areas of sustainability.

Sustainability is integrated into our management

system, which is based on the ISO 14001 environmental

management system, the ISO 45001 occupational health

and safety management system, and the ISO 9001 qual-

ity management system. Our management processes,

support processes and core business processes are all

part of this management system. The reporting required

by the EU Taxonomy for sustainable finance was also

added in 2022.

Principles governing sustainability

Our Code of Conduct defines the principles by which

SRV makes decisions and acts under all circumstances.

SRV also requires third parties, such as subcontractors

and other partners, to commit to its Code of Conduct.

Our sustainability action is guided by our quality

policy, environmental policy, occupational health and

safety policy, and procurement policy. Practical instruc-

tions round out and specify the guidelines laid out in the

Code of Conduct and the company’s policies.

SRV has set nine of the United Nations’ 17 Sus-

tainable Development Goals (SDG) as key goals for its

sustainable operations. The selected SDGs have been

integrated into SRV’s strategic programmes, and more

information about them can be found on SRV’s website.

SRV also supports the International Labour Organisa-

tion’s (ILO) Conventions and Recommendations.

Changes in the operating environment highlight

sustainability

Sustainability now has a greater impact on the price and

availability of funding, and ESG (Environment, Social and

Governance) and EU Taxonomy reporting is becoming

more important. Sustainable development is also being

reflected in national regulations. In the draft bill for the

new Zoning and Construction Act, carbon footprint cal-

culation has been added to the regulatory framework.

Alongside various other actors, SRV is actively

involved in developing transparency in reporting and

dialogue with the authorities. Some examples of this are

the Taxonomy, Sustainable Construction and Occupa-

tional Safety group coordinated by the Confederation of

Finnish Construction Industries RT and Green Building

Council Finland’s (FiGBC) BuildingLife initiative. SRV is

also involved in industry development via close cooper-

ation with other industry actors. SRV is also a member of

Finnish Business and Society (FiBS).

SRV also regularly assesses the significant risks

and opportunities in its operating environment as part of

its risk management process. During 2022, both climate

OUR SUSTAINABILITY

PROGRAMME FOCUSES

ON THEMES THAT HAVE

THE GREATEST IMPACT

ON OUR SUSTAINABLE

BUSINESS, SOCIETY

AND THE ENVIRONMENT

Part of report of the the Board of Directors

risks and the opportunities afforded by climate change

were assessed in accordance with the Task Force for

Climate-related Financial Disclosure (TCFD). This

analysis is presented in section Risks and risk manage-

ment.

Material responsibility themes

The Annual Report covers SRV’s material responsibil-

ity aspects for 2022 in accordance with the sustain-

ability programme. Our reporting takes into account

both the societal impacts of SRV’s business and our

stakeholders’ views. The impacts of our business on

society and stakeholders are described in the value

creation model, and we have used them as a basis for

our materiality work. Materiality themes have been

defined on the basis of a personnel survey and discus-

sions with stakeholders.

Significant progress was made in our sustainabil-

ity work during 2022. We enhanced our safety culture

by strengthening our risk management expertise and

preemptive measures. Since the beginning of 2022,

Key UN's Sustainable Development

Goals for SRV.

SRV’s construction sites have been net-zero in terms

of emissions from their own energy procurement. This

is the first decision to be made on such a scale in the

construction sector. We also launched biodiversity

targets and a long-term objective to be a carbon-neutral

company by 2030.

In 2022, we developed an ESG-based reporting

model and reported on our taxonomy alignment for the

first time as part of our EU Taxonomy reporting.

In accordance with the requirements of the Ac-

counting Act, a report on HR issues, social responsi-

bility, human rights, environmental and climate issues,

bribery and corruption and other required information

is provided in the Report of the Board of Directors. We

have committed to reporting in accordance with the

recommendations of the Task Force on Climate-related

Financial Disclosures (TCFD) and the framework of the

Global Reporting Initiative (GRI). A TCFD-compliant

assessment of our climate risks can be found in section

Risks and risk management.

WE BELIEVE THAT

SUSTAINABLE AND

CONSTRUCTION MADE BY

LISTENING CAN IMPROVE

PEOPLE'S LIVES AND

THE ENVIRONMENT

Part of report of the the Board of Directors

Environmental responsibility

SRV’s environmental efforts are based on a commit-

ment to legislative compliance, environmental pro-

tection, business development, and the continuous

improvement of standards in accordance with the ISO

14001 environmental system.

SRV’s environmental impacts

SRV’s most significant environmental impacts are

caused by construction waste, energy consumption,

and changes in land usage. Other environmental im-

pacts include noise, dust, vibration, water and material

consumption, and transport. The management of storm

water, trench water and chemicals is of key importance

in preventing environmental contamination.

Due to climatic conditions, most energy is used on

heating, which therefore holds the greatest potential for

reducing emissions from construction. Promoting waste

sorting and the circular economy are two of the main

objectives of SRV’s environmental action.

SRV’s most significant indirect environmental im-

pacts arise during the manufacture of building materials

and the use – and eventual demolition – of the final

product (i.e. buildings and infrastructure).

Construction has impacts on the surrounding envi-

ronment not only during the construction process itself,

but also indirectly by creating new long-term environ-

ments. Design solutions can impact water management,

create more biodiverse habitats, improve comfort, air

quality and indoor temperatures, and prepare for chang-

ing climate conditions. Through its project development

and lifecycle wisdom concept, SRV has the opportunity

to promote the design of healthy and pleasant com-

munities that are sustainable for both people and the

environment.

Our approach to environmental responsibility

SRV’s environmental policy steers both its own and its

partners’ efforts towards environmentally friendly car-

bon-neutral solutions.

The general operating principles for managing

environmental issues are described in our environmental

management manual and guidelines for environmental

action. SRV’s Code of Conduct and Construction Con-

tract Programme specify what we require of our partners

and subcontractors. Our procurement policy also takes

a stand on environmental responsibility.

Measures and progress in environmental

responsibility during 2022

We continued to move towards lower-emission

operations in 2022, and we made the transition to

zero-emission construction sites at the turn of the

year. By summer, SRV became net-zero emission-free

in its entirety. We implemented our new lifecycle-wise

strategy by developing concepts, creating guide-

lines to promote biodiversity, and introducing more

lifecycle wisdom indicators into our environmental

programme. We have used wood, solar panels and

recycled materials to increase the carbon handprint

of our buildings.

Waste stream utilisation projects were launched

with our partners, and the automated monitoring of soil

was piloted on our infrastructure construction sites.

Our environmental reporting system was renewed in

2022.

For many years now, we have invested in reduc-

ing waste volumes and sorting waste on construction

sites. The sorting-at-source rate is the best waste

management indicator of the progress being made

on construction sites. The goal since the beginning of

We aim to minimise harmful effects

on the environment in line with the

six UN Sustainable Development Goals.

Waste sorting rate

(%)

Sorting at source Target

Finnish worksites. Reported amounts do not include

demolition waste or soil excavation waste.

100

2020

2021

2022

Data Table

Legend Lajitteluaste tavoite

2020

7.0

2021

6

2022

67.6 7

67.0

62.0

67.6

70.0

2021

2020

Waste recovery rate

(%)

Data Table-1

Legend Value A Value B Value C

2020

2021

47 49

2022

55 44

Waste recovered (%) Waste recycled as material (%)

2021

2022

2020

Domestic worksites. Reported amounts do not include demolition

waste or naturally occuring materials.

Waste used for energy generation (%)

100

Total waste recovery rate was 99 %.

Construction waste (1,000 tonnes)

Legend

Raken

nusse

kajäte

Puu Betoni

Metall

Kipisi

Energi

ajäte

Muu

Vaaral

linen

jäte

Yhtee

nsä

2020 6.3 5.6 4.1 1.2 0.7 0.4 1.1 0.1 20.6

2021

.1 4.4 3.1 0.9 0.8 0.3 0.7 0 1.3

2022

4 3.3 3.3 0.9 0.3 0.2 0.1 0 12.5

2021

2022

2020

19.5

16.3

12.5

Mixed construction waste

Wood

Concrete

Metals

Gypsum

Cardboard and plastic

Asphalt/Bitumen

Waste for energy generation

2022 2021

SRV taxonomy-eligible share of

turnover (%)

91.4 99.2

SRV taxonomy-non-eligible share of

turnover (%)

8.6 0.8

SRV taxonomy-aligned share of

turnover (%)

53.6 N/A

SRV taxonomy-non-aligned share of

turnover (%)

46.4 N/A

SRV CapEx of taxonomy-aligned

turnover (M€)

2.5 2.6

SRV OpEx of taxonomy-aligned

turnover (M€)

0.4 0.7

Part of report of the the Board of Directors

2022 has been to raise it to at least 70% in all projects.

The rate for construction waste was 67.6% in 2022.

The recovery and recycling rates are the waste stream

averages reported by our waste management partners.

The key figures for construction waste are illustrated in

the graphs.

There was no major environmental damage in 2022,

and all reported deviations were low-risk in nature. The

most common deviations involved oil and fuel leaks from

subcontractors’ machinery. The spills were soaked up

and delivered to a licensed operator for treatment. A to-

tal of 48 environmental deviations were reported during

the year, 17 of which were oil leaks.

The majority of the energy consumed by SRV’s own

operations is used for heating. During 2022, SRV’s con-

struction sites were net emission-free in terms of their

own energy procurement. This means that our electricity

is renewable or otherwise emission-free, and we use

emission-free district heating and biofuels whenever

possible. Emissions saw a year-on-year decrease of 75%.

We plant trees equivalent to the remaining emissions in

cooperation with istutapuita.fi. In 2022, we planted trees

equivalent to 5,000 tCO2 of emissions. More detailed in-

formation about our emission calculations can be found

in our sustainability supplement.

In 2022, SRV used three general environmental cer-

tification systems (the international LEED and BreeAm

systems and the Finnish RTS system). 18 per cent of our

developer–contracted projects were environmentally

certified.

The impacts of various alternatives on the lifecycle

of a building were compared using lifecycle assess-

ments (LCA), not only in lifecycle projects and sites using

certification systems, but also in developer-contracted

housing projects and lifecycle-wise projects.

SRV’s EU Taxonomy reporting

The EU Taxonomy is a classification system for sus-

tainable finance. The taxonomy consists of a directive

and the regulatory technical standards issued on the

basis of the directive. We incorporated these criteria

in our management system during 2022, and they will

be reviewed as part of design management, procure-

ment and on-site operations. We reported our taxono-

my-aligned revenue for the first time in 2022.

Our business operates in accordance with the mini-

mum social protection requirements. We are committed

to the UN Guiding Principles on Business and Human

Rights, the ILO Convention, and international human

rights legislation. Our Code of Conduct, along with our

company’s policies, principles and processes, steer our

operations with respect to human rights and workers’

rights.

SRV has a confidential Ethics Channel that ena-

bles SRV employees and stakeholders to report cases

in which people may have acted illegally or contrary to

SRV’s values or Code of Conduct. SRV’s Ethics Channel

is operated and managed by an independent service

provider. SRV suppliers also meet our sustainability

requirements. Audits support our human rights work,

and we use them to trace, identify and prevent potential

risks related to our supply chain. Measures to prevent

corruption are described in more detail in the Good Gov-

ernance section. We operate in accordance with national

regulations in matters relating to taxation and compe-

tition law. During 2022, we also provided our personnel

with competition law training.

EU taxonomy

25%

50%

75%

100%

30%

37%

39%

28%

34%

19%

11%

31%

28%

42%

Energy consumption (%)

Data Table

% Sähkö Uusiutuvat

polttoaineet

Uusiutumattoma

t polttoaineet

Kaukolämpö

2020

1.

0.2

1. 3.

2021

28.3 0.8 33.9 3.9

2022

3. 11.3 7. 3.

Electricity

Renewable fuel

Non-renewable fuel

District heating

2021

2022

2020

MWh 2020 2021 2022

Sähkö

361

23504

16

Uusiutuvat polttoaineet

1

702

37

Uusiutumattomat

polttoaineet

16

28212

1

Kaukolämpö

3331

30700

1

Hiilidioksidipäästöt CO

(tonnia)

18424 173

117

MWh 2020 2021 2022

Electricity

36,108 23,504 10,056

Renewable fuel

145 702 3,708

Non-renewable fuel

16,558 28,212 9,159

District heating

33,431 30,700 10,028

Emissions (tn)

18,424 16,736 4,117

Energy use on Finnish operations (scope 1 and scope 2),

evaluation based on cost information. Emissions evaluated by

using average emission factors for each energy type, or product-

specific factors where reported.

Energy type MWh tCO

Scope 1 Non-renewable fuel 9,159 2,304

Renewable fuel 3,708 97

Scope 1

total 12,867 2,401

Scope 2 Electricity 10,056 202

District heating 8,955 1,352

District cooling 1,073 162

Scope 2

total 20,084 1,716

Total

(Scope 1 +

Scope 2) 32,951 4,117

Energy intensity (MWh/Revenue

MEUR) 43

Emission Intensity (tCO

e/Revenue

MEUR) 5

Biogenic emission (tCO

e) 945

Energy consumption and GHG-emissions in own

operations

Part of report of the the Board of Directors

EU taxonomy reporting tables

Substantial contribution criteria DNSH criteria

"Taxonomy-aligned

share of turnover"

Economic activities Code(s)

Absolute

turnover

Share of

turnover

Climate

change

mitigation

Climate

change

adaptation

Water

and marine

resources

Circular

economy Pollution

Biodiversity

and

ecosystems

Climate

change

mitigation

Climate

change

adaptation

Water

and marine

resources

Circular

economy Pollution

Biodiversity

and

ecosystems

Minimum

safeguards 2022 2021 Category

MEUR % % % % % % % Y/N Y/N Y/N Y/N Y/N Y/N Y/N % % E/T

Taxonomy-eligible activities

Taxonomy-aligned activities

Construction of new houses

and business premises,

renovations, infrastructure

construction, energy and life

cycle services and rental or

management of own or leased

properties.

7.1, 7.2,

6.13-6.17,

7.3-7.6, 7.7

377.30 53.60% 100.00% K K K K K K K 53.60% N/A

Turnover of Taxonomy-

aligned activities

377.30 53.60% 100.00% K K K K K K K 53.60% N/A

Taxonomy-non-aligned

activities

Activities, that do not include

construction

326.30 46.40%

Turnover of Taxonomy-non-

aligned activities

326.30 46.40% 46.40% N/A

Total Taxonomy-eligible

activities

703.60 91.40% 91.40% 99.20%

Taxonomy-non-eligible

activities

Turnover of Taxonomy-non-

eligible activities

66.50 8.60%

Total Taxonomy-eligible and

non-eligible turnover

770.10 100.00%

Part of report of the the Board of Directors

Substantial contribution criteria DNSH criteria

Taxonomy-aligned

share of CapEx

Economic activities Code(s)

Absolute

CapEx

Share of

CapEx

Climate

change

mitigation

Climate

change

adaptation

Water

and marine

resources

Circular

economy Pollution

Biodiversity

and

ecosystems

Climate

change

mitigation

Climate

change

adaptation

Water and

marine

resources

Circular

economy Pollution

Biodiversity

and

ecosystems

Minimum

safeguards 2022 2021 Category

MEUR % % % % % % % Y/N Y/N Y/N Y/N Y/N Y/N Y/N % % E/T

Taxonomy-eligible activities

Taxonomy-aligned activities

Construction of new houses

and business premises,

renovations, infrastructure

construction, energy and life

cycle services and rental or

management of own or leased

properties.

7.1, 7.2,

6.13-6.17,

7.3-7.6, 7.7

2.50 55.00% 100.00% K K K K K K K 55.00% N/A

CapEx of Taxonomy-aligned

activities

2.50 55.00% 100.00% K K K K K K K 55.00% 57.20%

Taxonomy-non-aligned

activities

Activities, that do not include

construction

0,00 0.00%

CapEx of Taxonomy-non-

aligned activities

2,00 45.00% 45.00% 42.80%

Total Taxonomy-eligible

activities

4.50 100.00% 100.00% 99.00%

Taxonomy-non-eligible

activities

CapEx of Taxonomy-non-

eligible activities

0.00 0.00%

Total Taxonomy-eligible and

non-eligible turnover

4.50 100.00%

Part of report of the the Board of Directors

Substantial contribution criteria DNSH criteria

Taxonomy-aligned

share of OpEx

Economic activities Code(s)

Absolute

OpEx

Share of

OpEx

Climate

change

mitigation

Climate

change

adaptation

Water

and marine

resources

Circular

economy Pollution

Biodiversity

and

ecosystems

Climate

change

mitigation

Climate

change

adaptation

Water and

marine

resources

Circular

economy Pollution

Biodiversity

and

ecosystems

Minimum

safeguards 2022 2021 Category

MEUR % % % % % % % Y/N Y/N Y/N Y/N Y/N Y/N Y/N % % E/T

Taxonomy-eligible activities

Taxonomy-aligned activities

Construction of new houses

and business premises,

renovations, infrastructure

construction, energy and life

cycle services and rental or

management of own or leased

properties.

7.1, 7.2,

6.13-6.17,

7.3-7.6, 7.7

0.40 50.00% K K K K K K K 50.00% N/A

OpEx of Taxonomy-aligned

activities

0.40 100% K K K K K K K 100.00% 100.00%

Taxonomy-non-aligned

activities

Activities, that do not include

construction

0,00 0.00%

OpEx of Taxonomy-non-

aligned activities

0,00 0.00% 0.00% 0.00%

Total Taxonomy-eligible

activities

0.40 100.00% 100.00% 100.00%

Taxonomy-non-eligible

activities

OpEx of Taxonomy-non-

eligible activities

0,40 100.00%

Total Taxonomy-eligible and

non-eligible OpEx

0.40 100.00%

Part of report of the the Board of Directors

Social responsibility

The impacts of SRV’s social responsibility

The impacts of SRV’s social responsibility are largely

related to the well-being of the company’s personnel,

and thereby to minimising personnel turnover. A good

workplace atmosphere and excellent leadership are the

cornerstones of personnel well-being at SRV, and are

supported by proactive occupational health and safe-

ty efforts. SRV wants to offer versatile career paths to

professionals with a broad range of backgrounds. Social

responsibility also extends to our products and services,

which are reported on in conjunction with our environ-

mental certifications (Measures and progress in envi-

ronmental responsibility during 2022) and in the Good

Governance section.

Our approach to social responsibility

SRV’s culture is built on its shared values, strategy,

customer promise and operating method. Our values

– sustainability, enthusiasm, profitability, bold in devel-

opment and open in cooperation – guide our operations.

Our approach describes desired behaviour – how we

get things done at SRV. Our HR management practices

are described in our HR policy and its supplementary

principles.

Measures and progress in social responsibility during

2022

Our employer promise defines three key themes for SRV,

and they also formed the basis for our key developmen-

tal themes in HR policy during 2022:

1. A responsible community that fosters team spirit

2. An innovator in workplace culture

3. The chance to flourish in an interesting job

Every year, we conduct an extensive personnel survey

covering workload, employee satisfaction and well-being

at work. This is supplemented by lighter pulse surveys on

a quarterly basis. The eNPS from SRV’s personnel work

motivation survey rose by 30% in 2022. Work motivation

has been excellent during 2022 (4.0/5.0).

SRV aims to be a safe, equal workplace with a good

community spirit. Extensive remote work recommenda-

tions were discontinued in Finland in early 2022 as the

coronavirus pandemic eased, and hybrid work has since

become a part of everyday life. Supervisor coaching has

focused on team development and supporting well-being

and coping at work.

We regularly measure customer satisfaction. In

2022, our NPS B2C was 37 and our NPS B2B was 50.

Customers also rated how well we conducted our busi-

ness in accordance with our customer promise – 7.9/10

B2C and 8.2/10 B2B.

We want to encourage young people to enter the

construction industry, and we therefore offer them a

broad range of jobs every year. SRV’s trainee programme

was updated in 2022 and employed 141 construction

students over the summer. Since 2021, SRV has also

been collaborating with the Finnish Olympic Committee’s

Lasten liike programme, which aims to get kids moving.

EQUALITY, DIVERSITY

AND INCLUSIVITY ARE

PART OF OUR VALUE-

BASED CULTURE

The UN Sustainable Development

Goals, that our human resources and

human rights work promote.

Part of report of the the Board of Directors

This cooperation supports hobbies for children during

the school day, and particularly the training of instruc-

tors for children’s hobbies.

After coronavirus restrictions were lifted, training

and personnel events could once again be organised as

hybrid events. The number of training days per person in

Finland was 0.7 (1.0).

SRV employed an average of 948 (958) people in

January–December 2022. The most important key fig-

ures relating to personnel can be found in the table and

graphs below.

Everyone at SRV who meets the requirements of

their duties is treated equally regardless of gender or

gender identity, language, religion, nationality or ethnic

origin, opinions, family relations, age, union or political

affiliations, and health.

SRV promotes diversity within the organisation by

highlighting examples of equality in communications

and internal training. In order to promote diversity in the

construction industry, we collaborated with the women’s

network of the Finnish Association of Civil Engineers

(RIL) in 2022.

In November–December 2022, we carried out

change negotiations under the Act on Co-operation within

Undertakings with a view to adjusting the company’s cost

structure and number of personnel to market demand.

These negotiations resulted in personnel reductions total-

ling 33.5 person-work-years, and 30 people were laid off

until further notice. Those who were laid off or had their

employment contracts terminated were provided with

guidance on finding new employment by the Employment

and Economic Development Office and our change secu-

rity partner. Those who had worked for the Group for at

least five years were eligible for change security training.

Developing our safety culture and safety management

A healthy and safe working environment is the foundation

for everything we do at SRV. We want to continuously

develop our safety culture, in which safety is an integral

aspect of a normal working day. SRV participates in the

Finnish Institute of Occupational Health’s Vision Zero Fo-

rum, and has committed to its target of Zero Accidents.

SRV's occupational health and safety aspects

Statistics on accidents at work indicate that the con-

struction sector is the most dangerous sector. This is

why we must ensure that health and safety measures are

implemented extremely well in terms of both our output

and personnel. SRV has an extensive safety programme

that we employ in a goal-oriented manner to ensure a

A HEALTHY AND

SAFE WORKING

ENVIRONMENT

IS THE FOUNDATION

FOR EVERYTHING

WE DO

200

400

600

800

1000

765

182

661

Personnel on 31 Dec. 2022.

Employees

in Finland 2022 (persons)

Data Table

Legend Value A Value B

661

1

76

7

Men (78%)

Women (22%)

Permanently employed

(91%)

Temporarily employed

(9%)

843

100

Personnel on 31 Dec. 2022.

Employees

internationally 2022 (persons)

Data Table

Legend Value A Value B



3

6



Men (65%)

Women (35%)

Permanently

employed (76%)

Temporarily

employed (24%)

2022 2021 2020

Age distribution, all employees*

34 or under (%)

286 302 275

35–51 (%)

340 330 323

52 and over (%)

217 237 228

Average age (years)

42 42 43

Gender distribution

All employess (share of women %, share of men %)

In Finland women 22%,

men 78%,

internationally women

35%, men 65%

In Finland women 21%, men

79%, internationally women

35%, men 65%

In Finland women 18%, men

82%, internationally women

58%, men 42%

Corporate executive team (share of women %, share

of men %)

Women 36%, men 64% Women 25%, men 75% Women 17%, men 83%

Board of Directors (share of women %, share of men %)

Women 20%, men 80% Women 20%, men 80% Women 17%, men 83%

* In Finland 31.12.2022.

Age and gender distribution

Part of report of the the Board of Directors

technical quality of investigations into the root causes

of safety incidents has enabled us to improve our ability

to share the lessons we have learned. Management has

regularly discussed the effectiveness of our safety activ-

ities, and has decided on measures to be taken. During

2022, our management carried out a total of 208 safety

audits to achieve our objective for them. Management

also takes part in accident investigations.

Risk management competence development was

part of our strategy in 2022. This has been reflected in

many concrete occupational safety measures, such as

regular safety briefings, safety management training,

occupational safety card training, and safety audits. The

safe working environment and reduce the number of

work-related accidents leading to absence. Through our

efforts to promote health and safety at our shared work-

places, we promote the health and well-being not only

of our own personnel, but also of our partners’ personnel.

The buildings we build have a long-term health

impact on their users, and this requires us to engage in

special planning, choose good construction solutions,

and make wise choices with regard to technical building

services. A built environment that supports well-being

makes everyday life more pleasant, supports employ-

ment, and is also sustainable from an environmental per-

spective. Factors that increase well-being include clean

indoor air, a comfortable temperature and good lighting.

Our approach

Our company’s occupational safety is developed as part

of SRV’s ISO 45001 management system and HSEQ ac-

tivities. SRV’s health and safety work is guided by our oc-

cupational health and safety policy, which includes gener-

al principles for safety management. We use management

system processes to make sure that our construction

sites are safe. SRV has a Code of Conduct, a Construction

Contract Programme for partners and onboarding prac-

tices to ensure that we conduct our business correctly.

Measures and progress in occupational health and

safety during 2022

Our goal-oriented safety efforts continued in line with

our updated 2022 guidelines towards our goal of Zero

Accidents. We set exemplary behaviour from manage-

ment and risk management competence development

as our focal points for occupational safety in 2022, and

we enhanced safety management in general using the

principle of continuous improvement. Developing the

2022 2021 2020

Lost-time injury frequency SRV personnel and subcontractors (LTIF,

rolling 12 months)

12.07 12.2 14.7

Lost-time injuries SRV personnel and subcontractors (number of)

71 90 122.0

Lost-time injuries, serious SRV personnel and subcontractors

(number of)

7 12 11

Lost-time injuries leading to death, SRV personnel and

subcontractors (number of)

0 0 0

Weekly risk assessment TR-measurements, average, SRV sites (%)

96.1 96.3 96

Weekly risk assessment MVR-measurement, average, SRV sites (%)

95.4 96.7 96

Weekly risk assessment measurements performed, number of

2,409 2,271 2,083

Safety observations, number of

13,024 14,466 17,508

Frequency of safety observations, number of

2,271 1,984 2,458

Correctness of TR and MVR-measurement use, % difference site vs.

Safety team

4.46 4.87 N/A

Occupational safety

requirements for personal protective equipment were

raised in 2022.

We regularly monitor occupational safety. The acci-

dent frequency rate (LTIF) declined in the previous year,

and stood at 12.1 in 2022 (12.2 in 2021). The number of

accidents has also declined.

SRV has firmly established a culture of making safety

observations, which have stabilised at a good level. The

key objective for safety observations in 2022 was to im-

prove the quality and usability of the observations.

During the 2022 Safety Week, we ran a campaign on

the theme of “the right to a good day at work”, which took

a stand on preventing labour exploitation.

WE EMPLOY AND

INFLUENCE IN THE

ENTIRE VALUE CHAIN

Good Governance

The impacts of SRV’s good governance

Good governance emphasises good management,

ethical practices and the development of sustainable op-

erations. We enhance our operating methods by listening

to our stakeholders and measuring the performance and

effectiveness of our management system. We encourage

our employees to innovate and share ethical and sustain-

able practices. We are developing our compliance func-

tion and drafting new guidelines. Our personnel are also

being trained in line with the principles of continuous im-

provement. We promote the realisation of human rights

and fair competition, and actively work to prevent labour

exploitation, bribery, corruption and the grey economy.

By providing employment and paying taxes, we make a

positive impact on both society and the economy.

Our approach

The President & CEO and SRV’s Corporate Executive

Te am a re r es po ns ib le f or c om pl ia nc e wi th e th ic al p ra c-

tices at a strategic level, while business units hold this

responsibility at an operational level. Our management

and ethical practices are described in our management

system, with which all employees are required to comply.

It is supplemented by policies and guidelines that specify

and document our guiding principles and practical pro-

cedures. We require our subcontractors and suppliers to

comply with these same ethical principles. These princi-

ples are enshrined in our Supplier Code of Conduct.

Measures and progress in good governance

during 2022

All of our personnel are required to complete annual

training in ethical practices. We provide our partners

with instructions in our agreements and construction

contract programmes.

We take any suspected misconduct seriously. At

SRV, all incidents that violate our Code of Conduct,

such as suspected discrimination or harassment, can be

reported via SRV’s Ethics Channel. We also encourage

our personnel to report their findings to their supervisor

or the legal department.

As part of our sustainability management, we have

long been developing operating methods to combat the

grey economy and ensure the manageability, transpar-

ency and legality of our operating chain. Ensuring that

human rights are realised, and that labour is not exploit-

ed in the supply chain, is also crucial for society. Which

is why SRV supports equality in the labour market, and

plays its part in preventing labour market segregation

and inequality. We also make sure that labour rights are

realised.

SRV employs a considerable number of its own

personnel and contractors. Since 2021, we have

required third-country nationals to have a residence

permit issued in Finland in order to combat the grey

economy and prevent labour exploitation. Since De-

cember 2021, SRV has not approved people working

on its construction sites with a commission agreement

through an invoicing service i.e. “light entrepreneurship”

without a business ID. There are no established legal

practices surrounding light entrepreneurship at societal

level, which means that it poses risks relating to the grey

economy.

We want to continuously improve supplier coopera-

tion, and develop competence and understanding of the

role played by procurement as an enabler of responsible

operations. Enhancing the management of our supplier

and contractor network was a key goal for procurement in

2022. SRV adheres to official procurement procedures in

the management of its supplier relationships, and the SRV

Network Register is an element of this. The SRV Network

3,600 active contractors. After Russia invaded Ukraine in

February 2022, SRV decided not to purchase any materi-

als from Russia.

SRV ensures that its subcontractors and suppli-

ers commit to ethical practices. In 2022, SRV’s supplier

network registration process included some sustaina-

bility-related questions. During 2022, a sustainability

Good Governance enables us to have a broad impact on society. Seven of the UN’s

Sustainable Development Goals (SDGs) guide our efforts as an innovator.

GOOD GOVERNANCE

IS AT THE CENTER

OF A HIGH-QUALITY

EMPLOYEE AND

CUSTOMER

EXPERIENCE

Part of report of the the Board of Directors

assessment was issued to all contractors on the basis of

their answers.

Audits enable us to ensure that our suppliers meet

the requirements of an SRV partner, and that we can

develop industry practices together. Our procurement

function audited 21 suppliers and contractors in 2022.

SRV holds anti-grey economy days on its Finnish

construction sites four times a year. These events seek to

minimise socially harmful phenomena associated with the

grey economy, such as the exploitation of foreign labour.

During our 2022 anti-grey economy days, construction

sites checked that our contractual partners and their sub-

contractors had met all the necessary conditions for both

the company and its employees to work on our construc-

tion site. About 70 per cent of all personnel were checked.

Only a few individual instructions were issued during

inspections of SRV’s construction sites carried out by the

authorities in the areas of occupational health and safety,

foreign workers and the Contractor’s Liability Act in 2022.

These were put into practice at the required level as soon

as the deviation was detected.

SRV pays its taxes and tax-like charges in accord-

ance with local legislation. A significant proportion of

tax-like charges consist of salary-related taxes and VAT

on goods and services. SRV also pays other taxes, such

as income tax, transfer tax, and property tax. The compa-

ny also has considerable impact as an indirect taxpayer

– SRV also generates indirect revenue for the State from

the income tax and social security payments paid via

subcontracting and hired labour.

SRV proactively cooperates with the authorities to

ensure that internal transactions within both the Group

and construction projects are properly handled with re-

spect to tax legislation.

2022 2021 2020

Ethical guidelines

People who have completed ethical guideline online course

(%) 42 N/A N/A

Reports of harassment and discrimination (number)

8 7 6

Own personnel and partners

SRV construction sites (number)

76 82 64

Subcontractors worked in SRV construction sites (number)

3,770 3,613 4,238

Personnel worked in SRV construction sites (persons)

23,102 25,301 27,697

Separate access permits issued at SRV's construction sites

32,488 37,572 40,348

Nationalities

Share of Finns among those who worked on construction

sites (%) 72.7 70.6 72.1

The share of personnel from other countries in the

construction sites (%)* 27.3 29.4 27.9

Nationalities (number)

111 106 101

Collected taxes paid and indirectly paid taxes in Finland

Payrol lltaxes (million euros)

17.2 16.6 16.2

Social costs (million. euros)

0.8 0.9 0.7

VAT, net** (million euros)

81.2 124.8 72.1

Corporate income tax (million euros)

0.0 0.0 -0.7

Transfer tax (million euros)

0.0 0.0 0.6

Real estate tax (million euros)

1.5 0.5 0.7

Collected taxes paid, total (million euros)

100.6 142.8 89.6

* After Finland, the most common citizenships were Estonia, Latvia, Russia and Poland

** The figures exclude shares of joint and associated companies

Key indicators related to good governance

Part of report of the the Board of Directors

WE EMPLOY AND

INFLUENCE IN THE

ENTIRE VALUE CHAIN

Changes in the Corporate Executive

Team

In December, construction engineer Hannu Lokka

(age 59) was appointed as SRV Group Plc’s Executive

Vice President, Strategic Project Development and a

member of the Corporate Executive Team as of 16 Jan-

uary 2023. In September, SRV announced that Timo

Nieminen, Executive Vice President, Strategic Project

Development, would be retiring by the end of January

2023. Nieminen left the Corporate Executive Team in

December 2022. Antti Nummi (formerly SVP, Commer-

cial) left both SRV and the Corporate Executive Team

on 31 January 2022.

Risks and risk management

SRV has published a Corporate Governance Statement,

which includes a general description of the company’s

risk management systems, as a separate report from the

Annual Report. The report is available on the company’s

website.

Strategic risks

Market risks

SRV’s most significant strategic market risks are

linked to weakened demand, the availability of ma-

terials and energy, cost inflation, and rising interest

rates. These factors could make it more difficult for

customers to obtain financing, prompt investors to

require higher returns or otherwise stricter investment

criteria, decrease housing prices, and slow down hous-

ing sales. If such market risks materialise, they could

pose a major risk to the company’s financial position

and profitability.

In order to reduce market-related risks, the com-

pany has further bolstered its activities to continuously

identify commercial opportunities, customer needs and

customers, to manage customer relationships and sales,

and to enhance SRV’s customer experience. In projects,

the aim is to make outlays on public integrated project

deliveries. SRV is seeking to put a stronger focus on

private development projects in the business premises

sector; while in the housing business area, projects will

be distributed more evenly among different sectors of

housing construction.

As the outlook for the construction industry weak-

ened significantly, SRV had to take risk management

measures for production and financial reasons at the

end of 2022. These measures included change negoti-

ations under the Act on Co-operation within Undertak-

ings, which resulted in personnel cuts and layoffs.

Strategic climate risks

We have used the recommendations of the Task Force

on Climate-related Financial Disclosures (TCFD) in

assessing the impacts of climate change. Our environ-

mental and climate governance model is described

in the Annual Report’s Section Sustainability man-

agement. SRV’s strategy, which emphasises lifecycle

wisdom, is strongly linked to combating climate change

and supporting customers in a changing operating

environment. In 2022, SRV created the Carbon Neu-

trality Roadmap 2030 to support its climate action. In

the Annual Report, we have deepened our description

of risks related to climate change by describing more

concrete measures and their impacts in our non-finan-

cial reporting. During 2022, we integrated climate risk

management more deeply into our company-wide risk

management process.

We estimated the business impacts of two cli-

mate scenarios. We determined that a temperature

increase of 1.5 degrees would increase the transition

risks related to markets, reputation, politics and

technology. Of the measures we take to manage these

risks, the most important involve reducing emissions

and preparing for potential increases in taxes and

operating costs.

Personnel risks

The main personnel risks that have been identified are

competition for project resources requiring special ex-

pertise and the retention of these resources. The overall

situation with regard to resources is currently good. In

order to manage their resources, we take care of our

personnel’s well-being and ensure that they have com-

petitive remuneration and benefits. Good management

and corporate culture are considered to be key draws

for the company. In 2022, a new onboarding process was

launched to ensure a smooth start for new employees.

We also made further investments in supervisory work

and performance management, by both renewing our

performance discussion process and the short-term

incentive plan for all personnel.

Financial risks

Financing and credit risks

SRV’s developer-contracted construction ties up capi-

tal. The availability and price of financing are important

for the company's business. Although the availability of

financing and certain guarantees for the company has

improved, their availability for developer contracting

projects remains somewhat limited.

Part of report of the the Board of Directors

WE MANAGE HUMAN

RESOURCES BY

TAKING CARE OF

THE REMUNERATION,

BENEFITS AND

WELL-BEING OF

OUR PERSONNEL

General interest rates have risen strongly during

2022. SRV is monitoring the interest rates connected to

its liabilities, and seeks to hedge interest rate risks through

interest derivatives and by choosing the interest type

and interest period. In July 2015, SRV signed two interest

rate swaps with total capital of EUR 100 million. They will

mature in 2025. In addition to its interest rate risk posi-

tion, SRV can also use interest derivatives to partly hedge

against the impact of interest rate changes on its business.

Due to the nature of SRV's operations, the unit sizes

of projects and sales invoices are relatively large. For

this reason, the company’s receivables from individual

customers may be subject to credit risks. The company

seeks to manage credit risks by means of assessing the

solvency of customers, security arrangements, prudent-

ly drafting payment instalment tables and proactively

keeping track of receivables. The Group's commercial

counterparties are mainly listed companies or major real

estate companies or institutional investment companies.

Historically, the amount of credit losses has been very low.

In the first quarter of 2022, SRV suspended the

construction of the Torihotelli contract in Oulu due to the

payment difficulties of the client. In June 2022, SRV filed

an application to declare the client bankrupt. As a result,

the District Court of Oulu declared the company devel-

oping the hotel, Kiinteistö Oy Oulun Torihotelli, bankrupt

in August 2022. The assets of the bankruptcy estate

are being liquidated. The company has also initiated

steps to liquidate its non-property collateral. At the end

of December, SRV had about EUR 16.0 million in trade

receivables due from this contract, secured by a mort-

gage on the property under construction and pledges on

certain other assets. Trade receivables in the Torihotelli

contract involve credit loss risks.

Liquidity and refinancing risks may have an effect

on the Group's financial results, cash flow and the imple-

mentation of the Group’s developer contracting projects

if the Group is unable to ensure sufficient financing for

its operations. In addition to cash assets and undrawn

housing corporation loans, SRV’s financing reserves

consist of an undrawn credit facility. Individual receiv-

ables may also be sold within the limits allowed for the

purpose of liquidity management, as necessary.

Negative changes in SRV’s earnings trend may

have an impact on the fulfilment of the covenants of the

revolving credit facility and thereby on the usability of

the facility and the company’s financing reserves. The

company actively monitors the development of the cov-

enant situation and, if necessary, seeks to negotiate on

financing terms with the creditor banks.

Russia’s invasion of Ukraine in February 2022,

and the subsequent sanctions, countersanctions and

weakening of the market situation, led to substantial

write-downs on SRV’s operations in Russia during the

first quarter of 2022. As a result of these write-downs,

the company executed a comprehensive restructuring

of its financing during the second quarter. This strength-

ened the equity ratio, and the company is now almost

net debt-free. SRV’s currency risk is extremely low due

to the write-downs on its operations in Russia.

In order to manage financial risks, financing for de-

veloper contracting projects is ensured through sales of

projects, project-specific credit facilities and the use of

SRV’s general financing reserves. The financing situation

of projects is assessed at different decision points and

the company only starts up projects for which financing

has been secured. New projects are only launched when

there is sufficient demand.

Operational risks

Project management risks

SRV seeks to implement profitable contracting pro-

jects for developer customers and to develop profitable

developer contracting projects and property projects

together with its partners. In addition to resource risks,

the most significant project management risks con-

cern the operations of customers and the authorities,

contract management, site planning, the implementation

of procurement, the management of schedules, quality,

costs, safety and environmental issues, and the market-

ing and sale of sites.

SRV seeks to manage project management risks by

investing in the development of management-enhancing

systems and its own customer-focused, flexible and net-

worked operating model (SRV Approach). The company

has a management system that steers its operations.

SRV has several ongoing projects to develop its opera-

tions, such as expanding the utilisation of the features of

the CRM system in marketing and sales, standardising

assessment criteria, decision-making poin ts and risk

management reviews in the project development phase,

and improving the housing production warranty work

process and its feedback systems.

Subcontracting risks

The management of the partner network in project

implementation involves risks related to matters such as

quality, costs, schedule, safety, the grey economy and

environmental issues. To manage subcontractor risks,

the backgrounds, technical competences and financial

capacities of key companies working in projects are

assessed, and phase-by-phase working plans are drawn

up before work begins. In addition to the implementa-

OUR CURRENCY

RISK IS

EXTREMELY

LOW DUE TO THE

WRITE-DOWNS ON

OUR OPERATIONS

IN RUSSIA

Part of report of the the Board of Directors

tion of the working plans, SRV constantly monitors the

development of procurement costs and reacts rapidly

to deviations. Procurement management and documen-

tation are handled with SRV’s procurement system and

in-house network register.

As the sanctions imposed by western countries and

Russia tighten, the availability of certain raw materials

and especially energy pose problems and hamper the

production and availability of construction materials,

which may further increase construction costs. The ex-

tensive reconstruction of Ukraine in the future might also

have a substantial impact on the availability and costs of

labour and materials. In addition, the materialisation of

certain other geopolitical tensions would pose problems

to global production chains. Proactive procurement is

employed to manage any material availability issues and

the impact of inflation on projects.

Operational sustainability risks

Occupational safety risks and accidents are major

operational sustainability risks. Occupational safety and

human rights risks involve serious accidents at work,

labour exploitation, working conditions, corruption and

the grey economy. Particular attention has been paid to

occupational safety management. Management com-

mitment has been increased and the quality of incident

investigations improved. In addition, the management

and monitoring of overall safety has been developed to

obtain an even more accurate and better picture of the

situation. At the same time, on-site training and own ob-

servations of occupational safety have been developed.

SRV requires human rights to be realised, and the

associated risks largely concern labour exploitation,

working conditions, corruption and the grey economy.

We have described the measures taken in 2022 to avoid

human rights risks in Annual Report’s Section Good

Governance in particular.

Contractual risks

Incomplete or unclear contract terms and deficient con-

tract management may give rise to ambiguities concerning

the responsibilities and obligations of the parties and dis-

putes that weaken project profitability. In particular, addi-

tional and modification work implemented during projects

in target-price and guaranteed maximum price contracts

are subject to the risk of divergent interpretations.

In order to avoid contractual risks, SRV’s key

agreements are drafted on the basis of legal expertise

and contract models adapted to the company’s opera-

tions. In addition, the company constantly maintains the

knowledge of responsible persons on different contract

terms and the content of contracts with guidance and

the necessary training. Contract practices are devel-

oped constantly.

Risks of large and demanding projects

Construction projects involve a variety of risks in the

project development, construction and in-service

phases, and their circumstances develop and change

constantly. Large-scale development projects that tie

up a great deal of capital over a long period of time are

particularly exposed to changes and thereby to risks.

In large and demanding projects, the company

manages the risks involved in each phase by carrying

out thorough risk analyses and adhering to the project

processes and operating system defined by the compa-

ny. Major risky projects are under the special supervision

of the company’s management. New practices have

been introduced in project risk management, and are

being further expanded and systematised.

WE PAY SPECIAL

ATTENTION TO

OCCUPATIONAL

SAFETY MANAGEMENT

Part of report of the the Board of Directors

November 2022, SRV and its Finnish co-investors sold

their holdings in Jupiter Realty 1 B.V., the company that

owns the Okhta Mall shopping centre in St Petersburg, to

the Cyprus-based property investor Geomare Invest-

ments Limited. Following the sale of Okhta Mall, SRV is

a co-owner in two Russian shopping centres through

associated companies. In addition, SRV owns one plot in

Russia. On 31 December 2022, the total value of hold-

ings in Russia in SRV’s balance sheet was only EUR 3.0

million. Due to sanctions and the tightening econom-

ic situation, SRV’s risks in Russia – in addition to the

remaining balance sheet item – are posed by managing

the operations of the two remaining co-owned shopping

centres and their profitability as well as the fulfilment of

the covenant terms of the loan agreements of the com-

panies that own the shopping centres. The company is

focusing on the careful management of these shopping

centres and at the same time is continuing to actively

engage in negotiations with a view to selling its remaining

assets in Russia.

Risks related to investments in Fennovoima

Through its subsidiary SRV Voima Oy, SRV has a

holding in Voimaosakeyhtiö SF, the main owner of Fen-

novoima, which had prepared the Hanhikivi 1 nuclear

power plant project. SRV has also made an investment

commitment to Voimaosakeyhtiö SF concerning the

construction of the nuclear power plant. SRV has the

same rights and obligations as other Voimaosakeyhtiö

SF shareholders.

In May 2022, Fennovoima announced that it had

terminated the Hanhikivi 1 nuclear power plant deliv-

ery agreement made with Rosatom and cancelled the

construction permit application for the plant project.

Due to the higher project risk, SRV’s holding in Fenno-

Other risks

Pandemic risks

Uncertainty posed by the coronavirus pandemic has

decreased as the number of those who have been

vaccinated and who have had the illness has risen.

However, the future development of the pandemic still

involves risks, especially with respect to new variants of

the virus. In addition, potential problems caused by the

coronavirus in China, for example, may still have nega-

tive impacts on global delivery chains and thereby on the

availability of materials and construction costs.

SRV is still monitoring the evolving impacts of the

pandemic, and will take any necessary measures to

maintain health and well-being, prevent the spread of

the pandemic and ensure business continuity.

Russian country-specific risks

Russia’s war against Ukraine that started in February

2022 and the sanctions that were consequently imposed

had a substantial impact on SRV’s ability to operate in

Russia. The company recognised substantial impair-

ments of its Russian operations and decided to exit its

businesses and holdings in Russia on an accelerated

schedule. SRV wrote down its holdings in Russia and

Fennovoima almost in their entirety in April 2022. The

company carried out an extensive financing arrange-

ment to restructure its balance sheet to bolster equity.

As a result of the financing arrangement, SRV is practi-

cally net debt-free.

SRV’s investments in Russian shopping centres

are holdings in associated companies. Their sale has

been agreed upon in the shareholder agreement of

each investment. That is, the company cannot decide

on the sale of projects or their date of sale on its own. In

voima – valued at EUR 13.3 million in the 31 December

2021 annual accounts – was written down in its entirety

in the second quarter of 2022. After this write-down,

the investment commitment to Voimaosakeyhtiö SF

amounts to a maximum of EUR 18.7 million. That said,

the realisation of this investment commitment involves

significant uncertainty due to the status of the Hanhiki-

vi 1 project.

Cyber, information security and continuity risks

The functionality and security of information systems

play a key role in the company’s business operations.

The growing threat posed by cybercrime, personnel

misconduct, and system replacements and modernisa-

tion are risk factors that can result in the interruption of

operations, reputational damage and significant financial

losses. Cyberattacks and hacking of telecommunica-

tions, IT systems and the functionality of other infra-

structure are on the rise, which might cause disruptions

in the operations of SRV and its customers and imple-

mentation partners. Problems in the energy market

might also grow significantly, which could lead to energy

shortages and power outages, for instance.

With respect to cyber and information security

risks, SRV enhances its information security culture by

maintaining and communicating its information security

policy and guidelines as well as information security-re-

lated practices. SRV monitors external threats and con-

stantly keeps track of how the situation develops. Other

means of risk management include automatic virus

scans of systems and issuing separate warnings about

major information security threats.

SRV participated in TIETO22, a cybersecurity

exercise that was run by the National Emergency Supply

Organisation's Digipooli Network in 2022.

WE WILL ACTIVELY

CONTINUE

NEGOTIATIONS WITH

A VIEW TO THE SALE

OF THE REMAINING

ASSETS LOCATED

IN RUSSIA

Part of report of the the Board of Directors

Corporate governance and the decisions

of the Annual General Meeting

General Meetings

SRV held two General Meetings in 2022. The Annual

General Meeting was held on 28 March 2022 and an

Extraordinary General Meeting was held on 30 May

2022. Due to the Covid-19 pandemic, both General

Meetings were held remotely on the basis of temporary

legislation (677/2020). Company shareholders could

attend the meeting and exercise their shareholders’

rights by voting in advance and submitting questions in

advance.

The Annual General Meeting approved all the

proposals made by the Board of Directors to the General

Meeting. The Annual General Meeting adopted SRV

Group Plc’s financial statements, including the consol-

idated financial statements, and discharged the Board

of Directors and the President & CEO from liability for

the financial period 1 January–31 December 2021 and

approved the 2021 Remuneration Report on the compa-

ny’s governing bodies.

Relating to the programme to reorganise the

company’s balance sheet, the Extraordinary Gen-

eral Meeting resolved on authorisations to issue

shares and special rights as proposed by the Board

of Directors. The Extraordinary General Meeting also

resolved to carry out a reverse share split and a re-

lated redemption of shares and authorised the Board

of Directors to resolve on a directed share issue. The

Extraordinary General Meeting also resolved to amend

the authorisation given by the Annual General Meeting

on 28 March 2022 to issue shares and special rights

conditionally on the entry into force of the reverse

share split registration so that the authorisation given

The Members and Chair of the Board of Directors and

remuneration

The Annual General Meeting confirmed the number of

members of the Board of Directors as five. Timo Kokkila,

M.Sc. (Eng.), Tomi Yli-Kyyny, M.Sc. (Eng.), Hannu Leinon-

en, M.Sc. (Eng.), Heikki Leppänen, Lic.Sc. (Tech.), and

Heli Iisakka, M.Sc. (Econ.) were re-elected to the Board

of Directors. Tomi Yli-Kyyny was elected as the Chair

of the Board of Directors. The Annual General Meeting

confirmed that the following annual fees would be paid

to the members of the Board: Board Chair EUR 72,000,

Vice Chair EUR 48,000, Board member EUR 36,000,

and Chair of the Audit Committee EUR 48,000 if he/she

does not simultaneously act as Chair or Vice Chair of the

Board of Directors. In addition, Board Members will be

paid a fee of EUR 700 per meeting for Board and Com-

mittee meetings. Travel expenses arising from perform-

ing the duties of a member the Board of Directors are

paid according to the company’s travel policy.

The aforementioned annual fees will be paid in

SRV Group Plc’s shares and in cash, with approximate-

ly 40 per cent of the remuneration paid in shares. After

the transfer of shares, the remaining amount is to be

paid in cash. The company will acquire the shares in

the name and on behalf of the Board members. The

company is responsible for the costs arising from the

acquisition of the shares. The shares are to be acquired

for Board members within two weeks from the publish-

ing of the interim report for the first quarter of 2022, or

as soon as it is possible in accordance with applicable

legislation.

At its meeting after the AGM, the Board of Direc-

tors elected a Vice Chair, Tomi Kokkila, from among its

members. Heli Iisakka was elected as Chair of the Audit

Committee, and Hannu Leinonen and Timo Kokkila as

on 28 March 2022 is revoked upon the registration

of the reverse share split and replaced by an author-

isation with the same content, however, such that

the maximum number of shares to be issued under

the authorisation as of the registration of the reverse

share split shall not exceed 1,700,000 shares. In ad-

dition, the Extraordinary General Meeting resolved to

amend the authorisation given by the Annual General

Meeting on 28 March 2022 to acquire the company’s

own shares conditionally on the entry into force of

the reverse share split registration so that the au-

thorisation given on 28 March 2022 is revoked upon

registration of the reverse share split and replaced by

an authorisation with the same content, however, such

that the maximum number of shares to be acquired

under the authorisation as of the registration of the

reverse share split is at maximum 1,700,000 shares in

the company so that the number of shares acquired

on the basis of the authorisation, when combined with

the shares already owned by the company and its sub-

sidiaries, does not at any given time exceed a total of

10 per cent of all shares in the company. The amended

authorisations came into effect following the registra-

tion of the reverse share split on 4 July 2022 and will

remain in force until 30 June 2023.

The detailed minutes and resolutions of the Annu-

al General Meeting and Extraordinary General Meeting

as well as presentations of the members of the Board

of Directors are available on the company’s website at

www.srv.fi/en/investors.

Dividend payment

In accordance with the proposal of the Board of Di-

rectors, the Annual General Meeting decided that no

dividend would be paid for the financial year 2021.

Part of report of the the Board of Directors

THE DETAILED

MINUTES AND

RESOLUTIONS OF

GENERAL MEETINGS

ARE READABLE

ON OUR WEBSITE AT

WWW.SRV.FI/EN/INVESTORS

members. Tomi Yli-Kyyny was elected as Chair of the HR

and Nomination Committee, and Hannu Leinonen and

Heikki Leppänen as members.

Board authorisations

Current Board authorisations for the acquisition of

treasury shares and the issue of shares and/or special

rights as per Chapter 10 Section 1 of the Limited Liability

Companies Act are presented in Annual Report’s Sec-

tion General Meetings.

Auditor and remuneration

The Annual General Meeting elected Pricewater-

houseCoopers Oy, a firm of public accountants, as the

company's auditor. Enel Sintonen, Authorised Public

Accountant, was appointed chief auditor. The auditors’

remuneration was confirmed as payable on the basis of

an approved invoice.

Changes in auditing

SRV Group Plc’s auditor PricewaterhouseCoopers Oy

appointed Authorised Public Accountant Markku Kata-

jisto as chief auditor as of 1 October 2022.

Share-based incentive plans

Descriptions of the company’s share-based incentive

plans are available on the company’s website at

www.srv.fi/en/investors/cg/remuneration.

Shares and shareholders

On 4 July 2022, SRV Group Plc executed a reverse

share split, including a directed share issue without

consideration, redemption of shares and cancellation of

shares. After these measures, the new number of shares

in the company is 16,982,343. The new number of shares

At the end of December 2022, SRV Group Plc held

44,531 treasury shares (0.3 per cent of the total number

of shares and combined number of votes).

Proposal for the distribution of profits

The parent company’s distributable funds on 31 Decem-

ber 2022 are EUR 79,261,450.9, of which net profit for

the financial year is EUR -223,599,660.31. The Board

of Directors proposes to the General Meeting that no

dividend be paid for the 2022 financial year.

Events after the end of the review period:

• SRV announced on 2 February 2023 that

the company will set new long-term financial

objectives that it aims to achieve by the end of

2026:

- Operative operating profit: 6%

- Revenue: EUR 900 million

- The objective is to distribute dividends equalling

30–50 per cent of the annual result, while taking

into account the outlook and capital needs of

the company

• On 2 February 2023, SRV announced remuneration

paid out from the one-off long-term incentive plan

2021–2022 and discontinuations of the President &

CEO's share-based incentive plan 2019–2026 and

the long-term incentive plan 2021–2025.

Annual General Meeting 2023

The Annual General Meeting of SRV Group Plc is sched-

uled for Monday 27 March 2023 at 4 pm. The Board

of Directors will convene the Annual General Meeting

separately at a later date.

was registered with the Trade Register maintained by

the Finnish Patent and Registration Office on 4 July

2022, and trading with the merged shares commenced

on Tuesday, 5 July 2022 under the new ISIN code

FI4000523675. SRV’s trading code SRV1V remained

the same. The reverse share split and related redemp-

tion of shares were executed such that each 40 shares

of SRV were merged into one share. The purpose of

merging the shares was to facilitate trade in the compa-

ny’s shares by increasing the value of an individual share

and to contribute to the shares’ efficient price formation.

In connection with the reverse share split on 4

July 2022, the maximum number of shares that can

be subscribed for with special rights in accordance

with the terms and conditions of the convertible hybrid

bonds ISIN FI4000198122 (with an outstanding princi-

pal of EUR 21,061,512) and ISIN FI4000315395 (with an

outstanding principal of EUR 36,047,145) was amended

such that the maximum number of the shares that can

be subscribed is 14,277,165. After the reverse share

split, the subscription price of the shares that can be

subscribed for with the convertible bonds is EUR 4.00

per share.

SRV Group Plc’s share capital is EUR 3.1 million. The

share has no nominal value and the number of shares

outstanding is 16,982,343. The company has one class

of shares.

The closing price at Nasdaq Helsinki on 31 Decem-

ber 2022 was EUR 3.80 (EUR 14.8 on 31 Dec 2021). The

highest share price during the year was EUR 16.12 and

the lowest was EUR 3.19. On 31 December 2022, SRV

had a market capitalisation of EUR 64.4 million (EUR

138.9 million on 31 Dec 2021), excluding the Group’s

treasury shares. 25.0 million shares were traded during

2022, with a trade volume of EUR 15.5 million.

Part of report of the the Board of Directors

Shares and

shareholders

Share price trend and trading of shares

The shares of SRV Group Plc are quoted on the Nasdaq

Helsinki Exchange. The trading with SRV Group Plc’s

shares started on the Main list of OMX on 15 June 2007.

During 2022 the highest price was EUR 16.12 and the

lowest price EUR 3.19. The average share price for 2022

was EUR 9.17.

The closing price for 2022 was EUR 3.80 and SRV

had a market capitalisation of EUR 64.4 million, exclud-

ing the Group’s treasury shares. 25.0 million shares were

traded in OMX and the trading value of the shares was

EUR 15.5 million.

SRV Group Plc’s share capital is EUR 3.1 million. The

share has no nominal value and the number of shares

outstanding is 16,982,343. The company has one class

of shares. At the end of December 2022, SRV Group Plc

held 44,533 treasury shares (0.3 per cent of the total

number of shares and combined number of votes).

SRV Group Plc announced on 3 February 2022

that the Board of Directors had decided to start repur-

chasing a maximum of 3,900,000 own shares based on

the authorization granted by the Annual General Meet-

ing (AGM) on 29 March 2021.

Between 7 February 2022 and 29 March 2022 SRV

Group Plc repurchased 1,112,480 of its own shares at an

average price per share of EUR 0.4394 through trad-

ing in a regulated market arranged by Nasdaq Helsinki

Ltd according to the rules and instructions of Nasdaq

Helsinki Ltd. The overall purchase price of the shares

was EUR 488,879.26 and the repurchased shares were

intended to be used for share-based incentive schemes.

Shareholders

Number of

Holding

and voting

rights, %

As Pontos Baltic 2,877,709 16.9

Keskinäinen Eläkevakuutusyhtiö

Ilmarinen

1,942,246 11.4

Kolpi Investments Oy 1,446,353 8.5

Havu Capital Oy 957,562 5.6

OP-Henkivakuutus Oy 749,547 4.4

Lareale Investments Oy 654,055 3.9

Tungelin Investments Oy 654,055 3.9

Keskinäinen Työeläkevakuutusyhtiö

Varma

483,611 2.8

Pohjola Vakuutus Oy 394,650 2.3

Nordea Henkivakuutus Suomi Oy 344,510 2.0

Mandatum Henkivakuutusosakeyhtiö 239,876 1.4

Ålandsbanken Euro High Yield 225,000 1.3

Kokkila Lauri 144,361 0.9

Kokkila Tuomas 144,361 0.9

Valtion Eläkerahasto 142,344 0.8

Sipola Saku Petri Tapio 141,434 0.8

Nieminen Timo 140,659 0.8

Tradeka-sijoitus oy 101,250 0.6

Ålandsbanken Kort Företagsränta

Placeringsfond

90,000 0.5

Dream Broker Oy 69,112 0.4

20 largest shareholders 11,942,695 70.3

Nominee registerations 226,528 1.3

Other 4,813,120 28.4

Total number of shares 16,982,343 100.0

Shareholders on 31 December 2022

After the repurchase of own shares SRV Group Plc

holded a total of 1,975,041 shares, which represented

approximately 0.75% of all SRV shares.

At the end of december there were 44,533 own

shares in Group´s possession, which represents 0.3 % of

all SRV shares.

SRV executed rights issue during the review period

resulting 348,056,400 new shares. The company earned

a total of EUR 34.8 million gross equity which was record-

ed in the company’s Invested Free Equity Fund. The Offer

Shares was registered with the Trade Register main-

tained by the Finnish Patent and Registration Office on

28 June 2022. The direct transaction costs of the rights

issue are recognised directly as an adjustment to equity.

SRV executed reverse share split on 4 July 2022 to the

effect that each forty shares of the company was merged

into one share. Concurrently with the reverse share split

and thereto related redemption of shares, the share issue

Number of

Number

of share-

holders

% of

share-

holders

Number of

shares % of share

1–100 7,314 65.6 196,567 1.2

101–500 2,424 21.7 546,428 3.2

501–1000 530 4.8 372,647 2.2

1001–5000 488 4.4 953,169 5.6

5001–10 000 79 0.7 349,519 2.1

10 001–50 000 170 1.5 1,854,237 10.9

50 001–100 000 77 0.7 477,435 2.8

100 001–500 000 41 0.4 1,900,679 11.2

500 001 – 29 0.3 10,331,662 60.8

Total 11,152 100.0 16,982,343 100.0

of which nominee

registrations

9 226,528 1.3

% of shares

Corporations 29.8

Financial and insurance institutions 12.9

Public institutions 15.6

Households 21.5

Non-profit organisations 1.5

Non-Finnish shareholders 18.6

Total 100.0

Breakdown of share ownership on 31 December 2022

by number of shares owned By shareholder category

was directed to shareholders, whose ownership of shares

according to the book-entry accounts was not divisible

by 40 on the Reverse Split Date. During the financial peri-

od the total number of issued shares was 4,845.

Board authorisations

Current Board authorisations for the acquisition of

treasury shares and the issue of shares and/or special

rights as per Chapter 10 Section 1 of the Limited Liabil-

ity Companies Act are presented in Board of Directors

Report’s Section General Meetings.

Management shareholding

The Members of the Board of SRV Group Plc as well as the

President and CEO and the Deputy CEO owned directly

a total of 1,256,569 shares on 31 December 2022 which

corresponds to 7.4 % of SRV shares and voting rights. Timo

Kokkila owns SRV shares through Havu Capital Oy.

GROUP AND SEGMENT INFORMATION BY QUARTER

SRV Group

EUR million 10–12/2022 7–9/2022 4–6/2022 1–3/2022 10–12/2021 7–9/2021 4–6/2021 1–3/2021

Revenue

181.2

186.8 211.4 190.7 336.3 191.1 218.0 187.1

Operative operating profit

0.2

3.9 9.8 4.9 -4.6 -0.6 5.7 4.8

Operating profit

-6.3

5.5 10.1 -85.7 -11.5 -1.6 6.3 5.2

Financial income and expenses, total

-3.8

0.3 43.6 -42.8 -8.1 -2.8 -3.7 -4.1

Profit before taxes

-10.0

5.8 53.7 -128.5 -19.5 -4.4 2.6 1.1

Order backlog

838.8

717.1 745. 9 858.0 872.3 1,038.2 1,047.5 1,061.1

New agreements

287.2

135.0 72.3 130.1 160.7 166.6 176.0 85.4

Earnings per share, eur

3 4

-0.82

0.39 5.36 -14.25 -2.10 -0.47 3.82 0.11

Equity per share, eur

3 4

6.65

6.62 6.31 1.18 15.93 18.24 18.44 18.12

Share closing price, eur

3.8

3.5 5.2 11.4 14.8 16.1 18.4 15.80

Equity ratio, %

36.3

36.3 33.3 6.4 27.4 27.0 26.1 23.8

Equity ratio, % excl. IFRS16

48.2

48.6 43.9 9.7 32.8 34.0 32.5 29.4

Net interest-bearing liabilities

80.5

86.4 90.1 197.7 170.0 269.0 279.8 309.5

Net interest-bearing liabilities excl. IFRS16

-11.5

-8.2 -4.6 110.1 81.0 142.1 152.5 180.5

Net gearing, %

55.1

59.3 64.2 748.4 103.0 147.5 151.9 170.8

Net gearing, % excl. IFRS16

-7. 5

-5.4 -3.1 343.2 47.5 75.5 80.3 96.5

Revenue

EUR million 10–12/2022 7–9/2022 4–6/2022 1–3/2022 10–12/2021 7–9/2021 4–6/2021 1–3/2021

Construction

180.4

183.9 206.8 175.2 335.8 188.0 218.5 187.8

business construction

112.3

95.3 120.9 98.7 184.8 115.2 140.9 140.5

housing construction

68.1

88.6 85.9 76.5 151.1 72.8 77.6 47.3

Investments

0.9

3.2 4.8 1.1 0.6 4.2 1.0 1.0

Other operations and eliminations

-0.1

-0.3 -0.2 14.4 -0.2 -1.1 -1.5 -1.7

Group, total

181.2

186.8 211.4 190.7 336.3 191.1 218.0 187.1

The Group's order backlog consists of the Construction business.

The effects of IFRS16 have been adjusted from the figure.

Figures are share issue adjusted.

SRV executed reverse share split on 4 July 2022 to the effect that each forty shares of the company was merged into one share. Share-specific figures have been adjuted accordingly.

Part of report of the the Board of Directors

FINANCIAL INDICATORS OF THE GROUP

2022 2021 2020 2019 2018

Revenue EUR million 770.1 932.6 975.5 1,060.9 959.7

Operative operating profit

EUR million 18.9 5.3 15.8 1.6 -20.0

Operative operating profit, % revenue % 2.5 0.6 1.6 0.2 -2.1

Operation profit EUR million -76 .4 -1.7 1.5 -93.0 -19.8

Operation profit, % revenue % -9.9 -0.2 0.2 -8.8 -2.1

Operation profit, excl. IFRS16

EUR million -7 9. 6 -6.9 -2.7 -94.3 -19.8

Operation profit, % revenue excl. IFRS16

% -10.3 -0.2 0.2 -8.8 -2.1

Profit before taxes EUR million -79 .1 -20.3 -28.0 -122.4 -37.3

Profit before taxes, % of revenue % -10.3 -2.2 -2.9 -11.5 -3.9

Net profit attributable to equity holders of the parent company EUR million -85.7 -19.9 -22.8 -104.4 -30.1

Return on equity, % % -55.0 -11.5 -14.1 -50.6 -12.1

Return on investment, %

% -10.1 -0.6 -15.2 -2.9 -2.9

Return on investment % excl. IFRS16

% -14.9 -2.1 -2.0 -17.5 -2.9

Capital employed EUR million 272.0 403.0 566.8 625.3 609.5

Capital employed excl. IFRS16

EUR million 186.4 319.4 436.0 479.4 609.5

Equity ratio % % 36.3 27.4 22.6 21.2 28.5

Equity ratio excl. IFRS16, %

% 48.2 32.8 27.8 26.4 28.5

Net interest-bearing debt EUR million 80.5 170.0 289.1 422.0 282.8

Net interest-bearing debt excl. IFRS16

EUR million -11.5 81.0 152.9 271.9 282.8

Net gearing ratio, % % 55.1 103.0 159.7 240.3 121.1

Net gearing ratio excl. IFRS16, %

% -7. 5 47.5 82.1 151.2 121.1

Order backlog

2) 3)

EUR million 838.8 872.3 1,153.4 1,344.2 1,816.0

New agreements EUR million 624.6 588.6 707.1 487.6 1,133.0

Personnel on average 948 959 991 1,080 1,129

2022 2021 2020 2019 2018

Earnings per share

EUR -6.62 -2.29 -4.26 -42.54 -12.86

Earnings per share (diluted)

EUR -6.62 -2.29 -4.26 -42.54 -12.86

Equity per share

EUR 8.63 17.56 19.70 68.70 91.40

Equity per share (excluding hybrid bond)

EUR 6.65 15.93 18.00 36.60 74.00

Dividend per share

EUR 0.00 0.00 0.00 0.00 0.06

Dividend payout ratio, %

% neg. neg. neg. neg. neg.

Dividend yield, %

% 0.0 0.0 0.0 0.0 3.5

Price per earnings ratio (P/E-ratio) neg. neg. neg. neg. neg.

Share price development

Share price at the end of the period EUR 3.80 14.80 16.60 27.90 34.80

Average share price EUR 9.17 17.05 16.63 30.82 53.84

Lowest share price EUR 3.19 12.64 12.55 25.61 34.00

Highest share price EUR 16.12 22.60 30.74 44.88 84.41

Market capitalisation at the end of the period

EUR million 64.4 139.1 156.0 72.2 90.0

Trading volume

1,000 25,033 45,701 45,524 14,412 6,580

Trading volume, %

% 189.2 17.4 26.2 20.0 9.1

Weighted average number of shares outstanding 1,000 13,231 9,398 6,234 2,586 2,586

Weighted average number of shares outstanding (diluted)

1,000 13,231 9,398 6,235 2,586 2,586

Number of shares outstanding at the end of the period

1,000 16,938 9,398 9,398 2,586 2,586

Effect of currency exchange fluctuations EUR million 7.3 1.5 -4.4 3.8 -9.8

Alternative performance measures used in interim reporting

The company discloses certain other widely used performance measures that can for the most

part be derived from the income statement and balance sheet. The formulas for these performance

measures are provided in the next page. In the company’s view, these measures clarify the result of

operations and financial position based on the income statement and balance sheet.

SRV presents key figures for operative operating profit and operating profit margin in the

interim report

The key figure for operative operating profit is considered to provide a better picture of the

Group’s operations when comparing the reported period to earlier periods. In accordance with

IFRS, the currency exchange rate gains and losses of associated companies as well as income

and expenses from hedging are eliminated from operating profit. The currency exchange rate

gains and losses of associated companies are included above operating profit on the line “share

of results of associated companies”. Income and expenses from currency hedging are included

above operating profit on the line “other operating expenses”.

SRV presents key figures excluding effect of IFRS 16 standard

The company publishes alternative key figures, that is, IFRS 16 key figures that have been

adjusted to exclude the impact of the IFRS 16 Leases standard on the balance sheet and result.

SRV is applying a simplified approach to adopting this standard, which is why the figures for

the comparison period have not been adjusted to comply with the standard. The figures are

considered to provide a better comparability to previous year figures.

At the end of the period

The Group's order backlog consists of the Construction business.

The company changed how it allocates deferred tax assets and liabilities; they are now fully

allocated to the Other operations and eliminations unit. Comparative data has also been adjusted.

The key figure also includes assets designated as held for sale in the balance sheet

The key figure has been adjusted for the share issue and the reverse share split in July 2022. The

right issue factor used was 1.4339

Part of report of the the Board of Directors

CALCULATION OF KEY FIGURES

Return on equity, % = 100 x

Total comprehensive income for the period

Total equity, average

Capital employed = Total assets – non-interest bearing debt – deferred tax liabilities – provisions

Capital employed, excl. IFRS16 = Total assets – non-interest bearing debt – deferred tax liabilities – provisions – property, plant and equipment, right -of-use asset – inventories, right -of-use asset

Return on investment, % = 100 x

Operating profit + interest and other financial income (incl. exchange rate gains and losses) + Financial receivables write-down and sales loss

Invested capital, average

Return on investment, % excl. IFRS16 = 100 x

Operating profit + interest and other financial income (incl. exchange rate gains and losses)

Capital employed excl. IFRS16, average

Equity ratio, % = 100 x

Total equity

Total assets – advances received

Equity ratio,% excl. IFRS16 = 100 x

Total equity – IFRS16 depreciations, leases and interest and financial expenses recoqnised in income statement - IFRS16 Retained earnings

Total assets – advances received – IFRS16 depreciations, leases and interest and financial expenses recoqnised in income statement

Net interest-bearing debt = Interest-bearing debt – cash and cash equivalents

Net interest-bearing debt excl. IFRS16 = Interest-bearing debt - interest-bearing lease liabilities – cash and cash equivalents

Net gearing ratio, % = 100 x

Net interest-bearing debt

Total equity

Net gearing ratio,% excl. IFRS16 = 100 x Interest-bearing debt - interest-bearing lease liabilities – cash and cash equivalents

Total equity – IFRS16 depreciations, leases, interest and financial expenses recoqnized in income statement

Earnings per share attributable to equity

holders of the parent company

Result for the period – non-controlling interest – hybrid bond interest, tax adjusted

Average number of shares

Earnings per share attributable to equity

holders of the parent company (diluted)

Result for the period – non-controlling interest – hybrid bond interest, tax adjusted

Average number of shares (diluted)

Equity per share =

Shareholders' equity attributable to equity holders of the parent company

Average number of shares at end of period

Part of report of the the Board of Directors

Equity per share (without hybrid bond) =

Shareholders' equity attributable to equity holders of the parent company – hybrid bond

Average number of shares at end of period

Price per earnings ratio (P/E-ratio) =

Share price at end of period

Earnings per share

Dividend payout ratio, % = 100 x

Dividend per share

Earnings per share

Dividend yield, % = 100 x

Dividend per share

Share price at end of period

Average share price =

Number of shares traded in euros during the period

Number of shares traded during the period

Market capitalisation at the end of the period = Number of shares outstanding at the end of the period x share price at the end of the period

Trading volume = Number of shares traded during the period and their percentage of the weighted average number of shares outstanding

Operative operating profit = Operating profit +/- currency exchange rate gains and losses +/- income and expenses from hedging +/- items affecting comparability

TILINPÄÄTÖS

CONSOLIDATED FINANCIAL

STATEMENTS

Part of Financial Statements

CONSOLIDATED FINANCIAL STATEMENTS, IFRS

Consolidated income statement

EUR 1,000 Note 2022 2021

Revenue 3 770,078 932,554

Other operating income 4 589 3,517

Change in inventories of finished goods and work in progress -88,445 -116,909

Use of materials and services -600,560 -733,357

Employee benefit expenses 7 -74,342 -71,567

Share of profits of associated and joint venture companies 16 -1,260 1,227

Depreciations 6 -5,147 -5,818

Impairments 6 -65,030 -500

Other operating expenses 5 -12,271 -10,721

Income and expenses on currency derivatives 5 0 -124

Operating profit -76,388 -1,697

Financial income 9 52,743 5,013

Financial expenses 9 -55,437 -23,662

Financial income and expenses, total -2,694 -18,649

Profit before taxes -79,081 -20,346

Income taxes 10 -6,580 467

Net profit for the financial year -85,662 -19,879

Attributable to

Equity holders of the parent company -85,662 -19,879

Non-controlling interests 0 0

Earnings per share attributable to equity holders of the parent company* 11 -6.62 -2.29

Earnings per share attributable to equity holders of the parent company (diluted)* 11 -6.62 -2.29

* Per-share key figures have been calculated and the figures for the comparison period have been restated using the new total number of shares

following the reverse share split (reverse split), in accordance with the decision made by the EGM on 30 May 2022. Each forty shares of the company

was merged into one share.

Statement of comprehensive income

EUR 1,000 Note 2022 2021

Net profit for the financial year -85,662 -19,879

Other comprehensive income

Other comprehensive income to be reclassified to profit or loss in subsequent periods:

Gains and losses arising from translating the financial statements of a foreign operation -3,999 -1,115

Share of other comprehensive income of associated companies and joint ventures 16 7,208 2,912

Other comprehensive income for the year, net of tax 3,209 1,797

The share of comprehensive income attributable to equity holders of the parent company 3,209 1,797

Non-controlling interests in comprehensive income 0 0

Total comprehensive income for the year -82,453 -18,082

Total comprehensive income attributable to:

Equity holders of the parent company -82,453 -18,082

Non-controlling interests 0 0

Part of Financial Statements

Consolidated balance sheet

EUR 1,000 Note 2022 2021

ASSETS

Non-current assets

Property, plant and equipment 13 4,114 3,590

Property, plant and equipment, Right-of-use asset

13 8,840 9,538

Goodwill 14 1,734 1,734

Other intangible assets 14 699 867

Shares in associated and joint venture companies 16 2,120 51,919

Other financial assets 15, 17 7,751 24,728

Receivables 15, 18 14,243 9,664

Long-term receivables from asso. comp. and joint ventures 15, 21 0 40,490

Deferred tax assets 19 37,458 42,248

Non-current assets, total 76,959 184,779

Current assets

Inventories 20 162,842 227,350

Inventories, Right-of-use asset

20 75,119 72,723

Account and other receivables 15, 22 88,254 133,428

Loan receivables from associated companies and joint ventures 15, 21 5 0

Current tax receivables 10 35

Cash and cash equivalents 23 45,309 68,009

Assets classified as held for sale 24 0 0

Current assets, total 371,538 501,545

ASSETS TOTAL 448,497 686,324

EUR 1,000 Note 2022 2021

EQUITY AND LIABILITIES

Equity attributable to equity holders of the parent company

Share capital 25 3,063 3,063

Invested free equity fund 25 303,559 264,680

Translation differences 25 -14,948 -18,157

Hybrid Bond 25 33,529 15,360

Retained earnings -179,019 -99,890

Equity attributable to equity holders of the parent company, total 146,184 165,057

Non-controlling interests 0 0

Equity, total 146,184 165,057

Non-current liabilities

Deferred tax liabilities 19 1,138 1,005

Provisions 26 12,196 13,048

Interest-bearing liabilities excluding lease liabilities 15, 27 23,828 128,771

Interest-bearing lease liabilities

27 89,545 86,743

Other liabilities 15, 28 6,252 14,762

Non-current liabilities, total 132,959 244,329

Current liabilities

Account and other payables 15, 28 148,022 243,205

Current tax payable 958 10

Provisions 26 7,932 11,259

Interest-bearing liabilities excluding lease liabilities 15, 27 10,000 20,192

Interest-bearing lease liabilities

27 2,442 2,272

Current liabilities, total 169,354 276,938

Liabilities, total 302,313 521,267

EQUITY AND LIABILITIES, TOTAL 448,497 686,324

Items related to IFRS 16 standard.

Part of Financial Statements

Consolidated statement of changes in equity

Equity attributable to equity holders of the parent company

EUR 1,000 Share capital

Invested free

equity fund

Translation

differences Hybrid Bond

Retained

earnings Total

Non controlling

interests Equity Total

Equity, total, 1 Jan 2021 3,063 264,680 -19,953 15,360 -78,183 184,967 -4,016 180,951

Net profit for the financial year 0 0 0 0 -19,879 -19,879 0 -19,879

Other comprehensive income items (with the tax effect)

Foreign currency translation differences for foreign operations 0 0 -1,115 0 0 -1,115 0 -1,115

Share of other comprehensive income of associated companies and joint ventures 0 0 2,912 0 0 2,912 0 2,912

Other financial assets 0 0 0 0 0 0 0 0

Other comprehensive income total 0 0 1,797 0 0 1,797 0 1,797

Comprehensive income for the review period 0 0 1,797 0 -19,879 -18,082 0 -18,082

Transactions with the owners

Dividends paid 0 0 0 0 0 0 0 0

Share based incentive plan 0 0 0 0 732 732 0 732

Hybrid bond interests 0 0 0 0 -2,561 -2,561 0 -2,561

Dissolution of non-controlling interest 0 0 0 0 0 0 4,016 4,016

Transactions with the owners, total 0 0 0 0 -1,829 -1,829 4,016 2,188

Equity, total, 31 Dec. 2021 3,063 264,680 -18,157 15,360 -99,890 165,057 0 165,057

Part of Financial Statements

Equity attributable to equity holders of the parent company

EUR 1,000 Share capital

Invested free

equity fund

Translation

differences Hybrid Bond

Retained

earnings Total

Non controlling

interests Equity Total

Equity, total, 1 Jan 2022 3,063 264,680 -18,157 15,360 -99,890 165,057 0 165,057

Net profit for the financial year 0 0 0 0 -85,662 -85,662 0 -85,662

Other comprehensive income items (with the tax effect)

Foreign currency translation differences for foreign operations 0 0 -3,999 0 0 -3,999 0 -3,999

Share of other comprehensive income of associated companies and joint ventures 0 0 7,208 0 0 7,208 0 7,208

Other financial assets 0 0 0 0 0 0 0 0

Other comprehensive income total 0 0 3,209 0 0 3,209 0 3,209

Comprehensive income for the review period 0 0 3,209 0 -85,662 -82,453 0 -82,453

Transactions with the owners

Purchase of own shares 0 0 0 0 -729 -729 0 -729

Share based incentive plan 0 0 0 752 752 0 752

Directed issue and write-down of hybrid loan 0 6,822 0 -15,360 8,538 0 0 0

Right issue 0 34,806 0 0 0 34,806 0 34,806

Costs related to share issue excl. taxes 0 -2,749 0 0 0 -2,749 0 -2,749

Conversion of notes 0 0 0 34,265 0 34,265 0 34,265

Costs related to notes' conversion 0 0 0 -736 0 -736 0 -736

Hybrid bond interests 0 0 0 -2,030 -2,030 0 -2,029

Dissolution of non-controlling interest 0 0 0 0 0 0 0 0

Transactions with the owners, total 0 38,878 0 18,169 6,531 63,578 0 63,580

Equity, total, 31 Dec. 2022 3,063 303,559 -14,948 33,529 -179,019 146,184 0 146,184

Part of Financial Statements

Consolidated cash flow statement

EUR 1,000 2022 2021

Cash flows from operating activities

Cash receipts from customers 805,413 927,246

Cash receipts from other operating income 614 3,086

Cash paid to suppliers and employees -802,540 -842,638

Net cash before interests and taxes 3,488 87,694

Interests received and other financial income 365 1,825

Interests paid and other expenses from financial costs -13,709 -20,479

Income taxes paid and received -255 -114

Cash flow from operating activities -10,112 68,926

Cash flows from investing activities

Purchase of tangible and intangible assets -2,478 -1,336

Sale of tangible and intangible assets 516 765

Purchase of investments -101 -3,034

Subsidiary shares bought 0 -375

Investments in associated companies and joint ventures -26 -26

Associated companies and joint ventures sold 4,171 0

Loans granted 0 -767

Proceeds from repayments of loans 0 12,001

Net cash used in investing activities 2,082 7,229

Cash flows from operating and investing activities in total -8,029 76,155

EUR 1,000 2022 2021

Cash flow from financing activities

Net cash from share issue 32,056 0

Proceeds from loans 1,000 0

Repayment of loans -31,745 -76,992

Hybrid bond costs -737 0

Hybrid bond interests -2,029 -3,206

Change in housing corporation loans -10,737 -22,575

Purchase of own shares -729 0

Repayment of lease liabilities -2,374 -2,669

Net cash flow from financing activities -15,294 -105,442

Net change in cash and cash equivalents -23,324 -29,286

Cash and cash equivalents at the beginning of period 68,009 96,748

Effect of exchange rate changes in cash and cash equivalents 623 549

Cash and cash equivalents at the end of period 45,309 68,009

Part of Financial Statements

Description of operations

SRV Group Plc and its subsidiaries (SRV Group) com-

prise one of Finland’s leading project management

contractors that builds and develops commercial and

business premises, housing as well as industrial and

logistics projects mostly in Finland. In line with the

Group’s strategy, business operations are organised into

two segments: Construction and Investments. The main

company is SRV Construction Ltd. The Construction

segment covers all of SRV’s construction activities in-

cluding the capital and plots required for developer-con-

tracted housing production. It is SRV’s intention to de-

velop, build and sell these plots to a faster schedule than

those we report on in the Investments segment. Con-

struction encompasses housing construction, business

construction, technical units and procurement, as well as

internal services in Finland and Russia. The Investments

segment encompasses both complete and incomplete

sites in which the company is a long-term investor. Plots

that SRV will develop itself, and whose expected profits

will be generated through development and longer-term

ownership, are also reported under Investments.

The Investments segment focuses on the man-

agement and realisation of the Group’s real estate

investments; the creation and ownership of new joint

investment structures; and the operation of selected

properties.

Other operations and eliminations include the

group functions of the parent company, SRV Group

Plc, and the Project Development Unit’s property and

project development activities. Group eliminations are

cost basis, except for financial assets and liabilities

at fair value through the income statement, financial

assets and liabilities measured at fair value through the

income statement and derivative contracts measured

at fair value as well as share-based payments which are

measured at fair value.

Following standards, interpretations and amend-

ments have been applied beginning from 1.1.2022:

Property, Plant and Equipment:

Proceeds before intended use

– Amendments to IAS 16

The amendment to IAS 16 Property, Plant and Equip-

ment (PP&E) prohibits an entity from deducting from

the cost of an item of PP&E any proceeds received from

selling items produced while the entity is preparing the

asset for its intended use. It also clarifies that an entity

is ‘testing whether the asset is functioning properly’

when it assesses the technical and physical perfor-

mance of the asset. The financial performance of the

asset is not relevant to this assessment. Entities must

disclose separately the amounts of proceeds and costs

relating to items produced that are not an output of the

entity’s ordinary activities.

Reference to the Conceptual Framework

– Amendments to IFRS 3

Minor amendments were made to IFRS 3 Business

Combinations to update the references to the Concep-

tual Framework for Financial Reporting and add

also included in this unit. Deferred tax assets and liabil-

ities have been allocated in full to Other operations and

eliminations. SRV has no assets held for sale according

to IFRS 5 during the review period. On 4th March 2022,

SRV published a statement regarding possibilities of

accelerated detaching from Russia. After the state-

ment, the company has actively made efforts towards

this by negotiating the sale of its Russian assets. The

negotiations have not yielded any results. The uncer-

tainty in the market is exceptionally high, meaning the

schedule and probability of detaching from Russia is

hard to estimate.

The Group’s parent company, SRV Group Plc (the

Company), is a Finnish public limited company that is

domiciled in Espoo, Finland. The Company’s registered

address is Tarvonsalmenkatu 15, 02601 Espoo. The

Company’s Board of Directors approved these consoli-

dated financial statements on 28 February 2023.

Accounting policies

Basis of presentation

The consolidated financial statements have been

prepared on 31 December 2022 in accordance with

IFRS (International Financial Reporting Standards).

International Financial Reporting Standards refer to the

standards and their interpretations issued and approved

for application within the EU in accordance with the pro-

cedure prescribed in EU regulation (EC) 1606/2002. The

financial statements are presented in thousands of eu-

ros unless otherwise stated. The consolidated financial

statements have been prepared based on a historical

an exception for the recognition of liabilities and con-

tingent liabilities within the scope of IAS 37 Provisions,

Contingent Liabilities and Contingent Assets and IFRIC

21 Levies. The amendments also confirm that contin-

gent assets should not be recognised at the acquisition

date. These updates do not change the accounting

requirements for business combinations.

Onerous Contracts – Cost of Fulfilling

a Contract Amendments to IAS 37

The amendment to IAS 37 clarifies that the direct costs

of fulfilling a contract include both the incremental

costs of fulfilling the contract and an allocation of other

costs directly related to fulfilling contracts. Before rec-

ognising a separate provision for an onerous contract,

the entity recognises any impairment loss that has

occurred on assets used in fulfilling the contract.

Annual Improvements to IFRS Standards

2018–2020

IFRS 9 Financial Instruments – clarifies which fees

should be included in the 10% test for derecognition of

financial liabilities. IFRS 16 Leases – amendment of illus-

trative example 13 to remove the illustration of payments

from the lessor relating to leasehold improvements,

to remove any confusion about the treatment of lease

incentives. IAS 41 Agriculture – removal of the require-

ment for entities to exclude cash flows for taxation when

measuring fair value under IAS 41. This amendment is

intended to align with the requirement in the standard to

discount cash flows on a post-tax basis.

Notes to the consolidated financial statements

Part of Financial Statements

Impacts of the coronavirus on SRV’s

financial reporting

SRV continuously assesses how the coronavirus

epidemic is developing and its potential impacts on fi-

nancial reporting. SRV uses certain stimulus measures

introduced in 2020 in response to the coronavirus epi-

demic. The company still uses payment arrangements

for VAT liabilities. At the end of 2021, other liabilities

included EUR 15.7 million in tax liabilities for which the

tax authorities had granted payment arrangements.

In accordance with these payment arrangements, the

company repaid the tax liabilities in full in June 2022.

Interest of 2.5 per cent is paid on the liabilities covered

by the payment arrangement.

Possible effects of war in Ukraine

to SRV’s business

Many of the risk positions involved in the construction

industry have increased significantly due to the war

in Ukraine. Although the general economy has been

recovering from the economic consequences of the

coronavirus pandemic in Finland as well, uncertainty

about the outlook for the future has grown substantial-

ly due to the war. Many forecasting institutions have

downgraded their estimates for near-term economic

growth that they issued at the beginning of the year.

Economic uncertainty might be negatively reflected

in the confidence of both companies and consumers,

and thereby also on construction and housing sales.

This risk is increased by accelerating inflation and the

now rising interest rates. Furthermore, the availability

of certain raw and construction materials and energy in

particular may be hampered by the sanctions imposed

by western countries and Russia, thereby further

rights of the lenders came into effect and thus the loans

were recorded in current interest-bearing liabilities on

31 March 2022. For this reason, the company and the

lenders of its Financing Facility agreed on a standstill

period lasting until 30 June 2022 during which the lend-

ers waived their rights to demand early repayment and

termination as a result of the write-downs of assets in

Russia, subject to the continuation of said restructuring

of financing. As the successful restructuring of financing

had not been confirmed when the interim report for the

period ending 31 March 2022 was published, the oper-

ations of the company were subject to material uncer-

tainty. After the publication of the interim report for the

period ending 31 March 2022, the company completed

written procedures regarding its Notes and Hybrid

Bonds as well as organised a rights issue that increased

the company’s equity by a total amount of EUR 32.3 mil-

lion. The company estimates that the successful execu-

tion of these measures has eliminated the uncertainties

related to the going concern.

Assets recognised as revenue over time are con-

trolled by the customer, and the revenue and expenses

of these customer projects are recognised as revenue

and expenses based on percentage of completion, when

the outcome of the project can be reliably estimated.

Percentage of completion is determined by calculating

for each project the share of expenses accrued by the

balance sheet date relative to total expenses estimated

for each project. The amount corresponding to the per-

centage of completion is recognised as revenue.When

it is probable that total costs necessary to complete

a project will exceed total revenue obtained from the

project, the expected loss is recognised immediately as

an expense.

increasing construction costs. Cyberattacks and

hacking of telecommunications and IT systems might

increase, causing disruptions in the operations of SRV

and its customers and partners.

Use of estimates

The preparation of financial statements in accordance

with IFRS requires the Group’s management to make

certain estimates and exercise judgement in applying

accounting policies. The estimates and assumptions

have an effect on balance sheet assets and liabilities as

well as on revenues, expenses and contingent liabilities

for the reporting revenue recognition of construction

contracts, in the measurement of current assets, in the

measurement of warranty and other provisions, in the

valuation of investments in associates and joint ven-

tures, in the recognition of current income tax assets

and liabilities, and the measurement of assets held for

sale.

Due to the impairment of Russian business oper-

ations as a result of Russia’s war against Ukraine and

the related economic sanctions, the company’s equity

decreased substantially; this had a significant impact on

equity ratio and gearing in the company’s interim report

for the period ending 31 March 2022. The equity ratio

calculated as per the covenants of financing agreements

was 12.3 per cent at 31 March 2022, taking into account

the recognition of income from developer-contracted

projects on the basis of percentage of completion. The

equity ratio covenant for bonds with total capital of

about EUR 100 million was no longer met. In addition,

the equity ratio and gearing covenants of the company’s

Financing Facility were no longer met. As the covenants

were no longer met, the termination and early repayment

Development and developer-contracted projects

may includes variable considerations that may result, for

example, from delay penalties and lease liabilities. Rec-

ognition of revenue is deferred for the estimated rental

liability and this estimated share of project revenue is

recognised as an advance received. Rental security

deposits reduce project-related advances received.

Uncertainties associated with signed lease agreements

are taken into account in recognition of revenue.

The Group carries out an annual impairment testing

of goodwill and intangible assets having an indefinite use-

ful life. The recoverable amounts of cash-generating units

have been defined on the basis of value-in-use calcula-

tions. The preparation of these calculations requires use

of estimates. Warranty provisions and 10-year warranty

provisions are recorded when the amount of the pro-

vision can be estimated reliably. The recorded amount

is the best estimate of the expected cost that will be

required to meet the claim as of the balance sheet date.

The estimate concerning probability of costs is based on

previous similar events and previous experience and it

requires judgement from the Group management.

When preparing the financial statements the Group

estimates the net realisable value of current assets and

the possible consequent need for write down. Estimates

of net realisable value are based on the most reliable evi-

dence available at the time the estimates are made as to

the amount the inventories are expected to realise. As-

sessing the need for impairment of inventory items may

require management to make estimates of matters such

as the future costs of development and construction, the

future income and expenses accruing from the item, the

market return requirement at the time of realisation and

the sale value of the item.

Part of Financial Statements

The Group assesses the value of these investments

in connection with financial statements and when there

are indication of impairment. Based on an assessment

of the value of the associated companies and joint

ventures that own completed properties, a valuation

calculation is prepared for properties. For significant in-

vestments, the Group obtains external property assess-

ments, if necessary. The determination of the present

value of investments is subject to assessment because

present value calculations include, for example, future

rental income, rental discounts given, turnover-based

rental income, occupancy rate, the running costs of the

property and the required return (yield) assumptions.

When preparing the financial statements, the Group

especially estimates if there is a need for recognition of

deferred taxes. The Group prepares an estimate about

the probability of the profits of group companies against

which the unused tax losses or unused tax credits can

be used.

Consolidated Financial Statements

Subsidiaries

The consolidated financial statements comprise all such

companies that belong to parent company SRV Group

Plc where the Group has authority. The Group has au-

thority in a company if the Group, by being involved in it,

is susceptible to or entitled to its changing revenue, and

is capable of exerting an impact on the revenue con-

cerned by applying its authority in a manner that affects

the company concerned. The subsidiaries will be com-

bined within the consolidated financial statements from

the day that authority is transferred to the Group, and

the combination will end on the day when this authority

ceases. The balance sheet items of self-sufficient con-

struction projects are comprised within the consolidated

financial statements.

The financial statements of the SRV Group have

been consolidated using the purchase method. Acqui-

sition cost is determined by taking into account funds

given as consideration and measured at fair value,

and liabilities assumed, as well as the direct costs of

an acquisition. Acquired and identifiable assets and

liabilities are measured at fair value at the acquisition

date, irrespective of the size of any non-controlling

interests. The amount by which the cost exceeds the

fair value of Group’s share of the net identifiable assets

acquired is recorded as goodwill. If the acquisition cost

is less than the fair value of the acquired subsidiary’s

net assets, this difference is recorded directly to the

income statement.

The accounting policies of subsidiaries have been

changed as necessary to correspond the Group’s

accounting policies. Intra-group transactions, receiv-

ables and liabilities as well as unrealised gains on

intra-group transactions are eliminated in the con-

solidated financial statements. Unrealised losses are

eliminated if the loss is not caused by impairment.

The group recognises non-controlling interests

in an acquired entity either at fair value or at the

non-controlling interest’s proportionate share of the

acquired entity’s net identifiable assets.

Non-controlling interests has been presented

separately after Net profit for the period and in Total

equity. Losses applicable to non-controlling inter-

ests in a subsidiary are allocated to non-controlling

interests, even if doing so causes the non-controlling

interests to have a negative balance.

Changes in the ownership share of the parent

company in the subsidiary that do not lead to the loss

of authority are treated as business operations affect-

ing equity. When the authority of the Group ceases,

the remaining ownership share is valuated to the fair

value of authority on the loss date, and the change in

book value is entered as effect on income. This fair

value functions as an original book value when the

remaining share is later treated as an associated com-

pany, joint venture or as financial assets. In addition,

amounts entered previously into other comprehen-

sive income-based items respective to the enterprise

concerned will be treated as if the Group had directly

transferred the assets and liabilities connected with

them. This may mean that amounts entered previously

into other comprehensive income-based items will be

transferred as effect on income.

Associated companies and Joint ventures

Associated companies are all enterprises in which the

Group has considerable influence, but not authority. This

is generally based on share ownership that generates

20–50% of the voting rights.

A joint arrangement is an arrangement of which

two or more parties have joint control. Joint control is

the jointly agreed sharing of control of an arrangement,

which exists only when decisions about the relevant

activities require the unanimous consent of the parties

sharing control. A joint arrangement is either a joint

operation or a joint venture. A joint venture is an ar-

rangement whereby the parties that have joint control

of the arrangement have rights to the net assets of the

arrangement, whereas in a joint operation the parties

that have joint control of the arrangement have rights to

the assets, and obligations for the liabilities, relating to

the arrangement.

The Group has applied the IFRS 11 standard to all

joint arrangements from the outset of 2014 onwards. Ac-

cording to IFRS 11, the joint arrangements are classified

as joint operations or joint ventures in compliance with

the investors' contractual rights and obligations. The

Group has assessed the character of its joint arrange-

ments and has determined that they are joint ventures.

The associated companies and joint ventures are

combined in the consolidated financial statements by

using the capital share method. If the Group's share of

associated company and joint venture losses exceeds

the book value of the investment, the investment will be

entered into the balance sheet with a value of zero, and

the losses exceeding book value will be combined, un-

less the Group is not obligated to fulfilling the obligations

of the associated company and joint venture. Associat-

ed company and joint venture investment contains the

goodwill that has been generated from its acquisition.

Non-realised profits and losses between the Group and

associated companies and joint ventures are eliminat-

ed in accordance with the Group's ownership share.

Non-realised losses are not eliminated if the transaction

suggests a reduction in value of the transferred asset.

The Group’s ownership share from the share of finan-

cial year results from an associated company and joint

venture is presented before business profit. The Group’s

share of the comprehensive income items of associated

companies and joint ventures is presented, however,

in consolidated comprehensive income. These arise

particularly from the Group’s share of the translation

differences of associated companies and joint ventures

operating in foreign currency.

Part of Financial Statements

The financial statement formulation principles ob-

served by an associated company and joint venture have

been amended as required to comply with the principles

the Group observes.

In accordance with the Group’s accounting princi-

ples, Group management judges the depreciation period

for the finished asset as beginning after a period of two

years, when the probability of sale, occupancy rate and

other important criteria will be evaluated. Depreciation

entries on asset items must begin no later than three

years after the completion of the asset item.

Foreign currency transactions

Functional and presentation currency

Items of each group company included in the consolidat-

ed financial statements are measured using the curren-

cy that best reflects the economic substance of the un-

derlying events and circumstances relevant to the Group

Company (the functional currency). The functional

currency of a group company may therefore differ from

the currency used in its country of location. The consoli-

dated financial statements are presented in euros, which

is the parent company's functional currency.

Group companies

The income statements of those subsidiaries whose

functional currency is not Euro are translated into euros

using the average monthly rate. The balance sheets of

subsidiaries are translated into euros using the rates

at the balance sheet date. The translation differences

arising from the use of different exchange rates are

recorded in Translation differences under equity. In

so far as the loans between the group companies are

considered part of net investment in foreign subsidiar-

ies, the currency exchange differences are recorded in

Translation differences. When a foreign subsidiary is sold,

the cumulative translation differences are recognised in

the income statement as part of the capital gain or loss.

Transactions and balance sheet items

Transactions denominated in foreign currency are recorded

using the exchange rate on the date of the transaction. Mon-

etary foreign currency items in the balance sheet are meas-

ured using the exchange rate at the closing date. Non-mon-

etary items denominated in foreign currency are measured

using the exchange rate on the date of the transaction.

Exchange rate gains and losses on business operations are

included in corresponding items above operating profit.

Exchange rate differences of financing items are included in

financial income and expenses.

Income recognition

Construction contracts

Sales revenue is recognised when control over goods or

services is transferred to the customer. The customer ob-

tains control when it is able to direct the use of goods or

services and to obtain the benefit from them. The Group’s

sales revenues consist of various types of residential and

commercial projects as well as other sales. The revenue

recognition practice is described in more detail in Note

3. A share equivalent to SRV’s own holding is eliminated

from the margin of construction carried out for associ-

ated companies and joint ventures. This elimination is

recognised as a reduction in revenue and is entered into

the balance sheet under Advances received. The margin

is realised when the holding is sold to an external party.

Order backlog

A construction project is included in the order backlog

when the construction contract of the project has been

signed or the decision to start construction has been

made, and the contract agreement has been signed in

developer contracting projects. In developer-contracted

projects, the order backlog includes the plot in addition to

consisting of the share of the projects not yet recognised

as revenue (including the plot). The order backlog also

includes completed and unsold housing and business

properties. The value of the order backlog is the expect-

ed amount of revenue to be recognised for projects.

Borrowing costs

Borrowing costs in projects that are implemented for

clients outside the Group are recognised as expenses in

the period in which they are incurred. In developer con-

tracted housing projects, part of interest on borrowing

costs is activated during the construction period (this is

described in the section of the accounting policies cov-

ering inventories) and is recognised as an expense when

the project is sold. These interest expenses are entered

as project expenses above operating profit. In develop-

er contracting of business premises, interest expenses

are activated on the basis of management’s estimates,

as the sales prices of projects are not always known in

advance.

Research and development expenditure

SRV Group does not have any actual research and

development expenses. The Group has business-related

project development costs, and the treatment of these

is described in the section of the accounting policies

covering inventories.

IFRS 16 Leases

According to the standard, all leases, except those

subject to special exemptions under the standard, are

recognised in the balance sheet. For all leases, a right-

of-use asset (the right to use the leased asset) is recog-

nised as an asset in the balance sheet and a financial

liability representing the obligation to make lease

payments is recognised in liabilities. In the income

statement lease expenses are presented in depreci-

ation and in financial expenses line. In the cash flow

statement, lease payments are presented in the item

‘interest paid and other expenses from financial costs’

and the items ‘proceeds from loans’ and ‘repayment

of lease liabilities’ under the cash flow from financing

activities.

Group leasing activities and their

accounting treatment

Land leases form the most significant proportion of the

right-of-use assets on SRV Group’s balance sheet. Land

leases are usually long-term and are typically made on

behalf of a real estate company being established. When

the real estate company is sold and its management is

transferred to the buyer, the lease and its obligations

transfer to the buyer of the property. In addition to land

leases, other significant leases include, for example,

leases for the company’s fixed operating locations,

and leases for site equipment and vehicles. Leases for

offices are generally made initially for a fixed term. The

duration of the fixed term is generally 5 to 10 years, after

which the lease continues for an indefinite period with

6-12 months’ notice of termination. Leases for site equip-

ment are generally made for an indefinite period with

no specific notice of termination. Equipment is typically

Part of Financial Statements

leased for 1 month to 12 months. Leases for vehicles are

made for fixed terms and their duration is generally 24

months.

In its reporting, the company applies two exemp-

tions included in the standard that relate to short-term

leases and to leases where the underlying asset is of

low value. Leases whose lease term is no more than 12

months and indefinite leases whose notice of termina-

tion is less than 12 months are considered to be short-

term leases. The most significant short-term leases

are mainly for site equipment. Low-value assets mainly

include IT equipment and small items of office furniture.

In addition, some minor leases, for example for vehicles

and IT equipment are treated as a group according to

the bundling principle.

At the commencement of the contract, the lease

liability is valued at the present value of the lease

payments payable over the lease term. In determining

the present value of lease payments, an estimate of the

lease term is required in some circumstances. Such

situations, for example, relate to leases that have options

to extend or terminate the lease. Such an option is taken

into account in determining the lease term if it is rea-

sonably certain that the option will be exercised. The

lease liability also includes the amount to be paid on the

basis of any residual value guarantee and the possible

exercise price of a purchase option, if it is reasonably

certain that the option will be exercised. There may also

be penalty payments for terminating the lease. Such

penalties are included in the amount of the lease liability

if it is considered during the lease term that the Group

will exercise this option.

Lease payments are discounted at the interest

rate implicit in the lease if the interest rate is readily

determinable, otherwise the interest rate on the lessee’s

incremental borrowing rate is used. Under IFRS 16, the

lessee’s incremental borrowing rate is the rate of interest

that the lessee would have to pay to borrow, over a sim-

ilar term and with similar security, the funds necessary

to obtain an asset of a similar value to the right-of-use

asset in a similar economic environment. Land leases

account for more than 90% of SRV Group’s right-of-

use assets, and the interest rate implicit in the leases is

always used as their discount rate. For other leases, the

rate implicit in the lease is primarily used and, alterna-

tively, the incremental borrowing rate. The incremental

borrowing rate is an estimate of what the company

would have to pay to borrow, over a similar term and with

similar security, the funds necessary to obtain an asset

of a similar value to the right-of-use asset in a similar

economic environment.

The acquisition cost of a right-of-use asset consists

of the liability initially measured under the lease, any

lease payments paid by the commencement date of the

lease, any initial direct costs incurred by the lessee and

the costs of restoration to the original condition. Any

incentives received are deducted from the acquisition

cost of the underlying asset. Subsequent measurement

of the right-of-use asset is based on the acquisition

cost model, whereby the right-of-use asset is measured

at acquisition cost less depreciation and impairment.

Depreciation is recognised on a straight-line basis over

the lease term. If the lease transfers the ownership of

the underlying asset to the lessee by the end of the

lease term or if the acquisition cost of the underlying

item takes into account that the lessee will exercise the

option to purchase, the underlying asset is amortised

over its useful life.

The Group is exposed to possible increases in

variable rents based on an index or price that are not

taken into account in the lease liability until they occur.

When changes in rents based on an index or price occur,

the lease liability is reassessed and adjusted against

the right-of-use asset. The rents paid are allocated to

capital and financial expenses. Financial expenses are

recognised through profit and loss over the lease term,

such that the interest rate of the outstanding liability is

the same in each period.

Accounting principle for plot leases

The SRV Group presents right-of-use assets related

to leased plots as inventories, because plots directly

owned by the Group are presented as inventories and

the same principle is also applied in the presentation of

right-of-use assets. From the beginning of construction,

the depreciations of the leased plots are recognised as

part of the cost of the construction project. The interest

expense on the lease liability presented in balance sheet

liabilities is capitalised as part of the cost of the con-

struction project.

Accounting principle for premises leases

The SRV Group presents right-of-use assets related to

premises in the balance sheet in non-current assets and

in financial liabilities in respect of the obligation to make

lease payments in liabilities. The most significant prem-

ise lease in the SRV Group is the lease for the company’s

head office.

Accounting principle for site equipment leases

Leases for site equipment are almost without excep-

tion typically leases with an indefinite lease term.

Such leases generally entitle the company to decide

to terminate the contract for each leased item at its

chosen time. Site equipment is generally leased to the

site for a special work stage, in which case the lease

term is usually for less than 12 months. Due to the

short lease terms and flexible termination conditions,

the exemption for short-term leases under IFRS 16 is

generally applied to site equipment leases. If, however,

a site equipment lease is made for a fixed term, and the

lease is not low-value, the lease is subject to the same

accounting principle as described above for premises

leases.

Accounting principle for office equipment leases

Leases for IT equipment typically concern office IT

equipment such as printers, multifunction devices and

computers. The exemption for low-value asset items

is applied to these assets. Leases for IT equipment

also include contracts that cannot be considered to be

low-value and short-term. Such agreements include,

for example, IT server leases. The same accounting

principle as described above for premises leases is

applied to such leases, but such that the asset items

are treated as a single entity in accordance with the

bundling principle. IT equipment lease terms are typi-

cally 24 or 48 months long.

Accounting principle for leased vehicles

Leases of leased vehicles are subject to the same ac-

counting principle as described above for premises leas-

es, but such that the asset items are treated as a single

entity in accordance with the bundling principle. Leases

for leased vehicles are typically 24 months long.

Part of Financial Statements

Property, plant and equipment

Property, plant and equipment is entered into the con-

solidated balance sheet at acquisition cost less accu-

mulated depreciation and any accumulated impairment

losses. Acquisition cost includes the expenses directly

related to acquiring the asset. Assets are subject to

straight-line depreciation over the estimated useful

financial life of the asset. Land and water areas are not

depreciated because the useful financial life of these

assets cannot be determined.

Depreciation is recognised as an expense over the

estimated useful financial life of an asset as follows:

• Buildings: 40–60 years

• Production machinery and equipment: 3–10 years

• Office fittings: 3–10 years

• IT equipment: 3–5 years

• Vehicles and rolling stock: 5 years

• Other tangible assets: 5–10 years

The carrying amounts and economic lives of prop-

erty, plant and equipment are estimated and values

adjusted as needed. The Group estimates at every

balance sheet date if there is a need for impairment. If

the carrying amount of an asset item exceeds the es-

timated recoverable amount, the carrying amount is

lowered to correspond the recoverable amount. When

controlling interest is lost in current asset company

in a transaction carried out, its remaining holding is

measured at fair value. Capital gains and losses on

property, plant and equipment are included in the

income statement, other operating income or other

operating expenses.

Intangible assets

Intangible assets which have a limited useful life are val-

ued at historical cost and amortised over their estimated

economic life (3–5 years). Intangible assets which have

an unlimited useful life are tested yearly for impairment.

Goodwill is the excess of the cost of the busi-

ness combination over the fair value of the Group’s

share of acquired net assets. Goodwill is subject to an

annual impairment test. For this purpose, goodwill has

been allocated to cash-generating units. Goodwill is

measured at historical cost less impairment. Impair-

ment is expensed directly to the income statement.

Assets which are depreciated or amortised are

always tested for impairment when events or changes

in circumstances indicate the carrying amount may

not be recovered. Impairment is recorded through

profit and loss to the extent that the carrying amount

of the asset item exceeds the recoverable amount.

The recoverable amount is the higher of the following:

the fair value of the asset item less selling costs or its

value-in-use.

Financial assets and liabilities

The Group classifies its financial assets and liabilities in

the following groups:

Financial assets: Financial assets at amortised

cost or at fair value through profit or loss. Financial liabil-

ities: Financial liabilities recognised at fair value through

profit or loss, or at amortised cost using the effective

interest rate method. The Group measures financial as-

sets at amortised cost when the objective of the business

model is to hold the assets and collect all the contractual

cash flows, and when the contractual cash flows of the

instrument consist only of payments of principal and

interest. All other financial assets are recognised and

measured in the Group at fair value through profit or loss.

A Group entity records financial assets and liabil-

ities in its balance sheet when – and only when – it be-

comes a party to the contractual terms and conditions

of the instrument. When an entity recognises a financial

asset for the first time, it must classify financial assets

and financial liabilities into the categories specified

above. A Group entity derecognises a financial asset

item from the balance sheet when the contractual rights

to the cash flows from the financial asset cease to exist

or when it transfers the financial asset to another party

and a significant part of the risks and benefits of owner-

ship have been transferred to the other party. A financial

liability is derecognised from the balance sheet when the

obligation specified in the contract has been discharged,

cancelled or expired. Financial assets are long-term

when their maturity is over 12 months and short-term

when the remaining maturity is less than 12 months.

Other financial assets are included in long-term finan-

cial assets unless there is an intention to relinquish the

investment within 12 months of the balance sheet date.

Financial liabilities are classified as short-term if their

maturity is under 12 months or if the Group does not

have the absolute right to repay them at least 12 months

after the end of the reporting period. Otherwise they are

classified as long-term.

Derivative instruments

The Group designates derivative instruments at the

time of entering into the contract as either cash flow

hedges of business or financing cash flows or as hedg-

es of investments in foreign entities. Derivatives are

entered into for hedging purposes and on their basis

the receivables and liabilities in the balance sheet are

small. Contracts concluded with the counterparties of

derivative instruments are based on the ISDA Master

Agreement. According to the terms of the arrangements,

if certain events occur (such as payment default), the

net receivable or liability position of an individual coun-

terparty in the same currency is designated as a liability

and all related arrangements are terminated. As SRV

does not have a legally enforceable offsetting right at the

closing date, said amounts have not been deducted from

each other in the balance sheet. The Group’s Treasury

unit is responsible for the hedge transactions according

to the policy approved by the Board of Directors. During

the fiscal years 2022 and 2021 there were no hedges

qualifying for IFRS hedge accounting.

Items recognised at fair value through profit or loss

The derivative instruments used by the Group are

classified at fair value through profit or loss. Derivatives

are initially recognised in the balance sheet at fair value

on the transaction day and thereafter measured at fair

value on each balance sheet date. The fair value of

interest rate swaps is usually zero at the original time of

recognition. Changes in fair values of interest rate swaps

are recognised in the income statement under other

financial income and expenses and in the balance sheet

under financial assets or liabilities. Foreign exchange

option premiums are considered to amount to the fair

value at the time of acquisition.

Changes in the fair values of foreign exchange

forward contracts and options are recognised in the

income statement under other financial income and

expenses, because they are used primarily to hedge

against currency rate gains and losses included in the

Part of Financial Statements

share of associated companies’ income. Other financial

assets may include both quoted and non-quoted shares

and they are measured at fair value through profit or

loss. The fair value of the investment is determined on

the basis of the investment’s bid price. In the event that

there are no quoted bid prices for the other financial

assets, the Group will apply various valuation methods to

their valuation. These are, for example, recent transac-

tions between independent interests, discounted cash

flows, or other similar types of instrument valuations.

Measured at amortised cost

Financial assets measured at amortised cost are trade

receivables, other receivables and loan receivables from

associated companies. Financial assets measured at

amortised cost are initially measured at fair value less

transaction costs. After initial recognition, they are rec-

ognised at amortised cost. Interest is recognised in the

income statement over the maturity of the loan using the

effective interest method.

Impairment

In the recognition of expected credit losses, the Group

applies an approach according to which all trade receiv-

ables and contractual assets are reviewed separately

and expected credit losses recognised over the entire

applicable duration.

The project customers are mainly large, well-known

companies with solid finances. If there is no information

on the customer's solvency, the information is checked

from public trade and credit information registers, with a

security deposit required if necessary. For international

commercial premises projects, more detailed customer

background checks are carried out for new customers.

Due to the business model and customer profile de-

scribed in the previous paragraph, the Group has not in-

curred any material credit losses over the last few years,

and no material credit losses are expected regarding the

items included in the balance sheet at the closing date.

Loan receivables from associated companies and

joint ventures are tested for impairment using a three-

stage model.

1. The Group’s management first reviews the

expected cash flows for the loan receivables from

associated companies and joint ventures together

with the associated company investments and

regularly assesses whether the credit risk related

to the receivables has increased significantly

after they were initially recorded. If the credit risk

associated with a receivable is deemed to be low

or if the credit risk has not significantly increased

after it was initially recorded, the receivable is

included in Stage 1 and the impairment is measured

based on an estimate of the probability of credit

losses occurring within 12 months.

2. If it is discovered that the credit risk concerning a

loan receivable has increased significantly, the loan

receivables are transferred to Stage 2, in which

case the associated likelihood of loss is assessed

over the entire lifetime. In this case, the credit

loss is recorded for the entire lifetime of the loan

receivable and calculated by comparing future

estimated cash flows for the entire lifetime with

contractual cash flows. At closing date, the balance

sheet included no loan receivables included in

Stage 2.

3. If loan receivables are found to be impaired as a

result of a credit risk, they are transferred to Stage 3.

Cash and cash equivalents

Cash and cash equivalents consist of cash, current bank

deposits as well as other current liquid investments with

a maturity not exceeding three months. Bank overdrafts

are included in current liabilities in the balance sheet.

Non-current assets held for sale

Non-current assets are classified as held for sale if their

carrying amount will be recovered principally through a

sale transaction rather than through continuing use and

a sale is considered highly probable. They are measured

at the lower of their carrying amount and fair value less

costs to sell. An impairment loss is recognised for any

initial or subsequent write-down of the asset to fair value

less costs to sell. A gain is recognised for any subse-

quent increases in fair value less costs to sell of an asset,

but not in excess of any cumulative impairment loss

previously recognised. A gain or loss not previously rec-

ognised by the date of the sale of the noncurrent asset

is recognised at the date of derecognition. Non-current

assets are not depreciated or amortised while they are

classified as held for sale. Interest and other expenses

attributable to the liabilities related to non-current as-

sets classified as held for sale continue to be recognised.

Non-current assets classified as held for sale are

presented separately from the other assets in the bal-

ance sheet. The liabilities related to non-current assets

classified as held for sale are presented separately from

other liabilities in the balance sheet.

Hybrid bonds

The hybrid bonds (equity loans) do not have maturi-

ty dates at which the holder of the loan can demand

repayment of the loan. The hybrid bonds are unsecured

and subordinated to the Company’s other debt instru-

ments but senior to other equity instruments. However,

the hybrid bonds do not confer shareholders’ rights to

bondholders.

Financial liabilities measured at amortised cost

Financial liabilities measured at amortised cost are

initially recognised at fair value. Transaction costs have

been included in the original carrying amount of financial

liabilities. Interest is recognised in the income statement

over the maturity of the loan using the effective inter-

est method. Financial liabilities are recognised under

non-current and current liabilities and they can be inter-

est-bearing or non-interest-bearing.

The liability for repaying the principal and inter-

est on company loans is transferred to the buyer of

the apartment at apartment assignment. Regardless

of whether the project is completed or not, but not yet

assigned to the buyer, the principal and interest for the

share of liabilities is presented in full in SRV’s consoli-

dated balance sheet, calculated until the due date of the

loan. Interest and principal are removed from the table

only when control is assigned.

Inventories

The costing of raw materials and consumables is

measured using weighted average cost method. The

balance sheet item “Work in progress” comprises the

cost of construction work and plot for uncompleted

construction projects not yet expensed. The acquisition

costs included in the Work in progress are raw materials,

direct cost of labour, other direct costs, indirect costs of

purchase and construction as well as borrowing costs in

certain cases. In SRV’s developer-contracted housing

Part of Financial Statements

projects, part of interest expenses on borrowing is cap-

italised during the construction period in current assets

in accordance with the Group’s capitalization rate. Dur-

ing the reporting period, SRV changed its capitalisation

practice such that, with respect to developer-contract-

ed housing projects, interest expenses on borrowing are

capitalized primarily using the project-specific financing

cost. If the proportion of project-specific financing is not

significant, the Group’s capitalisation rate is used in cap-

italising interest expenses. The significance of project

financing obtained for developer-contracted housing

projects has grown during the reporting period and, in

addition, the cost of borrowing is currently significantly

lower than the Group’s average interest rate, so the new

practice will, in the company’s view, result in a more

correct capitalisation of interest expenses. In the com-

parison year, the Group’s general financing was mainly

used for developer-contracted housing projects, and as

a result the revision of the capitalization practice would

not, in the company’s view, have a substantial impact

on the comparison periods presented in the financial

statements.

The balance sheet item “Land areas and plot-own-

ing companies” comprises costs of development stage

projects. The costs that are considered to increase the

value of land areas and plot-owning companies are cap-

italised. The balance sheet item “Shares in completed

housing corporations and real-estate companies”

comprises unsold completed projects. The balance

sheet item “Advance payments” comprises advance

payments in connection with the inventories. The bal-

ance sheet item “Other inventories” comprises share

capitals from projects of which the decision to start

construction has not yet been made and the property

bought for resale.

Inventories are valued at the lower of cost and net

realisable value. In ordinary business, net realisable

value is the estimated selling price which is obtainable,

less the estimated costs incurred in bringing the product

to its present condition and selling expenses. The net

realisable value of land areas and plot-owning compa-

nies is based on their expected use. The net realisable

value of land areas and plot-owning companies part of

the net realisable value of the entire project. Land areas

and plot-owning companies are impaired only if it is

forecast that the project as a whole will result in a loss.

If it is expected that a land area or plot-owning company

will be realised by sale, the net realisable value is based

on the estimated market price. The net realisable value

of work in progress and completed housing corpora-

tions and real-estate companies is based on their selling

price at the expected time of sale. Rental costs remitted

to an external party can be activated to book value for

the asset assigned to rent; e.g. the rental agency's fees.

Sales and marketing costs are not activated costs. In

preparing the asset, the activated rental costs should be

entered as expenditure along with the average duration

of the rental agreements. The margin generated from

rental services sold by the associated company and joint

venture should be eliminated in relation to the ownership

share.

Expenses arising from construction plans for plots

managed mainly by SRV and classified as current assets

are deemed eligible for activation when they can be

reliably to have a positive impact on the value of the plot

or project.

These expenses can be capitalised before a deci-

sion is made on the launch of construction.

Income taxes

Tax expense in the income statement comprises current

taxes and deferred taxes. Current tax is calculated

based on the taxable income for the financial period us-

ing the statutory tax rate that is in force in each country

at the balance sheet date (and local tax legislation). Tax-

es are recognised in the income statement, other than

those related to items of other comprehensive income or

items directly recognised as equity.

Taxes are adjusted for any taxes for previous peri-

ods. Deferred tax assets or liabilities are recognised on

temporary differences arising between the tax bases

of assets and liabilities and their carrying amounts in

the consolidated financial statements. The deferred tax

asset is recognised for unused losses and all tempo-

rary differences. Deferred taxes are not recognised in

connection with investments made in subsidiaries when

the Group can control the timing of the reversal of the

temporary difference, and the temporary difference will

probably not be reversed in the foreseeable future. A tax

asset is recognised to the extent when it is probable that

the asset can be utilised against future taxable income. If

a Group company has made a loss in the immediate past,

then, of the taxable loss, an imputed tax asset is recog-

nised only up to the amount where the company has suf-

ficient taxable temporary differences or other convincing

evidence of the ability to utilise the taxable loss.

Employee benefits

Pension liabilities

Group companies have various pension plans in accord-

ance with the local regulations and practices of each

country of operation. Pension plans are funded through

contributions paid to insurance companies based on

paid salaries and wages. The Group has only defined

contribution plans. The payments in connection with

Group’s defined contribution plans are recognised in the

income statement in the period which they relate to.

Share-based payment

The Group applies IFRS 2 Share-based Payment

standard on its share-based incentive schemes. Share-

based incentive scheme share settled transactions are

valued at fair value by using the share price at the time

of granting and paid in cash are valued at fair value in

every interim and annual closing. Changes in value are

recognised in the income statement over their effective

period. The share-based payments of the Group are

cash or share settled transactions.

Provisions

A provision is recognised when the company has a

legal or constructive obligation as a result of a past

event, the payment obligation is probable and the

amount of obligation can be reliably estimated. If com-

pensation can be received from a third party for a part

of the obligation, the compensation is recognised as a

separate item when it is virtually certain that the com-

pensation will be received. A provision is recognised

for a loss-making contract when the costs required to

Part of Financial Statements

incentive scheme share settled transactions are valued

at fair value by using the share price at the time of

granting and paid in cash are valued at fair value in every

interim and annual closing. Changes in value are recog-

nised in the income statement over their effective peri-

od. The share-based payments of the Group are cash or

share settled transactions.

Provisions

A provision is recognised when the company has a

legal or constructive obligation as a result of a past

event, the payment obligation is probable and the

amount of obligation can be reliably estimated. If com-

pensation can be received from a third party for a part

of the obligation, the compensation is recognised as a

separate item when it is virtually certain that the com-

pensation will be received. A provision is recognised

for a loss-making contract when the costs required to

meet the obligations exceed the benefits received from

the contract.

SRV and its subsidiaries are reengaged in several

legal proceedings which relate to ordinary business or to

other processes. The result of these legal proceedings

and processes is difficult to predict. In case of litigation,

a provision is recognised in the financial statements ac-

cording to the mentioned accounting policies when there

is a legal or constructive obligation against a third-party,

a payment obligation is probable and the amount of an

obligation can be reliably estimated.

Warranty provisions comprise the costs resulting

from the repair of completed projects if the warranty

period is still in effect at the balance sheet date. The

amount of provision is based on prior experience of the

materialisation of warranty expenses. It is expected that

warranty provisions are used during within two years

from the completion of the project.

The level of the construction industry’s 10-year

warranty provision is based on index-adjusted histori-

cal information or the estimated total costs of certain

individual projects. It is expected that a 10-year provision

will be used over the ten years following the completion

of the project.

Dividends

The dividend pay-out proposed by the Board of Direc-

tors to the Annual General Meeting is recognised in the

financial statements when the company’s shareholders

have approved the relevant resolution at the Annual

General Meeting.

1 SEGMENT INFORMATION

Segment information has been presented in accordance with IFRS 8 and following the accounting principles of the

consolidated financial statements and the Group’s management and organisational structure.

Pricing of transactions between segments takes place at current market prices. The assets and liabilities of seg-

ments are business items which the segments use in their operations or which on a reasonable basis can be allocated

to the segments. Unallocated items include income tax and financial items as well as items common to the entire

Group.

Operating segments

SRV Group has the following operating segments:

Construction

The Construction covers all of SRV’s construction activities, including the capital and plots required for

developer-contracted housing production. It is SRV’s intention to develop, build and sell these plots to a faster sched-

ule than those we report on in the Investments segment. Construction encompasses housing construction, business

construction, technical units and procurement as well as internal services in Finland and Russia. Construction em-

ploys approximately 800 people, i.e. the most of SRV’s personnel.

Investments

The Investments segment focuses on the management and realisation of the Group’s real estate investments, the

creation and ownership of new joint investment structures, and the operation of selected properties. Investments

encompasses both complete and incomplete sites in which the company is a long-term investor. Plots that SRV will

develop itself, and whose expected profits will be generated through development and longer-term ownership, are

also reported on under Investments.

Other operations and eliminations

Other operations and eliminations include the group functions of the parent company, SRV Group Plc, and the

Project Development Unit’s property and project development activities. Group eliminations are also included in this

unit. development activities. Group eliminations are also included in this unit. Deferred tax assets and liabilities are

allocated in full to Other operations and eliminations.

Operating segment information

Segment information is reported in a manner consistent with internal reporting to the Chief Operating Decision Mak-

er (CODM, as per IFRS 8). The CODM is the Group President & CEO, who is assisted decision-making by the Corpo-

rate Executive Team. Internal management reporting is consistent with segment reporting.

In the financial year 2022, the Group had no significant customers under the IFRS 8 definition in the Construc-

tion operating segment. In 2021, there was one customer which accounted for approximately 11% of the Group’s

revenue.

2022

EUR 1,000 Construction Investments

Other

operations

and

eliminations Total

Revenue

Revenue recognition at a point in time 48,394 1,743 0 50,138

Revenue recognition over time 691,720 1,979 0 693,699

Other revenue 6,185 6,207 13,849 26,241

Total 746,300 9,930 13,849 770,078

Revenue, external 745,700 9,821 14,557 770,078

Revenue, internal 600 108 -708 0

Total 746,300 9,930 13,849 770,078

Included in operating profit:

Depreciations and write-downs, excluding Right-of-use assets -1,121 -65,015 -259 -66,395

Depreciations and write-downs, Right-of-use asset -2,650 -26 -1,106 -3,782

Operating profit 23,256 -109,310 9,667 -76,388

Segment's assets

Shares in associated and join venture companies 2,119 0 0 2,120

Inventories total, excluding Right-of-use asset 159,781 3,058 4 162,843

Land areas and plot-owning companies

72,330 3,093 0 75,423

Work in progress 79,624 -35 0 79,589

Shares in completed housing

Corporations and real estate companies 4,795 0 0 4,795

Other inventories 3,032 0 4 3,036

Loan receivables from associated companies and joint ventures 5 0 0 5

Right-of-use asset 76,780 25 7,153 83,958

Other assets 148,399 10,374 40,805 199,577

Total 387,079 13,457 47,962 448,498

Segment's liabilities, excluding Lease Liabilities 219,734 45,844 -55,251 210,326

Segment's liabilities, Lease Liabilities 84,127 22 7,837 91,986

Total 303,861 45,866 -47,415 302,313

Invested capital

At the end of period 212,422 10,873 48,704 271,998

Return on investment, % 11.5 -118.3 -10.1

Order backlog

838,764 - - 838,764

Business construction 684,017

Housing construction 154,747

The Group order backlog consists of the Construction business. The unrecognised margin corresponding to the holding is no longer included in the

order backlog comparison figures. Capital employed and order backlog are unaudited.

After the impairments to land areas and plot assets, the total value of SRV’s holdings in Russia is EUR 3 098 thousand euros.

Part of Financial Statements

2021

EUR 1,000 Construction Construction

Other

operations

and

eliminations Total

Revenue

Revenue recognition at a point in time 161,846 3,152 0 164,998

Revenue recognition over time 752,149 2,581 0 754,730

Other revenue 16,155 1,063 -4,392 12,826

Total 930,150 6,797 -4,392 932,554

Revenue, external 926,195 6,707 -347 932,554

Revenue, internal 3,955 90 -4,044 0

Total 930,150 6,797 -4,392 932,554

Included in operating profit:

Depriciations and write-downs, excluding Right-of-use asset -1,546 -29 -444 -2,019

Depriciations and write-downs, Right-of-use asset -3,106 -71 -1,123 -4,300

Operating profit 14,112 -11,551 -4,258 -1,697

Segment's assets

Shares in associated and join venture companies 3,099 48,820 0 51,919

Inventories total, excluding Right-of-use asset 178,084 50,596 -1,329 227,351

Land areas and plot-owning companies 65,559 48,174 0 113,733

Work in progres 105,432 0 -1,332 104,100

Shares in completed housing

corporations and real estate companies 2,642 2,416 0 5,058

Other inventories 4,451 6 3 4,460

Loan receivables from accociated companies and joint ventures 0 40,490 0 40,490

Right-of-use asset 72,600 1,507 8,152 82,259

Other assets 200,540 29,787 53,979 284,306

Total 454,324 171,199 60,802 686,325

Segment's liabilities, excluding Right-of-use asset 314,246 148,424 -30,417 432,253

Segment's liabilities, Right-of-use asset 78,623 1,652 8,739 89,014

Total 392,870 150,076 -21,679 521,267

Invested capital

At the end of period 195,792 167,261 39,982 403,035

Return on investment, % 5.1 -16.4 -0.6

Order backlog

872,277 - - 872,277

-Business construction 508,292

-Housing construction 363,985

The Group order backlog consists of the Construction business. The unrecognised margin corresponding to the holding is no longer included in the

order backlog comparison figures. Capital employed and order backlog are unaudited.

2 ACQUISITIONS AND DISPOSALS

The company did not sell or acquire any operations during financial year.

3 SALES REVENUE FROM CUSTOMER CONTRACTS

EUR 1,000 2022 2021

Revenue

770,078 932,554

Attributable to

Revenue recognition at a point in time 50,138 164,998

Revenue recognition over time 694,805 755,281

Other revenue 25,135 12,275

Total 770,078 932,554

A breakdown of revenue by segment is reported in Note 1 Segment information.

Sales revenue for the following SRV project types is recognised at a point in time:

Developer-contracted residential project and commercial project.

Sales revenue for the following SRV project types is recognised over time:

Fixed-price contract, project management contract, turnkey contract (overall responsibility for the construc-

tion), alliance contract, residential development project, commercial development project and shopping centre

management.

EUR 1,000 2022 2021

Assets and liabilities based on customer contracts:

The Group’s trade receivables and trade payables are mainly based on customer contracts. The Group’s balance

sheet includes the gross amount due related to customer contracts and other short-term advance payments.

Gross amount due based on customer contracts 10,929 8,090

Advance payments related to customer contracts 46,223 73,606

Part of Financial Statements

EUR 1,000 2022 2021

Sales revenue recognised related to liabilities based on customer contracts

Sales revenue recognised that was included in contract-based liabilities at the beginning of the period 73,606 86,014

Sales revenue recognised for performance obligations fulfilled in earlier periods 8,090 13,011

Customer contract performance obligations and significant judgment-based solutions

The Group’s most common project types are: project management contract, turnkey contract (overall responsibility

for the construction), alliance contract, fixed-price contract, lifecycle project, residential development project, com-

mercial development project, developer-contracted residential project and commercial project.

In SRV’s contractor agreements and development projects, the management tasks and structural engineering

work of a construction or renovation project management contact concerning a property owned by the customer

have typically been agreed with the customer. Contract projects may include a number of different work stages and

tasks. These mainly, however, form a single integrated entity that is handled as one performance obligation.

In developer-contracted projects, buyers of apartments may be offered a parking space or a removal service. In

that case, the parking space and removal service are considered to be separate performance obligations. Typically,

these are handed over and recognised as revenue at the same time as the apartment itself. Any possible considera-

tion exemptions are equivalent to discounts and these are taken into account as an adjustment to the selling price.

The Group’s contract projects include variable considerations resulting, for example, from penalties or from

undershooting or overshooting the target price. Group management monitors and assesses variable considerations

at the end of each reporting period. The transaction price used in revenue recognition is based on the most likely

estimate. Of the estimated amount of variable consideration, only that portion is included in the transaction price and

revenue only recognised up to an amount such that it is highly likely that no significant reversal will have to be made

to the amount of accrued recognised sales revenue.

Development and developer-contracted projects also include variable considerations that may result, for ex-

ample, from delay penalties and lease liabilities. Recognition of revenue is deferred for the estimated rental liability

and this estimated share of project revenue is recognised as an advance received. Rental security deposits reduce

project-related advances received. Uncertainties associated with signed lease agreements are taken into account in

recognition of revenue.

Assets recognised as revenue over time are controlled by the customer, and the revenue and expenses of these

customer projects are recognised as revenue and expenses based on percentage of completion, when the outcome

of the project can be reliably estimated. Percentage of completion is determined by calculating for each project the

share of expenses accrued by the balance sheet date relative to the total expenses estimated for each project. The

amount corresponding to the percentage of completion is recognised as revenue. When it is probable that total costs

necessary to complete a project will exceed total revenue obtained from the project, the expected loss is recognised

immediately as an expense. If the expenses and recorded profits arising from a customer project exceed the amount

of progress billings, the difference is disclosed in the balance sheet item “trade and other receivables”. If expenses

and recorded profits arising from a customer project are less than the amount of progress billings, the difference is

disclosed in the balance sheet items “trade and other payables”. Tables of payments are used in customer billing, and

terms of payment for contracts typical for the industry are agreed on.

Customer projects recognised as revenue at a point in time are recognised after control of the asset has been

transferred and at the earliest after the completion of the project. The share of revenue and expenses corresponding

to the percentage of sale at the time of completion is recognised as revenue for the projects.

Development and developer-contracted projects may include a separate financing component. A significant fi-

nancing component may arise in factoring projects in which the factoring costs are charged from the client. On aver-

age, the construction time in Group factoring and developer contracting projects is less than two years, in which case

the average financing period is less than a year. In these, the Group will apply the “practical expedient” for periods of

less than a year as set out in IFRS 15.63. The Group also has projects with an average financing period of more than

one year. In such projects, the treatment procedure for a substantial financing component is applied and the item is

recognised as a reduction in revenue and an adjustment of interest income on financial items.

Customer project warranty provisions comprise the costs resulting from the repair of completed projects if the

warranty period is still in effect at the balance sheet date. A warranty provision is recognised at the time of the pro-

ject handover, and the amount of provision is based on prior experience of the materialisation of warranty expenses.

It is expected that warranty provisions will be used during the two years following the completion of the project. The

level of the construction industry’s 10-year warranty provision is based on index-adjusted historical information or

the estimated total costs of certain individual projects. It is expected that a 10-year provision will be used over the ten

years following the completion of the project.

The plots of development projects are recognised as revenue over time. The timing of the revenue recognition of

plots is always assessed on a case-by-case basis, however.

EUR 1,000

Transaction price allocated to the remaining

performance obligations of customer contracts Within 1 year Within 2 years Within 3 years Within 4 years

51% 34% 15% 0%

The aggregate amount of the transaction price allocated

to long-term customer project contracts that are partly or

completely unfulfilled 752,181 387,017 254,381 110,783 0

In practice, the table reflects the amount of order backlog sold and its recognition as revenue in future years.

Assets from obtaining or fulfilling customer contracts

Sales commissions may be associated with projects recognised as revenue over time. Expenses arising from ob-

taining these contracts are capitalised in project costs and recognised as an expense over the term of the contract.

During the reporting period and in the comparison period, the Group did not have any related assets.

Part of Financial Statements

4 OTHER OPERATING INCOME

EUR 1,000 2022 2021

Equipment and intangible assets 276 1,120

Rental income 244 904

Other income 69 1,493

Total 589 3,517

5 OTHER OPERATING EXPENSES

EUR 1,000 2022 2021

Equipment and intangible assets 46 0

Rental expenses 231 -68

Voluntary indirect personnel expenses 1,635 1,602

Car and travel expenses 747 534

Entertainment and marketing 1,162 905

Communications and IT 3,484 3,321

Other external services 1,638 1,241

Other fixed expenses 3,328 3,186

Total operating expenses 12,271 10,721

Income and expenses on currency derivatives 0 124

Total 12,271 10,845

Auditing fees

EUR 1,000 2022 2021

Audit 302 357

Auditors' statements 0 2

Tax services 0 0

Other services 364 64

Total 666 423

PricewaterhouseCoopers Oy has provided non-audit services to the entities of SRV Group in total of 364 thousand

euros during the financial year 2022 (EUR 66 thousand). The Finnish Patent and Registration Office Auditor Over-

sight has granted to PricewaterhouseCoopers Oy upon its request an exemption from the maximum amount of fees

for non-audit services referred to in Chapter 5, section 4 of the Finnish Auditing Act (1141/2015).

6 DEPRECIATION AND IMPAIRMENTS

EUR 1,000 2022 2021

Depreciation, excluding Right-of-use asset

Intangible assets

Other intangible assets 229 394

Property, plant and equipment

Buildings and structures 3 3

Machinery and equipment 1,086 1,021

Other tangible assets 48 101

1,365 1,519

Depreciation, Right-of-use asset

Land areas 1,748 2,268

Buildings and structures 1,361 1,393

Machinery and equipment 673 639

3,782 4,300

Depreciations 5,147 5,818

Impairments

65,030 500

Impairments in 2021 include EUR 0.5 million impairment loss of REDI shopping center related earn-out.

Impairments in 2022 include

EUR 1,000

Impairments of Russia holdings 45,851

Impairment of Fennovoima 13,319

Impairment of Tampere Arena project 2,396

Sale of holdings of Okhta Mall shopping centre -4,332

Translation difference of Okhta Mall shopping centre 7,796

Total 65,030

Holdings in Russia and Fennovoima

SRV has decided to exit its businesses and holdings in Russia on an accelerated schedule due to Russia’s war against

Ukraine. The company is a co-investor in three Russian shopping centre projects through its associated companies.

In addition, SRV owns plots in Russia. SRV has worked towards this goal by means such as negotiating on the sale of

assets in Russia. These negotiations have not led to results so far.

SRV has written down the balance sheet values of practically all of its shopping centres and other holdings in

Russia and its holding in Fennovoima. Impairments in the Investments segment amounted to EUR -133.7 million, of

Part of Financial Statements

7 EMPLOYEE-BENEFIT EXPENSES

EUR 1,000 2022 2021

Wages and salaries

60,931 57,787

Pension expenses - defined contribution plans

10,253 9,957

Share-based incentive scheme 790 1,210

Other indirect personnel expenses 2,367 2,613

Total 74,342 71,567

Information on management’s compensation as well as employee benefits is disclosed in Section Related party transactions.

SRV Group has only defined contribution plans in connection with the pensions.

Average number of personnel 2022 2021

Construction 816 803

Investments 71 100

Other operations and eliminations 61 55

Total 948 959

which EUR -92.0 million impacted on operating profit and EUR -41.7 million on financial expenses. After the write-

downs and change in the exchange rate of the rouble, the total value of SRV’s holdings in Russia is EUR 3.0 million.

Shopping centres have been consolidated using the equity method. Their balance sheet value is compared to

their cash flow statement value in order to test for potential impairment. SRV's investments in shopping centres con-

sist of equity investments in associated companies and loans granted to them. Furthermore, the companies that own

the shopping centres have preferred debt with local banks.

The calculation parameters are essential for the final result of the valuation calculation. The key parameters

are inflation, growth in consumer demand, forecasts of the trend in rental income and the weighted average cost of

capital, which correlates with the local risk-free interest level. The values of the calculation parameters have changed

significantly after Russia invaded Ukraine. Expected inflation has risen significantly and the forecast for consumer

demand has weakened considerably. The Central Bank of Russia has raised the key interest rate substantially, which

in turn strongly increases the weighted average cost of capital. In the prevailing exceptional circumstances, the esti-

mation of the used parameters involves extremely high uncertainty, and the situation is not expected to be rectified

in the near future. Using the available sources of information, the company has sought to establish an overview of the

parameters that is as accurate as possible. On the basis of the calculations, the discounted operational cash flows

of the shopping centres, adjusted by the amount of working capital, do not exceed the value of the preferred debts

of the centre in question and thus the asset items and their related loan receivables have been valued at zero. In the

2021 annual accounts, Okhta Mall was valued at EUR 69.3 million and Pearl Plaza at EUR 20.0 million. 4Daily had

already been valued at zero earlier.

The valuation of plots owned in Russia has been based on SRV’s strategy of developing and building on plots,

and thus the need to recognise any impairments of these plots has been assessed through project calculations. In

these changed circumstances, SRV no longer plans to develop and build on plots or leaseholds in Russia; instead,

impairment testing will be performed by comparing the value of the plot or leasehold against its probable selling

price. The assumed selling prices and sellability of plots have weakened substantially after the war began, and in the

current exceptional situation the assessment of selling prices involves extremely high uncertainty. In accordance

with the assessment that has been carried out, the plots have been valued at their assumed selling price of EUR 3.0

million, while in the 2021 annual accounts they were valued at EUR 47 million.

On 4 February 2022, SRV announced that it will sell its holding in Fennovoima to RAOS Voima Oy, subject to ap-

proval by the Ministry of Economic Affairs and Employment. The uncertainty surrounding the granting of the permit

and the risk of the interruption of the nuclear power plant project have risen significantly due to Russia’s war against

Ukraine. Due to these reasons, SRV’s holding in Fennovoima – valued at EUR 13.3 million in the annual financial state-

ments dated 31 December 2021 – was written off in its entirety at the end of the first quarter. SRV still has an EUR 18.7

million investment commitment in the nuclear power plant project, which is subject to significant uncertainty after

Fennovoima announced that it had terminated the plant delivery agreement with the RAOS Project on 2 May 2022

and cancelled its building permit application for the Hanhikivi 1 nuclear power plant on 24 May 2022. On 8 August

2022, SRV announced that the completion of the set of conditional agreements signed on 4 February 2022 between

SRV and RAOS Voima Oy, which would have led to SRV’s exit from its ownership in Fennovoima, will not be realised.

Part of Financial Statements

Share-based incentive schemes

Average number of personnel

2017

2019

2021

2022

Total

Grant year Set targets Employment Set targets Set targets Set targets

Reward principle

Original exercise price - 1.62 - - -

Dividend- and right issue-adjusted

exercise price - 0.55 - - -

Subscrition period 2017-2019 2021-2026 2021–2023 2021–2022 2022–2024

Total amount 25,000 25,000 110,000 110,000 110,000

Share incentives 1.1.202§ 849 25,000 0 0 25,849

Additions 0 110,000 110,000 220,000

Share incentives used 552 0 0 0 552

Share incentives returned or expired 298 0 0 0 298

Share incentives 31.12.2021 0 25,000 110,000 110,000 245,000

Share incentives 1.1.2022 0 25,000 110,000 110,000 0 245,000

Additions 0 0 0 0 110,000 110,000

Share incentives used 0 0 6,875 24,063 0 30,938

Share incentives returned or expired 0 0 0 13,750 0 13,750

Share incentives 31.12.2022 0 25,000 103,125 72,187 110,000 310,312

Expenses recognised in group 2021,

EUR 1,000* -213 -103 -235 -658 0 -1,210

Expenses recognised in group 2022,

EUR 1,000* 0 -44 -310 -118 -317 -789

Shares granted based on incentives,

2021 552 0 0 0 0 552

Shares granted based on incentives,

2022 0 0 0 0 0 0

* The share incentive figures have been adjusted for the share issue and the reverse share split in July 2022.

In February 2017, the Board of Directors decided on a new share-based incentive scheme for the Group's key personnel. The scheme covers 40

key SRV personnel. The scheme will be in effect from 2017 to 2019 and rewards are tied to the Group's result and specific business indicators. The

potential reward will be paid partly as shares in the company and partly in cash. The proportion to be paid in cash will cover taxes and tax-related

costs arising from the reward. A maximum of 1,000,000 SRV Group shares will be granted to key employees. The original cost of the share-based

incentive scheme is calculated by using the share price EUR 5.20, which makes the IFRS-cost for the scheme EUR 5.5 million with the addition of

the cash payments. Actual cost is based on how the company will achieve the financial targets and the market value of the share. If a key person’s

employment or service ends during said restriction period, he/she must return the shares rewarded under the scheme to the company. On 6 July

2020, SRV announced that it had assigned a total of 67,950 treasury shares to the members of the company’s share-based incentive plan.

The Board of Directors of SRV Group Plc has made the decision for a share-based incentive scheme for the President & CEO for 2019–2026. Under

the scheme, Saku Sipola has been given 600,000 acquisition rights, entitling him to acquire the number of SRV Group Plc’s shares corresponding

to the acquisition rights at EUR 1.62 per share. Under the scheme, new shares or treasury shares in the possession of the company can be issued.

The company’s Board of Directors will make a decision on the manner of implementation separately each time. Under the terms of the scheme, the

acquired shares are subject to a transfer restriction, which is valid for two years from the acquisition of the shares. The acquisition rights can be

exercised in three two-year long exercise periods, the first of which begins on 1 March 2021 and ends on 28 February 2023, the second begins on 1

September 2022 and ends on 31 August 2024, and the third begins on 1 September 2024 and ends on 31 August 2026. During each exercise period,

the acquisition rights holder is entitled to exercise 200,000 acquisition rights. The total recognised IFRS cost of the incentive scheme 2019–2026

is approximately EUR 0.3 million. On 17 December 2020, the Board of Directors of SRV Group Plc decided on changes to the share-based incentive

scheme of President and CEO Saku Sipola. The changes concern the number of acquisition rights, the subscription price of the acquisition rights

and the periods during which the acquisition rights can be exercised. The purpose of the changes is to ensure that the incentive effect of the scheme

remains at its previous level by taking into account the changes in the number of the company’s shares caused by SRV’s 2020 rights issues. The

incentive effect of the scheme is based on the value increase of SRV Group Plc’s shares. As a result of the changes, Sipola has the right to acquire

1,000,000 shares at a subscription price of EUR 0.55 per share. The basis for determining the subscription price is the volume-weighted average

price of SRV’s share on Nasdaq Helsinki in continuous trading from 1 August to 30 November 2020. After the changes, the acquisition rights can be

exercised in the following three periods: the first begins on 1 March 2022 and ends on 28 February 2023, the second begins on 1 March 2023 and

ends on 31 August 2024, and the third begins on 1 September 2024 and ends on 31 August 2026. During the first and second exercise periods, the

acquisition rights holder is entitled to exercise 300,000 acquisition rights and during the third period 400,000 acquisition rights.

On 29 of March 2021, the Board of Directors resolved to establish a new share-based Long-Term incentive plan. The Long-Term Incentive Plan

arrangement has three three-year performance periods, which begin yearly during 2021-2023. The calendar years are 2021–2023, 2022–2024

and 2023–2025. The Board of Directors of the Company will resolve on the plan’s key persons and performance criteria at the beginning of each

performance period. Approximately 30 key persons belong to the first performance period 2021-2023, including President and CEO Saku Sipola and

members of the Company’s management.

The potential reward from the performance period 2021–2023 will be based on the Group’s Total Shareholder Return (TSR) in relation to a

separately selected reference group, the level of the company’s indebtedness and the increase in share price. The rewards to be paid on the basis

of the performance period 2021-2023 correspond to the value of an approximate maximum total of 4,400,000 SRV Group Plc’s shares (gross

amount, of which the proportion to be paid as withholding tax will be deducted). The potential reward will be paid in 2024 in SRV Group Plc’s shares

(net amount) and the company will account for the withholding tax to tax authorities on behalf of the key persons. The potential share reward to the

President and CEO is subject to transfer restriction, which requires the shares to be held for two years from their reward.

On 29 of March 2021, the Board of Directors of SRV Group Plc resolved on a two-year One-off Long-Term Incentive Plan to enable the prolonging

of the Long-Term Incentive Plan performance period to three years. The One-off Long-Term Incentive Plan arrangement has one two-year

performance period, calendar years 2021–2022. Approximately 30 key persons belong to the target group of the plan, including President and CEO

Saku Sipola and members of the Company’s management.

The potential reward from the performance period 2021-2022 will be based on the Group’s operative cash flow and the Group’s Total Shareholder

Return (TSR) during the two-year period. The rewards to be paid on the basis of the performance period 2021-2022 correspond to the value of

an approximate maximum total of 4,400,000 SRV Group Plc’s shares (gross amount, of which the proportion to be paid as withholding tax will be

deducted). The potential reward will be paid in 2023 in SRV Group Plc’s shares (net amount) and the company will account for the withholding tax to

tax authorities on behalf of the key persons. The potential share reward to the President and CEO is subject to transfer restriction, which requires the

shares to be held for two years from their reward.

No new decisions have been made in 2022 for Long-Term Incentive Plans. Year 2022 consists of numbers from the performance period 2022–2024

plan which was decided in 2021. The share incentive figures have been adjusted for the share issue and the reverse share split in July 2022 for all

plans in the table.

Part of Financial Statements

8 RESEARCH AND DEVELOPMENT EXPENSES

SRV Group does not have any actual research and development expenses. The Group has business-related pro-

ject development costs, and the treatment of these is described in the section of the accounting policies covering

inventories.

9 FINANCIAL INCOME AND EXPENSES

EUR 1,000 2022 2021

Financial income

Interest income from associated and joint venture companies 233 1,830

Interest income from the other receivables 1,119 1,219

Foreign exchange gains 1,504 1,939

Financial assests and liabilities at fair value 9,978 0

Other financial income

39,909 25

Total 52,743 5,013

Financial expenses, excluding Lease Liabilities

Expenses for financial liabilities at amortised cost -4,647 -10,499

Financial assets and liabilities at fair value 0 3,074

Other financial expenses

-46,261 -11,020

Financial expenses, Lease Liabilities

Interests expences -4,529 -5,218

Total -55,437 -23,662

Financial income and expenses, total -2,694 -18,649

EUR 34.3 million of the hybrid and convertible bonds with a nominal value of EUR 57.1 million were recognised in the balance sheet as equity

instruments and the difference between their nominal value and carrying amount, EUR 22.8 million, was recognised as other financial income.

Other financial expenses include impairment losses of EUR 41.7 million (1.5) on financial assets of associated companies and joint ventures.

10 INCOME TAXES

Income taxes in the income statement

EUR 1,000 2022 2021

Current taxes 234 754

Taxes for previous financial years -16 0

Other taxes 82 0

Deferred taxes, Right-of-use asset -265 -8

Deferred taxes 6,545 -1,212

Total 6,580 -467

Effective income tax rate -8.3% 2.3%

The income taxes in the consolidated income statement differ from the statutory income tax rate in Finland

(20 percent in 2022 and in 2021) as follows:

Income tax reconciliation

EUR 1,000 2022 2021

Profit before taxes -79,081 -20,346

Income taxes at statutory tax rate in Finland -15,816 -4,069

Differing tax rates of foreign subsidiaries -2 -25

Tax exempt income -2,764 -23

Non-deductible expenses 25,197 2,940

Unrecognised and reversed tax losses -19 865

Taxes for previous financial years -16 0

Share of profits of associated and joint venture companies 0 -103

Adjustments 0 -52

Income taxes 6,580 -467

Income taxes recognised in other items in comprehensive income were not material.

The income tax credited directly to equity

EUR 1,000 2022 2021

Hybrid Bond interests tax 300 640

Total 300 640

Part of Financial Statements

11 EARNINGS PER SHARE

EUR 1,000 2022 2021

Profit/loss for the year attributable to equity holders of the parent -85,662 -19,879

Profit/loss for the year attributable to Hybrid Bond investors, tax-adjusted -1,921 -1,648

Profit/loss for the calculate the earnings per share -87,582 -21,527

EUR 1,000 2022 2021

Weighted average number of shares outstanding, (1,000 ) 13,231 9,398

Weighted average number of shares outstanding (diluted), (1,000) 13,231 9,398

Earnings per share attributable to equity holders of the parent company, eur per share * -6.62 -2.29

Earnings per share attributable to equity holders of the parent company (diluted), eur per share * -6.62 -2.29

* Per-share key figures have been calculated and the figures for the comparison period have been restated using the new total number of shares

following the reverse share split (reverse split), in accordance with the decision made by the EGM on 30 May 2022. Stock adjustment ratio is 1.4339

12 DIVIDEND PER SHARE

Dividends were not paid in 2022 and 2021.

A proposal for the Annual General Meeting on 27 March 2023 is that dividends from the year 2022 will not be paid.

13 PROPERTY, PLANT AND EQUIPMENT

Tangible assets, excluding Right-of-use asset

2022

EUR 1,000

Land and

water areas

Buildings and

structures

Machinery and

equipment

Other tangible

assets Total

Historical cost, 1 Jan. 41 10,273 19,860 859 31,034

Increases 0 0 2,880 90 2,970

Decreases 0 0 -1,254 -66 -1,320

Transfer 0 0 0 0 0

Foreign exchange differences 0 0 50 6 57

Historical cost, 31 Dec. 41 10,273 21,536 890 32,740

EUR 1,000

Land and

water areas

Buildings and

structures

Machinery and

equipment

Other tangible

assets Total

Accumulated depreciation and impairments, 1 Jan. 0 -10,112 -16,647 -684 -27,443

Depreciation 0 -3 -1,086 -48 -1,136

Accumulated depreciations of decreases 0 0 0 0 0

Writedowns 0 0 0 0 0

Foreign exchange differences 0 0 -38 -6 -44

Transfer 0 0 0 0 0

Accumulated depreciation and impairments, 31 Dec. 0 -10,115 -17,771 -738 -28,624

Carrying amount, 31 Dec. 41 158 3,765 151 4,114

Tangible assets, Right-of-use asset

2022

EUR 1,000

Land and

water areas

Buildings and

structures

Machinery and

equipment

Other tangible

assets Total

Historical cost, 1 Jan. 0 12,100 3,733 0 15,834

Increases 0 426 1058 0 1484

Decreases 0 0 -151 0 -151

Transfer 0 0 0 0 0

Foreign exchange differences 0 9 7 0 16

Historical cost, 31 Dec. 0 12,535 4,648 0 17,183

Accumulated depreciation and impairments, 1 Jan. 0 -4,051 -2,244 0 -6,295

Depreciation 0 -1,361 -673 0 -2,034

Accumulated depreciations of decreases 0 0 0 0 0

Writedowns 0 0 0 0 0

Foreign exchange differences 0 0 0 0 0

Transfer 0 -8 -4 0 -12

Accumulated depreciation and impairments, 31 Dec. 0 -5,420 -2,921 0 -8,341

Carrying amount, 31 Dec. 0 7,114 1,727 0 8,841

Part of Financial Statements

Tangible assets, excluding Right-of-use asset

2021

EUR 1,000

Land and

water areas

Buildings and

structures

Machinery and

equipment

Other tangible

assets Total

Historical cost, 1 Jan. 41 10,274 18,838 893 30,046

Increases 0 4 1,586 12 1,602

Decreases 0 -4 -592 -53 -650

Transfer 0 0 0 0 0

Foreign exchange differences 0 0 28 8 36

Historical cost, 31 Dec. 41 10,273 19,860 859 31,034

Accumulated depreciation and impairments, 1 Jan. 0 -10,109 -15,601 -579 -26,289

Depreciation 0 -3 -1,021 -101 -1,125

Accumulated depreciations of decreases 0 0 0 0 0

Foreign exchange differences 0 0 -24 -4 -29

Transfer 0 0 0 0 0

Accumulated depreciation and impairments, 31 Dec. 0 -10,112 -16,647 -684 -27,443

Carrying amount, 31 Dec. 41 161 3,213 175 3,590

Tangible assets, Right-of-use asset

2021

EUR 1,000

Land and

water areas

Buildings and

structures

Machinery and

equipment

Other tangible

assets Total

Historical cost, 1 Jan. 0 11,890 3,197 0 15,087

Increases 0 358 576 0 934

Decreases 0 -154 -45 0 -199

Transfer 0 0 0 0 0

Foreign exchange differences 0 6 6 0 12

Historical cost, 31 Dec. 0 12,100 3,733 0 15,834

EUR 1,000

Land and

water areas

Buildings and

structures

Machinery and

equipment

Other tangible

assets Total

Accumulated depreciation and impairments, 1 Jan. 0 -2,786 -1,603 0 -4,388

Depreciation 0 -1,393 -639 0 -2,032

Accumulated depreciations of decreases 0 134 0 0 134

Writedowns 0 0 0 0 0

Foreign exchange differences 0 0 0 0 0

Transfer 0 -6 -3 0 -9

Accumulated depreciation and impairments, 31 Dec. 0 -4,051 -2,244 0 -6,295

Carrying amount, 31 Dec. 0 8,049 1,489 0 9,538

14 GOODWILL AND OTHER INTANGIBLE ASSETS

2022

EUR 1,000

Intangible

rights Goodwill

Other

capitalised

expenditure Total

Historical cost, 1 Jan. 907 1,734 4,147 6,788

Foreign exchange differences 0 0 1 1

Increases 0 0 76 76

Decreases 0 0 -17 -17

Historical cost, 31 Dec. 907 1,734 4,206 6,848,

Accumulated amortisation, 1 Jan. -649 0 -3,536 -4,186

Amortisation 0 0 -229 -229

Accumulated depreciations of decreases -8 0 7 -1

Accumulated amortisation, 31 Dec. -658 0 -3759 -4,416

Carrying amount, 31 Dec. 250 1,734 449 2,433

Part of Financial Statements

2021

EUR 1,000

Intangible

rights Goodwill

Other

capitalised

expenditure Total

Historical cost, 1 Jan. 907 1,734 4,094 6,735

Foreign exchange differences 0 0 0 0

Increases 0 0 56 56

Decreases 0 0 -4 -4

Historical cost, 31 Dec. 907 1,734 4,147 6,788

Accumulated amortisation, 1 Jan. -615 0 -3,176 -3,791

Amortisation 0 0 -394 -394

Accumulated depreciations of decreases -34 0 33 -1

Accumulated amortisation, 31 Dec. -650 0 3,536 4,186

Carrying amount, 31 Dec. 257 1,734 610 2,601

SRV Group’s goodwill is allocated to operating segments:

Goodwill

EUR 1,000 2022 2021

Construction 1,734 1,734

Total 1,734 1,734

Impairment test

The recoverable amount of cash-generating units is based on value-in-use calculation model in which cash flows are

based on base year figures and on business units' growing cash flows for the next five years' strategy period.

In the impairment test of goodwill performed in December 2022, a growth factor of 2 per cent was used and it

does not exceed the actual long-term growth of the business. The main factors in the impairment test are the oper-

ating profit margin and the discount factor. The discount factor used is the latest weighted average cost of capital

(WACC) before taxes. In the value-in-use calculation a WACC of 10.0 per cent was used. The calculation parameters

of WACC are risk-free interest rate, market risk and company specific premium, industry specific beta, the cost of

liabilities and equity ratio.

The recoverable amount exceeded the carrying amounts significantly in all cash-generating units with goodwill.

According to the impairment tests there was no need for impairments.

Sensitivity analysis

The performed sensitivity analysis does not cause impairments for cash-generating units when using moderate

changes in default factors.

Part of Financial Statements

15 FINANCIAL ASSETS AND LIABILITIES BY MEASUREMENT CATEGORIES

2022

EUR 1,000

Financial assets

and liabilities at fair value

through profit and loss

Financial assets and

liabilities measured at

amortised cost

Carrying amounts by

balance sheet item Fair value Note

Non-current financial asset

Long-term interest bearing receivables 0 14,243 14,243 14,243 18

Derivative instruments 4,075 0 4,075 4,075 31

Other financial assets 7,752 0 7,7 52 7,752 17

Current financial assets

Accounts receivables 0 28,675 28,675 28,675 22.29

Other interest bearing receivables 0 7 7 7 22

Loan receivables from associated companies and joint ventures 0 5 5 5 21

Cash and cash equivalents 0 45,309 45,309 45,309 23

Total 11,827 88,239 100,065 100,065

Non-current financial liabilities

Interest bearing liabilities 0 23,828 23,828 23,828 27

Derivative instruments 0 0 0 0 28

Other non-current liabilities 0 6,252 6,252 6,252 28

Current financial liabilities

Interest bearing liabilities 0 10,000 10,000 10,000 27

Accounts payables 0 43,026 43,026 43,026 28

Total 0 83,107 83,107 83,107

Part of Financial Statements

2021

EUR 1,000

Financial assets

and liabilities at fair value

through profit and loss

Financial assets and

liabilities measured at

amortised cost

Carrying amounts by

balance sheet item Fair value Note

Non-current financial asset

Long-term interest bearing receivables 0 9,664 9,664 9,664 18

Long-term receivables 0 0 0 0 17.18

Loan receivables from associated companies and joint ventures 0 40,490 40,490 40,490 21

Other financial assets 24,728 0 24,728 24,728 17

Current financial assets

Accounts receivables 0 57,946 57,946 57,946 22.29

Other interest bearing receivables 0 124 124 124 22

Derivative instruments 0 0 0 0 31

Cash and cash equivalents 0 68,009 68,009 68,009 23

Total 24,728 176,233 200,961 200,961

Non-current financial liabilities

Interest bearing liabilities 0 128,771 128,771 111,054 27

Derivative instruments 5,903 0 5,903 5,903 28.31

Other non-current liabilities 0 8,860 8,860 8,860 28

Current financial liabilities

Interest bearing liabilities 0 20,192 20,192 20,192 27

Accounts payables 0 59,698 59,698 59,698 28

Total 5,903 217,521 223,424 205,707

Carrying amounts do not differ substantially from Fair value, excluding bonds.

The fair values of the bonds are based on 31.12.2022 market prices.

Counterparty price quotations are used to determine the fair value of derivatives. These price quotations are

based on predominant market circumstances and generally accepted pricing models.

Part of Financial Statements

16 SHARES IN ASSOCIATED AND JOINT VENTURE COMPANIES

Shares in associated and joint venture companies

EUR 1,000 2022 2021

Shares in associated companies 985 30,551

Shares in joint venture companies 1,134 21,368

Total 2,119 51,919

Shares in associated and joint venture companies are investments into construction projects together with other

investors. SRV has written down the balance sheet values of shares in associated and joint venture companies in

Russia.

SRV has not any substantial associated company or joint venture company in the financial year 2022. In 2021,

Jupiter Realty 1 B.V. was still categorised as a substantial associated company (2021 45%) and Netherland Pearl Pla-

za as a substantial joint venture company (2022 and 2021 50%).

In November 2022, SRV and its Finnish co-investors sold their holdings in Jupiter Realty 1 B.V.

Share of profits of associated and joint venture companies

2022 2021

Associated companies -4,289 -855

Joint venture companies 3,029 2,082

Total -1,260 1,227

Other comprehensive income

2022 2021

Associated companies 0 1,616

Joint venture companies 7,207 1,296

Total 7,207 2,912

17 OTHER FINANCIAL ASSETS AND LONG-TERM RECEIVABLES

Other financial assets may include quoted or unquoted shares. The valuation methods and the fair value hierarchy of

the available-for-sale financial assests are presented in note 29.

EUR 1,000 2022 2021

Opening balance at 1 Jan. 24,728 22,720

Increases 100 3,093

Changes in fair value -17,067 -500

Decreases -10 -585

Closing balance, 31 Dec. 7,751 24,728

Non-current 7,751 24,728

Current 0 0

Unquoted shares 7,751 24,728

Long-term receivables 0 0

18 RECEIVABLES

EUR 1,000

Carrying

amount

2022

Carrying

amount

2021

Non-current receivables

Long-term receivables 9,280 0

Long-term interest bearing receivables 4,963 9,664

Total 14,243 9,664

Part of Financial Statements

19 DEFERRED TAX ASSETS AND LIABILITIES

2022

EUR 1,000 1 Jan.

Recognised

in the

income

statement

Recog-

nised in

compre-

hensive

income

Recog-

nised in

equity

Acquisi-

tions and

disposals

of busi-

ness

Ex-

change

rate dif-

ference 31 Dec.

Deferred tax assets

Tax losses 37,238 -2,021 35,217

Financial assets at fair value through profit and loss 151 0 151

Accrual differences in developer contracting 37 -174 -136

Undeductible depreciations in taxation 1,001 104 1,105

Other temporary differences 2,472 -3,382 427 -1484

Right-of-use assets deferred tax receivables 1,349 257 1,606

Total 42,249 -5,217 0 0 0 427 37,458

Deferred tax liabilities

Borrowing costs 879 68 947

Cumulative depreciation differences -33 0 -33

Other temporary differences 160 65 225

Tax liabilities 10 930 940

Total 1,006 1,063 0 0 0 0 1,139

Net deferred taxes 41,243 -6,280 0 0 0 427 36,319

2021

EUR 1,000 1 Jan.

Recognised

in the

income

statement

Recog-

nised in

compre-

hensive

income

Recog-

nised in

equity

Acquisi-

tions and

disposals

of busi-

ness

Ex-

change

rate dif-

ference 31 Dec.

Deferred tax assets

Tax results 35,915 1,324 37,238

Financial assets at fair value through profit and loss 151 0 151

Accrual differences in developer contracting 1,060 -1,023 37

Undeductible depreciations in taxation 1,049 -48 1,001

Other temporary differences 2,069 -342 640 104 2,472

Right-of-use assets deferred tax receivables 1,341 8 1,349

Total 41,585 -81 0 640 0 104 42,248

Deferred tax liabilities

Borrowing costs 997 -118 879

Cumulative depreciation differences 94 -127 -33

Other temporary differences 1,261 -1,057 -45 160

Total 2,352 -1,302 0 0 0 -45 1,005

Net deferred taxes 39,233 1,221 0 640 0 149 41,243

On 31 December 2022, The Group's accumulated losses for which no deferred tax assets have been recognised were

EUR 5,299 thousand (EUR 12,581 thousand) because realisation of the tax benefit is not considered probable.

Deferred tax assets have been recognised for right-of-use EUR 1,606 thousand (EUR 1,349 thousand).

The deferred tax liability has been recognised in the consolidated financial statements in connection with the

undistributed profits of subsidiaries whose income tax is determined on the basis of profit distribution. The deferred

tax liability has not been recognised when the group is able to control the timing of profit distribution and the distribu-

tion is not probable at the balance sheet date.

As at 31 December 2022, the amount recognised as deferred tax assets in the SRV balance sheet was EUR 37.5

million. The majority of SRV's deferred tax assets relate to tax loss carry forwards. Tax losses have arisen from the

transfer of ownership of REDI shopping centre and the loss-making contracts of REDI shopping centre, REDI Light-

house and Tampere Deck and Arena. Deferred tax assets are recognised only up to the amount where the company

has sufficient taxable temporary differences or other convincing evidence of the ability to utilise the taxable losses.

The losses have arisen for individual identifiable reasons, which are not expected to repeat. Based on the taxable

income forecasts the Company has drawn up, SRV is able to utilise the losses fully by 2028. Assumptions about

the generation of future taxable income include the management's estimates of the future cash flows including the

amount of future net sales, operating costs and finance costs. SRV's ability to generate taxable income depends

also on factors related to the general economy, finance, competitiveness and regulations beyond SRV's control. If a

group company has made a loss in the immediate past, then a deferred tax asset from tax losses is recognised only

up to the amount where SRV has sufficient taxable temporary differences or other convincing evidence of the ability

to utilise the taxable loss. As at 31 December 2022, the deferred tax assets recognised on the balance sheet are

also subject to the losses being assessed in taxation so that they may be generally deducted from the future taxable

income of SRV.

Thus these estimates and assumptions are subject to risk and uncertainty, and it is possible that changes in cir-

cumstances will alter expectations, which may impact the amount of deferred tax assets and deferred tax liabilities

recognised on the balance sheet and the amount of deferred tax assets not yet recognised from the tax losses and

the amount of temporary differences. The tax loss carry-forwards will generally expire within 10 years from the date

of their creation. The majority of SRV's tax loss carry-forwards will expire in 2028–2029. If the taxable income of SRV

would be lower than expected and not all deferred tax assets could be utilised, the value of the deferred tax assets in

the company's balance sheet would be reduced.

Part of Financial Statements

20 INVENTORIES

EUR 1,000 2022 2021

Inventories excluding Right-of-use assets 162,842 227,350

Work in progress 79,588 104,100

Land areas and plot-owning companies 75,423 113,733

Shares in completed housing corporations and real estate companies 4,795, 5,058

Advance payments 897 465

Other inventories 2,139 3,994

Inventories, Right-of-use asset 75,119 72,723

Inventories, total 237,961 300,074

With respect to developer-contracted housing projects, interest expenses on borrowing are capitalised primarily

using the project-specific financing cost. If the proportion of project-specific financing is not significant, the Group’s

capitalisation rate is used in capitalising interest expenses. Capitalisation rate used was 5.0% on average. During

the financial year capitalised interests the amount of which was EUR 129 thousand (2021: EUR 930 thousand)was

included in the value of work in progress.

The carrying amount of completed inventories used as security for loans in 2022 amounted to EUR 3,373 thou-

sand (EUR 2,603 thousand), the carrying amount of inventories under construction in 2022 was EUR 79,093 thou-

sand (EUR 108,249 thousand),

During the financial year 2022 there was no impairment losses in shares in completed housing companies (EUR

0). Impairments to plot assets in Russia totalled EUR 37.1 million and in Estonia EUR 6.5 million (impairments in 2021

totalled EUR 5,586 thousand).

21 LOAN RECEIVABLES FROM ASSOCIATED COMPANIES AND JOINT VENTURES

EUR 1,000 2022 2021

Long term loan receivables from associated companies, 1 Jan. 40,490 44,281

Increases 0 2,206

Decreases 0 0

Writedown, level 3

-40,490 -6,512

Foreign exchange difference 0 515

Total 0 40,490

Long term loan receivables from joint ventures, 1 Jan. 0 0

Increases 0 0

Decreases 0 0

Total 0 0

Short term loan receivables from joint ventures, 1 Jan. 0 1,601

Increases 0 0

Decreases 0 -1,601

Total 0 0

Loan receivables from associatd companies and joint ventures have been valuated at zero in 2022.

22 ACCOUNTS RECEIVABLES AND OTHER RECEIVABLES

EUR 1,000

Kirjanpitoarvo

2022

Kirjanpitoarvo

2021

Accounts receivables 28,675 57,946

Loan receivables 7 124

Gross amount due from customers related to construction contracts 10,929 8,090

Accrued income and prepaid expenses 46,810 65,779

Other receivables 1,833 1,490

Total 88,254 133,428

Interest bearing receivables 7 124

Non-interest bearing receivables 88,247 133,304

Total 88,254 133,428

Carrying amount does not substantially differ from fair value. In 2022, the Group’s accounts receivables were on av-

erage EUR 43 million. The accounts receivables are non-interest bearing and they are normally about 21 days of age.

More information about credit risks in note 29.

23 CASH AND CASH EQUIVALENTS

EUR 1,000 2022 2021

Cash and cash equivalents 45,309 68,009

Total 45,309 68,009

24 ASSETS HELD FOR SALE

SRV Group had no assets held for sale at year-end 2022 or 2021.

Part of Financial Statements

25 EQUITY

EUR 1,000

Number of

1 Jan. 2021 262,166,692

Purchase of treasury shares -11,912

Transfer of treasury shares 0

The directed share issue 0

Rights issue 0

31 Dec. 2021 262,154,780

1 Jan. 2022 262,154,780

Purchase of treasury shares -1,112,480

The directed share issue 68,220,000

Rights issue 348,056,400

Total 677,318,700

After reverse split, 4 July 2022 16,932,965

Transfer of treasury shares 4,845

31 Dec. 2022 16,937,810

Shares and share capital

On 31 December 2022, the total number of SRV Group Plc's shares outstanding was 16,937,810 and the share capital

amounted to EUR 3,062,520. The share has no nominal value and the total number of shares is 16,982,343.

At the end of December there were 44,533 own shares in Group´s possession.

Directed share issue for holders of hybrid bonds

On 31 May 2022, based on an authorisation granted by the Extraordinary General Meeting, SRV Group Plc’s Board of

Directors passed a resolution on a directed share issue in which SRV would offer, in deviation from the pre-emptive

right of shareholders, up to 69,120,000 new shares to the holders of SRV’s hybrid bonds. The subscription period for

the directed issue commenced on 7 June 2022 and a total of 68,220,000 new shares were registered with the Trade

to be used for the payment was a maximum of 45 per cent of the nominal value of the hybrid bonds. The remaining

55 per cent of the nominal value of the hybrid bonds was written down entirely as part of the arrangement. If a holder

of a hybrid bond did not use 45 per cent of the nominal value of their hybrid bonds to subscribe for all, part or any

of the offer shares allocated to them, the entire remaining nominal value of such hybrid bond was written down at

the same time as the remaining 55 per cent of the nominal value of the hybrid bonds used for subscription and any

unpaid interest was written down in accordance with the amended and approved terms and conditions of the written

procedures ended 23 May 2022 concerning the hybrid bonds. The written-down value is recognised in the company’s

equity as a change in retained earnings. The direct transaction costs of the share issue are recognised directly as an

adjustment to equity.

Rights issue

SRV executed rights issue during the review period resulting in 348,056,400 new shares. The company earned a

total of EUR 34.8 million gross equity which was recorded in the company’s Invested Free Equity Fund. The Offer

Shares were registered with the Trade Register maintained by the Finnish Patent and Registration Office on 28 June

2022.The direct transaction costs of the rights issue are recognised directly as an adjustment to equity. SRV exe-

cuted a reverse share split on 4 July 2022 to the effect that each forty shares of the company was merged into one

share. Share-specific figures have been adjusted accordingly.

Invested free equity fund

Invested free equity fund consists of the net proceeds from the Offering of SRV Group Plc reduced by the cost relat-

ed to the share issue as well as received and cancelled SRV shares.

Translation difference

Translation difference comprises the differences of the translation of financial statetements of the foreign subsidiar-

ies to the functional currency of the parent company.

Hybrid bond

In June 2022, the terms and conditions of the EUR 45.0 million hybrid bonds the company issued on 22 March 2016

(with a principal of EUR 11.8 million) and the EUR 58.4 million hybrid bonds the company issued on 23 May 2019 (with

a principal of EUR 3.6 million) were amended in a written procedure so that 55 per cent of the principal of the notes

was written down and the remainder was converted into shares in a directed share issue with a subscription price of

EUR 0.10 per share. 98.3 per cent of the outstanding principal of the hybrid bonds issued on 22 March 2016 and 100

per cent of the outstanding principal of the hybrid bonds issued on 23 May 2019 were used to subscribe for shares in

the directed issue. The unconverted nominal value of the hybrid bonds was written down entirely.

In June, the company’s EUR 100 million senior unsecured callable fixed-rate notes (of which EUR 21.1 million

was outstanding on 31 Dec. 2022) and EUR 75 million senior unsecured callable fixed-rate notes (of which EUR 36.0

million was outstanding on 31 Dec. 2022) were converted into hybrid and convertible bonds by means of a written

procedure. Conversion into convertible bonds was executed by amending the terms and conditions of the notes with

the inclusion of a special right to convert the notes into shares pursuant to the Companies Act if the company does

not redeem them before 30 June 2026. Hybrid bonds have an annual coupon rate of 4.875 per cent.

The hybrid bond has no maturity dates at which the holder of the loan can demand repayment of the loan. The

hybrid bond is unsecured and subordinated to other debt instruments. The hybrid bonds do not confer shareholders’

rights to bondholders.

Part of Financial Statements

26 PROVISIONS

2022

EUR 1,000

Warranty

provisions

10-year

warranty

Other

provisions for

construction

contracts

Other

provisions Total

1 Jan. 14,971 9,311 25 0 24,307

Currency exchange differences 28 0 0 0 28

Increase in provisions 5,560 225 17 0 5,802

Provisions used -9,524 -463 -21 0 -10,008

Reversals of unused provisions 0 0 0 0 0

31 Dec. 11,034 9,074 20 0 20,128

Non-current 5,824 6,352 20 0 12,196

Current 5,210 2,722 0 0 7,932

Total 11,034 9,074 20 0 20,128

2021

EUR 1,000

Warranty

provisions

10-year

warranty

Other

provisions for

construction

contracts

Other

provisions Total

1 Jan. 14,617 9,186 11 0 23,814

Currency exchange differences 0 0 0 0 0

Increase in provisions 5,587 824 33 0 6,444

Provisions used -5,233 -699 -19 0 -5,951

Reversals of unused provisions 0 0 0 0 0

31 Dec. 14,971 9,311 25 0 24,307

Non-current 6,505 6,518 25 0 13,048

Current 8,466 2,793 0 0 11,259

Total 14,971 9,311 25 0 24,307

Other provisions for construction contracts include warranty for potential disputes and other provisions for con-

struction contracts. The level of the construction industry’s 10-year warranty provision is based on index-adjusted

historical information or the estimated total costs of certain individual projects.

Part of Financial Statements

27 INTEREST-BEARING LIABILITIES

Interest-bearing liabilities, excluding lease liabilities

EUR 1,000

Carrying

amount

2022

Fair value

2022

Carrying

amount

2021

Fair value

2021

Non-current

Loans from financial institutions 1,845 1,845 1,896 1,896

Bonds 0 0 94,156 78,169

Housing corporation loans 7,401 7,401 18,137 18,137

Other debt 14,583 14,583 14,583 14,583

Total 23,828 23,828 128,771 112,785

Current

Loans from financial institutions 10,000 10,000 10,000 10,000

Commercial papers 0 0 0 0

Bonds 0 0 10,192 8,461

Housing corporation loans 0 0 0 0

Total 10,000 10,000 20,192 18,461

Carrying amounts do not differ substantially from Fair value, excluding bonds.

The fair values of the bonds are based on market price indications.

Interest-bearing lease liabilities

2022

EUR 1,000 Land-Areas

Buildings and

structures

Machinery and

equipment Others Total

Non-current 81,903 6,549 1,093 0 89,545

Current 488 1,228 726 0 2,442

Total 82,391 7,7 77 1,818 0 91,986

Interest-bearing lease liabilities

2021

EUR 1,000 Land-Areas

Buildings and

structures

Machinery and

equipment Others Total

Non-current 78,355 7,462 925 0 86,743

Current 466 1,158 649 0 2,272

Total 78,821 8,620 1,574 0 89,014

In addition to the above-mentioned lease liabilities, the Group has committed to enter into a lease agreement for

the two Keilaniemi plots when the City of Espoo transfers the management of the plots to new buyers and building

permits have been granted. By agreement, the transfer of management took place for the first plot on 31 December

2022, and for the second plot it will take place in 2023. The lease liability for the plots will be recognised in the con-

solidated balance sheet in accordance with IFRS 16 Leases when the lease agreement has been signed. Before the

transfer of management, the company will pay compensation to a plot fund for use of capital. Payment of the trans-

action price of the plots will be phased to years 2023–2026. Additional information on changes to interest bearing

liabilities can be found in 29 Financial risk management.

28 OTHER LIABILITIES

EUR 1,000

Kirjanpitoarvo

2022

Kirjanpitoarvo

2021

Non-current

Derivative liabilities 0 5,903

Other liabilities 6,252 8,860

Total 6,252 14,762

Current

Accounts payables 43,026 59,698

Advance payments related to construction contracts 46,223 73,606

Other advance payments 15 9,230

Other current liabilities 19,923 44,102

Accrued expenses and prepaid income 38,835 56,568

Total 148,022 243,205

Accrued expenses and prepaid income

Wages and salaries and related expenses 11,753 11,085

Interest and other financial liabilities 247 1,777

Periodisations of project expenses 23,917 43,044

Other 2,919 663

Total 38,835 56,568

Part of Financial Statements

29 FINANCIAL RISK MANAGEMENT

SRV Group is exposed to a number of financial risks in its business operations. The most significant financial risks

are related to interest rate-, liquidity- and credit risk. The management of the Group’s financial risks is centralised in

the Group’s finance department. The management of financial risks is implemented in accordance with the financial

policies approved by the Board of Directors. The financial policy is reviewed annually and updated as required to re-

flect changes in the marketplace. The objective of the Group’s financial risk management is to reduce the uncertainty

that changes in the financial markets cause for the Group’s result and financial position.

Interest-rate Risks

The cash flows and fair values of the Group’s interest-bearing debts and receivables are susceptible to changes in

interest rates. Interest rate risk is composed primarily of the short- and long-term loans connected with the financ-

ing of business operations. The Group’s financing is divided into general financing and project-specific financing.

Construction period financing is typically either refinanced, transferred to the buyer or paid off at the time of comple-

tion. The Group can assume long-term debt at both variable and fixed interest rates. The weighted average interest

rate of the entire loan portfolio (incl. interest rate derivatives) at 31 December 2022 was 6.6% (2021: 6.0%). Euribor is

primarily the reference rate of variable interest loans.

Interest rate risk is monitored and measured from the perspective of the income statement by means of gap

analysis. Interest rate risk is managed by adjusting the ratio of variable and fixed interest debt in the loan portfolio.

There were no fixed-interest loans at the closing date (2021: 78 %). Interest rate risk is also managed by interest

period selection or by derivatives. SRV Group Plc entered into two interest rate swap contracts totalling EUR 100

million in 2015. Swapping of interest started in July 2016 and both contracts mature in 2025. Interest rate derivatives

are used to hedge against changes in market interest rates, and changes in the fair value of interest rate derivatives

are recognised in financial income and expenses for the financial period during which they occur. The fair values for

derivatives correspond to the prices that the Group would be required to pay or would receive if it were to exit the

derivative contracts. Counterparty price quotations are used to determine the fair value of interest rate derivatives.

These quotations are based on prevailing market circumstances and generally accepted pricing models. Hedge ac-

counting has not been applied to the interest rate derivatives used. The effect on profit and loss of the fair valuation

of interest rate derivatives would have been EUR 2.4 million (EUR 3.5 million) in the event of a one percentage point

increase in interest rates. If interest rates decrease by one percentage point, the effect on profit and loss would have

been EUR -2.5 million (EUR -3.6 million). A general change in the level of interest rates also has a direct impact on the

investment decisions of the Group’s customers and thereby cash flows from Group operating activities.

The accompanying sensitivity analysis under IFRS 7 contains variable interest rate financial liabilities and

receivables in which there is an interest rate fixing during the next 12 months, in accordance with the closing balance

sheet. The sensitivity analysis also includes interest rate swap contracts.

2022 2021

Interest risk

position

Average

interest rate

Average maturity,

months

Interest rate sensitivity EUR

Financial expenses and income

Interest risk

position

Interest rate

Sensitivity, EUR

EUR 1,000 -1 % +1 % -1 % +1 %

Debt, floating rate -19,246 5.57% 4.8 132 -184 -30,033 0

-81

Derivatives 100,000 1.15% 3.4 -729 729 100,000 -729 729

Fair value change of derivatives 100,000 -2,468 2,395 100,000 -3,616 3 448

Total -3,066 2,940 -4,345 4 096

Effect of one percentage point in market interest rates on the Group's interest expenses and income during the next 12 months. All other variables assumed unchanged.

If floating market rates are negative, a decrease in the market rate does not have an effect on interest amount, as under the contracts the reference rate is at least 0%.

Part of Financial Statements

Currency Risks

The Group is exposed to currency risks related to the international business operations’ commercial cash flows, fi-

nancing of projects during construction, currency-denominated equity, and investments in foreign project companies

and associated companies. The most significant currency to pose a currency risk in 2022 was the Russian ruble. The

foreign subsidiaries are, in accordance with the Group’s financial policies, responsible for identifying and reporting

currency exchange risks connected with currency-denominated cash flows to the finance department. The objective

of currency risk management is to minimise the effect of currency rate fluctuations on the Group’s business earnings

and equity. Derivatives or currency loans can be used as hedging instruments in accordance with Group policy to

manage currency risk. The currency risk has decreased substantially due to the write-downs of the Russian assets.

On the closing date, the Group had no foreign exchange option contracts for hedging against currency risk (2021:

EUR 0.0 million).

Currency risks are divided into transaction risk and translation risk. Transaction risk relates to foreign curren-

cy-denominated business (sales and purchases) and financing (loans) cash flows. Translation risk relates to invest-

ments in foreign subsidiaries, associated companies and project companies in which the functional currency is not

the euro, and whose imputed effects are reflected in translation differences in the Group’s consolidated equity. Cur-

rency risk is also present in project financing in Russia, as the value of project collateral can be affected by changes

in the value of the ruble. Declining project collateral value can lead to a need for additional collateral or re-negotiation

of loan terms and amounts.

Sensitivity to currency fluctuation

The ruble-denominated currency position that poses a translation risk was EUR 3 million (2021: EUR 73.2 million).

The ruble-denominated currency position that poses transaction risks was EUR 2.6 million (2021: 38.2 million). The

currency risk position consisted of short-term currency option which is presented below in the table. The currency

risk has decreased substantially due to the write-downs of the Russian assets.The weakening rouble led to trans-

lation differences of EUR -4.0 million (EUR 1.8 million 1-12/2021), which impacted both shareholders' equity and the

comprehensive result for the period. In addition to currency exchange rate gains with no cash flow impact amounting

to EUR 1.5 (1.9) million in financial income and expenses, the Group also entered similarly derived currency exchange

rate gains of EUR 7.3 (1.6) million with no cash flow impact under the profit accounted for by associated companies,

which are due primarily to the weaker rouble exchange rate. The total impact on equity before the recognition of

impairment was EUR 8.8 million.

Ruble exchange risk position

EUR million 31.12.2022 31.12.2021

Translation risk position

Group Companies equity 3.0 13.8

Joint ventures and associated companies equity 0.0 59.4

Total 3.0 73.2

Transcation risk position

Group Companies euro loan receivable/debt 2.6 8.1

Joint ventures and associated companies euro loan receivables/debt 0.0 30.1

Total 2.6 38.2

Ruble exchange risk position total 5.6 111.4

Short-term foreign exchange option- and forward contracts capital 0.0 0.0

Liquidity and Refinancing risks

Liquidity and refinancing risk may have an impact on the Group’s result, cash flow and the implementation of

developer contracting projects if the Group is unable to secure sufficient financing for its operations. Group manage-

ment monitors the level of financing continuously and takes the necessary measures to ensure sufficient financing.

The Group’s main sources of financing are project-specific loans and a committed revolving credit facility.

Financing for developer contracting projects is secured by the sales process, project loans and use of the compa-

ny’s general financial reserves. As a rule, the Group mainly starts projects whose financing has been secured. Where

appropriate, the sale of individual receivables may be used to manage liquidity within the scope of the available limit.

Receivables are transferred with risks and rewards and are not subject to repurchase obligations and are therefore

derecognised in full. The arrangement carries the risk that the counterparty to the arrangement may terminate the

receivable arrangement unilaterally, whereby receivables can no longer be sold.

SRV carried out the comprehensive restructuring of financing as planned in June during the first half of 2022

due to the impairments of assets in Russia and the holding in Fennovoima as a result of Russia’s war against Ukraine

and the related economic sanctions. These impairments had a substantial impact on SRV’s shareholders’ equity and

equity ratio, and restructuring sought to counteract the effects of these impairments by substantially strengthening

equity and reducing net interest-bearing debt.

Part of Financial Statements

The restructuring of financing in June consisted of the following measures:

(i) A rights issue of about EUR 34.8 million for the shareholders of the company. The issue was fully sub-

scribed.

(ii) The company’s EUR 100 million senior unsecured callable fixed-rate notes (of which EUR 21.1 million was

outstanding on 31 Dec. 2022) and EUR 75 million senior unsecured callable fixed-rate notes (of which EUR 36.0

million was outstanding on 31 Dec. 2022) were converted into hybrid and convertible bonds by means of a written

procedure. Conversion into convertible bonds was executed by amending the terms and conditions of the notes with

the inclusion of a special right to convert the notes into shares pursuant to the Companies Act if the company does

not redeem them before 30 June 2026. The notes were measured at fair value, which was 60 per cent of their nom-

inal value when the terms and conditions were amended. EUR 34.3 million of the hybrid and convertible bonds with

a nominal value of EUR 57.1 million were recognised in the balance sheet as equity instruments and the difference

between their nominal value and carrying amount, EUR 22.8 million, was recognised as other financial income. During

the written procedure on the amendment of the terms and conditions, the company made a voluntary tender offer to

the noteholders at a price of 60 per cent of the nominal value. In the tender offer, notes with a total nominal value of

EUR 42.7 million were purchased for EUR 25.6 million.

(iii) The terms and conditions of the EUR 45.0 million hybrid bonds the company issued on 22 March 2016 (with

an outstanding principal of EUR 11.8 million) and the EUR 58.4 million hybrid bonds the company issued on 23 May

2019 (with an outstanding principal of EUR 3.6 million) were amended in a written procedure so that 55 per cent of

the principal of the notes was written down and the remainder was converted to shares in a directed share issue with

a subscription price of EUR 0.10 per share. 98.3 per cent of the outstanding principal of the hybrid bonds issued on

22 March 2016 and 100 per cent of the outstanding principal of the hybrid bonds issued on 23 May 2019 were used

to subscribe for shares in the directed issue. The unconverted nominal value of the hybrid bonds was written down

entirely.

(iv) With the syndicate banks, the company agreed on the extension of its revolving credit facility and project

financing facility by 12 months and certain other amendments to the agreement on the revolving credit facility and

project financing facility.

At the end of the review period, EUR 10 million of the company’s EUR 30 million revolving credit facility was with-

drawn and EUR 20 million was unused. The commited amount of the company's revolving credit facility decreased

from EUR 40 million to EUR 30 milion in March as planned and agreed on the agreement. EUR 35.8 million of the

company’s EUR 40.0 million committed project financing facility was unused at the end of the review period. In addi-

tion, the company’s EUR 63.0 million non-committed project financing facility was entirely unused at the end of the

review period. As part of the aforementioned restructuring of financing, the due date of the revolving credit facility

and project financing facility was extended to April 2024.

In March 2022, the company made partial repayments of the aforementioned notes as planned to a total nom-

inal value of EUR 5.1 million. Both of the aforementioned notes were converted into hybrid and convertible bonds

by means of a written procedure in the restructuring of financing in June. Therefore, due to the change of terms to

hybrid, they are no longer presented as interest-bearing liabilities but as an item of equity.

The financial covenants of SRV’s financing agreements are equity ratio, gearing, minimum operating margin,

minimum cash, and certain other restrictions. The covenant levels of these financing agreements are determined

on the basis of the accounting principles in force when the loan agreements were signed. Recognition of income on

the basis of percentage of completion in developer contracting projects and the inclusion of capital loans into equity

are taken into consideration in the calculation of the equity ratio covenant. The loan agreements also contain some

other deviations from traditional covenant calculation methods. Minimum cash consists of cash and deposits held

in syndicated banks, from which account payables that are overdue by more than 10 days have been deducted. The

covenant levels of these financing agreements are determined according to each loan agreement and on the basis of

the accounting principles specified in the agreements, and there are cross-default terms in the agreements.

Of the covenants, equity ratio and gearing were reported quarterly and half-yearly during the financial year.

Minimum liquidity is reported according to the situation on the last day of each month. In the event of a violation of

the regularly reported covenants, the creditor has the right to demand immediate repayment of the debts. The cove-

nants and their levels at the closing date are presented in the capital structure management section of Note 29.

The maturity distribution below presents the contractual payment of the Group’s financial liabilities at the

closing date. Payments include interest payments and repayments of principal. The maturity table does not show

the estimated future payments of the hybrid bonds on equity terms presented in equity. Further information on the

hybrid bonds is given in Note 25 Equity and in the accounting principles of the financial statements.

At the end of the reporting period, the Group’s financing reserves totalled EUR 65.9 million (2021: EUR 100.1

million) and consisted of EUR 0.6 million (2021: EUR 2.1 million) in unwithdrawn project loans, an undrawn revolving

credit facility EUR 20.0 million (2021: EUR 30.0 million) and EUR 45.3 million (2021: EUR 68.0 million) in cash and

cash equivalents. At the balance sheet date, SRV's remaining purchase price receivables for developer-contract-

ed housing and commercial premises under construction in Finland amounted to EUR 0.35 million (2021: EUR 7,4

million), with the amount of financing for developer-contracted projects not withdrawn amounting to EUR 7.9 million

(2021: EUR 9.5 million). SRV estimates that EUR 7.8 million (2021: EUR 13.6 million) will be used for the completion of

developer-contracted projects. The sources of financing are described in table format under the maturity table.

Part of Financial Statements

Financial liabilities, excluding lease liabilities

2022 Maturity

EUR 1,000 Carrying amount Contractual liability

2023 2024 2025 2026 later

Bonds 0 0 0 0 0 0 0

Loans from financial institutions 11,845 13,714 11,392 2,322 0 0 0

Housing loans

7,401 11,961 256 333 371 407 10,593

Commercial Papers 0 0 0 0 0 0 0

Other liabilities 14,583 14,583 0 0 0 0 14,583

Other non-interest bearing liabilities 9,740 9,740 3,488 2,475 3,098 0 679

Derivative liabilities 0 0 0 0 0 0 0

Accounts payables 43,026 43,026 43,026 0 0 0 0

Total 86,595 93,024 58,162 5,131 3,470 407 25,854

Financial liabilities, excluding lease liabilities

2022 Maturity

EUR 1,000 Book value Carrying amount 2023 2024 2025 2026 later

Lease liabilities 91,986 220,851 7,033 6,773 6,103 6,008 194,934

Includes all contractual payments, e.g. interest and commitment fees.

The liability for payment of principal and interest of housing corporation loans is transferred to the buyer at the time of sale.

Loan and interest payment liability is noted for the full contractual amount until the completion of the property and thereafter in proportion of the sales rate.

Part of Financial Statements

Financial liabilities, excluding lease liabilities

2021 Maturity

EUR 1,000 Carrying amount Contractual liability

2023 2024 2025 2026 later

Bonds 104,348 124,099 16,078 15,480 14,903 77,638 0

Loans from financial institutions

11,896 13,481 11,103 2,378 0 0 0

Housing loans 18,137 23,023 309 300 508 964 20,942

Commercial Papers 0 0 0 0 0 0 0

Other liabilities 14,583 14,583 0 0 0 0 14,583

Derivative liabilities 11,529 11,529 2,561 5,381 0 2,775 813

Accounts payables 5,903 7,398 1,907 1,907 1,907 1,677 0

Investment commitment 59,698 59,698 59,698 0 0 0 0

Total 226,093 253,811 91,656 25,446 17,318 83,054 36,338

Financial liabilities, excluding lease liabilities

2021 Maturity

EUR 1,000 Book value Carrying amount 2023 2024 2025 2026 later

Lease liabilities 89,014 215,926 6,793 6,594 6,018 5,927 190,593

Includes all contractual payments, e.g. interest and commitment fees.

The liability for payment of principal and interest of housing corporation loans is transferred to the buyer at the time of sale.

Loan and interest payment liability is noted for the full contractual amount until the completion of the property and thereafter in proportion of the sales rate.

Credit risk is managed in accordance with credit policy principles. Project customers are mainly large, well-known and

financially sound companies. If no information is available on the customer’s solvency, a check is made of general trade

and credit information records, and collateral requested, if necessary. With regard to international business projects,

more detailed customer background checks are made if the customer is not already known. The creditworthiness of

home buyers is not checked, but the ownership of an apartment is not transferred to the customer until the purchase

price has been paid in full. In transactions made for unfinished apartments, the buyer has the option under the Housing

Transactions Act to cancel the transaction prior to the handover of the apartment, but damages are payable for the can-

cellation. Similarly, a construction company may cancel a transaction if the buyer fails to make the agreed payments.

Deposits and derivatives

The Group does not have any significant investment activities. Investments relate to daily cash management and are

mainly short-term bank deposits with the Group’s main banks. The Group Treasury unit is responsible for managing

Liquidity reserves

EUR 1,000 31.12.2022 31.12.2021

Committed credit facility

20,000 30,000

Undrawn housing loans and loans from financial institutions 563 2,074

Cash and cash equivalents 45,309 68,009

Total 65,871 100,083

The use of the company’s EUR 100 million credit facility includes certain limitations due to the level of interest coverage ratio financial covenant.

Credit risk

The Group is exposed to credit risk related to accounts receivable, amounts due from long-term project customers, asso-

ciated company and joint venture loan receivables, cash investments, and receivables based on derivative transactions.

Part of Financial Statements

investment and derivative instrument counterparty risks in accordance with the Group financing policy approved by the

Board of Directors. Derivatives are made for hedging purposes and the balance sheet receivables based on them are

small. Agreements made with counterparties to derivative contracts are based on the ISDA Convention. Under the terms

and conditions of arrangements, the net asset or liability position of an individual counterparty in the same currency is

considered should certain events (such as payment default) occur to be a liability and all arrangements related to it are

terminated. As SRV does not, at the closing date, have a legally enforceable right of set-off, these amounts have not been

deducted from the balance sheet. The credit risk associated with both deposits and derivatives is considered to be low.

Accounts receivable and amounts due based on customer projects

Business units are responsible for the credit risk related to amounts due and accounts receivable based on customer

projects, in accordance with the Group credit policy. Group credit policy defines the requirements for the credit deci-

sion process, terms of sale, and debt collection. The Group’s commercial counterparties are mainly listed companies

or major real estate or institutional investment companies. In the housing business, the counterparties are mainly pri-

vate individuals. In apartment sales, the customer gains control of the apartment when all of the purchase price items

have been paid. The same Group credit policy principles are applied to tenant selection as in commercial projects.

The Group applies the simplified approach for the recognition of expected credit losses, according to which

lifetime expected losses are recognised for all accounts receivable and contract-based assets. Overall, the company

has not had major material losses on these items due to the business model and customer profile mentioned above.

However, one business premises project under construction in Finland involves high credit loss risks related to trade

receivables: In the first quarter of 2022, SRV suspended the construction of the Torihotelli contract in Oulu due to

the payment difficulties of the client. On 27 June 2022, SRV filed an application to declare the client bankrupt. As a

result, the District Court of Oulu declared the company developing the hotel, Kiinteistö Oy Oulun Torihotelli, bankrupt

on 26 August 2022. The assets of the bankruptcy estate are being liquidated. Receivables in the Torihotelli contract

involve credit loss risks. At the end of December, SRV had about EUR 16.0 million in receivables due from Kiinteistö

Oy Oulun Torihotelli, secured by a mortgage on the property under construction and pledges on certain other assets.

The company has also initiated steps to liquidate its non-property collateral.

Competition for new orders in the construction industry is intense, which may affect the volume and profitability

of SRV’s new order backlog. Contracts concerning construction have significant value. The terms and conditions of

an agreement require the parties to achieve the agreed upon targets within a specified timetable and to adhere to the

agreed upon operating practices. In particular, execution of additional and alteration work may involve financial risks.

Contract receivables may involve additional and alteration work involving customer complaints or disputes concerning

the payment obligations of the customer. If an agreement cannot be reached on payment obligations during the final

financial review, the company may have to enter into legal proceedings against the customer. The outcomes of legal

proceedings involve uncertainties. It is also impossible to assess precisely the time required by court procedures in

dispute cases. For additional and alteration work in contracts recognised as revenue over time, only the portion likely to

be invoiced is recognised, in accordance with IFRS 15 Revenue from Contracts with Customers. Items subject to a sig-

nificant risk of impairment and which the company does not expect to receive are not taken into account in the contract

invoicing forecast.

Overdue accounts receivables

EUR 1,000 2022 2021

Undue accounts receivables 26,096 38,986

1–30 days past due 1,313 7,393

31–60 days past due 280 517

61–90 days past due 25 1,418

91–180 days past due 10 3,792

181–360 day past due 246 5,572

Over 361 days past due 1,246 267

Total 29,215 57,946

There were no past due receivables in other group financial assets.

Credit loss provisions are not included in accounts receivables, because SRV Group does not have any substan-

tial credit losses.

Loan receivables from associated companies and joint ventures

Loan receivables from associated companies and joint ventures are tested for impairment using a three-stage mod-

el. At the end of the reporting period, there were no loan receivables from associated companies and joint ventures.

1. Loans receivable from associated companies and joint ventures are assessed for impairment using a three-

stage model. Group management first examines the expected cash flows of loan receivables from associated

companies and joint ventures as a whole together with associated company investments and regularly

assesses whether the credit risk of the receivables has increased significantly since initial recognition. If the

credit risk of a receivable is considered to be low or its credit risk has not increased significantly since initial

recognition, the receivable is included in stage 1 and the impairment is calculated based on an assessment of

the probability of credit losses occurring within 12 months.

2. If it is considered that the credit risk associated with receivables has increased significantly, the receivables

are transferred to stage 2, in which case the probability of the loss associated with them is assessed over their

lifetime, and on this basis the estimated future cash flows are compared with contractual cash flows. In that

case, the expected credit losses on the loan receivable over its lifetime are recognised.

3. If loan receivables are found to be impaired due to credit risk, they are transferred to stage 3.

Part of Financial Statements

Long- and short-term loan receivables from associated companies and joint ventures

EUR 1,000 Stage 1 Stage 2 Stage 3 Total

31.12.2022

Long-term loan receivables 0 0 0 0

Short-term loan receivables 0 0 0 0

31.12.2021

Long-term loan receivables 40,490 0 0 40,490

Short-term loan receivables 0 0 0 0

Fair value hierarchy of financial assets and liabilities

Financial assets at fair value through profit or loss

On 31 December 2022, the Group had interest rate swaps recognised at fair value through profit or loss.

Derivative financial instruments at fair value through profit or loss

EUR 1,000 Level 1 Level 2 Level 3 Total

31.12.2022

Derivative financial assets 0 4,075 0 4,075

Derivative financial liabilities 0 0 0 0

31.12.2021

Derivative financial assets 0 0 0 0

Derivative financial liabilities 0 5,903 0 5,903

Other financial assets at fair value through profit or loss

EUR 1,000 Level 1 Level 2 Level 3 Total

31.12.2022

Unlisted shares 0 658 8,427 9,085

31.12.2021

Unlisted shares 0 628 24,200 24,728

Level 1 instruments are traded in active markets and their fair values are directly based on the market price.

The fair values of level 2 instruments are derived from market data. The fair values of level 3 instruments are not

based on observable market data but on amortised cost, quotations provided by brokers and market valuation

reports.

Unlisted shares and investments consist mainly of shares purchased for leisure facilities used by SRV’s employ-

ees (level 2) as well as shares in Voimaosakeyhtiö SF and investments in and related to real estate funds and projects

(level 3).

Assets recognised in level 3 consist mainly of SRV Voima’s investment in Voimaosakeyhtiö SF EUR 0 (2021: EUR

13.3 million) and Tampere Deck and Arena EUR 7.0 million(2021: EUR 9.2 million), in addition to including investments

in and related to real estate funds and projects.

The table below presents movements in level 3 instruments for 2022

EUR 1,000 Unquoted shares and holdings

Opening balance at 1.1.2022 24,100

Increases

Decreases -3

Gains and losses recognised in profit or loss -15,670

Closing balance, 31.12.2022 8,427

The table below presents movements in level 3 instruments for 2021

EUR 1,000 Unquoted shares and holdings

Opening balance at 1.1.202 22,114

Increases 3,071

Decreases -585

Gains and losses recognised in profit or loss -500

Closing balance, 31.12.2021 24,100

Part of Financial Statements

Capital risk management

Through effective capital structure management, the Group ensures that it is able to support to its businesses and

can grow shareholder value for investors. The Group does not have a public credit rating issued by a credit rating

agency. The capital structure of the Group is reviewed by the Board of Directors of SRV on a regular basis.

To maintain the capital structure, the Group can balance the payment of dividends as well as issue new shares

or hybrid bonds. Additionally, the Group can adjust its business operations and use of capital to maintain the capital

structure. The Group monitors its capital on the basis of consolidated equity ratio and gearing ratio. Total equity con-

sists of equity attributable to owners of the parent company and to non-controlling interests as well as a hybrid bond.

The Group’s loans are subject to covenants that are described in the section “Management of liquidity and

refinancing risks” (see above). These covenants are calculated in accordance with the terms and conditions of each

loan agreement, and are based on either FAS or IFRS figures. The table below describes the key covenants that must

be reported for the loan agreements that were in use by the Group at the end of the financial period 2022, and their

levels on 31 December 2022 and 31 December 2021. The covenant levels for all loan agreements were met on 31

December 2022.

Loan agreement covenants Covenant value 31.12.2022 31.12.2021

Percentage of completion equity ratio, RCF %

> 28% 48.2% 34.3%

Minimum liquidity ≥ 15 Meur at period end 36.4 58.7

Gearing %

≤ 100% -7. 5% 47.5%

EBIDTA

2, 3

≥ 15 meur 24.1 32.1

In accordance with terms of loan agreements, excluding impact of IFRS 16

At the beginning of December, the company agreed on a temporary change to the calculation of the minimum EBITDA covenant of the revolving

credit facility with the syndicate banks that granted the facility, effective until 30 June 2022.

Minimum EBITDA excluding the share of associated company results and before transaction costs and impairments.

30 OPERATING LEASES, COMMITMENTS AND CONTINGENT LIABILITIES

EUR 1,000 2022 2021

Collateral given for own liabilities

Real-estate mortgages given 9,246 20,033

Other commitments

Investment commitments given 19,586 19,666

Landarea commitments 7,973 28,947

The Group has guaranteed obligations of its subsidiaries. The total amount of these guarantees was EUR 223.1 million

(EUR 262.7 million).

The cost of rental agreements not included in lease liabilities

EUR 1,000 2022 2021

Cost related to short-term leases -22,470 -25,482

The cost of low-value assets -41 -51

Cost related to variable leases that are not includes in lease liabilities -7 7 5 -740

Total -23,287 -26,272

The cost of rental agreements not included in lease liabilities contains mainly costs related to site equipments (short-

term lease).

Cash flow of lease liabilities

EUR 1,000 2022 2021

Total -7,034 -8,749

Cash flow of lease liabilities is presented under the item ‘Interest paid and other expenses from financial costs’, and

the items ‘proceeds from loans and repayment of lease liabilities' under cash flow from financing activities, instead of

the item ‘cash paid to suppliers and employees’ under cash flow from operating activities.

Part of Financial Statements

31 FAIR AND NOMINAL VALUES OF DERIVATIVE INSTRUMENTS

EUR 1,000 2022 2021

Fair values of derivative instruments

Positive Negative Positive Negative

Foreign exchange forward contracts and options 0 0 0 0

Interest rate swap 4,075 0 0 5,903

Total 4,075 0 0 5,903

EUR 1,000

Nominal values of derivative instruments 2022 2021

Foreign exchange forward contracts and options 0 0

Interest rate swap 100,000 100,000

Total 100,000 100,000

The fair values of derivative instruments are based on the price quatations of the counterparties.

32 RECONCILIATION OF DEBTS REPORTED IN FINANCING ACTIVITIES:

Long term Short term

EUR 1,000

Interest-

bearing debt Hybrid bond

Interest-

bearing debt Total

Debt 31.12.20 368,445 15,360 17,362 401,167

Proceeds from loans 0 0 0 0

Repayment of loans -76,992 0 0 -76,992

Transfer long term/short term debts -5,427 0 5,427 0

Change in Lease Liabilities -46,846 0 -294 -47,140

Proceeds from Hybrid bond 0 0 0 0

Repayment of hybrid bond 0 0 0 0

Change in housing corporation loans -22,544 0 -31 -22,575

Net change in short-term loans 0 0 0 0

Other interest bearing debts -2,072 0 0 -2,072

0 0 0 0

Change in debt, non cash:

Efective interest 0 0 0 0

Other non-cash changes 950 0 0 950

Debt 31.12.21 215,514 15,360 22,464 253,338

Proceeds from loans 1,000 0 0 1,000

Repayment of loans -21,553 0 -10,192 -31,745

Transfer long term/short term debts -170 0 170 0

Change in Lease Liabilities 2,972 0 0 2,972

Proceeds from Hybrid bond 0 0 0 0

Repayment of hybrid bond 0 0 0 0

Change in housing corporation loans -10,737 0 0 -10,737

Net change in short-term loans 0 0 0 0

Other interest bearing debts 0 0 0 0

0 0 0 0

Change in debt, non cash: 0

Efective interest 0 0 0 0

Other non-cash changes -73,653 18,169 0 -55,484

Debt 31.12.22 113,373 33,529 12,442 159,344

Part of Financial Statements

33 SUBSIDIARIES

Name Domicile Group's holding, % Group's voting right, %

Shares in subsidiaries

SRV Rakennus Oy Espoo 100.00 100.00

SRV Ream Oy Helsinki 100.00 100.00

SRV Asumisen Palvelut Oy Espoo 100.00 100.00

SRV Joensuu Oy Joensuu 100.00 100.00

SRV Infra Oy Kerava 100.00 100.00

SRV Voima Oy Espoo 100.00 100.00

SRV Russia Oy Espoo 100.00 100.00

OOO IBI Development Pietari 100.00 100.00

SRV Ehituse AS Tallinna 100.00 100.00

Realty Holding B.V Amsterdam 100.00 100.00

International RE Oy Helsinki 100.00 100.00

The list does not include project companies.

34 RELATED PARTY TRANSACTIONS

2022

EUR 1,000

Selling of goods

and services

Purchase of

goods and

services Interest income Receivables Liabilities

Management and Board of Directors 0 0 0 0 0

Joint ventures 1,356 0 0 0 0

Associate company 1,469 0 0 0 0

Other related parties 0 0 0 0 0

Total 2,824 0 0 0 0

2021

EUR 1,000

Selling of goods

and services

Purchase of

goods and

services Interest income Receivables Liabilities

Management and Board of Directors 0 0 0 0 0

Joint ventures 1,032 0 0 223 7

Associate company 4,160 1 2,286 56,318 0

Other related parties 127 0 0 0 0

Total 5,319 1 2,286 56,541 7

The related parties of the Group include the parent company, subsidiaries and associated companies as well as joint

ventures. The related parties also include the Board of Directors and the Corporate Executive Team.

Other related parties include transactions carried out with other companies under the control of the Group's

management or with companies under the control of minority shareholders.

Goods and services are sold to related parties at market price.

Subsidiaries included in related parties are listed above in note 33 Subsidiaries. Subsidiaries are included in the

consolidated financial statements and therefore the transactions between Group companies are not included in note

34 Related party transactions.

Itemisation of management salaries and employment-based benefits

EUR 1,000 2022 2021

Management salaries and other short-term employment-based benefits 2,975 2,879

Share-based payments 710 896

Post-employment benefits, statutory pensions 0 7

Post-employment benefits, voluntary additional pensions 0 410

Benefits paid upon termination 3,685 4,192

The statutory occupational pension insurance of the company's employees is handled through Ilmarinen. Pension

payments are made on the basis of the statutory pension percentage, 23.85 (24.2%).

Salaries and compensations of CEO & Board of Directors

EUR 1,000 2022 2021

Sipola Saku, President and CEO 631 605

Nieminen Timo, Deputy CEO until 30 Nov 2022 224 231

Members of the Board

Yli-Kyyny Tomi, Chairman 115 84

Kokkila Timo, Vice Chairman from 29 Mar 2021 86 59

Kallasvuo Olli-Pekka, Vice Chairman until 29 Mar 2021 0 18

Leinonen Hannu 76 54

Leppänen Heikki 72 51

Iisakka Heli, from 29 Mar 2021 87 46

Alitalo Minna, until 29 Mar 2021 0 14

Members of the Board, total 435 324

The CEO's period of notice is 6 months. If SRV Group Plc terminates the contract, the period of notice is twelve months.

The 2022 paid statutory occupational pension insurance of the President and CEO and Deputy CEO was EUR 204

thousand (EUR 203 thousand in 2021).

Part of Financial Statements

35 EVENTS AFTER THE REPORTING PERIOD

On 2 February 2023 SRV announced remuneration paid out from the one-off long-term incentive plan 2021–2022

and discontinuations of the President & CEO's share-based incentive plan 2019-2026 and the long-term

incentive plan 2021-2025.

Part of Financial Statements

Parent company's financial statements, FAS

Income statement of the parent company

EUR 1,000 Note 2022 2021

Revenue 1 9,460 9,630

Other operating income 2 3 3

Personnel expenses 3 -6,155 -5,436

Indirect personnel costs

Pension costs -1,043 -869

Other indirect personnel costs -208 -219

Depreciation and impairments 4 -266 -452

Other operating expenses 5 -11,102 -6,449

Operating profit -9,311 -3,792

Financial income and expenses 6 -225,507 -7,129

Profit berofe appropriations and taxes -234,818 -10,921

Appropriations 7 12,000 0

Income taxes 8 -782 2,179

Net profit for the financial year -223,600 -8,742

Balance sheet of the parent company

EUR 1,000 Note 31.12.2022 31.12.2021

ASSETS

Non-current assets

Intangible assets 9 699 816

Property, plant and equipment 9 389 434

Investments

Shares in group companies 10 201,288 316,301

Other financial assets 10 1,906 1,944

Non-current assets, total 204,282 319,494

Current assets

Inventories 3 4

Long-term receivables 12 29,190 22,095

Short-term receivables 12 19,235 160,359

Cash and cash equivalents 40,488 58,141

Current assets, total 88,916 240,599

ASSETS, TOTAL 293,198 560,092

EQUITY AND LIABILITIES

Equity

Share capital 14 3,063 3,063

Invested free equity fund 14 310,219 268,592

Retained earnings 14 -7,358 -6,426

Profit/loss for the financial year 14 -223,600 -8,742

Equity, total 82,324 256,487

Liabilities

Non-current liabilities 17 57,967 110,948

Current liabilities 18 152,907 192,657

Liabilities, total 210,874 303,606

EQUITY AND LIABILITIES, TOTAL 293,198 560,092

Part of Financial Statements

Cash flow statement of the parent company

EUR 1,000 2022 2021

Cash flows from operating activities

Cash receipts from customers 9,440 8,728

Cash receipts from other operating income 40 912

Cash paid to suppliers and employees -50,220 -19,516

Net cash before interests and taxes -40,740 -9,876

Interests received and other financial income 99 6,868

Interests paid and other expenses from financial costs -8,091 -12,874

Cash flow from operating activities -48,732 -15,882

Cash flow from investing activities

Purchase of tangible and intangible assets -104 -42

Purchase of investments -95,195 -662

Subsidiary shares bought 0 -375

Loans granted for others -30,211 -2,604

Proceeds from repayments of subsidiary loans 1,618 356

Net cash used in investing activities -123,892 -3,327

EUR 1,000 2022 2021

Cash flow from financing activities

Net cash from share issue 34,806 0

Repayment of loans -30,695 -73,227

Hybrid bond costs -735 0

Hybrid bond intrests -2,029 0

Purchase of own shares -729 0

Change in group accounts 154,354 86,946

Net cash from financing activities 154,972 13,719

Net change in cash and cash equivalents -17,652 -5,489

Cash and cash equivalents at the beginning of financial year 58,141 63,630

Effect of exchange rate changes in cash and cash equivalents 0 0

Cash and cash equivalents at the end of financial year 40,488 58,141

Part of Financial Statements

Notes to parent company financial statements

Basic data

SRV Plc (reg 1707186-8) is a Finnish company founded in accordance with the Finnish law and based in

Espoo, Tarvonsalmenkatu 15, 02600 Espoo, Finland

Parent company's financial statements and the comparable information

EThe parent company's financial statements are prepared in accordance

with the principles of Finnish accounting legislation. The financial statements are prepared for 12 months

in the financial period January 1 – December 31, 2022.

ACCOUNTING PRINCIPLES

Non-Current assets

Tangible and intangible asset are recognised on the balance sheet at historical cost less depreciation according to

plan and impairment. Depreciation according to plan is calculated as straight-line depreciation on the basis of the

estimated economic life of tangible and intangible assets. The depreciation periods are as follow:

• Other intangible rights, 3–5 years

• Buildings and structures, 40–60 years

• Machinery and equipment, 3–10 vuotta

• IT programmes, 3–5 years

Investments are stated at the original purchase cost less accumulated impairment if the future income from the

investment is probably going to be smaller compared to purchase price. No depreciation is booked on land and water

areas and intangible rights. Development costs are recognised as annual costs during the year they arise.

Items denominated in foreign currency

Foreign currency business transactions are recognised at the exchange rate of transaction date.

Pensions

The statutory pension security in the parent company is provided by an external pension insurance company.

Taxes

The taxes in the income statement include the taxes for the financial year and adjustments for previous periods. The

defferred tax liability and receivable is calculated from the temporary difference in bookkeeping versus taxation

using the confirmed tax rate for the coming fiscal years. Defferred tax receivables are recorded in the balance sheet

and detailed in the note 12.

The valuation of financial instruments

Financial instruments have been valued as of 1 January 2015 at fair value in accordance with the Chapter 5 Section

2(a) of Finnish Accounting Act. The fair value of derivatives is estimated based on the present value of future cash

flows using market prices on the closing date. The change in fair value of the interest rate swaps are recognised in

interest income and expenses in the income statement and the the cumulative change in fair values is recognised in

the accrued income and expenses at the balance sheet.Hedging instruments are booked in the income statement in

financial expenses and in balance sheet in accrued expenses.

Currency forward deal premium cost are recongnised in financial expenses at transaction date.

Commitments

The parent company has given absolute guarantees on behalf of group companies. The guarantees are related to

construction projects.

Part of Financial Statements

1 REVENUE

EUR 1,000 2022 2021

Group services 9,388 8,696

Rent income 37 909

Other revenues 35 25

Total 9,460 9,630

2 OTHER INCOME

EUR 1,000 2022 2021

Other income 3 3

3 INFORMATION CONCERNING PERSONNEL

2022 2021

Number of personnel on average

Office employees 65 60

4 DEPRECIATION AND IMPAIRMENTS

EUR 1,000 2022 2021

Depreciation on Intangible assets 221 360

Depreciation on Buildings and Structures 10 10

Depreciation on Machinery and Equipment 35 81

Total 266 452

Auditing fees included in other operating expenses

EUR 1,000 2022 2021

Auditing 343 202

Statements 0 0

Tax advisory services 0 0

Other services 404 57

Total 746 259

5 OTHER OPERATING EXPENSES

EUR 1,000 2022 2021

Rents 1,083 1,188

Voluntary indirect personnel expenses 593 392

Car and travel expenses 180 185

Entertainment and marketing expenses 1,066 761

Communication and IT expenses 2,072 1,805

Other external services 3,421 647

Operating and maintenance costs 162 453

Other fixed expenses 2,525 1,017

Total 11,102 6,449

Notes to parent company financial statements

Part of Financial Statements

8 INCOME TAXES

EUR 1,000 2022 2021

Change in deferred taxes -782 2,179

Total -782 2,179

9 CHANGES IN NON-CURRENT ASSETS

Intangible assets

2022

EUR 1,000

Intangible

assets

Other

intangible

expenditures Total

Historical cost 1. Jan 715 2,421 3,137

Increase 0 104 104

Historical cost 31. Dec 715 2,525 3,241

Accumulated depreciation and impairments, 1 Jan. -465 -1,855 -2,321

Depreciation 0 -221 -221

Accumulated depreciation and impairments, 31 Dec. -465 -2,077 -2,542

Carrying amount, 31 Dec. 250 449 699

2021

EUR 1,000

Intangible

assets

Other

intangible

expenditures Total

Historical cost 1. Jan 715 2,379 3,095

Increase 0 42 42

Historical cost 31. Dec 715 2,421 3,137

Accumulated depreciation and impairments, 1 Jan. -465 -1,495 -1,960

Depreciation 0 -360 -360

Accumulated depreciation and impairments, 31 Dec. -465 -1,855 -2,321

Carrying amount, 31 Dec. 250 566 816

7 APPROPRIATIONS

EUR 1,000 2022 2021

Group contributions, received 12,000 0

Total 12,000 0

6 FINANCIAL INCOME AND EXPENSES

EUR 1,000 2022 2021

Dividend income

From group companies 0 0

Total 0 0

Interest and other financial income

From group companies 3,083 5,989

From other

17,164 73

Fair value impact of interest rate swap contracts 9,978 3,074

Total 30,225 9,136

Interest expenses

Interest expenses to group companies -1,804 0

Interest expenses to others -7,034 -12,238

Total -8,839 -12,238

Other financial expenses

To others

Fair value impact of currency forward contracts 0 -813

Structuring costs from currency forward contracts 0 -123

Impairment and reversing from non-current investments -210,245 0

Other financial expenses -36,649 -3,090

Total -246,893 -4,026

Financial income and expenses total -225,507 -7,129

Notes to balance sheet

Part of Financial Statements

Notes to balance sheet

10 INVESTMENTS

2022

EUR 1,000

Shares in

subsidiaries

Other shares

and holdings Total

Carrying amount, 1 Jan. 316,301 1,944 318,245

Increases 95,230 15 95,245

Decreases 0 -53 -53

Impairments -210,245 0 -210,245

Carrying amountt, 31 Dec. 201,286 1,907 203,193

SRV has written down the balance sheet values of subsidiaries SRV Russia Oy (EUR 102 445 thousand in 12/2021),

SRV Ehituse AS (EUR 13 068 thousand in 12/2021) and SRV Voima Oy (EUR 222 thousand in 12/2021)

2021

EUR 1,000

Shares in

subsidiaries

Other shares

and holdings Total

Carrying amount, 1 Jan. 299,279 2,453 301,732

Increases 17,022 15 17,037

Decreases 0 -525 -525

Carrying amountt, 31 Dec. 316,301 1,944 318,245

Tangible assets

2022

EUR 1,000

Land and

water areas

Buildings and

structures

Machinery

and

equipment Total

Historical cost 1. Jan 41 437 2,029 2,507

Increase 0 0 0 0

Decrease 0 0 0 0

Historical cost 31. Dec 41 437 2,029 2,507

Accumulated depreciation and impairments, 1 Jan. 0 -125 -1,948 -2,074

Depreciation 0 -10 -35 -45

Accumulated depreciation and impairments, 31 Dec. 0 -136 -1,983 -2,119

Carrying amount, 31 Dec. 41 301 46 389

2021

EUR 1,000

Land and

water areas

Buildings and

structures

Machinery

and

equipment Total

Historical cost 1. Jan 41 437 2,029 2,507

Increase 0 0 0 0

Decrease 0 0 0 0

Historical cost 31. Dec 41 437 2,029 2,507

Accumulated depreciation and impairments, 1 Jan. 0 -115 -1,867 -1,982

Depreciation 0 -10 -81 -91

Accumulated depreciation and impairments, 31 Dec. 0 -125 -1,948 -2,074

Carrying amount, 31 Dec. 41 312 81 434

Notes to balance sheet

11 SUBSIDIARY COMPANIES

Domicile 2022 2021

SRV Rakennus Oy Espoo 100.0 100.0

SRV Infra Oy Kerava 100.0 100.0

SRV Voima Oy Espoo 100.0 100.0

SRV Russia Oy Espoo 100.0 100.0

SRV Ehituse AS Tallinna 100.0 100.0

SRV Joensuu Oy Joensuu 100.0 100.0

SRV Ream Oy Helsinki 100.0 100.0

International RE Oy Helsinki 100.0 0.0

Part of Financial Statements

14 CHANGES IN EQUITY

EUR 1,000 2022 2021

Share capital 1.1. 3,063 3,063

Share capital 31.12. 3,063 3,063

Share premium reserve 1.1. 268,592 268,592

Share Issue 41,628 0

Share premium reserve 31.12. 310,219 268,592

Retained earnings 1.1. -15,167 -6,426

Transfer between items 8,394 0

Purchase/sell of own shares -585 0

Retained earnings 31.12. -7,358 -6,426

Net profit for the financial year -223,600 -8,742

Unrestricted shareholders' equity total 79,262 253,424

Equity 31.12. 82,324 256,487

13 ACCRUED RECEIVABLES

EUR 1,000 2022 2021

Appropriations 12,000 0

Fair value of currency forward 4,075 0

Other 24 64

Total 16,099 64

12 LONG-TERM AND SHORT-TERM RECEIVABLES

EUR 1,000 2022 2021

Long-term receivables

From Group companies

Loan receivables 9,400 1,640

Interest receivables 0 268

From others

Other receivbales 5,200 5,746

Deferred tax receivable 14,590 14,442

Long-term recaivables Total 19,790 20,188

Long-term recaivables Total 29,190 22,095

Short-term receivables

From Group companies

Accounts receivable 46 4

Loan receivables 0 14,513

Other receivables 3,076 145,369

Accrued receivables 12,000 0

Total 15,122 159,886

From others

Accounts receivable 6 6

Other receivables 9 403

Accrued receivables 4,099 64

Total 4,113 473

Short-term receivables, total 19,235 160,358

15 CALCULATION ON THE DISTRIBUTABLE EQUITY

EUR 1,000 2022 2021

Share premium reserve 310,219 268,592

Retained earnings -7,358 -6,426

Net profit for the financial year -223,600 -8,742

Total 79,262 253,424

Notes to balance sheet

Part of Financial Statements

18 SHORT-TERM LIABILITIES

EUR 1,000 2022 2021

To Group Companies

Accounts payables 1 0

Other liabilities 137,913 161,197

Total 137,913 161,197

To other companies

Loans from financial institutions 10,000 10,000

Bonds 0 10,192

Accounts payable 627 604

Accrued expenses 3,947 10,261

Other loans 420 403

Total 14,994 31,460

Short-term liabilities total 152,907 192,657

17 LONG-TERM LIABILITIES

EUR 1,000 2022 2021

To other companies

Hybrid Bond 57,109 15,360

Bonds 0 94,677

Other loans 679 731

Total 57,787 110,768

To Group Companies

Other loans 180 180

Long-term liabilities total 57,967 110,948

16 PROVISIONS

The company did not have other provisions during the financial year or the comparison period.

19 ACCRUED LIABILITIES

EUR 1,000 2022 2021

Salaries including social costs 1,377 1,234

Accrued liability related to interest rate swap 0 5,903

Interest and other financial expenses 1,588 3,124

Taxes 930 0

Other 52 0

Total 3,947 10,261

20 DERIVATIVE FINANCIAL INSTRUMENTS

By means of interest rate swap contracts, protection is sought from market interest rate changes during the financial

year. Interest rate swap contracts mature during the financial year 2025.

Derivative financial instruments:

EUR 1,000 2022 2021

Interest rate swaps

- Fair value positive 4,075 0

- Fair value negative 0 5,903

- Nominal value of underlying instruments 100,000 100,000

Fair value hierarcy of financial instruments:

Fair value hierarcy of financial instruments is described in note 29 in SRV Group notes.

21 RISK MANAGEMENT

The Group has a systematic and structured approach to risk management across business operations and process-

es. There are no separate or individual risk management policies or procedures for the Parent company. Risk man-

agement is described in the Report of the Board of Directors and in note 29 in Consolidated Financial Statement.

Part of Financial Statements

24 RELATED PARTY TRANSACTIONS

There were no related party transactions which would not been carried out under ordinary commercial terms

or which would be necessary to provide in order to give a true and fair view of the transactions.

EUR 1,000 2022 2021

Itemisation of management salaries and employment-based benefits

Salaries and other benefits 2,120 2,453

Total 2,120 2,453

Salaries and other benefits of CEO

CEO, Saku Sipola 631 605

Deputy Vice President, Timo Nieminen until 30.11.2022 224 231

Rewards and benefits of the members of the board:

Rewards and benefits 435 324

The 2022 paid statutory occupational pension insurance of the President and CEO and Deputy CEO was 204 thou-

sand euros (203 thousand euros in 2021).

On 17 December 2020, the Board of Directors of SRV Group Plc decided on changes to the share-based incen-

tive scheme of President and CEO Saku Sipola. The changes concern the number of acquisition rights, the subscrip-

tion price of the acquisition rights and the periods during which the acquisition rights can be exercised. The purpose

of the changes is to ensure that the incentive effect of the scheme remains at its previous level by taking into account

the changes in the number of the company’s shares caused by SRV’s 2020 rights issues. The incentive effect of the

scheme is based on the value increase of SRV Group Plc’s shares.

As a result of the changes, Sipola has the right to acquire 1,000,000 shares at a subscription price of EUR 0.55

per share. The basis for determining the subscription price is the volume-weighted average price of SRV’s share on

Nasdaq Helsinki in continuous trading from 1 August to 30 November 2020. After the changes, the acquisition rights

can be exercised in the following three periods: the first begins on 1 March 2022 and ends on 28 February 2023, the

second begins on 1 March 2023 and ends on 31 August 2024, and the third begins on 1 September 2024 and ends

on 31 August 2026. During the first and second exercise periods, the acquisition rights holder is entitled to exercise

300,000 acquisition rights and during the third period 400,000 acquisition rights.

No new decisions have been made in 2022 for Long-Term Incentive Plans.

On 4 July 2022, SRV Group Plc executed a reverse share split. The reverse share split and related redemp-

tion of shares were executed so that each 40 shares of SRV was merged into one share. On 2 February 2023, SRV

announced remuneration paid out from the one-off long-term incentive plan 2021- 2022 and discontinuations of the

President & CEO's share-based incentive plan 2019-2026 and the long-term incentive plan 2021-2025.

The parent company’s distributable funds on 31 December 2022 are EUR 79,261,450.94, of which net profit for

the financial year is EUR -223,599,660.31. The Board of Directors proposes to the General Meeting that no dividend

be paid for the 2022 financial year.

23 OTHER LIABILITIES

EUR 1,000 2022 2021

Guarantee obligations given on behalf of Group companies 233,074 262,699

Investment commitments 18,681 18,681

Through its subsidiary SRV Voima Oy, SRV has a holding in Voimaosakeyhtiö SF, the main owner of Fennovoima,

which had prepared the Hanhikivi 1 nuclear power plant project. SRV has also made an investment commitment to

Voimaosakeyhtiö SF concerning the construction of the nuclear power plant. SRV has the same rights and oblig tions

as other Voimaosakeyhtiö SF shareholders. In May 2022, Fennovoima announced that it had terminated the Hanhiki-

vi 1 nuclear power plant delivery agreement made with Rosatom and cancelled the construction permit application

for the plant project. Due to the higher project risk, SRV’s holding in Fennovoima – valued at EUR 13.3 million in the

2021 annual accounts – was written down in its entirety in the second quarter of 2022. After this write down, the

investment commitment to Voimaosakeyhtiö SF amounts to a maximum of EUR 18.7 million. That said, the realisation

of this investment commitment involves significant uncertainty due to the status of the Hanhikivi 1 project.

At the end of the financial period, EUR 10 million of the company’s EUR 30 million revolving credit facility was

withdrawn and EUR 20 million was unused. EUR 35.8 million of the company’s EUR 40.0 million committed project fi-

nancing facility was unused at the end of the review period. In addition, the company’s EUR 63.0 million non-commit-

ted project financing facility was entirely unused at the end of the review period. The due date of the revolving credit

facility and project financing facility was extended to April 2024.

22 LEASING AND OTHER RENT AGREEMENTS

EUR 1,000 2022 2021

Payable in less than a year 64 74

Payable later 41 57

Total 105 131

Rental lease liabilities

Payable in less than a year 1,337 1,337

Payable later 7,180 8,432

Total 8,516 9,768

Tilinpäätöksen ja toimintakertomuksen allekirjoitukset, Tilinpäätösmerkintä

Part of Financial Statements

Signatures to the financial statements and

Report of the Board of Directors, auditor's note

SIGNATURES TO THE FINANCIAL STATEMENTS AND REPORT OF THE BOARD OF

DIRECTORS

Espoo, 28 February 2023

To mi Yl i- Ky y ny Timo Kokkila

Chairman Vice Chariman

Heli Iisakka Hannu Leinonen

Heikki Leppänen Saku Sipola

President and CEO

AUDITOR'S NOTE

Our auditor’s report has been issued today.

Helsinki, 28 February 2023

PricewaterhouseCoopers Oy

Authorized Public Accounting Firm

Markku Katajisto

KHT

Tilintarkastuskertomus

100

Auditor’s Report (Translation of the Finnish Original)

To t he A nn ua l Ge ne ra l Me et i ng o f SRV Yh ti öt O yj

REPORT ON THE AUDIT OF THE

FINANCIAL STATEMENTS

Opinion

In our opinion

• the consolidated financial statements give a true

and fair view of the group’s financial position

and financial performance and cash flows in

accordance with International Financial Reporting

Standards (IFRS) as adopted by the EU

• the financial statements give a true and fair view

of the parent company’s financial performance

and financial position in accordance with the laws

and regulations governing the preparation of the

financial statements in Finland and comply with

statutory requirements.

Our opinion is consistent with the additional report to

the Audit Committee.

What we have audited

We have audited the financial statements of SRV Yhtiöt

Oyj (business identity code 1707186-8) for the year

ended 31 December 2022. The financial statements

comprise:

• the consolidated income statement and statement

of comprehensive income, consolidated

balance sheet, statement of changes in equity,

consolidated cash flow statement and notes,

including a summary of significant accounting

policies

As part of designing our audit, we determined materiality

and assessed the risks of material misstatement in the

financial statements. In particular, we considered where

management made subjective judgements; for exam-

ple, in respect of significant accounting estimates that

involved making assumptions and considering future

events that are inherently uncertain.

Materiality

The scope of our audit was influenced by our application

of materiality. An audit is designed to obtain reasonable

assurance whether the financial statements are free

from material misstatement. Misstatements may arise

due to fraud or error. They are considered material if

individually or in aggregate, they could reasonably be

expected to influence the economic decisions of users

taken on the basis of the financial statements.

Our Audit Approach

Overview

• Overall group materiality: 4,500,000 euros

• We performed an audit of SRV Group’s parent company and

its subsidiaries that are most significant based on the financial

position and result.

• Revenue recognised from construction contracts over time

• Renewal of financing

Materiality

Key audit

matters

Group

scoping

• the parent company’s balance sheet, income

statement, statement of cash flows and notes.

Basis for Opinion

We conducted our audit in accordance with good audit-

ing practice in Finland. Our responsibilities under good

auditing practice are further described in the Auditor’s

Responsibilities for the Audit of the Financial State-

ments section of our report.

We believe that the audit evidence we have ob-

tained is sufficient and appropriate to provide a basis for

our opinion.

Independence

We are independent of the parent company and of the

group companies in accordance with the ethical require-

ments that are applicable in Finland and are relevant to

our audit, and we have fulfilled our other ethical respon-

sibilities in accordance with these requirements.

To the best of our knowledge and belief, the

non-audit services that we have provided to the parent

company and to the group companies are in accordance

with the applicable law and regulations in Finland and we

have not provided non-audit services that are prohibited

under Article 5(1) of Regulation (EU) No 537/2014. The

non-audit services that we have provided are disclosed

in note 5 to the Financial Statements.

101

Based on our professional judgement, we deter-

mined certain quantitative thresholds for materiality, in-

cluding the overall group materiality for the consolidated

financial statements as set out in the table below. These,

together with qualitative considerations, helped us to

determine the scope of our audit and the nature, timing

and extent of our audit procedures and to evaluate the

effect of misstatements on the financial statements as a

whole.

Overall group materiality

4,500,000 euros (previous year 4,500,000 euros)

How we determined it

0.6% of groups revenue

Rationale for the materiality benchmark

applied

We chose revenue as the benchmark because, in our

view, it is the benchmark against which the performance

of the group is most commonly measured by users and

is a generally accepted benchmark. We chose 0.6%

which is within the range of acceptable quantitative

materiality thresholds in auditing standards.

How we tailored our group audit scope

We tailored the scope of our audit, taking into account

the structure of the SRV Group, the accounting pro-

cesses and controls, and the industry in which the group

operates.

SRV Group consists of two business areas; con-

struction and investments. In addition, Group services

are reported as other operations. As the majority of

the operations are in Finland, the focus of our audit has

mainly been on the parent company and its Finnish

How our audit addressed the key audit matter

Our procedures included the following procedures,

among others:

– We updated our understanding of processes of

revenue recognition and total cost estimation of

contracts. Also, we tested the effectiveness of

selected key controls.

– On selected construction contracts we performed

substantive audit procedures, of which the main

ones are described below.

– We read construction contracts and assessed the

appropriateness of applied revenue recognition

accounting principles.

– We compared the estimated revenue with the

terms of construction contracts.

– We monitored the progress of the projects and

changes in the total cost estimates by reading the

minutes of project meetings and discussing with

the management and responsible personnel.

– We assessed the accuracy of management

estimates by comparing the total cost estimates

of uncompleted projects included in the previous

financial year financial statements to their actual

outcome in the current financial year.

– We tested the mathematical accuracy of the

spreadsheets used to determine the percentage

of completion as well as the revenue and cost that

was recognised based on that.

Key audit matter in the audit of the group

Renewal of financing

Refer to Accounting policies for consolidated financial

statements and Notes 25 and 29

The Group’s main sources of financing are project fi-

nancing and revolving credit facility.

subsidiaries that are most significant based on the finan-

cial position and result.

Key Audit Matters

Key audit matters are those matters that, in our profes-

sional 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 opin-

ion thereon, and we do not provide a separate opinion on

these matters.

As in all of our audits, we also addressed the risk

of management override of internal controls, including

among other matters consideration of whether there

was evidence of bias that represented a risk of material

misstatement due to fraud.

Key audit matter in the audit of the group

Revenue recognised from construction contracts over

times

Refer to Accounting policies for consolidated financial

statements and Note 3

Revenue and costs of construction contracts are re-

corded over time as revenue and costs on the basis of

the percentage of completion where the outcome of the

construction contract can be estimated reliably. The

percentage of completion is calculated on the basis of

the estimated total cost of a contract and the cumulative

costs at the balance sheet date.

Management judgment has a significant impact on

the estimate of total cost of construction contracts and

on revenue and result of those contracts. Therefore rev-

enue recognised from construction contracts over time

is considered as a key audit matter in the audit of the

Group financial statements.

The parent company agreed on a comprehensive

renewal of financing, including a directed share issue to

the holders of 2016 and 2019 issued hybrid bonds, con-

verting unsecured callable fixed-rate notes into hybrid

and convertible bonds and a rights issue. This resulted in

a decrease in interest bearing liabilities.

Renewal of financing has had a significant impact

to the Group’s financing position and is therefore con-

sidered as a key audit matter in the audit of the Group

financial statements

How our audit addressed the key audit matter

Our procedures included the following procedures,

among others:

– We discussed with the management about financing

arrangements

– We examined new financing agreements and

evaluated the accounting treatment of those.

– We performed tests of details to executed rights issues.

– We evaluated the disclosures containing information

of new financing agreements.

Key Audit Matters

We have no key audit matters to report with respect to

our audit of the parent company financial statements.

There are no significant risks of material misstate-

ment referred to in Article 10(2c) of Regulation (EU)

No 537/2014 with respect to the consolidated financial

statements or the parent company financial statements.

Responsibilities of the Board of Directors

and the Managing Director for the

Financial Statements

The Board of Directors and the Managing Director are

responsible for the preparation of consolidated financial

102

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 finan-

cial 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 mis-

statement, 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 account-

ing unless there is an intention to liquidate the parent

company or the group or to 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 conduct-

ed in accordance with good auditing practice will always

detect a material misstatement when it exists. Misstate-

ments 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

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, includ-

ing 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 rele-

vant ethical requirements regarding independence,

and to communicate with them all relationships and

other matters that may reasonably be thought to bear

on our independence, and where applicable, related

safeguards.

decisions of users taken on the basis of these financial

statements.

As part of an audit in accordance with good au-

diting 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

From the matters communicated with those

charged with governance, we determine those matters

that were of most significance in the audit of the finan-

cial 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 ex-

pected to outweigh the public interest benefits of such

communication.

OTHER REPORTING REQUIREMENTS

Appointment

We were first appointed as auditors by the annual gen-

eral meeting on 26 March 2014 and our appointment

represents a total period of uninterrupted engagement

of 9 years.

Other Information

The Board of Directors and the Managing Director are

responsible for the other information. The other infor-

mation 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 audi-

tor’s report thereon.

Our opinion on the financial statements does not

cover the other information.

In connection with our audit of the financial state-

ments, our responsibility is to read the other information

identified above and, in doing so, consider whether the

other information is materially inconsistent with the

103

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

• the report of the Board of Directors has been

prepared in accordance with the applicable laws

and regulations.

If, based on the work we have performed on the other

information that we obtained prior to the date of this

auditor’s report, we conclude that there is a material

misstatement of this other information, we are required

to report that fact. We have nothing to report in this

regard.

Helsinki 28 February 2023

PricewaterhouseCoopers Oy

Authorised Public Accountants

Markku Katajisto

Authorised Public Accountant (KHT)

104

Part of Financial Statements

Independent Auditor’s Reasonable Assurance Report

on SRV Group Plc ESEF Financial Statements

TO THE MANAGEMENT OF SRV GROUP PLC

TILINPÄÄTÖKSEN TILINTARKASTUS

Olemme SRV Yhtiöt Oyj:n (y-tunnus 1707186-8) (jälWe

have been engaged by the Management of SRV Group

Plc (business identity code 1707186-8) (hereinafter also

“the Company”) to perform a reasonable assurance en-

gagement on the Company’s consolidated IFRS financial

statements for the financial year 1.1.-31.12.2022 in Europe-

an Single Electronic Format (“ESEF financial statements”)

version 743700GB29FXC0VXF414-2022-12-31-fi.zip.

Management’s Responsibility for the ESEF

Financial Statements

The Management of SRV Group Plc is responsible

for preparing the ESEF financial statements so that

they comply with the requirements as specified in the

Commission Delegated Regulation (EU) 2019/815 of 17

December 2018 (“ESEF requirements”). This responsi-

bility includes the design, implementation and mainte-

nance of internal control relevant to the preparation of

ESEF financial statements that are free from material

noncompliance with the ESEF requirements, whether

due to fraud or error.

Our Independence and Quality Control

We have complied with the independence and other

ethical requirements of the International Code of Ethics

for Professional Accountants (including International

Independence Standards) issued by the International

Ethics Standards Board for Accountants (IESBA Code),

which is founded on fundamental principles of integrity,

objectivity, professional competence and due care, con-

fidentiality and professional behaviour.

Our firm applies International Standard on Quality

Control 1 and accordingly maintains a comprehensive

system of quality control including documented policies

and procedures regarding compliance with ethical re-

quirements, professional standards and applicable legal

and regulatory requirements.

Our Responsibility

Our responsibility is to express an opinion on the ESEF

financial statements based on the procedures we have

performed and the evidence we have obtained.

We conducted our reasonable assurance engagement in

accordance with the International Standard on Assur-

ance Engagements (ISAE) 3000 (Revised) Assurance

Engagements Other than Audits or Reviews of Historical

Financial Information. That standard requires that we

plan and perform this engagement to obtain reasonable

assurance about whether the ESEF financial statements

are free from material noncompliance with the ESEF

requirements.

A reasonable assurance engagement in accord-

ance with ISAE 3000 (Revised) involves performing

procedures to obtain evidence about the ESEF financial

statements compliance with the ESEF requirements.

The procedures selected depend on the auditor’s judg-

ment, including the assessment of the risks of material

noncompliance of the ESEF financial statements with

the ESEF requirements, whether due to fraud or error. In

making those risk assessments, we considered internal

control relevant to the Company’s preparation of the

ESEF financial statements.

We believe that the evidence we have obtained

is sufficient and appropriate to provide a basis for our

opinion.

Opinion

In our opinion, SRV Group Plc’s ESEF financial state-

ments for the financial year ended 31 December 2022

comply, in all material respects, with the minimum re-

quirements as set out in the ESEF requirements.

Our reasonable assurance report has been pre-

pared in accordance with the terms of our engagement.

We do not accept, or assume responsibility to anyone

else, except for SRV Group Plc for our work, for this

report, or for the opinion that we have formed.

Helsinki 28 February 2023

PricewaterhouseCoopers Oy

Authorised Public Accountants

Markku Katajisto

Authorised Public Accountant (KHT)

Independent Auditor’s Reasonable Assurance Report

on SRV Group Plc ESEF Financial Statements

TO THE MANAGEMENT OF SRV GROUP PLC

TILINPÄÄTÖKSEN TILINTARKASTUS

Olemme SRV Yhtiöt Oyj:n (y-tunnus 1707186-8) (jälWe

have been engaged by the Management of SRV Group

Plc (business identity code 1707186-8) (hereinafter also

“the Company”) to perform a reasonable assurance en-

gagement on the Company’s consolidated IFRS financial

statements for the financial year 1.1.-31.12.2022 in Europe-

an Single Electronic Format (“ESEF financial statements”)

version 743700GB29FXC0VXF414-2022-12-31-fi.zip.

Management’s Responsibility for the ESEF

Financial Statements

The Management of SRV Group Plc is responsible

for preparing the ESEF financial statements so that

they comply with the requirements as specified in the

Commission Delegated Regulation (EU) 2019/815 of 17

December 2018 (“ESEF requirements”). This responsi-

bility includes the design, implementation and mainte-

nance of internal control relevant to the preparation of

ESEF financial statements that are free from material

noncompliance with the ESEF requirements, whether

due to fraud or error.

Our Independence and Quality Control

We have complied with the independence and other

ethical requirements of the International Code of Ethics

for Professional Accountants (including International

Independence Standards) issued by the International

Ethics Standards Board for Accountants (IESBA Code),

which is founded on fundamental principles of integrity,

objectivity, professional competence and due care, con-

fidentiality and professional behaviour.

Our firm applies International Standard on Quality

Control 1 and accordingly maintains a comprehensive

system of quality control including documented policies

and procedures regarding compliance with ethical re-

quirements, professional standards and applicable legal

and regulatory requirements.

Our Responsibility

Our responsibility is to express an opinion on the ESEF

financial statements based on the procedures we have

performed and the evidence we have obtained.

We conducted our reasonable assurance engagement in

accordance with the International Standard on Assur-

ance Engagements (ISAE) 3000 (Revised) Assurance

Engagements Other than Audits or Reviews of Historical

Financial Information. That standard requires that we

plan and perform this engagement to obtain reasonable

assurance about whether the ESEF financial statements

are free from material noncompliance with the ESEF

requirements.

A reasonable assurance engagement in accord-

ance with ISAE 3000 (Revised) involves performing

procedures to obtain evidence about the ESEF financial

statements compliance with the ESEF requirements.

The procedures selected depend on the auditor’s judg-

ment, including the assessment of the risks of material

noncompliance of the ESEF financial statements with

the ESEF requirements, whether due to fraud or error. In

making those risk assessments, we considered internal

control relevant to the Company’s preparation of the

ESEF financial statements.

We believe that the evidence we have obtained

is sufficient and appropriate to provide a basis for our

opinion.

Opinion

In our opinion, SRV Group Plc’s ESEF financial state-

ments for the financial year ended 31 December 2022

comply, in all material respects, with the minimum re-

quirements as set out in the ESEF requirements.

Our reasonable assurance report has been pre-

pared in accordance with the terms of our engagement.

We do not accept, or assume responsibility to anyone

else, except for SRV Group Plc for our work, for this

report, or for the opinion that we have formed.

Helsinki 28 February 2023

PricewaterhouseCoopers Oy

Authorised Public Accountants

Markku Katajisto

Authorised Public Accountant (KHT)

105

Operative operating profit (%)

% 10–12/2022 7–9/2022 4–6/2022 1–3/2022 10–12/2021 7–9/2021 4–6/2021 1–3/2021

Construction

1.3

2.6 4.8 3.6 -0.4 0.8 3.2 3.7

Investments

12.1 22.8 - - - - -

Group

0.1

2.1 4.6 2.6 -1.4 -0.3 2.6 2.5

Operating profit

% 10–12/2022 7–9/2022 4–6/2022 1–3/2022 10–12/2021 7–9/2021 4–6/2021 1–3/2021

Construction

1.3

2.6 4.8 3.6 -0.4 0.8 3.2 3.7

Investments

2.0 1.1 - - - - -

Group

-3.5

2.9 4.8 -44.9 -3.4 -0.8 2.9 2.8

Operating profit

EUR million 10–12/2022 7–9/2022 4–6/2022 1–3/2022 10–12/2021 7–9/2021 4–6/2021 1–3/2021

Construction

2.3

4.7 9.9 6.3 -1.3 1.6 7.0 6.9

Investments

-7. 2

1.9 1.4 -105.4 -8.6 -2.6 0.1 -0.4

Other operations and eliminations

-1.3

-1.2 -1.2 13.4 -1.5 -0.6 -0.8 -1.3

Group, total

-6.3

5.5 10.1 -85.7 -11.5 -1.6 6.3 5.2

Operative operating profit

EUR million 10–12/2022 7–9/2022 4–6/2022 1–3/2022 10–12/2021 7–9/2021 4–6/2021 1–3/2021

Construction

2.3

4.7 9.9 6.3 -1.3 1.6 7.0 6.9

Investments

-0.8

0.4 1.1 -0.2 -1.7 -1.6 -0.5 -0.8

Other operations and eliminations

-1.3

-1.2 -1.2 -1.2 -1.5 -0.6 -0.8 -1.3

Group, total

0.2

3.9 9.8 4.9 -4.6 -0.6 5.7 4.8

GROUP AND SEGMENT INFORMATION BY QUARTER

106

Order backlog

EUR million 31.12.2022 30.9.2022 30.6.2022 31.3.2022 31.12.2021 30.9.2021 30.6.2021 31.3.2021

- business construction

684.0

511.5 480.6 505.9 508.3 566.3 587.4 606.5

- housing construction

154.7

205.6 265.3 352.1 364.0 471.9 460.1 454.6

Group, total

838.8

717.1 745. 9 858.0 872.3 1,038.2 1,047.5 1,061.1

sold order backlog

747.8

629.7 679.4 788.1 798.2 956.3 942.3 930.6

unsold order backlog

91.0

87.4 66.5 69.9 74.0 81.9 105.2 130.5

Group's order backlog consists only of construction segment.

Order backlog, housing construction in Group

EUR million 31.12.2022 30.9.2022 30.6.2022 31.3.2022 31.12.2021 30.9.2021 30.6.2021 31.3.2021

Negotiation and construction contracts

129 186 254 251 259 231 207

Under construction, sold

1 24 40 39 131 124 117

Under construction, unsold

70 53 57 71 79 99 114

Completed and unsold

6 2 2 3 3 6 17

Housing construction, total

155

206 265 352 364 472 460 455

Housing production in Group

Units 10–12/2022 7–9/2022 4–6/2022 1–3/2022 10–12/2021 7–9/2021 4–6/2021 1–3/2021

Housing sales, total

6 12 251 190 328 447 348

sales, developer contracting

6 12 11 31 71 137 170

sales, negotiation contracts

0 0 240 159 257 310 178

Developer contracting

- start-ups

62 0 0 0 0 71 124

- completed

142 68 0 260 42 66 0

-recognized in revenue

124 65 4 259 48 102 44

- completed and unsold

26 8 5 9 8 14 46

Under construction, total

1,360

1,646 2,118 2,397 2,085 2,464 2,392 2,271

construction contracts

0 0 0 0 0 0 0

negotiation contracts

105

105 162 227 227 234 215 409

negotiated contracts

1,170

1,479 1,814 1,960 1,648 1,760 1,665 1,355

developer contracting

62 142 210 210 470 512 507

- of which sold

2 120 173 166 394 371 334

- of which unsold

60 22 37 44 76 141 173

107

Information for investors

Basic information on the SRV share

Listing: Nasdaq Helsinki

Listed since: 12 June 2007

No. of shares: 16,982,343

Trading currency: EUR

Ticker symbol: SRV1V

ISIN code: FI0009015309

Analysts that follow SRV

Olli Koponen, Inderes

Jerker Salokivi, Evli

SRV’s 2022 reporting consists of the Annual Review,

Report of the Board of Directors, Financial Statements,

Corporate Governance Statement, Remuneration

Report, sustainability appendix, and GRI and Taxonomy

Report. All publications are available on SRV’s website at

www.srv.fi/en/investors.

Annual General Meeting 2023

The Annual General Meeting 2023 of SRV Group Plc

will be held on Monday 27 March 2023 starting at 4 pm.

More information is available on SRV’s website at

www.srv.fi/en/investors.

The key tasks of investor relations

The key principles of SRV’s investor communications

are the accuracy, transparency, consistency, timeliness

and impartiality of information with respect to all parties.

It is the task of SRV’s investor communications to ensure

the correct price formation for SRV’s share or other

financial instruments by providing accurate, up-to-date

and sufficient information about SRV and its business.

The aim is to strengthen investor confidence in the

company both in Finland and abroad. The target group

for investor communications consists of shareholders,

institutional investors, analysts, portfolio managers,

investment bankers, and the financial media.

Results announcement in 2023

SRV will publish four interim reports in 2023:

• Financial Statement Release 2022 was published

on 2 February 2023 at 8.30 am

• Interim Report for January-March 2023 will be

published on 27 April 2023 at 8.30 am

• Half-year Report for January-June 2023 will be

published on 20 July 2023 at 8.30 am

• Interim Report for January-September 2023 will

be published on 27 October 2023 at 8.30 am

The interim reports are published in Finnish and

English and are available on SRV’s website at

www.srv.fi/en/investors. SRV observes a 30-day silent

period before publishing results.

Contact details

CFO

Jarkko Rantala

Tel. +358 (0)40 674 1949

jarkko.rantala@srv.fi

SVP, Communications and Marketing

Miia Eloranta

Te l. +3 58 ( 0) 50 4 41 4 22 1

miia.eloranta@srv.fi

SVP, Development (Lifecycle-wise solutions, sustainabili-

ty and development)

Miimu Airaksinen

Tel. +358 (0)40 770 4832

miimu.airaksinen@srv.fi

investor.relations@srv.fi

Derby Business Park

Tar von sa lme nkat u 1 5

02600 Espoo, Suomi

Tel: +358 (0)20 145 5200