Annual Report • Jan 15, 2021
Annual Report
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and investor information
2020
FOR THE FINANCIAL PERIOD NOVEMBER 1, 2019–OCTOBER 31, 2020
16 Consolidated cash flow statement
46 Notes to the financial statements
| October 31, 2020 |
October 31, 2019 |
|
|---|---|---|
| Net sales, MEUR | 159.0 | 182.9 |
| EBIT, MEUR | 0.8 | 3.8 |
| Profit before taxes, MEUR | -1.8 | 1.9 |
| Profit/loss from continuing operations, MEUR | -3.0 | 0.6 |
| Profit/loss from sold or discontinued operations, MEUR | -0.4 | 2.0 |
| Profit/loss for the financial period, MEUR | -3.4 | 2.5 |
| Earnings per share, undiluted (EUR) | -0.08 | 0.03 |
| Equity per share (EUR) | 0.82 | 0.96 |
Panostaja Group's net sales for the finished review period were MEUR 159.0 (MEUR 182.9).
Exports amounted to MEUR 9.1, or 5.8% (MEUR 8.2, or 4.0%), of net sales.
Two of the seven segments exceeded the cumulative net sales level of the reference period. The most significant factors resulting in the decline in net sales were the market uncertainty and decreased demand due to the coronavirus pandemic, which began in the second quarter. The coronavirus outbreak had a particularly notable impact on the demand for Grano's print products.
EBIT declined and was MEUR 0.8 (MEUR 3.8). The profit/loss for the review period is encumbered by the MEUR 3.3 goodwill impairment loss of the Carrot segment. As regards Grano, net sales for the review period dropped mostly as a result of the decline in demand as a result of the coronavirus pandemic. On the other hand, Grano and the other Panostaja companies conducted cost adaptation measures through layoffs and cutbacks to lessen the negative impacts caused by the pandemic. The Group's profit/loss for the reference period includes Grano's MEUR 1.0 cost provision related to employer-employee negotiations and the MEUR 0.9 impairment linked to restructuring measures related to ERP systems as well as sales profit for Ecosir Group in the amount of MEUR 1.6. Five of the seven segments exceeded the reference period EBIT.
The loss from discontinued operations was MEUR -0.4. The consolidated income statement does not include the income statement for operations sold in 2019. Instead, the result is entered separately in the consolidated income statement under 'Profit/loss from sold or discontinued operations.'
The Group's net financial expenses for the review period were MEUR -2.8 (MEUR -2.1). The Group's liquidity improved, and operating cash flow was MEUR 23.6 (MEUR 10.8).
During the financial year, the Group employed an average of 1,728 (1,969) people. At the end of the financial period, the Group employed 1,558 (1,895) persons.
The net sales of the parent company, Panostaja Oyj, amounted to MEUR 0.0 (MEUR 0.0). The EBIT loss for the review period was MEUR -2.0 (MEUR 2.9). The parent company's loss in the financial period was MEUR -4.4 (profit of MEUR 4.4).
The impacts of the coronavirus pandemic on the business operations of Panostaja and its segments started in mid-March with the pandemic itself and the lockdown and restriction measures implemented to prevent its propagation began to eat into demand and cause general uncertainty. Global and domestic forecasts regarding economic growth have declined significantly after the onset of the pandemic. Panostaja and its segments instituted a number of measures to safeguard their staff immediately after the outbreak.Remote work arrangements and restrictions on meetings were implemented where possible. In addition to this, the companies have responded to the decreased demand through cutbacks and layoffs. The companies have also implemented a wide range of measures to secure funding in the event that the crisis persists. These measures include flexibility in terms of funding, such as postponing loan payments, utilizing the full extent of the payment terms of fiscal payments, and active efforts to repatriate any receivables.
Panostaja tests intangible and tangible assets for impairment whenever there are signs that their value may have decreased. Goodwill and other intangible assets with infinite useful life are tested for impairment at least once a year. For the purposes of the testing, goodwill and intangible assets with infinite useful life are allocated to cash-generating units. The amount recoverable by cash-generating units is based on calculations of service value. Formulating these calculations requires the use of estimates. Panostaja has recognized the impairment risk with regard to certain segments and prepared estimates on their future prospects. Based on these calculations, a goodwill impairment of MEUR 3.3 was recorded for the Carrot segment.
On April 9, 2020, Panostaja signed an agreement on selling the majority of Tilatukku Group Oy's share capital to the company's acting management. Panostaja's holding in Tilatukku Group Oy has been 60%. The trade involved Panostaja relinquishing its ownership in the company entirely. After the trade, Tilatukku Group continued to operate as an independent company with Tomi Pirinen as its CEO.
Panostaja Group's segmentation is based on investment targets in majority ownership. The investment targets are also monitored as separate business operations. The investments in which Panostaja has majority holdings compose the company's operation segments. In addition to that there is the segment Others, in which associated companies and non-allocated items are reported, including the parent company. Panostaja Group's business segments are Grano, Helakeskus, Hygga, Heatmasters, CoreHW, Carrot, Oscar Software and Others. The Group's segment reporting is based on its business segments.
Grano is the most versatile content service specialist in Finland, providing marketing and communications solutions that promote the customers' sales, brand and profit – everything from digital to print services. The company's services cover all content projects that support business from start to finish, from creative design to production, publication, result measurement and asset management – across all digital and print channels essential to the customer's target audience. Grano provides its services in more than 20 localities in Finland. The company's head office is located in Helsinki. It also operates in Tallinn. Pekka Mettälä serves as the Group's CEO. At the end of the review period, Panostaja's shareholding in the Group stood at 55.2%.
During the financial year 2020, demand for Grano's services varied significantly between quarters and product areas. Starting from March, the clear drop in demand due to the coronavirus pandemic dragged the order volumes down. In the fourth quarter, the demand recovered compared to the previous quarter. During the review period, the strongest growth was demonstrated by the packaging and labelling business, translation services, electronic document management solutions and illuminated advertisements. The net sales for traditional sheet printing product groups lagged roughly 25% behind the reference year's level. The drop in demand in the large-scale print line was compensated by means of alternative business opportunities, such as manufacturing protective aprons used for health care and the treatment of COVID-19 patients. Due to the decline of print services, Grano's total net sales weakened by 15% to MEUR 109.9 (MEUR 129.7).
Despite the drop in net sales, Grano's EBIT was slightly higher than in the reference period, standing at MEUR 4.8 (MEUR 4.1). Significant recourse for the declining net sales was secured through extensive layoffs and cutbacks to fixed expenditures. The profit/loss for the reference period is encumbered by the MEUR 1.0 cost provision related to employer-employee negotiations and the MEUR 0.9 impairment linked to restructuring measures related to the company's ERP systems.
In September 2020, the company initiated employer-employee negotiations that aimed at improved structural agility in operations and an increase in customer orientation. The negotiations were completed at the beginning of November. The restructuring measures arrived at through the negotiations will result in the termination of an estimated 96 jobs in total. As a result of new role assignments, some 20 of these employees will remain in employment but in a different role. The operational restructuring and streamlining measures target about MEUR 3.4 in annual cost savings, about MEUR 1.0 of which are estimated to be realized in the 2021 financial year. The targeted savings will take full effect on an entire financial period's profitability level for the first time in the 2022 financial period.At the end of the financial period, the segment employed 940 (1,089) staff.
Suomen Helakeskus Oy, based in Seinäjoki, is a major wholesale dealer concentrating on furniture fittings. The company imports, markets and sells fittings for the fixture and furniture industry. The company is part of the Suomen Helasto Group, in which Panostaja has a 100% holding. The CEO of Suomen Helakeskus Oy is Martti Niemi.
Helakeskus' net sales dropped from the reference year level by about 6%, standing at MEUR 7.6 (MEUR 8.0). Over the course of the financial period, the market situation remained fair, even though the increase in general uncertainty as a result of the coronavirus pandemic weakened the outlook. The company continued its efforts to expand and hone the product selection, which is why the brokerage of consumer light fixtures was discontinued. The company also opened a new website during the financial period and continued to develop online trade. Despite the drop in sales, profitability was maintained at the reference year level at MEUR 0.5, thanks to strict cost control. At the end of the financial period, the segment employed 18 (19) staff.
Hygga offers an entirely new kind of ERP system as a licensed service to public and private dental care and health care providers. It also runs a dental clinic in Kamppi, Helsinki, with and entirely new service concept based on the proprietary ERP system. The clinic's operations are based on a customer-centered approach in which the customer is offered all dental care services in one visit, with top quality and without having to wait in line. The company's CEO is Jussi Heiniö. At the end of the review period, Panostaja's shareholding in the Group stands at 79.8%.
Hygga's net sales decreased during the review period from MEUR 4.7 to MEUR 4.1. The drop in net sales dragged Hygga's EBIT down to MEUR -0.3 (MEUR -0.2). The decrease in net sales is primarily due to the lower net sales of the Kamppi clinic.
As regards the clinic business, the market situation has been extremely challenging through the entire year, even though there was a clear increase in visitor numbers during the summer after the first wave of the pandemic. During the review period, the most significant event in terms of the clinic business was the contract made on June 1, 2020 with the City of Helsinki on the provision of outsourced oral health care services. Hygga estimates the total value of the contract to be about MEUR 23. The provision of the service will begin on November 1, 2020.
As regards the licensing business, the outlook remains bright in Finland and especially on an international scale. That said, the progress of new contracts stalled for almost the entire year as customers focused on urgent health care needs due to the coronavirus pandemic. Domestically, the company's focus is especially on the development of service solutions for general health care, and related pilot projects are currently under way in Rauma and Porvoo. In September, it was announced that Hygga's licensing segment is involved in the Aster project managed by the Central Finland Health Care District. Aster aims to develop a new information system for social welfare and health care professionals to combine basic health care, specialized health care and social services. Within the scope of the project, Hygga is responsible for providing a patient information system for oral health care and supplying the Hygga Flow ERP system. In terms of international licensing business, Hygga Flow has been adopted in the Netherlands and Sweden. Italy and Switzerland have also been interested. At the end of the financial period, the segment employed 79 (58) staff.
Heatmasters Group offers heat treatment services for metals in Finland and internationally, as well as produces, develops and markets heat treatment technology. In Finland, Heatmasters has facilities in Hollola, Varkaus and Turku. In addition to this, the group has facilities in Estonia and Poland. Panostaja's holding in the Group is 80.0%. Heatmasters Group Oy's CEO is Ilkka Mujunen.
Despite the challenging market conditions, Heatmasters' net sales remained almost at the level of the reference period, standing at MEUR 4.0 (MEUR 4.2). The coronavirus pandemic, which began in the spring, pulled the rug out from under the planned measures to boost net sales. Among other contracts, the large-scale outage planned for the Neste refinery in Kilpilahti was cancelled due to the pandemic. On the other hand, the summer season was exceptionally busy in terms of furnace treatments at the Varkaus facility, which provided some compensation for the situation. The coronavirus pandemic was especially hard on equipment demand as customer uncertainty reduced equipment trade across the globe. Despite the drop in net sales, the company's profit/loss improved slightly over the reference period to MEUR 0.3 (MEUR 0.2), thanks to strict cost discipline, adaptation measures and staff flexibility At the end of the financial period, the segment employed 35 (38) staff.
Established in 2013, CoreHW is a company that provides highadded value design services in the RF IC sector, developing RF microchips and antenna technology and offering related consulting services. The company's business is divided into design services, consulting and the development of proprietary and licensed technologies (IP). CoreHW has offices in four cities: Tampere, Helsinki, Oulu and Turku. The CEO of the company is Tomi-Pekka Takalo. At the end of the review period, Panostaja's holding in the segment stands at 61.1%.
For CoreHW, the 2020 financial period was good: net sales increased by 40% to MEUR 8.1 (MEUR 5.7). The year largely progressed as planned, and the coronavirus pandemic had little impact on the deliveries of agreed-upon projects. In terms of acquiring new international customers, on the other hand, the pandemic slowed down the process. Demand for the company's services has been high, with no change in sight. Over the course of the financial period, CoreHW began cooperation with three significant new customers, and the order book for design services remains strong for the coming financial year. Over the course of the review period, heavy investments continued to be made on the company's first proprietary product, the CoreHW RABBIT antenna switch intended for indoor positioning. Later in the year, the company supplied evaluation solutions for indoor positioning technology to multiple international customers, and the customer feedback has been excellent. The company successfully recruited several new professionals during the financial year, despite the fierce competition for skilled specialists. CoreHW's EBIT stood at MEUR 0.5 (MEUR 0.4). The result for the review period is partially encumbered by the investments in the sales and marketing of the proprietary product as well as new recruitments. At the end of the financial period, the segment employed 72 (56) staff.
The Carrot Palvelut Oy group provides nationwide high-quality staffing, recruitment and outsourcing services and serves as a strategic HR partner to its customers. Carrot employs thousands of experts in various fields annually, meets a variety of recruitment needs and serves as a partner to its customers in wider outsourcing projects. The company's customers include companies in the fields of construction, industry and logistics, for example. Carrot has a head office in Helsinki and smaller offices in more than ten localities in Finland. Jouni Arolainen served as the company's CEO until March 16, 2020. The company's current CEO is Tessa Koivunen. At the end of the review period, Panostaja's holding in the segment stands at 74.1%.
Carrot's net sales for the review period stood at MEUR 14.5 (MEUR 20.8) while its operational EBIT was MEUR -0.7 (MEUR -0.4). The company's reported EBIT of MEUR -4.0 for the reference period includes a goodwill impairment of MEUR 3.3. Over the course of the review period, market demand has remained low and the impacts of the coronavirus pandemic have been significant. In the construction business, project kick-offs have been delayed and, in the customer service segment, restrictions have weakened the demand for Carrot's services. During the review period, the company, under the leadership of its new CEO, implemented a program aimed at restoring profitability and increasing net sales. Significant strides in terms of digitalization were also taken by making the entire recruitment process digital, for example. At the end of the financial period, the segment employed 277 (476) staff.
Oscar Software Oy is a software service company specialized in the development of enterprise resource planning (ERP) systems and various business services. In addition to the diverse ERP systems, Oscar provides financial management and HR services as well as software for webstores and services for online business. Oscar has a wide customer base, which includes SMEs from various sectors. The company has around 800 customers, its HQ is located in Tampere and it has offices in Helsinki and Turku. The company's CEO was Simo Salminen until May 25, 2020. The company's current CEO is Riikka Kivimäki. At the end of the review period, Panostaja's holding in the segment stands at 54.5%.
Oscar Software's net sales for the review period increased by 9% and were MEUR 11.0 (MEUR 10.1). The demand situation for the ERP software business and financial outsourcing services has been largely good for the financial period. Despite the coronavirus pandemic, most customers have continued normal development with the company. That said, the coronavirus outbreak has slowed down decision-making among customers, especially with regard to new ERP acquistions. EBIT increased significantly from the reference period to MEUR 1.1 (MEUR 0.2). The EBIT boost is explained by the measures taken to streamline internal operations to increase customer invoicing and cut costs. In addition to this, the coronavirus pandemic led to substantial adaptation measures during the review period: for example, recruitment primarily focused on increasing profitability in the short term. During the coming financial year, the intention is to continue to bolster the company's resources through recruitment and pay particular attention to the development of the customer experience. At the end of the financial period, the segment employed 127 (131) staff.
The net sales of the Others segment remained close to the level of the reference period. In the review period, two associated companies, Gugguu Group Oy and Spectra Yhtiöt Oy, issued reports to the parent company. The profit/loss of the reported associated companies in the review period was MEUR 0.2 (MEUR 0.2), which is presented on a separate row in the consolidated income statement.
Operating cash flow improved and stood at MEUR 23.6 (MEUR 10.8). Liquidity remained good. The Group's liquid assets were MEUR 34.3 (MEUR 16.4) and interest-bearing net liabilities MEUR 64.0 (MEUR 53.7). Net gearing increased and was 90.1% (67.5%). Net liabilities increased by about MEUR 20.2 due to the implementation of the IFRS 16 standard. The Group's net financial expenses for the review period were MEUR -2.8 (MEUR -2.1), or 1.8% (1.1%) of net sales.
Panostaja has a MEUR 15.0 corporate acquisition limit, which enables the withdrawal of three-year loans to fund Panostaja's corporate acquisitions and/or additional investments in the Group's companies. MEUR 15.0 of Panostaja's corporate acquisition limit remains to be withdrawn.
The Group's equity ratio at the end of the review period was 33.6% (41.3%). Return on equity was -4.6% (3.1%). Return on investment fell to 0.5% (3.8%).
The Group's gross capital expenditure for the review period was MEUR 4.7 (MEUR 7.9), or 3.0% (4.3%) of net sales. Investments were mainly targeted at tangible and intangible assets. During the financial period, MEUR 2.8 (MEUR 1.6) of development expenses were activated.
At the time of closing the books, there were no payables to related-party companies. The totals and the main loan conditions of the loans issued to management are presented in Note 35 to the financial statements.
The Group takes controlled risks to utilize opportunities for business operations in an optimal manner. The Group's conventional business risks concern the market and competitive situations of the investment targets, customer and supplier risks, corporate acquisitions and the risks involved in related financing.
The seven investment targets in which Panostaja has a majority shareholding operate in different fields. The aim is to ensure that the Group's financial performance is not substantially dependent on the development and results of a single investment target but, depending on the market conditions and as a business area grows, its significance for the Group is emphasized, which may mean that the risk is substantial. The Group's financial performance and development are not normally dependent on a single customer, but losing one or more important customers may have financial consequences for the results and development of a single investment target.
The general trend development and especially the development of the Finnish economy may have a significant effect on the Group's financial performance and development. The Group's results and development are also affected by the seasonal nature of the business. The seasonal variations of the business operations have the effect that ordinarily the first half of the year is weaker than the second. The continuous changes in competition, such as price competition and new rivals for an individual investment target, may affect the Group's financial performance and development, although the Group and its investment targets work continuously to develop their activities to meet the competitive situation. The risks involved in the price and availability of the raw materials that the different investment targets use in their operations may also significantly influence the financial performance and development of a single investment target, but will normally not affect the whole Group's development and results in any substantial way.
Exchange rate, interest, financial and credit loss risks have normally no significant effect on the Group's financial performance and development, but they may have a substantial influence on the financial performance and development of a single investment target. The Group and its various investment targets strive significantly to hedge against these risks in different ways, but it is not always possible.
The risks connected to the Group's staff may influence the Group's and its investment targets' development and financial performance if the Group is unsuccessful in the recruitment of key persons and other employees or in committing them to the Group.
If unsuccessfully managed, the risk of weakening reputation or trust due to negative publicity or the realization of some other risk may impact the development and financial result of the Group or its segments. Risks related to reputation are managed by maintaining an ethical corporate culture, ensuring timely and sufficient communications, implementing compliance activities and instructions, understanding the expectations of interest groups and preparing crisis management plans.
If unsuccessfully managed, risks concerning the environment may affect the development and financial performance of the Group and its investment targets. The Group complies with the legislation concerning environmental issues and takes the responsibilities they bring into account especially carefully and in all its operations strives to observe the principles of sustainable development. The Group has no knowledge of any significant risks concerning environmental issues.
The Group has extensive insurance coverage that covers material damage in accordance with the insurance terms and conditions. The insurance level of property risks is monitored regularly. If unsuccessful in managing them, risks concerning guarantees, suspension, product liability and repair may affect the development and financial performance of the Group and its investment targets. All Group companies endeavor to minimize these risks by investing in the management of the supply chain, the quality of their own activities, product development and the regular assessment of risks. If possible, such risks are covered by insurance protection.
If unsuccessfully managed, risks concerning the corporate acquisitions may affect the development and financial performance of the Group and its investment targets. The Group also aims to grow through corporate acquisitions. The goodwill associated with corporate acquisitions entered in the consolidated balance sheet amounts to approximately MEUR 88.0. Goodwill is not written off annually on a regular basis but, instead of depreciations, an impairment test is performed at least annually, or when there are indications of amortization. Values are normally checked during the second half of the year in connection with the budgeting process. Such a change might make goodwill write-downs necessary.
Official regulations may affect the development and financial performance of the Group and its investment targets. Amendments to regulations are followed carefully within the Group and the different investment targets, and efforts are made to react to them in advance if possible.
Panostaja Oyj's Annual General Meeting was held on February 6, 2020 in Tampere. The number of Board members was confirmed at five (5), and Jukka Ala-Mello, Eero Eriksson, Mikko Koskenkorva, Tarja Pääkkönen and Kalle Reponen were re-elected to the Board for the term ending at the end of the next Annual General Meeting. As proposed by the Board, the Annual General Meeting decided to confirm the number of auditors to be one (1).
The Annual General Meeting decided to select Authorized Public Accountants PricewaterhouseCoopers Oy as the auditor for the term concluding upon the end of the Annual General Meeting of 2021. Auditing service network PricewaterhouseCoopers Oy has stated that Authorized Public Accountant Lauri Kallaskari will serve as the chief responsible public accountant.
Discharge from liability for the financial period November 1, 2018–October 31, 2019 was granted to the following persons: Board members Jukka Ala-Mello, Eero Eriksson, Mikko Koskenkorva, Tarja Pääkkönen and Hannu-Kalle (Kalle) Reponen and CEO Juha Sarsama for the period November 1, 2018–December 31, 2018 and CEO Tapio Tommila for the period January 1, 2019–October 31, 2019. The Annual General Meeting decided to grant a discharge from liability to the aforementioned members of the Board and CEOs.
The General Meeting confirmed the financial statements and consolidated financial statements presented for the financial year November 1, 2018–October 31, 2019 and resolved that the shareholders be paid EUR 0.05 per share as dividends.
The Meeting also resolved that the Board of Directors be authorized to decide at its discretion on the potential distribution of assets to shareholders should the company's financial status permit this, either as dividends or as repayment of capital from the invested unrestricted equity fund. The maximum distribution of assets performed on the basis of this authorization totals EUR 4,700,000. The authorization includes the right of the Board to decide on all other terms and conditions relating to said asset distribution. The authorization will remain valid until the beginning of the next Annual General Meeting. The General Meeting granted exemption from liability to the members of the Board and to the CEO.
The General Meeting resolved that the remuneration of the Board of Directors remain unchanged and that the Chairman of the Board be paid EUR 40,000 as compensation for the term ending at the end of the next Annual General Meeting, and that the other members of the Board each be paid compensation of EUR 20,000. It was further resolved at the General meeting that approximately 40% of the compensation remitted to the members of the Board be paid on the basis of the share issue authorization given to the Board, by issuing company shares to each Board member if the Board member does not own more than one (1) percent of the company's shares on the date of the General Meeting. If the holding of a Board member on the date of the Meeting is over one percent (1%) of all company shares, the compensation will be paid in full in monetary form. It was further resolved that the travel expenses of the Board members will be paid on the maximum amount specified in the valid grounds of payment of travel expenses ordained by the Finnish Tax Administration.
The chairman presented to the Annual General Meeting the Board's proposal for authorizing the Board to decide on the acquisition of the company's own shares.
As proposed by the Board, the Annual General Meeting decided to authorize the Board to decide on the acquisition of the company's own shares in one or more installments on the following conditions:
The number of the company's own shares to be acquired may not exceed 5,200,000 in total, which corresponds to about 9.9% of the company's total stock of shares. By virtue of the authorization, the company's own shares may be obtained using unrestricted equity only. The company's own shares may be acquired at the date-of-acquisition price in public trading arranged by Nasdaq Helsinki Oy or otherwise at the prevailing market price.
The Board of Directors will decide how the company's own shares are to be acquired. The company's own shares may be acquired while not following the proportion of ownership of the shareholders (directed acquisition).
The authorization issued at the Annual General Meeting on January 31, 2019 to decide on the acquisition of the company's own shares is canceled by this authorization. The authorization will remain valid until August 5, 2021.
Immediately upon the conclusion of the General Meeting, the company's Board held an organizing meeting in which Jukka Ala-Mello was elected Chairman and Eero Eriksson Vice Chairman.
At the close of the review period, Panostaja Oyj's share capital was EUR 5,568,681.60. The number of shares is 52,533,110 in total.
The total number of own shares held by the company at the end of the review period was 110,824 (at the beginning of the financial period 193,594). The number of the company's own shares corresponded to 0.2% of the number of shares and votes at the end of the entire review period.
In accordance with the decisions by the General Meeting and the Board on February 1, 2019, Panostaja Oy relinquished a total of 28,325 individual shares as share bonuses to the company management on December 16, 2019. On December 16, 2019, the company relinquished to the Board members a total of 12,195 shares as meeting compensation. In accordance with the Board decision of February 6, 2020, Panostaja relinquished a total of 13,514 shares on March 13, 2020, a total of 14,368 shares on June 5, 2020 and a total of 14,368 shares on September 4, 2020, as meeting compensation.
Panostaja Oyj's share closing rate fluctuated between EUR 0.51 (lowest quotation) and EUR 1.00 (highest quotation) during the financial period. During the review period, a total of 5,807,553 shares were exchanged, which amounts to 11.1% of the share capital. The October 2020 share closing rate was EUR 0.71. The market value of the company's share capital at the end of October 2020 was MEUR 37.2 (MEUR 40.8). At the end of October 2020, the company had 4,697 shareholders (4,464).
The company's Board of Directors proposes to the Annual General Meeting that a dividend of EUR 0.03 per share be paid for the past financial period.
The Board also proposes that the General Meeting authorize the Board of Directors to decide, at its discretion, on the potential distribution of assets to shareholders, should the company's financial status permit this, either as dividends or as repayment of capital from the invested unrestricted equity fund. The maximum distribution of assets performed on the basis of this authorization shall total no more than EUR 4,700,000. It is proposed that the authorization include the right of the Board to decide on all other terms and conditions relating to said asset distribution. It is also proposed that the authorization remain valid until the start of the next Annual General Meeting.
Panostaja Oyj's Annual General Meeting will be held on February 5, 2021 in Tampere.
No significant events after the review period.
As regards the corporate acquisition market, plenty of opportunities are available and the market is active. The need to leverage ownership arrangements and growth opportunities will persist for SMEs, but the high market liquidity and increased price expectations of sellers are making the operating environment more challenging for corporate acquisitions. We will continue exploring new possible investment targets in accordance with our strategy and assess divestment possibilities as part of the ownership strategies of the investment targets.
It is thought that the demand situation for different investments will develop in the short term as follows:
The demand information presented above involves uncertainties relating to the possible escalation of the COVID-19 pandemic. This may impact the future development of Grano, Carrot and Hygga, in particular, and rapidly and dramatically change the estimate provided above.
In this report, we provide information on how Panostaja as a Group handles environmental and social matters as well as employees, human rights and anti-corruption efforts.
Panostaja's Board of Directors approves the report on an annual basis. The report is issued by the parent company for the entire Group, covering the period from November 1, 2019 to October 31, 2020.
Based on Directive 2014/95/EU, the Accounting Act requires listed companies to report on the aforementioned matters. As regards each of them, the company must report the following, for example:
| ENVIRONMENT | SOCIAL MATTERS AND EMPLOYEES |
HUMAN RIGHTS |
KORRUPTION TORJUNTA |
|---|---|---|---|
| Energy consumption |
Occupational safety and health |
Human rights | Anti-corruption and -bribery efforts |
| Carbon footprint |
Absences due to illness |
Ethical guidelines |
Ethical guidelines |
| Employee training |
Training attendance |
Training attendance |
|
| Employee satisfaction |
*In this context, KPI (Key Performance Indicator) is a key figure specified by Panostaja for non-financial information.
Panostaja companies strive to adhere to the principle of continuous improvement. This means taking a systematic approach with regard to problems or challenges and their possible causes. The correct resources are used to plan and implement preventive and corrective measures. In addition to the above, results are monitored and analyzed to ensure the success and sustainability of the operations.
Panostaja has published an ethical Code of Conduct on its website. The Code of Conduct includes guidelines regarding our principles and practices, as well as our responsibilities toward our business environment, employees, business partners and society.
Panostaja is an investment company developing Finnish SMEs in the role of an active shareholder. At Panostaja, ownership is active partnership, development of management work, identification of growth potential and facilitation of reaching full potential. To Panostaja, growth and ownership are responsible and long-term work for success.
Panostaja actively seeks financially healthy companies it believes can rise to the top tier of its field with the Group's support. Panostaja provides business-related and strategic expertise to the company, along with tools that support management. Panostaja also assists the companies in securing financing and implementing corporate acquisitions. The increased owner value is realized upon divestment after the development phase.
Financial responsibility within the group refers to continuous efforts to ensure operational profitability. Profitable operations enable continuous development in order to maintain the competitiveness of the business operations. This is also a requirement for the Group being able to take care of its personnel, fulfil its responsibilities toward society and partners, and take the necessary responsibility for the development of environmental matters. Panostaja adheres to the effective acts, decrees and regulations.
The financial goal must be reached by responsible and ethical means, with due consideration to environmental and social responsibilities. In the long term, responsible operations according to the principles of sustainable development is the cornerstone of profitable business.
Panostaja Group is aware of its responsibility in environmental matters and strives to consistently reduce its environmental load and foster the principles of sustainable development. Panostaja's most significant environmental impacts are related to energy consumption, use of printing materials, and the distribution and transportation of products. The company seeks to prevent and minimize detrimental environmental effects through efficient operations and materials use as well as responsible procurement arrangements. The Group aims to protect and conserve the environment by complying with environmental law, improving the energy efficiency of its operations and reducing the amount of generated waste. This area is covered by Panostaja's Code of Conduct. Panostaja's subsidiary Grano uses a certified environmental management system ISO14001:2015. The principles of continuous development are observed in accordance with the standard. In terms of its other subsidiaries, Panostaja is developing methods that ensure due diligence.
Panostaja has identified energy consumption and carbon footprint as the most important environmental KPIs. The Group companies operate in different fields, which is why there is variation between them in terms of energy consumption. Panostaja does not operate in an energy-intensive field of industry and estimates its environmental risk to be low.
The companies report their energy consumption for all properties involved in their operations. Consumption data is collected from energy company reports, and the companies' figures are aggregated. The Group's key figure for energy consumption (MWh) is 10,432 (10,823). Consumption has remained at the level of the reference period.
Greenhouse gas emissions are reported in accordance with
the international GHG Protocol reporting principles. The Group monitors carbon dioxide emissions in adherence to the Scope 2 key figures (tn CO2).
The relevant key figure encompasses the emissions caused by energy procured within subgroups. The energy consumption data have been obtained from the companies' electricity providers. This information has been collected from all facilities of all companies and then consolidated. Scope 2 emissions are calculated and reported in two ways:
1. Market based (method based on contractual greenhouse gas emissions/residual mix). The market-based emission amount caused by energy consumption is 2,598 tnCO2 (2,859) The market-based value is calculated using the following formula:
Energy consumption (kWh) * emission factor (gCO2/kWh) 1,000,000
2. Location based (method based on average greenhouse gas emissions from Finnish energy production). The emission amount caused by location-based energy consumption is 1,471 tnCO2. (1,710)
The location-based emission value is calculated by multiplying the energy consumption with the average emission factor of Finnish energy production 141 g CO2/kWh. In 2019, the emission factor was 158 g CO2/kWh.
The most significant reason for the change in power consumption and greenhouse gas emissions is the divestment of a portion of the Group's business operations and the decrease in the volume of print production.
The rapidly progressing coronavirus pandemic impacted Panostaja's operations from March onward. Immediately after the escalation of the pandemic, the Group companies implemented precautions to protect the health and well-being of their staff and customers and ensure the functionality of services. Where possible, the companies transitioned to remote working arrangements and made efforts to minimize workplace contact. The companies were able to adapt to the extraordinary circumstances without any service interruptions.
The Group has identified risks related to employee health, occupational safety and the work environment. The Group's Code of Conduct details relevant principles, practices and responsibilities.
Social responsibility is a key factor in terms of employee well-being. Panostaja wishes to create safe and healthy work conditions that are based on respect and fairness.
Panostaja does not tolerate any forms of harassment, threats, bullying or discrimination. The company respects its employees and treats them equally. Panostaja provides its employees with equal opportunities to advance their careers, regardless of their gender, age, values or other personal characteristics.
The Group strives to promote work well-being and improve the quality of working life within the work community. The equal treatment of personnel and the promotion of equality are the principles guiding supervisory work. Management work also considers the varying life situations, values and expectations among employees of different ages.
Panostaja takes care of work well-being by investing in
high-quality management and supervisory work, smooth interaction and internal communications, and a healthy and trusting atmosphere at work.
Numerous training and discussion events are organized for the management personnel of companies each year. Coaching to supervisors and mentors is also provided. During the past financial period, the sessions have primarily been held remotely. Sales training and various events related to business development have also been organized. A Management Index survey was arranged between 2013 and 2019 to measure the development of management with regard to a variety of areas.
Employee satisfaction and related factors have been studied since 2013. The results of the Management Index survey conducted at the beginning of 2018 indicated that work satisfaction is at a good level at Panostaja, with the total index standing at 4.4 (scale 1–6). An updated Management Index survey was carried out in the 2019 financial period. The structure of the survey has been changed but the results are in line with the previous years. Toward the end of 2020, Panostaja switched to the more agile Pulssi survey. Initially, the Pulssi survey was conducted on a monthly basis. Going forward, it will be carried out at least every other month. The purpose of the survey is to measure work satisfaction and well-being among the staff of Panostaja companies. The more concise survey that is conducted more than only once a year enables proactive measures and more focused responses to a variety of issues.
Work satisfaction has remained good for the entire seven-year-period during which surveys have been carried out. Work atmosphere and its development within the companies is also monitored through occupational health.
The Group finds it important that the employees are competent enough to perform their tasks in a responsible manner. Therefore, orientation training is provided to new employees and staff training is organized actively. Training is considered an element of day-today work activities. The Group companies have their own training systems, and employees have personal development plans.
The companies pay attention to preventive health care and encourage their employees to engage in sports and exercise. They also have in place an early support model aimed at ensuring the recognition of factors related to work capability and well-being and their sufficiently early recognition. It is important to Panostaja to ensure that employees are enthusiastic about their own work and the work atmosphere remains good.
Each subgroup must handle matters related to occupational safety and health at individual workplaces. Heatmasters Group has the occupational health and safety certificate OHSAS 18001.
Panostaja monitors employee absences and work-related accidents on a monthly basis. HR management records employee absences, any accidents that occur and average training days among personnel. The occupational health service issues regular reports on the statistics it collects. This information is used to derive the following non-financial key figures for the Group:
| 2020 | 2019 | 2018 | 2017 |
|---|---|---|---|
| 53 | 91 | 85 | 47 |
| 17.7 | 25.1 | 21.7 | 17.6 |
| 3.4 | 3.2 | 2.7 | 2.8 |
| 1,138 | 1,853 | 1,518 | 459 |
Number of work accidents that led to at least one day of sick leave / working hours completed * 1,000,000
Absences during illness or injury and in relation to the illness of a child are counted toward the time of absences for the financial period.
Number of sick days in the financial period November 1–October 31 / (theoretical regular working hours during the financial period in days) * 100
Panostaja has estimated its risk in relation to respecting human rights to be low. That said, there is always the risk that the Group may violate human rights in its own operations or through its supply chain. These infringements may have a negative effect on individual persons and harm Panostaja's reputation.
Panostaja respects all internationally recognized human rights and strives to construct its methods and practices in a manner that ensures the consideration of human rights across all of the company's operations. The Group observes the labor legislation, collective agreements and rights defined in the Universal Declaration of Human Rights, adopted by the United Nations, that include equality between people, prohibition of discrimination and freedom of religion and opinion. In its Code of Conduct, Panostaja provides guidelines to employees on how to report possible infringements. No human rights violations were reported in 2020.
In its Code of Conduct, Panostaja prohibits all activities that may violate human rights. At the end of the financial period, 91% of the Group's entire staff (92% in the reference year) have completed training on the content of the Code of Conduct.
Panostaja adheres to the effective acts, decrees and regulations. Panostaja's companies always compete in a fair and honest manner in compliance with competition law. The Group's companies do not participate in cartels or discuss contract terms, prices or other matters related to competition with our competitors. Panostaja prohibits corruption and bribery in all our operations, and we do not accept services, goods, trips or anything else from any of our cooperation partners or suppliers that exceeds the limits of normal hospitality This area is covered by Panostaja's Code of Conduct.
The identification and assessment of corruption-related risks are part of the general risk assessment measures conducted by Panostaja and business units. However, corruption and bribery can occur in Panostaja's own operations or its supply chain. Cases of corruption and bribery may lead to legal sanctions. Although, based on these assessments, Panostaja's own operations and services do not entail a high risk of corruption, it strives to incorporate responsible business practices into all areas of its operations.
Panostaja has provided guidelines to employees on how to report possible infringements. No infringements related to bribery were reported during the financial period or the reference period.
KEY FIGURES OF PANOSTAJA-GROUP
| 2020 | 2019 | 2018 | |
|---|---|---|---|
| Net sales, MEUR | 159.0 | 182.9 | 185.2 |
| EBIT, MEUR | 0.8 | 3.8 | 4.1 |
| % of net sales | 0.5 | 2.1 | 2.2 |
| Profit for the financial period, MEUR | -3.4 | 2.5 | 27.1 |
| Return on equity (ROE), % | -4.6 | 3.1 | 36.5 |
| Return on investment (ROI), % | 0.5 | 3.8 | 18.4 |
| Equity ratio, % | 33.6 | 41.3 | 40.4 |
| Gearing, % 1) |
90.1 | 67.5 | 69.0 |
| Current ratio | 1.0 | 1.0 | 1.2 |
| Gross capital expenditure, MEUR | 4.7 | 7.9 | 23.5 |
| % of net sales | 3.0% | 4.3% | 12.7% |
| Avg. no. of Group employees | 1,727 | 1,969 | 1,927 |
| Earnings per share (EPS), EUR, undiluted * |
-0.08 | 0.03 | 0.46 |
| Earnings per share (EPS), EUR, diluted * |
-0.08 | 0.03 | 0.46 |
| Equity per share, EUR | 0.82 | 0.96 | 1.02 |
| Dividend per share, EUR 2) |
0.03 | 0.05 | 0.05 |
| Extra dividend per share, EUR | 0.03 | ||
| Dividend/Earnings % undiluted | -36.1 | 159.2 | 10.8 |
| Dividend/Earnings % diluted | -36.1 | 159.2 | 10.8 |
| Extra dividend/Earnings % diluted | 95.5 | ||
| Extra dividend/Earnings % diluted | 95.5 | ||
| Effective dividend income % | 4.2 | 6.4 | 5.0 |
| Average number of outstanding shares in the financial period (1,000) | 52,392 | 52,298 | 52,125 |
| Number of shares at the end of the financial period (1,000) | 52,533 | 52,533 | 52,533 |
| Weighted average of the number of issue-adjusted shares during the financial period, (1,000) |
52,392 | 52,298 | 52,125 |
| Closing rate for the financial period, EUR | 0.71 | 0.78 | 1.00 |
| Lowest share price, EUR | 0.51 | 0.77 | 0.88 |
| Highest share price, EUR | 1.00 | 1.16 | 1.21 |
| Average share price in the financial period, EUR | 0.75 | 0.86 | 1.03 |
| Market value of stock, MEUR | 37.2 | 40.8 | 52.1 |
| Shares exchanged, 1,000 | 5,808 | 9,499 | 9,375 |
| Shares exchanged, % | 11.1 | 18.1 | 18.0 |
2) Board of Directors' proposal * Audited key figure
The value-added tax adjustment by deducting a total of MEUR 0.5 from the previous year's profits did not have a substantial impact on the key figures for 2018–2019.
Key figures provide a brief overview of the business development and financial position of a company as well as profit distribution.
The key figures for the 2018 financial period have not been changed due to divestment or discontinuation of businesses during the past financial period.
| = Return on investment (ROI) % |
Profit/loss after financial items + financial costs + profit/loss on discontinued operations x 100 | ||||
|---|---|---|---|---|---|
| Balance sheet total - non-interest bearing liabilities (average in the financial period) | |||||
| = | Profit for the financial period x 100 | ||||
| Return on equity (ROE) % | Equity (average in the financial period) | ||||
| Equity x 100 | |||||
| Equity ratio, % | = | Balance sheet total - advances received | |||
| Interest-bearing net liabilities | = | Interest-bearing liabilities - interest-bearing receivables - financial assets | |||
| = | Interest-bearing net liabilities | ||||
| Gearing, % | Equity | ||||
| = | Equity attributable to parent company shareholders | ||||
| Equity per share | Adjusted number of shares on the balance sheet date | ||||
| = | Result for the financial period attributable to parent company shareholders | ||||
| Earnings per share (EPS) | Adjusted number of shares on average during the financial period | ||||
| Current assets | |||||
| Current Ratio | = | Current liabilities | |||
| Dividend distributed in the financial period | |||||
| Dividend per share | = | Adjusted number of shares on the balance sheet date | |||
| Dividend / share x 100 | |||||
| Dividend / Earnings % | = | Earnings per share (EPS) | |||
| Dividend per share x 100 | |||||
| Effective dividend income, % | = | Share price on the balance sheet date |
| MEUR | October 31, 2020 | October 31, 2019 |
|---|---|---|
| Liabilities total | 140.9 | 113.8 |
| Non-interest-bearing liabilities | 37.6 | 38.6 |
| Interest-bearing liabilities | 103.4 | 75.2 |
| Trade and other receivables | 22.9 | 29.8 |
| Non-interest-bearing receivables | 17.8 | 24.7 |
| Interest-bearing receivables | 5.1 | 5.1 |
| Interest-bearing liabilities | 103.4 | 75.2 |
| Interest-bearing receivables | 5.1 | 5.1 |
| Cash and cash equivalents | 34.3 | 16.4 |
| Interest-bearing net liabilities | 64.0 | 53.7 |
For the financial period November 1, 2019–October 31, 2020
| (EUR 1,000) Note |
November 1, 2019– October 31, 2020 |
November 1, 2018– October 31, 2019 |
|---|---|---|
| Net sales | 158,998 | 182,949 |
| Other operating income 9 |
1,009 | 2,485 |
| Materials and services | 45,180 | 51,151 |
| Staff expenses 11 |
75,582 | 89,806 |
| Depreciations, amortizations and impairment 12 |
20,340 | 11,461 |
| Other operating expenses 13 |
18,093 | 29,245 |
| EBIT | 812 | 3,771 |
| Financial income 14 |
369 | 382 |
| Financial expenses 15 |
-3,212 | -2,451 |
| Share of associated company profits 10 |
233 | 150 |
| Profit before taxes | -1,798 | 1,853 |
| Income taxes | -1,230 | -1,283 |
| Profit/loss from continuing operations | -3,028 | 569 |
| Profit/loss from sold and discontinued operations | 7 -410 |
1,963 |
| Profit/loss for the financial period | -3,438 | 2,533 |
| Attributable to | ||
| Shareholders of the parent company | -4,351 | 1,640 |
| Minority shareholders | 913 | 893 |
| Earnings per share calculated from the profit belonging to the shareholders of the parent company: |
||
| Earnings per share from continuing operations, EUR 17 |
||
| Undiluted | -0.075 | -0.006 |
| Diluted | -0.075 | -0.006 |
| Earnings per share from discontinued operations, EUR 17 |
||
| Undiluted | -0.008 | 0.038 |
| Diluted | -0.008 | 0.038 |
| Earnings per share on continuing and discontinued operations, EUR 17 |
||
| Undiluted | -0.083 | 0.031 |
| Diluted | -0.083 | 0.031 |
| Extensive consolidated income statement | ||
| Result for the period | -3,438 | 2,533 |
| Items of the extensive income statement | ||
| Translation differences | -5 | -132 |
| Extensive income for the period | -3,443 | 2,401 |
| Attributable to | ||
| Shareholders of the parent company | -4,356 | 1,508 |
| Minority shareholders | 913 | 893 |
The notes constitute an integral part of the financial statements.
| (EUR 1,000) Note |
October 31, 2020 | October 31, 2019 | |
|---|---|---|---|
| ASSETS | |||
| Non-current assets | |||
| Goodwill | 18 | 88,010 | 93,685 |
| Other intangible assets | 18 | 12,633 | 14,525 |
| Property, plant and equipment | 19 | 32,177 | 14,359 |
| Interests in associated companies | 20 | 3,575 | 3,342 |
| Other non-current assets | 21 | 5,818 | 8,057 |
| Deferred tax assets | 23 | 6,248 | 6,007 |
| Non-current assets total | 148,462 | 139,975 | |
| Current assets | |||
| Stocks | 6,330 | 7,158 | |
| Trade and other receivables | 25 | 22,868 | 29,714 |
| Tax assets based on taxable income for the period | 25 | 40 | 130 |
| Cash and cash equivalents | 26 | 34,255 | 16,381 |
| Current assets total | 63,494 | 53,383 | |
| Varat yhteensä | 211,958 | 193,360 | |
| EQUITY AND LIABILITIES | |||
| Equity attributable to parent company shareholders | |||
| Share capital | 27 | 5,569 | 5,569 |
| Share premium account | 27 | 4,646 | 4,646 |
| Other funds | 27 | 0 | 0 |
| Invested unrestricted equity fund | 27 | 13,612 | 13,550 |
| Translation difference | -282 | -353 | |
| Retained earnings | 19,281 | 26,929 | |
| Total | 42,826 | 50,341 | |
| Minority shareholders' interest | 28,185 | 29,211 | |
| Equity total | 71,012 | 79,552 | |
| Non-current liabilities | |||
| Deferred tax liabilities | 23 | 6,727 | 6,204 |
| Financial liabilities | 28 | 71,119 | 54,361 |
| Non-current liabilities total | 77,847 | 60,567 | |
| Current liabilities | |||
| Current financial liabilities | 28 | 32,264 | 20,839 |
| Tax liabilities based on taxable income for the period | 232 | 123 | |
| Trade payables and other liabilities | 29 | 30,605 | 32,279 |
| Provisions | 30 | 0 | 0 |
| Current liabilities total | 63,100 | 53,242 | |
| Liabilities total | 140,947 | 113,809 | |
| Equity and liabilities in total | 211,958 | 193,360 |
The notes constitute an integral part of the financial statements.
| (EUR 1,000) Note |
2020 | 2019 |
|---|---|---|
| Business operations | ||
| Profit/loss for the financial period before the minority share | -3,438 | 2,533 |
| Adjustments: | ||
| Depreciations 12 |
20,340 | 11,495 |
| Financial income and costs 14, 15 |
2,843 | 2,082 |
| Share of associated company profits 10 |
-233 | -150 |
| Taxes 16 |
1,230 | 1,283 |
| Sales profits and losses from property, plant and equipment 9, 13 |
-40 | -1,876 |
| Other earnings and expenses with no payment attached | 683 | -3,159 |
| Operating cash flow before change in working capital | 21,384 | 12,209 |
| Change in working capital | ||
| Change in non-interest-bearing receivables | 5,681 | 3,620 |
| Change in non-interest-bearing liabilities | -858 | 743 |
| Change in stocks | 238 | 166 |
| Change in working capital | 5,061 | 4,529 |
| Operating cash flow before financial items and taxes | 26,446 | 16,738 |
| Financial items and taxes: | ||
| Interest paid | -2,753 | -2,972 |
| Interest received | 202 | 244 |
| Taxes paid | -339 | -3,168 |
| Financial items and taxes | -2,889 | -5,896 |
| Operating net cash flow | 23,556 | 10,842 |
| Investments | ||
| Investments in intangible and tangible assets | -4,490 | -5,129 |
| Sales of intangible and tangible assets | 176 | 206 |
| Acquisition of subsidiaries with time-of-acquisition liquid assets deducted 6 |
-226 | -1,283 |
| Sale of subsidiaries with time-of-sale liquid assets deducted 7 |
540 | 4,106 |
| Acquisition and divestment of associated companies | 1 | 701 |
| Financial assets acquired and sold entered at fair value through profit and loss | 0 | 0 |
| Capital gains from sales of other shares | 0 | 5 |
| Loans receivable and repayments granted | 2,135 | 1,076 |
| Investment net cash flow | -1,865 | -319 |
| Finance | ||
| Share issue | 0 | 400 |
| Loans drawn | 15,202 | 2,725 |
| Loans repaid | -15,601 | -11,464 |
| Disposal of own shares | -202 | 184 |
| Dividends paid | -3,214 | -5,334 |
| Finance net cash flow | -3,814 | -13,489 |
| Change in liquid assets | 17,877 | -2,966 |
| Liquid assets at the beginning of the period | 16,381 | 19,348 |
| Effect of exchange rates | -3 | -1 |
| Liquid assets at the end of the period | 34,255 | 16,381 |
The notes constitute an integral part of the financial statements.
| Equity attributable to parent company shareholders | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| MEUR | Note | Share capital |
Share premium account |
Invested unrestricted equity fund |
Translation differences |
Retained earnings |
Total | Minority shareholders' interest |
Equity total |
| Equity as of November 1, 2018 | 5,569 | 4,646 | 13,393 | -292 | 29,501 | 52,818 | 31,341 | 84,159 | |
| Credit loss provision | -144 | ||||||||
| Adjusted equity as of November 1, 2018 |
5,569 | 4,646 | 13,393 | 292 | 29,361 | 52,677 | 31,341 | 84,018 | |
| Extensive income | |||||||||
| Profit/loss for the financial period |
1,640 | 1,640 | 893 | 2,533 | |||||
| Other extensive income items (adjusted with tax effect) |
|||||||||
| Translation differences | -61 | -71 | -132 | -132 | |||||
| Extensive income for the financial period total |
0 | 0 | 0 | -61 | 1,569 | 1,508 | 893 | 2,401 | |
| Transactions with shareholders | |||||||||
| Dividend distribution | 27 | -4,185 | -4,185 | -1,439 | -5,624 | ||||
| Repayment of capital | 27 | 0 | 0 | 0 | |||||
| Share issue | 0 | 0 | |||||||
| Disposal of own shares | 27, 35 | 157 | 157 | 157 | |||||
| Other changes | 0 | 0 | |||||||
| Reward scheme | 35 | -9 | -9 | -9 | |||||
| Transactions with shareholders, total |
0 | 0 | 157 | 0 | -4,194 | -4,037 | -1,439 | -5,476 | |
| Changes to subsidiary holdings | |||||||||
| Sales of shares in subsidiaries without change in controlling interest |
380 | 380 | 1,210 | 1,590 | |||||
| Selling of shares of subsidiaries owned resulting in loss of controlling interest |
-25 | -25 | -2,119 | -2,144 | |||||
| Business operations with minority shareholders |
8 | 8 | 437 | 445 | |||||
| Acquisitions of minority share holdings |
8 | -166 | -166 | -1,112 | -1,278 | ||||
| Adjusted equity as of October 31, 2019 |
5,569 | 4,646 | 13,550 | -353 | 26,928 | 50,340 | 29,211 | 79,552 |
| Equity attributable to parent company | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| MEUR | Note | Share capital |
Share premium account |
Invested unrestricted equity fund |
Translation differences |
Retained earnings |
Total | Minority shareholders' interest |
Equity total |
| Adjusted equity as of October 31, 2019 |
5,569 | 4,646 | 13,550 | -353 | 26,928 | 50,340 | 29,211 | 79,552 | |
| Value-added tax adjustment for financial periods 2018–2019 |
-511 | ||||||||
| Adjusted equity as of November 1, 2019 |
5,569 | 4,646 | 13,550 | -353 | 26,416 | 49,828 | 29,211 | 79,040 | |
| Extensive income | |||||||||
| Profit/loss for the financial period |
-4,351 | -4,351 | 913 | -3,438 | |||||
| Translation differences | 71 | -76 | -5 | 5 | |||||
| Extensive income for the financial period total |
0 | 0 | 0 | 71 | -4,427 | -4,356 | 913 | -3,443 | |
| Transactions with shareholders | |||||||||
| Dividend distribution | 27 | -2,619 | -2,619 | -751 | -3,370 | ||||
| Disposal of own shares | 27, 35 | 62 | 62 | 62 | |||||
| Other changes | 0 | 0 | |||||||
| Reward scheme | 35 | 64 | 48 | 48 | |||||
| Transactions with shareholders, total |
0 | 0 | 62 | 0 | -2,555 | -2,493 | -751 | -3,244 | |
| Changes in shares of subsidiaries |
|||||||||
| Changes in shares of subsidiaries owned resulting in loss of controlling interest |
0 | -935 | -935 | ||||||
| Business operations with minority shareholders |
8 | 0 | 0 | ||||||
| Acquisitions of minority share holdings |
8 | -152 | -152 | -253 | -405 | ||||
| Equity as of October 31, 2020 | 5,569 | 4,646 | 13,612 | -282 | 19,282 | 42,827 | 28,185 | 71,012 |
*Adjustment regarding value-added tax deducted from the parent company's other expenses for the 2018-2019 financial periods based on tax auditing. The reversing entry is listed under other Group liabilities in the financial statement.
| 2020 | 2019 | ||
|---|---|---|---|
| KL-Varaosat | KL Parts Oy | 0 | 100 |
| Grano | Grano Group Oy | 506 | 972 |
| Grano Diesel Oy | 245 | 367 | |
| 751 | 1,439 |
The parent company, Panostaja Oyj, invests in Finnish SMEs primarily by purchasing majority shareholdings in them. Panostaja Oyj, together with its subsidiaries, (hereinafter referred to as "Panostaja" or "the Group") form a group whose primary market area is Finland. At the time of closing the books, Panostaja has a majority holding in nine investment targets.
Panostaja Oyj is a Finnish public corporation operating under the legislation of the Finnish state. The company's shares have been quoted publicly since 1989. The shares are quoted on the Nasdaq Helsinki stock exchange. The company's registered office is in Tampere and the address of its head office is Kalevantie 2, 33100 Tampere. A copy of its consolidated financial statements is available at this address. At its meeting of December 10, 2020, Panostaja Oyj's Board of Directors approved these consolidated financial statements for publishing. Under the Finnish Limited Liability Companies Act, the shareholders may approve or reject the financial statements at the Annual General Meeting held after its publication on February 5, 2021. The AGM also has the opportunity to decide on implementing changes to the financial statements.
The consolidated financial statements have been prepared in accordance with the International Financial Reporting Standards (IFRS), and the IAS and IFRS standards, as well as the SIC and IFRIC interpretations, valid as of October 31, 2020, have been complied with. The International Financial Reporting Standards refer to the standards approved for application in the EU and the interpretations given on them in the Finnish Accounting Act and the provisions based on it in accordance with the procedure enacted in EU Regulation No 1606/2002. The notes to the consolidated financial statements also comply with the requirements of the Finnish legislation on accounting and corporations which complement the IFRSs.
The consolidated financial statements have been prepared based on the original acquisition costs, with the exception of the financial assets and liabilities recorded at fair value through profit and loss. Compiling financial statements in accordance with the IFRSs requires the Group's management to prepare certain estimates and to use discretion in applying the accounting principles. The data about such discretion the management have used in applying the Group's accounting principles for the preparation of the financial statements, and which most affect the consolidated financial statements, are presented in Accounting Principles under the section "Accounting principles requiring the management's judgement and the principal uncertainties of estimates."
The consolidated financial statements include the parent company Panostaja Oyj and all its subsidiaries.
Subsidiaries are companies in which the Group has a controlling interest. This controlling interest arises when the Group owns more than half of the voting power, or it otherwise has a controlling interest. The existence of potential voting power has also been taken into consideration in estimating the conditions for the emergence of a controlling interest, when the instruments warranting potential voting power are realizable at the time of observation. Controlling interest refers to the right to dictate the principles of the company's finances and business activities to gain benefits from its operations.
The Group's inter-group shareholding has been eliminated by the acquisition method. The consideration given and the acquired company's separately identifiable assets and equity and liabilities have been valued at fair value at the time of purchase. The expenses connected to the acquisition, apart from the costs incurred by the issuance of liability or equity securities, are recognized as expenditure. The consideration given does not include business operations which are processed as separate from the acquisition. The effect thereof has been observed in connection with the acquisition through profit and loss. Any conditional additional purchase price is valued at fair value at the time of purchase and is classified either as a liability or equity. An additional purchase price that is categorized as a liability is valued at fair value on the closing date of each reporting period, and the profit or loss arising from this is recognized through profit and loss or in other items of extensive income. An additional purchase price that has been classified as equity will not be revalued.
Subsidiaries acquired are integrated in the consolidated financial statements from the moment when the Group has gained a controlling interest, and disposed subsidiaries until such time when the controlling interest ends. All of the Group's intracompany transactions, receivables, liabilities and unrealized gains as well as its internal profit distribution are eliminated when preparing the consolidated financial statements. Unrealized losses are not eliminated if the loss results from amortization. The distribution of the financial-year profit or loss to the owners of the parent company and minority shareholders is presented in a separate income statement, and the distribution of extensive income to the owners of the parent company and minority shareholders is presented in connection with the extensive income statement. Any minority shareholders' interest in the procured item is valued either at fair value or to the amount that corresponds to the proportion of minority shareholders' interest in the separately identifiable net assets of the procured item. The valuation principle is determined separately for each corporate acquisition. Extensive income is allocated to the owners of the parent company and minority shareholders, even if this results in the minority shareholders' interest being negative. The proportion of equity belonging to minority shareholders is presented in the balance sheet as a separate item as part of equity. The changes to the parent company's holding in a subsidiary which do not result in the loss of the controlling interest are treated as business operations concerning equity.
When an acquisition takes place in stages, any previous holding is valued at fair value, and the profit or loss arising from this is recognized through profit and loss. When the Group loses its controlling interest in a subsidiary, the remaining investment is valued at the fair value on the date of the loss of the controlling interest, and the difference arising from this is recognized through profit and loss.
Associated companies are enterprises in which the Group has substantial authority. Substantial authority is created when the Group owns more than 20% of the company's voting power, or when the Group has considerable influence in some other manner without having a controlling interest. Associated companies are integrated in the consolidated financial statements using the equity method. If the Group's share of the associated company's loss exceeds the book value of the investment, the investment is recognized in the balance sheet at zero value and losses exceeding the book value are not combined, unless the Group has committed itself to fulfilling the associated company's obligations.
Unrealized profits between the Group and an associate have been eliminated following the holding the Group has. An investment in an associated company includes the goodwill arising from the acquisition. In the Group's income statement, the result corresponding to the Group's holding is presented in row Share of associated company profits.
The Group's segment reporting is based on its business segments. Reports on these business segments are prepared in a manner in line with the internal reporting submitted to the highest operational decision-maker. Panostaja's Senior Management Team has been defined as the highest operational decision-making body that is responsible for allocating resources to segments and assessing their results.
The consolidated financial statements are prepared in Euros, which is the functional and presentation currency of the Group's parent company. Foreign currency transactions are recorded in the functional currency using the rate of exchange prevailing on the date of transaction. At each balance sheet date, monetary receivables and liabilities are translated using the rate on the closing date. The exchange differences arising from such translations are recorded in the income statement. The foreign exchange gains and losses of operations are included in the comparable items above operating profit. Non-monetary items are translated using the rate of the transaction date.
Income statements of foreign Group companies have been translated into euros at the average exchange rate for the period, while balance sheets have been translated using the closing rates of the balance sheet date. The translation of the profit for the financial year using different currencies in the income statement, the extensive income statement and equity causes a translation difference that is recognized in the other items of the extensive income statement, and it is included in equity in the item 'Translation differences.' The translation differences arising from the elimination of the acquisition costs of foreign subsidiaries and from the translation of equity items accrued after the acquisition are recorded in the items of the extensive income statement. When a foreign unit is sold in part or in full, the translation differences accumulated in equity are recognized through profit and loss as an adjustment of classification as part of sales profit or loss.
Net sales consist of income from the sale of products and services at fair value, adjusted according to indirect taxes and discounts. Within the Group, earnings from product sales are primarily recorded once the essential risks and benefits related to ownership of the goods as well as their right of possession and actual control have been transferred to the buyer and payment is likely. Correspondingly, earnings from services are generally recorded once the services have been rendered. The recognition principles of segment-specific net sales are presented in conjunction with segment information in Note 5.
The IAS 1 standard on the presentation of financial statements does not define the concept of operating profit or loss. The Group has defined it as follows: EBIT is the net sum arrived at when other operating income is added to net sales and the following expenses deducted from it: acquisition costs adjusted by the changes in the stocks of finished or incomplete goods, expenses incurred in manufacture for the company's own use, employee benefit expenses, depreciation and any amortization or impairment losses or other operating expenses. All other income statement items besides those mentioned above are presented under operating profit. Exchange rate differences are included in EBIT if they arise from business-related items; in other cases, they are recognized in financial items.
Tax expense consists of the taxes based on taxable income and deferred tax liabilities for the financial period. Taxes are recognized through profit and loss, except when they relate directly to the items recorded in equity or other items of the extensive income. In such cases, tax is also recorded in these items.
Deferred taxes are calculated on temporary differences between the book values of assets and liabilities and the tax value of assets and liabilities. Deferred taxes are recorded by the balance sheet date using statutory tax rates. However, deferred tax liabilities are not recorded when an asset item or a liability to be initially recognized in bookkeeping is in question, and when the integration of business operations is not in question, and when the recording of such an asset item or liability item does not affect the accounting result nor taxable income at the time the business transaction takes place.
The most important temporary differences arise from the valuation of the net assets of acquired companies at fair value, and from appropriations and unexploited tax losses. Deferred tax assets are recognized to the extent that it is probable that future taxable income will become available against which the temporary differences may be utilized. In this respect, the requirements for recognizing deferred tax assets are always estimated on the last trading day of the reporting period.
Non-current asset items (or disposal groups) are classified as held for sale when their recoverable amount, equivalent to their book value, will be recovered mainly from their sale and when their sale is extremely probable. If their recoverable amount which corresponds to their book value will mainly be accrued from their sale instead of their continuous use, they are presented at their book value or fair value less costs to sell, depending on which is smaller. Depreciations from non-current asset items are cancelled on the date of classification.
A discontinued operation is a part of the Group that has been disposed of or that has been classified as held for sale and that represents an important separate business area or geographical area of operation, or is a part of one coordinated plan that concerns the renunciation of an important separate business area or geographical area of operation, or is a subsidiary that has been acquired with the sole purpose of reselling it. The profit from discontinued operations is presented in a row of its own in the consolidated income statement.
The goodwill arising from the integration of operations is recorded in the amount that makes the combined amount of the consideration given, minority shareholders' interest in procured item and the proportion owned previously exceed the acquired net assets.
Instead of recording goodwill depreciations, goodwill is tested at least once a year for amortization, and it is valued at its original acquisition cost less amortizations. For the purpose of impairment testing, goodwill is allocated to cash-generating units.
Research expenditure is recognized as an expense in the income statement for the period in which it incurs. Development costs are activated when they can reliably be expected to benefit the Group financially in the future and when their acquisition costs can be determined reliably, and when other IAS 38 criteria, such as the product's technical and financial execution criteria, are met. Other development expenditure is recognized as expenses. Development costs that have been previously recorded as expenses are not activated in later financial periods.
Other intangible assets that have limited financial useful lives are recorded in the balance sheet and recognized as expenses in the income statement, marked as depreciations on a straightline basis, during their financial useful lives. All the company's intangible assets have a limited financial useful life.
Intangible rights include software licenses, joining fees and customer relationships. Other intangible assets include computer software.
The standard times for planned depreciations of intangible assets: Development costs 5 years
Intangible rights 3–5 years Other intangible assets 5–10 years
All property, plant and equipment are valued at original acquisition cost less depreciations, amortizations and impairment. Depreciations on a straight-line basis are made on property, plant and equipment within their estimated financial useful lives. No depreciations are made on land.
The estimated financial useful lives are as follows: Buildings 20–25 years Plant and equipment 3–5 years Other tangible assets 3–10 years
The depreciation values and financial useful lives of property, plant and equipment are estimated and adjusted at least at the end of each financial period, and if they differ significantly from previous estimates they will be altered accordingly.
The sales profits and losses of property, plant and equipment are determined by comparing their sales price to their book value, and they are presented in the income statement as other operating income or expenses.
Rental agreements where the lessor carries a significant share of the risks and rewards integral to ownership are classified as other rental agreements. Rental liabilities related to other rental agreements are not recorded in the balance sheet, and the related rents are recognized in the income statement as equalsized items over the lease term.
IFRS 16 Leases (effective for financial periods beginning on or after January 1, 2019) concerns definitions, records, valuations and notes regarding lease agreements. IFRS 16 replaces standard IAS 17 Leases. According to IFRS 16, all leases are to be presented in the lessee's balance sheet. The standard requires companies to record the relevant asset items and lease liabilities in the balance sheet. These are valuated at the current value of upcoming rent payments. Any write-downs from asset items are recorded in the income statement. The interest costs arising from lease liabilities are also recorded in the income statement.
Panostaja has applied the standard as of November 1, 2019. As a result of the standard, almost all lease agreements were recorded in the balance sheet as fixed asset items, excluding agreements that are shorter than 12 months in length and low in value. Panostaja is applying a simplified implementation method, and the reference figures for the year preceding the implementation will not be adjusted. However, the lease agreement concepts in the agreements to be addressed as liabilities and those detailed in IFRS 16 differ, which is why the number of agreements recorded in the balance sheet may differ from the number of liabilities. Primarily, the agreements recorded in the new balance sheet will consist of lease agreements for premises and cars.
In accordance with the applicable financial statement principles, the Group will record the lease agreements in the balance sheet as lease liabilities and asset items. The rent payments are presented as loan repayments and related interest costs. The rent payments are presented in the financial cash flow and the rent-related interests in the business cash flow. Rent payments related to short-term and low-value lease agreements, as well as variable rents, are presented in the business cash flow. The change prescribed by the standard is also impacting the key figures based on the balance sheet, such as gearing.
The nominal value of the lease liabilities is valued at the current value of rent payments. Rent payments do not include variable rents. Variable rents that are not included in the original lease liability value are recorded directly in the income statement. The lease period is the non-cancellable period of the lease agreement, with an extension or cancellation option if the lessee can be reasonably expected to use the extension option. The lease periods for lease agreements effective until further notice are determined based on the realistic estimates of the management. During the transition period, rent payments were discounted at the estimated interest of additional credit.
The net current value of the Group's capitalized lease debt in the balance sheet stands at MEUR 25.6. During the review period, the rental costs arising from the lease agreements dropped by MEUR 6.6 and the interest costs increased by MEUR 0.5. The write-downs for the review period increased by MEUR 6.4 due to the asset item write-downs.
| EUR 1,000 | October 31, 2019 | Impact of IFRS 16 | November 1, 2019 |
|---|---|---|---|
| ASSETS | |||
| Non-current assets | |||
| Intangible assets | 108,210 | 108,210 | |
| Property, plant and equipment | 231 | 231 | |
| Asset items | 14,128 | 25,651 | 39,779 |
| Interests in associated | |||
| companies | 3,344 | 3,344 | |
| Deferred tax assets | 6,007 | 6,007 | |
| Other non-current assets | 8,057 | 8,057 | |
| Non-current assets total | 139,977 | 25,651 | 165,628 |
| Current assets | |||
| Stocks | 7,158 | 7,158 | |
| Trade and other receivables | 29,844 | 29,844 | |
| Cash and cash equivalents | 16,381 | 16,381 | |
| Current assets total | 53,383 | 0 | 53,383 |
| ASSETS IN TOTAL | 193,360 | 25,651 | 219,011 |
| EQUITY AND LIABILITIES | |||
| Share capital | 5,569 | 5,569 | |
| Other equity | 44,772 | 44,772 | |
| Equity attributable to parent | |||
| company shareholders | 50,341 | 0 | 50,341 |
| Minority interest | 29,211 | 29,211 | |
| Equity total | 79,552 | 0 | 79,552 |
| Liabilities | |||
| Non-current liabilities | |||
| Interest-bearing liabilities | 54,331 | 19,567 | 73,898 |
| Imputed tax liabilities | 6,204 | 6,204 | |
| Other liabilities | 30 | 30 | |
| Non-current liabilities total | 60,566 | 19,567 | 80,133 |
| Current liabilities | |||
| Interest-bearing liabilities | 20,839 | 6,084 | 26,923 |
| Other liabilities | 32,403 | 32,403 | |
| Current liabilities total | 53,242 | 6,084 | 59,326 |
| Liabilities total | 113,808 | 25,651 | 139,459 |
| EQUITY AND LIABILITIES IN TOTAL |
193,360 | 25,651 | 219,011 |
At each balance sheet closing date, the Group assesses whether there are indications that the carrying amount of an asset item may not be recoverable. If such indications exist, the recoverable amount of the asset item in question will be measured. The recoverable amount is also assessed yearly with reference to the following asset items, regardless of whether there are indications of impairment: goodwill, intangible assets with indefinite useful lives and incomplete intangible assets. The impairment need is examined at the level of cash-generating units.
An impairment loss is recognized if the book value of the asset item or cash-generating unit exceeds the recoverable amount. Impairment losses are recorded in the income statement. An impairment loss of a cash-generating unit is first allocated to decrease the goodwill directed at the cash-generating unit, and thereafter to symmetrically decrease the other asset items of the unit. On the recognition of an impairment loss, the financial useful life of the asset item depreciated is reassessed.
The recoverable amount of tangible and intangible assets is determined either so that it is their fair value less costs to sell, or a higher service value. In determining service value, the estimated deferred cash flows are discounted to their current value based on discount rates which reflect the average capital cost before tax of the cash-generating unit in question. The discount rates used have been determined before taxes, and the special risk of the cash-generating unit in question is also taken into consideration in calculating them.
Impairment loss connected to property, plant and equipment and other intangible assets except goodwill is cancelled if a change has occurred in the estimates used in determining the amount recoverable from an asset item. Impairment loss is cancelled no higher than to the amount that would have been determined as the book value of an asset item (less depreciation) if impairment losses had not been recognized for it in previous years. Impairment loss recorded for goodwill will not be cancelled.
Allowances for the acquisition of tangible or intangible assets are reduced from the book value of the asset item in question where there is reasonable reliability that the grant will be received and that the Group will meet all the conditions set for receiving the grant. Allowances are recognized in the form of smaller depreciations during the service life of the asset item.
Stocks are valued at the acquisition cost or a lower net realizable value. Net realizable value is the estimated sales price obtainable in conventional business, from which the estimated costs resulting from manufacturing the item for sale and the estimated costs necessary for carrying out the sale have been deducted.
The value of stocks has been determined using the FIFO method and it includes all the direct costs resulting from the acquisition, as well as other indirect focused costs. In addition to the purchase cost of materials, direct labor costs and other direct expenses, the acquisition cost of manufactured stocks includes a proportion of the general expenses of production, but not the outlay for sales or financing. The value of stocks has been reduced as far as obsolescent property is concerned.
The Group has no essential derivative agreements other than interest rate swaps.
Derivative agreements are initially recognized in accounting at fair value on the day that the Group becomes a party to a contract, and they are further valued at fair value at a later date. The Group does not apply hedge accounting to interest rate swaps, because they do not meet the conditions for hedge accounting defined in IFRS 9. In such a case, a change in the fair value of hedging instruments is immediately recognized in financing income and costs through profit and loss.
Financial assets have been classified into the following groups in accordance with the IFRS 9 Financial Instruments standard: allocated acquisition cost, fair value through profit and loss and financial assets recognized at fair value through other extensive profit/ loss items. The classification has been made based on the purpose of the acquisition and the cash flow properties in conjunction with the original acquisition. Financial assets maturing within 12 months are included in current assets.
Purchases and sales of financial assets are recognized based on the trading day, i.e., the day when the Group undertakes to purchase or sell an asset item. Financial assets are not recognized in the balance sheet after the rights to the cash flows of the investment have ceased or been transferred to another party and the Group has transferred a substantial part of the risks and rewards involved in ownership to another party.
Fund investments and derivatives to which hedge accounting is not applied are classified as financial assets at fair value through profit and loss. The Group has no essential derivative agreements other than interest rate swaps. Derivative agreements are initially recognized in accounting at fair value on the day that the Group becomes a party to a contract, and they are further valued at fair value at a later date. The change in fair value is recorded under financial income and expenses in the income statement. The fund investments include interest rate fund shares.
The financial assets recognized through allocated acquisition cost include loan receivables, sale receivables, accrued income and other receivables. Impairments of sales receivables are recorded under expected credit losses based on a simplified model described in Note 25 Trade and other receivables. Sales receivables and agreement-based asset items are derecognized as final credit losses, as payment for them cannot be reasonably expected. Indications of this include the debtor's significant financial troubles, the likelihood of bankruptcy, negligence of payments or delay of payments in excess of 360 days. Impairment losses arising from trade receivables and agreement-based asset items are presented in the income statement under other business costs.
The Group recognizes investments in unquoted shares as financial assets at fair value through profit and loss, which means that profit or loss resulting from a change in fair value can be recorded under other extensive income statement items instead of classifying them as items to be recognized through profit and loss in conjunction with the sale. Dividends from shares are recorded under financial income when the right to receive dividends has been created. They are current assets, unless the management intends to keep the investment in question for a period longer than 12 months from the balance sheet date.
Cash and cash equivalents consist of cash in hand, short-term
bank deposits and other current, extremely liquid investments whose initial maturity is no more than three months. Used bank account limits are presented in other non-current liabilities. The Group has estimated that these do not involve a substantial expected credit loss.
Initially, loans are recognized in accounting at fair value, less transaction costs. After this, they are valued in allocated acquisition costs using the effective interest method; the difference between payment received (less transaction costs) and the amount repayable is recognized as interest costs during the loan period.
Loans are classified as current, unless the Group has an absolute right to postpone their payment to at least 12 months from the balance sheet date.
Liability costs are recognized as expenses once they materialize. The liability expenses resulting directly from the acquisition, construction or manufacture of an asset item that fulfills the conditions set are activated as part of the asset's acquisition costs when they are likely to produce deferred financial benefits and when the costs can be reliably determined.
The Group classifies the instruments it issues based on their nature either as equity or as a financial liability. An equity instrument is any agreement which demonstrates the right to a share of an organization's assets after the deduction of all its liabilities. Costs that concern the issue or acquisition of the Group's own equity instruments are presented as an equity deductible item. If the Group buys back its own equity instruments, the acquisition cost for these instruments is deducted from equity.
The Group's pension schemes have been classified as payment-based schemes. A payment-based pension scheme refers to an arrangement in which the company makes fixed payments to a separate corporation. The company is under no legal or actual obligation to pay additional charges if the separate corporation in question does not have enough funds to pay everyone the benefits relating to their work that they have made payments on during the present or earlier financial periods. The payments made to the payment-based scheme are recognized as the expenses of the financial period during which the payment is made.
The Group has incentive schemes in which payments are made as equity instruments. Expenses incurred by business operations that are paid as equity are determined based on the fair value of the grant date. The company determines fair value using an appropriate pricing method. An expense resulting from business operations paid as equity and a corresponding increase in equity is recognized during the period when the work is performed and/or when the conditions based on the performance of the work are met. This period ends on the date when the persons involved are fully entitled to remuneration ("Time of the origin of entitlement"). The expenses accrued that are recorded by each balance sheet date from business operations that are paid as equity reflect the extent to which the time of the origin of entitlement has elapsed, and the Group's best estimate on the number of the equity instruments to which this right will eventually be created. The profit/loss is presented in the Group's income statement under staff expenses.
Provisions are recognized when a company, as a result of past events, has a legal or actual obligation, when it is probable that an outflow of resources will be required to settle the obligation, and when a reliable estimate of the amount of the obligation can be made. The amount recognized as a provision corresponds to the best estimate of the costs that are required for the fulfillment of the existing obligation on the balance sheet date.
Since November 1, 2019, the Group has applied the following new and amended standards and interpretations.
Effective for financial periods beginning on or after January 1, 2019; earlier application is permitted only if IFRS 15 is implemented at the same time.
IFRS 16 primarily affects the accounting of lessees, and as a result, nearly all leases are recorded in the balance sheet. The standard has abandoned the division into operating leases and finance leases, and it requires an asset item (right to use the leased asset item) and finance liability related to the obligation to pay rent to be recorded for practically all lease agreements. An exception can be applied to short-term leases that concern asset items with little value.
The standard also affects the income statement since the total expenses are typically higher at the beginning of the lease agreement's validity and lower near its end. Furthermore, the rent cost that is currently included in the business costs will be replaced with interests and depreciations, which will impact the key figures, such as the EBITDA. Earlier application is permitted only if IFRS 15 is implemented at the same time.
The operating cash flows are larger than before since the payment portion of the lease agreement liability capital is classified as financial cash flow. Only the interest portion will continue to be presented in the operating cash flows.
The accounting process of the lessors will not be changed significantly. The new instructions regarding the definition of a lease agreement may result in some differences compared to the current situation. According to IFRS 16, an agreement is a lease or includes a lease if the agreement grants control entitling to the use of a specified asset item for a specific period of time in exchange for compensation.
The application of the new standards and interpretations began on November 1, 2020. They did not significantly impact the Group's financial statements.
Effective as of January 1, 2019
The interpretation describes the recognition and measurement of tax revenue and liabilities based on taxable profit, when there is uncertainty over income tax treatments. Specific focuses:
Even though there are no requirements for new notes, companies are reminded of the general requirement to present information on discretionary solutions and estimates made in conjunction with preparing the financial statement.
The minor change made to IFRS 9 Financial Instruments in October 2017 enables the recognition of certain financial assets with a negative compensation that can be paid before the maturity date to be valued at allocated acquisition cost. These assets, which include some loan receivables and debt loan instruments, would otherwise have to be recognized at fair value through profit and loss.
In order for the requirements for valuation at allocated acquisition cost to be met, the negative compensation must be a "reasonable compensation for the early termination of the contract" and the holding of the asset item must be based on a business model aimed at accumulating cash flows.
Effective as of January 1, 2019
The amendments clarify the accounting process for such longterm interests in an associate or joint venture that form part of the net investment in the associate or joint venture but to which the equity method is not applied. As regards these interests, IFRS 9 Financial Instruments must be applied before the application of the requirements on loss allocation and impairment laid down in IAS 28 Long-term interests in associates and joint ventures.
Effective as of January 1, 2019
The following improvements were confirmed in December 2017:
the entity must not remeasure previously held interests in that business.
The amendments made to the IAS 19 Employment Benefits clarify the accounting treatment of amendments, curtailments or settlements. According to the amendments, companies must:
*Applied for reporting periods beginning on or after the specified date.
The following standards and interpretations were published by July 31, 2020, but they were not effective in binding form during the financial period that ended on October 31, 2020.
Effective as of January 1, 2020
IASB has made some amendments to IAS 1 Presentation of Financial Statements and IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors. According to the changes, a consistent definition of materiality must be used in all conceptual frameworks of reporting, in addition to clarifying when information is material and amending IAS 1 with instructions on immaterial information.
The amendments specifically clarify that:
potential investors, lenders and other creditors" which must largely meet their needs for financial information by means of the financial statements intended for general use.
Effective as of January 1, 2020
According to the updated definition of business, an acquisition must include an input and a substantive process that together significantly contribute to the ability to create outputs. The definition of "output" is amended to emphasize the production of goods and services to customers and the accrual of investment revenue and other income. It does not include revenue received in the form of smaller expenses and other financial benefits. As a result of the changes, a larger portion of acquisitions will be treated as asset acquisition.
Effective as of January 1, 2020
IASB has released an updated Conceptual Framework for Financial Reporting, the implementation of which began immediately in decisions regarding the issue of standards. The essential changes are as follows:
Changes will not be made to any effective standard. However, the updated framework must be applied as of January 1, 2020 by companies that use the framework to define any such financial statement principles that are applied to business activities, events and circumstances and that are not otherwise addressed in the standards. These companies must consider whether or not the preparation principles they utilize are still appropriate under the updated framework.
The Group's financial risks comprise credit and counterparty risk, interest rate risk and liquidity risk. Credit and counterparty risk comprises payments of trade receivables coming from customers, the centralization of the customer base and co-operative banks approved as counterparties. Group companies operate primarily in the eurozone and so are only exposed to transaction risk stemming from exchange rate fluctuations, principally resulting from export activity, to a slight degree. The Group has no significant investments in foreign companies, so it is not exposed to significant translation risk. The effects of changes in interest rates on the value of interest-bearing liabilities and receivables and on the amount of future interest payments cause interest risk.
Panostaja's management of financial risks is handled in a centralized manner within the framework of the parent company's financial operations, under the leadership of Panostaja's Chief Financial Officer. The CFO actively monitors the subsidiaries' financial risks and actively participates in the process of securing funding and the implementation of hedges with the management of subsidiaries. The CFO also supports the management of Panostaja's subsidiaries in other matters related to financial management. The Group subsidiaries do not utilize a mutual fund allocation scheme, and their financial arrangements are independent of each other. The parent company may, by separate decision, allocate its funds to subsidiaries in the form of additional funding based on their financial and liquidity needs. The general principles of the Group's risk management are approved by the Board of Directors and their practical implementation is the responsibility of the parent company together with the subsidiaries.
The Group mainly operates in the eurozone and so is only exposed to foreign exchange risks resulting from changes in exchange rates to a slight degree.
The Group's income and operating cash flow is largely independent of fluctuations in market interest rates. The Group's interest risk primarily constitutes borrowing. At the end of the financial year, liabilities stood at MEUR 60.352 (MEUR 61.840). MEUR 55.891 of the liabilities are variable-interest loans. MEUR 4.461 of the liabilities are fixed-interest loans.
The following table illustrates how any moderate change in interest rates, other variables remaining constant, would affect the Group's results as a consequence of changes to the cost of interest on debts with floating interest rates. Interest rate risk sensitivity is presented after taxes.
| EUR 1,000 | 1% higher Income statement |
2% higher Income statement |
1% lower Income statement |
|---|---|---|---|
| Effect of change to interest rate |
|||
| 2020 | -447 | -894 | 447 |
| 2019 | -452 | -904 | 452 |
Credit risk is managed at Group level, with the exception of risk associated with trade receivables. The companies in the Group check the creditworthiness of customers at least when the customer relationship is being established. To minimize credit risk, the aim is to obtain effective collateral if a customer's creditworthiness so requires. The Group has long-established business relationships with its major customers. The Group has no significant risk concentration. Credit risk is primarily focused on outstanding receivables. The maturity distribution of sales receivables is presented in Note 25 to the financial statement.
The risk associated with the Group's liquid assets and derivative agreements is low, since these financial agreements are only concluded with banks with a good credit rating in accordance with the Group's risk management principles.
The Group's most important loan covenants are reported to financiers every three, six and twelve months. If the Group breaches the terms and conditions of a loan covenant, the creditor may demand the accelerated repayment of the loans. Management regularly checks the fulfilment of loan covenant terms and conditions. The Group's parent company has provided securities to financiers on behalf of its subsidiaries as security for creditors (Note 34 to the financial statements).
The loan covenant terms are related to the key figure of the Group's separate company or subgroup, the ratio between interest-bearing loans and operation margin (interest-bearing loans/ operating margin) and equity ratios or Panostaja Group's equity ratio and the ratio of interest-bearing net liabilities and operating margin.
During the financial period, the loan covenant was broken in one of the subgroups.However, with regard to the loans of one subgroup, totaling MEUR 2.8, consent has been received from the financiers that they will not demand the accelerated repayment of the loans before the end of the financial period. Arrangements concerning liabilities and breaches of contract are presented in Note 28 to the financial statements.
The Group constantly assesses and monitors the amount of finance required for its operations, so that it will have sufficient liquidity to finance its business and repay its loans when they fall due. Efforts are made to guarantee the availability and flexibility of finance through adequate credit limits and by using different sources and forms of finance in the procurement of finance. At the time of the closing of the books, the Group's subsidiaries had MEUR 5.5 of unused credit limits at their disposal.
Panostaja also has a MEUR 15 corporate acquisition limit, which enables the withdrawal of three-year loans to fund Panostaja's corporate acquisitions and/or additional investments in the Group's companies. MEUR 15.0 of Panostaja's corporate acquisition limit remains to be withdrawn.
The aim of the Group's capital management is to ensure that the business has the prerequisites for operating normally and to increase the share value over the long term. The capital structure is influenced through dividend distribution, the purchase of own shares, capital repayments, share issues and loan withdrawals and repayments. In Panostaja's operating model, decisions on acquiring and divesting investments are also an important part of capital management. Panostaja's goal is to persistently increase the value of its investments and, over the long term, implement divestments that lead to significant increases in value and strengthen the capital structure.
The trend in the Group's capital structure is monitored with equity ratio and gearing. The Group's equity ratio was 33.6% (41.3%) and its gearing ratio 90.1% (67.5%).
The increase in gearing ratio was impacted by the increase in the Group's leasing debt, as specified in the IFRS 16 standard.
| (EUR 1,000) | 2020 | 2019 |
|---|---|---|
| Interest-bearing financial liabilities | 103,355 | 75,171 |
| Interest-bearing receivables | 5,102 | 5,130 |
| Cash and cash equivalents | 34,255 | 16,381 |
| Interest-bearing net liabilities | 63,998 | 53,660 |
| Equity total | 71,012 | 79,552 |
| Gearing ratio | 90.1% | 67.5% |
In preparing the consolidated financial statements and related notes, the management of the company must prepare estimates and make assumptions. Any estimates prepared and discretion exercised are founded on previous experience and other factors, such as presumptions about future events. The estimates prepared and discretion applied are examined on a regular basis. Below is a description of the most important areas in which estimates and discretion have been applied.
IFRS 3 requires the supplier to enter any intangible asset as separate from goodwill, if the entry criteria are met. Recognizing an intangible right at fair value requires the management's estimate of future cash flows. As far as possible, the management has applied the available market values as the basis for the allocation of an acquisition cost in determining fair value. Whenever this is not possible, which is typical with intangible assets especially, valuation is based on the asset item's historical revenue and its intended use in future business. Valuations are founded on discounted cash flows and estimated transfer and replacement prices, and require the management's estimates and assumptions on the future use of the asset items and their effects on the company's financial status. Shifts in the focus and orientation of the company's business activities may, in the future, bring about changes in the original valuation (Note 6 and 18 to the financial statements).
Management uses significant discretion when assessing the fair value of possible conditional additional purchase prices on the closing day of each reporting period. At the end of the financial period, there were no conditional additional purchase prices for the Group companies.
Intangible and tangible assets are tested for impairment whenever there are signs that their value may have decreased. Goodwill and other intangible assets with infinite useful life are tested for impairment at least once a year. For the purposes of the testing, goodwill and intangible assets with infinite useful life are allocated to cash-generating units. The amount recoverable by cash-generating units is based on calculations of service value. Formulating these calculations requires the use of estimates. Although the presumptions applied in accordance with the management's vision are appropriate, the estimated recoverable amounts may differ significantly from those materializing in the future (Note 18 to the financial statements).
It is the management's principle to enter any impairment loss from slowly moving and outdated stocks on the basis of the management's best estimation of the potentially unusable stocks possessed at the balance sheet date. The management bases its estimation on a systematic and continuous monitoring and evaluation. The company also applies a valuation code founded on the stocks' turnover ratio.
It takes discretion to decide whether deferred tax assets should be entered on the balance sheet. Deferred tax assets are only recognized if it is more likely that they will be realized than not, which is determined by whether sufficient taxable income accumulates in the future. The assumptions for accrual of taxable income are based on the evaluations and assumptions of the management.
These evaluations and suppositions involve risk and uncertainty, and it is therefore possible that changes in circumstances bring about changes to assumptions, and this may in turn affect the deferred tax receivables recorded in the balance sheet as well as any other as yet unrecognized tax losses and temporary differences.
If the taxable income of Group companies turns out to be less than what management predicted when deferred tax receivables were being determined, the value of the receivables will fall or they will become completely worthless. In that case, the amounts entered on the balance sheet may have to be canceled through profit and loss.
There are MEUR 6.2 worth of deferred tax assets on the balance sheet of Panostaja Group.
In accordance with the applicable IFRS 16 standard, the Group will record the lease agreements in the balance sheet as lease liabilities and asset items. The nominal value of the lease liabilities is valued at the current value of rent payments. The lease period is the non-cancellable period of the lease agreement, with an extension or cancellation option if the lessee can be reasonably expected to use the extension option. The lease periods for lease agreements effective until further notice are determined based on the realistic estimates of the management. During the transition period, rent payments were discounted at the estimated interest of additional credit.
The seven investments in which Panostaja has majority holdings compose the company's operation segments. In addition to that there is the segment Others, in which associated companies and non-allocated items are reported, including the parent company. Panostaja Group's business segments are Grano, Helakeskus, Heatmasters, Hygga, CoreHW, Carrot, Oscar Software and Others.
These reported segments have been formed because they produce products and services that differ from each other. The transactions between segments have taken place on normal commercial terms and conditions.
Reports on these business segments are prepared in a manner in line with the internal reporting submitted to the highest operational decision-maker. Senior operational decision-making is represented by the Senior Management Team of the Panostaja Group.
The Group has determined Grano Group as a subgroup involving a significant minority shareholding, as specified in IFRS 12. The Grano Group subgroup's financial information is presented in this segment note under the Grano business segment. To specify, the financial information of the subgroup in question corresponds with the segment-specific information in question.
Net sales consist of income from the sale of products and services at fair value, adjusted according to indirect taxes and discounts.
ment projects are not significant in terms of their quantity.
| Group in total | 159,197 | 0 | 158,998 | -20,340 | 812 | -2,843 | 233 | -1,230 | -3,028 | 211,958 | 140,946 | 1,558 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Eliminations | -199 | 0 | 0 | 0 | , | -7,181 | -7,181 | |||||
| Other | 0 | 0 | 0 | -87 | -2,028 | 233 | 33,609 | 1,172 | 10 | |||
| Oscar Software | 10,992 | 162 | 10,829 | -1,145 | 1,141 | 12,059 | 7,267 | 127 | ||||
| Carrot | 14,540 | 16 | 14,524 | -3,644 | -4,009 | 6,782 | 7,980 | 277 | ||||
| CoreHW | 8,059 | 0 | 8,059 | -758 | 470 | 8,305 | 6,405 | 72 | ||||
| Heatmasters | 3,960 | 0 | 3,960 | -334 | 266 | 2,797 | 1,417 | 35 | ||||
| Hygga | 4,146 | 0 | 4,146 | -464 | -262 | 5,097 | 9,484 | 79 | ||||
| Helakeskus | 7,582 | 0 | 7,582 | -321 | 474 | 4,949 | 5,381 | 18 | ||||
| Grano | 109,919 | 21 | 109,898 | -13,586 | 4,760 | 145,542 | 109,021 | 940 | ||||
| 2020 | Net sales total | Internal net sales |
External net sales |
Depre ciations, amortiza tions and impairment |
EBIT | Financial income and expenses |
Share of associated company profits |
Income tax | Profit/ loss from continuing operations |
Assets | Liabilities | Employees at the end of the period |
| Group in total | 183,207 | 0 | 182,949 | -11,461 | 3,771 | -2,069 | 150 | -1,283 | 569 | 193,360 | 113,808 | 1,895 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Eliminations | -257 | 0 | 0 | 0 | -8,806 | -8,807 | ||||||
| Other | 0 | 0 | 0 | -67 | -1,074 | 150 | 40,308 | 3,405 | 28 | |||
| Oscar Software | 10,084 | 107 | 9,977 | -658 | 229 | 11,984 | 7,762 | 131 | ||||
| Carrot | 20,845 | 73 | 20,773 | -290 | -375 | 11,478 | 8,526 | 476 | ||||
| CoreHW | 5,687 | 0 | 5,687 | -266 | 432 | 7,385 | 5,725 | 56 | ||||
| Heatmasters | 4,166 | 0 | 4,166 | -157 | 186 | 2,573 | 1,370 | 38 | ||||
| Hygga | 4,688 | 0 | 4,688 | -309 | -170 | 4,122 | 7,691 | 58 | ||||
| Helakeskus | 8,048 | 0 | 8,048 | -16 | 457 | 5,502 | 5,921 | 19 | ||||
| Grano | 129,689 | 78 | 129,611 | -9,697 | 4,086 | 0 | 118,813 | 82,215 | 1,089 | |||
| 2019 | Net sales total | Internal net sales |
External net sales |
Depre ciations, amortiza tions and impairment |
EBIT | Financial income and expenses |
Share of associated company profits |
Income tax | Profit/ loss from continuing operations |
Assets | Liabilities | Employees at the end of the period |
There were no subsidiary acquisitions during the financial year.
On October 30, 2019, Panostaja Oyj announced that its subsidiary Selog Group Oy had signed an agreement with Tilatukku Oy to merge the companies. The merger took the form of an exchange of shares, which involved Selog Group Oy purchasing Tilatukku Oy's shares and the current owners of Tilatukku ending up with 40% of Selog Group Oy's shares. Tilatukku Oy will continue as a subsidiary fully owned by Selog Group Oy.
At the time of the closing of the books, the overall purchase price was estimated to be MEUR 0.8. Tilatukku's balance was consolidated into Panostaja Group's records on October 31, 2019.
| Note | MEUR | |
|---|---|---|
| Consideration given | 0.80 | |
| Conditional consideration | 0.00 | |
| Consideration in total | 0.80 | |
| Acquired assets and liabilities | ||
| Permanent assets | 19 | 0.00 |
| Machinery and equipment | 0.04 | |
| Stocks | 24 | 0.15 |
| Current receivables | 25 | 0.57 |
| Cash and cash at bank | 26 | 0.02 |
| Total assets | 0.78 | |
| Non-current liabilities | 23 | 0.08 |
| Current liabilities | 29 | 0.70 |
| Deferred tax liabilities | 0.00 | |
| Total liabilities | 0.78 | |
| Net assets | 0.00 |
Goodwill 0.80
On April 9, 2020, Panostaja signed an agreement on selling Tilatukku Group Oy's share capital to the company's acting management. Panostaja Oyj's shareholding in Tilatukku Group Oy was 60%. The trade involved Panostaja relinquishing its ownership in the company entirely. Panostaja Group recorded a sales loss of MEUR 0.5 from the transaction.
In the consolidated financial statements, the result of the Tilatukku segment is presented in the section 'Result from Discontinued Operations' in the financial periods that ended on October 31, 2020 and October 31, 2019.
The result of sold businesses, profit resulting from its divestment and the share of cash flows were as follows:
MEUR
| Profit/loss of the Tilatukku segment |
November 1, 2019– April 9, 2020 |
November 1, 2018– October 31, 2019 |
|---|---|---|
| Earnings | 4.2 | 7.3 |
| Costs | -4.0 | -7.5 |
| Profit before taxes | 0.2 | -0.2 |
| Taxes | 0.0 | 0.0 |
| Profit after taxes | 0.1 | -0.2 |
| Disposal loss | -0.5 | |
| Tax expenditure related to disposal | 0.0 | |
| Profit/loss from discontinued operations |
-0.4 | -0.2 |
| Tilatukku segment's cash flows until the moment of sale | ||
| Operating cash flow | 0.5 | 0.8 |
| Investment cash flow | -0.3 | 0 |
| Funding cash flow | -0.4 | -0.6 |
| Total cash flows | -0.2 | 0.2 |
The effect of the sale of the Tilatukku segment on the financial position of
| the Group: | April 9, 2020 |
|---|---|
| Property, plant and equipment | 0.1 |
| Intangible assets | 2.3 |
| Stocks | 0.6 |
| Deferred tax assets | 0.0 |
| Other assets | 1.4 |
| Cash and cash equivalents | 0.4 |
| Sold liabilities | -2.5 |
| Net assets | 2.3 |
| Consideration received as cash | 0.9 |
| Cash and cash equivalents from divested unit | -0.4 |
| Net cash flow from corporate divestments | 0.5 |
On May 29, 2019, together with other owners of KL-Parts Oy, Panostaja signed an agreement on selling KL-Parts Oy's share capital to Oy Kaha Ab. The trade made Kaha the primary owner of KL-Parts. The management of KL-Parts will continue with the company as a minority shareholder. KL-Parts owns 100% of KL-Varaosat Oy. Panostaja Oyj's ownership in KL-Parts was 75%. The trade involved Panostaja relinquishing its ownership in the company entirely. Panostaja Group's recorded sales profit for the trade was MEUR 2.7 before taxes.
| November 1, 2018– | November 1, 2017– | |
|---|---|---|
| MEUR | May 29, 2019 | October 31, 2018 |
| Profit/loss of the KL-Varaosat segment |
||
| Earnings | 7.2 | 14.4 |
| Costs | -6.8 | -13.2 |
| Profit before taxes | 0.4 | 1.2 |
| Taxes | -0.1 | -0.2 |
| Profit after taxes | 0.2 | 1.0 |
| Gain on disposal | 2.7 | |
| Tax expenditure related to disposal |
-0.8 | |
| Profit/loss from discontinued operations |
2.1 | 1.0 |
| KL-Varaosat segment's cash flows until the moment of sale Operating cash flow |
0.2 | 1.1 |
| Investment cash flow | 0.0 | -0.1 |
| Funding cash flow | -0.3 | -0.7 |
| Total cash flows | -0.1 | 0.3 |
| The effect of the sale of the KL-Varaosat segment on the financial position of the Group: |
May 29, 2019 | |
| Property, plant and equipment | 0.1 | |
| Intangible assets | 2.0 | |
| Stocks | 2.3 | |
| Deferred tax assets | 0.0 | |
| Other assets | 0.8 | |
| Cash and cash equivalents | 0.0 |
| Net assets | 3.5 |
|---|---|
| Consideration received as cash | 4.8 |
| Cash and cash equivalents from divested unit | 0.0 |
| Net cash flow from corporate divestments | 4.8 |
Sold liabilities -1.7
Panostaja Oyj claimed the shares of a minority shareholder in Grano Group Oy, increasing its holding in Grano Group Oy to 55.2%.
Oscar Software Holdings Oy claimed the shares of a minority shareholder and recorded them as its own shares. After the acquisition, Panostaja's shareholding in the Oscar group is 54.5%.
| Effect of the change in ownership on retained earnings | -152 |
|---|---|
| Consideration received or paid | -481 |
| Divested or acquired minority shareholders' interest | 329 |
| 2020 |
Panostaja Oyj claimed the shares of a minority shareholder in Grano Group Oy, increasing its holding in Grano Group Oy to 54.8%.
Carrot Palvelut Group Oy claimed the shares of a minority shareholder and recorded them as its own shares. After the acquisition, Panostaja's shareholding in the Carrot group is 74.1%.
Selog Group Oy purchased Tilatukku Oy's shares by means of an exchange of shares, after which the current owners of Tilatukku ended up with 40% of Selog Group Oy's shares. After the arrangement, Panostaja owns 60% of the Selog Group.
Oscar Software Holdings Oy carried out a targeted share issue. After the arrangement, Panostaja's shareholding dropped to 50.7%.
CoreHW Group Oy conducted a targeted share issue. After the arrangement, Panostaja's shareholding is 61.1%.
Grano Group Oy claimed the shares of minority shareholders in its subsidiary Grano Oü. This increased Grano's holding in the subsidiary to 100%.
Grano Group Oy divested shares in its subsidiary Grano 3D by means of an exchange of shares in such a way that it gained 32.6% of the new business entity Maker3D Oy.
The following table shows the total effect of the change in shareholding on Group earnings:
| Effect of the change in ownership on retained earnings | 192 |
|---|---|
| Consideration received or paid | -91 |
| Divested or acquired minority shareholders' interest | 283 |
| 2019 |
| 2019 | ||
|---|---|---|
| (EUR 1,000) | 2020 | Adjusted *) |
| Associated company sales profits | 0 | 1,815 |
| Sales profits on tangible assets | 110 | 67 |
| Received allowances | 304 | 104 |
| Other income | 595 | 499 |
| Total | 1,009 | 2,485 |
*) The comparative data presented in the financial statements regarding the income statement and cash flow for 2019 has been adjusted due to the Tilatukku subgroup being presented as a sold operation.
Details of the company's associated companies are given in note 20. Investments in associated companies.
The Group has payment-based pension schemes, the payments of which are recorded in the income statement in the relevant period.
Details of the employee benefits, including share-based payments, of management considered related parties are given in note 35. Related party disclosures
During the financial year, the Group employed an average of 1,726 (1,969) people. At the end of the financial period, it employed 1,557 (1,895) persons. The figures for the reference year include the personnel employed by the Tilatukku group (52).
| Total | 75,582 | 89,806 |
|---|---|---|
| Other social security expenses | 2,225 | 2,527 |
| Pension costs - payment-based arrangements |
9,963 | 12,739 |
| Salaries and fees | 63,394 | 74,540 |
| (EUR 1,000) | 2020 | 2019 Adjusted *) |
*) The comparative data presented in the financial statements regarding the income statement and cash flow for 2019 has been adjusted due to the Tilatukku subgroup being presented as a sold operation.
| 2019 | ||
|---|---|---|
| (EUR 1,000) | 2020 | Adjusted *) |
| Depreciation by asset group: | ||
| Property, plant and equipment | ||
| Buildings and structures | 6,267 | 0 |
| Machinery and equipment | 5,053 | 4,784 |
| Other tangible assets | 0 | 0 |
| Intangible assets | ||
| Goodwill | 0 | 0 |
| Development expenses | 1,317 | 821 |
| Intangible rights | 2,400 | 3,048 |
| Other capitalized long-term expenditure |
1,744 | 1,930 |
| Total | 16,781 | 10,583 |
| Impairments by asset group: | ||
| Property, plant and equipment | ||
| Buildings and structures | ||
| Machinery and equipment | 0 | 0 |
| Other tangible assets | ||
| Intangible assets | ||
| Goodwill | 3,300 | 0 |
| Development expenses | 225 | 0 |
| Intangible rights | 35 | 878 |
| Other capitalized long-term expenditure |
||
| Total | 3,560 | 878 |
| Total depreciations, amortiza tions and impairment by asset group: |
||
| Property, plant and equipment | ||
| Machinery and equipment | 5,053 | 4,784 |
| Other tangible assets | 0 | 0 |
| Intangible assets | ||
| Goodwill | 3,300 | 0 |
| Development expenses | 1,317 | 821 |
| Intangible rights | 2,659 | 3,926 |
| Other capitalized long-term expenditure |
1,744 | 1,930 |
*) The comparative data presented in the financial statements regarding the income statement and cash flow for 2019 has been adjusted due to the Tilatukku subgroup being presented as a sold operation.
Total 20,340 11,461
| (EUR 1,000) | 2020 | 2019 Adjusted *) |
|---|---|---|
| Sales losses and scrappings connected with tangible assets |
70 | 6 |
| Rental costs | 713 | 8,615 |
| External services | 7,451 | 9,595 |
| Other expense items | 9,859 | 11,029 |
| Total | 18,093 | 29,245 |
| Auditing fees | 235 | 290 |
| Other fees | 80 | 57 |
| Fees paid to auditors total, continuing operations |
315 | 347 |
*) The comparative data presented in the financial statements regarding the income statement and cash flow for 2019 has been adjusted due to the Tilatukku subgroup being presented as a sold operation.
| 2019 | ||
|---|---|---|
| (EUR 1,000) | 2020 | Adjusted *) |
| Dividend income from held-for sale investments |
0 | 0 |
| Foreign exchange gains | 4 | 2 |
| Financial income from associated companies |
0 | 0 |
| Interest earned | 365 | 380 |
| Changes in fair value from financial assets recorded at fair value through profit and loss |
||
| - interest derivatives, not in hedge accounting |
0 | 0 |
| - from financial assets that are managed based on fair value |
0 | 0 |
| Total | 369 | 382 |
*) The comparative data presented in the financial statements regarding the income statement and cash flow for 2019 has been adjusted due to the Tilatukku subgroup being presented as a sold operation.
| Total | 3,212 | 2,451 |
|---|---|---|
| Interest expenses for other financial liabilities |
2,300 | 2,300 |
| Interest expenses for lease liabilities |
830 | 390 |
| Impairment losses from loan receivables |
23 | 0 |
| Foreign exchange losses | 59 | 24 |
| (EUR 1,000) | 2020 | 2019 Adjusted *) |
*) The comparative data presented in the financial statements regarding the income statement and cash flow for 2019 has been adjusted due to the Tilatukku subgroup being presented as a sold operation
| (EUR 1,000) | 2020 | 2019 |
|---|---|---|
| Direct tax | -539 | -328 |
| Taxes in previous periods | 2 | -9 |
| Deferred taxes | ||
| Incurred and resolved temporary taxes |
-694 | -946 |
| Income taxes total | -1,230 | -1,283 |
Balancing statement between the tax expense in the income statement and the taxes calculated using the Finnish tax rate of 20.0%
Reconciliation:
| Taxes in the income statement | -1,230 | -1,283 |
|---|---|---|
| Taxes for previous periods | 125 | |
| Temporary differences during the period |
-94 | -53 |
| Share of associated company profits | 47 | 30 |
| Use of tax losses not recorded previously |
91 | 97 |
| Tax impact of previously non deductible expenses |
||
| Unrecognized deferred tax assets from tax losses |
-419 | -180 |
| Goodwill impairments | -660 | 0 |
| Non-deductible expenses | -954 | -1,488 |
| Non-taxable income | 520 | |
| Income tax on Group income at the tax rate in Finland before taxes |
360 | -334 |
| Profit before taxes | -1,798 | 1,671 |
The figures for discontinued operations are not distinguishable in the information for the reference year.
Undiluted earnings per share (EPS) are calculated by dividing the profit for the period attributable to the parent company shareholders by the weighted average of the number of shares outstanding during the period. The fair value of a share is based on the average price of a share for the financial year.
| 2020 | 2019 | |
|---|---|---|
| Continuing operations | -3,941 | -324 |
| Discontinued operations | -410 | 1,963 |
| Profit for the financial period attributable to parent company shareholders (EUR 1,000), |
-4,351 | 1,639 |
| Interest on equity convertible loan (taking into account the impact of tax) |
0 | 0 |
| Profit used when calculating profit per share |
-4,351 | 1,639 |
| Profit used when calculating profit per share adjusted with the diluting effect |
-4,351 | 1,639 |
| Number of shares at the end of the financial period |
52,533 | 52,533 |
| of which held by company | 111 | 194 |
| Weighted average number of shares outstanding, 1,000 |
52,392 | 52,298 |
| Share-based payments, 1,000 | 28 | |
| Weighted average number of shares outstanding, 1,000 pcs |
52,457 | 52,326 |
| Earnings per share calculated from the profit belonging to the shareholders of the parent company: |
||
| Earnings per share from continuing operations, EUR |
||
| Undiluted | -0.075 | -0.006 |
| Diluted | -0.075 | -0.006 |
| Earnings per share from sold and disconti nued operations, EUR |
||
| Undiluted | -0.008 | 0.038 |
| Diluted | -0.008 | 0.038 |
| Earnings per share on continuing and discontinued EUR |
||
| operations | ||
| Undiluted | -0.083 | 0.031 |
| Diluted | -0.083 | 0.031 |
| Intangible | Deve lopment |
Other intangible |
|||
|---|---|---|---|---|---|
| (EUR 1,000) | Goodwill | rights | expenses | assets | Total |
| Acquisition cost as of November 1, 2019 | 102,852 | 24,314 | 7,315 | 11,516 | 145,996 |
| Additions | 42 | 2,802 | 782 | 3,626 | |
| Deduction | 0 | ||||
| Effect of company acquisition | 0 | ||||
| Effect of the company sale or discontinuation | -2,368 | -29 | -18 | -2,415 | |
| Asset deal | 0 | ||||
| Transfer merger | 0 | ||||
| Transfer between balance sheet groups | 13 | 204 | 217 | ||
| Exchange rate differences | 0 | ||||
| Acquisition cost October 31, 2020 | 100,484 | 24,327 | 10,130 | 12,484 | 147,424 |
| Accumulated depreciations, amortizations and impairment November 1, 2019 |
-9,167 | -19,054 | -2,508 | -7,056 | -37,785 |
| Depreciations, amortizations and impairment for the period | 0 | ||||
| Depreciations in the financial period | -2,400 | -1,317 | -1,744 | -5,461 | |
| Deductions | |||||
| Effect of company acquisition | |||||
| Effect of the company sale or discontinuation | 29 | 4 | 33 | ||
| Asset deal | 0 | ||||
| Transfer merger | 0 | ||||
| Transfers between balance sheet groups | 0 | ||||
| Impairment | -3,300 | -225 | -35 | -3,560 | |
| Accumulated depreciations, amortizations and impairment | |||||
| October 31, 2020 | -12,467 | -21,425 | -4,050 | -8,835 | -46,777 |
| Book value as of October 31, 2020 | 88,017 | 2,901 | 6,080 | 3,649 | 100,645 |
| Acquisition cost as of November 1, 2018 | 104,005 | 24,241 | 4,885 | 10,558 | 143,688 |
| Additions | 88 | 1,480 | 798 | 2,366 | |
| Deduction | -52 | -732 | -784 | ||
| Effect of company acquisition | 800 | 800 | |||
| Effect of the company sale or discontinuation | -1,901 | -15 | -299 | -2,215 | |
| Asset deal | 0 | ||||
| Transfer merger | -63 | -63 | |||
| Transfer between balance sheet groups | 950 | 1,254 | 2,204 | ||
| Exchange rate differences | 0 | ||||
| Acquisition cost as of October 31, 2019 | 102,852 | 24,314 | 7,315 | 11,516 | 145,996 |
| Accumulated depreciations, amortizations and impairment as of | |||||
| November 1, 2018 | -9,167 | -16,017 | -1,687 | -5,410 | -32,281 |
| Depreciations, amortizations and impairment for the period | 0 | ||||
| Depreciations in the financial period | -3,048 | -821 | -1,930 | -5,799 | |
| Deductions | |||||
| Effect of company acquisition | |||||
| Effect of the company sale or discontinuation | 11 | 223 | 234 | ||
| Asset deal | 0 | ||||
| Transfer merger | 61 | 61 | |||
| Transfers between balance sheet groups | 0 | ||||
| Impairment | 0 | ||||
| Accumulated depreciations, amortizations and impairment as of October 31, 2019 |
-9,167 | -19,054 | -2,508 | -7,056 | -37,785 |
| Book value as of October 31, 2019 | 93,685 | 5,259 | 4,807 | 4,460 | 108,210 |
Goodwill has been allocated to the following cash flowproducing units (or groups within units):
| MEUR | 10/2020 | 10/2019 |
|---|---|---|
| Grano | 67.0 | 67.0 |
| Oscar Software | 7.1 | 7.1 |
| Carrot | 4.6 | 7.9 |
| CoreHW | 3.4 | 3.4 |
| Helakeskus | 3.0 | 3.0 |
| Hygga | 2.6 | 2.6 |
| Heatmasters | 0.3 | 0.3 |
| Tilatukku | - | 2.4 |
| Total | 88.0 | 93.7 |
Impairment testing of goodwill in the financial period was undertaken for the situation on September 30. The recoverable amount through business operations has been determined in an impairment test with the help of service value. The determined anticipated cash flows are based on the vision of the Group's management on the development of the next three years. The subsequent years after the forecast period have been extrapolated using a 2% growth estimate.
The key variables used in calculating service value are budgeted net sales and budgeted operating profit. In terms of operating profit, the cost savings and other benefits produced by restructuring activities which have already been implemented, or to which a commitment has been made, were also taken into account. Future outgoing cash flows taking place after the time of observation are not linked to these reorganization efforts to any significant extent.
In calculating service value, Grano's net sales are expected to grow moderately. Grano's EBIT is expected to improve during the forecast period as a result of operational streamlining measures. The net sales and EBIT of Helakeskus are expected to grow moderately during the forecast period. Hygga's net sales are expected to grow significantly, especially in terms of the clinic business. EBIT is also expected to increase for the clinic and licensing business. The net sales and EBIT of Heatmasters are expected to grow moderately. CoreHW's net sales are expected to continue their significant growth due to an increase in the sale of proprietary products, among other factors, and the company's profitability is expected to improve. Carrot's net sales are expected to grow moderately, and relative profitability is expected to improve significantly compared to 2020. Oscar Software's net sales are expected to grow, and its profitability is expected to remain at a good level.
The discount rates before tax used in the calculations are (discount rate % used in the reference year):
Grano 6.8% (6.8%), Carrot 8.5% (8.9%), Oscar Software 10.1% (10.1%), Hygga 9.5% (9.4%), Helakeskus 7.0% (7.0%), Heatmasters 9.5% (9.5%) and CoreHW 7.6% (7.5%).
The service value determined with the test of the company's units that have been analyzed through continuous testing has been greater than their book value in all units, except Carrot.
Despite the moderate development of the staffing sector, the development of the Carrot segment's net sales and EBIT has been weaker than anticipated during the financial period. As part of impairment testing of goodwill, Panostaja has reviewed the prospects of the Carrot segment and other presumptions related to the business environment. With reference to the Carrot segment's impairment tests, the Carrot segment's consolidated goodwill has been written down by MEUR 3.3. The Carrot segment's remaining amount of goodwill is MEUR 4.6.
Moderate changes to the key parameters used in the test calculations of segments other than Carrot do not result in the asset items' book value exceeding the recoverable amount accruable from them. Due to the current low interest level, however, it is clear that the sensitivity of the impairment tests will increase as the interest rates climb.
| (EUR 1,000) | Land areas | Buildings and premises |
Machinery and equipment |
Other tangible assets |
Advance payments fixed assets |
Total |
|---|---|---|---|---|---|---|
| Acquisition cost as of November 1, 2019 | 194 | 0 | 44,026 | 282 | 1,090 | 45,592 |
| Additions | 2,909 | 383 | 3,292 | |||
| Additions to asset items | 27,366 | 432 | ||||
| Effect of company acquisition | 0 | 0 | ||||
| Effect of the company sale or discontinuation | -530 | -317 | -847 | |||
| Deductions | -722 | -227 | -63 | -1,012 | ||
| Transfer merger | 0 | |||||
| Transfers between balance sheet groups | 179 | -396 | -217 | |||
| Exchange rate differences | -3 | -145 | -148 | |||
| Other changes | 0 | |||||
| Acquisition cost October 31, 2020 | 194 | 26,111 | 46,857 | 282 | 1,014 | 74,458 |
| Accumulated depreciations, amortizations and impairment November 1, 2019 |
-179 | 0 | -29,898 | -208 | -947 | -31,232 |
| Depreciations in the financial period | -4,944 | -4,944 | ||||
| Depreciations of asset items | -6,267 | -109 | -6,376 | |||
| Effect of company acquisition | 0 | 0 | ||||
| Effect of the company sale or discontinuation | 225 | 225 | ||||
| Deductions | 0 | -79 | -79 | |||
| Transfer merger | 0 | |||||
| Transfers between balance sheet groups | 0 | |||||
| Exchange rate differences | -1 | 4 | 123 | 126 | ||
| Other changes | 0 | |||||
| Accumulated depreciations, amortizations and impairment October 31, 2020 |
-180 | -6,263 | -34,682 | -208 | -947 | -42,280 |
| Book value as of October 31, 2020 | 14 | 19,848 | 12,175 | 74 | 67 | 32,177 |
| Acquisition cost as of November 1, 2018 | 194 | 0 | 43,015 | 282 | 1,759 | 45,250 |
| Additions | 2,216 | 1,824 | 4,040 | |||
| Effect of company acquisition | 40 | 40 | ||||
| Effect of the company sale or discontinuation | -504 | -504 | ||||
| Deductions | -105 | -197 | -302 | |||
| Transfer merger | -976 | -976 | ||||
| Transfers between balance sheet groups | 93 | -2,296 | -2,203 | |||
| Exchange rate differences | 33 | 33 | ||||
| Other changes | 214 | 214 | ||||
| Acquisition cost as of October 31, 2019 | 194 | 0 | 44,026 | 282 | 1,090 | 45,592 |
| Accumulated depreciations, amortizations and impairment as of November 1, 2018 |
-179 | 0 | -26,391 | -208 | -947 | -27,725 |
| Depreciations in the financial period | 0 | -4,818 | -4,818 | |||
| Effect of the company sale or discontinuation | 384 | 384 | ||||
| Deductions | 0 | 0 | 0 | |||
| Transfer merger | 976 | 976 | ||||
| Transfers between balance sheet groups | 0 | |||||
| Exchange rate differences | 0 | |||||
| Other changes | -49 | -49 | ||||
| Accumulated depreciations, amortizations and impairment as of October 31, 2019 |
-179 | 0 | -29,898 | -208 | -947 | -31,232 |
| Book value as of October 31, 2019 | 15 | 0 | 14,128 | 74 | 143 | 14,359 |
In accordance with the applicable financial statement principles, the Group will record the lease agreements in the balance sheet as lease liabilities and asset items. The rent payments are presented as loan repayments and related interest costs. The lease period is the non-cancellable period of the lease agreement, with an extension or cancellation option if the lessee can be reasonably expected to use the extension option. The lease periods for lease agreements effective until further notice are determined based on the realistic estimates of the management. During the transition period, rent payments were discounted at the estimated interest of additional credit.
| Book value as of October 31 | 3,575 | 3,342 |
|---|---|---|
| Deductions | 0 | -262 |
| Additions | 0 | 2,314 |
| Share of the profit of the financial period |
233 | 150 |
| Book value as of November 1 | 3,342 | 1,140 |
| (EUR 1,000) | 2020 | 2019 |
| October 31, 2020 | Registered office | Shareholding | Assets | Equity | Liabilities | Net sales | Total |
|---|---|---|---|---|---|---|---|
| Gugguu Oy | 235 | ||||||
| Spectra Oy | Lohja | 39.0% | 2,199 | 903 | 1,296 | 6,285 | 339 |
| Maker3D | Helsinki | 32.6% | - | - | - | - | - |
Spectra Oy is an associated company in which Panostaja Group has a 39.0% holding. The profit/loss is based on the profit/loss for the financial period.
Panostaja invested in Gugguu Oy's shares. Gugguu is a company established in 2012 that designs and manufactures firstrate children's clothing from ecological high-quality materials. The company's products include indoor and outdoor clothing for children as well as children's accesories. After the restructuring, Panostaja's holding in the company is 43%.
Grano's subsidiary Grano 3D merged with Maker3D on September 30, 2019. Through the exchange of shares, the company became one of Grano's associated companies (shareholding 32.6%). Maker3D designs and manufactures high-quality 3D-printable products. The company has notified the Finnish Patent and Registration Office of its decision to extend the financial year by four months. No financial information on the new business entity is available at this time.
| Total | 5,818 | 8,057 |
|---|---|---|
| Other receivables | 786 | 2,862 |
| Held-for-sale investments | 216 | 224 |
| Loan receivable | 4,816 | 4,971 |
| (EUR 1,000) | 2020 | 2019 |
Under other receivables, Panostaja Oyj has a receivable of MEUR 0.6 from the Group's Senior Management Team in relation to the reward scheme. There are more details concerning the reward scheme in note 35. Related party disclosures.
| Investments in unquoted shares: | 2020 | 2019 |
|---|---|---|
| At the start of the financial period, November 1 |
224 | 226 |
| Additions caused by the merging of businesses |
0 | 0 |
| Additions | 0 | 0 |
| Deductions | -8 | -2 |
| At the end of the financial period, October 31 |
216 | 224 |
| Financial assets recorded at fair value through profit and loss |
2020 | 2019 |
|---|---|---|
| At the start of the financial period, November 1 |
8,394 | 11,000 |
| Changes in fair value | ||
| - realized | -14 | -106 |
| - unrealized | -14 | |
| Additions | 2,000 | 4,500 |
| Deductions | -4,000 | -7,000 |
| At the end of the financial period, October 31 |
6,366 | 8,394 |
The financial assets recorded at fair value through profit and loss include an investment in the Fennian Varainhoito Oy Cash Asset Management Portfolio. The portfolio mainly consists of short-term interest bond funds and investments in company loan funds. The fund is low-risk and the investment can be withdrawn at any time. At the end of the financial year, the fund held MEUR 6.4 in investments.
| Losses confirmed or to be confirmed in |
||||
|---|---|---|---|---|
| taxation | Impairment losses | Other items | Total | |
| November 1, 2018 | 670 | 0 | 5,784 | 6,454 |
| Recorded in the income statement | -88 | -349 | -437 | |
| Items of the extensive income statement | ||||
| Acquired business operations | ||||
| Discontinued operations | 0 | |||
| Adjustment from changes in the tax rate | ||||
| Losses confirmed or to be confirmed in taxation | ||||
| Exchange rate differences | ||||
| Recognized directly in equity | ||||
| October 31, 2019 | 582 | 0 | 5,435 | 6,017 |
| Recorded in the income statement | -3 | 234 | 231 | |
| Items of the extensive income statement | ||||
| Acquired business operations | ||||
| Discontinued operations | ||||
| Adjustment from changes in the tax rate | ||||
| Losses confirmed or to be confirmed in taxation | ||||
| Exchange rate differences | ||||
| Recognized directly in equity | ||||
| October 31, 2020 | 579 | 0 | 5,669 | 6,248 |
| Fair value allocations |
Varying tax depreciations |
Discontinued business operations |
Acquired business operations |
Other items | Total | |
|---|---|---|---|---|---|---|
| November 1, 2018 | 2,334 | 3,321 | 0 | 0 | 0 | 5,655 |
| Recorded in the income statement | -545 | 1,094 | 549 | |||
| Items of the extensive income statement | ||||||
| Acquired business operations | 0 | |||||
| Discontinued operations | 0 | |||||
| Adjustment from changes in the tax rate | ||||||
| Losses confirmed or to be confirmed in taxation | ||||||
| Transfer between items | 0 | |||||
| Exchange rate differences | ||||||
| Recognized directly in equity | ||||||
| October 31, 2019 | 1,789 | 4,415 | 0 | 0 | 0 | 6,204 |
| Recorded in the income statement | -458 | 1,194 | 736 | |||
| Items of the extensive income statement | ||||||
| Acquired business operations | ||||||
| Discontinued operations | -213 | -213 | ||||
| Adjustment from changes in the tax rate | ||||||
| Losses confirmed or to be confirmed in taxation | ||||||
| Transfers between items | ||||||
| Exchange rate differences | ||||||
| Recognized directly in equity | ||||||
| October 31, 2020 | 1,331 | 5,609 | -213 | 0 | 0 | 6,727 |
A tax receivable in the amount of MEUR 0.5 has been recognized for the confirmed losses of the subsidiaries. Deferred tax receivables have not been recognized for the MEUR 0.3 in total confirmed losses of subsidiaries. In the management's estimation, the deferred tax receivables from the subsidiaries' confirmed losses can be utilized based on estimated taxable income derived from the subsidiaries' approved business plans and budgets. The unused tax losses will expire between 2021 and 2029.
| Total | 6,330 | 7,158 |
|---|---|---|
| Other stocks | 7 | 11 |
| Finished products and goods | 2,586 | 3,104 |
| Unfinished products | 648 | 963 |
| Materials and supplies | 3,089 | 3,080 |
| (EUR 1,000) | 2020 | 2019 |
The Group did not record stock impairments for the 2020 financial year or the reference period.
The book value of trade receivables and other receivables corresponds to the maximum amount for the credit risk associated with them on the balance sheet date.
| (EUR 1,000) | 2020 | 2019 |
|---|---|---|
| Trade receivables | 19,008 | 25,700 |
| Loans receivable | 188 | 46 |
| Accrued income | 3,140 | 3,538 |
| Receivables from associated companies |
0 | 0 |
| Tax assets based on taxable income for the period |
40 | 130 |
| Other receivables | 533 | 430 |
| Total | 22,908 | 29,844 |
| (EUR 1,000) | 2020 | 2019 |
|---|---|---|
| Not past due | 17,042 | 21,699 |
| Past due 1–30 days | 1,659 | 2,936 |
| Past due 31–180 days | 243 | 978 |
| Past due 181–360 days | 87 | 142 |
| Past due over a year | 65 | 30 |
| Credit loss provision and ECL in total |
-88 | -85 |
| Balance sheet value of trade receivables |
19,008 | 25,700 |
The companies have recorded impairment losses of EUR 160,000 from trade receivables in the financial period (EUR 163,000 in 2019). The amortizations have affected invoices over a year past due as well as receivables from companies with a bankruptcy or corporate restructuring decision.
Due to the implementation of IFRS 9, the Group has recorded the credit loss provision according to a separate calculation model. The model for assumed credit losses is based on the amount of historical losses and the payment behavior of customers. The Group has recorded a credit loss appropriation of EUR 88,000 in accordance with IFRS 9.
| Deductible | ||
|---|---|---|
| October 31, 2020 | Gross book | item regarding |
| (EUR 1,000) | value | the loss |
| Not matured | 17,176 | 9 |
| 1-30 | 1,659 | 2 |
| 31-90 | 180 | 0 |
| 91–180 | 60 | 3 |
| 181–360 | 87 | 9 |
| Over 360 | 65 | 65 |
| Total | 19,096 | 88 |
| Total | 3,140 | 3,538 |
|---|---|---|
| Others | 1,809 | 2,058 |
| Advances | 1,209 | 1,099 |
| Annual rebates | 117 | 366 |
| Salaries and social charges | 5 | 15 |
| (EUR 1,000) | 2020 | 2019 |
The balance sheet value of receivables is essentially the equivalent of their fair value.
| (EUR 1,000) | 2020 | 2019 |
|---|---|---|
| Financial assets Fennia | 6,366 | 8,394 |
| Cash in hand and bank accounts | 27,889 | 7,988 |
| Total | 34,255 | 16,381 |
At the end of the financial period, Panostaja Oyj's share capital was EUR 5,568,681.60 and the total number of shares was 52,533,110.
The maximum amount paid by the shareholders in connection with share issues that exceeds the nominal value of the shares is recorded in the share premium account. The amounts recorded in the share premium account relate to the share issues under the former Finnish Limited Liability Companies Act (734/1978), which was in force on August 31, 2006.
In cases where option rights were decided when the old Companies Act was in force, the cash payments received from share subscriptions based on the options are recognized in accordance with the terms and conditions of the arrangement for share capital and the share premium account.
The invested unrestricted equity fund consists of investments of the nature of equity and the amount paid by shareholders in connection with share issues decided upon following the entry-into-force on September 1, 2006 of the new Limited Liability Companies Act (624/2006), where it is not recognized in the share capital in accordance with an express decision. The invested unrestricted equity fund also contains a convertible bond loan equity component.
Share issues were not carried out in the 2020 financial period nor in the 2019 reference period.
Share subscriptions were not carried out in the 2020 financial period or the 2019 reference period.
The purchase price of bought shares and their transaction costs are given as a deduction under invested unrestricted capital.
At the end of the 2020 financial period, there were 110,824 of the company's own shares (193,594).
In accordance with the decisions by the General Meeting and the Board on February 1, 2019, Panostaja Oy relinquished a total of 28,325 individual shares as share bonuses to the company management on December 16, 2019. On December 16, 2019, the company relinquished to the Board members a total of 12,195 shares as meeting compensation. In accordance with the Board decision of February 6, 2020, Panostaja relinquished a total of 13,514 shares on March 13, 2020, a total of 14,368 shares on June 5, 2020 and a total of 14,368 shares on September 4, 2020, as meeting compensation.
The dividend paid for the 2019 financial period stood at MEUR 2.6 in total (EUR 0.05 per share). MEUR 0.8 in dividends was paid to minority shareholders in subsidiaries.
The dividend paid for the 2018 financial period stood at MEUR 2.6 in total (EUR 0.05 per share). In September, Panostaja's Board of Directors decided to distribute an extra dividend in the amount of MEUR 1.6 (EUR 0.03 per share). MEUR 1.4 in dividends was paid to minority shareholders in subsidiaries.
The Group's equity has been adjusted by a total amount of MEUR 0.5 according to value-added taxes levied on the company for previous financial periods 2018–2019 based on tax auditing.
| (EUR 1,000) | 2020 | 2019 |
|---|---|---|
| Non-current financial liabilities valued at acquisition cost |
||
| Loans from financial institutions | 49,741 | 47,383 |
| Lease liabilities | 20,905 | 6,502 |
| Other loans | 474 | 491 |
| Total | 71,120 | 54,377 |
| Current financial liabilities valued at acquisition cost |
||
| Installments on non-current financial loans |
8,988 | 11,391 |
| Other loans from financial institutions |
15,298 | 6,878 |
| Lease liabilities | 7,977 | 2,571 |
| Total | 32,264 | 20,839 |
The fair value of liabilities is presented in Note 32. The fair values of financial assets and liabilities.
The weighted average of interest rates on October 31, 2020 was 2.5% (October 31, 2019: 2.5%). At the time of closing the books, the Group's financial liabilities stood at EUR 60,352,000. Of this, EUR 55,891,000 were variable-interest loans and EUR 4,461,000 were fixed-interest loans. Interest-bearing non-current and current liabilities are in euros.
Carrot Group Oy's MEUR 2.8 loans involve a covenant term on equity ratio and key figure on interest-bearing net liabilities / operating margin. At the time of closing the books, the company did not meet the required covenant term. However, the financier has, before the end of the financial period, consented to not maturing the liabilities in question due to a breach of covenant.
| Loans from financial institutions | Finance lease liabilities | Other loans | |||||
|---|---|---|---|---|---|---|---|
| Amortizations (EUR 1,000) |
2020 | 2019 | 2020 | 2019 | 2020 | 2019 | |
| < 1 year | 9,255 | 11,637 | 7,977 | 2,571 | 23,483 | 6,877 | |
| 1–2 years | 14,853 | 8,114 | 4,938 | 1,549 | 6,768 | 446 | |
| 2–3 years | 7,421 | 9,008 | 4,938 | 1,549 | 0 | 0 | |
| 3–4 years | 25,999 | 6,775 | 4,938 | 1,549 | 0 | 0 | |
| 4–5 years | 1,210 | 22,893 | 4,938 | 1,549 | 0 | 0 | |
| > 5 years | 554 | 1,244 | 1,153 | 306 | |||
| 59,292 | 59,671 | 28,882 | 9,073 | 30,251 | 7,323 |
| Total | 30,876 | 32,403 |
|---|---|---|
| Other current liabilities | 7,142 | 6,130 |
| Accruals and deferred income | 13,751 | 14,463 |
| Trade payables | 9,305 | 11,065 |
| Advances received | 679 | 745 |
| (EUR 1,000) | 2020 | 2019 |
| (EUR 1,000) | 2020 | 2019 |
|---|---|---|
| Annual holiday pay and social costs |
10,026 | 8,986 |
| Accrued wages and salaries | 1,323 | 1,273 |
| Accrued interest | 83 | 116 |
| Accrued taxes | 68 | 298 |
| Accrued employee pension | 1,362 | 1,626 |
| Other items | 889 | 2,164 |
| Total | 13,751 | 14,463 |
The other liabilities include a MEUR 0.5 value-added tax adjustment deducted from the parent company's other expenses for the 2018-2019 financial periods based on tax auditing.
The Group did not have loss-making contracts or guarantee provisions in the financial period or reference period.
The Group provides a guarantee of between one and three years for certain of its products. Faults in products noticed during the guarantee period are repaired at the cost of the Group or a similar new product is given to the customer. A provision for a guarantee given is recognized on the basis of an estimate of probable guarantee expenses. Guarantee provisions are expected to be used over the next three years, especially, however, during the first 12 months. The Group did not have recorded guarantee provisions in the financial period or reference period.
| (EUR 1,000) | 2020 | 2019 |
|---|---|---|
| Gross amount of lease liabilities – minimum rents by maturity date: |
||
| In one year | 8,777 | 2,870 |
| Between one and five years | 20,361 | 6,659 |
| In over five years | 1,165 | 356 |
| Total | 30,303 | 9,885 |
| Future financial costs of lease liabilities |
-1,421 | -812 |
| Current value of lease liabilities | 28,882 | 9,073 |
| The current value of the lease liabilities will mature as follows |
||
| In one year | 7,977 | 2,571 |
| Between one and five years | 19,751 | 6,196 |
| In over five years | 1,154 | 306 |
| Total | 28,882 | 9,073 |
The property, plant and equipment listing includes asset items acquired using lease liabilities.
SIn accordance with the applicable financial statement principles, the Group will record the lease agreements in the balance sheet as lease liabilities and asset items. The rent payments are presented as loan repayments and related interest costs.
The nominal value of the lease liabilities is valued at the current value of rent payments. Rent payments do not include variable rents. Variable rents that are not included in the original lease liability value are recorded directly in the income statement. The lease period is the non-cancellable period of the lease agreement, with an extension or cancellation option if the lessee can be reasonably expected to use the extension option. The lease periods for lease agreements effective until further notice are determined based on the realistic estimates of the management. During the transition period, rent payments were discounted at the estimated interest of additional credit.
The Group's net current value of the capitalized lease debt in the balance sheet stood at MEUR 25.6 at the beginning of the review period and at MEUR 28.9 at its end. During the review period, the rental costs arising from the lease agreements dropped by MEUR 6.6 and the interest costs increased by MEUR 0.5. The write-downs for the review period increased by MEUR 6.3 due to the asset item write-downs.
| (EUR 1,000) | Note | At fair value through profit and loss |
At fair value through other extensive profit/loss items |
At allocated acquisition cost |
Book values of balance sheet items |
Fair value |
|---|---|---|---|---|---|---|
| Non-current financial assets | ||||||
| Other non-current assets | 21 | 5,602 | 5,602 | 8,525 | ||
| Held-for-sale investments | 21 | 216 | 216 | 216 | ||
| Current financial assets | ||||||
| Trade and other receivables | 25 | 0 | 0 | |||
| Short-term investments | 22 | 6,366 | 6,366 | 6,366 | ||
| Financial assets total | 6,366 | 216 | 5,602 | 12,184 | 12,195 | |
| Non-current financial liabilities | ||||||
| Loans from financial institutions | 28 | 70,646 | 70,646 | 70,794 | ||
| Other non-current liabilities | 28 | 473 | 473 | 473 | ||
| Current liabilities | ||||||
| Interest-bearing liabilities | 28 | 32,264 | 32,264 | 32,264 | ||
| Derivative agreements | 29 | 88 | 88 | 88 | ||
| Financial liabilities total | 88 | 0 | 103,383 | 103,471 | 103,619 |
* The non-current financial liabilities include MEUR 20.5 in lease liabilities.
* The current financial liabilities include MEUR 7.9 in lease liabilities.
| (EUR 1,000) | Note | At fair value through profit and loss |
At fair value through other extensive profit/loss items |
At allocated acquisition cost |
Book values of balance sheet items |
Fair value |
|---|---|---|---|---|---|---|
| Non-current financial assets | ||||||
| Other non-current assets | 21 | 7,833 | 7,833 | 7,772 | ||
| Held-for-sale investments | 21 | 224 | 224 | 224 | ||
| Current financial assets | ||||||
| Trade and other receivables | 25 | 0 | 0 | |||
| Short-term investments | 22 | 8,394 | 8,394 | 8,394 | ||
| Financial assets total | 8,394 | 224 | 7,833 | 16,451 | 16,390 | |
| Non-current financial liabilities | ||||||
| Loans from financial institutions | 28 | 53,886 | 53,886 | 54,033 | ||
| Other non-current liabilities | 28 | 476 | 476 | 476 | ||
| Current liabilities | ||||||
| Interest-bearing liabilities | 20,839 | 20,839 | 20,839 | |||
| Derivative agreements | 29 | 101 | 101 | 101 | ||
| Financial liabilities total | 101 | 0 | 75,201 | 75,302 | 75,449 |
The fair values of trade receivables, other current receivables, trade payables and other current liabilities correspond to their book value, because the effect of discounting is not essential, taking into account the maturity of the receivables. Their fair value is therefore not specified in the Notes.
The fair values of other receivables and liabilities valued at allocated acquisition cost are set by discounting their future cash flows on the balance sheet day using market interest rates, at which the company would get a similar loan on the date of the closing of the books or, with regard to receivables, market interest rates at which the company could grant a loan to a counterparty on the date of the closing of the books.
The process of determining the fair value of items valued at fair value on the balance sheet is explained in Note 33.
| Fair values at the end of the period under review October 31, 2020 |
|||
|---|---|---|---|
| (EUR 1,000) | Level 1 | Level 2 | Level 3 |
| Financial assets recorded at fair value through profit and loss |
|||
| Interest rate swaps | |||
| Interest rate fund shares | |||
| Held-for-sale investments | |||
| Short-term investments | 6,366 | 0 | |
| Investments in unquoted shares |
216 | ||
| Total | 6,366 | 0 | 216 |
| Financial liabilities recorded at fair value through profit and loss |
|||
| Interest rate swaps | 88 | ||
| Total | 0 | 88 | 0 |
| Fair values at the end of the period under review October 31, 2019 |
|||||
|---|---|---|---|---|---|
| (EUR 1,000) | Level 1 | Level 2 | Level 3 | ||
| Financial assets recorded at fair value through profit and loss |
|||||
| Interest rate swaps | |||||
| Interest rate fund shares | |||||
| Held-for-sale investments | |||||
| Short-term investments | 8,394 | ||||
| Investments in unquoted shares |
224 | ||||
| Total | 8,394 | 0 | 224 | ||
| Financial liabilities recorded at fair value through profit and loss |
|||||
| Interest rate swaps | 101 | ||||
The fair values under Level 1 in the hierarchy are based completely on the quoted prices for the same asset items or liabilities on existing markets.
Total 0 101 0
Level 2 fair values are based on input data other than the quoted prices contained in Level 1, yet on information that is verifiable either directly or indirectly for the asset item or liability concerned. Fund investments are valued based on the valuation reports of fund management companies. Derivatives are valued using the discounted cash flow method.
Level 3 fair values are based on a price other than that available on the market, and they might contain assessments made by management.
Held-for-sale non-current financial assets are all investments in unquoted shares. They are valued at acquisition price, because their fair values are not reliably available.
| (EUR 1,000) | 2020 | 2019 |
|---|---|---|
| Guarantees given on behalf of Group companies |
||
| Enterprise mortgages | 94,255 | 95,258 |
| Pledges given | 112,920 | 116,268 |
| Other liabilities | 4,944 | 5,730 |
The pledges given include pledged shares in subsidiaries worth MEUR 136.8. The nominal or book value of a collateral has been used as the value of liabilities.
| Total for loans from institutions | 102,909 | 74,725 |
|---|---|---|
| Total | 27,505 | 30,195 |
| In over five years | 275 | 1,368 |
| In over one year but within five years maximum |
16,873 | 17,551 |
| In one year | 10,357 | 11,276 |
| Other rental agreements | ||
| (EUR 1,000) | 2020 | 2019 |
The Group's related parties include the parent company as well as the subsidiaries, associated companies and joint ventures. Alongside companies with control and significant influence, corresponding power is exercised by natural persons. In addition to any persons exercising control and significant influence, the company's related parties include key persons in the management of the company and its parent company.
Individuals with rights and responsibilities relating to the planning, management and control of the activities of the corporation in question are regarded as key persons. Examples of key persons are members of the Board and Senior Management Team as well as the chief executive officer and senior vice president.
Close family members of key persons (and persons exercising control/influence) are also considered to be related parties. Marital or common law spouses and the children or other dependents of the person or their spouse, for example, are regarded as family members. In addition to family members (and persons exercising control/influence) the company's circle of related parties includes companies in which a key person or their spouse, individually or together, exercises control or significant influence.
The Board of Directors of Panostaja Oy decides on the principles underlying the reward scheme for the CEO and members of the Senior Management Team. The management's reward and commitment schemes consist of salary, employee benefits and share rewards. The retirement pension is determined in accordance with the Employees Pensions Act (TyEL).
Panostaja Oyj's Annual General Meeting decides on rewards to members of the Board on an annual basis. Rewards to Board members are based on an annual proposal submitted by the largest shareholders (at least 10%) to the General Meeting, which then decides the annual reward level.
According to the share remuneration scheme, a total of 65,085 Panostaja shares will be issued to members of the Senior Management Team in December 2020. A potential bonus may also be paid in cash to cover the taxes and tax-like payments arising from the bonus.
At the time of closing the books on October 31, 2020, the members of the Senior Management Team held in their personal ownership, or in the ownership of a company where they have a controlling interest, 700,000 Panostaja shares related to the remuneration system that they have undertaken to retain in their ownership for the duration of the system's period of validity. The Management's share ownership within the incentive and commitment scheme is distributed as follows:
| Total | 700,000 pcs |
|---|---|
| Minna Telanne | 200,000 pcs |
| Miikka Laine | 200,000 pcs |
| Comito Oy (Tapio Tommila) | 300,000 pcs |
The members of the Senior Management Team have financed their investments themselves, in part, and through company loans, in part, and they bear the genuine corporate risk with respect to the investment they have made in the scheme.
| (EUR 1,000) | 2020 | 2019 |
|---|---|---|
| At the start of the financial period | 1,107 | 1,181 |
| Loans granted during the financial period |
0 | 0 |
| Loans repaid and amortizations | -499 | -74 |
| Debited interest | 5 | 6 |
| Interest payments received during the financial period |
-5 | -6 |
| At the end of the financial year | 608 | 1,107 |
The loan conditions for key management personnel are as follows:
| Total | 608 | ||
|---|---|---|---|
| Miikka Laine | 148 | of the loan period | 0.250 |
| Repayment in full at the end | |||
| Minna Telanne | 148 | Repayment in full at the end of the loan period |
0.250 |
| Comito Oy (Tapio Tommila) |
313 | Repayment in full at the end of the loan period |
0.250 |
| Name | Amount of loan |
Conditions of repayment | Interest |
On October 31, 2020, company shares with a fair value of MEUR 0.4 represented the collateral on loans granted.
It was resolved at Panostaja Oyj's General Meeting on February 6, 2020, regarding payment of meeting compensation, that approximately 40% of the compensation remitted to the members of the Board be paid on the basis of the share issue authorization given to the Board, by issuing company shares to each Board member if the Board member does not own more than 1% of the company's shares on the date of the General Meeting. If the holding of a Board member on the date of the General Meeting is over one percent of all company shares, the compensation will be paid in full in monetary form. In addition, the Board of Directors of Panostaja Oyj decided at an organizing meeting held immediately after the General Meeting to implement the decision taken at the General Meeting regarding the compensation of the Board members as regards shares, so that the compensation is always sent four times a year on the day following publication of an interim report/financial statements for the year.
On March 18, 2020, the shareholders of Panostaja subsidiary CoreHW Group authorized the Board of Directors to decide on the granting of an option right to subscribe to no more than 100,000 new company shares, as referred to in Chapter 10, Section 1 of the Limited Liability Companies Act. Each option right will entitle the recipient to subscribe one new company share at a unit price of EUR 19.79. The granting date is August 12, 2020. The option rights have been granted for a weighty financial reason, as referred to in Chapter 10.1, Section 1 of the Limited Liability Companies Act. The aim of the measures is to engage the company's key personnel in the long-term development of the company's operations and the efforts combine the goals of the management and shareholders. The option rights do not provide any rights regarding later share issues, options or rights, when company assets are distributed as specified in Chapter 13, Section 1.1 of the Limited Liability Companies Act, in the event of a merger or division of the company, or in the context of minority shareholder redemption, as described in Chapter 18 of the Limited Liability Companies Act.
| Registered office | Share of voting power |
Parent company's shareholding % |
|
|---|---|---|---|
| Parent company | |||
| Panostaja Oyj | Tampere | ||
| Subsidiaries | |||
| Carrot Akatemia | Helsinki | 74.1 | 74.1 |
| Carrot Itä-Suomi Oy | Kuopio | 74.1 | 74.1 |
| Carrot Joensuu Oy | Joensuu | 74.1 | 74.1 |
| Carrot Jyväskylä Oy | Jyväskylä | 74.1 | 74.1 |
| Carrot Keski-Uusimaa Oy | Hyvinkää | 74.1 | 74.1 |
| Carrot Logistiikka Oy | Helsinki | 74.1 | 74.1 |
| Carrot Länsi-Suomi Oy | Pori | 74.1 | 74.1 |
| Carrot Oulu Oy | Oulu | 74.1 | 74.1 |
| Carrot Palvelut Group Oy | Tampere | 74.1 | 74.1 |
| Carrot Palvelut Oy | Helsinki | 74.1 | 74.1 |
| Carrot Pirkanmaa Oy | Tampere | 74.1 | 74.1 |
| Carrot Pohjanmaa Oy | Vaasa | 74.1 | 74.1 |
| Carrot Pohjois-Suomi Oy | Oulu | 74.1 | 74.1 |
| Carrot Rakennus Oy | Helsinki | 74.1 | 74.1 |
| Carrot Satakunta Oy | Turku | 74.1 | 74.1 |
| Carrot Tampere Oy | Tampere | 74.1 | 74.1 |
| Carrot Teollisuus Oy | Helsinki | 74.1 | 74.1 |
| Carrot Uusimaa Oy | Helsinki | 74.1 | 74.1 |
| Carrot Varsinais-Suomi Oy | Turku | 74.1 | 74.1 |
| Copynet Finland Oy | Helsinki | 55.2 | 55.2 |
| CoreHW Group Oy | Tampere | 61.1 | 61.1 |
| CoreHW Oy | Tampere | 61.1 | 61.1 |
| CoreHW Semiconductor Oy |
Tampere | 61.1 | 61.1 |
| Grano Oy | Helsinki | 55.2 | 55.2 |
| Grano Group Oy | Helsinki | 55.2 | 55.2 |
| Grano Diesel Oy | Helsinki | 55.2 | 55.2 |
| Heatmasters Group Oy | Tampere | 80.0 | 80.0 |
| Heatmasters Sp.zoo | Puola | 80.0 | 80.0 |
| Tallinna, | |||
| Grano Digital Oü | Viro | 55.2 | 55.2 |
| Hygga Group Oy | Helsinki | 79.8 | 79.8 |
| Hygga Oy | Helsinki | 79.8 | 79.8 |
| Tukholma, | |||
| Hygga AB | Ruotsi | 79.8 | 79.8 |
| Suomen Arkistovoima Oy | Turku | 55.2 | 55.2 |
| Suomen Helakeskus Oy | Seinäjoki | 100.0 | 100.0 |
| Suomen Helasto Oy | Seinäjoki | 100.0 | 100.0 |
| Oscar Software Holdings Oy |
Tampere | 54.5 | 54.5 |
| Oscar Software Oy | Tampere | 54.5 | 54.5 |
The subgroup subsidiary holdings are presented in the table in accordance with the holding of the Panostaja subgroup's parent company. More specific information on relationships of ownership of subgroup subsidiaries can be found in the financial statements of each respective subgroup.
At the time of the closing of the books, the Group had no legal cases or disputes regarding which significant claims could be targeted at the Group.
A value-added tax inspection was conducted within the Panostaja parent company concerning the financial periods 2018- 2019. The tax authority has decided on the partial limitation of the right to deduct value-added taxes and demanded the payment of an approximate amount of MEUR 0.6 in value-added taxes deducted during the years under review, including interest. The decision will be appealed.
A corresponding tax inspection was conducted in 2014. At the time, the tax authority deemed that Panostaja Oyj was not entitled to VAT deductions. Panostaja Oyj appealed the Tax Administation's decision to the Administrative Court, where the Tax Administration's decision was overturned. The Supreme Administrative Court did not grant the Tax Administration a right of appeal in the decision issued in November 2017. The Tax Administration refunded the non-deducted value-added taxes to Panostaja with interest.
There are no major events to report after the review period.
| Nov 1, 2019- | Nov 1, 2018– | ||
|---|---|---|---|
| (EUR 1,000) | Note | Oct 31, 2020 | Oct 31, 2019 |
| Other operating income | 1.1. | 245 | 6,318 |
| Staff expenses | -1,340 | -1,801 | |
| Depreciations, amortizations and impairment |
1.3. | -38 | -67 |
| Other operating expenses | 1.4. | -889 | -1,508 |
| OPERATING PROFIT/LOSS | -2,021 | 2,942 | |
| Financial income and costs | 1.5. | -2,563 | 2,172 |
| PROFIT/LOSS BEFORE APPROPRIATIONS |
|||
| AND TAXES | -4,584 | 5,113 | |
| Appropriations | 1.6. | 200 | |
| Income taxes | 1.7. | 9 | -667 |
| PROFIT/LOSS FOR THE FINANCIAL PERIOD |
-4,375 | 4,446 |
| October 31, | October 31, | ||
|---|---|---|---|
| (EUR 1,000) | Note | 2020 | 2019 |
| PERMANENT ASSETS | |||
| Intangible assets | 2.1. | 28 | 34 |
| Tangible assets | 2.2. | 116 | 146 |
| Investments | 2.3. | 36,979 | 39,453 |
| PERMANENT ASSETS TOTAL | 37,123 | 39,633 | |
| CURRENT ASSETS | |||
| Non-current receivables | 2.4. | 10,966 | 14,395 |
| Current receivables | 2.5. | 2,598 | 2,779 |
| Short-term investments | 2.6. | 6,366 | 8,394 |
| Cash and cash at bank | 2,395 | 1,285 | |
| CURRENT ASSETS TOTAL | 22,125 | 26,853 | |
| TOTAL ASSETS | 59,447 | 66,487 | |
| October 31, | October 31, | ||
|---|---|---|---|
| (EUR 1,000) | Note | 2020 | 2019 |
| EQUITY | 2.7. | ||
| Share capital | 5,569 | 5,569 | |
| Share premium account | 4,691 | 4,691 | |
| Invested unrestricted equity fund |
16,865 | 16,803 | |
| Profit/loss for the previous financial periods |
35,726 | 34,411 | |
| Profit/loss for the financial period |
-4,375 | 4,446 | |
| EQUITY TOTAL | 58,476 | 65,920 | |
| LIABILITIES | 2.8. | ||
| Non-current | 42 | 42 | |
| Current | 929 | 525 | |
| LIABILITIES TOTAL | 971 | 567 | |
| TOTAL LIABILITIES | 59,447 | 66,487 |
| Nov 1, 2019- | Nov 1, 2018- | |
|---|---|---|
| (EUR 1,000) | Oct 31, 2020 | Oct 31, 2019 |
| Profit/loss for the financial period | -4,375 | 4,446 |
| Adjustments: | 2,362 | -7,597 |
| Planned depreciations | 38 | 67 |
| Sales profits | -87 | -6,160 |
| Sales losses | 58 | 0 |
| Financial income and costs | 2,563 | -2,172 |
| Appropriations total | -200 | 667 |
| Taxes | -9 | 0 |
| CHANGES | ||
| Change in current non-interest-bearing | ||
| operating receivables | -71 | 47 |
| Change in current non-interest-bearing | ||
| liabilities | -47 | 45 |
| Interest and other financial costs | -108 | -143 |
| Interest and other financial income | 144 | 172 |
| Taxes paid | -3,286 | |
| Cash flow before appropriations | -2,147 | -6,316 |
| OPERATING CASH FLOW | -2,147 | -6,316 |
| INVESTMENT CASH FLOW | ||
| Investments in tangible and intangible | ||
| assets | -46 | -34 |
| Investments in subsidiaries | -226 | -1,092 |
| Investments in associated companies | 0 | -1,505 |
| Other investments | 0 | -3 |
| Capital gains from the disposal of | ||
| tangible and intangible assets | 51 | 33 |
| Capital gains from the disposal of subsidiaries |
924 | 4,812 |
| Capital gains from the disposal of | ||
| associated companies | 0 | 2,206 |
| Capital gains from the disposal of | ||
| other shares | 0 | 3 |
| Net change in internal receivables | -80 | -100 |
| Loans granted | 0 | |
| Loans receivable repaid | 2,507 | 1,074 |
| Paid dividends | 550 | |
| INVESTMENT CASH FLOW | 3,785 | 5,943 |
| FINANCIAL CASH FLOW | ||
| Share issue | ||
| Acquisition and disposal of own shares | 62 | 189 |
| Change in current interest-bearing | ||
| receivables | 0 | -93 |
| Change in non-current internal loans | ||
| Dividends paid | -4,185 | |
| Other financial cash flow | ||
| FINANCIAL CASH FLOW | -2,557 | -4,089 |
| CHANGE IN CASH AND CASH EQUIVALENTS |
-918 | -4,462 |
| Cash and cash equivalents at the | ||
| beginning of the financial period | 9,679 | 14,141 |
| CHANGE IN CASH AND CASH | ||
| EQUIVALENTS | -918 | -4,462 |
| Cash and cash equivalents at the end of the financial period |
8,761 | 9,679 |
Panostaja Group's parent company is Panostaja Oyj, registered office in Tampere, Finland.
The Group's consolidated financial statements can be obtained at Kalevantie 2, 33100 Tampere, Finland.
As a result of the tax inspection conducted during the financial period November 1, 2019–October 31, 2020, the company was ordered to pay a total of EUR 511,000 in value-added taxes for previous financial periods. The taxes have been recorded as an encumbrance to the account 'Profit/loss for previous financial periods.'
Current fixed assets are entered in acquisition costs in the balance sheet with planned depreciations deducted. Fixed asset shares are valued at their acquisition price.
Statutory pension insurance for staff is managed by an external pension insurance company. Pension costs are entered as a cost in the year of accrual.
Planned depreciations from permanent assets are calculated based on probable operating life from the original purchase price.
Planned depreciation periods are:
| 3y |
|---|
| 5–10y |
| 5–10y |
| 20–40y |
| 3–10y |
| 3–10y |
As a result of the tax inspection conducted during the financial period November 1, 2019–October 31, 2020, the company was ordered to pay a total of EUR 511,000 in value-added taxes for previous financial periods. The taxes have been recorded as an encumbrance to the account 'Profit/loss for previous financial periods.'
| 245 | 6,318 | |
|---|---|---|
| Others | 151 | 140 |
| Support received | 7 | 17 |
| Profits from sale of fixed assets | 87 | 6,160 |
| (EUR 1,000) | 2020 | 2019 |
| (EUR 1,000) | 2020 | 2019 |
|---|---|---|
| Salaries and fees | 1,117 | 1,510 |
| Pension costs | 148 | 200 |
| Other social security expenses | 75 | 91 |
| 1,340 | 1,801 | |
| During the financial period, the company employed on average |
||
| Clerical staff | 10 | 10 |
| (EUR 1,000) | 2020 | 2019 |
|---|---|---|
| Planned depreciations | ||
| Other capitalized long-term expenditure | 9 | 25 |
| Machinery and equipment | 28 | 43 |
| 38 | 67 |
| (EUR 1,000) | 2020 | 2019 |
|---|---|---|
| Other operating expenses internal | 90 | 100 |
| Other operating expenses | 300 | 382 |
| Marketing costs | 62 | 163 |
| Data management costs | 76 | 93 |
| Costs for expert services | 175 | 641 |
| Loss on disposal of fixed asset shares | 58 | |
| Rental costs | 129 | 129 |
| Other operating expenditure total | 889 | 1,508 |
| Auditor's fees | ||
| auditing fees | 43 | 70 |
| auxiliary services | 17 | 24 |
| 60 | 94 |
| (EUR 1,000) | 2020 | 2019 |
|---|---|---|
| Dividend yields | ||
| From companies in the same Group | 548 | 1,578 |
| From others | 4 | 11 |
| Dividend yields total | 552 | 1,589 |
| Other interest yields | ||
| From companies in the same Group | 465 | 418 |
| From others | 251 | 257 |
| Other interest yields total | 716 | 675 |
| Other financial income | ||
| From companies in the same Group | 49 | 51 |
| Other financial income total | 49 | 51 |
| Other interest and financial yields total | 764 | 725 |
| Other financial expenses | ||
| For others | 108 | 143 |
| Other financial expenses | 108 | 143 |
| Interest costs and other financial | ||
| costs total | 108 | 143 |
| Impairments of Group shares | 3,771 | |
| Impairment of stocks and shares | 0 | 0 |
| Financial income and costs total | -2,563 | 2,172 |
| (EUR 1,000) | 2020 | 2019 |
|---|---|---|
| Group contribution | 200 | 0 |
| (EUR 1,000) | 2020 | 2019 |
|---|---|---|
| Income taxes from financial period | 0 | 791 |
| Income taxes from previous financial period | 9 | -124 |
| 9 | 667 |
| (EUR 1,000) | 2020 | 2019 |
|---|---|---|
| Intangible rights | ||
| Acquisition cost Nov 1 | 59 | 59 |
| Acquisition cost Oct 31 | 59 | 59 |
| Accrued planned depreciations Nov 1 | -54 | -54 |
| Book value as of October 31 | 5 | 5 |
| Other capitalized long-term expenditure | ||
| Acquisition cost Nov 1 | 405 | 405 |
| Additions Nov 1–Oct 31 | 4 | 0 |
| Acquisition cost Oct 31 | 408 | 405 |
| Accrued planned depreciations Nov 1 | -376 | -351 |
| Planned depreciations Nov 1–Oct 31 | -9 | -25 |
| Book value as of October 31 | 23 | 29 |
| Intangible assets total | ||
| Acquisition cost Nov 1 | 464 | 464 |
| Additions Nov 1–Oct 31 | 4 | 0 |
| Acquisition cost Oct 31 | 468 | 464 |
| Accrued planned depreciations Nov 1 | -430 | -406 |
| Planned depreciations Nov 1–Oct 31 | -9 | -25 |
| Book value as of October 31 | 28 | 34 |
| (EUR 1,000) | 2020 | 2019 |
|---|---|---|
| Machinery and equipment | ||
| Acquisition cost Nov 1 | 851 | 836 |
| Additions Nov 1–Oct 31 | 43 | 34 |
| Deductions Nov 1–Oct 31 | -45 | -20 |
| Acquisition cost Oct 31 | 848 | 851 |
| Accrued planned depreciations Nov 1 | -738 | -695 |
| Planned depreciations Nov 1–Oct 31 | -28 | -43 |
| Book value as of October 31 | 82 | 112 |
| Other tangible assets | ||
| Acquisition cost Nov 1 | 34 | 34 |
| Acquisition cost Oct 31 | 34 | 34 |
| Book value as of October 31 | 34 | 34 |
| Tangible assets total | ||
| Acquisition cost Nov 1 | 885 | 870 |
| Additions Nov 1–Oct 31 | 43 | 34 |
| Deductions Nov 1–Oct 31 | -45 | -20 |
| Acquisition cost Oct 31 | 882 | 885 |
| Accrued planned depreciations Nov 1 | -738 | -695 |
| Planned depreciations Nov 1–Oct 31 | -28 | -43 |
| Book value as of October 31 | 116 | 146 |
| (EUR 1,000) | 2020 | 2019 |
|---|---|---|
| Interests in companies in the same Group | ||
| Acquisition cost Nov 1 | 37,127 | 36,785 |
| Additions Nov 1–Oct 31 | 2,196 | 1,092 |
| Deductions Nov 1–Oct 31 | -4,671 | -750 |
| Acquisition cost Oct 31 | 34,653 | 37,127 |
| Interests in associated companies | ||
| Acquisition cost Nov 1 | 2,205 | 820 |
| Additions Nov 1–Oct 31 | 0 | 1,505 |
| Deductions Nov 1–Oct 31 | 0 | -120 |
| Acquisition cost Oct 31 | 2,205 | 2,205 |
| Other shares and interests | ||
| Acquisition cost Nov 1 | 121 | 121 |
| Additions Nov 1–Oct 31 | 0 | 3 |
| Deductions Nov 1–Oct 31 | 0 | -3 |
| Acquisition cost Oct 31 | 121 | 121 |
| Investments total | ||
| Acquisition cost Nov 1 | 39,453 | 37,726 |
| Additions Nov 1–Oct 31 | 2,196 | 2,600 |
| Deductions Nov 1–Oct 31 | -4,671 | -872 |
| Acquisition cost Oct 31 | 36,979 | 39,453 |
| (EUR 1,000) | 2020 | 2019 |
|---|---|---|
| Subordinated loans receivable from companies in the same Group |
4,842 | 5,451 |
| Loans receivable from companies in the same Group |
1,309 | 1,974 |
| Loans receivable | 4,816 | 4,970 |
| Other receivables | 0 | 2,000 |
| 10,966 | 14,395 |
| (EUR 1,000) | 2020 | 2019 |
|---|---|---|
| Trade receivables from companies in the same Group |
365 | 270 |
| Trade receivables | 21 | 16 |
| Loans receivable from companies in the same Group |
0 | 200 |
| Group contributions | 200 | 0 |
| Other receivables | 12 | 55 |
| Dividend receivables from companies in the same Group |
548 | 1,028 |
| Other loans receivable | 170 | 0 |
| Interest receivables from companies in the same Group |
107 | 62 |
| Accrued income | 1,174 | 1,148 |
| 2,598 | 2,779 |
| (EUR 1,000) | 2020 | 2019 |
|---|---|---|
| Accrued income essential items | ||
| Interest receivables from insider loans | 7 | 6 |
| Interest receivables from other loans receivable |
99 | 86 |
| Passed-on costs | 989 | 989 |
| Other insurance premium advances | 2 | 0 |
| Cost scheduling | 78 | 67 |
| 1,174 | 1,148 |
| (EUR 1,000) | 2020 | 2019 |
|---|---|---|
| Other shares and interests | ||
| Investment fund shares | 6,366 | 8,394 |
| (EUR 1,000) | 2020 | 2019 |
|---|---|---|
| Share capital Nov 1 | 5,569 | 5,569 |
| Share capital Oct 31 | 5,569 | 5,569 |
| Share premium account Nov 1 = Oct 31 | 4,691 | 4,691 |
| Invested unrestricted equity fund Nov 1 | 16,803 | 16,614 |
| Rewards to Senior Management Team as own shares |
23 | 150 |
| Board bonuses as own shares | 39 | 39 |
| Invested unrestricted equity fund Oct 31 | 16,865 | 16,803 |
| Retained earnings/loss Nov 1 | 38,857 | 38,597 |
| Tax audit on value-added taxes 2018-2019 | -511 | 0 |
| Dividend distribution | -2,619 | -4,185 |
| Retained earnings/loss Oct 31 | 35,726 | 34,411 |
| Profit/loss for the financial period | -4,375 | 4,446 |
| Equity total | 58,476 | 65,920 |
| Distributable unrestricted equity Oct 31 | 48,216 | 55,660 |
| (EUR 1,000) | 2020 | 2019 |
|---|---|---|
| 2.8.1. Non-current liabilities | ||
| Other non-current liabilities | 3 | 3 |
| 3 | ||
| Liabilities owed to companies in the same Group |
||
| Other liabilities | 39 | 39 |
| 39 | 39 | |
| Non-current liabilities total | 42 | 42 |
| 2.8.2 Current liabilities | ||
| Trade payables | 63 | 89 |
| Other liabilities | 541 | 33 |
| Accruals and deferred income | 323 | 402 |
| 928 | 524 | |
| Liabilities owed to companies in the same Group |
||
| Trade payables | 1 | 1 |
| 1 | 1 | |
| Material items contained in accruals and deferred income |
||
| Annual holiday salaries and social costs | 152 | 180 |
| Scheduling of non-wage labor costs | 43 | 34 |
| Bonus allocation | 122 | 121 |
| Accrued interest | 6 | 6 |
| Accrued taxes | 0 | 60 |
| 323 | 402 | |
| Current liabilities total | 929 | 525 |
| (EUR 1,000) | 2020 | 2019 |
|---|---|---|
| Guarantees and contingencies | ||
| On behalf of Group companies | ||
| Guarantees given | 3,266 | 3,313 |
| Rental liabilities | ||
| In one year | 166 | 163 |
| More than one and within 5 years | 235 | 393 |
| Other pledges given | ||
| As security for own liabilities | 1 | 1 |
Panostaja Oyj's distributable assets, including the profit for the current and past financial periods of EUR 31,351,140.72 and EUR 16,865,107.77 in the invested unrestricted equity fund, amount to EUR 48,216,248.49.
The Board of Directors proposes to the Annual General Meeting that a dividend of EUR 0.03 per share be paid to the shareholders for the past financial period.
The Board also proposes that the General Meeting authorize the Board of Directors to decide, at its discretion, on the potential distribution of assets to shareholders, should the company's financial status permit this, either as dividends or as repayment of capital from the invested unrestricted equity fund. The maximum distribution of assets performed on the basis of this authorization shall total no more than EUR 4,700,000.
It is proposed that the authorization include the right of the Board to decide on all other terms and conditions relating to said asset distribution. It is also proposed that the authorization remain valid until the start of the next Annual General Meeting.
A report has today been issued about the audit performed. Tampere, December 10, 2020
Jukka Ala-Mello Chairman of the Board
Tampere, December 10, 2020
Mikko Koskenkorva
PricewaterhouseCoopers Oy Audit firm
Eero Eriksson
Tarja Pääkkönen
Kalle Reponen
Tapio Tommila CEO
Lauri Kallaskari AUTHORIZED PUBLIC ACCOUNTANT
As our report, we submit that
Our report is consistent with the additional report submitted to the Board.
We have audited Panostaja Oyj's (business ID 0585148-8) financial statements for the financial period November 1, 2019– October 31, 2020. The financial statements contain:
We performed the audit in conformity with the good auditing practice enforced in Finland. Our obligations under this good auditing practice are described in more detail in the section 'Duties of the auditor in auditing financial statements.'
It is our view that we have obtained the required amount of appropriate auditing evidence for establishing a foun-dation for our report.
We are independent of the parent company and the companies in the Group in accordance with the ethical requirements observed in Finland which pertain to the audit we have performed, and we have fulfilled our other ethical obligations under these requirements.
To the best of our knowledge and understanding, all non-audit services which we have provided to the parent company and the Group's companies are in compliance with the regulations enforced in Finland regarding such services, and we have not provided any prohibited non-audit services within the meaning of paragraph 1 of Article 5 of Regulation (EU) No 537/2014. The non-audit services we have provided are presented in Note 13 to the financial statements, titled 'Other operating expenses.'
As part of the audit's planning process, we determined the materiality and assessed the risk of the financial statements containing a material inaccuracy. In particular, we assessed areas in which the management made subjective estimates. Examples of such areas include significant accounting estimates which involve assumptions and evaluation of future events.
The materiality which we applied affected the planning and implementation of our audit. The goal of the audit is to obtain reasonable assurance of whether the financial statements as a whole contain material inaccuracies. Inaccuracies may be caused by misconduct or errors. They are considered to be material when they, alone or in combination, can be reasonably expected to impact financial decisions that are made by users based on the financial statements.
Based on our professional discretion, we determined certain quantitative thresholds related to materiality, such as the materiality determined for the consolidated financial statements, described in the table below. These thresholds, in combination with qualitative factors, helped us determine the full scope of the audit and the nature, timing and scope of individual auditing measures and assess the impact of inaccuracies on the financial statements as a whole.
| Materiality determined for the consolidated financial statements |
MEUR 1.8 (MEUR 1.9) |
|---|---|
| Benchmark used in determining materiality |
1% of net sales (three-year average) |
| Grounds for choosing the benchmark |
We chose net sales as the benchmark for determining materiality as, to our understanding, net sales are a benchmark generally used by readers of financial statements when asses sing the Group's performance. Net sales are also a generally accepted benchmark. |
When determining the scope of our audit, we took the Panostaja Group's structure and industry as well as the processes and controls related to financial reporting into account.
In addition to the parent company, our audit also covered all of the Group's subsidiaries in Finland. The Group's net sales are formed, to a significant extent, by these subsidiaries. The other subsidiaries are not considered to be at risk of material inaccuracy with regard to the consolidated financial statements.
Key factors for the audit are factors which, according to our professional discretion, were the most significant in the audit of the financial period in question. These factors were taken into account in our audit of the financial statements as a whole and in the preparation of our report on this audit. We will not provide a separate report on these factors.
We take the risk of the management ignoring controls into account in all our auditing. This includes an assessment of whether there are any indications of the management having a tendentious attitude which poses a risk of material inaccuracy as a result of misconduct.
| Valuation of goodwill | |
|---|---|
| See the accounting principles for the preparation of the consolidated financial statements and Note 18 Intangible assets |
In our audit measures, we focused on confirming the adequacy of the estimates which require discretion by the management by using the following measures: |
| The Panostaja Group's balance sheet, dated October 31, 2020, lists MEUR 88.0 as goodwill, which accounts for 42% of the Group's total assets. For the purpose of impairment testing, goodwill is allocated to the Group's cash-generating units. |
We audited the accuracy of the service value calculation model used by the company by comparing the model to the requirements of IAS 36: Impairment of Assets and by confirming the mathematical accuracy of the calculations; |
| The company always tests goodwill for impairment when there are indications that goodwill may be impaired, but at least once a year. In impairment testing, the amount of goodwill is compared to the recoverable amount. The recoverable amount is based on calculations of service value. These calculations require significant discretion from the management in relation to estimates of future cash flows, such as the development of net sales and expenditures, and the determination of the discount rate. |
We assessed the process related to the determination of cash flow forecasts that are used in service value calculations, and we compared the forecasts to government-approved budgets and forecasts; |
| Due to the management's assessments related to predictions used in goodwill testing and the significance of the balance sheet value, the valuation of goodwill is essential to the audit. |
We assessed the reliability of the forecasts used by the management with regard to net sales growth and EBIT trends, among other things, by comparing forecasts from previous years to actual figures; |
| We assessed the adequacy of the assumptions used in the sensitivity calculation prepared by the management; |
|
| The calculation assumptions used in determining the discount rates were compared, as applicable, to external, generally accepted information sources; and |
|
| We assessed the sufficiency and adequacy of the information provided in Note 18 to the consolidated financial statements. |
| Valuation of shares in subsidiaries | |
|---|---|
| See Note 2.3 Investments to the parent company's financial statements | Our audit measures included the following measures: |
| In Panostaja Oyj's financial statements, dated October 31, 2020, the value of shares in subsidiaries, which are included in investments on the balance sheet, is MEUR 37.0. |
We assessed the process, calculation principles and key assumptions related to the determination of cash flow forecasts used in the service value calculations; |
| The value of the shares in subsidiaries was determined with the help of service value calculations. |
We assessed the reliability of the forecasts used by the management with regard to net sales growth and EBIT trends, among other things, by comparing forecasts from previous years to actual figures; |
| The number of shares in subsidiaries on the parent company's balance sheet was significant, and their valuation includes significant discretion by the management. |
The calculation assumptions used in determining the discount rates were compared, as applicable, to external, generally accepted information sources; and |
| We tested the mathematical accuracy of the valuation calculations. |
With regard to the consolidated financial statements and the parent company's financial statements, there are no risks of material misstatements, as referred to in Article 10, paragraph 2(c) of Regulation EU No 537/2014.
The board of directors and CEO are in charge of preparing the financial statements so that the consolidated financial statements provide an accurate and sufficient picture in accordance with the International Financial Reporting Standards (IFRS) approved for use in the European Union and so that the financial statements provide an accurate and sufficient picture in accordance with the regulations currently in effect in Finland regarding the preparation of financial statements and meet the statutory requirements. The board of directors and CEO are also in charge of the type of internal control which they consider to be necessary in order to prepare the financial statements without any material inaccuracies resulting from misconduct or errors.
When preparing the financial statements, the board of directors and CEO are obligated to assess the ability of the parent company and Group to continue their operation and, as applicable, present the factors that are related to the continuity of the operations and the fact that the financial statements are prepared based on this continuity. The financial statements are prepared based on the continuity of operations except if the parent company or Group is planned to be dissolved or the operations discontinued or there are no other realistic alternatives available.
Our goal is to obtain reasonable assurance of whether the financial statements as a whole contain any material inaccuracies resulting from misconduct or errors and submit an audit report containing our statement. Reasonable assurance is a high level of assurance, but it is no guarantee that a material inaccuracy will always be recognized in audits in accordance with good auditing practice. Inaccuracies may be caused by misconduct or error, and they are considered to be material when they, alone or in combination, can be reasonably expected to impact financial decisions that are made by users based on the financial statements.
Audits that follow good auditing practice involve the use of professional discretion and retention of professional skepticism throughout the audit process. Additionally:
lied in the preparation of the financial statements and the reasonableness of the accounting estimates made by the management and the information presented on these estimates.
We communicate with administrative bodies regarding many matters, including the planned scope and timing of the audit and significant observations made during the audit, including possible considerable deficiencies in internal controls which we recognize during the audit.
We also confirm to the administrative bodies that we have complied with the relevant ethical requirements pertaining to independence and communicate with them regarding all relationships and other factors that may reasonably be considered to impact our independence and, as applicable, regarding relevant precautions.
We decide which of the factors communicated to the administrative bodies were the most significant in the audit of the financial period in question and therefore essential to the audit. We describe the factors in question in our audit report, unless a regulation or provision prevents the factor in question from being publicized or when, in extremely rare cases, we find that the factor in question will not be communicated in the audit report because its adverse impacts could be reasonably expected to be greater than the general benefits arising from such communication.
We have acted as the auditor chosen by the Annual General Meeting for 20 years without interruption, since March 7, 2000.
The board of directors and CEO are responsible for other information. Other information covers the operations review and the information contained in the annual report, but it does not contain the financial statements or our audit report thereof. We were provided with the operations review before this audit report's submission date and expect to be provided with the annual report after the date in question.
Our report concerning the audit does not cover other information.
We are obligated to read the other information specified above in connection with the audit of the financial statements and simultaneously assess whether the other information is materially inconsistent with the financial statements or the knowledge we obtain while conducting the audit or whether it otherwise appears to be materially inaccurate. With regard to the operations review, we are also obligated to assess whether the review was prepared in accordance with the regulations applicable to its preparation.
As our report, we submit that
If, based on work focused on other information that we obtain before the audit report's submission date, we conclude that the other information in question contains a material inaccuracy, we must report this fact. Regarding this matter, we have nothing to report.
PricewaterhouseCoopers Oy Audit firm
Lauri Kallaskari AUTHORIZED PUBLIC ACCOUNTANT
At the close of the review period, Panostaja Oyj's share capital was EUR 5,568,681.60. The number of shares is 52,533,110 in total.
The total number of own shares held by the company at the end of the review period was 110,824 (at the beginning of the financial period 193,594). The number of the company's own shares corresponded to 0.2% of the number of shares and votes at the end of the entire review period.
In accordance with the decisions by the General Meeting and the Board on February 1, 2019, Panostaja Oy relinquished a total of 28,325 individual shares as share bonuses to the company management on December 16, 2019. On December 16, 2019, the company relinquished to the Board members a total of 12,195 shares as meeting compensation. In accordance with the Board decision of February 6, 2020, Panostaja relinquished a total of 13,514 shares on March 13, 2020, a total of 14,368 shares on June 5, 2020 and a total of 14,368 shares on September 4, 2020, as meeting compensation.
The company's shares have been publicly listed since 1989. Currently, its shares are quoted on the Nasdaq Helsinki stock exchange.
Panostaja Oyj's Annual General Meeting was held on February 6, 2020 in Tampere. The number of Board members was confirmed at five (5), and Jukka Ala-Mello, Eero Eriksson, Mikko Koskenkorva, Tarja Pääkkönen and Kalle Reponen were re-elected to the Board for the term ending at the end of the next Annual General Meeting.
As proposed by the Board, the Annual General Meeting decided to confirm the number of auditors to be one (1).
The Annual General Meeting decided to select Authorized Public Accountants PricewaterhouseCoopers Oy as the auditor for the term concluding upon the end of the Annual General Meeting of 2021. Auditing service network PricewaterhouseCoopers Oy has stated that Authorized Public Accountant Lauri Kallaskari will serve as the chief responsible public accountant.
Discharge from liability for the financial period November 1, 2018–October 31, 2019 was granted to the following persons: Board members Jukka Ala-Mello, Eero Eriksson, Mikko Koskenkorva, Tarja Pääkkönen and Hannu-Kalle (Kalle) Reponen and CEO Juha Sarsama for the period November 1, 2018–December 31, 2018 and CEO Tapio Tommila for the period January 1, 2019– October 31, 2019. The Annual General Meeting decided to grant a discharge from liability to the aforementioned members of the Board and CEOs.
The General Meeting confirmed the financial statements and consolidated financial statements presented for the financial year November 1, 2018–October 31, 2019 and resolved that the shareholders be paid EUR 0.05 per share as dividends.
The Meeting also resolved that the Board of Directors be authorized to decide at its discretion on the potential distribution of assets to shareholders should the company's financial status permit this, either as dividends or as repayment of capital from the invested unrestricted equity fund. The maximum distribution of assets performed on the basis of this authorization totals EUR 4,700,000. The authorization includes the right of the Board to decide on all other terms and conditions relating to said asset distribution. The authorization will remain valid until the beginning of the next Annual General Meeting. The General Meeting granted exemption from liability to the members of the Board and to the CEO.
The General Meeting resolved that the remuneration of the Board of Directors remain unchanged and that the Chairman of the Board be paid EUR 40,000 as compensation for the term ending at the end of the next Annual General Meeting, and that the other members of the Board each be paid compensation of EUR 20,000. It was further resolved at the General meeting that approximately 40% of the compensation remitted to the members of the Board be paid on the basis of the share issue authorization given to the Board, by issuing company shares to each Board member if the Board member does not own more than one (1) percent of the company's shares on the date of the General Meeting. If the holding of a Board member on the date of the Meeting is over one percent (1%) of all company shares, the compensation will be paid in full in monetary form. It was further resolved that the travel expenses of the Board members will be paid on the maximum amount specified in the valid grounds of payment of travel expenses ordained by the Finnish Tax Administration.
In addition, the Board was authorized to decide on the acquisition of the company's own shares in one or more installments so that the number of the company's own shares to be acquired may not exceed 5,200,000 in total, which corresponds to about 9.9% of the company's total share capital. By virtue of the authorization, the company's own shares may be obtained using unrestricted equity only. The company's own shares may be acquired at the date-of-acquisition price in public trading arranged by NASDAQ Helsinki Oy or otherwise at the prevailing market price. The Board of Directors will decide how the company's own shares are to be acquired. The company's own shares may be acquired while not following the proportion of ownership of the shareholders (directed acquisition). The authorization issued at the Annual General Meeting of January 31, 2019 to decide on the acquisition of the company's own shares is cancelled by this authorization. The authorization will remain valid until August 5, 2021.
Immediately upon the conclusion of the General Meeting, the company's Board held an organizing meeting in which Jukka Ala-Mello was elected Chairman and Eero Eriksson Vice Chairman.
Panostaja Oyj's share closing rate fluctuated between EUR 0.51 (lowest quotation) and EUR 1.00 (highest quotation) during the financial period. During the review period, a total of 5,807,553 shares were exchanged, which amounts to 11.1% of the share capital. The October 2020 share closing rate was EUR 0.71. The market value of the company's share capital at the end of October 2020 was MEUR 37.2 (MEUR 40.8). At the end of October 2020, the company had 4,697 shareholders (4,464).
| Lowest, | Highest, | Share issue adjusted | ||
|---|---|---|---|---|
| EUR | EUR | trading (no. of shares) | % of shares | |
| 2020 | 0.51 | 1.00 | 5,807,553 | 11.1 |
| 2019 | 0.77 | 1.16 | 9,489,880 | 18.1 |
| 2018 | 0.88 | 1.21 | 9,374,954 | 18.0 |
| 2017 | 0.82 | 0.98 | 7,863,788 | 15.1 |
| 2016 | 0.81 | 1.04 | 5,959,389 | 11.5 |
| 2015 | 0.77 | 0.94 | 6,508,111 | 12.7 |
| 2014 | 0.69 | 0.91 | 7,908,686 | 15.4 |
| 2013 | 0.66 | 0.86 | 3,814,701 | 7.4 |
| 2012 | 0.73 | 1.05 | 5,725,530 | 11.1 |
| 2011 | 0.97 | 1.51 | 3,841,477 | 7.7 |
| 2010 | 1.32 | 1.75 | 5,301,507 | 11.2 |
| 2009 | 0.89 | 1.4 | 8,108,040 | 17.5 |
| pcs | % | |
|---|---|---|
| 1 Treindex Oy | 5,886,200 | 11.20 % |
| 2 Oy Koskenkorva Ab | 5,469,798 | 10.41 % |
| 3 Keskinäinen Eläkevakuutusyhtiö Ilmarinen | 4,259,000 | 8.11 % |
| 4 Keskinäinen Vakuutusyhtiö Fennia | 3,468,576 | 6.60 % |
| 5 Koskenkorva Mikko Matias | 1,986,055 | 3.78 % |
| 6 Malo Hanna Maria | 1,682,207 | 3.20 % |
| 7 Kumpu Minna Kristiina | 1,682,170 | 3.20 % |
| 8 Koskenkorva Maija Kristiina | 1,347,542 | 2.57 % |
| 9 Koskenkorva Matti Olavi | 1,158,903 | 2.21 % |
| 10 Koskenkorva Mauno Juhani | 1,040,769 | 1.98 % |
| 11 Johtopanostus Oy | 1,030,000 | 1.96 % |
| pcs | % | ||
|---|---|---|---|
| 12 Porkka Harri | 822,000 | 1.56 % | |
| 13 Pravia Oy | 751,665 | 1.43 % | |
| 14 Koskenkorva Pekka Juhani | 733,502 | 1.40 % | |
| 15 LähiTapiola Keskinäinen Vakuutusyhtiö | 674,000 | 1.28 % | |
| 16 Malkavaara Kari | 408,203 | 0.78 % | |
| 17 Hietanen Reijo Tapio | 378,330 | 0.72 % | |
| 18 Maxstar Oy | 369,991 | 0.70 % | |
| 19 Comito Oy | 300,000 | 0.57 % | |
| 20 Telanne Minna Liisa | 259,659 | 0.49 % | |
| 33,708,570 | 64.17 % | ||
| Other shareholders | 18,824,540 | ||
| Total | 52,533,110 | ||
| Number of shares | Shareholders pcs | % | Shares/votes pcs | % |
|---|---|---|---|---|
| 1–1,000 | 2,750 | 58.55% | 1,063,352 | 2.02% |
| 1,001–10,000 | 1,615 | 34.38% | 5,320,412 | 10.13% |
| 10,001–100,000 | 285 | 6.07% | 7,586,467 | 14.44% |
| 100,001–500,000 | 32 | 0.68% | 6,570,492 | 12.51% |
| 500,001– | 15 | 0.32% | 31,992,387 | 60.90% |
| Total | 4,697 | 100.00% | 52,533,110 | 100.00% |
| of which nominee-registered | 9 | 205,249 | 0.04% | |
| Number of shares issued | 52,533,110 | 100.00 % |
| Sector class | Shareholders pcs | % | Shares/votes pcs | % |
|---|---|---|---|---|
| Companies | 2.96 % | 15,378,784 | 29.27 % | |
| Financial and insurance institutions | 12 | 0.26 % | 4,327,241 | 8.24 % |
| Public bodies | 1 | 0.02 % | 4,259,000 | 8.11 % |
| Households | 4,518 | 96.19 % | 28,219,147 | 53.72 % |
| Non-profit organizations organizations | 11 | 0.23 % | 131,764 | 0.25 % |
| Foreign | 16 | 0.34 % | 11,925 | 0.02 % |
| Total | 4,697 | 100.00 % | 52,327,861 | 99.61 % |
| of which nominee-registered | 9 | 205,249 | 0.39 % | |
| Number of shares issued | 52,533,110 | 100.00 % |
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Kalevantie 2, 33100 Tampere [email protected] PanostajaOyj @PanostajaOyj panostaja.fi
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