2020

ANNUAL REPORT

Financial Statements and Report of the Board of Directors

ASPOCOMP

CEO'S REVIEW ... 3
REPORT OF THE BOARD OF DIRECTORS 2020 ... 4
Key indicators 2020-2016 ... 13
Formulas and definitions ... 14
FINANCIAL STATEMENTS 2020 ... 15
Consolidated financial statements, IFRS ... 15
Consolidated Income Statement ... 15
Consolidated Balance Sheet ... 16
Consolidated Statements of Changes in Equity ... 17
Consolidated Cash Flow Statement ... 18
Notes to the Consolidated Financial Statements ... 19
Parent Company Financial Statements ... 53
Parent Company Income Statement ... 53
Parent Company Balance Sheet ... 54
Parent Company Cash Flow Statement ... 55
Notes to the Financial Statements of the Parent Company, FAS ... 56
Board of Directors' dividend proposal and signatures ... 68
The Auditor's note ... 68
Auditor's Report ... 69
Our Audit Approach ... 70
Overview ... 70
GOVERNANCE ... 75
The Board of Directors, December 31, 2020 ... 75
The Management Team, December 31, 2020 ... 76
Information for shareholders ... 77
Contact Information ... 78

ASPOCOMP 2020

CEO'S REVIEW

The decline in net sales continued in the last quarter of the year, when demand was lower than expected, especially in the Telecommunications and Automotive segments. Net sales for 2020 amounted to EUR 25.6 million, a year-on-year decrease of 18 percent in total. A balance was achieved in full-year sales between different customer segments.

In the Telecommunications segment, net sales decreased by 60 percent to EUR 5.4 million because customers had lower PCB needs in their product development projects than in the previous year. In addition, Asian PCB mass suppliers have still had overcapacity due to the weaker market situation, which allowed them to exceptionally respond to changing customer needs. The oversupply situation is not expected to ease before the COVID-19 pandemic subsides and the economy recovers.

In the Automotive segment, sales decreased by 27 percent to EUR 5.4 million. The decline in net sales was mainly due to the weak market situation in the European automotive industry at the beginning of the year and the consequent increase in PCB inventories. Inventory levels are expected to return to a normal level at the beginning of the year, but the availability of semiconductor components may weaken and affect the development of the automotive industry.

In the Security, Defense and Aerospace segment, sales increased by 107 percent to EUR 5.1 million. During the year, we continued to make significant R&D investments in the segment's product development and customers' special requirements. The first phase of the development project to achieve AS9100 defense and aviation quality certification was successfully approved at the Oulu plant. The development project and final certification will be completed in the early months of the year.

The strong growth in the Semiconductor segment leveled off in the last quarter of the year. In 2020, sales of the Semiconductor segment increased by 65 percent to EUR 5.1 million. Growth has been driven particularly by the increased use of remote access devices. Likewise, the rapid development of digitalization is leading to the renewal of artificial intelligence and 5G semiconductor components and increasing their testing needs.

Sales of the Industrial Electronics segment decreased by 9 percent to EUR 4.4 million because COVID-19 restrictions delayed industrial investment.

The year-end order book was at the same level as a year earlier and amounted to EUR 4.4 million.

The operating result in the fourth quarter was clearly lower than in the previous year and amounted to EUR 0.0 million. The operating result was particularly burdened by the decline in net sales and the weaker demand for quick-turn deliveries. The operating result for 2020 remained EUR 0.1 million in the red, including a EUR 0.3 million loan loss provision.

The COVID-19 pandemic and the weakened economy continue to make it difficult to assess near-term customer needs. Despite the exceptional circumstances, we have continued to invest in capacity and increased our product development investments in new products and more challenging technologies.

I would like to thank all our loyal customers, shareholders and other stakeholders for the excellent past year. I would also like to say a big thanks to our hard-working and flexible staff.

Mikko Montonen, President and CEO

ASPOCOMP 2020

REPORT OF THE BOARD OF DIRECTORS

REPORT OF THE BOARD OF DIRECTORS 2020

2020 IN BRIEF

	1-12/2020	1-12/2019	Change *
Net sales	25.6 M€	31.2 M€	-18 %
EBITDA	1.5 M€	4.7 M€	-68 %
Operating result	-0.1 M€	3.4 M€	-104 %
% of net sales	-0.5 %	10.9 %	-11 ppts
Earnings per share	-0.01 €	0.59 €	-102 %
Operative cash flow	3.7 M€	4.3 M€	-14 %
Equity ratio	63.6 %	61.3 %	2 ppts
Order book at the end of period	4.4 M€	4.4 M€	0 %
Dividend/share **	0.07 €	0.15 €	-53 %

The total may deviate from the sum totals due to rounding up and down.
** The Board of Directors will propose to the Annual General meeting.

The Board of Directors will propose to the Annual General Meeting to be held on April 13, 2021, that the Annual General Meeting decide to authorize the Board of Directors to decide, at its discretion, on the distribution of up to EUR 0.07 per share from retained earnings and / or return on invested equity in one or more tranches. It is proposed that the authorization be valid until the beginning of the next Annual General Meeting. The company will publish any Board decision on the distribution of funds separately and at the same time confirms the relevant reconciliation and payment dates.

NET SALES AND EARNINGS 2020

Net sales amounted to EUR 25.6 (31.2) million, a year-on-year decrease of 18 percent. During the financial year, sales between the different customer segments were balanced and each segment accounted for about one-fifth of net sales.

In the Telecommunications segment, net sales decreased by 60 percent because customers had lower PCB needs in their product development projects than in the previous year.

In the Automotive segment, sales decreased by 27 percent mainly due to the weak market situation in the European automotive industry at the beginning of the year and the consequent increase in PCB inventories.

In the Security, Defense and Aerospace segment, net sales increased by 107 percent. Significant R&D investments in the segment's product development and customers' special requirements supported the segment's positive development.

The strong growth in the Semiconductor segment leveled off in the last quarter of the year and full-year net sales were up 65 percent. Growth in demand has been driven particularly by the increased use of remote access devices. In addition, the rapid development of digitalization is leading to the renewal of artificial intelligence and 5G semiconductor components and increasing their testing needs.

Sales of the Industrial Electronics segment decreased by 9 percent because COVID-19 restrictions delayed investment.

The five largest customers accounted for 41 (58) percent of net sales. In geographical terms, 85 (98) percent of net sales were generated in Europe and 15 (2) percent on other continents.

ASPOCOMP 2020

REPORT OF THE BOARD OF DIRECTORS

The full-year operating result amounted to EUR -0.1 (3.4) million, including a EUR 0.3 million loan loss provision. The operating result was weakened by lower net sales and weaker demand for quick-turn deliveries.

Net financial expenses amounted to EUR 0.3 (0.1) million. Earnings per share were EUR -0.01 (0.59).

Impact of the COVID-19 pandemic

Due to the COVID-19 pandemic and the resulting decline in general demand, as well as for financial reasons, some customers have had to postpone or even cancel their orders. Asian PCB mass suppliers have had overcapacity due to the weaker market situation, which allowed them to exceptionally respond to changing customer needs. In the Automotive segment, demand has continued to decline as customers have reduced their inventory levels in line with the weakened demand.

Despite the COVID-19 pandemic, Aspocomp has been able to purposefully expand and grow its customer base and product offering. In the Security, Defense and Aerospace segment, demand has doubled and in the Semiconductor Industry segment, demand has grown over 65 percent.

The company's production at the Oulu plant has continued normally and delivery capacity has been good. The company has continued to invest in new capacity and increased its product development investments in new products and more challenging technologies.

The pandemic has not affected the company's liquidity. The cash situation has remained good and the credit facilities have not been used. The company has had no need to recognize write-downs of goodwill.

INVESTMENTS AND R&D

In 2020, investments amounted to EUR 2.0 (3.5) million. The investments were mainly focused on upgrading the capabilities of the Oulu plant, improving automation, and increasing production efficiency. The first phase of the EUR 10 million investment program launched in 2017 was completed in early 2020. The first two years of the investment program focused on enhancing the capabilities of the Oulu plant, particularly in the Semiconductor Industry segment. The goals of the project were successfully achieved: the customer base was strengthened, and the planned technological improvements were implemented.

The investment program continued with its second phase of investments in the spring of 2020. The company was granted a total of EUR 1.35 million in development support by the ELY Center for the implementation of the second phase of its Oulu plant investment, corresponding to about 25 percent of its total cost. No additional plant space will be built; all of the new equipment will be installed in an existing plant building. The second-phase investments will be carried out in the period between 2020 and 2022. The second phase of the investment program aims in particular to increase the capacity of the Oulu plant, improve automation and increase production efficiency. With these investments, the company aims to further strengthen its position as a strategic partner to leading companies in the semiconductor, automotive, defense and aerospace, and telecommunications (5G) industries.

CASH FLOW AND FINANCING

Cash flow from operations amounted to EUR 3.7 (4.3) million in 2020.

Cash assets amounted to EUR 2.8 (2.4) million at the end of the period. Interest-bearing liabilities amounted to EUR 5.7 (5.8) million. Gearing was 17 (19) percent. Non-interest-bearing liabilities amounted to EUR 4.1 (5.6) million.

At the end of the period, the Group's equity ratio amounted to 63.6 (61.3) percent.

The company has a EUR 1.0 (1.0) million credit facility, which was not in use at the end of the review period. In addition, the company has a recourse factoring agreement, of which EUR 0.0 (0.0) million was in use.

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REPORT OF THE BOARD OF DIRECTORS

DEFERRED TAX ASSETS

At the end of the 2020 financial year, the company had EUR 5.0 in deferred tax assets in its balance sheet. The deferred tax assets are primarily due to decelerated tax depreciation.

PERSONNEL

During the review period, the company had an average of 140 employees (124). The personnel count on December 31, 2020 was 138 (132). Of them, 87 (80) were blue-collar and 51 (52) white-collar employees.

The Group's personnel expenses amounted to EUR 7.8 (7.8) million. In addition, the Group booked personnel service costs of EUR 0.2 (0.5) million in 2020.

ENVIRONMENT

Sustainability is one of the key strategy points at Aspocomp. Environmental responsibility is an integral part of Aspocomp's operations, management and decision making, seeking to minimize the company's environmental impact. We seek to continuously develop our operations to prevent and reduce the emissions and wastes caused by our operations. We are committed to minimizing the use of materials that have a harmful impact on the environment throughout the whole life cycle of products.

Aspocomp manages its environmental compliance with an environmental system that has been certified in line with ISO 14001, the latest version of the standard. The company's environmental system aims to continuously reduce its environmental impact and conserve natural resources. By using the best available and economically viable technologies, we strive to cut emissions and to economically use natural resources and energy. Aspocomp complies with the environmental legislation and regulations that are in force as well as seeks to proactively boost the efficiency of its operations while taking environmental issues into consideration in all of its functions. Approximately 80% of the company's employees work in ISO 14001-certified workplaces.

In order to achieve the objectives of our environmental system, we train our employees and constantly work in cooperation with our customers, the authorities and other stakeholders. The electronics supply chain has a great impact on the environmental friendliness of the end products. Therefore, we seek to work closely with other electronics companies and subcontractors in projects concerning the environment and its protection. The goal is to collect reliable data on the composition of the production materials, and to identify the most environmentally friendly raw materials and production processes.

Aspocomp can provide its customers with detailed material reports that itemize the chemical elements and compounds used in each PCB. Customers can consult these reports to determine the recyclability of the final product at the end of its life cycle. If necessary, Aspocomp helps its customers organize PCB recycling by utilizing its partners.

Aspocomp identifies and assesses the environmental perspectives of its operations at least every other year. These reviews are performed by a working group assembled by the officer responsible for environmental issues. The latest evaluation of environmental perspectives carried out focused in particular on determining possibilities to improve emissions and waste recovery. On the basis of the evaluation, the following goals were set for the environmental program in 2019-2021:

Air pollutant emissions review and necessary actions
Waste recovery
Optimizing material usage

The Oulu plant covers most of the company's energy and water consumption and waste. Every year, the company provides the national environmental protection information system with data on its use of energy and chemicals, production volumes, water consumption, wastes generated during operations, and the wastewater load discharged into bodies of water.

In 2020, 62% of the electricity we used came from fossil-free sources. Waste in proportion to production volume in 2020 at the Oulu plant was approximately 3 percent less than in the previous year and we

ASPOCOMP 2020

REPORT OF THE BOARD OF DIRECTORS

are constantly striving to promote the recycling of waste. The PCB manufacturing process requires a large amount of water. After the manufacturing process, all water is treated at the plant's own wastewater treatment facility before being diverted to municipal wastewater treatment. The company's headquarters in Espoo, Finland are located on the premises of an environmentally responsible property. The property has been implemented on a sustainable basis and has been awarded the LEED Platinum environmental certificate. LEED is a Green Property Certification System that aims to reduce the environmental load during construction and operation of buildings and the Platinum level is the highest level of certification.

THE ANNUAL GENERAL MEETING 2020

The Annual General Meeting of Aspocomp Group Plc. was held on June 9, 2020 at Pohjoisesplanadi 29, Kämp Symposion, Helsinki, Finland. The Annual General Meeting adopted the annual accounts and the consolidated annual accounts for the financial period 2019 and granted the members of the Board of Directors and the CEO discharge from liability.

The Board of Directors

The Annual General Meeting 2020 decided to set the number of Board members at four and re-elected Ms. Päivi Marttila and Ms. Kaarina Muurinen, Ms. Julianna Borsos and Mr. Juha Putkiranta, for a term of office ending at the closing of the following Annual General Meeting.

The Annual General Meeting decided that the Chairman of the Board of Directors will be paid EUR 30,000, the Vice Chairman of the Board of Directors be paid EUR 20,000 and the other members will be paid EUR 15,000 each in remuneration for their term of office. The Annual General Meeting further decided that EUR 1,000 will be paid as remuneration per meeting to the Chairman and that the other members be paid EUR 500 per meeting of the Board and its committees. The members of the Board of Directors will further be reimbursed for reasonable travel costs.

Authorizations given to the Board

The Annual General Meeting decided to authorize the Board of Directors to decide, at its discretion, on the distribution of up to EUR 0.15 per share from retained earnings and / or return on invested equity in one or more trances. The authorization is valid until the beginning of the next Annual General Meeting. The Annual General Meeting further decided that the company will publish any Board decision on the distribution of funds separately and at the same time confirms the relevant reconciliation and payment dates.

The Annual General Meeting decided to authorize the Board of Directors, in one or more installments, to decide on the issuance of shares and the issuance of options and other special rights entitling to shares referred to in Chapter 10 Section 1 of the Companies Act as follows: The number of shares to be issued based on the authorization may in total amount to a maximum of 683,450 shares. The Board of Directors decides on all the terms and conditions of the issuances of shares and of options and other special rights entitling to shares. The authorization concerns both the issuance of new shares as well as own shares possibly held by the company. The issuance of shares and of options and other special rights entitling to shares referred to in Chapter 10 Section 1 of the Companies Act may be carried out in deviation from the shareholders' pre-emptive rights (directed issue).

The authorization cancels the authorization given by the General Meeting on April 3, 2019 to decide on the issuance of shares as well as the issuance of special rights entitling to shares. The authorization is valid until June 30, 2021.

Dividend

The Board of Directors for Aspocomp Group Plc decided on September 16, 2020 on the distribution of dividend based on the authorization granted to the Board by the company's AGM held on June 9, 2020. The Board of Directors decided that EUR 0.15 per share shall be distributed as dividend. The dividend was paid to shareholders registered in the company's register of shareholders maintained by Euroclear Finland Ltd on the record date of the dividend distribution, September 18, 2020. The dividend was paid on September 25, 2020.

ASPOCOMP 2020

REPORT OF THE BOARD OF DIRECTORS

Author

The Annual General Meeting re-elected in accordance with the proposal of the Board of Directors PricewaterhouseCoopers Oy, Authorized Public Accountants as the company's auditor for the 2020 financial year. The Meeting resolved that the auditor's fees shall be paid according to the auditor's invoice.

The Board of Directors' organization meeting

In its organization meeting on June 9, 2020, the Board of Directors of Aspocomp Group Plc. re-elected Ms. Päivi Marttila as Chairman of the Board and Ms. Kaarina Muurinen as Vice Chairman of the Board. The Board decided not to establish an Audit Committee. The Board itself performs the duties of the Audit Committee.

In its organization meeting held after the Annual General Meeting 2020, the Board of Directors performed an evaluation of Board members' independence. According to the evaluation, all Board members are independent of the company. On the basis of the overall evaluation, the Board of Directors considered that Board member Ms. Julianna Borsos is not independent of the company's major shareholders, as a member of her family is one of the company's major shareholders, having more than 15% of the company's shares and voting rights. All the other Board members are independent of the company's major shareholders.

THE MANAGEMENT TEAM

Mr. Mikko Montonen, M.Sc. (Eng.) is the President and Chief Executive Officer of Aspocomp Group Plc. In addition to Mr. Montonen, the company's Management Team in 2020 included Mr. Antti Ojala, VP Business Development and Deputy CEO, Mr. Ari Beilinson, VP, Sales and Marketing, Mr. Jari Isoaho, COO, Mr. Jouni Kinnunen, CFO, and Mr. Mitri Mattila.

CORPORATE GOVERNANCE STATEMENT

The Corporate Governance Statement for 2020 is issued separately from the report of the Board of Directors, and it is available on the company's Internet site at www.aspocomp.com/governance.

SHARES AND OWNERSHIP STRUCTURE

Number of shares

Aspocomp Group Plc. shares have been listed on the main list of the Helsinki Stock Exchange since October 1, 1999. The company's trading code on the Nasdaq Helsinki Small Cap segment is ACG1V. The total number of Aspocomp's shares at December 31, 2020 was 6,841,440 and the share capital stood at EUR 1,000,000. The company did not hold any treasury shares. Each share is of the same share series and entitles its holder to one vote at a General Meeting and to have an identical dividend right.

On March 13, 2020, Aspocomp Group Plc's CEO subscribed for a total of 130,000 new Aspocomp shares with the 2014C option rights under the company's 1/2014 stock option terms and conditions. The new shares were registered in the Trade Register on March 30, 2020. The new shares were incorporated into the book-entry system and admitted to trading on Nasdaq Helsinki in the same class with the company's other shares on March 31, 2020. After the registration of the new shares, the total number of Aspocomp Group Plc's shares increased to 6,834,505.

The Board of Directors of Aspocomp Group Plc decided on June 9, 2020 on a directed share issue without payment based on Aspocomp's Share Reward Plan 2016-2019 for the performance period 2019. According to the terms and conditions of the Share Reward Plan 2016-2019 and after deduction of the cash payment portions of the remunerations meant for taxes and tax-like contributions, the persons included in the 2019 share-based incentive scheme received altogether 6,935 new shares in the company through a directed share issue without payment. The new shares were registered in the Trade Register on June 23, 2020. After the registration of the new shares, the total number of Aspocomp Group Plc's shares has increased to 6,841,440.

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REPORT OF THE BOARD OF DIRECTORS

Date	Event	Change	Number of shares
January 1, 2020			6,704,505
March 31, 2020	Stock options exercised	+ 130,000	130,000
June 23, 2020	Directed share issue	+ 6,935	38,000
December 31, 2020			6,841,440

Share turnover and price

A total of 2,530,573 Aspocomp Group Plc. shares were traded on Nasdaq Helsinki during the period from January 1 to December 31, 2020. The aggregate value of the shares exchanged was EUR 10,552,941. The shares traded at a low of EUR 3.20 and a high of EUR 6.20. The average share price was EUR 4.17. The closing price at December 31, 2020 was EUR 3.92, which translates into market capitalization of EUR 26.8 million. The company had 3,702 shareholders at the end of the review period. Nominee-registered shares accounted for 2.4 percent of the total shares.

Share price development and share turnover per month 2019-2020

ASPOCOMP 2020

REPORT OF THE BOARD OF DIRECTORS

Ownership structure

Size of holding, December 31, 2020

Shares	Number of shareholder	% of shareholders	Number of shares	% of shares
1 - 100	1,613	43.6 %	73,299	1.1 %
101 - 500	1,228	33.2 %	327,829	4.8 %
501 - 1,000	400	10.8 %	324,579	4.7 %
1,001 - 5,000	361	9.7 %	832,008	12.2 %
5,001 - 10,000	56	1.5 %	401,703	5.9 %
10,001 - 50,000	29	0.8 %	555,151	8.1 %
50,001 - 100,000	5	0.1 %	357,223	5.2 %
100,001 - 500,000	8	0.2 %	1,838,347	26.9 %
500,001 -	2	0.1 %	2,131,004	31.1 %
Shares in trust and awaiting clearance			297	0
Total	3,702	100%	6,841,440	100 %
of which nominee registered	10		166,435	2.4 %

Shareholders by sector, December 31, 2020

	Number of shareholder	% of shareholders	Number of shares	% of shares
Household	3,533	95.4 %	3,550,803	51.9 %
Companies	136	3.7 %	2,403,954	35.1 %
Financial and insurance institution	12	0.3 %	743,388	10.9 %
Non-domestic	14	0.4 %	141,038	2.1 %
Non-profit organizations	7	0.2 %	1,960	0.0 %
Public sector organizations	0	-	0	-
Shares in trust and awaiting clearance	0		297	0
Total	3,702	100%	6,841,440	100%

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Shareholders

	Shareholders, December 31, 2020	Shares	Ownership, %
1	Joensuun Kauppa Ja Kone Oy	1,130,000	16.52
2	Tiiviste-Group Oy	1,001,004	14.63
3	Montonen Mikko	390,000	5.70
4	Mandatum Henkivakuutusosakeyhtiö	328,361	4.80
5	Etola Erkki	300,000	4.39
6	Nordea Henkivakuutus Suomi Oy	275,000	4.02
7	Lähdesmäki Tuomo	165,000	2.41
8	Lahdenperä Matti	145,700	2.13
9	Citibank Europe Plc (Nomineereg.)	119,970	1.75
10	Koskinen Jouni	114,316	1.67
11	Lauren Karri-Pekka	84,408	1.23
12	Vuorialho Kari	77,314	1.13
13	Aj Eab Value Hedge Sr	71,800	1.05
14	Lahdenperä Marja Helena	65,601	0.96
15	Haaron Perunatila Oy	58,100	0.85
16	Lemmetti Juhani	45,457	0.66
17	Eyemaker's Finland Oy	30,000	0.44
18	Salminen Roni	28,200	0.41
19	Hypericus Ab	26,000	0.38
20	Maikola Marko	25,683	0.38
	20 major shareholders total	4,481,914	65.51
	Other shareholders	2,359,526	34.49
	Total shares	6,841,440	100.00

Information on shareholders is based on Aspocomp Group Plc.'s shareholder list, which is maintained by Euroclear Finland Ltd.

MAJOR SHAREHOLDER ANNOUNCEMENTS IN 2020

on August 18,2020, Mr. Kyösti Kakkonen’s holdings in Aspocomp Group Plc exceeded 15 percent threshold. Mr. Kakkonen’s holdings and voting rights in Aspocomp amounted to 1,130,000 shares, which corresponded to 16.51 percent of the total amount of shares and votes in Aspocomp Group Plc.

On March 30, 2020, Mr. Mikko Montonen’s holdings in Aspocomp Group Plc exceeded 5 percent threshold. Mr. Montonen’s holdings and voting rights in Aspocomp amounted to 390,000 shares, which corresponded to 5.71 percent of the total amount of shares and votes in Aspocomp Group Plc.

EVENTS AFTER THE FINANCIAL PERIOD

Aspocomp made changes to its Management Team on January 7, 2021. As of January 7, 2021, the Management Team includes Mr. Mikko Montonen, President and CEO, Mr. Antti Ojala, COO and Deputy CEO, Mr. Ari Beilinson, VP, Sales and Marketing, Mr. Jouni Kinnunen, CFO and Mr. Mitri Mattila, CTO.

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OUTLOOK FOR 2021

The COVID-19 pandemic and the restrictions it has caused are having a broad impact on the supply chains of the electronics industry and on customer orders. Due to the major uncertainties related to customer demand, the outlook for 2021 involves a significantly higher risk than normal.

Aspocomp estimates that its net sales will increase and its operating result for 2021 will improve from 2020. In 2020, net sales amounted to EUR 25.6 million and the operating result to EUR -0.1 million.

ASSESSMENT OF SHORT-TERM BUSINESS RISKS

A major share of Aspocomp's net sales is generated by quick-turn deliveries and R&D series, and thus the company's order book is short. The company's aim is to systematically expand its services to cover the PCB needs of customers over the entire life cycle and thereby balance out variations in demand and the order book.

Impact of the COVID-19 pandemic on the electronics supply chain

The COVID-19 pandemic and the weakened economy are having a major impact on the supply chains of the entire electronics industry. The availability of the PCBs subcontracted by the company in China might weaken significantly and their delivery times become considerably longer. At the same time, the COVID-19 pandemic may affect the availability of parts and components required by electronic assemblers, which would weaken demand.

Dependence on key customers

Aspocomp's customer base is concentrated; over half of sales are generated by five key customers. This exposes the company to significant fluctuations in demand.

Market trends

Although Aspocomp is a marginal player in the global electronics market, changes in global PCB demand also have an impact on the company's business. Competition for quick-turn deliveries and short production series will accelerate as the market for PCBs weakens and continues to have a negative impact on both total demand and market prices.

Aspocomp's main market area comprises Northern and Central Europe. In case Aspocomp's clients would transfer their R&D and manufacturing out of Europe, demand for Aspocomp's offerings might weaken significantly.

BOARD OF DIRECTORS' DIVIDEND PROPOSAL

According to the financial statements dated on December 31, 2020 the parent company's distributable earnings amounted to EUR 6,602,810.28, of which the retained earnings were EUR 3,619,383.52.

There have been no significant changes in the company's financial position since the close of the financial period. According to the Board of Directors, the proposed dividend distribution does not endanger the company's financial standing.

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KEY INDICATORS 2020-2016

	2020	2019	2018	2017	2015
Net sales, M€	25.6	31.2	29.1	23.9	17.5
Operating result before depreciation (EBITDA), M€	1.5	4.7	4.0	1.9	0.0
Operating profit/loss (EBIT), M€	-0.1	3.4	2.9	0.8	-1.2
Share of net sales, %	-0.5	10.9	9.9	3.5	-6.8
Pre-tax profit from operations, M€	-0.4	3.3	2.8	0.8	-1.3
Share of net sales, %	-1.7	10.4	9.5	3.3	-7.4
Net profit/loss for the period, M€	-0.1	3.9	3.2	1.3	-1.0
Share of net sales, %	-0.4	12.6	11.1	5.3	-5.8
Net cash flow from operating activities, M€	3.7	4.3	2.0	0.8	-0.1
Return on equity (ROE), %	-0.6	23.9	24.0	11.2	-10.1
Return on investment (ROI), %	0.8	18.4	19.8	10.3	-12.6
Equity ratio, %	63.6	61.3	57.6	69.1	68.6
Gearing, %	16.6	19.0	19.3	9.3	10.7
Investments, M€	2.0	3.5	3.4	1.0	0.5
Share of net sales, %	7.7	11.4	11.5	4.0	2.7
Order book at the end of period	4.4	4.4	2.8	2.5	1.0
Personnel, year end	138	132	117	113	106
Personnel, average	140	124	116	111	121
Earnings/share (EPS), €	-0.01	0.59	0.49	0.19	-0.16
Dividend/share, €	0,07*	0,15*	0.12	0,07	0.00
Price/earnings ratio (P/E)	-392.00	8.92	7.55	12.47	-7.00

*Proposal of the Board of Directors

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FORMULAS AND DEFINITIONS

Earnings/share (EPS), €	=	Profit attributable to equity shareholders
		Adjusted weighted average number of shares outstanding
Dividend/share, €	=	Dividend for the period
Price/earnings (P/E)	=	Share price at the end of period
		Earnings/share

Treasury shares are eliminated when calculating share based ratios.

The Alternative Performance Measures (APM) used by the Group

Aspocomp presents in its financial reporting alternative performance measures, which describe businesses' financial performance and its development as well as investments and return on equity. In addition to accounting measures which are defined or specified in IFRS, alternative performance measures complement and explain presented information. Aspocomp presents in its financial reporting the following alternative performance measures:

EBITDA	= Earnings before interests, taxes, depreciations and amortizations EBITDA indicates the result of operations before depreciations, financial items and income taxes. It is an important key figure, as it shows the profit margin on net sales after operating expenses are deducted.
Operating result	= Earnings before income taxes and financial income and expenses presented in the IFRS consolidated income statement. The operating result indicates the financial profitability of operations and their development.
Profit/loss before taxes	= The result before income taxes presented in the IFRS consolidated statements.
Equity ratio, %	= Equity Total assets - advances received
Gearing, %	= Net interest bearing liabilities Total equity Gearing indicates the ratio of capital invested in the company by shareholders and interest-bearing debt to financiers. A high gearing ratio is a risk factor that may limit a company's growth opportunities and financial latitude.
Gross investments	= Acquisitions of long-term intangible and tangible assets (gross amount).
Order book	= Undelivered customer orders at the end of the financial period.
Cash flow from operating activities	= Profit for the period + non-cash transactions +- other adjustments +- change in working capital + interest income - interest expenses - taxes

ASPOCOMP ANNUAL REPORT 2020

CONSOLIDATED FINANCIAL STATEMENTS, IFRS

FINANCIAL STATEMENTS 2020

CONSOLIDATED FINANCIAL STATEMENTS, IFRS

CONSOLIDATED INCOME STATEMENT

	1000 € Note	1.1.-31.12.2020	1.1.-31.12.2019
Net sales	1	25,635	31,189
Change in inventory of finished goods and work in progress		-211	640
Other operating income	2	83	73
Materials and services	3	-11,760	-14,603
Personnel expenses	4, 5	-7,856	-7,763
Depreciation and impairment		-1,643	-1,263
Other operating expenses	6	-4,380	-4,881
Operating profit		-131	3,393
Financial income	7	0	0
Financial expenses	7	-295	-136
Profit before tax		-426	3,257
Income tax	8	327	683
Profit for the period		-98	3,940
Other comprehensive income
Items that will not be reclassified to profit or loss
Remeasurements of defined benefit pension plans		6	50
Income tax relating these items		-1	-8
Items that may be reclassified subsequently to profit or loss:
Currency translation differences		0	-2
Other comprehensive income for the period, net of tax		5	40
Total comprehensive income		-93	3,979
Earnings per share (EPS)	9
Basic EPS		-0.01	0.59
Diluted EPS		-0.01	0.59

ASPOCOMP ANNUAL REPORT 2020

CONSOLIDATED FINANCIAL STATEMENTS, IFRS

CONSOLIDATED BALANCE SHEET

Assets	1000 €	Note	Dec. 31, 2020	Dec. 31, 2019
Non-current assets
Intangible assets		10	3,247	3,260
Property, plant and equipment		11	5,916	5,607
Right-of-use assets		12	1,029	1,333
Financial assets at fair value through profit or loss			95	15
Deferred tax assets		8	5,043	4,673
Total non-current assets			15,330	14,888
Current assets
Inventories		14	2,932	3,321
Short-term receivables		15	5,891	8,937
Cash and bank deposits		16	2,801	2,382
Total current assets			11,623	14,639
Total assets			26,953	29,527
Equity and liabilities	1000 €	Note	Dec. 31, 2020	Dec. 31, 2019
Equity		27
Share capital			1,000	1,000
Reserve for invested unrestricted equity			4,705	4,534
Remeasurements of defined benefit pension plans			-7	-12
Retained earnings			11,450	12,574
Total equity			17,148	18,096
Liabilities
Non-current liabilities
Long-term financing loans		13, 17, 18	3,411	3,227
Lease liabilities		12, 13, 17, 18	835	1,099
Employee benefits and remeasurements of defined pension plans		5	340	355
Other non-current liabilities		13, 17	0	0
Deferred tax liabilities		8	19	25
Current liabilities
Short-term financing loans		17	992	1,035
Lease liabilities		17	415	451
Trade and other payables		13,17	3,794	5,239
Total equity and liabilities			26,953	29,527

ASPOCOMP ANNUAL REPORT 2020

CONSOLIDATED FINANCIAL STATEMENTS, IFRS

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

1000 €

| | Share capital | Reserve for invested
unrestricted equity | Remeasurements of
defined pension plans | Translation
differences | Retained earnings | Total equity |
| --- | --- | --- | --- | --- | --- | --- |
| Balance at Jan. 1, 2020 | 1,000 | 4,534 | -12 | 2 | 12,572 | 18,096 |
| Comprehensive income | | | | | | |
| Comprehensive income for the period | | | | | -98 | -98 |
| Other comprehensive income for the period, net of tax | | | | | | |
| Remeasurements of defined benefits
plans | | | 5 | | | 5 |
| Translation differences | | | | 0 | | 0 |
| Total comprehensive income for the p | 0 | 0 | 5 | 0 | -98 | -93 |
| Business transactions with owners | | | | | | |
| Dividends paid | | | | | -1,026 | -1,026 |
| Share-based payment | | 171 | | | | 171 |
| Business transactions with owners,
total | 0 | 171 | 0 | 0 | -1,026 | -855 |
| Balance at Dec. 31, 2020 | 1,000 | 4,705 | -7 | 2 | 11,448 | 17,148 |
| Balance at Jan. 1, 2019 | 1,000 | 4,504 | -53 | 4 | 9,432 | 14,888 |
| --- | --- | --- | --- | --- | --- | --- |
| Comprehensive income | | | | | | |
| Comprehensive income for the period | | | | | 3,940 | 3,940 |
| Other comprehensive income for the period, net of tax | | | | | | |
| Remeasurements of defined benefits
plans | | | 41 | | | 41 |
| Translation differences | | | | -2 | | -2 |
| Total comprehensive income for the period | | | 41 | -2 | 3,940 | 3,979 |
| Business transactions with owners | | | | | | |
| Dividends paid | | | | | -800 | -800 |
| Share-based payment | | 29 | | | | 29 |
| Business transactions with owners,
total | 0 | 29 | | | -800 | -770 |
| Balance at Dec. 31, 2019 | 1,000 | 4,534 | -12 | 2 | 12,572 | 18,096 |

ASPOCOMP ANNUAL REPORT 2020

CONSOLIDATED FINANCIAL STATEMENTS, IFRS

CONSOLIDATED CASH FLOW STATEMENT

	1000 € Note	Dec. 31, 2020	Dec. 31, 2019
Cash flow from operating activities
Profit for the period		-98	3,940
Adjustments
Non-cash transactions	21	2,130	1,405
Other adjustments	21	-355	-747
Change in working capital	21	2,303	-159
Interest income		0	0
Interest expenses		-292	-151
Taxes		-14	-1
Net cash flow from operating activities		3,674	4,287
Cash flow from investing activities
Investments in property, plant and equipment		-1,906	-3,548
Investments		-80
Proceeds from sale of property, plant and equipment		28	66
Net cash flow from investing activities		-1,959	-3,482
Net cash flow before financing		1,716	805
Cash flow from financing activities
Loans drawn down		3,000	1,000
Loans repaid		-2,852	-828
Decrease in lease liabilities (2018: Financial lease payments)		-380	-356
Stock options exercised		139
Dividends paid		-1,026	-800
Net cash flow from financing activities		-1,119	-983
Change in cash and cash equivalents		596	-179
Cash and cash equivalents at the beginning of period	16	2,382	2,565
Effects of exchange rate changes on cash and cash equivalents		-177	-5
Cash and cash equivalents at the end of period	16	2,801	2,382

ASPOCOMP ANNUAL REPORT 2020

Notes to THE CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

ACCOUNTING PRINCIPLES OF THE CONSOLIDATED FINANCIAL STATEMENTS

Basis of preparation

The financial statements for 2020 have been prepared in accordance with International Financial Reporting Standards (IFRS) and in conformity with the international accounting standards (IAS/IFRS) in force at December 31, 2020 as well as SIC and IFRS interpretations. In the Finnish Accounting Act and the regulations based on it, International Financial Reporting Standards refer to the standards and the interpretations that are issued regarding them that have been approved for application within the EU in accordance with the procedure prescribed in Regulation (EC) 1606/2002. The notes to the consolidated financial statements are also in accordance with Finnish accounting and company legislation.

The figures in the financial statements are presented in thousands of euros.

New and revised standards adopted by the Group

Amendments to IAS 1 and IAS 8 Definition of Material

The IASB has issued the following new or revised standards and interpretations that the Group has not yet applied. The Group adopts them from the effective date of each standard and interpretation, or, if the effective date is other than the first day of the financial year, from the beginning of the financial year following the effective date.

The IASB has amended IAS 1 Presentation of Financial Statements and IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors to use a uniform definition of materiality throughout IRFSs and the Conceptual Framework for Financial Reporting, clarifying when information is material and including guidance on irrelevant information.

In particular, the amendments clarify:

that the reference to obscuring information applies to situations where the effect is similar to the omission or misstatement of that information and that the entity assesses materiality in the light of the financial statements as a whole; and
that “primary users of financial statements for general use” means those to whom the financial statements are addressed and include “many current and potential investors, lenders and other

ASPOCOMP ANNUAL REPORT 2020

Notes to THE CONSOLIDATED FINANCIAL STATEMENTS

creditors” who are largely required to meet their financial information needs through publicly available financial statements.

Any other IFRS or IFRIC interpretation already issued but not yet effective is not expected to have a material impact on the Group.

Accounting principles

Subsidiaries are all entities over which the Group has control. The Group controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group and are deconsolidated when control ceases.

The Group applies the acquisition method to account for business combinations. The consideration transferred for the acquisition of a subsidiary is the fair values of the assets transferred, the liabilities incurred to the former owners of the acquiree and the equity interests issued by the Group. The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration arrangement. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. The Group recognizes any non-controlling interest in the acquiree on an acquisition-by-acquisition basis, either at fair value or at the non-controlling interest's proportionate share of the recognized amounts of the acquiree's identifiable net assets.

Acquisition-related costs are expensed as incurred.

If the business combination is achieved in stages, the acquisition date carrying value of the acquirer's previously held equity interest in the acquiree is remeasured to fair value at the acquisition date; any gains or losses arising from such remeasurement are recognized in profit or loss.

Any contingent consideration to be transferred by the Group is recognized at fair value at the acquisition date. Subsequent changes to the fair value of the contingent consideration that is deemed to be an asset or liability is recognized through profit or loss. Contingent consideration that is classified as equity is not remeasured, and its subsequent settlement is accounted for within equity.

Inter-company transactions, receivables, liabilities and unrealized gains on transactions between Group companies are eliminated. Unrealized losses are also eliminated. When necessary, amounts reported by subsidiaries have been adjusted to conform with the Group's accounting policies.

Transactions with non-controlling interests that do not result in loss of control are accounted for as equity transactions - that is, as transactions with the owners in their capacity as owners. The difference between the fair value of any consideration paid and the relevant share acquired of the carrying value of net assets of the subsidiary is recorded in equity. Gains or losses on disposals to non-controlling interests are also recorded in equity.

When the Group ceases to have control, any retained interest in the entity is remeasured to its fair value at the date when control is lost, with the change in carrying amount recognized in profit or loss. The fair value is the initial carrying amount for the purposes of subsequently accounting for the retained interest as an associate, joint venture or financial asset. In addition, any amounts previously recognized in other comprehensive income in respect of that entity are accounted for as if the Group had directly disposed of the related assets or liabilities. This may mean that amounts previously recognized in other comprehensive income are reclassified to profit or loss.

Segment reporting

Operating segments are reported in a manner consistent with internal reporting to the chief operative decision-maker. Aspocomp Group Plc.'s Board of Directors is the chief operative decision-maker responsible for the allocation of resources to the operating segments and the assessment of their results. The Aspocomp Group's business operations comprise a single operating segment. The Board of Directors monitors unadjusted net sales, operating result and profit/loss for the period in accordance with IFRS.

ASPOCOMP ANNUAL REPORT 2020

Notes to THE CONSOLIDATED FINANCIAL STATEMENTS

Recognition policies

IFRS 15 Revenue from Contracts with Customers establishes a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers. The core principle of IFRS 15 is that an entity should recognize revenue to depict the transfer of promised goods or services to customers with an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Under IFRS 15, an entity recognizes revenue when (or as) a performance obligation is satisfied, i.e., when control of the good or service underlying the particular performance obligation is transferred to the customer. These principles are applied using the following five steps:

Identify the contract(s) with a customer
Identify the performance obligations in the contract
Determine the transaction price
Allocate the transaction price to the performance obligations in the contract
Recognize revenue

The Group manufactures and provides high-tech PCB trading services for the electronics industry. Aspocomp's net sales are based mainly on product sales. Revenues from these sales are recognized in accordance with the terms of delivery at the point in time the products and the control of the products are transferred to the customer. Consignment stock arrangements have been made with certain customers, in which revenues are recognized when the product arrives at the warehouse. In freight and handling services related to product delivery, the Group acts as principal and recognizes the service at the same time as the products are delivered to the customer.

The payment period for the products sold is typically 14 to 60 days, so the sale is not considered to include a financing component.

Divided income

Dividend income is recognized when the right to receive payment is established.

Conversion of items denominated in currencies other than the euro

Foreign currency transactions

The consolidated financial statements are presented in euros, the functional and presentation currency of the parent company. Foreign currency transactions are converted to euros using the exchange rates on the date of the transaction in question. Receivables and liabilities denominated in a foreign currency are converted to euros using the rates on the closing date. The resulting exchange differences are recorded in the income statement such that exchange differences on business transactions are included in operating profit and exchange differences due to financial assets and liabilities are presented in financial items.

Conversion of the financial statements of foreign subsidiaries

The income statements of foreign subsidiaries have been converted to euros at the average rate for the financial period and the balance sheets at the rate on the closing date. Translation differences due to the use of the average rate and the rate on the closing date are recognized in the Group's shareholders' equity.

Translation differences arising from eliminations of the acquisition cost of foreign subsidiaries and the translation of equity items accumulated after acquisition are recognized in shareholders' equity. When a subsidiary is sold in full or in part, the accumulated translation differences are recognized in the income statement as capital gains or losses.

Share-based payments

The Group has two share-based commitment and incentive plans for management and key employees, a share reward plan and option scheme.

ASPOCOMP ANNUAL REPORT 2020

Notes to THE CONSOLIDATED FINANCIAL STATEMENTS

In the share reward plan, payments are made partly in the form of shares in the company and partly in cash. The benefits granted under this plan are measured at fair value at the time when they are granted and are recognized in the income statement as employee benefit expenses in even instalments over the earnings and commitment period. The shares are subject to a 36-month lockup period.

Share options are measured at fair value at the grant date and expensed on a straight-line basis over the commitment period. The counter-item is recognized in retained earnings. The expenditure determined at the option grant date is based on the Group's estimate of the number of options expected to vest at the end of the commitment period. The Group updates the estimate of the final number of options at each balance sheet date. Any movements in estimates are recorded in the income statement. The fair value of options has been calculated using the Black-Scholes option pricing model.

When option rights are exercised, the payments received from the subscription of shares, adjusted for possible transaction costs, are recognized in the shareholders' equity. Assets from share subscriptions based on the option arrangements decided upon after the new Companies Act became effective are recognized in the invested non-restricted equity fund in accordance with the conditions of the arrangements, with adjustments for possible transaction costs.

More information on share-based payments is provided in Note 24.

Employee benefits

Pension liabilities

In the consolidated financial statements, pension schemes in different countries are classified as defined contribution or defined benefit schemes. In defined contribution schemes, the Group makes fixed payments to a separate unit. The Group does not have a legal or constructive obligation to make additional payments if the recipient cannot pay the pension benefits in question. All such schemes that do not fulfill these conditions are considered to be defined benefit schemes. Payments for defined contribution schemes have been recorded in the income statement for the period to which the payment pertains.

The Group has pension schemes that have been classified as defined contribution or defined benefit schemes. In defined contribution schemes, payments have been recorded in the income statement for the period to which the payment pertains.

In a defined benefit scheme, the commitment to be recognized as a liability is the net amount of the present value of the pension liabilities on the closing date and the fair value of assets adjusted by the non-depreciated part of the obligation based on unrecognized retroactive work performance. The pension liability is calculated by independent actuarial mathematicians based on the amount of the predicted pension liability by applying the projected unit credit method; the liability is discounted to the present value of future cash flows at an interest rate corresponding to the interest on high-quality bonds issued by the company. Pension costs are recognized as expenses in the income statement over the service years of personnel. Actuarial gains and losses are recognized in the statement of comprehensive income.

Long service rewards

Long service reward schemes at the Group's different units have been classified as defined benefit schemes as set out in IAS 19 and the related commitments have been recorded as liabilities in the balance sheet. When calculating liabilities deriving from the long service reward schemes, the following parameters have been used: turnover of personnel, average increase in salaries and the average annual pay of personnel. The liabilities have been discounted to their present value. Changes in the estimated values of the commitments are recognized in the income statement.

Operating profit/loss

The IAS 1 standard Presentation of Financial Statements does not include a definition of operating profit/loss. The Group has defined it as follows: operating profit/loss is the net sum remaining after other operating income is added to net sales, less purchasing costs (adjusted for the change in inventories of finished goods and work in progress and the expenses incurred from production for own

ASPOCOMP ANNUAL REPORT 2020

Notes to THE CONSOLIDATED FINANCIAL STATEMENTS

use) and less expenses, depreciation and impairment losses caused by employee benefits and less other operating expenses. All other items are presented below operating profit/loss. Exchange rate differences are included in operating profit/loss if they arise from business-related items; otherwise they are recognized in financial items.

Income taxes

Taxes on the Group companies' financial results for the period, adjustments of taxes from previous periods and the change in deferred taxes are recorded as the Group's taxes. The deferred tax asset or liability is calculated on all temporary differences between carrying amounts and taxable values, applying the tax rates confirmed on the closing date. Deferred tax assets are recognized from confirmed losses by applying the average result for the past four financial years, to the future financial years in which losses confirmed in taxation can be used. Deferred tax assets arising from acquisition costs that have not been deducted in taxation are recognized in full in undeducted acquisition costs at the end of the reported financial year.

Deferred tax is not recognized on the undistributed profits of subsidiaries when it is probable that the temporary difference will not be dissolved in the foreseeable future.

Intangible assets

Goodwill

Goodwill represents the share of the acquisition cost exceeding the Group's share at the moment of acquisition of the fair value of the itemizable net assets of an acquired subsidiary. Goodwill from the acquisition of subsidiaries is included in intangible assets. For impairment testing, it is allocated to cash-generating units. Goodwill is tested for impairment annually and is recognized in the balance sheet at acquisition cost less impairment losses. An impairment loss on goodwill is not reversed. The carrying amount of goodwill related to a sold company has an effect on the capital gains or losses.

Research and development expenditure

The company does not engage in actual product development. Research and development expenditure represent general development of the production process that cannot be directly allocated to any customer order, but which does not fulfill the capitalization criteria of IAS 38. The company no longer engages in PCB technology-related research and development that would be directly connected to customer projects and which would therefore be capable of independently generating income. The company cannot separate the research phase from the development phase, and it does not engage in actual product development, and thus treats all production process-related expenditure as expenditure on the research phase (IAS 38.53).

Software

Purchased software is recorded in the balance sheet at the original cost less accumulated amortization and impairment, if any.

Intangible rights

Intangible assets with limited useful lives are recorded in the balance sheet at the original cost less accumulated amortization and impairment, if any.

The estimated useful lives of intangible assets are:

Intangible rights 3 years
Other intangible assets 5 - 10 years.

Property, plant and equipment and right-of-use assets

Property, plant and equipment are measured at original cost less accumulated depreciation and impairment. Property, plant and equipment are depreciated on a straight-line basis in accordance with the estimated useful life.

ASPOCOMP ANNUAL REPORT 2020

Notes to THE CONSOLIDATED FINANCIAL STATEMENTS

If the asset consists of several parts with different useful lives, each part is treated as a separate asset. In this case the costs arising from renewal of the part are capitalized and the remainder is expensed. Other costs are treated as property, plant and equipment only when the economic benefits relating to these assets are probable and when the acquisition cost can be defined reliably. Other repair and maintenance costs are recognized in the income statement as they arise.

The estimated useful lives of property, plant and equipment are:

Buildings and structures 15 - 30 years
Machinery and equipment 3 - 8 years
Other tangible assets 5 - 10 years
Land and water leased 20 - 22 years.

The residual value of the assets and their useful lives are reviewed at least at each balance sheet date and, if necessary, adjusted to reflect changes in their expected economic benefits.

Gains and losses resulting from derecognition of property, plant and equipment are entered under other operating income or expenses.

Impairment of tangible and intangible assets

The Group assesses asset items annually for indications of impairment. If there are such indications, the recoverable amount of said asset item is estimated and then compared with the carrying amount of the asset item in question. In addition, the recoverable amounts of goodwill are assessed annually. Impairment is examined at the level of cash-generating units - that is, at the lowest unit level that is primarily independent of other units and whose cash flows can be separated out from other cash flows.

The recoverable amount is the higher of the fair value of the asset less disposal costs or the value in use. The value in use is the estimated future net cash flow of the asset or cash-generating unit discounted to its present value. The discount interest rate used is determined before taxes and describes the market outlook for the time value of money and the special risks associated with the asset item to be tested.

An impairment loss is recognized if the carrying amount of the asset item is higher than its recoverable amount. An impairment loss on an item other than goodwill is reversed if the situation changes and the recoverable amount of the asset has changed since the date of impairment loss recognition. An impairment loss on goodwill is not reversed.

Presentation of asset grants

Government grants are deducted in determining the carrying amount of an asset. The grant is recognized in profit or loss in the form of a decrease in depreciation during the useful life of the asset.

Inventories

Inventories are measured at the lower of the acquisition cost or probable net realizable value. The acquisition cost is determined using the FIFO method. The value of finished and work-in-progress inventories includes variable costs and a share of the fixed costs of purchasing and manufacturing.

Financial assets and financial liabilities

Financial assets

The Group's financial assets are classified in the following categories: "Financial assets at fair value through other comprehensive income" and "Financial assets at fair value through profit or loss". Initial recognition is performed on the basis of the usage of the financial assets at the time of acquisition.

All purchases and sales of financial assets are booked on the transaction date. Financial assets are derecognized from the balance sheet when the Group has lost its contractual rights to their cash flows, or when the Group has substantially transferred the risks and rewards out of the Group.

ASPOCOMP ANNUAL REPORT 2020

Notes to THE CONSOLIDATED FINANCIAL STATEMENTS

Loans and Other Receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market and which are not held for trading. Recognition is based on amortized cost. They are presented under Loans and Other Receivables in the balance sheet as non-current assets if they fall due after a period exceeding 12 months. Otherwise they are presented as current assets under "Short-term Receivables".

Financial assets at fair value through profit or loss are those non-derivative financial assets that are designated as available for sale or are not classified in any other group. They are included in non-current assets, unless the intention is to keep them less than 12 months from the closing date; if that is the case, they are recognized as current assets. Changes in fair value are transferred to the income statement when the investment is sold or when its value has declined such that an impairment loss must be recorded. Financial assets at fair value through profit or loss during the disclosed periods only include investments in unquoted shares whose acquisition cost is substantially equal to their fair value (based on, for instance, recent transactions). The markets for said shares are inactive and the Group does not intend to divest itself of these shares in the near future.

Cash and cash equivalents

Cash and cash equivalents consist of cash on hand and bank deposits. Cash and cash equivalents have a maximum maturity of three months from the date of acquisition.

Financial liabilities

Group's financial liabilities are classified in the groups "Accounts payable," "Other short-term payables," "Loans," "Factoring dept," "Lease liabilities" and "Derivative financial instruments".

Transaction costs are included in financial liabilities' initial carrying amount. Later all financial liabilities are recognized at amortized cost. The difference between the money received (less transaction costs) and the amount to be repaid is entered in the income statement using the effective interest method over the loan period. Financial liabilities are included in non-current and current liabilities.

All financial liabilities are booked in the balance sheet when the company becomes a contractual party in said financial liabilities. Financial liabilities are derecognized when the obligation specified in the contract has been discharged or cancelled or has expired.

When the terms of financial liabilities are renegotiated and the terms change substantially, the renegotiated liabilities are accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability. The terms are considered to be substantially different if the present value of the discounted cash flows under the new terms, including any fees paid net of any fees received and discounted using the original effective interest rate, is at least 10 percent different from the present value of the remaining discounted cash flows of the original financial liability. The difference between the carrying amount of the new financial liability and the original financial liability is recognized through profit or loss in financial income or expenses. If the change in the terms of the liability is not substantial, and said change is not accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability, then the carrying amount of the liability is adjusted with the resulting costs and fees, which are recognized as expenses over the remaining maturity of the liability whose terms have been revised.

Impairment of financial assets

The Group assesses at each balance sheet date whether there is any objective evidence that a financial asset or group of financial assets is impaired. A substantial or long impairment of share investments, in which their value declines below their acquisition cost, indicates the impairment of an equity instrument classified as a financial asset at fair value through profit or loss if there is evidence of impairment, the loss accumulated in the fair value reserve is transferred into the income statement.

The Group recognizes an impairment loss on accounts receivable if there is objective evidence that the receivables cannot be collected in full. The major financial difficulties of the debtor, the probability of bankruptcy, delinquent payments or significant delays in payments constitute evidence of the impairment of accounts receivable. The amount of the impairment loss recognized in the income statement is measured as the difference between the carrying amount of the receivables and the

ASPOCOMP ANNUAL REPORT 2020

Notes to THE CONSOLIDATED FINANCIAL STATEMENTS

present value of estimated future cash flows discounted at the effective interest rate. If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognized, the previously recognized impairment loss shall be reversed. The amount of the reversal shall be recognized in profit or loss.

Derivative financial instruments and interest rate risk hedging

The Group has not implemented hedge accounting. All derivative financial instruments are recognized initially at fair value and they are recognized in profit or loss. Forward foreign exchange contracts are valued at fair value using the market prices of forward contracts on the closing date. Derivatives are included in the balance sheet in other assets and liabilities. Realized and unrealized gains and losses arising from changes in fair value are recognized in the income statement under financial income and expenses in the period in which they arise. The fair value of interest rate swaps is determined using a method based on the present value of future cash flows. Fair value is the amount that the Group would receive or pay to terminate the derivative contract.

Shareholders' equity

Outstanding shares are presented as share capital. Costs related to issuing or acquiring own equity instruments are disclosed as items reducing shareholders' equity. The acquisition costs of equity instruments that have been bought back have been deducted from shareholders' equity.

Provisions

Provisions are recognized when the Group incurs, due to a previous event, a legal or constructive obligation whose settlement will probably require payment whose amount can be estimated reliably. Provisions are recognized at the present value of these obligations.

A provision for restructuring is recognized when the Group has prepared a detailed restructuring plan and restructuring has either commenced or the plan has been announced in an appropriate manner. No provisions are recognized for the costs of the Group's continuing operations.

A provision is recognized for a loss-making contract when the expenditure required to meet the obligations exceeds the benefits received from the contract. Environmental provisions are recorded when the Group has a present obligation under environmental legislation or the Group's environmental responsibility principles related to the decommissioning of a production plant, environmental rehabilitation and restoration, or relocating equipment.

Accounting principles requiring judgments by management and key sources of estimation uncertainty

When preparing financial statements, estimates and assumptions about the future must be made, and actual results may differ from these estimates and assumptions. If the actual results differ from the estimates and assumptions, this may affect the carrying amounts of assets and liabilities as well as the income and expenses for the financial period. Management must also exercise judgment in the application of accounting principles. The management has considered that the continuity of operations does not involve significant uncertainty. Additional information on risks and business continuity is presented in Note 26.

Accounting estimates and assumptions

The estimates made when preparing the financial statements are based on management's best assessment on the balance sheet date. The estimates are based on historical experiences and assumptions at the balance sheet date regarding matters such as the most probable future development of the Group's financial operating environment with respect to net sales and cost level. The Group regularly monitors the realization of the estimates and assumptions as well as changes in their underlying factors. Any changes in estimates and assumptions are recognized both in the financial period during which said estimates and assumptions are adjusted and in all subsequent financial periods.

ASPOCOMP ANNUAL REPORT 2020

Notes to THE CONSOLIDATED FINANCIAL STATEMENTS

Goodwill impairment testing

It has been estimated that any changes in assumptions and estimates will have the greatest impact on goodwill impairment testing.

The Group tests goodwill, incomplete intangible assets, intangible assets with an unlimited useful life and tangible assets for impairment on an annual basis. In addition, the Group evaluates all balance sheet items for indications of impairment as set out in the accounting principles above. If such indications exist, said assets are tested for impairment. The recoverable amounts from cash-generating units have been defined on the basis of value in use calculations. Estimates must be used when performing these calculations (see Note 26).

The estimates required in impairment testing are related to the key assumptions used in the calculations, which are the average growth rate of net sales and the sales margin during the period covered by the cash flow forecasts used in impairment test calculations, and the discount rate used in the calculations. Net sales forecasts involve the most significant estimates.

The impairment test calculations and related assumptions are presented in Note 25.

Recognition of deferred tax assets

The deferred tax asset results mainly from slowed tax depreciation. The company decelerated its tax depreciation during the 2012-2019 tax years and will decelerate in the 2020 tax year.

Deferred tax assets are presented in Note 8.

Judgment exercised by management in the selection and application of accounting principles

In addition to estimates and assumptions concerning the future, management must also exercise judgment in the application of accounting principles. In particular, management must exercise judgment in the selection and application of accounting principles in cases where the current IFRS standards provide for alternative methods of recognition, measurement and presentation.

The major areas involving the use of estimates and assumptions are the valuation of inventories and provisions.

Inventories

The company assesses its inventories regularly to check whether the inventory amounts are larger than the actual figures, the inventory items include non-marketable assets, or the market value of inventory items has fallen below their acquisition cost and recognizes an allowance for such decreases. To this end, management must make estimates of future demand for products. Any changes in these estimates may lead to adjustments of the carrying amount of inventories in future financial periods.

More information on inventories is presented in Note 14.

Provisions

Provisions are recorded when the Group has a legal or constructive obligation on the basis of a prior event and the materialization of the payment obligation is probable. A provision for restructuring is recognized when the Group has prepared a detailed restructuring plan and the plan has been announced. The provision reflects management's best estimate of the present value of future expenditure.

Application of IFRS 16 Leases from January 1, 2019

The effective standard replaces IAS 17 and related interpretations in IFRS. Above all, IFRS 16 provides guidance to the lessee and sets out the principles for recognizing leases as both an asset and a lease payment obligation. Lease costs must be presented in the income statement for the lessee as depreciation and financing costs instead of rental costs.

Until December 31, 2018, lease agreements for machinery, according to which the Group, as the lessee, had a substantial part of the risks and benefits inherent in ownership, were classified as finance leases.

ASPOCOMP ANNUAL REPORT 2020

Notes to THE CONSOLIDATED FINANCIAL STATEMENTS

Fixed assets acquired under finance leases were recognized in the balance sheet at the lower of the fair value of the leased asset and the present value of the minimum lease payments. An asset acquired under a finance lease was depreciated over the useful life of the asset or a shorter lease term. Lease payments are apportioned between the finance charge and the reduction of the liability over the lease term so as to achieve a constant periodic rate of interest on the remaining balance of the liability.

In connection with the adoption of IFRS 16, lease liabilities were recognized for contracts classified as "operating leases" in accordance with IAS 17. The Group applied a simplified approach to the adoption of the standard and therefore did not adjust the data for the comparison year in its reporting. The lease liability is determined at the present value of the remaining lease payments using the interest rate of the additional credit at the date of application. The weighted average interest rate on the lessee's additional loan, which was applied to lease liabilities on January 1, 2019, was 2.9 per cent. The Group does not have the right to use assets as defined in the investment property and the Group does not have any finance leases in which it is the lessor.

When IFRS 16 is applied for the first time, the following practical remedies have been used: Low-value or short-term leases with a lease term of 12 months or less are treated as short-term leases. Applying a single discount rate to a portfolio of leases with approximately similar characteristics.

For leases previously classified as finance leases, the carrying amount of the asset and liability under the lease immediately before the transfer was recognized as the carrying amount of the fixed asset and the lease liability at the date of application. The valuation principles in accordance with IFRS 16 have been applied only after that date.

Right-of-use assets recognized by the Group as of January 1, 2019 primarily consist of machinery, leased cars, and land lease. As a significant share of the Group's right-of-use assets consisted of machinery leases, which were treated as finance lease arrangements even prior to the adoption of IFRS 16, the standard is not considered to have a material impact on the Group's key figures. In the balance sheet, the lease liability is presented as long-term and short-term interest-bearing liabilities (see Note 11 Fixed asset).

Application of new or revised IFRS and IAS standards

The other IFRSs or IFRIC interpretations that have been published but have not yet come into effect are not expected to have a material impact on the Group.

ASPOCOMP ANNUAL REPORT 2020

Notes to THE CONSOLIDATED FINANCIAL STATEMENTS

1. NET SALES INFORMATION

The Group manufactures and provides high-tech PCB trading services for the electronics industry. Aspocomp's net sales are based solely on product sales. All revenues are recognized in accordance with the terms of delivery at a point in time the products and the control of the products is transferred to the customer. For freight and handling services related to the delivery of the products, the Group acts as principal and recognizes the service at the same time as the products are delivered to the customer.

The payment period for the products sold is typically 14 to 60 days, so the sale is not considered to include a financial contribution.

	2020		2019
Net sales
Telecommunication	5,369	21%	13,358	43%
Automotive	5,358	21%	7,381	24%
Industrial Electronics	5,130	20%	4,833	15%
Security & Defence & Aerospace	4,389	17%	2,332	7%
Semiconductor industry	5,108	20%	3,100	10%
Others	280	1%	185	1%
Total	25,635	100%	31,189	100%

Geographical areas

Net sales by geographical area
Finland	7,065	28%	13,233	42%
Europe	14,835	58%	17,403	56%
Other areas	3,735	15%	553	2%
Total	25,635	100%	31,189	100%

ASPOCOMP ANNUAL REPORT 2020

Notes to THE CONSOLIDATED FINANCIAL STATEMENTS

2. OTHER OPERATING INCOME

	2020	2019
Gains on sale of fixed assets	28	66
Other operating income	56	8
Total	83	73

3. MATERIALS AND SERVICES

	2020	2019
Purchase of materials and supplies	11,173	14,291
Change in inventories	177	-348
Materials and services, total	11,350	13,943
Outsourced services	410	660
Total	11,760	14,603

4. PERSONNEL EXPENSES

	2020	2019
Wages and salaries	6,623	6,451
Share-based rewards	75	82
Other long-term employee benefits	-3	-21
Pension costs - defined contribution plans	889	966
Other personnel expenses	272	285
Total	7,856	7,763
Personnel, average	140	124
Personnel at Dec. 31, 2019
Blue-collar	87	80
White-collar	51	52
Total	138	132

5. EMPLOYEE BENEFITS

	2020	2019
Obligation at the beginning of the year	92	114
Increases during the financial year	11	19
Realized during the financial year	-14	-41
Obligation at the end of the year	89	92

Aspocomp has a long-term employee benefit plan covering all of its employees in Finland. The plan has been terminated in 2014 and now only applies to those who have been Aspocomp's employ before January 1, 2014. The plan will expire on December 31, 2028, at the latest. The plan is by nature a so-called long service reward, where an extra payment is made to employees after they have been in Aspocomp's employ for a certain period.

ASPOCOMP ANNUAL REPORT 2020

Notes to THE CONSOLIDATED FINANCIAL STATEMENTS

5. (continues)

PENSION OBLIGATIONS

The Group has pension plans that are classified as either defined contribution plans or defined benefit plans. The contributions made to defined contribution plans are recognized as an expense in the income statement in the period in which they occur. Pensions handled through an insurance company and covered by the Statutory Employee Pensions system (TyEL) are treated as defined contribution plans.

The defined benefit plans are used in Finland. In accordance with IAS 19 the company retains the responsibility for future index and salary increases for company employees who are covered by the pension plan. The pension fund was closed down in 1999. The arrangement applied to the active employees who were covered by the Aspo Group Pension Fund on December 31, 1999.

Amounts of liabilities for defined benefit plans recognized in the balance sheet:

	2020	2019
Defined benefit obligation	1,527	1,627
Fair value of plan assets	1,277	1,364
Net liability, Dec. 31, 2020	262	262
Defined benefit pension liabilities in the income statement and comprehensive income statement:
Current service cost	3	4
Interest cost	2	5
Defined benefit expenses recognized in the income statement	6	9
Changes in actuarial gains and losses	0	0
Defined benefit expenses recognized in the income statement and comprehensive income statement	6	9
Change in net liability for defined benefit
Net liability for defined benefit, Jan. 1	262	311
Contributions paid to the fund	-13	-16
Expenses recognized in the income statement	6	9
Remeasurement gain (-)/loss included in the consolidated income statement	-5	-41
Net liability for defined benefit, Dec. 31	250	262
Actuarial assumptions	2020	2019
Discount rate	0.55%	0.95%
Future salary increase	N/A	N/A
Future pension increase	1.50%	1.95%

ASPOCOMP ANNUAL REPORT 2020

Notes to THE CONSOLIDATED FINANCIAL STATEMENTS

5. (continues)

Sensitivity of defined benefit obligation to changes in the weighted principal assumptions:

Assumption	Change in assumption	Impact of increase	Impact of decrease
Discount rate	0.50%	-6.9 %	7.8 %
Future salary increase	0.50%	N/A	N/A
Future pension increase	0.25%	3.3 %	-3.1 %
Mortality change	5.00%	-1.6 %	1.7 %
Assumption fair value of plan assets	Change in assumption	Impact of increase	Impact of decrease
Discount rate	0.50%	-6.3 %	7.0 %
Future salary increase	0.50%	N/A	N/A
Future pension increase	0.25%	0.0 %	0.0 %
Mortality change	5.00%	-1.4 %	1.5 %

6. OTHER OPERATING EXPENSES

	1000 €	2020	2019
Rental expenses		83	91
Maintenance and repair costs		868	646
Energy costs		558	477
Water consumption and wastewater treatment		-36	139
Other variable expenses of production		245	280
Voluntary social costs		209	213
Real estate costs		380	658
Insurance charges		139	132
Travel costs		39	310
IT costs		294	278
External services		397	678
Audit fees		62	66
Administration costs		404	489
Other costs		738	424
Total		4,380	4,881
Authorized Public Accountants' (PwC Ltd) fees	2020	2019
---	---	---
Auditing	54	60
Tax consultation	0	0
Certificates and statements	3	2
Other services	4	4
Total	62	66

ASPOCOMP ANNUAL REPORT 2020

Notes to THE CONSOLIDATED FINANCIAL STATEMENTS

FINANCIAL INCOME AND EXPENSES

	2020	2019
Income
Interest income on loans and other receivables	0	0
Total financial income	0	0
Expenses
Interest expenses on bank loans and overdrafts	288	124
Changes in the value of derivative instruments recognized at fair value through profit or loss	6	12
Total financial expenses	295	136
Total financial income and expenses	294	136

ASPOCOMP ANNUAL REPORT 2020

Notes to THE CONSOLIDATED FINANCIAL STATEMENTS

8. INCOME TAXES

	2020	2019
Current income tax
Current income tax for the year	-49	-1
Current income tax for previous years	0	0
Deferred income tax	377	684
Total current income tax	327	683
A reconciliation of the income tax expense computed at statutory rates and income tax expense recorded in the income statement.
Profit before tax	-477	3209
Taxes at Finnish statutory tax rate 20.0%	95	-642
Different tax rates of foreign subsidiaries	1	1
Non-deductible expenses	0	-1
Deferred tax assets on other temporary differences	231	1,325
Total income tax expense	327	683

The taxable income of the Group companies for 2020 was EUR 918 thousand. If the result for 2020 is confirmed in taxation, the total amount of confirmed losses would be EUR 0 thousand. After the taxes for 2019 have been confirmed, the remaining losses amount to EUR 918.

Foreign subsidiaries do not have significant distributable funds.

1000 €
Confirmed tax losses	Losses	Expire in
for 2010	422	2020
for 2014	377	2024
for 2015	119	2025
	918
Deferred income taxes	2020	2019
---	---	---
Deferred income tax liabilities
- Deferred income tax liabilities due after 12 months	0	0
- Deferred income tax liabilities due within the next 12 months	19	25
	19	25
Deferred income tax assets
- Deferred income tax assets due after 12 months	4,673	3,985
- Deferred income tax assets due within the next 12 months	370	687
	5,043	4,673
Deferred income tax (net)	5,025	4,648

ASPOCOMP ANNUAL REPORT 2020

Notes to THE CONSOLIDATED FINANCIAL STATEMENTS

(continues)

1000 €

Deferred tax assets and liabilities during the financial year are shown below without offsetting them against each other.

Deferred income tax liability	Others	Total
Jan. 1, 2019	21	21
Recognized in net profit for the year	4	4
Recognized in comprehensive income for the year
Recognized directly in equity
Dec. 31, 2019	25	25
Recognized in net profit for the year	-6	-6
Recognized in comprehensive income for the year
Recognized directly in equity
Dec. 31, 2020	19	19
Deferred income tax assets	From decelerated tax depreciation	Confirmed losses
---	---	---
Jan. 1, 2019	3,799	0
Recognized in net profit for the year	497	185
Recognized in comprehensive income for the year
Recognized directly in equity
Unrecognized portion of the change
Dec. 31, 2019	4,295	185
Recognized in net profit for the year	586	-185
Recognized in comprehensive income for the year
Recognized directly in equity
Unrecognized portion of the change
Dec. 31, 2020	4,881	0

The deferred tax asset results mainly from the slowed tax depreciation. The company decelerated its tax depreciation during 2013-2019 tax years. In the 2020 tax year, the company will decelerate depreciation to a total of about EUR 24.4 million, resulting in deferred tax assets of about EUR 4,881 thousand under the current 20.0% corporate tax rate.

ASPOCOMP ANNUAL REPORT 2020

Notes to THE CONSOLIDATED FINANCIAL STATEMENTS

9. EARNINGS PER SHARE

1000 € 2020 2019

(a) Basic earnings per share

Basic earnings per share are calculated by dividing the profit attributable to equity holders of the company by the weighted average number of shares during the year.

Profit attributable to equity holders of the company -98 3,939

Weighted average number of shares (1,000) 6,806 6,692

(b) Diluted earnings per share

Diluted earnings per share are calculated by adjusting the weighted average number of shares outstanding such that all dilutive potential shares are considered to be traded shares. There were no diluting effects in 2020 and 2019.

10. INTANGIBLE ASSETS

	Intangible rights	Group goodwill	Total
Acquisition cost at Jan. 1, 2020	604	3,000	3,604
Increase	95	0	95
Decrease	-107	0	-107
Transfers between lines	0	0	0
Acquisition cost at Dec. 31, 2020	591	3,000	3,591
Total accumulated depreciation and impairment Jan. 1, 2020	344	0	344
Accumulated depreciation of decreases and transfers	-107	0	-107
Depreciation for the year	107	0	107
Total accumulated depreciation and impairment Dec. 31, 2020	344	0	344
Book value Dec. 31, 2020	247	3,000	3,247
Acquisition cost at Jan. 1, 2019	702	3,000	3,702
Increase	73	0	73
Decrease	-171	0	-171
Transfers between lines	0	0	0
Acquisition cost at Dec. 31, 2019	604	3,000	3,604
Total accumulated depreciation and impairment Jan. 1, 2019	421	0	421
Accumulated depreciation of decreases and transfers	-170	0	-170
Depreciation for the year	92	0	92
Total accumulated depreciation and impairment Dec. 31, 2019	344	0	344
Book value Dec. 31, 2019	260	3,000	3,260

The principles of the impairment testing of goodwill are presented in Note 25.

ASPOCOMP ANNUAL REPORT 2020

Notes to THE CONSOLIDATED FINANCIAL STATEMENTS

PROPERTY, PLANT AND EQUIPMENT AND RIGHT-OF-USE ASSETS

	1000 € Land and water areas	Buildings and structures	Machinery and equipment	Advances	Total
Acquisition cost at Jan. 1, 2020	168	1,409	18,120	1,461	21,158
Increase	0	10	887	643	1,540
Decrease	0	0	-612	0	-612
Transfers between lines	0	0	1,461	-1,461	0
Acquisition cost at Dec. 31, 2020	168	1,420	19,856	643	22,086
Total accumulated depreciation and impairment Jan. 1, 2020	8	150	14,061	0	14,218
Accumulated depreciation of decreases and transfers	0	0	-612	0	-612
Depreciation for the year	8	96	1,432	0	1,535
Total accumulated depreciation and impairment Dec. 31, 2020	15	245	14,881	0	15,142
Book value Dec. 31, 2020	153	1,174	4,975	643	6,945
Acquisition cost at Jan. 1, 2019	0	1,248	16,053	917	18,218
Increase	168	161	2,297	1,283	3,909
Decrease	0	0	-969	0	-969
Transfers between lines	0	0	740	-740	0
Acquisition cost at Dec. 31, 2019	168	1,409	18,120	1,461	21,158
Total accumulated depreciation and impairment Jan. 1, 2019	0	62	13,215	0	13,277
Accumulated depreciation of decreases and transfers	0	0	-230	0	-230
Depreciation for the year	8	87	1,076	0	1,171
Total accumulated depreciation and impairment Dec. 31, 2019	8	150	14,061	0	14,218
Book value Dec. 31, 2019	160	1,260	4,059	1,461	6,939

ASPOCOMP ANNUAL REPORT 2020

Notes to THE CONSOLIDATED FINANCIAL STATEMENTS

12. RIGHT-OF-USE ASSETS

Property, plant and equipment include property, plant and equipment where the Group is the lessee under IFRS 16.

1000 €	Land and water areas	Machinery and equipment	Total
Acquisition cost at Jan. 1, 2020	168	2,217	2,385
Increase	0	80	80
Decrease	0	0	0
Acquisition cost at Dec. 31, 2020	168	2,297	2,465
Total accumulated depreciation and impairment Jan. 1, 2020	8	1,045	1,052
Accumulated depreciation of decreases and transfers	0	0	0
Depreciation for the year	8	376	384
Total accumulated depreciation and impairment Dec. 31, 2020	15	1,421	1,436
Book value Dec. 31, 2020	153	876	1,029
Acquisition cost at Jan. 1, 2019	0	1,813	1,813
Increase	168	404	572
Decrease	0	0	0
Acquisition cost at Dec. 31, 2019	168	2,217	2,385
Total accumulated depreciation and impairment Jan. 1, 2019	0	679	679
Accumulated depreciation of decreases and transfers	0	0	0
Depreciation for the year	8	365	373
Total accumulated depreciation and impairment Dec. 31, 2019	8	1,045	1,052
Book value Dec. 31, 2019	160	1,172	1,333

From 2019 leased assets are presented as a separate line item in the balance sheet.

LEASES

Finance leases have been reclassified to property, plant and equipment in 2019.

	2020	2019
Financial lease agreements 31.12.2018		1,335
Short term 1.1.2019		327
Long term 1.1.2019		1,007
Total		1,335
Lease liabilities 31.12.
Short term	415	451
Long term	835	1,099
Total	1,250	1,551

ASPOCOMP ANNUAL REPORT 2020

Notes to THE CONSOLIDATED FINANCIAL STATEMENTS

FINANCIAL ASSETS AND LIABILITIES

	1000 €	2020	2019
Financial assets
Financial assets at amortized cost
Accounts receivable		5,548	7,969
Other cash and cash equivalents at amortized cost
Cash and cash equivalents		2,801	2,382
Shares		95	15
Total		8,444	10,366
	1000 €	2020	2019
Financial liabilities
Liabilities at amortized cost
Trade and other payables		3,793	5,239
Loans		4,403	4,253
Factoring debt		1	2
Lease liabilities		1,250	1,551
Derivative financial instruments (not in hedge accounting)		0	6
Total		9,447	11,051

INVENTORIES

	2020	2019
Materials and supplies	1,908	2,085
Work in progress	488	844
Finished goods	537	392
Total	2,932	3,321
Write down of inventories	72	107

ASPOCOMP ANNUAL REPORT 2020

Notes to THE CONSOLIDATED FINANCIAL STATEMENTS

SHORT-TERM RECEIVABLES

	1000 €			2020			2019
Short-term receivables
Trade receivable				5,548			7,969
Accrued receivables				302			228
Other receivables				40			740
Total				5,891			8,937
Age distribution of accounts receivable
Trade receivable that not are impaired
	Gross	Average loss %	Impairment IFRS 9	Net	Gross	Average loss %	Impairment IFRS 9	Net
Receivables carried forward	4165	0.4	-17	4,149	6,555	0.2	-13	6,542
Expired
in less than 30 days	975	1.1	-11	965	946	0.2	-2	944
in 30-60 days	70	2.2	-2	69	277	0.8	-2	275
in 61-90 days	10	3.3	0	10	88	1.2	-1	87
over 90 days	327	4	-13	314	123	2	-2	121
Total	5549		-42	5,506			-20	7,969

ASPOCOMP ANNUAL REPORT 2020

Notes to THE CONSOLIDATED FINANCIAL STATEMENTS

15. (continues)

	2020	2019
The breakdown by currencies of short-term receivables
EUR	3,464	4,622
USD	2,084	3,347
Total	5,548	7,969

Other receivables and accrued receivables consist mainly of normal trade receivables but no amounts which are individually significant.

Balance sheet values correspond best to the maximum monetary value of the credit risk, excluding the fair value of collateral in cases where the other parties to the agreement are unable to fulfill their obligations with respect to the financial instruments. Receivables do not involve significant credit risk concentrations.

The fair values of short-term receivables are equivalent to their book values, as the effect of discounting them is not material, considering their maturities.

The Group has a recourse factoring arrangement in use. Under this arrangement, the Group has transferred part of the relevant receivables to the factor in exchange for cash. However, the company has retained the late payment and credit risk. The Group therefore continues to recognize the transferred assets in their entirety in its balance sheet. The amount repayable under the factoring agreement is presented as a secured borrowing.

The Group estimates expected credit losses on accounts receivable and recognizes a credit loss provision based on historical credit losses as well as current circumstances and macroeconomic analysis of the future. The Group has estimated the potential impact of the coronavirus pandemic on expected credit losses. As a result, the credit loss provision has been adjusted in line with the higher risk. The credit loss provision is recognized based on the age distribution of accounts receivable according to the business area and geographic location. A credit loss provision of EUR 42 thousand has been recognized.

16. CASH AND EQUIVALENTS

	1000 €	2020	2019
Cash and bank accounts		2,801	2,382
Total		2,801	2,382

On the balance sheet date, cash and cash equivalents totaled EUR 2,5283 thousand in Finland and EUR 273 thousand in other countries. Cash and cash equivalents were primarily held in bank accounts.

ASPOCOMP ANNUAL REPORT 2020

Notes to THE CONSOLIDATED FINANCIAL STATEMENTS

17 FINANCING LOANS

	2020		2019
	Book value	Fair value	Book value	Fair value
Long-term financing loans
Bank borrowings	3,411	3,486	3,227	3,250
Lease liabilities	835	833	1,099	1,099
Total	4,245		4,326

The fair values of long-term loans are based on discounted cash flows. The discount rate is the interest that the Group would receive for an equivalent loan from an external party on the closing date. The total interest rate comprises risk-free interest and a company-specific risk premium.

Financial leasing

In financial leasing, fair values are estimated by discounting future cash flows with an interest rate corresponding to the interest on equivalent leasing agreements on the closing date.

Discount rates used in determining fair values

Bank borrowings	1.5 %	2.0 %
Financial leasing	2.5 %	2.5 %

Short-term financing loans

Bank borrowings	992	1,027
Lease liabilities	415	451
Derivative financial instruments	0	6
Credit facility	0	0
Factoring-debt	1	2
Total	1,408	1,486

The fair values of short-term financing loans are equivalent to their book values, as discounting has no material effect in view of the maturities of the debts.

Bank loans

Aspocomp had a EUR 1 million credit facility costing 1.95 percent per annum. The interest on credit drawn down is 1.0 percent above the one-week Euribor rate. At the end of the financial year EUR 0 thousand credit was in use.

ASPOCOMP ANNUAL REPORT 2020

Notes to THE CONSOLIDATED FINANCIAL STATEMENTS

(continues)
The breakdown of the maturity of payables 1000 €

Dec. 31, 2020	Balance		12		Over 5
	sheet value	Cash flow	months	1-2 years	2-5 years	years
Bank borrowings
Principal	4,402	4,402	992	2,263	1,147	0
Paid interest expenses		175	75	86	13	0
Lease liabilities
Principal	1,250	1,250	317	590	243	100
Paid interest expenses		41	24	15	2	0
Derivative financial instruments	0	0	0	0	0	0
Factoring debt	1	1	1	0	0	0
Trade and other payables	3,794	3,794	3,794	0	0	0
Total	9,447	9,663	5,203	2,955	1,405	100
Dec. 31, 2019	Balance		12		Over 5
---	---	---	---	---	---	---
	sheet value	Cash flow	months	1-2 years	2-5 years	years
Bank borrowings
Principal	4,053	4,053	1,027	2,053	973	0
Paid interest expenses		255	77	133	45	0
Lease liabilities
Principal	1,551	1,551	451	339	661	100
Paid interest expenses		102	32	54	17	0
Derivative financial instruments	6	6	6	0	0	0
Factoring debt	2	2	2	0	0	0
Trade and other payables	5,239	5,239	5,239	0	0	0
Total	10,851	11,209	6,834	2,579	1,696	100
Trade and other payables	2020	2019
---	---	---
The breakdown by currencies of accounts payable
EUR	1,173	1,737
GBP	9	0
CHF	0	5
CNY	14	33
SEK	1	3
USD	1,020	1,710
Total	2,217	3,488
Accrued payables	1,577	1,750
Total trade and other payables	3,794	5,239
Accrued liabilities
Personnel expenses	1,111	1,467
Accrued interest on loans	5	2
VAT liabilities	48	45
Total	1,165	1,514

ASPOCOMP ANNUAL REPORT 2020

Notes to THE CONSOLIDATED FINANCIAL STATEMENTS

18. STATEMENT OF CHANGES IN INTEREST - BEARING LIABILITIES

	1000 €	Long-term interest-bearing liabilities	Short-term interest-bearing liabilities	Total interest-bearing liabilities
Liabilities December 31, 2019		4,326	1,486	5,812
Loan withdrawals (cash flow)		2,842	158	3,000
Lease debt withdrawals (other change)		62	18	80
Loan payments (cash flow)		-2,851	0	-2,851
Lease debt payment (cash flow)		-134	-253	-387
Factoring loan payment (cash flow)		0	-1	-1
Liabilities December 31, 2020		4,245	1,408	5,653
	1000 €	Long-term interest-bearing liabilities	Short-term interest-bearing liabilities	Total interest-bearing liabilities
---	---	---	---	---
Liabilities December 31, 2018		4,266	1,170	5,436
Loan withdrawals (cash flow)		684	316	1,000
Financial lease debt withdrawals (other change)		559	18	577
Loan payments (cash flow)		-827	0	-827
Financial lease debt payment (other change)		-356	-18	-373
Factoring loan payment (cash flow)		0	-1	-1
Liabilities December 31, 2019		4,326	1,486	5,812

LEASES

1000 €	2020	2019
Financial leasing debts December 31		1335
Liabilities related to operating leases December 31		329
Discounted by the lessee's additional loan at the time of application		253
Short-term leases not recognized as a liability are deducted		-85
Contractual debt recognized as of December 31	1,250	1,503

19. NET FOREIGN EXCHANGE GAINS/LOSSES

	2020	2019
The exchange differences charged/ credited to the income statement
Other operating costs	152	9
Financial expenses	151	12
Total	304	21

ASPOCOMP ANNUAL REPORT 2020

Notes to THE CONSOLIDATED FINANCIAL STATEMENTS

20 CONTINGENCIES AND COMMITMENTS

	2020	2019
Other rental payables
Minimum rents of other rent agreements that cannot be terminated
Within one year	49	65
After one year but not more than five years	0	0
More than five years	0	0
Total	49	65
Contingent liabilities at Dec. 31, 2020
Guarantees
Business mortgage	6,000	6,000
Collateral note	1,200	1,200
Guaranteed contingent liability towards the Finnish Customs	35	35
Total	7,235	7,235

ADJUSTMENTS TO CASH FLOW FROM OPERATING ACTIVITIES

	2020	2019
Non-cash transactions
Depreciation	1,643	1,263
Others	487	142
Non-cash transactions, total	2,130	1,405
Other adjustments
Sales profit	-28	-64
Taxes	-327	-683
Other adjustments, total	-355	-747
Change in net working capital
Change in receivables	3,046	-223
Change in inventories	389	-988
Change in trade and other payables	-1,132	1,052
Total	2,303	-159

DERIVATIVE FINANCIAL INSTRUMENTS

Nominal values
	1000 €	2020	2019
Interest rate swap contracts, nominal value		2,000	2,000
Interest rate swap contracts, fair value (non-current assets)		0	0
Interest rate swap contracts, fair value (current assets)		0	6

ASPOCOMP ANNUAL REPORT 2020

Notes to THE CONSOLIDATED FINANCIAL STATEMENTS

23. RELATED-PARTY DISCLOSURES

	1000 €	2020
Aspocomp Group's related parties include subsidiaries, members of the Board of Directors, the CEO and members of the Management Team, and close family members of key executives and companies in which they or their family members have control.
Salaries and benefits of the Management Team
CEO Mikko Montonen as of May 15, 2014
Salaries and fringe benefits	296	352
Options	335	0
Share-based payment	0	0
Pension costs, defined contribution plans	44	62
Other Management Team
Salaries and fringe benefits	587	772
Share-based payment	30	82
Pension costs, defined contribution plans	85	136
Fees of members of the Board
Ms. Päivi Marttila, Chairman of the Board	37	38
Mr. Matti Lahdenperä (member until June 9, 2020)	7	20
Ms. Julianna Borsos (member as of March 23, 2017)	20	19
Ms. Kaarina Muurinen, Vice Chairman (as of March 26, 2015)	25	25
Mr. Juha Putkiranta (member as of April 7, 2016)	19	19
Total remunerations of the members of the Board	107	120
Management's total employment benefits	1,377	1,404

The CEO's age of retirement and grounds for his/her pension are in accordance with current legislation. If the contract of service of the CEO is terminated either by the CEO or by the company, the notice period is 6 months. If the company terminates the contract an additional 6 months' severance pay shall be paid. The CEO does not have any voluntary additional pension arrangements.

The CEO and Board members have not been granted any loans, nor have any guarantees or commitments been given on their behalf.

Aspocomp shareholdings (number of shares)	Dec. 31, 2020	Dec. 31, 2019
Members of the Board	1,164,963	1,259,974
CEO	390,000	260,000
Other management	21,444	18,024
Total shareholdings	1,576,407	1,537,998
Votes conferred by the shares	23.0 %	22.9 %

ASPOCOMP ANNUAL REPORT 2020

Notes to THE CONSOLIDATED FINANCIAL STATEMENTS

24. SHARE-BASED PAYMENTS

On February 25, 2016, the Board of Directors of Aspocomp Group Plc. decided to introduce share-based incentive and commitment plans for the company's key personnel.

1. Share reward plan for key personnel

The share reward plan offers the members of the Management Team and other key employees the possibility to receive shares in the company on the basis of the achievement of targets that will be set by the Board of Directors for four earnings periods, which are the four 12-month financial years during the period 1/2016 through 12/2019.

The target group for the plan consists of approximately 15 persons. The Board of Directors may decide on including new key employees and their annual maximum rewards. The maximum reward is expressed as a number of shares. In addition, the reward consists of a cash payment, the amount of which is determined on the basis of the value of the share reward at the time of payment. The cash payment aims at covering taxes and similar charges arising from the reward. Achievement of targets set for the earnings periods determines the portion of the maximum reward to be paid to a person.

Recipients of shares on the basis of the share reward plan must hold them for at least 36 months after the shares are entered on their book-entry accounts. If a plan participant's employment or service relationship with a group company ends during this commitment period, he or she is as a general rule required to return the shares to the company without compensation.

Earnings periods	2020	2019
Grant date
Earnings period begins		Jan. 1, 2019
Earnings period ends		Dec. 31, 2019
Shares are released 36 months after entry into the book-entry account
Earnings criteria	2020	2019
Earnings per share (EPS) without extraordinary items
Achievement of earnings criteria, %		14%
Share price listed on grant date, €		4.40
Share price listed on balance sheet date, €		5.26
Impact of share incentive plan on the result for the	2020	2019
Impact of the scheme on the profit for the period	75	82

ASPOCOMP ANNUAL REPORT 2020

Notes to THE CONSOLIDATED FINANCIAL STATEMENTS

24. (continues)

2. CEO's stock option program

The Board of Directors of Aspocomp Group Plc resolved on May 15, 2014 to issue in total a maximum of 390,000 stock options to the company's President and CEO. The issue, which has been made in deviation from the shareholders' pre-emptive subscription rights, is based on the authorization by the Annual General Meeting held on April 23, 2014.

The maximum number of stock options issued under Option Program 2014 will be 390,000. Each stock option shall entitle the CEO to subscribe for one new share in the company. The stock options are issued free of charge. The program is divided into A, B and C series, each of which covers a maximum of 130,000 option entitlements. The share subscription price of the stock options A is the trade volume weighted average quotation of the share during March 1 - March 31, 2014 (EUR 0.99), of the stock options B the trade volume weighted average quotation of the share during March 1 - March 31, 2015 (EUR 1.24) and of the stock options C the trade volume weighted average quotation of the share during March 1 - March 31, 2016 (EUR 1.26).

	Option A	Option B	Option C
Date of issue	May 14, 2014	May 14, 2014	May 14, 2014
Issued number of options	130,000	130,000	130,000
Subcription price	0.99	1.24	1.26
Share price on the date of issue	1.45	1.45	1.45
Fair value	0.63	0.45	0.48
	May 1, 2016-	May 1, 2017-	May 1, 2018-
Subscription period	Apr. 30, 2018	Apr. 30, 2019	Apr. 30, 2020
Number of options
Outstanding on January 1	0	0	130,000
Exercised	0	0	130,000
Outstanding on December 31	0	0	0
	1000 €	2020	2019
Recognized as an expense	0		0

ASPOCOMP ANNUAL REPORT 2020

Notes to THE CONSOLIDATED FINANCIAL STATEMENTS

25. IMPAIRMENT TESTING

	1000 €	2020	2019
Goodwill from the acquisition of a subsidiary is allocated to a cash-generating unit as follows:
PCB manufacturing plant		3,000	3,000
The PCB manufacturing operations of the cash-generating unit Aspocomp Oulu. The plant primarily manufactures HDI (High Density Interconnection), multilayer and special material PCBs.
Impairment testing is carried out using the value-in-use method, in which the recoverable amount of the unit generating goodwill is determined and then compared with the book value of said unit. The cash flows after the forecast period are based on the average cash flow for the forecast years.
According to the impairment test, the recoverable amount exceeded the book amount by EUR 31.3 million, and thus goodwill was not impaired in 2020 (EUR 31.3 million in 2019) despite the COVID-19 pandemic.
Key variables and assumptions used in impairment testing		2020	2019
Annual growth in net sales is based on the budget approved by management for the years 2021-2024. The growth rate after the end of the forecast period is assumed to be one (1) percent.		15.5 %	8.3 %
The sales margin is based on the average budgeted margin for the forecast period.		43%	45%
The discount rate is set using the weighted average cost of capital (WACC), which describes the total cost of equity and liabilities, accounting for the specific risks of asset items. The discount rate is determined before taxes.		6.9 %	7.4 %
Investments during the period under review are based on the strategic investment plan approved by management. The level of investments somewhat exceeds the ordinary level of investments in the industry.
Sensitivity analysis of impairment testing
The following changes in the values of each of the key variables (if all the other variables remain unchanged) would mean that the book value of the unit would be the same as its recoverable amount.	Zero limit of the sensitivity analysis	Compared with the assumed figure
Annual growth in net sales	-5.1%	- 20.6 ppts
Average sales margin	16.0%	- 26.8 ppts
Discount rate	21.4%	+ 14.5 ppts
Assumptions concerning the discount rate	2020	2019
Risk-free market yield	-0.4 %	0.1 %
Gearing target (average based on an industry analysis)	9.5 %	9.5 %
Equity market risk premium (EMRP)	6.0 %	6.0 %
Additional risk premium for small companies with no liquid assets	2.0 %	2.0 %
Loan margin	2.0 %	2.0 %
Weighted average cost of capital (WACC)	6.9 %	7.4 %

ASPOCOMP ANNUAL REPORT 2020

Notes to THE CONSOLIDATED FINANCIAL STATEMENTS

26. FINANCIAL RISK MANAGEMENT

1000 €

Aspocomp is exposed to numerous financial risks in its ordinary operations. These risks are described in greater detail below. The President and CEO and the financial department identify, assess and if necessary hedge against financial risks and report to the Board of Directors on the financial position and adequacy of financing.

Liquidity risk

The company's liquidity is based on cash assets, the cash flow generated by business operations, and external financing.

At the end of the financial year 2020, the nominal value of interest-bearing liabilities was EUR 5.7 million. Gearing was 16.6 percent (19.0%) and equity ratio was 63.6 percent (61.3%).

The company has a credit facility of EUR 1.0 million, of which EUR 0.0 million was in use at the end of the financial year 2020.

Maturities of financial liabilities are presented in Note 17.

The company seeks to continuously evaluate and monitor the amount of financing to ensure that it has enough liquid funds to finance operations and repay maturing loans. To assess liquidity, the company has prepared a month-specific cash flow forecast for 2021. The forecast is updated on a monthly basis. On the basis of the cash flow forecast prepared during the drafting of the financial statements, the company estimates that it has enough working capital to meet its needs during the next 12 months, provided that the company's sales and production cost structure develop as predicted and the availability of financing does not weaken unexpectedly. The company has a EUR 1.0 million credit facility, of which EUR 0.0 million was in use as at December 31, 2020, and a recourse factoring agreement, of which EUR 0.0 million was in use at the end of the review period. These forms of finance used to safeguard liquidity include covenant term. The covenant terms were broken during the financial year 2020, but in 2020 the financiers gave a waiver for the financial year 2020.

Capital management

As equity, the company manages the shareholders' equity shown in the consolidated balance sheet. The objective is to ensure the continuity of the company's operations and the appreciation of shareholder value. The capital structure of the Group is monitored and forecast regularly in order to ensure liquidity. Capital management does not involve significant risks, as the shareholders' equity of the company is strong.

ASPOCOMP ANNUAL REPORT 2020

Notes to THE CONSOLIDATED FINANCIAL STATEMENTS

26. (continues)

1000 €

Interest rate risk

The Group has hedged against rises in the interest rates of the loan drawn down in 2020 with an interest rate collar. As a rise in interest rates can have a substantial effect on the interest costs of a loan, the interest rate collar safeguards the loan by agreeing on a minimum and maximum level for the reference rate. The interest payable on the loan is based on a reference rate with a minimum and maximum level over the validity of the interest rate collar as well as a loan margin. No separate fees are paid for the interest rate collar.

Foreign currency risk

The Group's production activities are carried out in Finland. In addition, the Group has subsidiaries in Germany and China. The Group's main currency is the euro and 62 percent of the Group's receivables are denominated in euros (at the end of year: 58%). The breakdown by currencies of the receivables is presented in Note 15. All the Group's long-term liabilities are denominated in euro. At the end of the year, 63 percent of the short-term debts were denominated in euros.

Calculation of exchange rate risk sensitivity

Change in exchange rate

1000 €	Gross	-10%	+ 10 %
USD/EUR	1064	-118	97
SEK/EUR	-1	0	0
GBP/EUR	-9	1	-1
	1054	-117	96

Credit risk

The Group trades only with recognized, creditworthy third parties. According to the credit policy agreed by the Board, all new customers are subject to credit verification procedures. The creditworthiness of existing customers is reviewed on a regular basis. Overdue receivables are reported to top management and the sales teams on a monthly basis and all the necessary actions are taken in order to collect the overdue receivables. On the reporting date, the maximum amount of financial assets exposed to credit risk was equal to their book value.

The five largest customers accounted for 41 percent of net sales (58% in 2019). During the financial year were recorded credit losses of EUR 0.3 million.

The age distribution of accounts receivable is presented in Note 15.

ASPOCOMP ANNUAL REPORT 2020

Notes to THE CONSOLIDATED FINANCIAL STATEMENTS

27. NOTES TO THE CONSOLIDATED CHANGES IN EQUITY

1000 €

	Number of shares
Jan. 1, 2019	6,666,505
Stock options	38,000
Dec. 31, 2019	6,704,505
Jan. 1, 2020	6,704,505
Stock options	136,935
Dec. 31, 2020	6,841,440

Share capital

Aspocomp Group Plc. has one share series. The maximum number of shares is 6,841,440 (6,704,505 shares in 2019). All issued shares are fully paid.

Treasury shares

The treasury share fund includes the treasury shares owned by the parent company, measured at acquisition cost. At the end of the fiscal years 2019 and 2020, the company did not hold any treasury shares.

Reserve for invested unrestricted equity

The reserve for invested unrestricted equity includes other equity investments and share subscription fees insofar as a decision has not been made to enter them into share capital. On the basis of the stock option programs launched after the new Companies Act (July 21, 2006/624) came into force (September 1, 2006), fees received from share subscriptions are recognized in full in the reserve for invested unrestricted equity.

Payment of dividends

28. EVENTS AFTER THE FINANCIAL PERIOD

No significant reportable events after the financial period.

ASPOCOMP ANNUAL REPORT 2020

Parent Company Financial Statement, FAS

PARENT COMPANY FINANCIAL STATEMENTS

PARENT COMPANY INCOME STATEMENT

	€ Note	1.1.-31.12.2020	1.1.-31.12.2019
Net sales	1.1	25,362,960.69	31,572,306.35
Change in finished goods and work in progress		-216,387.52	228,963.04
Other operating income	1.2	82,877.16	73,181.35
Materials and services	1.3	-11,669,090.41	-14,548,584.48
Personnel costs	1.4	-7,460,470.93	-7,421,328.60
Depreciation and write-downs	1.5	-2,936,088.01	-2,556,155.75
Other operating expenses	1.6	-4,682,241.88	-5,321,766.32
Operating loss		-1,518,440.90	2,026,615.59
Financial income and expenses	1.7	-294,669.49	-137,935.70
Profit/loss before appropriations and taxes		-1,813,110.39	1,888,679.89
Income tax	1.8	-35,342.96	0.00
Profit/loss for the year		-1,848,453.35	1,888,679.89

ASPOCOMP ANNUAL REPORT 2020

Parent Company Financial Statements, FAS

PARENT COMPANY BALANCE SHEET

Assets	Note	12/31/2020	12/31/2019
Non-current assets
Intangible assets	2.1	2,535,813.32	3,857,782.18
Property, plant and equipment	2.2	5,910,389.85	5,596,514.92
Right-of-use assets	2.3	996,199.60	1,327,909.41
Investments	2.4	207,166.94	127,130.50
Total non-current assets		9,649,569.71	10,909,337.01
Current assets
Inventories	2.5	3,111,751.52	3,505,469.04
Short-term receivables	2.6	5,430,774.04	8,478,744.85
Cash and cash equivalents		2,491,381.63	2,116,873.34
Total current assets		11,033,907.19	14,101,087.23
Total assets		20,683,476.90	25,010,424.24
Liabilities and shareholders' equity
Shareholders' equity	2.7
Share capital		1,000,000.00	1,000,000.00
Reserve for invested unrestricted equity		2,983,426.76	2,812,704.10
Retained earnings		5,467,836.87	4,605,372.98
Net profit/loss for the period		-1,848,453.35	1,888,679.89
Total shareholders' equity		7,602,810.28	10,306,756.97
Liabilities
Long-term liabilities	2.8	4,224,570.37	4,325,955.91
Short-term liabilities	2.9	8,856,096.25	10,377,711.36
Total liabilities		13,080,666.62	14,703,667.27
Total liabilities and shareholders' equity		20,683,476.90	25,010,424.24

ASPOCOMP ANNUAL REPORT 2020

Parent Company Financial Statements, FAS

PARENT COMPANY CASH FLOW STATEMENT

	€ 1.1.-31.12.2020	1.1.-31.12.2019
Cash flow from operations
Operating profit/loss	-1,848,453.35	1,888,679.89
Adjustments
Non-cash transactions	3,437,766.10	2,663,380.23
Change in working capital	2,318,023.77	-187,437.55
Paid interest expenses	-291,171.48	-150,786.99
Received interest income	0.00	106.62
Net cash flow from operations	3,616,165.04	4,213,942.20
Cash flow from investing activities
Purchase of tangible and intangible assets	-1,906,432.30	-3,545,894.63
Investments in holdings	-80,036.44	0.00
Proceeds from sale of tangible and intangible assets	27,800.00	65,600.00
Net cash flow from investing activities	-1,958,668.74	-3,480,294.63
Net cash flow before financing	1,657,496.30	733,647.57
Cash flow from financing activities
Loans drawn down	3,000,000.00	1,000,000.00
Loans repaid	-2,851,987.18	-827,513.42
Decrease in lease liabilities	-369,699.40	-344,033.33
Stock options exercised	139,100.00	0.00
Payments of dividends	-1,026,171.45	-799,944.96
Net cash flow from financing activities	-1,108,758.03	-971,491.71
Change in cash and cash equivalents	548,738.27	-237,844.14
Effects of exchange rate changes on cash and cash equivalents	-174,229.98	-4,245.33
Cash and cash equivalents at the beginning of period	2,116,873.34	2,358,962.81
Cash and cash equivalents at the end of period	2,491,381.63	2,116,873.34

ASPOCOMP ANNUAL REPORT 2020

Notes to the Financial Statements of the Parent Company

NOTES TO THE FINANCIAL STATEMENTS OF THE PARENT COMPANY, FAS

Accounting principles of the parent company

The financial statements of the company have been prepared in accordance with the procedures laid out in the Finnish Accounting Act and other Finnish Accounting Standards (FAS). The figures from the previous year have been adjusted for comparability. The financial statements are presented in euros.

Tangible and intangible assets

Intangible assets

Goodwill

Goodwill represents the share of the acquisition cost exceeding the company's share at the moment of acquisition of the fair value of the itemizable net assets of an acquired subsidiary. Goodwill from the acquisition of subsidiaries is included in intangible assets. For impairment testing, it is allocated to cash-generating units. Goodwill is tested for impairment annually and is recognized in the balance sheet at acquisition cost less impairment losses. An impairment loss on goodwill is not reversed. The carrying amount of goodwill related to a sold company has an effect on the capital gains or losses.

Research and development expenditure

The company does not engage in actual product development. Research and development expenditure represents general development of the production process that cannot be directly allocated to any customer order, but which does not fulfill the capitalization criteria of IAS 38. The company no longer engages in PCB technology-related research and development that would be directly connected to customer projects and which would therefore be capable of independently generating income. The company cannot separate the research phase from the development phase, and it does not engage in actual product development, and thus treats all production process-related expenditure as expenditure on the research phase (IAS 38.53).

Software

Purchased software is recorded in the balance sheet at the original cost less accumulated amortization and impairment, if any.

Intangible rights

Intangible assets with limited useful lives are recorded in the balance sheet at the original cost less accumulated amortization and impairment, if any.

The estimated useful lives of intangible assets are:

Intangible rights 3 years
Other intangible assets 5 - 10 years.

Property, plant and equipment and right-of-use assets

The estimated useful lives of property, plant and equipment are:

Buildings and structures
15 - 30 years

ASPOCOMP ANNUAL REPORT 2020

Notes to the Financial Statements of the Parent Company

Machinery and equipment 3 - 8 years
Other tangible assets 5 - 10 years
Land and water leased 20-22 years

The residual value of the assets and their useful lives are reviewed at least at each balance sheet date and, if necessary, adjusted to reflect changes in their expected economic benefits.

Gains and losses resulting from derecognition of property, plant and equipment are entered under other operating income or expenses.

Impairment of tangible and intangible assets

The company assesses asset items annually for indications of impairment. If there are such indications, the recoverable amount of said asset item is estimated and then compared with the carrying amount of the asset item in question. In addition, the recoverable amounts of goodwill are assessed annually. Impairment is examined at the level of cash-generating units - that is, at the lowest unit level that is primarily independent of other units and whose cash flows can be separated out from other cash flows.

Presentation of asset grants

Government grants are deducted in determining the carrying amount of an asset. The grant is recognized in profit or loss in the form of a decrease in depreciation during the useful life of the asset.

Financial assets and financial liabilities

Financial assets

All purchases and sales of financial assets are booked on the transaction date. Financial assets are derecognized from the balance sheet when the company has lost its contractual rights to their cash flows, or when the Group has substantially transferred the risks and rewards out of the company.

Financial assets at fair value through profit or loss are those non-derivative financial assets that are designated as available for sale or are not classified in any other group. They are included in non-current assets, unless the intention is to keep them less than 12 months from the closing date; if that is the case, they are recognized as current assets. Changes in fair value are transferred to the income statement when the investment is sold or when its value has declined such that an impairment loss must be recorded. Financial assets at fair value through profit or loss during the disclosed periods only include investments in unquoted shares whose acquisition cost is substantially equal to their fair value (based on, for instance, recent transactions). The markets for said shares are inactive and the company does not intend to divest itself of these shares in the near future.

ASPOCOMP ANNUAL REPORT 2020

Notes to the Financial Statements of the Parent Company

Cash and cash equivalents

Cash and cash equivalents consist of cash on hand and bank deposits. Cash and cash equivalents have a maximum maturity of three months from the date of acquisition.

Financial liabilities

Financial liabilities are recognized initially at their fair value. Transaction costs are included in financial liabilities' initial carrying amount. Later all financial liabilities are recognized at amortized cost. The difference between the money received (less transaction costs) and the amount to be repaid is entered in the income statement using the effective interest method over the loan period. Financial liabilities are included in non-current and current liabilities.

Impairment of financial assets

The Group applies a simplified procedure for the recognition of expected credit losses in accordance with IFRS 9, whereby all trade receivables and contractual assets are recognized over the life of the loan. For the purposes of determining expected credit losses, trade receivables and contractual assets are grouped based on common credit risk characteristics and late payment.

Net sales

Discounts, VAT and exchange rate differences of accounts receivable have been accounted for under adjustments to net sales.

Research and development expenditure

Research and development expenditure is fully expensed during the financial year in which it was incurred.

Extraordinary income and expenses

Extraordinary income and expenses include exceptional and significant events that are not related to the company's line operations.

Provisions

Provisions are recorded when the company has a legal or constructive obligation on the basis of a prior event and the materialization of the payment obligation is probable. A provision for restructuring is recognized when the company has prepared a detailed restructuring plan and the plan has been announced. The provision reflects management's best estimate of the present value of future expenditure.

Pension arrangements

In the financial statements, pension schemes in different countries are classified as defined contribution or defined benefit schemes. In defined contribution schemes, the company makes fixed

ASPOCOMP ANNUAL REPORT 2020

Notes to the Financial Statements of the Parent Company

payments to a separate unit. The company does not have a legal or constructive obligation to make additional payments if the recipient cannot pay the pension benefits in question. All such schemes that do not fulfill these conditions are considered to be defined benefit schemes. Payments for defined contribution schemes have been recorded in the income statement for the period to which the payment pertains.

The company has pension schemes that have been classified as defined contribution or defined benefit schemes. In defined contribution schemes, payments have been recorded in the income statement for the period to which the payment pertains.

Items denominated in foreign currencies

Taxes

Taxes on the company's financial results for the period, adjustments of taxes from previous periods and the change in deferred taxes are recorded as the Group's taxes. The deferred tax asset or liability is calculated on all temporary differences between carrying amounts and taxable values, applying the tax rates confirmed on the closing date. Deferred tax assets are recognized from confirmed losses by applying the average result for the past four financial years, to the future financial years in which losses confirmed in taxation can be used. Deferred tax assets arising from acquisition costs that have not been deducted in taxation are recognized in full in undeducted acquisition costs at the end of the reported financial year.

Deferred tax is not recognized on the undistributed profits of subsidiaries when it is probable that the temporary difference will not be dissolved in the foreseeable future.

ASPOCOMP ANNUAL REPORT 2020

Notes to the Financial Statements of the Parent Company

1.1 NET SALES BY GEOGRAPHICAL AREA

	2020	2019
Europe	21,624,249.70	31,019,236.81
Rest of the world	3,738,710.99	553,069.54
Total	25,362,960.69	31,572,306.35

1.2 OTHER OPERATING INCOME

	2020	2019
Gains on sale of tangible assets	27,800.00	22,500.00
Other income	55,077.16	50,681.35
Total	82,877.16	73,181.35

1.3 MATERIALS AND SERVICES

	2020	2019
Purchase during accounting period	11,082,066.89	14,236,727.21
Change in inventories	177,330.00	-348,398.00
Subcontracting (external services)	409,693.52	660,255.27
Total	11,669,090.41	14,548,584.48

1.4 NOTES ON PERSONNEL AND MEMBERS OF ADMINISTRATIVE BODIES

	2020	2019
Personnel costs
Salaries and wages	6,327,276.20	6,201,585.53
Fees	0.00	0.00
Pension costs	895,702.03	972,825.52
Other personnel costs	237,492.70	246,917.55
Total	7,460,470.93	7,421,326.60
Management salaries and benefits
CEO and Board Members	738,101.60	472,035.40
Personnel at the end of year
Non-office workers	87	80
Salaried employees	45	46
Total	132	126
Personnel on average during the year
Non-office workers	87	75
Salaried employees	47	44
Total	134	119

ASPOCOMP ANNUAL REPORT 2020

Notes to the Financial Statements of the Parent Company

1.5 DEPRECIATIONS AND WRITE-DOWNS

	2020	2019
Depreciation of intangible rights	1,416,664.46	1,406,029.63
Depreciation of machinery and equipment	1,519,423.55	1,150,126.12
Total	2,936,088.01	2,556,155.75

1.6 OTHER OPERATING EXPENSES

	2020	2019
Rental expenses	70,424.66	79,143.48
Real estate costs	223,428.88	480,710.16
Energy costs	912,054.56	851,869.23
IT costs	292,755.83	276,617.21
External services	902,508.14	1,173,118.36
Other expenses	2,281,069.81	2,460,307.88
Total	4,682,241.88	5,321,766.32
Auditor's fees
1. Auditing	54,338.45	60,068.00
2. Tax consultation	0.00	0.00
3. Certificates and statements	2,858.00	1,632.00
4. Other services	4,400.00	4,060.66
Total	61,596.45	65,760.66

1.7 FINANCIAL INCOME AND EXPENSES

	2020	2019
Interest and other financial income
From group companies	0.00	0.00
From others	0.00	106.62
Total	0.00	106.62
Interest and other financial expenses
To group companies	0.00	0.00
To others	294,669.49	138,042.32
Total	294,669.49	138,042.32
Total financial income and expenses	-294,669.49	-137,935.70

1.8 INCOME TAX

	€	2020	2019
Branch taxes		35,342.96	0.00
Total		35,342.96	0.00

ASPOCOMP ANNUAL REPORT 2020

Notes to the Financial Statements of the Parent Company

2.1 INTANGIBLE ASSETS

€

2020	Intangible rights	Goodwill	Other long-lived assets	Total
Acquisition cost Jan. 1, 2020	603,547.29	13,051,744.81	525,041.87	14,180,333.97
Increase	94,695.60	0.00	0.00	94,695.60
Decrease	-107,411.48	0.00	0.00	-107,411.48
Acquisition cost Dec. 31, 2020	590,831.41	13,051,744.81	525,041.87	14,167,618.09
Accumulated depreciation Jan. 1, 2020	343,537.17	9,462,514.98	516,499.64	10,322,551.79
Accumulated depreciation of decreases and transfers	-107,411.48	0.00	0.00	-107,411.48
Depreciation for the year	107,497.96	1,305,174.48	3,992.02	1,416,664.46
Accumulated depreciation Dec. 31, 2020	343,623.65	10,767,689.46	520,491.66	11,631,804.77
Book value Dec. 31, 2020	247,207.76	2,284,055.35	4,550.21	2,535,813.32
2019	Intangible rights	Goodwill	Other long-lived assets	Total
---	---	---	---	---
Acquisition cost Jan. 1, 2019	702,047.14	13,051,744.81	525,041.87	14,278,833.82
Increase	72,957.73	0.00	0.00	72,957.73
Decrease	-171,457.58	0.00	0.00	-171,457.58
Acquisition cost Dec. 31, 2019	603,547.29	13,051,744.81	525,041.87	14,180,333.97
Accumulated depreciation Jan. 1, 2019	421,075.68	8,157,340.50	508,097.32	9,086,513.50
Accumulated depreciation of decreases and transfers	-169,991.34	0.00	0.00	-169,991.34
Depreciation for the year	92,452.83	1,305,174.48	8,402.32	1,406,029.63
Accumulated depreciation Dec. 31, 2019	343,537.17	9,462,514.98	516,499.64	10,322,551.79
Book value Dec. 31, 2019	260,010.12	3,589,229.83	8,542.23	3,857,782.18

ASPOCOMP ANNUAL REPORT 2020

Notes to the Financial Statements of the Parent Company

2.2 TANGIBLE ASSETS AND RIGHT-OF-USE ASSETS
€

2020	Buildings and structures	Land areas	Machinery and equipment	Advance payments & constructions in progress	Total
Acquisition cost Jan. 1, 2020	1,409,147.54	168,065.23	9,918,783.14	1,460,671.02	12,956,666.93
Increase	10,453.99	0.00	848,152.74	642,981.94	1,501,588.67
Decrease	0.00	0.00	-611,718.34	0.00	-611,718.34
Transfers between items	0.00	0.00	1,460,671.02	-1,460,671.02	0.00
Acquisition cost Dec. 31, 2020	1,419,601.53	168,065.23	11,615,888.56	642,981.94	13,846,537.26
Accumulated depreciation Jan. 1, 2020	149,599.33	7,639.32	5,875,003.95	0.00	6,032,242.60
Accumulated depreciation of decreases and transfers	0.00	0.00	-611,718.34	0.00	-611,718.34
Depreciation for the year	95,807.00	7,639.32	1,415,977.23	0.00	1,519,423.55
Accumulated depreciation Dec. 31, 2020	245,406.33	15,278.64	6,679,262.84	0.00	6,939,947.81
Book value Dec. 31, 2020	1,174,195.20	152,786.59	4,936,625.72	642,981.94	6,906,589.45
2019
Acquisition cost Jan. 1, 2019	1,248,000.00	0.00	7,869,892.16	917,188.18	10,035,080.34
Increase	161,147.54	168,065.23	2,278,652.23	1,283,171.02	3,891,036.02
Decrease	0.00	0.00	-969,449.43	0.00	-969,449.43
Transfers between items	0.00	0.00	739,688.18	-739,688.18	0.00
Acquisition cost Dec. 31, 2019	1,409,147.54	168,065.23	9,918,783.14	1,460,671.02	12,956,666.93
Accumulated depreciation Jan. 1, 2019	62,400.06	0.00	5,049,477.66	0.00	5,111,877.72
Accumulated depreciation of decreases and transfers	0.00	0.00	-229,761.25	0.00	-229,761.25
Depreciation for the year	87,199.27	7,639.32	1,055,287.54	0.00	1,150,126.13
Accumulated depreciation Dec. 31, 2019	149,599.33	7,639.32	5,875,003.95	0.00	6,032,242.60
Book value Dec. 31, 2019	1,259,548.21	160,425.91	4,043,779.19	1,460,671.02	6,924,424.33

ASPOCOMP ANNUAL REPORT 2020

Notes to the Financial Statements of the Parent Company

2.3 RIGHT-OF-USE ASSETS

€

Property, plant and equipment include leased as follows:

2020	Land areas	Machinery and equipment	Total
Acquisition cost Jan. 1, 2020	168,065.23	2,200,190.41	2,368,255.64
Increase	0.00	40,868.11	40,868.11
Decrease	0.00	0.00	0.00
Acquisition cost Dec. 31, 2020	168,065.23	2,241,058.52	2,409,123.75
Accumulated depreciation Jan. 1, 2020	7,639.32	1,032,706.91	1,040,346.23
Accumulated depreciation of decreases and transfers	0.00	0.00	0.00
Depreciation for the year	7,639.32	364,938.60	372,577.92
Accumulated depreciation Dec. 31, 2020	15,278.64	1,397,645.51	1,412,924.15
Book value Dec. 31, 2020	152,786.59	843,413.01	996,199.60
2019
Acquisition cost Jan. 1, 2019	0.00	1,813,163.10	1,813,163.10
Increase	168,065.23	387,027.31	555,092.54
Decrease	0.00	0.00	0.00
Acquisition cost Dec. 31, 2019	168,065.23	2,200,190.41	2,368,255.64
Accumulated depreciation Jan. 1, 2019	0.00	679,220.36	679,220.36
Accumulated depreciation of decreases and transfers	0.00	0.00	0.00
Depreciation for the year	7,639.32	353,486.55	361,125.87
Accumulated depreciation Dec. 31, 2019	7,639.32	1,032,706.91	1,040,346.23
Book value Dec. 31, 2019	160,425.91	1,167,483.50	1,327,909.41

ASPOCOMP ANNUAL REPORT 2020

Notes to the Financial Statements of the Parent Company

2.4 INVESTMENTS

€

2020	Shares		Receivables	Total
	Group companies	Others	Group companies
Book value Jan. 1, 2020	112,234.00	14,896.50	0.00	127,130.50
Increases	0.00	80,036.44	0.00	80,036.44
Decreases	0.00	0.00	0.00	0.00
Book value Dec. 31, 2020	112,234.00	94,932.94	0.00	207,166.94

2019

Book value Jan. 1, 2019	112,234.00	14,896.50	0.00	127,130.50
Increases	0.00	0.00	0.00	0.00
Decreases	0.00	0.00	0.00	0.00
Book value Dec. 31, 2019	112,234.00	14,896.50	0.00	127,130.50
Group companies	Domicile	Group interest (%)	Parent company (%)	Parent company's (no.)
---	---	---	---	---

Aspocomp Trading Oy	Finland	100.00	100.00	320
Aspocomp GmbH	Germany	100.00	100.00	2
AC Shenzhen Electronics Co., Ltd. China		100.00	100.00
Total
Other shares and participations
Other shares
Total

2.5 INVENTORIES

€	2020	2019
Materials and supplies	1,907,554.00	2,084,884.00
Work in progress	427,894.00	755,712.00
Finished goods	776,303.52	664,873.04
Total	3,111,751.52	3,505,469.04

2.6 SHORT-TERM RECEIVABLES

€	2020	2019
Accounts receivable	5,153,206.04	7,555,238.69
Other receivables	40,000.00	735,350.11
Other accrued income	237,568.00	188,156.05
Short-term receivables, total	5,430,774.04	8,478,744.85

ASPOCOMP ANNUAL REPORT 2020

Notes to the Financial Statements of the Parent Company

2.7 SHAREHOLDERS' EQUITY

	2020	2019
Shareholders' equity Jan. 1	1,000,000.00	1,000,000.00
Shareholders' equity Dec. 31	1,000,000.00	1,000,000.00
Reserve for invested unrestricted equity Jan. 1	2,812,704.10	2,783,228.10
Increase	170,722.66	29,476.00
Reserve for invested unrestricted equity Dec. 31	2,983,426.76	2,812,704.10
Retained earnings Jan. 1	6,494,052.87	5,405,353.58
Dividends paid	-1,026,216.00	-799,980.60
Retained earnings Dec. 31	5,467,836.87	4,605,372.98
Net profit/loss for the period	-1,848,453.35	1,888,679.89
Total balance	7,602,810.28	10,306,756.97
Distributable funds in unrestricted equity	6,602,810.28	9,306,756.97

2.8 NON-CURRENT LIABILITIES

	2020	2019
Loans from financial institutions
Loans from financial institutions	3,410,526.31	3,226,660.00
Financial leasing debts	663,167.06	942,524.90
Lease liability	150,877.00	156,771.01
Non-current liabilities, total	4,224,570.37	4,325,955.91

ASPOCOMP ANNUAL REPORT 2020

Notes to the Financial Statements of the Parent Company

2.9 CURRENT LIABILITIES

	2020	2019
Loans from financial institutions
Bank loans	991,578.95	1,026,670.00
Financial leasing debts	396,895.33	440,640.88
Derivative financial instruments	0.00	6,387.00
Lease liability	5,893.93	5,727.82
Factoring debt	892.43	1,654.87
Total	1,395,260.64	1,481,080.57
Accounts payable, other payables and accrued expenses
Accounts payable	2,203,624.67	3,415,561.09
Other payables	194,719.08	155,460.40
Accrued expenses	1,231,961.28	1,494,001.58
Total	3,630,305.03	5,065,023.07
Material items in accrued expenses:
Periodization of personnel expenses	961,276.34	1,300,691.97
Interest periodization of loans	5,107.22	1,739.88
Vat liabilitiesat theyear end	0.00	44,873.01
Other items	265,577.72	146,696.72
Total	1,231,961.28	1,494,001.58
Liabilities to Group companies
Liabilities to Group companies	3,830,530.58	3,831,607.72
Current liabilities, total	8,856,096.25	10,377,711.36

3.1 CONTINGENCIES AND COMMITMENTS

	2020	2019
Other rental payables
Minimum rents of other rent agreements that cannot be terminated
Within one year	46,915.03	56,815.14
After one year but not more than five years	2,016.00	7,692.33
More than five years	0.00	0.00
Total	48,931.03	64,507.47
Contingent liabilities at Dec. 31, 2020
Guarantees
Business mortgage	6,000,000.00	6,000,000.00
Collateral note	1,200,000.00	1,200,000.00
Guaranteed contingent liability towards the Finnish Customs	35,000.00	35,000.00
Total	7,235,000.00	7,235,000.00

ASPOCOMP ANNUAL REPORT 2020

BOARD OF DIRECTORS' DIVIDEND PROPOSAL AND SIGNATURES

According to the financial statements dated December 31, 2020 the parent company's distributable earnings amounted to EUR 6,602,810.28, of which the retained earnings were EUR 3,619,383.52.

Helsinki, March 9, 2021

Päivi Marttila
Chairman of the Board

K Marina Muurinen
Vice Chairman of the Board

Julianna Borsos
Member

Juha Putkiranta
Member

Mikko Montonen
President and CEO

THE AUDITOR'S NOTE

The audit carried out has been submitted Auditor's Report today.

Helsinki, March 9, 2021

PricewaterhouseCoopers Oy
Authorized Public Accountants

Jouko Malinen
Authorized Public Accountant

ASPOCOMP ANNUAL REPORT 2020

AUDITOR'S REPORT

(Translation of the Finnish Original)

To the Annual General Meeting of Aspocomp Group Oyj

REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS

OPINION

In our opinion

the consolidated financial statements give a true and fair view of the group's financial position and financial performance and cash flows in accordance with International Financial Reporting Standards (IFRS) as adopted by the EU
the financial statements give a true and fair view of the parent company's financial performance and financial position in accordance with the laws and regulations governing the preparation of the financial statements in Finland and comply with statutory requirements.

Our opinion is consistent with the additional report to the Audit Committee of the Board of Directors.

What we have audited

We have audited the financial statements of Aspocomp Group Oyj (business identity code 1547801-5) for the year ended 31 December 2020. The financial statements comprise:

the consolidated balance sheet, statement of comprehensive income, statement of changes in equity, statement of cash flows and notes, including a summary of significant accounting policies
the parent company's balance sheet, income statement, statement of cash flows and notes.

BASIS FOR OPINION

We conducted our audit in accordance with good auditing practice in Finland. Our responsibilities under good auditing practice are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Independence

We are independent of the parent company and of the group companies in accordance with the ethical requirements that are applicable in Finland and are relevant to our audit, and we have fulfilled our other ethical responsibilities in accordance with these requirements.

To the best of our knowledge and belief, the non-audit services that we have provided to the parent company and to the group companies are in accordance with the applicable law and regulations in Finland and we have not provided non-audit services that are prohibited under Article 5(1) of Regulation (EU) No 537/2014. The non-audit services that we have provided are disclosed in note 6 to the Financial Statements.

ASPOCOMP ANNUAL REPORT 2020

AUDITOR'S REPORT

OUR AUDIT APPROACH

OVERVIEW

Overall group materiality: € 230 000 (previous year € 280 000), which represents 0,9 % of net sales 2020
Audit scope: The audit scope included the Group parent entity
Revenue recognition
Valuation of goodwill
Valuation of deferred tax assets

As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the financial statements. In particular, we considered where management made subjective judgements; for example, in respect of significant accounting estimates that involved making assumptions and considering future events that are inherently uncertain.

Materiality

The scope of our audit was influenced by our application of materiality. An audit is designed to obtain reasonable assurance whether the financial statements are free from material misstatement. Misstatements may arise due to fraud or error. They are considered material if individually or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the financial statements.

Based on our professional judgement, we determined certain quantitative thresholds for materiality, including the overall group materiality for the consolidated financial statements as set out in the table below. These, together with qualitative considerations, helped us to determine the scope of our audit and the nature, timing and extent of our audit procedures and to evaluate the effect of misstatements on the financial statements as a whole.

Overall group materiality	€ 230 000 (previous year € 280 000)
How we determined it	0,9 % of net sales 2020
Rationale for the materiality benchmark applied	We chose net sales as the benchmark because, in our view, it reflects the volume and growth objectives Group’s business operations. Because the profit performance of the company is not steady, net sales is also a generally accepted benchmark. The percentage applied in the calculation is within the range of generally accepted quantitative materiality thresholds.

How we tailored our group audit scope

We tailored the scope of our audit, taking into account the structure of the group, the accounting processes and controls, and the industry in which the group operates.

Aspocomp Group has one operative company, the Group parent, which has been selected into the audit scope. Group parent audit covers almost 100 % of the consolidated net sales.

ASPOCOMP ANNUAL REPORT 2020

AUDITOR'S REPORT

KEY AUDIT MATTERS

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

As in all of our audits, we also addressed the risk of management override of internal controls, including among other matters consideration of whether there was evidence of bias that represented a risk of material misstatement due to fraud.

Key audit matter in the audit of the group	How our audit addressed the key audit matter
Revenue recognition
For more information on revenue recognition please refer to the Accounting Principles of the Group Financial Statements and Note 1. Net Sales Income
Revenue for sale of goods is recognized when significant risks and benefits related to the ownership have transferred to the buyer and the group no longer has right of possession or actual control over a good. In calculation of revenue, the sales income is adjusted by indirect taxes and granted discounts.
We concentrated to the audit of revenue cut-off, as there is a risk that revenue from sales transactions is recognized to wrong period.	Our audit procedures included for example the following procedures:
• We reviewed net sales recording to the correct accounting period by inspecting sales transactions recorded as revenue both before and after the last day of the financial period. For the selected sales transactions, we verified recognition of revenue in the correct financial period by going through delivery notes that the revenue was recorded to the correct financial period.
• We reviewed on a sample of sales transactions and validated the selected transactions to both sales invoices and delivery notes.
• We performed IT assisted audit procedures on Group net revenue analyzing all sales transactions during the financial period and ascertained logical accounting treatment of all revenue recognition bookings.
Valuation of goodwill
For information on valuation of goodwill refer to Accounting Principles of the Group Financial Statements and Note 25. Impairment Testing
The company is obliged to test valuation of goodwill for depreciation at least once a year. The consolidated group goodwill at year end is € 3 million and relates to the circuit board factory in Oulu.
This area is important for the audit, as impairment testing involves management consideration regarding the key assumptions such as average increase rate of goodwill over the cash flow forecast period, gross margin and the discount rate used in the calculations. We concentrated on cash flow forecasts, as these involve most inherent judgement.	Our audit procedures included for example the following procedures:
• We reviewed the estimates of annual increase in net sales and discount rate used in impairment testing, and traced them to budgets approved by the board of directors.
• We evaluated and challenged the future cash flow forecasts and discount rate, and reviewed the process of forming those forecasts. We validated the mathematic accuracy of the impairment testing calculations.
• We compared the actual results of the year ended with the forecasts used in the impairment testing calculations, and reviewed impairment testing of prior years in view of realization in order to ensure that the management forecasts

ASPOCOMP ANNUAL REPORT 2020

AUDITOR'S REPORT

Based on impairment testing, the recoverable amount exceeded the book value and thus goodwill was not impaired in 2020.

were not too optimistic e.g. in terms of estimated margins and net sales increase rate.

We reviewed the sensitivity analyses made by the management, which have been prepared by estimating the effects of the increase of net sales, weakening of the gross margin and changes in the discount rate both individually and in aggregate to the results of the impairment testing.

Valuation of deferred tax assets

For information on valuation of deferred tax assets refer to Accounting Principles of the Group Financial Statements and Note 8. Income Taxes

The Group’s consolidated balance sheet includes deferred tax assets of € 5,0 million, which were mainly recorded from slowed tax depreciations. Over the financial period the deferred tax assets have increased by € 0,4 million. Valuation of deferred tax assets involves inherent management judgement, since utilisation of the tax assets is subject to the company being likely to have taxable income in the future, based on which valuation of deferred tax assets is a key audit matter.

In addition, the Group confirmed losses for the parent company from previous financial periods, for which no deferred tax assets have been recorded in the Group consolidated balance sheet per 31 December, 2020.

Our audit procedures included for example the following procedures:

We challenged the management forecasts of future taxable income. We verified the conformity of these forecasts with the estimates used for impairment testing.
We reviewed the grounds for recording deferred tax assets prepared by the management and challenged the management on the prerequisites for recording deferred tax assets.
We validated the mathematic accuracy of the calculations prepared by management.
We also evaluated accuracy of previous forecasts in comparison with actual financial performance of the Group.

We have no key audit matters to report with respect to our audit of the parent company financial statements.

There are no significant risks of material misstatement referred to in Article 10(2c) of Regulation (EU) No 537/2014 with respect to the consolidated financial statements or the parent company financial statements.

RESPONSIBILITIES OF THE BOARD OF DIRECTORS AND THE MANAGING DIRECTOR FOR THE FINANCIAL STATEMENTS

The Board of Directors and the Managing Director are responsible for the preparation of consolidated financial statements that give a true and fair view in accordance with International Financial Reporting Standards (IFRS) as adopted by the EU, and of financial statements that give a true and fair view in accordance with the laws and regulations governing the preparation of financial statements in Finland and comply with statutory requirements. The Board of Directors and the Managing Director are also responsible for such internal control as they determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the Board of Directors and the Managing Director are responsible for assessing the parent company’s and the group’s ability to continue as a going concern, disclosing, as applicable, matters relating to going concern and using the going concern basis of accounting. The financial statements are prepared using the going concern basis of accounting unless there is an intention to liquidate the parent company or the group or to cease operations, or there is no realistic alternative but to do so.

ASPOCOMP ANNUAL REPORT 2020

AUDITOR'S REPORT

AUDITOR'S RESPONSIBILITIES FOR THE AUDIT OF THE FINANCIAL STATEMENTS

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with good auditing practice will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with good auditing practice, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the parent company's or the group's internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of the Board of Directors' and the Managing Director's use of the going concern basis of accounting and based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the parent company's or the group's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the parent company or the group to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events so that the financial statements give a true and fair view.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor's report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

ASPOCOMP ANNUAL REPORT 2020

AUDITOR'S REPORT

OTHER REPORTING REQUIREMENTS

APPOINTMENT

PricewaterhouseCoopers Oy was first appointed as auditors by the annual general meeting of Aspo Oyj (demerged company liquidated) which decided on the demerger 15.4.1999. Our appointment represents a total period of uninterrupted engagement of 21 years starting from the establishment of Aspocomp Group Oyj 1.10.1999 and the Company has been public interest entity for the whole period.

OTHER INFORMATION

The Board of Directors and the Managing Director are responsible for the other information. The other information comprises the report of the Board of Directors and the information included in the Annual Report but does not include the financial statements and our auditor's report thereon. We have obtained the report of the Board of Directors prior to the date of this auditor's report and the Annual Report is expected to be made available to us after that date.

Our opinion on the financial statements does not cover the other information.

In connection with our audit of the financial statements, our responsibility is to read the other information identified above and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated. With respect to the report of the Board of Directors, our responsibility also includes considering whether the report of the Board of Directors has been prepared in accordance with the applicable laws and regulations.

In our opinion

the information in the report of the Board of Directors is consistent with the information in the financial statements
the report of the Board of Directors has been prepared in accordance with the applicable laws and regulations.

If, based on the work we have performed on the other information that we obtained prior to the date of this auditor's report, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Helsinki, 9 March 2021

PricewaterhouseCoopers Oy
Authorised Public Accountants

Jouko Malinen
Authorised Public Accountant (KHT)

ASPOCOMP ANNUAL REPORT 2020

CORPORATE GOVERNANCE / The Board of Directors

GOVERNANCE

THE BOARD OF DIRECTORS, DECEMBER 31, 2020

PÄIVI MARTTILA

Chairman

M.Sc. (Econ.), born 1961, Finnish Citizen

Independent member of the Board since 2013 and Chairman of the Board since 2014

Primary work experience

Sievi Capital Plc, CEO, 2018-, Midagon Oy, CEO, 2012-16, Flextronics Group, VP Sales and Marketing, 2005-11, Plamec Oy, CEO, 2002-05, QPR Software Oyj, Director and Founder, 1991-2001.

Key positions of trust

Midagon Oy, Chairman of the Board, Patria Oyj, Member of the Board.

KAARINA MUURINEN

Vice Chairman

M.Sc. (Econ.), born 1958, Finnish Citizen

Independent member of the Board and Vice Chairman of the Board since 2015

Primary work experience

Vaisala Oyj, CFO, 2011-, Nokia Oyj, Vice President, Supply Chain Finance & Control, 2008-11, Vice President, Shared Accounting Services, 2003-08, Director, Financial Services Platform, 1998-2003, Hewlett-Packard Brussels Coordination Center, Accounting Manager, Europe Inventory & Revenue, 1994-98.

JULIANNA BORSOS

Member of the Board

D.Sc. (Econ.), born 1971, Finnish Citizen

Independent of the company, dependent of significant shareholders of the company, member of the Board since 2017

Primary work experience

Private Equity company Bocap, Founder and CEO, 2011-, Intelligem Oy, Merasco Capital Oy, Investment Bank Executive & Partner, 2002-2009, Mandatum, Partner and Head of International Operations, 1999-2001, Nordea, Economist and Chief Analyst, European emerging markets, 1997-1999, ETLA, Researcher, 1993-1997

Key positions of trust

Bocap Group and its subsidiaries, Chairman of the Board, Suomen Hypoteekkiyhdistys, EAB Group Oyj, MediVida Oy, Administer Oy, Member of the Board, The EU Comission's Horizon 2020 funding program, Member of the selection panel, Detection technology Oyj, Member of the Board 2013-2015.

JUHA PUTKIRANTA

Member of the Board

M.Sc. (Engineering), born 1957, Finnish Citizen

Independent member of the Board, 2016-

Primary work experience

Saafricon Oy, CEO and owner, 2015-, Microsoft Corporation, Corporate Vice President, 2014, Nokia Oyj, Executive Vice President, Operations, 2013-14, Nokia Oyj, Senior Vice President, executive positions, 1997-12, Symbian Ltd, Member of the Board, 1998-01, Hewlett-Packard Corporation, Director of Marketing, Europe and Africa, Electronic Measurement solutions, 1992-97, Siar Oy, consult, 1986-87, Nokia Oyj, various projects, sales & marketing management positions, Information Solutions, 1979-86.

Key positions of trust

Familings Oy and Variantum Oy, Chairman of the Board, Bittium Corporation, Nordcloud Oy and 4TS Oy, Member of the Board, Meontrust Oy, Advisor of the Board

ASPOCOMP ANNUAL REPORT 2020

CORPORATE GOVERNANCE / Management Team

THE MANAGEMENT TEAM, DECEMBER 31, 2020

MIKKO MONTONEN

President and CEO

M.Sc. (Tech.), b. 1965, Finnish citizen

CEO and Chairman of the Management Team as of April 15, 2014

the President, 2008-14, Executive Vice President, Sales, 2008-10 and Senior Vice President, Sales and Marketing, 2004-07, Okmetic Inc., North America, President, Vice President, Sales and Marketing, 2000-04, Okmetic Oy, Sales Manager, Process Engineer, 1991-99.

ANTTI OJALA

Vice President, Business Development & Deputy CEO

M.Sc. (Eng.), b. 1979, Finnish citizen

VP, Business Development and member of the Management Team as of October 25, 2013

Previous work experience: various positions in Aspocomp Group Plc. since 2003.

ARI BEILINSON

Vice President, Sales and Marketing

M.Sc. (Econ.), born 1963, Finnish citizen

VP, Sales and Marketing as of April 29, 2019

Previous work experience: Ramboll Finland Oy, Sales and Management positions, 2018, Recright.com, CEO, 2011-2017, iConsulting Finland Oy, CEO and consultant, 2009-2011, SRV Group, EVP, 2006-2009, Nokia Plc, Sales and Management positions, 1994-2006, IBM, Sales and Management positions, 1988-1994

JARI ISOAHO

Chief Operational Officer

B.Sc. (Eng.), b. 1960, Finnish citizen

COO and member of the Management Team as of September 19, 2011

Primary work experience: various positions in Aspocomp Group Plc., 1989-

JOUNI KINNUNEN

Chief Financial Officer

Diploma in Business and Administration, b. 1960, Finnish citizen

CFO and member of the Management Team as of September 19, 2011

Primary work experience: various positions in Aspocomp Group Plc., 1984-

MITRI MATTILA

Chief Technology Officer

M.Sc. (Eng.), b. 1973, Finnish citizen

CTO and member of the Management Team as of February 26, 2018

Primary work experience: various positions in Aspocomp Group Plc., 1997-

After the reporting period, on January 7, 2021 Aspocomp announced changes in the Management Team. Antti Ojala was appointed Chief Operating Officer as of January 7, 2021. He succeeds Jari Isoaho. Prior to this, Antti Ojala has served as Aspocomp's VP, Business Development.

ASPOCOMP ANNUAL REPORT 2020

GOVERNANCE/ Responsibility

INFORMATION FOR SHAREHOLDERS

INVESTOR RELATIONS

The Group’s investor relations contact is Mikko Montonen, CEO.
Tel. +358 20 775 6860, [email protected]

FINANCIAL INFORMATION

Aspocomp Group Plc.’s financial information publication schedule for 2021 is:

Interim report for January-March: Tuesday, April 27, 2021
Half-year report for January-June: Thursday, August 12, 2021
Interim report for January-September: Thursday, November 4, 2021.

Interim reports will be published at around 9:00 a.m. (EET).

ANNUAL GENERAL MEETING, APRIL 13, 2021

The Annual General Meeting of Aspocomp Group Plc. will be held on Tuesday, April 13, 2021 at 10:00 a.m. (EET). The meeting will take place at Stage studio, Itämerenkatu 3, Helsinki, Finland. In order to prevent the spread of the Covid-19 pandemic, the Annual General Meeting will be held without shareholders’ and their proxy representatives’ presence at the meeting venue.

The Board of Directors of the company has resolved on the exceptional procedure for the meeting based on the temporary legislative act to limit the spread of the Covid-19 pandemic (677/2020) entered into force on 3 October 2020. The company has resolved to take actions enabled by the act in order to hold the meeting in a predictable manner, taking into account the health and safety of the company’s shareholders, personnel and other stakeholders.

Each shareholder who is registered on March 30, 2021 in the shareholders’ register of the company held by Euroclear Finland Oy, has the right to participate in the Annual General Meeting. A holder of nominee registered shares has the right to participate in the Annual General Meeting by virtue of shares based on which he/she/it on the record date of the meeting, i.e., on March 30, 2021, would be entitled to be registered in the shareholders’ register of the company held by Euroclear Finland Oy.

Shareholders can participate in the General Meeting and use their shareholder rights in connection with the General Meeting only by voting in advance (either personally or through a proxy representative), by submitting counterproposals in advance and by asking questions in advance Proxy representatives must also vote in advance Shareholders may follow the Annual General Meeting remotely on the internet via video stream. Shareholders following the meeting this way are not considered to participate in the Annual General Meeting and thus may not exercise shareholder’s right to pose questions or vote in the meeting. This is therefore not a question of remote participation in accordance with the Finnish Limited Liability Companies Act, but the possibility of following the General Meeting remotely.

Further information about the agenda of the AGM and right to participate and registration can be found in the Notice of the AGM, which is available on the company’s website at www.aspocomp.com/agm as of March 10, 2021.

PAYMENT OF DIVIDENDS

ASPOCOMP ANNUAL REPORT 2020

GOVERNANCE / RESPONSIBILITY

CONTACT INFORMATION

Aspocomp Group Plc

SALES

Finland	Tutkijantie 11, 90590 Oulu	P: +358 20 775 6860
	Keilaranta 1, 02150 Espoo	P: +358 20 775 6860
Germany	Siegfriedstraße 1, 86356 Neusäβ	P: +49 821 454 4913
	Paracelsusstrasse 10, 72762 Reutlingen	P: +49 7121 230 902
Sweden	Köpenhamnsvägen 101, 217 75 Malmö	P: +46 702 120 065
United Kingdom	8 Second Cross road, TW2 5RF Twickenham	P: +44 776 142 228

PRODUCTION

Finland	Tutkijantie 11, 90590 Oulu	P: +358 20 775 6860

CHINA OPERATIONS

| Shenzhen | Room 901B, Building B, Nanxian commercial Plaza, 43# of MeiLong Road, LongHua district, Shenzhen People's Republic of China | P: +86 755 8376 156
F: +86 755 8376 1766
(Post code: 518131) |
| --- | --- | --- |

HEADQUARTERS

Finland	Keilaranta 1, 02150 Espoo	P: +358 20 775 6860

www.aspocomp.com

ASPOCOMP - HEART OF TECHNOLOGY

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Aspocomp Group Oyj — Annual Report 2020

3301_rns_2021-03-23_64fa7c99-ccf6-417d-8678-6fd765ad3024.pdf

2020

ANNUAL REPORT

CEO'S REVIEW

REPORT OF THE BOARD OF DIRECTORS 2020

NET SALES AND EARNINGS 2020

Impact of the COVID-19 pandemic

INVESTMENTS AND R&D

CASH FLOW AND FINANCING

DEFERRED TAX ASSETS

PERSONNEL

ENVIRONMENT

THE ANNUAL GENERAL MEETING 2020

The Board of Directors

Authorizations given to the Board

Dividend

Author

The Board of Directors' organization meeting

THE MANAGEMENT TEAM

CORPORATE GOVERNANCE STATEMENT

SHARES AND OWNERSHIP STRUCTURE

Number of shares

Share turnover and price

Ownership structure

Shareholders

MAJOR SHAREHOLDER ANNOUNCEMENTS IN 2020

EVENTS AFTER THE FINANCIAL PERIOD

OUTLOOK FOR 2021

ASSESSMENT OF SHORT-TERM BUSINESS RISKS

Impact of the COVID-19 pandemic on the electronics supply chain

Dependence on key customers

Market trends

BOARD OF DIRECTORS' DIVIDEND PROPOSAL

KEY INDICATORS 2020-2016

FORMULAS AND DEFINITIONS

The Alternative Performance Measures (APM) used by the Group

FINANCIAL STATEMENTS 2020

CONSOLIDATED FINANCIAL STATEMENTS, IFRS

CONSOLIDATED INCOME STATEMENT

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

COMPANY INFORMATION

ACCOUNTING PRINCIPLES OF THE CONSOLIDATED FINANCIAL STATEMENTS

Basis of preparation

New and revised standards adopted by the Group

Amendments to IAS 1 and IAS 8 Definition of Material

Accounting principles

Segment reporting

Recognition policies

Divided income

Conversion of items denominated in currencies other than the euro

Foreign currency transactions

Conversion of the financial statements of foreign subsidiaries

Share-based payments

Employee benefits

Pension liabilities

Long service rewards

Operating profit/loss

Income taxes

Intangible assets

Goodwill

Research and development expenditure

Software

Intangible rights

Property, plant and equipment and right-of-use assets

Impairment of tangible and intangible assets

Presentation of asset grants

Inventories

Financial assets and financial liabilities

Financial assets

Cash and cash equivalents

Financial liabilities

Impairment of financial assets

Derivative financial instruments and interest rate risk hedging

Shareholders' equity

Provisions

Accounting principles requiring judgments by management and key sources of estimation uncertainty

Accounting estimates and assumptions

Aspocomp Group Oyj Annual Report 2020