1
QPR Software
ANNUAL REPORT
2023
2
TABLE OF CONTENTS
3 Our purpose, strategy and markets
6 Review by the CEO
8 Board of Directors
11 Executive Management Team
15 Report of the Board of Directors
33 Financial statements
43 Notes to Financial Statements
90 Signatures of Board of Directors and Financial Statements
92 Auditor’s Report
99 Information for Shareholders
100 Contact Information
Our purpose, strategy and
markets
4
OUR PURPOSE IS TO HELP
ORGANIZATIONS REACH THEIR
FULL OPERATIONAL POTENTIAL
QPR Software’s mission is to innovate, develop and
deliver software for analyzing, monitoring, and
modeling the organizations’ operations.
The company also offers consulting services to ensure
that customers get full value from the software and
related methods.
We help our customers drive process and business
transparency, ensure that their operations are run
as required and designed, and create actionable
intelligence where modern AI meets thought
leadership.
By providing organizations with the technologies and
methods to transform the invisible into visible and the
unknown into manageable, they are empowered to
reach long-lasting, continuous results.
OUR STRATEGY AND STRATEGIC
TARGETS
QPR Software Plc refined its current strategy in
December 2023 to reflect market changes and the
Company's priority areas and announced renewed
financial goals for the strategy period 2024-2027.
In accordance with the refined strategy, the Company
profiles itself even more strongly as a software and
SaaS player and as a consultant for its core business
areas as well as a leading player in Digital Twin of
an Organization (DTO) technology. The aim of the
refined strategy is to further increase the value the
Company produces for its customers and to support
the Company's growth through concentration. The
Company's mission is to innovate, develop and deliver
software for analyzing, monitoring, and modeling the
organizations’ operations. The Company also offers
consulting services to ensure that customers get full
value from the software and related methods.
In accordance with the adjusted strategy (2024–2027),
the Company focuses its business on the international
growth of SaaS solutions offered by Digital Twin of an
Organization (DTO) and the process mining at its core.
The Company's DTO offering also includes software
developed for modeling and managing and measuring
the organization's strategy and performance.
The Company's revised financial goals for the strategic
period 2024–2027 are average twenty (20) percent
annual SaaS growth, and sustainable operating profit.
The Company also continues to build new strategic
partner networks in accordance with the strategy
announced on March 10, 2022, to achieve a scalable
Go-to-Market model, expand its own offering and
improve the value it provides to its customers together
with technology and implementation partners. The
Company concentrates its growth investments in
Europe and the Middle East and, through a partner
network, on new market areas such as North America.
5
THE CURRENT STATE
OF OUR MARKETS
The Company reports the following geographical
areas: Finland, the rest of Europe (including Turkey),
and the rest of the world. The Company has closed its
business and partnerships in Russia for the time being.
QPR has its own sales staff in Finland, and the United
Arab Emirates. The Company concentrates its growth
investments in Europe and the Middle East and,
through a partner network, on new market areas such
as North America.
The Company’s management estimates that the
size of the process mining market in 2022 was
approximately $1.1 billion. The management estimates
that the market continues to grow at an average
annual rate of around 49% and reach $28 billion by
2030. The demand for Digital Twin of an Organization
technology is expected to grow with the development
of the process mining market.
The management estimates also that the modeling
and organizational strategy and performance
management software market is also around $1.0
billion. The market is quite mature but continues to
grow at an average annual percentage rate of single
digits.
6
REVIEW BY THE CEO
"The year 2023 was a turning point for QPR in
many ways, and despite the challenging operating
environment, we achieved improvement in results as
a whole. The changes we made produced significant
results with the company's profitability, cost and
organizational structure, refined strategy and focus on
core business.
SaaS net sales, which is at the core of our strategy,
continued to grow by 36% in January-December.
The group's total net sales decreased by 3% due to
discontinuation of consulting services outside the core
business in Finland. Our software business grew by 8%.
EBITDA improved significantly and was 182 thousand
euros, an improvement of approximately two million
euros compared to the comparison period. In addition,
the operating cash flow grew to 849 thousand euros,
while in 2022 it was about two million euros negative.
The group's total free cash flow was 108 thousand
euros and it improved approximately by 3.5 million
euros.
In supporting the transformation efforts, the company
organized a directed share issue in the third quarter.
This infusion strengthened its capital and financial
position, resulting in gross assets of approximately
800 thousand euros. This shows confidence in the
company's turnaround trajectory and supports the
execution of its strategic initiatives.
QPR Software's mission is to innovate, develop and
deliver software for analyzing, monitoring, and
modeling the operations of organizations. QPR was
named a visionary in the 2023 Magic Quadrant™ for
Process Mining Tools study published by Gartner in
March. In July 2023, Business Finland granted QPR
a research grant for the further development of the
artificial intelligence and machine learning features of
our process mining technology.
In September, we announced the company's new
positioning as a leading player in Digital Twin of an
Organization (DTO) technology. QPR is the only player
in the market whose product portfolio includes all
the different areas of the DTO solution for process
mining, modeling and managing strategy and digital
transformation. With this, the company streamlined
its product portfolio to focus exclusively on its core
business as a software and SaaS provider, also offering
customized consulting services. The new positioning
improves the customer experience, increases the value
we already produce for our customers and effectively
responds to the environment's rapidly changing needs.
The change in strategic focus also gives QPR the
opportunity to utilize our strengths more effectively,
adapt to market dynamics and achieve sustainable
success in our chosen market segments.
The market is typically dominated by large companies
with extensive resources and an established
reputation. The compact structure is our hidden
strength and QPR has established strong, sustainable
customer and partner relationships with industry
giants. This indicates the quality and reliability of our
products and services. Our agility allows us to quickly
adapt to changing market demands, and to offer
individual attention to our customers. We managed
to win new customers and expand cooperation with
our existing customers. In addition, we also won back
customers who had switched to our competitors in the
meantime. Our agile delivery, personalized service, and
excellent return on investment (ROI) and lower total
cost of ownership (TCO) attracted users of competing
products.
The outlook for our presence in the Middle East market
developed positively. The negative effects of fixed-price
software delivery projects, which were sold in prior
years, on the company's business and profitability in
2022 and early 2023 were fully completed during the
second quarter of 2023. QPR is known in the market as
a visible and reputable vendor with a strong partner
network. In October, we concluded the first process
mining SaaS contract in this market with a local
investment and finance company. Demand for our
products has been strong at the start of 2024.
One key goal during 2023 was to strengthen our global
partner network, in addition to increasing software
sales and improving profitability. An important step
in this endeavor was to find potential partners for
the US market. Our process mining software, QPR
ProcessAnalyzer, stands out globally as the sole
software capable of running directly on the Snowflake
Data Cloud. A substantial part of Snowflake's clientele
is in the US market. We expect to be able to report on
progress in early 2024.
We are entering the year 2024 with a positive and
confident mind. The market for process mining and
the adoption of digital solutions in company business
development continue to experience robust growth.
I see many unique and exciting opportunities in our
industry. The slowly budding recovery of economic
growth, falling interest rates and normalizing inflation
will improve the financial position of customers, and
investment decisions can be expected to accelerate
towards the end of 2024. We expect the operating
results to improve in the 2024 financial year.
I would like to warmly thank our customers, partners,
QPR investors and shareholders for their trust in
QPR during 2023. I would also like to thank all our
employees for their dedication and hard work for the
company's future and success."
Heikki Veijola
Chief Executive Officer
Board of Directors and
Executive Management Team
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BOARD OF DIRECTORS
The Board of Directors oversees the company’s
management and organizes the operations
as appropriate. The Board validates the
principles concerning the company’s strategy,
organization, accounting, and financial control
and appoints the company’s CEO. The Board's
work is determined by the Board's rules of
procedure, which e.g. determine the matters
requiring consideration by the Board. The CEO is
responsible for executing the company’s strategy
and managing current matters in accordance
with the instructions and regulations issued by
the Board.
QPR Software Plc’s general meeting elected the
members of the board of directors at the annual
general meeting on May 3, 2023. At the meeting,
it was decided that the Board of Directors
will consist of four members. Pertti Ervi, Matti
Heikkonen, Antti Koskela and Jukka Tapaninen.
The Annual General Meeting elected Pertti Ervi
as Chairman of the Board. The Board did not
form committees due to the small scope of the
business and the size of the Board.
QPR's Board members have broad, deep, and
strategic expertise and strong experience in the
technology sector as well as software business
development, growth, and internationalization.
About
• Chairman of the Board since March 2021.
Key experience
• Independent management consultant and professional board member
• Computer 2000 AG, Co-CEO 1995 – 2000.
• Computer 2000 Finland Oy, Founding Member and Managing Director 1983 – 1995.
Key positions of trust
• Member and Chairman of the Board, Chairman of the Audit Committee,
F-Secure Oyj, 2003 – present
• Member of the Board, WithSecure Oyj, 2003 – 2023
• Member and Chairman of the Board, Efecte Oy, 2008 – present
• Chairman of the Board, Mintly Oy, 2017 – present
• Member of the Board, Pointsharp Holding AB, 2021 – present
• Member and Chairman of the Board, Teleste Oyj, 2009 – 2020
• Chairman of the Board, Comptel Oyj, 2011 – 2017
MEMBERS OF THE BOARD OF DIRECTORS
Pertti Ervi
Chairman
of the Board
b. 1957, engineer
Antti Koskela
Member of the Board
b. 1971
Master of Science in
Technology
About
• Member of the Board since March 2021.
Key experience
• WithSecure Oyj, Executive Vice President and Chief Product Officer, 2021 – present
• Elisa Oyj, Vice President, Business Development, 2020 – 2021
• Nokia Software, CDO and Vice President, 2018 – 2020
• Comptel, CTO and Executive Vice President, 2011 – 2017
• Nokia Siemens Networks, various managerial positions, 2007 – 2011
• Nokia Networks, various managerial positions, 1999 – 2007
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About
• Member of the Board since March 2021.
Key experience
• Enreach Group, Chief Commercial Officer 2023- present
• Enreach for Enterprises, CEO, 2021 – present
• Benemen Oy, CEO, 2018 – 2021
• Questback AS, EVP Global Operations, 2010 – 2018
• Digium Oy, CEO, 2007 – 2010
• Nokia, various managerial positions, 2004 – 2007
• Various CEO and managerial positions in the software industry, 1998 – 2004
Key positions of trust
• Member of the Board, QT-Group 2023-
• Chairman of the Board, Identia Oy 2023-
• Chairman of the Board, Benemen Oy, 2017 – 2018
• Member of the Board and Audit Committee, F-Secure Oyj, 2013 – 2019
• Member and Chairman of the Board, Mobile Wellness Solutions MWS Oy, 2015 – 2019
• Member and Chairman of the Board, The Finnish Software and E-business
Association, 2004 – 2017
• Member of the Board, Ixonos Oyj, 2011 – 2015
MEMBERS OF THE BOARD OF DIRECTORS
Matti Heikkonen
Member of the Board
b. 1976
Master of Science in
Technology
Jukka Tapaninen
Member of the Board
b. 1963
Master of Science in
Economics
About
• Member of the Board since March 2021.
Key experience
• Aiforia Technologies, CEO, 2020 – present
• Pegasystems, VP and Managing Director EMEA, APAC and Japan, 2016 – 2020
• SAP, Vice President Global/EMEA, 2005 – 2016
• Basware, SVP and General Manager, 2002 – 2005
• Stonesoft Inc, CEO Americas, 2000 – 2002
• HP, Regional and Global managerial roles, Sales and Business Development, 1995 – 2000
Key positions of trust
• Vice Chairman of the Board, Aiforia Oy, 2015 – 2020
• Member of the Board, WeVision Oy, 2014 – present
• Member of the Board, Meshworks Wireless Oy, 2011 – present
• Chairman of the Board, Addoro Ab, 2014 – 2017 (acquisition)
• Member of the Board, Findity Ab, 2013 – 2016
• Member of the Board, VeliQ B.V., 2015
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Matti Erkheikki
Chief Product Officer
b. 1978
Master’s Degree in Industrial
Engineering and Management
EXECUTIVE MANAGEMENT TEAM
Heikki Veijola
CEO
b. 1970
Master of Science in Economics
About
• The Company’s CEO since March 2023
• Member of the Executive Management Team since March 2023
Area of Responsibility
Heikki Veijola started as the CEO of QPR Software Oyj on March
1, 2023. As the CEO of QPR Software, Heikki Veijola is responsible
for managing the running administration of the Company in
accordance with the instructions and regulations issued by the
Board of Directors. Veijola is also responsible for representing
the Company, its operational management, sales and partner
operations, human resources, and preparation of decisions and
implementation thereof that belong to the Board of Directors.
Experience
Veijola has most recently served as Enreach Oy’s Director
of Strategic Partnerships and a member of the executive
management team, being responsible for business operations
in the Microsoft and Salesforce ecosystems as well as for
cooperation with system integrators, consultants, and other
strategic partnerships, especially in Northern Europe. Before
this, Veijola was the Sales Director of Enreach Oy.
Veijola has strong experience in building and renewing sales,
international growth, partner ecosystems, and cloud- and SaaS
(Software as a Service) businesses. During his career, Veijola has
also worked for 11 years in Finland's largest marketing group
Salomaa Group as a CEO of KASKI Agency, and advertising
agency Adsek Oy, leading the companies through two industry
transformations.
Education
Veijola has a master's degree in Economics (M.Sc., Turku
School of Economics and Business Administration) majoring in
International Marketing.
About
• Member of the Executive Management Team since August
2022
Area of responsibility
Kerkelä-Hiltunen is responsible for QPR Software's finance
and administration, including external and internal reporting,
monitoring and managing the financial performance of the
business, capital allocation and procurement. She also oversees
investor relations, compliance with the Insider Trading Manual,
coordination of risk management and treasury functions.
Experience
Kerkelä-Hiltunen has more than 20 years of solid expertise in
finance and management, as well as a wealth of knowledge in
the fields of telecom, technology and manufacturing industries
in business-to-business, and consulting. Before joining QPR,
she was in charge of the Deloitte Finance and Performance
Energy, Resources and Industrial clients portfolio, business
finance offering as well as regional CFO program coordination.
Prior to joining Deloitte, Mervi had a lengthy career at Nokia
where she held a variety of global financial management
positions, including Head of Finance Transformation and
Group Functions, Finance Process Owner, Head of Business
Reporting, and ss the CFO and Chair of the Board of the Indian
mobile phone factory and company.
Education:
Mervi holds a Master's degree in Economics from the University
of Oulu and has also completed the Finance Executive program
at Aalto Executive Education and the Good Board Member
(HHJ) training.
About
• Member of the Executive Management Team since July
2007
Area of Responsibility
Matti Erkheikki is the head of QPR's product management
unit and is responsible for QPR's products and the vision
and strategy of the product portfolio. It is on Erkheikki's
responsibility that the Company's products and their
characteristics are in line with the organization's goals and
that the product portfolio is constantly developed and
improved in accordance with the needs of customers and
target groups.
Experience
Erkheikki has been employed by QPR since 2002, first as
a consultant, participating in QPR's delivery projects both
domestically and internationally. In 2005, Erkheikki worked
as the company's development manager, and in 2006 as
the regional manager responsible for the USA and Canada
operations in California at QPR's American subsidiary. In the
years 2007–2014, he as responsible for QPR's Finnish business
and in the years 2012–2014 also for the global OEM business.
Prior to his current position, since January 2015, he has held
the role of Business Director, responsible for QPR's process
mining and strategy management operations internationally.
Education
Erkheikki holds a master's degree in industrial engineering
and management.
Mervi Kerkelä-Hiltunen
CFO
b. 1975
Master of Science in Economics
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Sanna Salo
CMO
b. 1977
Master of Science in Economics
EXECUTIVE MANAGEMENT TEAM
Tero Aspinen
VP, Middle-East Business
b. 1985
Master’s Degree in Industrial
Engineering and Management
About
• Member of the Executive Management Team since January
2017
Area of Responsibility
Tero Aspinen is responsible for QPR’s business in the Middle
East market and forsales an development of Performance
Management software solutions globally.
Experience
Tero Aspinen has served QPR Software in various roles
since 2008. He has been involved in more than a hundred
customer cases where organizations have implemented
QPR’s solutions. Prior to his current role, Mr. Aspinen worked
as Vice President for Middle East Business and Performance
Management Solutions (2017–2022).
Education
Aspinen holds a Master’s degree in Industrial Engineering
and Management.
About
• Member of the Executive Management Team since
February 2022
Area of Responsibility
Sanna Salo is responsible for the strategy, planning,
development, and implementation of QPR Software's
brand, marketing, communication, and stock exchange
communication.
Experience
Salo has more than 20 years of experience of B2B business in
the IT industry through various positions in sales, marketing,
and communication. Before starting at QPR, Salo worked as
the Marketing and Communications Director of B2B digital
marketing solutions provider Fonecta Oy. Before Fonecta,
Salo worked for ten years at International Business Machines
Corporation (IBM), holding various management positions in
marketing both in Finland and in the Nordic countries. Before
this, Salo worked for nine years at Atea Finland Oy in a range
of marketing, communication, and sales positions.
Education
Salo has a Master's degree in Economics (M.Sc., Turku
School of Economics and Business Administration)
majoring in marketing. Salo also has a Bachelor of Business
Administrarion (B.Sc.) degree in international business from
Häme University of Applied Sciences.
Teemu Lehto
Chief Professional Services
b. 1970
Doctor of Science (Technology)
About
• Member of the Executive Management Team since March
2023
Area of Responsibility
Teemu Lehto is responsible for QPR’s professional services
business.
Experience
Teemu Lehto has worked in management and expert
positions at QPR Software for over 20 years. During his
long career at QPR, Lehto has been responsible for the
consulting business, marketing and communication, product
development, as well as sales and partnerships.
Before joining QPR, Lehto worked as CEO of Planway Oy,
as the development manager of ICL Data Oy, and as the
product development manager of ViSolutions Oy. He has also
previously worked as a software engineer at Nokia Research
Center and Systeemikonsultit Oy.
Education
Lehto holds a Doctoral degree in Technology.
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EXECUTIVE MANAGEMENT TEAM
Mika Maliniemi
Chief Operating Officer
b. 1980
Datanome
About
• Member of the Executive Management Team since January
2024
Area of Responsibility
Maliniemi's area of responsibility includes QPR's software
product development, cloud service development and
production, and customer support services.
Experience
Mika Maliniemi has worked in management and expert
positions for over 20 years. Maliniemi has a long career at
QPR, where he has been responsible for partnerships and
technical consulting. He has also led QPR’s Customer Care,
Cloud Services, and the Technical Services units.
Outside QPR, Maliniemi worked at Mawell Plc, where he
established and launched their customer support operations.
He has also worked at TietoEvry as a manager, leading the
customer support and deployments.
Education
Mika holds a degree in business information technology from
Business School of Oulu.
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QPR Software
Board Review
and Financial
Statement 2023
14
TABLE OF CONTENTS
15 Report of the Board of Directors
33 Financial statements
43 Notes to Financial Statements
90 Signatures of Board of Directors and Financial Statements
Report of the Board of Directors
16
SUMMARY OF THE FULL YEAR
2023
• SaaS software business grew +36 %
(January-December 2022: +35 %)
• Net sales was 7,550 thousand euros and a decrease
of 3 % (7,823) as the company focused on its core
business
• EBITDA was 182 thousand euros (- 1,753), change
from the comparison period 1,935 thousand
• The operating result was – 813 thousand euros
(- 2,770), the change compared to the comparison
period was 1,957 thousand
• The result before taxes was -924 thousand euros
(-2,864), a change from the comparison period
of 1,940 thousand
• The result was -924 thousand euros (-2,686),
a change from the comparison period of
1,943 thousand
• Earnings/share was -0.055 euros (-0.202)
• Cash flow from operations 849 thousand
euros (-1,765)
BUSINESS OPERATIONS
QPR Software Plc is a pioneer in business process
optimization solutions and has positioned itself as a
leading player in Digital Twin of an Organization (DTO)
technology.
QPR innovates, develops, and delivers software for
analyzing, monitoring and modeling the operations
of organizations. The company also offers consulting
services to ensure that customers get full value from
the software and associated methods.
QPR Software reports one business segment,
Organizational Development of organizations. In
addition to this, the Company reports revenue from
products and services as follows: Software licenses,
Renewable software licenses, Software maintenance
services, Cloud services, and Consulting.
Recurring revenue reported by the Company consists
of SaaS revenue, as well as revenue from renewable
licenses and maintenance services. Software licenses
are sold to customers without time restrictions or for
a limited-term. Renewable software licenses are sold
to customers as a user right with an indefinite-term
contract. These contracts are automatically renewed
at the end of the agreed period, usually one year,
unless the agreement is terminated within the notice.
Renewable license revenue is recognized at one point
in time, in the beginning of the invoicing period, yet
at the earliest on the delivery. SaaS and maintenance
service revenues are recognized monthly as recurring
revenue throughout the contract period.
The geographical areas reported are Finland, the rest
of Europe (including Russia and Turkey), and the rest
of the world. Net sales are reported according to the
location of the customer’s headquarters. The company
has closed its business and partnerships in Russia for
the time being.
Until 2023, the company provided consulting services,
predominantly to public administration, which were
unrelated to its core business. In the end of 2023, the
company discontinued these activities. In the future,
the company will prioritize offering consulting services
tailored to the software it develops, aiming to deliver
maximum added value to its
NET SALES
The net sales in January-December was 7,550 thousand
euros (7,823). The share of continuous net sales was
61% (53). Net sales decreased by 273 thousand euros
(3%) because of the company's decision to discontinue
providing consulting services beyond its core business
to domestic public sector clients. The net sales of the
group's other business areas increased (8.5%).
The group's net sales increased in the rest of Europe
by 383 thousand euros (14%), decreased in Finland
by 665 thousand euros (15%) and increased by 30
thousand euros (3%) in the rest of the world. The
growth in Europe was related to the expansion of the
software business and related consulting business in
line with the company's internationalization strategy.
In Finland, the decline in net sales occurred because
consulting outside the previously mentioned core
business were discontinued. The decrease in net
sales in the rest of the world was primarily due to
the end of fixed-price software delivery projects sold
to public administration customers in the Middle
East in the previous year’s 2020–2021. The projects in
question were implementations of software solutions
in the application area of strategy and performance
management. The discussion about the possible
continuation of the completed projects with a new
contract structure has been ongoing, and project
deliveries will most likely start during the first half
of 2024. The decrease in net sales was balanced out
by obtaining a substantial long-term maintenance
contract from the same customer, one year ahead
of schedule; and by securing new contracts with
customers in the Middle East market.
17
Of the net sales, 46% (50) derived from Finland, 42%
(35) from the rest of Europe (including Turkey), and 12%
(12) from the rest of the world.
SaaS net sales grew by 36%, to 2,371 thousand euros
(1,738). The increase in net sales from SaaS services
was a result not only of the expansion of the use
of QPR ProcessAnalyzer's SaaS solution with a
global pharmaceutical company, announced by the
company in December 2022, but also because of other
successful customer expansions. The growth was also
partly due to customers switching from licenses to the
SaaS service model, and partly due to the company's
price increases caused by inflationary pressure.
SaaS growth was also boosted by successes in new
customer acquisition.
Transitioning to SaaS invoicing, ongoing contract net
sales accounted for 61% of total net sales. Aligning
with company’s strategy, recurring net sales increased
by 8% from the comparison period. However, license
revenues declined compared to last year due to the
transition to SaaS and delays in customer decision-
making prompted by challenging market conditions.
Consulting net sales was 2,469 thousand euros (3,139),
and its decrease was due to the discontinuation of
outside the core business consulting in Finland. The
decrease in net sales related to the end of fixed-price
projects in the Middle East was compensated by the
increase in consulting related to the implementation
of products delivered to Europe.
18
NET SALES BY PRODUCT GROUP
The Group’s net sales derive from software and consulting businesses are broken down as follows:
Group, IFRS
(EUR 1 000)
2023 2022 Change, %
Software licenses 485 560 -13
Renewable software licenses 504 583 -13
Software maintenance services 1,720 1,803 -5
Cloud services 2,371 1,738 36
Consulting services 2,469 3,139 -21
Total net sales 7,550 7,823 -3
NET SALES BY GEOGRAPHIC AREA
The geographical areas reported are Finland, the rest of Europe (including Russia and Turkey), and the rest of
the world. Net sales are reported according to the customer’s location. The company has closed its business and
partnerships in Russia for the time being.
Finland 3,499 4,126 -15
Europe incl. Russia and Turkey 3,128 2,745 14
Rest of the world 923 953 -3
Total net sales 7,550 7,823 -3
Group, IFRS
(EUR 1 000)
2023 2022 Muutos %
19
FINANCIAL PERFORMANCE
The group's EBITDA was a positive 182 thousand euros
(-1,753) and the operating result was -813 thousand
euros (-2,770). EBITDA was significantly improved
compared to the comparison period by the company's
strong cost-saving measures and the 8.5% growth of
the software business. EBITDA, on the other hand,
was reduced by discontinued public sector consulting
projects in Finland, as well as a fixed-price project
in the Middle East that ended in the first half of the
year. In addition, the business result was improved
by 55% lower company premises costs reported in
depreciation in accordance with IFRS.
The group's variable expenses were 896 thousand
euros (1,552), and they decreased by 42% compared
to the comparison period. Expenses decreased
mainly after the completion of challenging fixed-
price software delivery projects in the Middle East
during the second quarter. With this, the need for the
use of external services decreased significantly. The
impact of fixed-price projects in the Middle East on
the company's EBITDA for the first half of the year was
negative.
The group's fixed expenses were 6,473 thousand euros
(8,028), i.e. 19% lower than in the comparison period,
due to personnel reductions and layoffs implemented
in the last quarter of 2022 and the second quarter of
2023, as well as external cost savings.
Investments in long-term product development
substantially decreased of 702 thousand euros,
settling at 619 thousand euros (1,321). Consequently,
this reduction mitigates the impact of cost reductions
during the comparison period.
The change in the provision for bad debts included
in the fixed costs of the reporting period was four
thousand euros (January-December 2022: 3).
Overall, the group’s expenses decreased by 17%
compared to the comparison period due to the
company’s significant cost savings, as well as lower
subcontracting costs for projects in the Middle East.
In 2023, the company's SaaS net sales grew by 36%
and software net sales as a whole by 8%. Net sales
decreased in Finland, due to the discontinuation of
consulting outside the core business in Finland, as well
as the delay of follow-up projects in the Middle East.
The company responded to the changing challenges
of the business environment by implementing strong
cost-saving measures throughout the financial year.
In addition to this, on October 19, 2023, the company
carried out change negotiations focused on the
public administration consulting unit, which resulted
in the termination of a total of nine positions. The
savings from these measures will positively affect the
company's profitability in the second quarter of 2024.
Additionally, as a result of the change negotiations
announced on December 14, 2023, and concluded on
January 5, 2024, the company aims for cost savings
from the termination of a total of 10 positions. The
company also strives to organize its operations more
efficiently, respond to changes in the operating
environment, and renew the organizational structure
to achieve the company's long-term growth and
profitability goals.
The employment contracts, ended as a result of
change negotiations, will carry work obligation until
the end of employment. Thus, the company did not
record provisions related to change negotiations at the
end of 2023.
The result for the review period was -924 thousand
euros (-2,868) and the earnings per share -0.055 euros
(-0, 202).
FINANCE AND INVESTMENTS
Cash flow from operations during the review period
was a positive 849 thousand euros (–1,798). The change
in operating cash flow compared to 2022 was due
to significant improvements in operating profit and
working capital. During the final quarter of the year,
the company garnered more of the annual revenue
from its expanding software business through
advance payments, compared to the previous year's
corresponding period.
Annual invoicing focuses on the turn of the year and
is therefore seasonal. In addition to this, the company
was able to collect its receivables from completed
projects in the Middle East and was able to advance
the start of a significant maintenance contract by
a year. The cash flow of projects in the Middle East
improved by approximately 300 thousand euros
compared to 2022. Due to the robust cost-saving
measures implemented by the company, there was a
notable decrease in outgoing cash flow.
Net financing costs were 111 thousand euros (62), and
they included exchange losses of 14 thousand euros
(20).
The investments were 620 thousand euros (1,353), and
they were mainly product development investments.
The net cash flow from financing was 639 thousand
euros (2,726), primarily driven by a directed share issue
amounting to 760 thousand euros (2,937), alongside
premises rents paid totaling 121 thousand euros (266).
The group's financial situation is fair. At the end
20
of the review period, the group's cash and cash
equivalents were 884 thousand euros (17) and short-
term receivables were 1,706 thousand (3,452). 79%
(82%) of receivables are denominated in euros and
53% of invoices are not yet due. Of the total amount of
short-term receivables, the share of 1-30 days overdue
receivables was 35%, 30-60 days 9% and more than
60 days 3%. The company was able to improve its
invoicing cycle and enhance its collection. In addition,
the group has available a credit limit of 500,000 euros.
At the end of the review period, the group had a
bank loan of EUR 1,500 thousand, of which EUR 1,000
thousand was long-term.
In accordance with the original financing agreement,
the first installment of EUR 0.5 million is due on
January 31, 2024. After this, installments of EUR 0.5
million will mature annually in January 2025 and 2026.
The covenants related to the loan are based on the
company's EBITDA and equity ratio. The EBITDA of the
covenants is tested every six months, and the equity
ratio is tested annually according to the situation
on the last day of the year. In the testing carried out
on 31 December 2023, EBITDA fell below the agreed
covenant limit. In December 2023, the bank pledged
not to exercise its receivables maturity right under
the financing agreement in the event of a potential
breach of the group's EBITDA covenant as per the 2023
financial statements.
The company's free cash flow, operating and
investment cash flows, and premises rents totaled 108
thousand euros (-3,385). The significant change was
due to the improvement of operating cash flow, lower
cash flows from investments, and lower paid premises
rents.
The equity ratio was 8.1% (7.4%), largely driven by the
directed share issue executed in the third quarter,
which resulted in the acquisition of 760 thousand
euros in new equity capital. Furthermore, the
company's bolstered cash reserves, coupled with
the reduction of the head office lease term from 5.5
years to 3.5 years in June, have enhanced the equity
ratio. The equity ratio was reduced by the negative
operating result of 924 thousand euros for the financial
year.
PRODUCT DEVELOPMENT
QPR has positioned itself as a leading player in Digital
Twin of an Organization (DTO) technology. The
company innovates and develops software products
that analyze, measure, and model the operations of
organizations.
QPR innovates and develops software products
that analyze, measure, and model operations in
organizations. The Company develops the following
software products: QPR ProcessAnalyzer, QPR
EnterpriseArchitect, QPR ProcessDesigner, and QPR
Metrics.
Product development expenses for the full year were
1,427 thousand euros (2,674) and product development
expenses were capitalized in the balance sheet of
637 thousand euros (1,336). Product development
depreciation was recorded at 782 thousand euros
(660). The amortization period for capitalized product
development expenses is four years.
PERSONNEL
At the end of the review period, the group employed
49 people (85). The average number of personnel in
2023 was 57 (81).
The average age of the personnel is 46 (44) years.
Women account for 22% (26) of employees, and men
for 78% (74). Of all personnel, 13% (17) work in sales
and marketing, 44% (44) in consulting and customer
care, 33% (30) in product development, and 10% (9) in
administration.
Personnel expenses were 5,287 thousand euros (7,214),
of which the share of salaries and bonuses was 4,363
thousand euros (5,995).
For incentive purposes, the company has a bonus
program covering the entire personnel. The top
management's short-term remuneration consists
of monetary salary, fringe benefits and a possible
annual bonus, mainly determined by the net sales
development of the group and profit units. In addition,
the company has a stock option program for key
personnel.
STRUCTURAL CHANGE IN THE
GROUP
There were no changes in the group structure in 2023.
In 2022, the company has established a French branch
under QPR Software Plc.
STOCK OPTION PLAN
The Board of Directors of QPR Software Plc decided
in a meeting held on September 6, 2023, to launch a
new key employee stock option plan, based on the
authorization granted at the Annual General Meeting.
QPR Software is operating with 2019B, 2022 and 2023
stock option plans intending to use these as part of the
Group's incentive and commitment program for the
key employees. The purpose of the stock options is to
encourage the key employees to work on a long-term
basis to increase the shareholder value and retain the
key employees at the company. The stock options are
issued gratuitously.
21
Option plan 2019B provides for the issuance of up
to 473,000 options and option plan 2022 maximum
489,542 options, and option plan 2023 maximum
1,000,000 calculation. Each option entitles its holder to
subscribe for one share.
Out of the 2019 stock option plan, 437,000 options
are marked with the symbol 2019B. The subscription
period for stock options marked 2019B is January
1,2023-January 31,2024. The subscription period for
the company's previous option program 2019A was
January 1, 2022-January 31, 2023, and no shares were
subscribed with the options of that program.
The allocated number of shares, subscribed by
exercising 2019B stock options issued corresponds
to a maximum total of 0.8 per cent of all shares and
votes of the shares in the company after the potential
share subscriptions, if new shares are issued in the
share subscription. After the share subscriptions with
allocated stock options, the number of the company’s
shares may be increased by a maximum total of
138,000 shares, if new shares are issued in the share
subscription.
The share subscription price for stock options 2019B is
EUR 2.55 per share, which corresponded to the market
price of the company’s share with an addition of 50 per
cent at the time of issuance. The theoretical market
value of stock options 2019 is approximately EUR 83
thousand in total. On December 31, 2023, out of stock
option plan 2019B, no subscription has been made.
The stock option plan 2022 is marked with the symbol
2022. The Share subscription period with the Stock
Options shall be 15 June 2025 - 31 May 2027. The
number of shares for the stock option plan 2022,
subscribed by exercising stock options corresponds
to a maximum of 1.9% of the Company’s shares and
votes after possible share subscriptions, if new shares
are issued in the share subscription. As a result of the
share subscriptions with stock options, the number of
the Company’s shares may increase by a maximum of
489,542 shares, if new shares are issued in the share
subscription.
The share subscription price for stock options 2022 is
EUR 0.85 per share, which corresponds to the market
price of the company’s share at the time of issuance.
The theoretical market value of stock option 2022 is
approximately EUR 88 thousand in total.
The stock option plan 2023 is marked with the symbol
2023. The Share subscription period with the Stock
Options shall be 6 September 2026 – 6 September
2028. The number of shares for the stock option
plan 2023, subscribed by exercising stock options
corresponds to a maximum of 5.2% of the Company’s
shares and votes after possible share subscriptions, if
new shares are issued in the share subscription. As a
result of the share subscriptions with stock options, the
number of the Company’s shares may increase by a
maximum of 1,000,000 shares, if new shares are issued
in the share subscription.
The share subscription price for stock options 2023 is
EUR 0.42 per share, which corresponds to the market
price of the company’s share at the time of issuance.
The assumed cost effect of the option program is
around 150 thousand euros in total.
The terms and conditions of the stock option plans for
2019, 2022 and 2023 are available on the company’s
webpage www.qpr.com/investors.
STRATEGY
QPR Software's mission is to innovate, develop and
deliver software for analyzing, monitoring and modeling
the operations of organizations. The company also offers
consulting services to ensure that customers get full
value from the software and associated methods.
On December 14, 2023, QPR Software Plc refined its
current strategy to reflect market changes and the
company's priority areas and announced renewed
financial goals for the strategy period.
In accordance with the adjusted strategy, the company
profiles itself even more strongly as a software and SaaS
player, a consultant for its core business areas, and as one
of the leading players in Digital Twin of an Organization
(DTO) technology.
The aim of the adjusted strategy is to further increase
the value the company produces for its customers and to
support the company's growth through concentration.
The company's mission is to innovate, develop and
deliver software for analyzing, monitoring, and modeling
the organizations’ operations. The company also offers
consulting services to ensure that customers get full
value from the software and related methods.
In accordance with the adjusted strategy (2024–2027),
the company focuses its business on the international
growth of SaaS solutions offered by Digital Twin of an
Organization (DTO) and the process mining at its core.
The Company's DTO offering also includes software
developed for modeling and managing and measuring
the organization's strategy and performance.
The Company's revised financial goals for the strategic
period 2024–2027 are:
• Average twenty (20) percent annual SaaS growth,
and
• Sustainable operating profit.
The Company also continues to build new strategic
partner networks in accordance with the strategy
announced on March 10, 2022, to achieve a scalable Go-
to-Market model, expand its own offering and improve
22
the value it provides to its customers together with
technology and implementation partners. The Company
concentrates its growth investments in Europe and the
Middle East and, through a partner network, on new
market areas such as North America.
THE PARENT COMPANY’S
FINANCIAL PERFORMANCE AND
POSITION
Parent company Net Sales was EUR 6,957,506 and
it declined 3,8% from the comparable period (2022:
7,234,554). The decline in Net Sales was due to lower
license and consulting revenue partly netted of by
higher SaaS revenue.
The Parent company’s operative loss was -13% of net
sales and it was EUR -934,116 (2022: -33%, -2,375,022).
Operating result increased due to cost saving
measures and software revenue growth, while revenue
from public sector consulting in Finland decreased as
well as other income.
In addition to previously explained impacts, the parent
company result EUR -1,402,736 (-3,007,840) improved
due to lower financing costs compared to comparable
year and was deteriorated due to impairment of the
shares and capital loan of its subsidiary that previously
operated business in Russia. Financing costs were
EUR 160,190 (600,190), the value of impaired subsidiary
shares EUR 80,608 and value of impaired subsidiary
capital loan EUR 225,000.
The parent company transferred on August 23,2023
EUR 1,279,090 from share capital to invested
unrestricted equity fund with the authorization
granted by the Annual General Meeting. The share
capital at the end of the fiscal year 2023 was €80,000,
divided into 18,175,192 shares. The company has one
class of shares. Each share carries one vote and equal
rights to dividends. The book value of the shares is
€0.11. The shares are registered in the book-entry
system maintained by Euroclear Finland Ltd.
The parent company's equity at the end of the fiscal
year was EUR 1,112,072 (EUR 1,670,507). The equity
was strengthened by the proceeds of a directed
share issue, totaling EUR 760,000, and was, in turn,
weakened by the loss-making financial year. During
the fiscal year, the company reduced the value of the
shares of its subsidiary that had previously conducted
business in Russia by EUR 83,608 and wrote down the
capital loan granted to that company by EUR 225,000.
In January 2023, the parent company converted a
short-term bank loan of EUR 1,000,000 into a long-
term loan. Partially due to this, along with significant
cost savings made by the company, the parent
company's short-term debt decreased to EUR 1,653,151,
totaling EUR 5,887,781. The short-term liabilities of
the parent company included loans from subsidiaries
amounting to EUR 2.1 million, while the parent
company had borrowed EUR 2.3 million from its
subsidiaries. Additionally, the parent company's short-
term liabilities include advance payments for the year
2024 totaling EUR 2.1 million.
Return for own equity was negative -126%, but it
improved compared to comparison period (2022:
-180%). The own equity ratio was 14% (2022: 18%).
SHARE CAPITAL,
SHAREHOLDERS, AND SHARES
The company's share capital at the end of the fiscal
year 2023 was 80,000 euros, divided into 18,175,192
shares. The company has one series of shares. Each
share has one vote and an equal right to dividends. The
share's book value is EUR 0.11 euros. The Company’s
shares are included in the Finnish book-entry
securities system managed by Euroclear Finland Oy.
At the end of the financial year, the company had 1,943
shareholders (1,747). The company's shares were traded
for EUR 1,586,000 (2,315) during the financial year, or an
average of 6,318 euros per trading day (9,187).
Trading in shares was on total 3,538,455 shares
(2,263,135). Turnover in shares corresponds to 19.8% of
the outstanding shares (14.1) and the average trading
price of the shares was EUR 0.45 (1.02). The highest
closing price of the financial year was EUR 0.75 (1.86)
and the lowest closing price was EUR 0.32 (0.53).
At the end of the year, the total market value of
the company’s outstanding shares was EUR 5,957
thousand at the closing price of EUR 0.33/share.
Additional information is presented in Note 34.
On 23 August 2023, QPR Software Plc received a
notification from AC Invest Oy pursuant to Chapter
9, Section 5 of the Securities Markets Act (AML),
according to which its direct share ownership of QPR
Software Oyj's total number of shares and votes has
decreased under (5) percent.
On 23 August 2023, QPR Software Oyj received a
notification from Vesa-Pekka Leskinen pursuant to
Chapter 9, Section 5 of the Securities Markets Act
(AML), according to which his direct share ownership
of QPR Software Oyj's total number of shares and votes
has decreased under ten (10) percent.
On 23 August 2023, QPR Software Oyj received a
notification from Oy Fincorp Ab pursuant to Chapter
9, Section 5 of the Securities Markets Act (AML),
according to which its direct share ownership of QPR
Software Oyj's total number of shares and votes has
increased to more than twenty (20) percent.
Major shareholders of QPR Software Plc, December 31, 2023
Registered shareholders No. Shares
% of shares and
votes
KEMPE ROGER KENNETH: 4,696,335 26 %
OY FINCORP AB 4,653,535 26 %
KEMPE ROGER KENNETH 42,800 0 %
LESKINEN VESA-PEKKA ILMARI: 1,768,759 10 %
LESKINEN VESA-PEKKA ILMARI 1,135,200 6 %
KAUPPAMAINOS OY 633,559 3 %
UMO CAPITAL OY 971,900 5 %
SIILASMAA RISTO KALEVI 805,333 4 %
OY TALCOM AB 562,000 3 %
LAMY OY 553,249 3 %
JUNKKONEN KARI JUHANI 520,824 3 %
LAAKSO JANNE JUHANI 444,444 2 %
PIEKKOLA ASKO 413,917 2 %
PELKONEN JOUKO ANTERO: 385,400 2 %
POHJOLAN RAHOITUS OY 385,000 2 %
PELKONEN JOUKO ANTERO 400 0 %
QPR SOFTWARE OYJ 339,471 2 %
AC INVEST OY 319,253 2 %
LESKINEN VELI-MIKKO ILMARI 310,040 2 %
TRADEIRA OY 204,842 1 %
KEMPE PIA PAULINA 168,333
1 %
KEIKKO AARON SAMUEL 111,164
1 %
OY CATA-HOLDING AB 100,000
1 %
LEINO RIKU PETTERI 90,358
0 %
NORDCENTERIN NUORISOVALMENNUKSEN EDISTÄMISSÄÄTIÖ S 86,666 0 %
PALOHEIMO ASSET MANAGEMENT OY 79,306 0 %
20 largest shareholders, total 12,931,594 71 %
Other shareholders, total 5,243,598 29 %
TOTAL 18,175,192 100 %
*exclude nominee registered shareholders
24
Distribution of shareholding by size, December 31, 2023
Shareholders Shares and votes
Number of Shares Number % Number %
1 – 500 1,277 65.7 168,005 0.9
501 - 1 000 219 11.3 169,291 0.9
1 001 - 5 000 299 15.4 701,847 3.9
5 001 - 10 000 53 2.7 387,183 2.1
10 001 - 50 000 66 3.4 1,616,560 8.9
50 001 - 100 000 11 0.6 788,840 4.3
100 001 -1 700 000 18 0.9 14,343,466 79
TOTAL 1,943 100 18,175,192 100
of which nominee registered 7 1,879,292 10.3
Distribution of shareholding by sector, December 31, 2023
Shareholders: Shares and votes:
Sector Number % Number %
Private companies 52 2.7 3,943,626 21.7
Financial and insurance institutions 7 0.4 7,085,685 39.0
Households 1,873 96.4 6,914,023 38.0
Non-profit organizations 2 0.1 86,667 0.5
European union 5 0.3 136,191 0.7
Other countries 4 0.2 7,000 0.04
TOTAL 1,943 100 18,173,192 100
of which nominee registered 7 1,879,202 10.3
25
QPR Software shareholding by insiders and closely related persons, December 31, 2023
Options
Name and position
Number of
shares
By controlled
entities
By closely related
persons *)
2019 B 2022 2023
Pertti Ervi, Chairman of the board 73,112
Matti Heikkonen, Board member 24,487 40,922
Antti Koskela, Board member 42,945
Jukka Tapaninen, Board member 32,976
Petri Kettunen, Principal auditor
Heikki Veijola, CEO 135,000 97,908 200,000
Insiders by definition:
Tero Aspinen, VP, Management team 0 33,000 36,716 80,000
Matti Erkheikki, Director/Management team 2,000 65,000 48,954 100,000
Mervi Kerkelä-Hiltunen, Director/Management
team
5,121 0 0 36,716 150,000
Pekka Keskiivari, Director/Management team 2,565 0 45,000 36,716 80,000
Teemu Lehto, Director/Management team 34,000 0 10,000 7,434 80,000
Sanna Salo, Director/Management team 5,121 7,350 0 36,716 80,000
* Shares held by spouses and persons under
guardianship
Insider ownership, TOTAL 220,327 40,922 9,350 288,000 301,160 770,000
26
OWN SHARES
QPR Software Plc’s 1,719,871 new shares issued in
the direct share issue on August 22, 2023 have been
registered in the trade register kept by the Finnish
Patent and Registration Board on August 23, 2023.
After the registration of the new shares, the total
number of the company's shares is 18,175,192, of
which the company had 339,471 own shares with a
total nominal value of EUR 37,342 euros and a total
purchase price of EUR 347,552 euros.
The shares held by the company (treasury shares)
represent 1.9% of the company's share capital and
votes.
GOVERNANCE
QPR Software Plc’s (QPR) management practices
reflect sound corporate governance
and high ethical principles. They comply with the
regulatory rules related to the management of public
companies, such as the Finnish Companies Act, the
Market Abuse Regulation, and the Securities Markets
Act. Also, QPR’s Articles of Association, as well as the
Finnish Corporate Governance Code (effective as of
January 1, 2020) and the Guidelines for Insiders.
A separate report has been issued on QPR Software's
corporate governance system for 2023, which was
published along with the annual report on 22 March
2024.
The company's management principles and an
explanation of the corporate governance system
can be read in the investor section of the company's
website.
The investor pages also contain a report on insider
governance, information on the largest owners, the
articles of association, the board's rules of procedure,
a report on internal control and audit, introductions
of the board of directors and the management team,
a summary of the company's disclosure policy, and
the company's press releases published during the
financial year.
ANNUAL GENERAL MEETING
The Annual General Meeting of QPR Software Plc
was held May 3, 2023, in Helsinki. The Annual General
Meeting adopted the Company's financial statements
for the financial year 2022 and discharged the
members of the Board of Directors and the CEO from
liability. The Annual General Meeting resolved that no
dividend be paid based on the balance sheet adopted
for the financial year ended on December 31, 2022,
further adopted the Company’s Remuneration Report,
and resolved to amend the Company’s Articles of
Association.
Further, the Annual General Meeting resolved to
reduce the share capital of the Company, to authorize
the Board of Directors to decide on share issues and on
the issue of other special rights entitling to shares as
well as on the acquisition of own shares.
Annual accounts and the use of the profit shown on
the balance sheet
The Annual General Meeting adopted the Company’s
financial statements and discharged the members of
the Board of Directors and the CEO from liability for
the financial period January 1 – December 31, 2022. The
Annual General Meeting resolved that no dividend be
paid based on
Board of Directors and Auditor
The Annual General Meeting confirmed that the
number of Board members is four. Pertti Ervi was re-
elected as the Chairman of the Board of Directors and
Matti Heikkonen, Antti Koskela, and Jukka Tapaninen
were re-elected as members of the Board of Directors.
The Authorised Public Accountants KPMG Oy Ab was
re-elected as the Company’s auditor. KPMG Oy Ab has
announced that Petri Kettunen, Authorized Public
Accountant, will act as the principal auditor.
Remuneration of the members of the Board of
Directors and the Auditor
The Annual General Meeting resolved that the
Chairman of the Board of Directors be paid EUR
45,000 per year and the other members of the Board
of Directors EUR 25,000 per year. Approximately 40
percent of the remuneration will be paid in shares and
60 percent in cash. The shares will be granted as soon
as possible after the Annual General Meeting and if the
insider regulations allow it. The members of the Board
of Directors will also be reimbursed for travel and
other expenses incurred while they are managing the
Company's affairs.
The remuneration to the Auditor shall be paid
according to the reasonable invoice.
Amendment of the Articles of Association
The Annual General Meeting resolved to amend
27
Articles 6 and 9 of the Company’s Articles of
Association. Article 6 was amended to correspond to
the responsibility for the auditor oversight stipulated
in the amended Finnish Auditing Act (1141/2015) and
further so that the term of the auditor shall end at the
closing of the first Annual General Meeting following
the election. Article 9 was amended to enable holding
a general meeting entirely without a meeting venue as
a so-called remote meeting in addition to the Helsinki,
Espoo and Vantaa. Further, said article was amended
due to certain legislation changes stipulating the
matters to be resolved upon in an Annual General
Meeting.
Reduction of the share capital
The Annual General Meeting resolved to reduce
the Company’s registered share capital from EUR
1,359,090 to EUR 80,000, i.e. by an aggregate amount
of EUR 1,279,090, with the reduced amount of EUR
1,279,090 being transferred to the reserve for invested
unrestricted shareholders’ equity. The reduction of the
share capital requires a public notice in accordance
with the Finnish Companies Act.
Authorization of the Board of Directors to decide on
share issues and on the issue of other special rights
entitling to shares
The Annual General Meeting resolved to authorize
the Board of Directors to decide on issuances of new
shares and conveyances of the own shares held by
the Company (share issue) either in one or more
instalments. The share issues can be carried out
against payment or without consideration on terms
to be determined by the Board of Directors. The
authorization also includes the right to issue special
rights referred to in Chapter 10, Section 1 of the Finnish
Companies Act, which entitle to the Company's new
shares or own shares held by the Company against
consideration. Based on the authorization, the
maximum number of new shares that may be issued
and own shares held by the Company that may be
conveyed in share issues or on the basis of special
rights referred to in Chapter 10, Section 1 of the Finnish
Companies Act is 3,200,000 shares. The authorization
includes the right to deviate from the shareholders'
pre-emptive subscription right. The authorization is in
force until the next Annual General Meeting.
Authorization of the Board of Directors to decide the
acquisition of own shares
The Annual General Meeting resolved to authorize the
Board of Directors to decide on the acquisition of the
Company’s own shares. Based on the authorization, an
aggregate maximum amount of 500,000 own shares
may be acquired, either in one or more instalments.
The authorization includes the right to acquire own
shares otherwise than in proportion to the existing
shareholdings of the Company’s shareholders, using
the Company’s non-restricted shareholders’ equity. The
authorization is in force until the next Annual General
Meeting.
The terms of all authorizations given to the board of
QPR Software Plc by the Annual General Meeting can
be read in full in the stock exchange release published
by the company on May 3, 2023. The release can be
read in the investor section of the company's website.
MANAGEMENT AND AUDITORS
The other members of the management team were:
• Director responsible for QPR's products and the
vision and strategy of the product portfolio Matti
Erkheikki
• The company's director responsible for sales and
customers Eric Allart (until June 27, 2023)
• Director responsible for technology Pekka
Keskiivari
• Tero Aspinen, director responsible for Middle East
business
• The director responsible for the consulting
business was Samuel Rinnetmäki until February
28, 2023, and Teemu Lehto from March 1, 2023.
• Director responsible for marketing,
communication, and brand Sanna Salo
• The company's CFO Mervi Kerkelä-Hiltunen
• Johanna Lähde served as the company's HR
director until 1 September 2023
During the accounting period, the auditing firm KPMG
Oy Ab acted as the actual auditor of QPR Software Plc,
and the principal auditor was Petri Kettunen, KHT.
SHARES HELD BY THE BOARD
AND CEO
QPR Software Plc's board members and CEO and
their close associates owned 485,041 QPR Software
Plc shares on 31 December 2023, which corresponds
to 2.7% of the company's shares and voting power.
(31/12/2022: 1.9).
The number of shares includes own, spouse's,
guardians' and controlling entities' holdings.
28
INTERNAL CONTROL
The Group’s internal control and risk management
aim to ensure that the Group operates efficiently and
effectively, distributes reliable information complies
with regulations and operational principles, reaches its
strategic goals, reacts to changes in the market and
operational environment, and ensures continuity of its
business.
The Board of Directors' duty is to monitor the
appropriateness, effectiveness and efficiency of risk
management and internal control within the Group.
The Board assesses the risks based on the threat they
pose to shareholders. The Board
also oversees that the Company has defined operating
principles for internal control and
that the Company monitors the effectiveness of
controls.
RISK MANAGEMENT
The Group’s CFO is responsible for coordinating
and reporting on the Group’s internal controls and
risk management. The Group’s risk management is
driven by the requirements arising from legislation,
shareholder expectations regarding business
objectives, as well as the expectations from customers,
personnel, and other important stakeholders.
QPR’s risk management aims to systematically and
comprehensively identify the risks related to its
operations and to ensure that risks are managed and
considered in decision making. Risk management
responsibilities are integrated throughout the
organization. Risk management is developed by
continuously improving the Company’s operational
processes. The principle of materiality is used as the
basis for identifying risks: the realization of monitored
risks must have a material effect on the Company’s
business operations.
QPR Software has identified the following three
groups of risks related to its operations: risks related
to business operations, risks related to information
and products, and risks related to financing. Property,
operational, and liability risks are covered by way of
insurance.
QPR Software Plc’s Management System was awarded
the ISO 9001:2015 quality certificate covering all of the
Company’s activities, which are audited annually by an
external evaluator.
RISKS RELATED TO BUSINESS
OPERATIONS
The following risks are related to QPR Software’s
business operations:
Country risk
Risk is measured by assessing the potential loss
of country-specific revenue. Risk is managed by
continuously gathering market information and
diversifying business across geographical markets
and industries as well as considering movements in
geopolitical environment.
Customer risk
Risk is measured in terms of software maintenance
customer churn and the share of overdue accounts
receivable in total receivables (%). Risk is managed by
taking good care of every customer and reseller, as
well as by actively following up on accounts receivable.
Personnel risk
Risk is measured in terms of personnel churn. Risk is
managed through skilled recruitment, professional
management practices, and by providing job rotation
and learning and growth opportunities.
Legal and other risks
Risk is measured by comparing the cumulative
euro-value of all open legal disputes with annual net
sales (%). Risk is managed with good knowledge of
contract law and standard terms, and by conducting
business activities that are both ethical and in line with
Company values.
QPR’s country and customer risks are mitigated by
conducting business in more than 50 countries, in
both public and private sectors, as well as in several
different industries.
Reasonable credit risk concerning individual business
partners is characteristic to any international business.
QPR seeks to limit this risk by continuously monitoring
standard payment terms, receivables, and credit limits.
The value of trade receivables over 60 days past due
was 3% (3) of total trade receivables at the end of the
period.
RISKS RELATED TO
INFORMATION AND PRODUCTS
QPR Software has identified the following three risks
related to information and products:
29
Risk related to products
Risk is managed by ensuring that the Company’s
offering remains competitive by differentiating from
competitors through the strengths of its content and
products. The Company seeks to ensure the security of
its products by using automatic malware prevention.
Intellectual Property Rights
The Company’s Intellectual Property Rights (IPR) are
protected by the confidentiality of the source code, its
secure storage, and selected patent applications.
In the process mining business, the Company has
adopted a more active IPR strategy. As a result, QPR
filed patent applications for five separate inventions
in Finland and the USA in 2012. The inventions relate
to automated business process discovery based on
processing event data. In April 2015, QPR announced
that the U.S. Patent and Trademark Office has granted
a patent as a result of the applications. In May 2016,
QPR informed that the U.S. Patent and Trademark
Office granted an additional patent to its process
mining technology.
In addition, the Company uses contract management
and internal training to ensure that third-party IPRs
are not used in QPR products without permission. The
Company has legal expense insurance.
Information and security risks
QPR Software regularly monitors and mitigates
information security risks in its operations and
reports to the Board of Directors. The Company uses
governance practices and technology to improve
the security of their systems. To mitigate information
security risks, the Company has adopted data and
vendor governance models, conducted annual audits
of our partners, and organized relevant in-house
training to improve security awareness. QPR has had
no significant information security events or problems
related to product management, and no significant
changes in the risks of these have been observed
during 2023. In June 2023, there was extensive sewage
water damage at the company's headquarters
in Helsinki, which did not, however, cause any
information security risks.
In September 2023, Bureau Veritas performed the
re-certification of QPR Software's information security
management system according to the latest ISO
27001:2022 standard.
The international ISO 27001 standard contains
requirements for establishing, implementing,
maintaining, and continually improving an information
security management system. The information security
management system preserves the confidentiality,
integrity, and availability of information by applying
a risk management process and gives confidence to
interested parties that risks are adequately managed.
QPR Software’s ISO 27001 certificate was issued after
the completion of a formal audit performed by Bureau
Veritas, an independent and
RISKS RELATED TO FINANCING
QPR Software has identified the following two
financing risks:
Currencies
Foreign currency risk is measured by calculating the
share of all non-euro receivables in total receivables, or
the share of an individual non-euro currency in total
receivables (%). The risk is managed by using the euro
as the primary invoicing currency and by currency
hedging in accordance with the Company’s hedging
policy. The company constantly monitors how the
open positions of the biggest invoicing currencies
develop. At the end of the financial year, the Company
had not hedged its foreign currency (non-euro) trade
receivables. Approximately 79% of the Group’s trade
receivables were in euros at the end of the financial
year (82).
Liquidity risk
Liquidity risk means insufficient financing or higher
than usual financing costs due to a lack of liquid
assets when business conditions suddenly deteriorate,
and financing is needed. The goal of liquidity risk
management is to maintain sufficient liquidity and to
ensure that funds are constantly available to finance
the business quickly enough. QPR maintains sufficient
liquidity through efficient cash management, deposits,
and by reacting to rapidly changing situations. The
business cash flow forecast is used as a measure. The
risk is managed by active monitoring of the forecast
and efficient collection.
Risks related to the company's financial position are
mitigated by the relatively high share of continuous
income in turnover. In addition to this, the company
invoices most of the continuous income receivables
with pre-invoicing. The company's financial position on
December 31, 2023, was moderate due to the previous
loss-making performance, the impact of which the
company will reduce with the cost savings brought
about by the concluded change negotiations during
2024.
In addition, on January 24, 2023, the company
converted a short-term financing limit of 1.5 million
euros into a long-term one, the conditions of which
are covenants tied to EBITDA and equity ratio. The
EBITDA of the covenants is tested every six months,
and the equity ratio is tested annually according to the
30
situation on the last day of the year.
In the testing carried out on 31 December 2023,
EBITDA fell below the agreed covenant limit. In
December 2023, the bank pledged not to exercise
its receivables maturity right under the financing
agreement in the event of a potential breach of the
group's EBITDA covenant as per the 2023 financial
statements. The financing limit will be repaid in
installments of 500 thousand euros on 31 January 2024,
31 January 2025, and 31 January 2026.
To manage the liquidity risk, the company also has an
agreement for a credit limit of 500 thousand euros,
which was not in use on December 31, 2023.
Financial risk management is described in more detail
for the financial year 2023 in note 30 to the financial
statements.
LEGAL DISPUTES
In 2022 and 2023, the Company did not have any legal
disputes.
OUTLOOK FOR 2024
The company monitors the development of the world's
economic situation and geopolitical tensions. The
slowly budding recovery of economic growth, falling
interest rates and normalizing inflation will improve
the financial position of customers, and investment
decisions can be expected to accelerate towards the
end of 2024.
Supported by the current contract base and the
projected growth of SaaS (Software as a Service) net
sales, QPR expects the growth of SaaS net sales to be
double-digit and estimates that the entire software net
sales will grow in 2024 (2023: 5,122 thousand euros).
The company expects the operating result to improve
significantly in the financial year 2024. The operating
result in 2023 was -813 thousand euros.
THE BOARD OF DIRECTORS’
PROPOSAL ON DIVIDEND
At the end of the 2023 fiscal year, the parent
company's distributable funds were EUR 1,340,682.
The Board of Directors proposes to the Annual General
Meeting that no dividend be distributed for the
financial year 2023.
There have been no significant changes in the
company's financial position since the end of the
financial year.
EVENTS AFTER THE REPORTING
PERIOD
Change negotiations related to the adjustment of
QPR Software Plc´s strategy
On December 14, 2023, QPR Software Plc announced
its adjusted strategy and the change in its
organizational structure planned to support it and
submitted a negotiation proposal in accordance
with the related Cooperation Act to start the
change negotiations. The change negotiations were
completed on Thursday, January 4, 2024.
In the change negotiations, the Company planned
to change its organizational structure to support its
adjusted strategy. The goal of the planned changes
is to support the more efficient organization of QPR
Software's operations, to try to respond to changes
in the operating environment, and to renew the
organizational structure in order to achieve the
Company's long-term growth and profitability goals.
Change negotiations were held separately in both QPR
Software Plc and QPR Services Oy. As a result of the
negotiations, the Company will terminate a maximum
of four positions at QPR Software Plc and a maximum
of six positions at QPR Services Oy.
QPR Software Plc signed the first partner
agreement in North America and received an
affirmative decision on Business Finland's support
for market mapping
QPR Software's unique process mining software, QPR
ProcessAnalyzer, is globally the only software running
natively in the Snowflake Data Cloud. This means
solving performance, scalability, and security issues
for customers. The majority of Snowflake's customers
are in the US market. In accordance with its strategy,
QPR aims to expand to the North American market,
utilizing the partner network that is being built there.
An important step in this endeavor is the signing of
a significant partnership agreement with Solution BI
on January 16, 2024. The agreement includes resale
rights for QPR ProcessAnalyzer in the United States,
Canada and Mexico. QPR Software also cooperates
with Solution BI in the Middle East region.
In addition, on January 30, 2024, Business Finland
approved QPR Software Oyj's Market Explorer funding,
which is used to investigate business opportunities
and map markets in North America. Granted support
covers 50% of incurred costs, upper limit 39,995
euros. This financial support is intended to facilitate
the mapping of the company's new markets and to
promote the conditions for the internationalization of
the business.
31
Key figures of the group 2021-2023
Group, IFRS
(EUR 1 000)(EUR 1 000)
2023 2022 2021
Net sales 7,550 7,823 9,140
Growth of net sales, % -3.5 -14.4 1.9
Operating result -813 -2,770 -1,248
% of net sales -10.8 -35.4 -13.7
Result or loss before tax -924 -2,864 -1,356
% of net sales -12.2 -36.6 -14.8
Result for the period -924 -2,868 -1,356
% of net sales -12.2 -36.7 -14.8
Return on equity, % -221.5 -625.7 -111.4
Return of investments, % -42.0 -120.3 -49.3
Cash and cash equivalents 884 17 441
Net liabilities 934 2,262 1,241
Equity 348 487 430
Gearing, % 268.3 464.9 288.5
Equity ratio, % 8.1 7.4 8.3
Total balance sheet 5,869 7,442 5,800
Investment in intangible and
tangible assets
637
2,324 924
% of net sales
8.4
29.7 10.1
Research and development expenses
1,427
2,674 2,115
% of net sales 18.9 34.2 23.1
Personnel average for period 57 81 80
Personnel at the beginning of period 85 80 88
Personnel at the end of period
49 85 80
32
Per-share key figures 2021-2023
Group, IFRS
(EUR 1,000)(EUR 1,000)
2023 2022 2021
Diluted/Undiluted Earnings per share, EUR -0.055 -0.202 -0.113
Equity per share, EUR 0.020 0.030 0.035
Dividend per share *, EUR 0.000 0.000 0.000
Dividend as % of result 0.0 0.0 0.0
Effective dividend yield, % 0.0 0.0 0.0
Price/earnings ratio (P/E) -6.0 -2.8 -16.4
Development of share price 0.0 0.0 0.0
Average price, EUR 0.45 1.02 1.97
Lowest closing price, EUR 0.32 0.50 1.48
Highest closing price, EUR 0.75 1.89 2.38
Closing price on Dec 31, EUR 0.33 0.56 1.85
Market capitalization on Dec 31, 5 957 8 983 22 178
EUR 1,000 5,957 8,983 22,178
Development of trading volume
Number of shares traded, 1,000 pcs 3,538 2,263 3,324
% of all shares 19.8 14.1 27.7
Number of shares on Dec 31, 1,000 pcs
18,175 16,455 12,445
Average number of shares outstanding 17,836 16,042 11,988
*) Year 2023: The Board of Director's proposal to the Annual General Meeting.
Financial Statements
QPR Software Plc Annual Report 2023 and related Annual Financial Report (AFR) ESEF tagging is
officially published in Finnish. QPR Software Plc has decided to provide voluntarily non-official version
translated in English in this ESEF tagged document.
34
(EUR 1 000) Note 2023 2022
Net sales 3 7,550 7,823
Other operating income 4 1 4
Materials and services 6 896 1,552
Employee benefit expenses 7 5,287 7,214
Depreciation and amortization 9 995 1,017
Other operating expenses 10 1,186 814
Total expenses 8,363 10,597
Operating Result -813 -2,770
Financial income 11 1 4
Financial expenses 11 -112 -66
Financial items, net -111 -62
Provisions 25 0 -33
Result before tax -924 -2,864
Income taxes 12 0 -3
Result for the financial year -924 -2,868
Other items in comprehensive income that may
be reclassified subsequently to profit or loss:
Exchange differences on translating foreign operations -1 2
Other items in comprehensive income, net of tax -1 2
Total comprehensive income for the financial year -925 -2,866
Earnings per share, EUR
Undiluted, EUR 13 -0.055 -0.202
Diluted, EUR 13 -0.055 -0.202
CONSOLIDATED
COMPREHENSIVE INCOME
STATEMENT, IFRS
35
CONSOLIDATED BALANCE
SHEET, IFRS (1/2)
(EUR 1 000) Note 2023 2022
ASSETS
Non-current assets
Capitalized product development expenses 14 2,217 2,380
Other intangible assets 14 28 31
Goodwill 15 358 358
Tangible assets 16 81 171
Other investments 17 5 5
Right-of-use assets 16 318 756
Deferred tax assets 19 273 273
Total non-current assets 3,279 3,973
Current assets
Trade and other receivables 20 1,706 3,452
Cash and cash equivalents 21 884 17
Total current assets 2,590 3,469
Total assets 5,869 7,442
36
CONSOLIDATED BALANCE
SHEET, IFRS (2/2)
EQUITY AND LIABILITIES
Equity
Share capital 23 80 1,359
Other funds 21 21
Treasury shares -348 -406
Translation difference -67 -66
Invested non-restricted equity fund 23 4,925 2,943
Retained earnings -4,263 -3,364
Equity attributable to shareholders of the parent company 348 487
Non-current liabilities
Interest-bearing lease liabilities 192 609
Interest-bearing liabilities 1,000 0
Deferred tax liabilities 19 0 0
Total non-current liabilities 1,192 609
Current liabilities
Interest-bearing lease liabilities 126 149
Provisions 25 0 33
Trade and other payables 25 3,703 4,644
Interest-bearing liabilities 24 500 1,521
Total current liabilities 4,329 6,346
Total liabilities 5,521 6,955
Total equity and liabilities 5,869 7,442
(EUR 1,000) Note 2023 2022
37
CONSOLIDATED CASH FLOW
STATEMENT, IFRS
(EUR 1 000) Note 2023 2022
Cash flow from operating activities
Result for the period -924 -2,868
Adjustments for the result
Depreciation 995 1,017
Other adjustments 27 83 -143
Changes in working capital:
Increase (-)/decrease (+) in short-term non-interest bearing 1,872 -680
Increase (+)/decrease (-) in short-term non-interest bearing -1,051 988
Interest expense and other financial expenses paid -107 -58
Interest income and other financial income received 0 0
Taxes paid -19 -21
Net cash flow from operating activities 849 -1,765
Cash flow from investing activities
Acquisition of tangible assets 0 -111
Capitalized development expenses -619 -1209
Acquisition of other intangible assets -2 -35
Net cash flow from in investing activities -620 -1,355
Cash flow from financing activities
Proceeds from borrowings 24 1,500 1,521
Repayments of borrowings 24 -1,500 -1,500
Payment of lease liabilities -121 -266
Share issue, net 23 760 2,937
Net cash used in financing activities 639 2,693
Change in cash and cash equivalents 868 -427
Cash and cash equivalents at the beginning of year 17 441
Effect of exchange rate differences 0 3
Cash and cash equivalents at the end of year 21 884 17
*2022: Includes non-interest bearing liabilities related to Investments EUR 127 thousand
38
PARENT COMPANY INCOME
STATEMENT, FAS
(EUR) Note 2023 2022
Net sales 3 6,957,506 7,234,554
Other operating income 4 388,696 693,716
Material and services 6 2,301,230 2,511,492
Personnel expenses 7 3,992,126 5,306,728
Depreciation and amortization 9 158,066 185,842
Other operating expenses 10 1,828,896 2,299,231
Total expenses 8,280,317 10,303,292
Operating result -934,116 -2,375,022
Financial income and expenses 11 -468,620 -600,190
Result before appropriations and taxes -1,402,736 -2,975,212
Appropriations 25 0 -32,628
Result before taxes -1,402,736 -3,007,840
Income taxes 12 0 0
Result for the financial year -1,402,736 -3,007,840
39
PARENT COMPANY
BALANCE SHEET, FAS
(EUR) Note 2023 2022
ASSETS
Non-current assets
Intangible assets 14 84,107 150,426
Tangible assets 16 80,775 170,866
Investments in group companies 17 3,497,653 3,581,261
Other investments 17 4,562 4,562
Total non-current assets 3,667,098 3,907,115
Current assets
Non-current receivables 18.19 0 225,000
Current receivables 20 3,472,941 5,111,014
Cash and cash equivalents 21 859,814 938
Total current assets 4,332,755 5,336,952
Total assets 7,999,852 9,244,067
EQUITY AND LIABILITIES
Equity
Share capital 23 80,000 1,359,090
Invested unrestricted equity fund 23 5,529,731 3,454,341
Retained earnings -2,747,372 270,643
Treasury shares -347,552 -405,726
Provisions - 32,628
Total equity 1,112,072 1,670,507
Appropriations
Result for the financial year -1,402,736 -3,007,840
Total appropriations 0 32,628
Liabilities 1,000,000 -
Current liabilities 24.25 5,887,781 7,540,932
Total liabilities 6,887,781 7,540,932
Total equity and liabilities 7,999,852 9,244,067
40
PARENT COMPANY CASH
FLOW STATEMENT, FAS
(EUR) 2023 2022
Cash flow from operations
Operating result -1,402,736 -2,375,022
Adjustment for the period:
Depreciation and amortization 158,066 185,842
Non-cash transactions 356,610 35,199
Financial items, net -69,746 -42,031
Cash flows before change in working capital -957,806 -2,196,012
Change in working capital
Increase (-) / decrease (+) in current receivables 1,807,431 -875,913
Increase (-) / decrease (+) in current liabilities* -952,531 1,061,813
Change in net working capital 854,900 185,900
Net cash from operating activities -102,905 -2,010,112
Cash flows from investing activities
Investments in intangible assets -1,657 -34,534
Purchases of tangible assets 0 -111,043
Investments in subsidiary loans granted 203,694 -1,185,942
Net cash used in investing activities 202,037 -1,331,519
Cash flows from financing activities
Proceeds from current loans and borrowings 1,500,000 1,520,756
Repayments of short-term borrowings -1,500,000 -1,500,000
Proceeds from share issuance 759,744 2,937,392
Cash flows from financing activities 759,744 2,958,148
Change in cash and cash equivalents 858,876 -383,483
Cash and cash equivalents at the beginning of the year 938 384,421
Cash and cash equivalents at the end of the year 859,814 938
41
STATEMENTS OF CHANGES
IN EQUITY
Consolidated statement of
changes in equity, IFRS
(EUR 1,000)
Share
capital
Other
funds
Translation
differences
Treasury
shares
Invested
unrestricted
equity fund
Retained
earnings
Equity
attributable to
shareholders
of the parent
company
Equity Dec 31, 2021 1,359 21 -68 -439 5 -448 430
Disposal of own shares 0 0 0 34 0 0 34
Stock option scheme 0 0 0 0 0 -47 -47
Share issue, net 0 0 0 0 2,937 0 2,937
Comprehensive
income 0 0 2 0 0 -2,868 -2,866
Equity Dec 31, 2022 1,359 21 -66 -406 2,943 -3,364 487
Disposal of own shares 0 0 0 58 0 -10 48
Reduction of share
capital -1,279 0 0 0 1,279 0 0
Stock option scheme 0 0 0 0 0 36 36
Share issue, net 0 0 0 0 703 0 703
Comprehensive
income 0 0 -1 0 0 -924 -925
Equity Dec 31, 2023 80 21 -67 -348 4,925 -4,263 348
42
Parent company statement of changes in shareholders’ equity, FAS
Restricted equity Vapaa oma pääoma
(EUR)
Number of
shares Share capital Treasury shares
Invested
unrestricted
equity fund
Retained
earnings
Total
unrestricted
equity Total equity
Equity Jan 1, 2022 12,444,863 1,359,090 -439,307 5,347 256,223 -177,736 1,181,354
Right issue 0 0 0 3,448,994 0 3,448,994 3,448,994
Treasury share price difference 0 0 0 0 14,418 14,418 14,418
Disposal of own shares 0 0 33,581 0 0 33,581 33,581
Result for the year 0 0 0 0 -3,007,840 -3,007,840 -3,007,840
Equity Dec 31, 2022 16,455,321 1,359,090 -405,726 3,454,341 -2,737,199 311,417 1,670,507
Right issue 0 0 0 796,300 0 796,300 796,300
Reduction of share capital 0 -1,279,090 0 1,279,090 0 1,279,090 0
Treasury share price difference 0 0 0 0 -10,175 -10,175 -10,175
Disposal of own shares 0 0 58,175 0 0 58,175 58,175
Result for the year 0 0 0 0 -1,402,736 -1,402,736 -1,402,736
Equity Dec 31, 2023 18,175,192 80,000 -347,551 5,529,731 -4,150,108 1,032,072 1,112,072
Notes to Financial Statements
44
COMPANY INFORMATION
QPR offers services and software tools for developing
business processes and enterprise architecture. The
Group’s parent company, QPR Software Plc (company
ID 0832693-7), is a public limited liability company
incorporated in Finland. The parent company is
domiciled in Helsinki and its registered office is located
at Huopalahdentie 24, 00350 Helsinki, Finland. The
shares of the parent company, QPR Software Plc , have
been listed on the Helsinki Stock Exchange since 2002.
A copy of the Consolidated Financial Statements is
available on the Internet at www.qpr.com or at QPR
Software Plc, Huopalahdentie 24, Helsinki, Finland .
the financial statements for publication on February 16,
2024. Shareholders have the right to approve or reject
financial statements in the Annual General Meeting or
decide to revise them.
1. ACCOUNTING PRINCIPLES
FOR CONSOLIDATED FINANCIAL
STATEMENT
Basis of preparation
have been prepared in accordance with the
International Financial Reporting Standards (IFRS) and
take into account the IAS and IFRS standards, as well
as SIC and IFRIC interpretations, in force on December
31, 2023. In the Finnish accounting legislation,
International Financial Reporting Standards refer to
standards and interpretations accepted to be followed
in the European Union in accordance with Regulation
(EC) No 1606/2002.
The financial statements have been prepared using
the historical cost convention, unless otherwise
disclosed in the accounting principles below. The
Consolidated Financial Statements are presented in
Euro, which is the functional currency of the parent
company. Financial statements are presented in
thousands of Euros. All presented figures are rounded,
which means that the sum of individual amounts may
differ from the total presented. Key figures have been
calculated using exact amounts.
New and amended standards and interpretations
adopted in 2023
From the beginning of 2023, the Group has applied
the following new and revised standards and
interpretations.
Disclosure of Accounting Policies – Amendments
to IAS 1 Presentation of Financial Statements and
IFRS Practice Statement 2 Making Materiality
Judgements * (effective for financial years beginning
on or after January 1, 2023, early adoption is permitted)
The amendments clarify the application of materiality
in deciding which accounting policies to disclose.
Classification of Liabilities as Current or Non-current
– Amendments to IAS 1 Presentation of Financial
Statements * (effective for financial years beginning
on or after January 1, 2023, early adoption is permitted)
Amendments aim to harmonize the way IAS 1 is
applied in practice and to clarify the classification of
liabilities as current or non-current.
Definition of Accounting Estimates – Amendments
to IAS 8 Accounting Policies, Changes in Accounting
Estimates and Errors * (effective for financial years
beginning on or after January 1, 2023, early adoption is
permitted)
Amendments clarify how entities should distinguish
changes between accounting principles and
accounting estimates and focus on developing and
clarifying accounting estimates.
Consolidation principles
The Consolidated Financial Statements include
the parent company, QPR Software Plc, and the
subsidiaries it controls. The parent company's control is
based on the ownership of the entire share capital or a
majority of shares in the case of subsidiaries, as well as
100% voting rights. The Company did not own shares
in joint ventures or associated companies in 2023 and
2022.
Subsidiaries acquired during the financial period
are consolidated from the date on which control is
obtained, and divestments are included until the date
on which control ceases. Intragroup shareholdings
are eliminated using the acquisition cost method.
Intercompany business transactions, receivables,
liabilities, unrealized profits, as well as intragroup
profit distribution, are eliminated in the Consolidated
Financial Statements. The profit for the financial year
applicable to non-controlling interests is presented
separately in the consolidated comprehensive income
statement, and the share of the non-controlling
interest in shareholders’ equity is presented separately
in the consolidated balance sheet. The Group’s
subsidiaries did not have any non-controlling interests
in 2023 and 2022.
Continuity of operations
The Consolidated Financial Statements have
been prepared in accordance with the principle of
continuity. The company concluded a long-term
refinancing agreement at the beginning of 2023.
Additional information in the note 30.
45
Foreign currency translation
The functional currency of foreign subsidiaries is the
local bookkeeping currency.
Transactions denominated in foreign currency have
been translated into the group reporting currency
using the exchange rate valid on the transaction
date. Monetary items have been converted into the
group reporting currency using the exchange rate
on the closing date, and non-monetary items using
the exchange rate on the transaction date. The
exchange gains and losses from business operations
are included in operating profit, and the exchange
gains and losses from financial assets or liabilities are
included in financial income and expenses.
The income statements of foreign subsidiaries are
translated into Euro using the average exchange rates
for the year, and the balance sheets are translated
using the exchange rates on the balance sheet date.
Translation differences arising from the elimination of
foreign subsidiaries and the translation of equity items
accumulated after the acquisition are entered in other
comprehensive income. Foreign currency gains and
losses from monetary items that are part of the net
investment in a foreign unit are recognized in other
comprehensive income.
Revenue recognition
Net sales include the normal sales income from the
Group’s business operations, deducted by sales-related
taxes and granted discounts. When calculating net
sales, they are adjusted to account for exchange rate
differences.
Revenue is recognized when (or as) the control of
goods or services are transferred to a customer either
over time or at a point in time.
The consolidated net sales consist of software license
sales, software maintenance services, cloud (SaaS)
services and consulting. In relation to its resellers, the
Company acts as a principal and records in its net sales
the revenue from the software sales of the resellers to
the end customers, and records in its costs the reseller
commission.
Software license revenue is recognized at a point in
time, when (or as) a company transfers control of
license or user rights to a customer.
Limited term license performance obligations are
license and maintenance, and revenue is recognized as
the performance obligation if fulfilled, either at a point
in time or over time, during the agreement period.
Long-term software license contracts agreed for
indefinite duration have the performance obligation
for licenses and maintenance. The license part of
the revenue is recognized at a point in time, in the
beginning of each invoicing period, however not earlier
than delivery is performed. The maintenance part as
well as cloud services in total are recognized over time,
evenly during the contract period.
Software maintenance services covering software
updates and customer support are recognized over
time, evenly during the agreement period.
Cloud services (SaaS) in totality are recognized over
time, as the performance obligation is the service
rendered over time.
Revenues from consulting services are recognized
as services are rendered, when (or as) control of the
services has been transferred to the customer.
The Group uses payment terms typical for each
market, including domestic terms, which are typically
shorter than international terms.
Advance payments
Licenses and maintenance fees for long-term,
indefinite-term software licenses (Renewable
Licenses), software maintenance revenues, as well
as revenues from cloud services (SaaS services)
are generally invoiced before the commencement
of the performance obligation. The portion of
the performance obligation is recorded in the
balance sheet as deferred income liabilities, and,
correspondingly, either as accounts receivable or,
upon the fulfillment of the performance, into the bank
account.
Other operating income
Other operating income includes income that is not
related to the parent company’s core business. Public
subsidies are recorded in other operating income,
except when they are related to investments, in which
case they are deducted from the acquisition cost of
the asset.
Research and development expenditure
Research costs are expensed as incurred. Expenses
related to the introduction of new technology, or
the development of a new product are capitalized
and amortized over the useful life of 4 years. When
determining the duration of useful economic life, the
technology’s eventual obsolescence and the product’s
typical life cycle are considered. Amortization begins
when the product becomes commercially viable.
Maintenance costs and minor improvements to
existing products are expensed. Grants received for
product development are recognized in the income
statement for the periods in which the corresponding
expenses are incurred.
Pension plans
The Group’s pension scheme is a defined contribution
46
plan managed by a pension insurance company. The
expenses are recognized in the comprehensive income
statement in the financial period that the contribution
relates to. The Group does not have a legal or
constructive liability to pay additional contributions
in case of non-performance by the pension insurance
company.
Share-based payments
The Group has adopted an option plan for key persons
as of beginning of the year 2019 and expanded it with
a new plans in 2022 and 2023. In the Group incentive
plan payments are made in the form of equity
instruments. The benefits granted under the plans
are recognized at fair value on the date on which they
were granted and entered as costs evenly throughout
the period during which they were earned. The effect
of the plans on profit or loss is presented under the
costs of employee benefits.
The cost determined on the date on which the options
were granted is based on the Group estimate of the
number of options for which rights are presumed to
arise at the end of the incentive earning period. The
Group updates the presumption of the final number
of options on the final day of every reporting period.
Changes in estimates are treated through profit or
loss. The fair value of the option plan is defined based
on the Black-Scholes pricing model. Terms that are
not market based, such as profitability and specific
growth targets, are not taken into consideration when
determining the fair value of options. Instead, they
affect the estimate of the final number of options.
When option rights are exercised, the assets obtained
from share subscriptions are entered into the invested
unrestricted equity fund in accordance with the terms
of the plan.
Operating profit
IAS 1 “Presentation of Financial Statements” does not
define the concept of operating profit. The Group uses
the following definition of operating profit: operating
profit is the sum of net sales and other operating
income, less the cost of materials and services,
expenses for employee benefits, other operating
expenses, as well as depreciation, amortization and
impairment losses of tangible and intangible assets.
Exchange rate differences arising from working
capital items are included in operating profit, whereas
exchange rate differences arising from financial assets
and liabilities are included in financial income and
expenses.
Impairment
At each annual closing, the Group reviews asset items
for any indication of impairment losses. If there are
such indications, the amount recoverable from the
said asset item is assessed. The recoverable amount
of tangible and intangible assets is the higher of
the asset item’s fair value less the cost arising from
disposal and its value in use. The recoverable amount
of financial assets is either the fair value or the present
value of expected future cash flows discounted at the
original effective interest rate. An impairment loss is
recognized in the comprehensive income statement
when the carrying amount is greater than the
recoverable amount.
Goodwill is not amortized but its recoverable
amount is estimated annually or more frequently
if circumstances indicate that the value may be
impaired. Such an estimate is prepared at least at each
annual closing. For such purposes, goodwill is allocated
to cash-generating units. An impairment loss is
recognized in the consolidated comprehensive income
statement, if the impairment test shows that the
carrying amount of goodwill exceeds its recoverable
amount. In this case the goodwill is recorded at its
recoverable amount. After the initial recognition,
goodwill is valued at original acquisition cost, less
impairment losses recognized. Impairment losses on
goodwill cannot be reversed.
Income taxes
The tax expense in the comprehensive income
statement consists of tax based on taxable income
for the financial year and deferred tax. Tax based on
taxable income for the financial year is calculated on
the basis of taxable income and the tax rate valid in
each country. Income taxes are charged to income,
except when they are related to items recorded in
equity or other items in comprehensive income, in
which case the tax expense is adjusted to such items.
Deferred taxes are calculated based on temporary
differences between the book value and tax value of an
asset or liability item. Deferred taxes are calculated at
tax rates enacted by the balance sheet date.
A deferred tax asset is recognized in the amount that
it is probable, in accordance with IAS 12, that future
taxable income will be generated against which the
temporary difference can be utilized. Deferred tax
liabilities are recognized in the balance sheet in full.
Intangible assets
Goodwill arising from business acquisitions represents
the excess of the cost of an acquisition, amount of
non-controlling interests, and previously owned equity
interests, over the fair value of the net assets of the
acquired company. Goodwill is valued at the original
acquisition cost minus impairment losses.
47
Other intangible assets include, for example, patents
and IT systems. They are amortized on a straight-line
basis over their useful life, which is 2 – 5 years.
Tangible assets
The balance sheet values of tangible assets are based
on original acquisition cost minus accumulated
depreciation and impairment losses. Depreciation is
calculated using the straight-line method and is based
on the estimated useful life of the asset.
The Group didn’t capitalize any borrowing costs in
2022 and 2021.
Useful lifetimes of tangible assets:
Machinery and equipment 3 – 7 years
IT machinery and equipment 2 – 5 years
Lease agreements
The Group has adopted the IFRS 16 standard on leases.
According to the standard, a contract is or contains a
lease if the Group has a right to control the use of an
identified asset for a certain period of time in exchange
for consideration. When determining the non-
cancellable period, the Group assesses the probability
of exercising extension and termination options by
considering all relevant facts and circumstances.
Lease payments are divided into liabilities and financial
expenses. Financial expenses are recognized in the
income statement for the lease period. The right-of-
use asset is depreciated using the straight-line method
over the asset’s useful life or lease term, if shorter
than useful life. Lease liabilities are discounted at the
average loan interest rate of the year.
When future lease payments are revised due to
changes in an index rate or the terms of the lease, the
right-of-use asset and the corresponding lease liability
is revalued to reflect these changes.
The group applies a practical expedient, under
which the company does not recognize lease
agreements with a lease term of up to 12 months
at the commencement date (short-term lease) on
the balance sheet. Instead, the company recognizes
the lease payments related to short-term leases as
expenses on a straight-line basis over the lease term.
The Group primarily leases offices for business use.
Lease agreements are typically made either as fixed-
term contracts or indefinite-term contracts.
Financial assets and liabilities
The Group’s financial assets are classified into the
following measurement categories: financial assets at
fair value through profit or loss and financial assets at
amortized cost. The classification of financial assets
is based on the purpose of the acquisition (business
model for managing the asset) that is determined
upon initial recognition. Transaction costs are included
in the original carrying amount of a financial asset
when the item is not measured at fair value through
profit or loss. Purchases and sales of financial assets
are recorded on the trade date. Items recognized at
amortized cost comprise trade receivables.
Financial liabilities are initially recognized at fair
value minus the transaction costs that are directly
attributable to the acquisition or issue of financial
liability. Subsequently financial liabilities, except for
derivative liabilities, are measured at amortized cost
using the effective interest rate (EIR) method. Financial
liabilities may include both non-current and current
liabilities and they can be interest-bearing or non-
interest-bearing.
Financial assets and liabilities measured at fair value
are presented in accordance with the hierarchy levels
based on fair value measurement. Levels 1, 2 and 3
are based on the source of information used in the
measurement. On level 1, fair values are based on
public quotes. On level 2, fair values are based on
quoted market rates and prices, discounted cash
flows, and valuation models (options). For assets
and liabilities classified on level 3, there is no reliable
market information source, and therefore, the fair
values of these instruments are not based on market
information.
To measure expected credit losses of trade receivables
from customers, the Group uses a simplified approach,
where the loss allowance is measured based on an
allowance matrix and recognized at an amount equal
to lifetime expected credit losses. Expected credit
losses are measured based on historical information
on previous credit losses, and also the available
information on future economic conditions is included
in the model.
Derivative contracts
Derivative contracts are initially recognized at fair value
on the date on which the Group becomes party to the
contract and are subsequently measured at fair value.
The Group has no derivative contracts in 2023 and
2022.
Cash and cash equivalents
Cash and cash equivalents include cash and cash
equivalents which are highly liquid and have a
maturity of no more than three months from the date
of acquisition.
Treasury shares
The repurchase of our own shares as well as the related
direct costs are recorded as deductions in equity.
48
Provisions
A provision is recognized when the Group has a legal
or constructive obligation as a result of an action, the
outflow of resources required to settle the obligation is
probable, and a reliable estimate of the amount can be
made.
A restructuring provision is recognized when a detailed
and appropriate plan has been prepared and the
company has begun to implement the plan or has
announced that it will do so. Restructuring provisions
are based on the management’s best estimate of
the expenses to be incurred, e.g., from employee
termination payments.
A provision for a loss-making agreement is recognized
when unavoidable expenditure required to fulfill the
obligations exceeds the benefits obtainable from the
agreement.
Accounting principles that require management
consideration, and essential factors of uncertainty
related to management estimates
The preparation of the financial statements
in accordance with IFRS standards requires
management to make estimates and assumptions
that affect the amounts of assets and liabilities at the
date of the balance sheet, as well as the amounts of
income and expenses for the reporting period and
future periods. In addition, professional judgment
is required in applying the accounting principles
used in the preparation of the financial statements.
Since the estimates and assumptions related to the
determination of the carrying amounts of assets and
liabilities are based on management's views at the
date of the financial statements, expected outcomes,
and other assumptions that were available when
preparing these consolidated financial statements
and are considered appropriate in the circumstances.
Estimates involve risks and uncertainties, and
actual outcomes may differ from the estimates and
assumptions made.
In estimates requiring management judgment,
the management has taken into account general
uncertainties such as geopolitical tensions, inflation,
and uncertainties affecting the overall economic
development in the valuation. Uncertainties may affect
revenue development, the discount rate used, and the
evolution of the company's cost structure. Additionally,
uncertainties may impact the company's customers'
payment behavior, as well as potential misjudgments
in the capitalization of research and development
expenses resulting from technology choices.
Estimates are reviewed if there are changes in
circumstances or if new information or experience is
obtained. Since estimates inherently involve various
degrees of uncertainty, the actual outcome may differ
from the estimated, leading to adjustments in the
carrying amounts of assets and liabilities.
Learn more about the key areas that required
management consideration:
• Share-based payments and option schemes
(Note 8)
• Product development expenditure (Note 14)
• Goodwill (Note 15)
• Deferred tax (Note 19)
• Trade receivables (Note 20)
• Leases (Note 29)
• Financial risk management (Note 31)
Adoption of new or revised IFRS standards
The Group has not yet adopted the following
already published new or amended standards
and interpretations. The Group will adopt them
immediately after the standard or interpretation is
effective or, when applicable, at the beginning of
the next financial year. (*= On December 31, 2022,
the standard in question was not yet approved for
adoption in EU)
Management is currently assessing the impact of the
following new or revised standards and interpretations
on the Consolidated Financial Statements.
Sale or Contribution of Assets between an Investor
and its Associate or Joint Venture – Amendments
to IFRS 10 Consolidated Financial Statements and
IAS 28 Investments in Associates and Joint Ventures
* (voluntary adoption is allowed, entry into force
postponed for the time being)
Amendments eliminate the conflict between current
guidance on consolidation and equity method
accounting and require that a full gain should be
recognized when transferred assets constitute a
business as defined in IFRS 3 Business Combinations.
Other new and revised standards and interpretations
are not expected to influence the Consolidated
Financial Statements when they become effective.
ACCOUNTING PRINCIPLES OF
PARENT COMPANY FINANCIAL
STATEMENTS
Financial statements of the parent company, QPR
Software Plc, have been prepared in accordance with
49
Finnish Accounting Standards (FAS), which differ in
certain respects from the international standards
(IFRS) used in the Consolidated Financial Statements.
Financial statements have been prepared using
historical cost convention, unless otherwise disclosed
in the accounting principles below. The parent
company financial statements are presented in
Euro. All figures are rounded, which means that the
sum of individual amounts may differ from the total
presented. Key figures have been calculated using
exact amounts.
Foreign currency translation
Transactions denominated in foreign currency are
translated using the exchange rate on the transaction
date. At the end of the reporting period, financial
assets and liabilities denominated in foreign currency
are valued at balance sheet date. Exchange rate
differences arising from foreign currency business
transactions are recorded in their corresponding
income statement accounts above operating profit;
and the net exchange rate differences arising from
financial items are recorded in financial income or
expenses.
Revenue recognition and Advance payments
The parent company applies the same principles of
revenue recognition and advance payment booking
principles as the Group. The Group’s principles of
revenue recognition and advance payments are
introduced in Note 1, page 45.
Other operating income
Other operating income includes income that is not
related to the parent company’s core business. Public
subsidies are included in other operating income,
except when they are related to investments, in which
case they are deducted from the acquisition cost of
the asset.
Pension plans
The employees’ statutory pension plan is managed
by a pension insurance company. Statutory pension
contributions are stated in the income statement as an
expense in the year of their accrual.
Research and development expenditure
Research costs are expensed as incurred. Expenses
related to the introduction of new technology, or
the development of a new product are capitalized
and amortized over the useful life of 4 years. When
determining the duration of useful economic life, the
technology’s eventual obsolescence and the product’s
typical life cycle are considered. Amortization begins
when the product becomes commercially viable.
Maintenance costs and minor improvements to
existing products are expensed. Grants received for
product development are recognized in the income
statement for the periods in which the corresponding
expenses are incurred.
Intangible assets
Intangible assets are reported at original acquisition
cost minus accumulated amortization and
impartment losses, if any. Public subsidies used to
acquire an intangible asset are deducted from the
asset’s acquisition cost and reduce asset amortization
in the income statement. The expected useful lifetime
of an intangible asset ranges from 2 – 5 years.
Tangible assets
Tangible assets are stated in the balance sheet
at original acquisition cost minus accumulated
depreciation and impartment losses. The economic life
of a tangible asset ranges from 2 – 7 years.
Investments
The shares the parent company holds in subsidiaries
and other entities are valued at original acquisition
cost or at fair value, if lower.
Provisions
A provision is recognized when the parent company
has a legal or constructive obligation as a result of an
action, an outflow of resources required to settle the
obligation is probable, and a reliable estimate of the
amount can be made.
Leasing
Lease payments are treated as expenses during the
rental period.
.
50
2. SEGMENT INFORMATION
QPR Software reports on one operating segment: Operational development of organizations. In addition to this,
the Company reports net sales from products and services as follows: Software license sales, Renewable software
license sales, Software maintenance services, Cloud services, and Consulting. Recurring revenue reported by the
Group consists of software maintenance services and cloud services as well as of renewable software licenses.
They are based on long-term, indefinite, or multiyear contracts, and are generally invoiced annually in advance.
The accounting and valuation principles for the segments are the same as in the Consolidated Financial
Statements.
Group (EUR 1 000) 2023 2022
Net sales by operating segment
Operational development of organizations 7,550 7,823
Total net sales 7,550 7,823
3. NET SALES
Net Sales by Product Group
The Group’s net sales derive from software and consulting businesses are broken down as follows:
Group, IFRS
(EUR 1 000)
2023 2022
Software licenses 485 560
Renewable software licenses 504 583
Software maintenance services 1,720 1,803
Cloud services 2,371 1,738
Consulting services 2,469 3,139
Total net sales 7,550 7,823
51
Parent company, FAS
(EUR)
2023 2022
Software licenses 446,561 511,639
Renewable software licenses 239,533 342,862
Software maintenance services 1,480,323 1,562,072
Cloud services 2,322,405 1,678,508
Consulting services 2,468,683 3,139,472
Total net sales 6,957,506 7,234,554
Net sales geographically
The geographical areas reported are Finland , the rest of Europe (including Russia and Turkey), and the rest of
the world. Net sales are reported according to the customer’s location. The company has closed its business and
partnerships in Russia for the time being.
Group, IFRS
(EUR 1 000)
2023 2022
Finland 3,499 4,126
Europe incl. Russia and Turkey 3,128 2,745
Rest of the world 923 953
Total net sales 7,550 7,823
Parent company, FAS
(EUR)
2023 2022
Finland 3,499,399 4,125,501
Europe incl. Russia and Turkey 2,627,272 2,240,723
Rest of the world 830,835 868,330
Total net sales 6,957,506 7,234,554
Balance sheet items based on customer agreements are presented in Note 22.
52
4. OTHER OPERATING INCOME
Group, IFRS
(EUR 1 000)
2023 2022
Other items 1 4
Total 1 4
5. ACQUIRED BUSINESS OPERATIONS, PARENT COMPANY
The branch to France was established under QPR Software Plc in 2022.
Parent company, FAS
(EUR)
2023 2022
Other items 388,696 693,716
Total 388,696 693,716
The other items include intra-group service charges from the parent company.
6. MATERIALS AND SERVICES
Group, IFRS
(EUR 1 000)
2023 2022
Materials and services 896 1,552
Parent company, FAS
(EUR)
2023 2022
Materials and services 2,301,230 2,511,492
53
Materials and services include mainly commissions and localization fees charged by the reseller network, as well
as consultancy subcontracting.
Materials and services of the parent company include intra-group license fees in addition to the above-
mentioned expenses.
7. EMPLOYEES AND RELATED PARTIES
Group, IFRS
(EUR 1 000)
2023 2022
Wages and salaries 4,425 5,995
Pension expenses - defined contribution plans 741 1,008
Other personnel expenses 121 211
Total 5,287 7,214
Average number of employees during the year 57 81
Parent company, FAS
(EUR)
2023 2022
Wages and salaries 3,339,953 4,413,833
Pension expenses - defined contribution plans 551,973 728,847
Other personnel expenses 100,200 164,048
Total 3,992,126 5,306,728
Average number of employees during the year 40 56
54
Related parties
The Group and the parent company’s related parties include members of the parent company’s Board of
Directors and the Executive Management Team, including the Chief Executive Officer, their spouses, domestic
partners, children and dependents, spouses’ or domestic partners’ children and dependents, as well as entities
controlled by any such related party.
The Group does not have any loans, commitments or guarantees granted to or received from related parties. The
Group has not had business transactions with related parties in 2023 and 2022.
Related parties to the parent company also include subsidiaries in the Group. The list of Group companies is
presented in Note 17. Shares in subsidiaries and other entities. Transactions between the parent company and
other Group companies, as well as intra-Group receivables, liabilities, commitments, and guarantees are included
as total amounts in the notes for the parent company financial statements.
Salaries, bonuses, fringe benefits and change in vacation bonus and bonus accruals for management
The Group has determined management to include members of the Board of Directors and the Executive
Management Team, including the Chief Executive Officer.
Group, IFRS (EUR 1 000)
2023 2022
Salaries and other short-term benefits: 0 0
Members of the Board of Directors 120 113
Chief Executive Officer Jussi Vasama 56 219
Chief Executive Officer Heikki Veijola 163 0
Executive Management Team 1,041 969
Total 1,380 1,301
Parent company, FAS (EUR)
2023 2022
Salaries and other short-term benefits:
Members of the Board of Directors 120,000 113,175
Chief Executive Officer Jussi Vasama 55,937 219,058
Chief Executive Officer Heikki Veijola 162,593 0
Executive Management Team 1,041,134 969,066
Total 1,379,664 1,301,299
55
The Group and the parent company’s related parties include members of the parent company’s Board of
Directors and the Executive Management Team, including the Chief Executive Officer, their spouses, domestic
partners, children and dependents, spouses’ or domestic partners’ children and dependents, as well as entities
controlled by any such related party.
The Group does not have any loans, commitments or guarantees granted to or received from related parties. The
Group has not had business transactions with related parties in 2023 and 2022.
Related parties to the parent company also include subsidiaries in the Group. The list of Group companies is
presented in Note 17. Shares in subsidiaries and other entities. Transactions between the parent company and
other Group companies, as well as intra-Group receivables, liabilities, commitments, and guarantees are included
as total amounts in the notes for the parent company financial statements.
In 2023, the maximum annual bonus of Executive Management Team, including the CEO, was 50% of the annual
base salary. The bonus scheme for members of the Executive Management Team was based on a set of KPI's
including development of the Group net sales, new sales and other non financial KPI's. For financial year 2023
about 44 thousand euros (2022: EUR 12 thousand) will be paid to the executive management team, including
the CEO.
Parent company, FAS
(EUR)
2023 2022
Board fees by member:
Ervi Pertti, Chairman of the Board 45,000 43,020
Heikkonen Matti 25,000 23,385
Koskela Antti 25,000 23,385
Tapaninen Jukka 25,000 23,385
Total 120,000 113,175
56
8. SHARE BASED PAYMENTS
Option scheme
QPR Software is operating with 2019B, 2022 and 2023
stock option plans intending to use these as part of the
Group's incentive and commitment program for the
key employees. The purpose of the stock options is to
encourage the key employees to work on a long-term
basis to increase the shareholder value and retain the
key employees at the company. The stock options are
issued gratuitously.
The option plan 2019 B provides for the issuance of
up to 473,000 options, option plan 2022 maximum
489,542 options and option plan 2023 maximum
1,000,000 options. Each option entitles its holder to
subscribe for one share. The option plan participants
can execute their reward during a one or two-year
subscription period following each vesting period
through either subscribing for shares or selling
options. The option plan participants generally lose the
right to their reward if their employment terminates
during the vesting period.
Stock option plan 2019 B with 437,000 options is
marked with the symbol 2019B. The subscription
period for stock options marked 2019 B is January
1,2023-January 31, 2024.
The allocated number of shares, subscribed by
exercising 2019 B stock options issued corresponds
to a maximum total of 0.8 per cent of all shares and
votes of the shares in the company after the potential
share subscriptions, if new shares are issued in the
share subscription. After the share subscriptions with
allocated stock options, the number of the company’s
shares may be increased by a maximum total of
138,000 shares, if new shares are issued in the share
subscription.
The share subscription price for stock options 2019B is
EUR 2.55 per share, which corresponded to the market
price of the company’s share with an addition of 50 per
cent at the time of issuance. The share subscription
price will be credited to the reserve for the company’s
invested unrestricted equity. The share subscription
price will be deducted by the amount of dividends and
distribution of assets paid.
The initial theoretical market value for Stock Option
plan 2019B, is approximately EUR 0.11 per stock option.
The theoretical market value of stock options 2019B
is approximately EUR 50,400 in total. The theoretical
market value of one stock option has been calculated
using the Black & Scholes stock option pricing model
by taking into account the share subscription price
of a stock option and with the following input factors:
share price EUR 1.70, risk free interest rate 0 per cent,
times to maturities of stock options approximately
5 years and volatility approximately 22 per cent. On
December 31, 2023, out of stock option plan 2019 B, no
subscription has been made.
A member of the Executive Management Team
participating in the stock option plan must increase
his or her share ownership in the company with the
net profit received through the stock options. He or
she must invest half of the net profit received through
the stock options in the company’s shares until his or
her share ownership in the company corresponds to
the value of his or her annual gross salary. The share
ownership must be maintained at such level as long as
his or her employment or service is in force.
The Board of Directors resolved on the 2019 B stock
option plans by virtue of an authorization granted
by the company’s Annual General Meeting of
Shareholders held on 12 April 2018. The target group
of the stock option plan includes in total less than
15 key employees and persons belonging to the
management. The terms and conditions of the stock
options 2019 available on the company’s webpage:
www.qpr.com/investors.
The stock option plan 2022 are marked with the
symbol 2022. The Share subscription period with the
Stock Options shall be 15 June 2025 - 31 May 2027.
The number of shares for the stock option plan 2022,
subscribed by exercising stock options corresponds
to a maximum of 1.9% of the Company’s shares and
votes after possible share subscriptions, if new shares
are issued in the share subscription. As a result of the
share subscriptions with stock options, the number of
the Company’s shares may increase by a maximum of
489,542 shares, if new shares are issued in the share
subscription.
The share subscription price for stock options 2022 is
EUR 0.85 per share, which was corresponding to the
market price of the company’s share at the time of
issuance. The share subscription price will be credited
to the reserve for the company’s invested unrestricted
equity. The share subscription price will be deducted
by the amount of dividends and distribution of assets
paid.
The theoretical market value of one stock option 2022
is approximately EUR 0.22 per stock option and is
approximately EUR 107,700 in total. The theoretical
market value of one stock option has been calculated
using the Black & Scholes stock option pricing model
by taking into account the share subscription price of a
stock option and with the following input factors: share
price EUR 0.85, risk free interest rate 0.88 per cent,
times to maturities of stock options approximately 4.8
years volatility approximately 27 per cent.
57
The Board of Directors resolved on the 2022 stock
option plans by virtue of an authorization granted
by the company’s Annual General Meeting of
Shareholders held on 6 April 2022. The target group
of the stock option plan includes in total less than
10 key employees and persons belonging to the
management. The terms and conditions of the stock
options 2022 available on the company’s webpage:
www.qpr.com/investors.
The stock option plan 2023 are marked with the
symbol 2023. The Share subscription period with
the Stock Options shall be 6 September 2026 - 6
September 2028.
The number of shares for the stock option plan 2023,
subscribed by exercising stock options corresponds
to a maximum of 5.2% of the Company’s shares and
votes after possible share subscriptions, if new shares
are issued in the share subscription. As a result of the
share subscriptions with stock options, the number of
the Company’s shares may increase by a maximum of
1,000,000 shares, if new shares are issued in the share
subscription.
The share subscription price for stock options 2023 is
EUR 0.42 per share, which was corresponding to the
market price of the company’s share at the time of
issuance. The share subscription price will be credited
to the reserve for the company’s invested unrestricted
equity. The share subscription price will be deducted
by the amount of dividends and distribution of assets
paid.
The theoretical market value of one stock option
2023 is approximately EUR 0.16 per stock option and
is approximately EUR 158,000 in total. The theoretical
market value of one stock option has been calculated
using the Black & Scholes stock option pricing model
by taking into account the share subscription price of a
stock option and with the following input factors: share
price EUR 0.42, risk free interest rate 0.88 per cent,
times to maturities of stock options approximately 5
years volatility approximately 42 per cent.
The Board of Directors resolved on the 2023 stock
option plans by virtue of an authorization granted
by the company’s Annual General Meeting of
Shareholders held on 3 May 2023. The target group
of the stock option plan includes key employees and
persons belonging to the management. The terms and
conditions of the stock options 2023 available on the
company’s webpage: .www.qpr.com/investors.
Stock option schemes and
subscription period
Stock options
granted /
outstanding at end
of the year
Returned/
exercised/
expired Un-distributed
Share
subscription
price
2019B 1.1.2023–31.1.2024 288,000 288,000 2,55
2022 15.6.2025–31.5.2027 352,470 0 0,85
2023 6.9.2026–6.9.2028 950,000 0 0,42
Total 1,590,470 0 288,000
58
9. DEPRECIATION AND AMORTIZATION
Group, IFRS
(EUR 1 000)
2023 2022
Intangible assets 787 671
Tangible assets
Machinery and equipment 90 111
Right-of-use assets, buildings 118 235
Total 995 1,017
Parent company, FAS
(EUR)
2023 2022
Intangible assets 67,975 74,634
Tangible assets
Machinery and equipment 90,091 111,208
Total 158,066 185,842
No write-downs on assets were booked in 2023 and 2022.
59
10. OTHER OPERATING EXPENSES
Group, IFRS
(EUR 1 000)
2023 2022
Non-statutory indirect employee costs 93 191
Premises 52 25
Travel expenses 14 44
Marketing and other sales promotion 223 279
Computers and software 615 528
External services 604 807
Doubtful receivables and bad debts 2 58
Capitalized product development expenses -619 -1,321
Other expenses 201 202
Total 1,186 814
Other expenses include fees paid to the Company’s auditor as follows:
Auditing 73 66
Other services 2 5
Total 75 71
Product development expenses incurred during the year
Expenses recognized in profit or loss 809 1,353
Capitalized expenses 619 1,321
Total 1,428 2,674
60
Product development expenses mainly consist of external services and personnel expenses. Recognized
expenses do not include amortization. The amortization of capitalized product development expenses is
presented in Note 14.
Parent company, FAS
(EUR 1 000)
2023 2022
Non-statutory indirect employee costs 66,015 147,982
Premises 169,780 290,750
Travel expenses 14,428 39,386
Marketing and other sales promotion 222,965 279,009
Computers and software 601,099 509,695
External services 573,746 777,597
Doubtful receivables and bad debts -4,948 46,401
Other expenses 185,810 208,411
Total 1,828,896 2,299,230
Other expenses include fees paid to the Company’s auditor as follows:
Auditing 67,572 59,237
Tax consulting - -
Other services 2,000 5,419
Total 69,572 64,656
Product development expenses incurred during the year
Expenses recognized in profit or loss 13,913 118,606
Capitalized expenses - -
Total 13,913 118,606
61
11 . Financial income and expenses
Recognized in profit or loss
Group, IFRS
(EUR 1 000)
2023 2022
Interest income from loans and other receivables 1 0
Interest expenses from loans -89 -21
Other financial income and expenses -9 -25
Exchange rate differences -14 -16
Total -111 -62
Exchange rate differences in profit and loss
Exchange rate differences included in net sales -40 -10
Exchange rate gains in financial income 0 4
Exchange rate losses in financial expenses -14 -20
Total -54 -26
62
Recognized in profit or loss
Parent company, FAS
(EUR)
2023 2022
Interest income from loans and other receivables 655 0
Impairment losses of holdings in Group companies -83,610 -
Interest expenses from loans -88,322 -21,032
Other financial income and expenses -317,272 -525,714
Exchange rate differences 19,929 -53,524
Total -468,620 -600,270
Recognized in profit or loss
Exchange rate differences included in net sales -36,867 -12,833
Exchange rate gains in financial income 0 1,508
Exchange rate losses in financial expenses 19,929 -55,032
Total -16,938 -66,357
Other Financial income and expenses in parent company include right issue costs worth of EUR 93,409 (2022:
EUR 511,602) according to FAS. According to IAS32 group is presented right issuance as net value.
The parent company (FAS) wrote down the value of its subsidiary, QPR CIS OY, which had previously engaged
in business in Russia, by 83,610 EUR. The parent company assesses that the ongoing war initiated by Russia and
the sanctions imposed by the European Union will significantly impact the business opportunities of QPR CIS
OY. Consequently, the discounted cash flow of future earnings is lower than the value of the shares in the parent
company's balance sheet.
Additionally, the parent company (FAS) wrote down the capital loan, 225,000 EUR, it had previously granted to its
subsidiary engaged in business in Russia, QPR CIS OY. The parent company assesses the repayment prospects
of the loan as weak due to the war initiated by Russia and the related sanctions imposed by entities like the
European Union.
63
12. INCOME TAXES
Group, IFRS
(EUR 1 000)
2023 2022
Current tax expense 0 0
Tax expense from previous years 0 3
The recognition of deferred tax assets is recorded to the extent it is probable that taxable income will be
generated in the future against which unused tax losses, unused tax credits, and deductible temporary
differences can be utilized in the respective countries. QPR continuously assesses the probability of realizing
deferred tax assets and considers both favorable and unfavorable evidence in this evaluation. QPR has
recognized 273 thousand euros of deferred tax assets on its balance sheet between the years 2016 and 2020.
The company estimates that it will have taxable income to an extent that it can utilize these deferred tax
assets during the period from 2026 to 2030. Based on the assessment made as of December 31, 2023, QPR did
not consider it probable that it could utilize the unused tax losses from the year 2023, unused tax credits, and
deductible temporary differences in Finnish taxation in the foreseeable future. The evaluation was mainly based
on previous results. If the company has incurred losses in the recent past in the country to which the deferred tax
asset relates, special consideration must be given to the recognition of deferred tax assets in the balance sheet.
The company recognizes deferred tax assets from unused tax losses and tax credits only to the extent that it has
sufficient taxable temporary differences or other convincing evidence that there will be sufficient taxable income
against which it can utilize the unused tax losses or tax credits in the future. When assessing the recognition
of deferred tax assets favorably in the future, less weight may be given if there is other unfavorable evidence,
such as accumulated losses, which can be considered a strong indication that there may not be taxable income
available in the future.
In 2023, QPR incurred an accounting loss, so the company believes it lacks sufficient evidence of generating
long-term taxable income to consider it probable that it can utilize the deferred tax assets in Finland. This
conclusion is based on emphasizing objective unfavorable evidence compared to more subjective favorable
evidence. The primary factors in this assessment used more objectively include realized long-term financial
performance compared to inherently more subjective expectations of future financial performance in Finland.
Parent company, FAS
(EUR)
2023 2022
Current tax expense 0 0
Tax expense from previous years 0 0
64
QPR continues to assess the utilization of deferred tax assets, especially monitoring realized profits, and may
reclassify the deferred tax asset related to Finland back to the balance sheet when sufficient tax profitability is
achieved. The utilization of these deferred tax assets is uncertain in the foreseeable future due to previous years'
tax losses and a lack of sufficiently convincing evidence that taxable income will be generated sufficiently in the
coming years in Finland. In Finland, deferred tax assets can be offset against profits for the next ten tax years. The
first possible expiring deferred tax asset, 34 thousand euros, would expire in the tax year 2026 if the company
does not achieve a profitable result by the end of that fiscal year.
The income statement tax expense is calculated at the Finnish tax rate (20.0% in 2023 and 2022). The company
did not recognize deferred tax assets in the years 2023 and 2022. Deferred tax assets are 217 thousand euros in
2023 and 722 thousand euros in 2022. The recognized and unrecognized deferred tax assets amount to a total of
1,424 thousand euros.
In Note 19, the assessment criteria for deferred tax assets are described in more detail.
Reconciliation of Deferred Taxes:
Group, IFRS
(EUR 1,000)
2023 2022
Result before tax -924 -2,864
Income tax calculated at the Finnish
corporate tax rate 185 573
Effect of different tax rates in foreign subsidiaries -1 -1
Effect of IFRS 15 and IFRS 16 6 40
Other items -11 -7
Withholding tax 19 12
Deferred tax of right issue costs 19 102
Unrecognized deferred tax -217 -722
Tax expense in the comprehensive income statement 0 -3
65
13. EARNINGS PER SHARE
Undiluted earnings per share are calculated by dividing total comprehensive income attributable to shareholders
of the parent company by the weighted average number of shares outstanding during the financial year.
Group, IFRS
(EUR 1,000)
2023 2022
Total comprehensive income attributable to shareholders of the parent
company (EUR thousand) -925 -2,870
Number of shares outstanding (1,000 pcs) 16,678 14,187
Earnings per share (EUR/share)
Undiluted and diluted -0,055 -0,202
The Group is operating share option schemes, Stock option plan 2019B, 2022 and 2023. In 2023 and 2022, the
stock option scheme did not have a dilutive effect. The group arranges successfull right issuance in 2023 with
1,719,871 new shares. Total outstading shareson December 31, 2023 was 17,835,721.
14. INTANGIBLE ASSETS
Group (EUR 1 000), IFRS
Computer
software
Other
intangible
assets
Capitalized
product
development Total
Book value Jan 1, 2022 7 1 1,704 1,711
Increases and decreases 0 35 1,336 1,371
Amortization for the period -4 -7 -660 -671
Acquisition cost Dec 31, 2022 1,064 2,630 9,699 13,394
Accum. amortization and write-downs Dec 31, 2022 -1,061 -2,603 -7,319 -10,983
Book value Jan 1, 2023 3 28 2,380 2,411
Increases and decreases 0 2 619 620
Amortization for the period -2 -3 -782 -787
Acquisition cost Dec 31, 2023 1,064 2,632 10,318 14,014
Accum. amortization and write-downs Dec 31, 2023 -1,063 -2,605 -8,101 -11,769
Book value Dec 31, 2023 1 27 2,217 2,245
66
R&D assets EUR 2181 thousand (2022: EUR 1710 thousand) and unfinished product development projects EUR 36
thousand (2022: EUR 670 thousand), which have not yet commercialized and respectively started depreciations,
are tested at the end of each financial period or at any event if there is indication of impairment on any asset.
The calculations are prepared following the discounted cash flow method using the management approved
estimates driven from budget for the following year and subsequent development derived from the strategic
plans. Terminal year value has been defined based on the long-term strategic plans taking average cash flows
of the period. Cash flows beyond the 5-year period are calculated using the terminal value method. The terminal
growth rate of 1.0% percent (1.0%) used in projections is based on management’s assessment on conservative
long-term growth. Key driver for the valuation is the revenue growth based on the Group’s performance and
future strategic growth plans, market position as well as the potential in key markets. The applied discount rate
is the weighted average pre-tax cost of capital (WACC). The components of the WACC are risk-free rate, market
risk premium, company specific factor, and industry specific beta, cost of debt and debt/equity ratio. The WACC
of 11.36% percent (11.28 %) has been used in the calculations. As a result of the impairment test, no impairment
loss for the CGU was recognized for the financial period ended 31.12.2023. Based on testing performed in 2023, no
need was found for recognizing impairment losses: a clear margin was left for each tested unit.
Accounting estimates and management's judgements:
The management uses significant estimates and judgement when determining whether there are indications
of impairment of R&D assets. Management judgement has also been used when defining the amount of cash
generating units and taken into account software business area and related consulting recoverable amounts.
The cash flow projections are based on budgets and financial estimates approved by management covering
a 5-year period. Cash flow forecasts are based on QPR’s existing business structure, actual results and the
management’s best estimates on future sales, cost and EBITDA development, general market conditions, growth
potential on the market as well as economic uncertainties. Management has considered in the estimates the
impact of decided structural changes in all business areas to improve performance. Management tests the
impacts of changes in significant estimates used in forecasts by sensitivity analyses. According to Group level
sensitivity analyses for R&D assets, there will be need for write-downs, if the growth rate of net sales decreases
of expected average growth rate by 38 percentage, regardless of possible cost savings. Expected changes of
discount rate do not have impact to the impairment testing results.
67
15. GOODWILL
Group (EUR 1 000) 2023 2022
Acquisition cost Jan 1 358 358
Write-downs 0 0
Acquisition cost Dec 31 358 358
Book value Dec 31 358 358
Parent company (EUR 1 000), FAS
Computer
software
Other
intangible
assets
Capitalized
product
development Total
Book value Jan 1, 2022 184,299 1,007 5,219 190,526
Increases 0 34,534 0 34,507
Amortization for the period -63,799 -7,356 -3,479 -74,634
Acquisition cost Dec 31, 2022 1,331,427 1,587,126 365,292 3,283,819
Accum. amortization and write-downs Dec 31, 2022 -1,210,927 -1,558,941 -363,552 -3,134,420
Book value Jan 1, 2023 120,500 28,185 1,740 150,399
Increases 0 1,657 0 1,657
Amortization for the period -63,664 -2,571 -1,740 -67,975
Acquisition cost Dec 31, 2023 1,331,427 1,588,783 365,292 3,285,502
Accum. amortization and write-downs Dec 31, 2023 -1,274,591 -1,561,512 -365,292 -3,201,395
Book value Dec 31, 2023 56,836 27,271 0 84,107
68
QPR does not have intangible asset with an unlimited economic useful life. QPR's goodwill arises from the
acquisition of Nobultec Ltd in 2011 and it has been allocated to the group software business, previously to the
Process Mining business unit.
QPR has made goodwill impairment test for the reporting period at 31.12.2023. The recoverable amount from
the cash generating unit is determined based on value in-use calculations. The calculations are prepared
following the discounted cash flow method using the management approved estimates driven from budget
for the following year and subsequent development derived from the strategic plans. Terminal year value has
been defined based on the long-term strategic plans. Cash flows beyond the 5-year period are calculated using
the terminal value method. The terminal growth rate of 1.0% percent (1.0%) used in projections is based on
management’s assessment on conservative long-term growth. Key driver for the valuation is the revenue growth
based on the software business performance and future strategic growth plans, market position as well as the
potential in key markets. The applied discount rate is the weighted average pre-tax cost of capital (WACC). The
components of the WACC are risk-free rate, market risk premium, company specific factor, and industry specific
beta, cost of debt and debt/equity ratio. The WACC of 11.36% percent (11.28 %) has been used in the calculations.
As a result of the impairment test, no impairment loss for the CGU was recognized for the financial period ended
31.12.2023. When assessing the recoverable amounts of cash generating unit, management believes that no
reasonably possible change in any of the key variables used would lead to a situation where the recoverable
amount of the unit would fall below their carrying amount. Considering that, QPR does not present any
sensitivity analyses regarding impairment test.
Accounting estimates and management's judgements
The management uses significant estimates and judgement when determining whether there are indications
of impairment of goodwill. Management judgement has also been used when defining the amount of cash
generating units and considered Process Mining software business area and related consulting recoverable cash
flows, as well as recoverable cash flows from common functions. The cash flow projections are based on budgets
and financial estimates approved by management covering a 5-year period. Cash flow forecasts are based on
QPR’s existing business structure, actual results and the management’s best estimates on future Net Sales, cost
development, general market conditions and growth potential on the market as well as economic uncertainties.
Management has considered structural changes impacting to all business areas for improving performance as
well as realized last quarter growth drivers. Management tests the impacts of changes in significant estimates
used in forecasts by sensitivity analyses.
69
16. TANGIBLE AND RIGHT-OF-USE ASSETS
Group (EUR 1 000), IFRS
Machinery and
equipment
Right-of-use
assets: buildings
Book value Jan 1, 2022 171 148
Increases 111 842
Depreciation for the period -111 -235
Acquisition cost Dec 31, 2022 2,277 1,854
Accum. depreciation and write-downs Dec 31, 2022 -2,105 -1099
Book value Dec 31, 2022 171 756
Increases 0 0
Decreases 0 -319
Depreciation for the period -90 -118
Acquisition cost Dec 31, 2023 2,277 1,535
Accum. depreciation and write-downs Dec 31, 2023 -2,195 -1,217
Book value Dec 31, 2023 81 318 *)
*) Right-of-use assets Note 28 Leases
The Company renegotiated office lease agreements shortening it's maturity from 5.5 years to 3.5 years and partly
agreed of discounted leases for 2023 and 2024. Lease contract's maturity is 2 years and 4 months. According to
agreement, the Company has a possibility to move to the landloard’s other facilities with mutual agreement.
Along with the change of lease contract, company's Right of Use assets decreased from the comparable period.
70
Parent company (EUR), FAS Machinery and equipment
Book value Jan 1, 2022 171,030
Increases 111,043
Depreciation for the period -111,207
Acquisition cost Dec 31, 2022 2,237,106
Accum. depreciation and write-downs Dec 31, 2022 -2,066,240
Book value Jan 1, 2023 170,866
Increases 0
Depreciation for the period -90,091
Acquisition cost Dec 31, 2023 2,237,106
Accum. depreciation and write-downs Dec 31, 2023 -2,156,331
Book value Dec 31, 2023 80,775
17. SHARES IN SUBSIDIARIES AND OTHER ENTITIES
The parent company of the Group is QPR Software Plc.
Parent company
Subsidiaries Domicile 2023 2022
Owned directly by the parent company:
QPR CIS Oy Helsinki, Finland 100 % 100 %
QPR Software AB Stockholm, Sweden 100 % 100 %
QPR Services Oy Helsinki, Finland 100 % 100 %
QPR Software Inc. San Jose, CA, USA 100 % 100 %
QPR Software Limited London, UK 100 % 100 %
71
Parent company
(EUR)
Shares in subsidiaries 2023 2022
Acquisition cost Jan 1 3,581,263 3,581,263
Increases 0 0
Decreases -83,610 0
Acquisition cost Dec 31 3,497,653 3,581,263
Book value Dec 31 3,497,653 3,581,263
Other shares
Acquisition cost Jan 1 4,562 4,562
Acquisition cost Dec 31 4,562 4,562
Book value Dec 31 4,562 4,562
Total book value of shares Dec 31 3,502,215 3,585,825
18. LONG-TERM RECEIVABLES
Parent company, FAS
(EUR)
2023 2022
Receivables from the Group companies 0 225,000
Breakdown of the Parent company's receivables from Group companies:
QPR CIS Oy 0 225,000
Total 0 225,000
The parent company (FAS) wrote down the value of its subsidiary, QPR CIS OY, which had previously engaged
in business in Russia. The parent company assesses that the ongoing war initiated by Russia and the
sanctions imposed by the European Union will significantly impact the business opportunities of QPR CIS OY.
Consequently, the discounted cash flow of future earnings is lower than the value of the shares in the parent
company's balance sheet.
72
19. DEFERRED TAX ASSETS AND LIABILITIES
Deferred tax assets, based on tax-loss carryforwards, have changed as follows:
Group, IFRS
(EUR 1,000)
2023 2022
Jan 1 273 273
Dec 31 273 273
A deferred tax asset of EUR 273 thousand has been recognized in the balance sheet for confirmed and probable
unused losses of the Group’s Finnish Companies. These tax assets company will most likely be able to utilize
before the end of the utilization period by 2030.
The company has not recognized deferred tax assets in 2021 -2023 according to the principle of precaution.
Unbooked deferred tax assets for the loss in 2023 amount to EUR 217 thousand, for 2022 amounted to EUR 722
thousand and for year 2021 amounted to EUR 212 thousand. Total of unbooked deferred tax assets is EUR 1,151
thousand. Recognized and unrecognized deferred tax assets are EUR 1,424 thousand.
At 31 December 2023, QPR concluded based on its assessment that it is not probable for result year 2022 that it
will be able to utilize the unused tax losses, unused tax credits and deductible temporary differences in Finland
in the foreseeable future. This assessment was done primarily based on the historical performance. In 2023, QPR
generated accounting and taxable loss. This conclusion is based on the weighting of objective negative evidence
against more subjective positive evidence. The primary factors in this weighting were the more objective record
of a pattern of financial performance compared to the more inherently subjective expectations regarding future
financial performance in Finland. QPR continues to assess the realizability of deferred tax assets including in
particular its actual profitability and may re-recognize deferred tax assets related to Finland where a clear pattern
of tax profitability can be established. Finnish unrecognized and recognized deferred tax assets expires in ten
years from the time those arose, starting from year 2026 until 2033 and are available against future Finnish tax
liabilities.
The parent company (FAS) wrote down the capital loan it had previously granted to its subsidiary engaged in
business in Russia, QPR CIS Oy. The parent company assesses the repayment prospects of the loan as weak due
to the war initiated by Russia and the related sanctions imposed by entities like the European Union.
73
20. TRADE AND OTHER RECEIVABLES
Group, IFRS (EUR 1 000)
2023 2022
Trade receivables 1,290 2,831
Credit loss provision -7 -3
Accrued income and prepaid expenses 218 380
Other receivables 205 242
Total 1,706 3,449
Geographical breakdown of trade receivables:
Finland 547 1,172
Other European countries 452 1,162
Countries outside Europe 291 497
Total 1,290 2,831
Eoyhtiö, FAS (EUR)
2023 2022
Trade receivables 1,179,236 2,775,016
Credit loss provision - -3,100
Accrued income and prepaid expenses 203,191 369,006
Income tax receivables - -
Other receivables 83,565 62,756
Current receivables from Group companies 2,231,949 1,907,336
Total 3,697,941 5,111,014
Geographical breakdown of trade receivables:
Finland 546,539 1,171,644
Other European countries 371,457 1,146,350
Countries outside Europe 261,240 457,022
Total 1,179,236 2,775,016
74
Currency breakdown of trade receivables:
Group, IFRS
(EUR 1,000) 2023 % 2022 %
EUR (Euro) 1,014 78,6 2,316 81,8
USD (U.S. Dollar) 248 19,2 240 8,5
SEK (Swedish Krona) 3 0,2 33 1,2
ZAR (South African Rand) 9 0,7 6 0,2
JPY (Japanese Yen) 13 1,0 16 0,6
GBP (Pound Sterling) 4 0,3 23 0,8
AED (United Arab Emirates dirham) - - 196 6,9
Total 1,290 100 2,831 100
Age analysis of trade receivables:
Not due 681 52,8 1,940 68,5
0 - 90 days overdue 543 42,1 825 29,1
90 - 180 days overdue 33 2,5 47 1,7
More than 180 days overdue 33 2,6 20 0,7
Total 1,290 100 2,831 100
Fair value of trade receivables:
The initial book value of trade receivables equals fair value because the effect of discounting is not material
considering maturity.
Credit losses and provision of credit losses
The Group recognizes expected credit loss provision based on thee age of the trade receivable.
75
Group, IFRS
Trade receivables
Credit loss
expectation
based on trade
receivables 2023,
EUR 1,000
Credit loss
expectance based
on age trade
receivables, %
Not due 681 0 0,02
0 - 60 days overdue 452 2 0,5
60 - 120 days overdue 119 1 1,0
120 - 180 days overdue 4 0 2,0
>180 days overdue 33 3 10,0
Total 1,290 7 0
In addition to the maturity-based matrix for trade receivables, in 2023, the Company has not recognized
additional provisions for credit losses (2022: EUR 0).
Credit losses of EUR 2 thousand (2022: EUR 36) on trade receivables have been recognized in the Group’s result.
Breakdown of the parent company's accrued income and prepaid expenses:
Parent company, FAS
(EUR)
2023 2022
Accrued income 33,522 32,456
Prepaid expenses 168,077 330,350
Total 201,599 362,806
Breakdown of the parent company's receivables from Group companies:
Parent company, FAS
(EUR)
2023 2022
QPR Services Oy 2,006,949 1,907,336
Total 2,006,949 1,907,336
76
21. CASH AND CASH EQUIVALENTS
Group, IFRS
(EUR 1 000)
2023 2022
Bank accounts 884 17
Total 884 17
The parent company has a revolving credit facility of EUR 1.5 million with Nordea for financing need. The funds
were used at the end of 2023: EUR 1.0 million (at the end of 2022: EUR 0) in the long term liabilities and EUR 0.5
million (at the end of 2022: EUR 1.5 million) in the short term liabilities. The agreement for the revolving credit
facility was renewed 24th January 2023 and transferred as long term loan maturing 31st January 2026.
The Group has a credit limit of EUR 0.5 million, which was not in use at the end of 2023 (2022: EUR 22 thousand).
The amount of the credit limit decreased from EUR 1 million to EUR 0.5 million in February 2023.
Parent company, FAS
(EUR)
2023 2022
Bank accounts 859,814 938
Total 859,814 938
77
22. BALANCE SHEET ITEMS RELATED TO CUSTOMER CONTRACTS
Group, IFRS
(EUR 1 000)
2023 2022
Trade receivables 1,290 2,831
Contract assets 34 33
Contract liabilities* -2,186 -2,258
*The contractual liability for the comparision year has been restated according to 2023 reporting principles.
Contract assets are items for which performance obligations have already been fulfilled, but the customers
have not yet been invoiced. In QPR Software, contract assets are usually related to consulting services, which are
invoiced after the performance obligations have been fulfilled.
Contract liabilities, on the contrary, are items which have already been invoiced, but for which performance
obligations have not yet been entirely fulfilled. In QPR Software, contract liabilities are usually related to
maintenance or SaaS fees, which are invoiced in advance and are recognized as revenue over the duration of the
contract period.
Parent company, FAS
(EUR 1 000)
2023 2022
Trade receivables 1,179,236 2,775,016
Contract assets 33,522 32,778
Contract liabilities* -2,061,924 -2,200,622
78
23. SHAREHOLDERS' EQUITY
The Company has one series of shares and the maximum value of share capital is EUR 80 thousand. All issued
shares have been paid in full. The Company arranged right issuance in 2023 increasing number of shares to
18,175,192 (2022: 16,455,321).
Other funds
Includes the reserve fund in subsidiary QPR Software AB.
Treasury shares
Includes the purchase price of shares repurchased by the Group.
Invested unrestricted equity fund
Invested unrestricted equity fund includes proceedings from right issuance arranged in third quarter 2023. Along
the right issuance 1,719,871 new shares were registered. According to Finnish accounting standards, invested
unrestricted equity fund is reported into gross value.
Calculation of the distributable funds
Parent company, FAS
(EUR)
2023 2022
Retained earnings -2,747,372 270,643
Result for the period -1,402,736 -3,007,840
Dividends paid - -
Treasury shares -347,552 -405,727
Invested unrestricted equity fund 5,529,731 3,454,341
Distributable funds 1,032,072 311,418
79
24. OTHER NON-CURRENT LIABILITIES AND
INTEREST-BEARING LOANS
Group, IFRS
(EUR 1 000)
Non-current liabilities 2023 2022
Non-current Lease liabilities 192 609
Loans from banks 1,000 -
Total 1,192 609
Parent company, FAS
(EUR)
Non-current liabilities 2023 2022
Loans from banks 1,000,000 0
Total 1,000,000 0
Group, IFRS
(EUR 1 000)
Current interest-bearing loans 2023 2022
Loans from banks, next year repayment 500 1,521
Lease libilities 126 149
Total 626 1670
Parent company, FAS
(EUR)
Current interest-bearing loans 2023 2022
Lease libilities 500,000 1,520,756
Total 500,000 1,520,756
80
The company has EUR 1 million of long term and 0.5 million of short term loan from banks. Interest-bearing loans
consist of euribor 12 months and 1.05 % interest margin.
The Group has a credit limit of EUR 0.5 million, which was not in use at the end of 2023 (2022: EUR 22 thousand).
The amount of the credit limit decreased from EUR 1 million to EUR 0.5 million in February 2023,.
The parent company has a revolving credit facility of EUR 1.5 million with Nordea for financing need. The funds
were used at the end of 2023: EUR 1.0 million (at the end of 2022: EUR 0) in the long term loans and EUR 0.5
million (at the end of 2022: EUR 1.5 million) in the short term loans. The agreement for the revolving credit facility
was renewed 24th January 2023 and transferred as long term loan maturing 31st January 2026.
Covenants attached to the loan, are based on the company's EBITDA and equity ratio. The EBITDA is tested every
six months, and the equity ratio is tested annually according to the situation on the last day of the year. At the
covenant test on 31st December 2023, EBITDA was below the agreed covenant limit. In December 2023, the bank
committed to not exercising the right to demand immediately it's receivables based on the financing agreement
if the group breaches a possible EBITDA covenant as of the financial statements in December 2023.
Considering the discounted present value of the debt, taking into account its maturity and interest rate, it is 1.435
million euros, which is 65 thousand euros lower than the original book value of the debt, which was 1.5 million
euros.
Repayment schedule of right-of-use liabilities
Group, IFRS
(EUR 1,000)
2023 2022
Nominal
interest
rate Maturity Book value Book value
Lease liabilities 4,6 % 2022-2026 318 758
Interest-bearing right-of-use liabilities 318 758
The Company renegotiated office lease agreements shortening it's maturity from 5.5 years to 3.5 years and partly
agreed of discounted leases for 2023 and 2024. Lease contract's maturity is 2 years and 4 months. According to
agreement, the Company has a possibility to move to the landloard’s other facilities with mutual agreement.
Along with the change of lease contract, company's lease expenses decreased from the comparation period.
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25. TRADE PAYABLES AND OTHER LIABILITIES
Group, IFRS
(EUR 1 000)
2023 2022
Provisions - 33
Trade payables 212 499
Accrued expenses and prepaid income 1,539 2,598
Advances received 1,558 885
Other liabilities 395 661
Total 3,703 4,676
The initial carrying amount of trade paybles and other liabilities corresponds to the fair value because the effect
of discounting is not material considering the maturity of the item. The amount of trade payables in foreign
currencies was 23 %, (2022: 1 %).
The Group didn't book provisions at the end of 2023. At the end of 2022 QPR recognised a provision for the
estimated restructuring cost following management's approval of the publication of the detailed restructuring
plan. The provision applied to expenses related to the reorganisation of personnel published 20th September
2022 and as a result to costs related to termination of the lease of the premises. On 31st December 2022 the
provision was EUR 33 thousands. Cash flows related to the restructuring materialized in the beginning of 2023.
This provision was reported in QPR Plc in provisions, in group bookings.
Parent company, FAS
(EUR)
2023 2022
Provisions for liabilities and charges - 32,628
Trade payables 189,566 457,733
Accrued expenses and prepaid income 1,262,222 2,338,513
Advances received 1,530,141 860,024
Other liabilities 309,345 570,708
Current liabilities to Group companies 2,096,506 1,793,198
Total 5,387,781 6,052,804
82
Breakdown of the parent company's accrued expenses and prepaid income:
Parent company, FAS
(EUR)
2023 2022
Holiday pay, including social costs 415,751 574,955
Bonuses, including social costs 102,645 136,189
Prepaid income 612,515 1,508,242
Other accrued expenses 131,311 119,127
Total 1,262,222 2,338,513
Breakdown of the parent company's liabilities to Group companies:
Parent company, FAS
(EUR)
2023 2022
QPR CIS Oy 23,414 24,488
QPR Software AB 1,347,642 1,016,631
QPR Software Inc 724,532 750,080
QPR Software Limited 919 1,999
Total 2,096,506 1,793,198
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26. CLASSIFICATION OF FINANCIAL ASSETS AND LIABILITIES
The table discloses carrying amounts of financial assets and financial liabilities. The fair value hierarchy level
for equity investments measured at fair value is 3. The carrying amount of other financial assets and financial
liabilities is a reasonable estimate of their fair value. The financial assets and liabilities are classified in accordance
with IFRS 9.
December 31, 2023 Book value
Note
At fair value
through profit or
loss
Recognised at
amortised cost Total
Financial assets
Financial assets measured at fair value
Equity investments 17 5 5
Total 5 5
Financial assets not measured at fair value
Trade and other receivables 20 1,706 1,706
Cash and cash equivalents 21 884 884
Total 2,590 2,590
Financial liabilities
Financial liabilities not measured at fair value
Bank borrowings 24 1,500 1,500
Right-of-use liabilities 24 318 318
Trade payables and other liabilities 25 3,703 3,703
Total 5,521 5,521
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27. ADJUSTMENTS TO THE CASH FLOW FROM OPERATING ACTIVITIES
Group, IFRS
(EUR 1,000)
2023 2022
Other items 21 -173
Total 21 -173
Other items includes Stock option program IFRS2 adjustments and accounts payable related to investments.
28. COMMITMENTS AND CONTINGENT LIABILITIES
Group
(EUR 1 000)
2023 2022
Business mortgage 2,382 2,382
Lease liabilities and rental commitments
Maturing within one year 30 47
Maturing during in 1-5 years 27 80
Total 2,439 2,509
Parent company
(EUR)
2023 2022
Business mortgage 2,337,288 2,337,288
Lease liabilities and rental commitments
Maturing within one year 166,310 226,178
Maturing during in 1-5 years 225616 749419
Total 2,729,214 3,312,885
85
Rental commitments include following agreements:
Group (IFRS):
Business mortages are given as guarantee for Nordea towards RCF loan value EUR 1,500 thousand.
Rental guarantees totaling EUR 3 thousand are included in other current receivables in the balance sheet.
Rental agreements related office and IT equipments as well as car lease agreements
PARENT (FAS)
Business mortages are given as guarantee for Nordea towards RCF loan value EUR 1,500 thousand.
Rental guarantees totaling EUR 2 thousand are included in other current receivables in the balance sheet.
Rental agreements related office and IT equipments as well as car lease agreements
The Company renegotiated office lease agreements shortening it's maturity from 5.5 years to 3.5 years and partly
agreed of discounted leases for 2023 and 2024. Lease contract's maturity is 2 years and 4 months. According to
agreement, the Company has a possibility to move to the landloard’s other facilities with mutual agreement.
Along with the change of lease contract, company's lease expenses decreased from the comparation period.
29. LEASE AGREEMENTS
Leases in the Balance Sheet
Group, IFRS
(EUR 1,000)
Dec 31, 2023 Dec 31, 2022
Assets
Non-current assets
Right-of use assets, buildings 318 756
Total 318 756
Lease liabilities, non-current 192 609
Lease liabilitiess, current 126 149
Total 318 758
86
The Company renegotiated office lease agreements shortening it's maturity from 5.5 years to 3.5 years and partly
agreed of discounted leases for 2023 and 2024. Lease contract's maturity is 2 years and 4 months. According to
agreement, the Company has a possibility to move to the landloard’s other facilities with mutual agreement.
Along with the change of lease contract, company's lease expenses decreased from the comparation period.
Leases in the Income Statement
01-12/2023 01-12/2022
Depreciation of right-of-use assets -118 -235
Interest expenses -6 -8
Total -124 -243
The total cash outflow for leases in 2023 was EUR 121 thousand (2022: 266).
30. FINANCIAL RISK MANAGEMENT
The International business operations of QPR Group are exposed to risks typical in normal international
transactions. Financial risk management aims to secure sufficient financing cost-effectively and to monitor,
and when necessary, to mitigate the materializing risks. Risk management is a centralized responsibility of
the Group’s financing function and the CEO. The general risk management policies are approved by the QPR
Software Plc Board of Directors. The Board is also responsible for supervising the adequacy, appropriateness, and
effectiveness of the Group’s risk management
Foreign exchange risk
The main sales currency for the Group is Euro and most purchases are made in Euros.
The majority of trade receivables is in Euros (EUR), 79%. During the financial year, the most significant invoicing
currencies after EUR were the U.S. Dollar (USD) and the Japanese yen (JPY). If the value of USD and JPY against
EUR were to decrease by 10%, and the share of currencies were to remain on the same level, the value of trade
receivables would decrease by EUR 26 thousand, equaling 2.0 % of the total value of all trade receivables.
Correspondingly, if the value of all non-EUR invoicing currencies were to decrease by 10%, the value of trade
receivables would decrease by EUR 28 thousand. A breakdown of trade receivables by currency is presented in
Note 20
In accordance with the foreign exchange risk policy approved by the Board of Directors, the Company may
engage in foreign currency hedging. The purpose of currency hedging is to reduce the uncertainty brought by
exchange rates and to minimize the adverse impact of exchange rate changes to the Group’s cash flow, financial
87
results, and equity. Management regularly reviews the Company’s foreign exchange risks, taking into account
the hedging costs. At the end of 2023 and 2022, the Company did not have any hedging instruments
Interest rate risk
The impact of interest rate changes on the Group result is insignificant and the Group did not take any hedging
measures during the financial year. According to the financing agreement made on 24th, January 2024, the
interest rate for the 1.0 million EUR long term and 0.5 million EUR short term loans is tied to 12 months euribor
and 1,05% margin.
Liquidity risk
Liquidity risk is defined as financial distress or extraordinarily high financing costs due to the shortage of liquid
funds in a situation where business conditions unexpectedly deteriorate and require financing.
The purpose of liquidity risk management is to maintain sufficient liquidity and to ensure that funds are
continuously available to finance business operations quickly enough. QPR maintains sufficient liquidity through
efficient cash management and deposits. The group converted it's loans in January 2023 to the long term and
bind under covenants, measured against EBITDA and own equity ratio. EBITDA based performance measure
is tested bi-annually and own equity ratio annually in the end of year. At the covenant test on 31st December
2023, EBITDA was below the agreed covenant limit. In December 2023, the bank committed to not exercising the
right to demand immediately it's receivables based on the financing agreement if the group breaches a possible
EBITDA covenant as of the financial statements in December 2023. The credit limit will be repaid in instalments
of 500 thousand on 31.1.2024, 31.1.2025, and 31.1.2026.
Dec, 31 2023
Group, IFRS
(EUR 1,000)
Tasearvo 0–6 kk 7-12 kk yli 12 kk
Trade and other payables 212 212 0 0
Bank borrowings, revolving credit facility 1500 500 0 1000
Lease liabilities (IFRS16) 318 57 69 192
Total 2,031 769 69 1,192
Dec, 31 2022
Group, IFRS
(EUR 1 000)
Tasearvo 0–6 kk 7-12 kk yli 12 kk
Trade and other payables 499 499 0 0
Bank borrowings, revolving credit facility 1521 1521 0 0
Lease liabilities (IFRS16) 758 85 63 609
Total 2,778 2,105 63 609
88
The interest of the bank loan consists of euribor 12 months and 1.05 % interest margin, trade liabilities are free of
interest and lease liability has imputed interest of 4.563 %.
Operative credit risk
The Group’s international business operations are by their nature exposed to reasonable credit risk related to
individual partners. However, the Group’s customer base and reseller network is broad and spread over several
market areas. Thus, the Group’s trade receivables are collected from a large number of resellers and customers in
several market areas, and according to management’s estimate there are no concentrations of reseller, customer,
or geographical risks. In addition, the continuous and active monitoring of receivables and credit limits aim
to mitigate the Group’s credit risks. The Group’s maximum credit risk corresponds to the book value of trade
receivables. Additional information on the Group’s trade receivables is presented in Note 20.
31. CAPITAL MANAGEMENT
Group, IFRS (EUR 1,000) 2023 2022
Cash and cash equivalents 884 17
Net liabilities 934 2,262
Shareholders' equity 348 487
Gearing, % 268,3 464,9
Equity ratio, % 8,1 7,4
Total balance sheet 5,869 7,442
The development of Group's capital structure is monitored, in particular, through gearing and equity ratio.
32. EVENTS AFTER THE REPORTING PERIOD
Change negotiations related to the adjustment of QPR Software Plc´s strategy
On December 14, 2023, QPR Software Plc announced its adjusted strategy and the change in its organizational
structure planned to support it and submitted a negotiation proposal in accordance with the related
Cooperation Act to start the change negotiations. The change negotiations were completed on Thursday,
January 4, 2024.
89
In the change negotiations, the Company planned to change its organizational structure to support its adjusted
strategy. The goal of the planned changes is to support the more efficient organization of QPR Software's
operations, to try to respond to changes in the operating environment, and to renew the organizational structure
in order to achieve the Company's long-term growth and profitability goals.
Change negotiations were held separately in both QPR Software Plc and QPR Services Oy. As a result of the
negotiations, the Company will terminate a maximum of four positions at QPR Software Plc and a maximum of
six positions at QPR Services Oy.
QPR Software Plc signed the first partner agreement in North America and received an affirmative decision
on Business Finland's support for market mapping
QPR Software's unique process mining software, QPR ProcessAnalyzer, is globally the only software running
natively in the Snowflake Data Cloud. This means solving performance, scalability, and security issues for
customers. The majority of Snowflake's customers are in the US market. In accordance with its strategy, QPR
aims to expand to the North American market, utilizing the partner network that is being built there.
An important step in this endeavor is the signing of a significant partnership agreement with Solution BI on
January 16, 2024. The agreement includes resale rights for QPR ProcessAnalyzer in the United States, Canada and
Mexico. The company also cooperates with Solution BI in the Middle East region.
In addition, on January 30, 2024, Business Finland approved QPR Software Plc's Market Explorer funding, which
is used to investigate business opportunities and map markets in North America. Granted support covers 50%
of incurred costs, upper limit 39,995 euros. This financial support is intended to facilitate the mapping of the
company's new markets and to promote the conditions for the internationalization of the business.
33. RECONCILIATION OF ALTERNATIVE KEY FIGURES
2023 2022
Equity ratio, %
Total Equity 348 487
balance sheet total 5,869 7,442
Advances received 1,558 885
Advances received
Total equity x 100
(Balance sheet total - advances received) 8.1 % 7.4 %
90
SIGNATURES OF BOARD
OF DIRECTORS’ AND
FINANCIAL STATEMENTS
Helsinki, Finland, February 16, 2024
QPR Software Plc
Board of Directors
Pertti Ervi
Chairman of the Board
Matti Heikkonen
Board member
Antti Koskela
Board member
Jukka Tapaninen
Board member
Heikki Veijola
Chief Executive Officer
AUDITOR’S NOTE
An auditor’s report concerning the performed audit
has been given today.
Helsinki, Finland, February 16, 2024
KPMG Oy Ab
Authorized Public Accountants
Petri Kettunen
Authorized Public Accountant
91
DEFINITION OF
KEY INDICATORS
Return on equity (ROE), %:
Result for the period x 100
Shareholders' equity (average)
Return on investment (ROI), %:
(Result before taxes + interest and other financial
expenses) x 100
Balance sheet total - non-interest bearing liabilities
(average)
Equity ratio, %:
Total equity x 100
Balance sheet total - advances received
Gearing:
Interest-bearing liabilities - cash and cash equivalents
Gearing, %:
(Interest-bearing liabilities - cash and cash
equivalents) x 100
Total equity
Earnings per share, euro:
Result for period
Weighted average number of shares outstanding
during the year
Equity per share, euro:
Equity attributable to shareholders of the parent
company
Number of shares outstanding at the end of the year
Dividend per share, euro:
Total dividend paid
Number of shares outstanding at the end of the year
Dividend per Result, %:
Dividend per share x 100
Earnings per share
Effective dividend yield, %:
Dividend per share x 100
Share price at the end of the year
Price/earnings ratio (P/E):
Share price at the end of the year
Earnings per share
Market capitalization:
Total number of shares outstanding x share price at
the end of the year
Turnover of shares, % of all shares:
Number of shares traded x 100
Average number of shares outstanding during the
year
Alternative key figures
The Group reports certain performance measures that
are not based on IFRS (i.e. alternative performance
measures). Alternative performance measures are
used to provide relevant information to interested
parties and improve comparability of reporting
periods. Alternative performance measures may
not be considered as a substitute for measures of
performance in accordance with IFRS. Definitions
for alternative measures can be found under the title
”Definition for key indicators”.
Auditor's Report
93
TO THE ANNUAL GENERAL
MEETING OF QPR SOFTWARE PLC
Report of the Audit of the
Financial Statements
Opinion
We have audited the financial statements of QPR
Software Plc (business identity code 0832693-7) for
the year ended 31 December 2023. The financial
statements comprise the consolidated balance sheet,
comprehensive income statement, statement of
changes in equity, cash flow statement and notes,
including a summary of material accounting policies,
as well as the parent company’s balance sheet, income
statement, statement of cash flows and notes.
In our opinion
— the consolidated financial statements give
a true and fair view of the group’s financial position,
financial performance and cash flows in accordance
with International Financial Reporting Standards
(IFRS) as adopted by the EU
— the financial statements give a true and fair
view of the parent company’s financial performance
and financial position in accordance with the laws
and regulations governing the preparation of financial
statements in Finland and comply with statutory
requirements.
Our opinion is consistent with the additional report
submitted to the Board of Directors.
Basis for Opinion
We conducted our audit in accordance with good
auditing practice in Finland. Our responsibilities under
good auditing practice are further described in the
Auditor’s Responsibilities for the Audit of the Financial
Statements section of our report.
We are independent of the parent company and of
the group companies in accordance with the ethical
requirements that are applicable in Finland and are
relevant to our audit, and we have fulfilled our other
ethical responsibilities in accordance with these
requirements.
In our best knowledge and understanding, the non-
audit services that we have provided to the parent
company and group companies are in compliance
with laws and regulations applicable in Finland
regarding these services, and we have not provided
any prohibited non-audit services referred to in Article
5(1) of regulation (EU) 537/2014. The non-audit services
that we have provided have been disclosed in note 10
to the consolidated financial statements.
We believe that the audit evidence we have obtained
is sufficient and appropriate to provide a basis for our
opinion.
Materiality
The scope of our audit was influenced by our
application of materiality. The materiality is determined
based on our professional judgement and is used to
determine the nature, timing and extent of our audit
procedures and to evaluate the effect of identified
misstatements on the financial statements as a
whole. The level of materiality we set is based on our
assessment of the magnitude of misstatements that,
individually or in aggregate, could reasonably be
expected to have influence on the economic decisions
of the users of the financial statements. We have also
taken into account misstatements and/or possible
misstatements that in our opinion are material for
qualitative reasons for the users of the financial
statements.
Key Audit Matters
Key audit matters are those matters that, in our
professional judgment, were of most significance in
our audit of the financial statements of the current
period. These matters were addressed in the context of
our audit of the financial statements as a whole, and
in forming our opinion thereon, and we do not provide
a separate opinion on these matters. The significant
risks of material misstatement referred to in the EU
Regulation No 537/2014 point (c) of Article 10(2) are
included in the description of key audit matters below.
We have also addressed the risk of management
override of internal controls. This includes
consideration of whether there was evidence of
management bias that represented a risk of material
misstatement due to fraud.
94
THE KEY AUDIT MATTER
— The financial statements have been prepared
on a going concern basis considering the efficiency
improvement measures taken, the operating forecast
as well as the financing agreement renewed by the
company during the financial year. The financing
agreement includes financial covenants based on the
company's EBITDA margin and equity ratio.
— In recent years, the Group has generated
losses, cash flow from operating activities has been
negative and liquidity tight. The Group has taken
efficiency improvement measures to strengthen its
financial position, create a more sustainable cost
structure, and secure liquidity. The Group's result for
the financial year 2023 is EUR 0.9 million negative,
against a positive cash flow from operating activities of
EUR 0.8 million. The company's financial position has
been strengthened by a directed share issue of EUR
0.76 million in the financial year.
Sufficiency of Group’s liquidity and financing arrangements - Refer to consolidated cash flow statement,
accounting policies for the consolidated financial statements and notes 25, 26 and 30 to the consolidated
financial statements
HOW THE MATTER WAS ADDRESSED IN THE AUDIT
Our audit procedures included, among others:
— In our audit, we inspected the financing
arrangements for the directed share issue and the
renewed financing agreement carried out during
the financial year. We assessed compliance with the
covenants in the financing agreement and the impact
of a breach of the EBITDA covenant on the company's
financial position and liability classification.
— To assess the sufficiency of financing, we
analyzed the business plans and cash flow estimates
prepared by the company.
— As a part of our year-end audit procedures,
we assessed the accuracy of classification of
financial liabilities, and considered the adequacy
and appropriateness of the disclosures provided on
the financial status in the consolidated financial
statements.
95
Valuation of capitalised product development costs and valuation of goodwill - Refer to accounting
principles for the consolidated financial statements and notes 9, 10, 14 and 15
— The Group companies develop software
and consulting service products to be used by
their customers. The development expenditures
are capitalized to the extent that they meet the
capitalization criteria set out in the relevant accounting
standard (IAS 38) and are assessed to contribute future
economic benefits. The assessment may change
even in a rather short term, e.g. as a result of technical
development.
— The total product development costs
capitalized in the financial year ended amounted to
EUR 0.6 million. The capitalized product development
costs are amortized over four years on a straight-line
basis. At the year-end 2023, the capitalized product
development costs amounted to EUR 2.2 million. The
capitalized product development costs represent 637
percent of the consolidated equity.
— Goodwill amounted to EUR 0.4 million at the
financial year-end 2023 and represents 103 percent of
the consolidated equity.
— Goodwill and capitalized product development
costs are tested at least annually for impairment.
— The preparation of the cash flow projections
underlying the impairment tests requires
management judgement in regard to e.g. sales
growth, profitability, terminal growth and discount
rates.
— Due to the significant carrying amounts and
management judgment involved in determining
recoverable amounts and useful life, the valuation of
capitalized product development costs and goodwill is
one of the key areas that our audit is focused on.
Our audit procedures included, among others:
— We assessed the appropriateness of the
capitalization process and the amortization periods of
development expenditures and considered whether
the development costs capitalized during the year
had met the capitalization criteria under the relevant
accounting standard.
— We assessed the appropriateness of the
impairment test carried out for the goodwill in the
consolidated financial statements.
— Our audit procedures on the impairment
testing included, among others, the following: We
evaluated the cash flow estimates for future financial
periods prepared by management and the key
assumptions used in the impairment tests, such as
sales growth, profitability and terminal growth.
— Furthermore, we considered the adequacy
and appropriateness of the Group's notes in respect of
goodwill, testing calculations and intangible assets.
96
Revenue recognition and valuation of trade receivables - Refer to accounting principles for the
consolidated financial statements and notes 2, 3 and 20
— The consolidated net sales consist of software
license sales, software maintenance services, cloud
(SaaS) services and consulting services. Revenue is
recognized when (or as) the control of the service is
transferred to the customer, which may be over time
or at a point in time.
— Application of revenue recognition principles
requires management judgement especially in
identifying separate performance obligations,
determining stand-alone selling price as well as
in analyzing terms and conditions of the contract
to determine the appropriate timing to recognize
revenue.
— The revenue recognition principles and their
consistent application have a significant impact on the
net sales and profitability as reported by QPR Software
Plc. Therefore, the revenue recognition is one of the
key areas that our audit is focused on.
— Trade receivables were in total EUR 1.3 million
at 31 December 2023, representing a significant part of
the balance sheet. Regardless the fact that there are
no significant credit losses incurred in the past, there
may be valuation risk associated with trade receivables.
Due to the significance of the carrying amount of the
trade receivables, the valuation and monitoring of
trade receivables is one of the key areas that our audit
is focused on.
Our audit procedures included, among others:
— We evaluated the revenue recognition
principles by reference to applicable financial
reporting standards and contract terms.
— Our audit procedures included testing of key
controls designed to ensure the completeness and
accuracy of net sales.
— We completed detailed audit procedures
over revenue contracts that we selected based
on size, timing and complexity. In respect of the
selected contracts, we assessed the identification
of performance obligations, tested the accuracy
of invoicing and compared revenue transactions
recorded with contractual terms and traced them to
supporting evidence of delivery.
— We evaluated the monitoring routines for trade
receivables and the effectiveness of the key internal
controls. We also analyzed the trade receivables
followed up the payments received after year-end 2023
in respect of selected trade receivables.
— In addition, we assessed the adequacy and
accuracy of disclosures related to revenue recognition
and trade receivables in the consolidated financial
statements.
97
Responsibilities of the Board of Directors and the
Managing Director for the Financial Statements
The Board of Directors and the Managing Director
are responsible for the preparation of consolidated
financial statements that give a true and fair view in
accordance with International Financial Reporting
Standards (IFRS) as adopted by the EU, and of
financial statements that give a true and fair view in
accordance with the laws and regulations governing
the preparation of financial statements in Finland
and comply with statutory requirements. The Board
of Directors and the Managing Director are also
responsible for such internal control as they determine
is necessary to enable the preparation of financial
statements that are free from material misstatement,
whether due to fraud or error.
In preparing the financial statements, the Board of
Directors and the Managing Director are responsible
for assessing the parent company’s and the group’s
ability to continue as a going concern, disclosing,
as applicable, matters relating to going concern
and using the going concern basis of accounting.
The financial statements are prepared using the
going concern basis of accounting unless there is an
intention to liquidate the parent company or the group
or cease operations, or there is no realistic alternative
but to do so.
Auditor’s Responsibilities for the Audit of the
Financial Statements
Our objectives are to obtain reasonable assurance
about whether the financial statements as a whole
are free from material misstatement, whether due
to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high
level of assurance, but is not a guarantee that an
audit conducted in accordance with good auditing
practice will always detect a material misstatement
when it exists. Misstatements can arise from fraud or
error and are considered material if, individually or in
the aggregate, they could reasonably be expected to
influence the economic decisions of users taken on the
basis of the financial statements.
As part of an audit in accordance with good auditing
practice, we exercise professional judgment and
maintain professional skepticism throughout the
audit. We also:
— Identify and assess the risks of material
misstatement of the financial statements, whether
due to fraud or error, design and perform audit
procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide
a basis for our opinion. The risk of not detecting
a material misstatement resulting from fraud is
higher than for one resulting from error, as fraud
may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control.
— Obtain an understanding of internal control
relevant to the audit in order to design audit
procedures that are appropriate in the circumstances,
but not for the purpose of expressing an opinion
on the effectiveness of the parent company’s or the
group’s internal control.
— Evaluate the appropriateness of accounting
policies used and the reasonableness of accounting
estimates and related disclosures made by
management.
— Conclude on the appropriateness of the
Board of Directors’ and the Managing Director’s use
of the going concern basis of accounting and based
on the audit evidence obtained, whether a material
uncertainty exists related to events or conditions that
may cast significant doubt on the parent company’s
or the group’s ability to continue as a going concern.
If we conclude that a material uncertainty exists, we
are required to draw attention in our auditor’s report
to the related disclosures in the financial statements
or, if such disclosures are inadequate, to modify our
opinion. Our conclusions are based on the audit
evidence obtained up to the date of our auditor’s
report. However, future events or conditions may cause
the parent company or the group to cease to continue
as a going concern.
— Evaluate the overall presentation, structure
and content of the financial statements, including
the disclosures, and whether the financial statements
represent the underlying transactions and events so
that the financial statements give a true and fair view.
— Obtain sufficient appropriate audit evidence
regarding the financial information of the entities
or business activities within the group to express an
opinion on the consolidated financial statements.
We are responsible for the direction, supervision and
performance of the group audit. We remain solely
responsible for our audit opinion.
We communicate with those charged with governance
regarding, among other matters, the planned scope
and timing of the audit and significant audit findings,
including any significant deficiencies in internal
control that we identify during our audit.
We also provide those charged with governance with
a statement that we have complied with relevant
ethical requirements regarding independence, and
communicate with them all relationships and other
matters that may reasonably be thought to bear on
our independence, and where applicable, related
safeguards.
98
From the matters communicated with those charged
with governance, we determine those matters that
were of most significance in the audit of the financial
statements of the current period and are therefore
the key audit matters. We describe these matters in
our auditor’s report unless law or regulation precludes
public disclosure about the matter or when, in
extremely rare circumstances, we determine that a
matter should not be communicated in our report
because the adverse consequences of doing so would
reasonably be expected to outweigh the public interest
benefits of such communication.
OTHER REPORTING
REQUIREMENTS
Information on our audit engagement
We have been the auditors appointed by the Annual
General Meeting since 2006, and our appointment
represents a total period of uninterrupted engagement
of 18 years.
Other Information
The Board of Directors and the Managing Director
are responsible for the other information. The other
information comprises the report of the Board of
Directors and the information included in the Annual
Report but does not include the financial statements
and our auditor’s report thereon.
Our opinion on the financial statements does not
cover the other information.
In connection with our audit of the financial
statements, our responsibility is to read the other
information and, in doing so, consider whether the
other information is materially inconsistent with the
financial statements or our knowledge obtained
in the audit, or otherwise appears to be materially
misstated. With respect to the report of the Board of
Directors, our responsibility also includes considering
whether the report of the Board of Directors has been
prepared in accordance with the applicable laws and
regulations.
In our opinion, the information in the report of the
Board of Directors is consistent with the information in
the financial statements and the report of the Board
of Directors has been prepared in accordance with the
applicable laws and regulations.
If, based on the work we have performed, we conclude
that there is a material misstatement of the other
information, we are required to report that fact. We
have nothing to report in this regard.
Helsinki, 16 February 2024
KPMG OY AB
PETRI KETTUNEN
Authorized Public Accountant, KHT
99
INFORMATION FOR SHAREHOLDERS
THE SHARE OF QPR SOFTWARE PLC
QPR SOFTWARE PLC SHARES
The share of QPR Software Plc is quoted on the
main list of the Nasdaq Helsinki, in the Information
technology sector, Small Cap segment. Trading started
on March 8, 2002.
Trading code
QPR1V
ISIN code
FI0009008668
ANNUAL GENERAL MEETING
The Annual General Meeting will be held
on May 15th, 2024
The Board of Directors convenes the Annual General
Meeting, with a separate announcement of the
General Meeting.
CHANGES OF ADDRESSES
If the address of a shareholder changes, we request
you to contact the custodian bank holding the
shareholder’s book-entry account.
FINANCIAL INFORMATION
IN 2024
QPR will publish three Interim Reports in 2024:
• Interim Report January–March 2024 on
Friday 19 April 2024
• Half-year Financial Report January-June 2024
on Friday 2 August 2024
• Interim Report January-September 2024 on
Friday 25 October 2024
The interim reports and all stock exchange bulletins of
QPR Software Plc are available on the Investor pages of
the Company's web pages (www.qpr.com/Investors)
100
CONTACT INFORMATION
QPR Software Plc
Domicile: Helsinki (Finland)
Business ID: 0832693-7
Official address:
Huopalahdentie 24,
00350 HELSINKI, Finland
Head Office
Huopalahdentie 24,
00350 HELSINKI
Tel: 0290 001 150
Customer Care
Tel: 0290 001 156
customercare@qpr.com
Company website
www.qpr.com
101
To the Board of Directors of QPR Software Plc
We have undertaken a reasonable assurance
engagement in respect of whether the consolidated
financial statements for the year ended 31 December,
2023 included in the digital financial statements
7437003V4S76KM56UW70-2023-12-31-en.zip of QPR
Software Plc (Business ID 0832693-7) have been
marked up with iXBRL markups in accordance with the
requirements of Article 4 of EU Delegated Regulation
2018/815 (ESEF RTS).
The Responsibility of the Board of Directors and
Managing Director
The Board of Directors and Managing Director are
responsible for preparing the report of the Board of
Directors and financial statements (ESEF financial
statements) that comply with the requirements of
ESEF RTS. This responsibility includes:
— preparation of ESEF financial statements in
XHTML format in accordance with Article 3 of the ESEF
RTS
— marking up the primary statements and the
notes to the consolidated financial statements, and
the company identification data included in the ESEF
financial statements with iXBRL tags in accordance
with Article 4 of the ESEF RTS; and
— ensuring consistency between ESEF financial
statements and audited financial statements.
The Board of Directors and the Managing Director are
also responsible for such internal control as they deem
necessary to prepare the ESEF financial statements in
accordance with the requirements of the ESEF RTS.
Auditor’s Independence and Quality Management
We are independent of the company in accordance
with the ethical requirements applicable in Finland,
which apply to the engagement we have performed,
and we have fulfilled our other ethical responsibilities
in accordance with these requirements.
The auditor applies International Standard on Quality
Management ISQM 1, which requires the firm to
design, implement and operate a system of quality
management including policies or procedures
regarding compliance with ethical requirements,
professional standards and applicable legal and
regulations requirements.
Auditor’s Responsibility
In accordance with the Engagement Letter our
responsibility is to express an opinion on whether the
marking up of the consolidated financial statements
included in the ESEF financial statements comply in
all material respects with the Article 4 of the ESEF RTS.
We conducted our reasonable assurance engagement
in accordance with International Standard on
Assurance Engagements 3000.
The engagement involves procedures to obtain
evidence whether;
— the primary statements of the consolidated
financial statements included in the ESEF financial
statements are, in all material respects, marked up
with iXBRL tags in accordance with Article 4 of the
ESEF RTS, and;
— whether the notes to the consolidated financial
statements and the company identification data
included in the ESEF financial statements data, have
been marked up, in all material respects, with iXBRL
tags in accordance with Article 4 of the ESEF RTS; and
— whether the ESEF financial statements and the
audited financial statements are consistent with each
other.
The nature, timing and the extent of procedures
selected depend on practitioner’s judgement. This
includes the assessment of the risks of material
departures from the requirements set out in the ESEF
RTS, whether due to fraud or error.
We believe that the evidence we have obtained is
sufficient and appropriate to provide a basis for our
opinion.
Opinion
In our opinion, the primary statements of the
consolidated financial statements, the notes to
the consolidated financial statements and the
company identification data included in the ESEF
financial statements of QPR Software Plc identified
as 7437003V4S76KM56UW70-2023-12-31-en.zip for
the year ended 31 December, 2023 are, in all material
respects, marked up in compliance with the ESEF
Regulatory Technical Standard.
Our audit opinion on the audit of the consolidated
financial statements of QPR Software Plc for the year
ended 31 December, 2023 is set out in our Auditor’s
Report dated 16 February, 2024. In this report, we
do not express any audit opinion or other assurance
conclusion on the consolidated financial statements.
Helsinki 18 March, 2024
KPMG OY AB
Petri Kettunen
Authorised Public Accountant, KHT
Independent Auditor’s Reasonable Assurance Report on QPR Software Plc’s
ESEF Financial Statements