SSH Communications Security Oyj
Financial Statements and
Report of the Board of Directors
2020
2
SSH Communications Security Group
TABLE OF CONTENTS
TABLE OF CONTENTS 2
REPORT OF THE BOARD OF DIRECTORS FOR 1 JAN – 31 DEC 2020 3
CONSOLIDATED FINANCIAL STATEMENTS 15
CONSOLIDATED COMPREHENSIVE INCOME STATEMENT 16
CONSOLIDATED BALANCE SHEET 17
CONSOLIDATED BALANCE SHEET 18
CONSOLIDATED CASH FLOW STATEMENT 19
STATEMENT OF CHANGES IN CONSOLIDATED EQUITY 20
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 22
PARENT COMPANY FINANCIAL STATEMENTS 50
PARENT COMPANY INCOME STATEMENT 51
PARENT COMPANY BALANCE SHEET 52
PARENT COMPANY INCOME STATEMENT 53
PARENT COMPANY CASH FLOW STATEMENT 54
NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS 55
DIVIDEND PROPOSAL AND SIGNATURES 63
3
SSH Communications Security Group
Report of the Board of Directors for 1 Jan – 31 Dec 2020
NET SALES
Consolidated net sales for January–December totaled EUR 11.3 million (2019: EUR 14.4 million),
down by 21.7 %, year on year.
The majority of SSH Communications Security’s invoicing is U.S. dollar based. During the financial
year, the average exchange rate of the U.S. dollar against the euro depreciated by 1.9 % compared
to 2019. With comparable exchange rates, the software business sales reduction in 2020 would
have been 20.8 % compared to 2019.
PROFIT AND PROFITABILITY TRENDS
Operating loss for the financial year amounted to EUR -2.5 million (2019: EUR -1.2 million), with
net profit totaling EUR -3.1 million (2019: EUR -1.5 million).
Sales, marketing, and customer support expenses amounted EUR -6.7 million (2019: EUR -7.5 mil-
lion), while research and development expenses totaled EUR -5.0 million (2019: EUR -4.9 million)
and administrative expenses EUR -2.7 million (2019: EUR -2.9 million). Operating expenses de-
creased by 5.1 % compared to previous year.
BALANCE SHEET AND FINANCIAL POSITION
The financial position of SSH Communications Security was good during the financial year. The
consolidated balance sheet total on December 31, 2020 stood at EUR 18.6 million (31 Dec 2019:
EUR 23.8 million), of which liquid assets accounted for EUR 8.5 million (31 Dec 2019: EUR 12.0
million), or 45.7 % of the balance sheet total. Interest-bearing debts were EUR 1.3 million at the
end of financial year (31 Dec 2019: EUR 0.9 million). Interest-bearing liabilities increased by EUR
0.4 million from December 31, 2019 due to the new leasing contracts. Interest-bearing liabilities
EUR million
10-12/
2020
7-9/
2020
4-6/
2020
1-3/
2020
1-12/
2020
10-12/
2019
1-12/
2019
BY GEOGRAPHICAL SEGMENT
AMERICAS
1.4
1.4
1.5
1.6
5.9
2.4
7.8
APAC
0.5
0.4
0.3
0.9
2.1
0.5
2.9
EMEA
1.0
0.7
0.9
0.6
3.2
1.2
3.6
Total
3.0
2.6
2.6
3.1
11.3
4.1
14.4
BY OPERATION
Subscription sales
0.2
0.2
0.2
0.2
0.8
0.2
0.7
License sales
0.6
0.4
0.4
0.8
2.2
1.5
4.5
Maintenance sales
1.7
1.9
2.0
2.1
7.8
2.1
8.6
Professional services & others
0.4
0.0
0.0
0.0
0.4
0.3
0.6
Total
3.0
2.6
2.6
3.1
11.3
4.1
14.4
4
SSH Communications Security Group
include a subordinated loan of EUR 0.6 million (December 31, 2019: 0.6 million) taken out from
the non-controlling interest holder State Security Networks Group Finland. On December 31,
2020, gearing, or the ratio of net liabilities to shareholders’ equity, was -85.3 % (31 Dec 2019: -
92.3 %) and the equity ratio stood at 69.7 % (31 Dec 2019: 78.0 %).
The capital and interest of the subordinated loan which Kyberleijona Oy has taken out from the
non-controlling interest holder State Networks Group Finland can only be repaid in circumstances
permitted by Chapter 12 of the Finnish Limited Liability Companies Act. The capital of the subor-
dinated loan can only be repaid to the extent the unrestricted shareholders’ equity and the total
amount of the subordinated loan at the time of the repayment exceeds the loss that is to be
confirmed for the company’s latest financial year or is included in the balance sheet of more re-
cent financial statements. The annual interest for the loan, three per cent (3 %), has been recog-
nized as expense.
The reported gross capital expenditure for the period totaled EUR 2.1 million (2019: EUR 2.0 mil-
lion). Financial income and expenses totaled EUR -0.6 million (2019: EUR -0.1 million), which con-
sisted mainly of exchange rate losses and interest expenses from sales and leasing contracts.
The Group had a cash flow of EUR -0.2 million (2019: EUR 0.3 million) from business operations,
and investments showed a cash flow of EUR -1.5 million (2019: EUR -1.1 million). Cash flow from
investments includes government grants of EUR 0.6 million (2019: EUR 0.9 million). Cash flow
from financing totaled EUR -1.3 million (2019: EUR -0.8 million).
RESEARCH AND DEVELOPMENT
Research and development expenses totaled EUR -5.0 million (2019: EUR -4.9 million), the equiv-
alent of 44.9 % of net sales (2019: 34.0 %). During the reporting period, R&D cost capitalizations
totaled EUR 1.3 million (2019: EUR 1.6 million). Capitalized product development expenses were
reduced by the amount of EUR 0.4 million received as funding from EU (2019: EUR 0.1 million).
Depreciation from R&D capitalization assets was EUR -1.3 million (2019: EUR -1.3 million).
RISKS AND UNCERTAINTIES
The ongoing COVID-19 pandemic is a major macro-level risk that, if prolonged, may affect SSH
Communications Security through challenges it poses on new license sales. The most significant
risks that might impact the profitability of the company have remained by and large the same as
in the previous reporting period and are listed below. Other risks, which are currently either un-
known or considered immaterial to SSH Communications Security may, however, become mate-
rial in the future.
Largest risks:
• Continuing uncertainty of the macroeconomic environment, such as Covid-19 pandemic
• Cybercrime, including e.g. ransomware
• Delays in product development and closing new business
• Ability to execute our strategy
• Ability to retain and recruit key personnel
• Maintaining our ability to innovate and develop our product portfolio, including intellec-
tual property rights (IPR)
• IPR litigation and the utilization of our patent portfolio
5
SSH Communications Security Group
• A significant proportion of the company revenue is invoiced in U.S. dollars, and possible
large fluctuation in the U.S. dollar exchange rates during 2021 could have unpredictable
effects for profitability that difficult to estimate at this time. The company decides on
hedging of USD based contracts on a case-by-case basis.
The principles and organization of risk management of SSH Communications Security can be
read from the company’s website www.ssh.com.
HUMAN RESOURCES AND ORGANIZATION
SSH Communications Security Group had 94 (2019: 90) employees at the end of December, up by
four persons or 4.4 % from the previous year. The average age of the employees was 43 years
(2019: 42.4 years). Approximately 15.8 % (2019: 16.7 %) of the employees were women and 84.2
% (2019: 83.3 %) men. At the end of the period under review, 33.0 % (2019: 35.6 %) of the em-
ployees worked in sales, marketing, and customer services, 51.1 % (2019: 51.1 %) in research and
development, and 16.0 % (2019: 13.3 %) in corporate administration.
At the end of the financial period, the parent company had 73 (2019: 64) employees on its payroll.
On average, the parent company had 66 (2019: 63) employees during the financial period. Parent
company salaries, bonuses, and other personnel expenses during the financial period totaled EUR
5.7 million (2019: 5.1 million).
BOARD OF DIRECTORS AND AUDITORS
At the Annual General Meeting held on March 26, 2020 Mr. Tatu Ylönen was re-elected and Ms.
Aino-Mari Kiianmies and Mr. Sampo Kellomäki were elected as a new member of the Board of
Directors. Mr. Tatu Ylönen was elected as the Chairman of the Board of Directors at the Board’s
organizing meeting.
Authorized Public Accountants Ernst & Young Oy was re-elected as the auditor of the company
with Erkka Talvinko, authorized public accountant, as principal auditor.
The Extraordinary General Meeting of SSH Communications Security Oyj was held on June 26,
2020. The Extraordinary General Meeting approved that the members of the Board of Directors
is five (5) and elected Mr. Tatu Ylönen, Ms. Aino-Mari Kiianmies, Mr. Sampo Kellomäki, Mr. Henri
Österlund (new member) and Mr. Kai Tavakka (new member) as members of the Board of Direc-
tors. Mr. Henri Österlund was elected as the Chairman of the Board of Directors at the Board’s
organizing meeting.
GROUP MANAGEMENT TEAM
At the end of 2020, the Group Management Team consisted of three members:
Teemu Tunkelo, Chief Executive Officer
Jussi Mononen, Chief Commercial Officer
Niklas Nordström, Chief Financial Officer
6
SSH Communications Security Group
PRINCIPAL PROVISIONS OF THE ARTICLES OF ASSOCIATION
According to the Articles of Association, the highest decision-making power in the company is
wielded by the shareholders at the shareholders’ meeting. The Annual General Meeting (AGM) is
held within six months of the completion of the company’s financial period, at a time decided by
the Board. The AGM decides the number of members of the Board of Directors and elects them.
Additionally, under the Finnish Limited Liability Companies Act, the AGM has the authority to
amend the company’s Articles of Association, adopt the financial statements, approve the
amount of dividend, and select the company’s auditors. Each SSH Communications Security Cor-
poration share conveys one vote at the shareholder’s meeting. Under the Articles of Association,
the CEO is appointed by the Board of Directors.
CORPORATE GOVERNANCE
SSH Communications Security abides by its Articles of Association as well as principles of trans-
parent and responsible corporate governance, and high ethical standards in its governance and
decision-making. The company complies with the Finnish company and securities market legisla-
tion, including the market abuse regulation, rules of Nasdaq Helsinki and Finnish Corporate Gov-
ernance Code 2020 adopted by the Securities Market Association.
For more information see our Corporate Governance Statement that is published annually as a
separate report and can be found at SSH’s website.
RESPONSIBILITY AND BUSINESS ETHICS
SSH Communications Security is committed to systematically maintain and develop the responsi-
bility and sustainability of business through its strategy, operations and actions. Company is com-
mitted to operate in socially and ethically responsible way.
The company’s ethical principles emphasize values that are important to SSH, such as antibribery,
position and treatment of employees, and safety and behavioral culture within workplaces.
SSH Communications Security is responsible employer and treats all employees equally. Company
does not approve harassment or discrimination in any form and for that the company has created
internal guideline and organized training. Company constantly develops the safety and comfort
of its workplaces as well as the management of work-related stress and coping with the workload.
The company’s headquarters in Helsinki moved to new, modern premises during spring 2020. In
addition, the company offers its employees physical, cultural and other benefits.
SSH Communications Security regards the diversity of its personnel as essential strength and en-
courages the appraisal and adoption of diversity throughout the organization including top man-
agement.
The company has a separate Anti-Bribery and Anti- Corruption Policy as well as equality plan fo-
cusing on equal and fair treatment of its employees.
The company has also a whistleblowing policy in place to ensure that employees and third parties,
if they wish, can report anonymously suspected serious deficiencies, abuses and crimes within
the SSH Group.
7
SSH Communications Security Group
SSH has established a Code of Conduct for responsible and transparent activities, employee sat-
isfaction and ethics for all employees worldwide.
SHARES, SHAREHOLDING, AND CHANGES IN GROUP STRUCTURE
The reported trading volume of SSH Communications Security Corporation totaled 19,431,318
shares (valued at EUR 24,937,080). The highest quotation was EUR 1.97 and the lowest EUR 0.65.
The trade-weighted average share price for the period was EUR 1.28 and the share closed at EUR
1.70 (December 31, 2020).
Tatu Ylönen sold 6.4 million shares in SSH to investment fund Accendo Capital SICAV, SIF on May
22, 2020 and further 4.93 million shares on June 3, 2020. Accendo Capital came the largest
shareholder of SSH, with 29.2 % of the company. Tatu Ylönen is the second-largest shareholder
of SSH after the sale with 18.0 % and Juha Mikkonen holds directly 5.2 % of the company’s
shares. More information about the shareholding can be obtained from the company’s web site
www.ssh.com.
The company has the following subsidiaries:
• SSH Communications Security, Inc. and SSH Government Solutions, Inc. in the USA
• SSH Communications Security Ltd. in Hong Kong,
• SSH Communications Security UK Ltd. in the UK
• SSH Operations Ltd., Kyberleijona Ltd., and SSH Technology Ltd. in Finland. SSH Opera-
tions Ltd. has a branch in Germany.
State Security Networks Group Finland (Suomen Erillisverkot Oy) became a non-controlling inter-
est holder of Kyberleijona Oy on August 14, 2018 with 35 % ownership. SSH Communications
Security Oyj owns 65 % of the shares in Kyberleijona Oy.
During the review period, no dividend or return of capital have been distributed.
INFORMATION ON SHAREHOLDERS
Distribution of ownership by sector
Type of sector
Number of
shares
Percentage of
shares and votes, %
Households and private individuals
17 806 698
45.89 %
Financial and insurance institutions
14 817 163
38.19 %
Public sector organizations
3 184 157
8.21 %
Companies
2 705 989
6.97 %
Foreign shareholders
285 555
0.74 %
Non-profit organizations
2 671
0.01 %
Total
38 802 233
100.00 %
8
SSH Communications Security Group
DISTRIBUTION OF HOLDINGS BY NUMBER OF SHARES
Shares
Number of
sharehold-
ers
Percentage of
shareholders,
%
Number of
shares
Percentage of
shares, %
1−100
1 712
35.73 %
90 848
0.23 %
101−500
1 319
27.53 %
388 524
1.00 %
501−1,000
640
13.36 %
525 552
1.35 %
1,001−5,000
801
16.72 %
1 914 506
4.93 %
5,001−10,000
134
2.80 %
995 601
2.57 %
10,001−50,000
147
3.07 %
3 043 571
7.84 %
50,001−100,000
19
0.40 %
1 221 698
3.15 %
100,001−500,000
11
0.23 %
2 156 629
5.56 %
500,001−999,999,999
9
0.19 %
28 465 304
73.36 %
Total
4 792
100.00 %
38 802 233
100.00 %
of which nominee-regis-
tered
9
14 830 115
38.22 %
SHARE CAPITAL AND BOARD AUTHORIZATIONS
The registered share capital of SSH Communications Security Corporation on December 31,
2020 was EUR 1,164,066.99 consisting of 38,802,233 shares.
Share subscriptions have not been made with the warrants of the stock option programs in the
financial years 2020 and 2019.
The Annual General Meeting approved the Board of Directors’ proposal to authorize the Board of
Directors to decide upon the issuing of a maximum of 6,000,000 shares as a share issue against
payment or by giving stock options or other special rights entitling to shares, in accordance with
The ten largest shareholders Dec 31, 2020,
excluding nominee-registered
Percentage
of shares, %
Number of shares
Ylönen Tatu
18.01 %
6 987 123
Mikkonen Juha Taneli
5.15 %
2 000 000
Elo Mutual Pension Insurance Company
4.01 %
1 555 258
Gaselli Group Oy
2.70 %
1 047 500
Ilmarinen Mutual Pension Insurance Company
2.25 %
873 599
Varma Mutual Pension Insurance Company
1.95 %
755 300
Syrjälä Timo Kalevi
1.61 %
623 011
Kettunen Risto Juhani
1.09 %
422 000
AC Invest Oy
0.87 %
338 293
Pulli Anita Irmeli
0.79 %
307 610
Total
38.42 %
14 909 694
9
SSH Communications Security Group
Chapter 10 Section 1 of the Finnish Companies Act, either according to the shareholders’ pre-
emptive right to share subscription or deviating from this right, in one or more tranches. Based
on the authorization, it can be either issuing of new shares or transfer of own shares, which the
company possibly has in its possession.
Based on the authorization, the Board of Directors shall have the same rights as the Annual Gen-
eral Meeting to decide upon the issuing of shares against payment and special rights (including
stock options) in accordance with Chapter 10 Section 1 of the Finnish Companies Act. Thereby,
the authorization to be given to the Board of Directors includes, inter alia, the right to deviate
from the shareholders’ pre-emptive rights with directed issues providing that the company has a
weighty financial reason for the deviation in respect of the share issue against payment.
Furthermore, the authorization includes the Board of Directors’ right to decide upon who are
entitled to the shares and/or stock options or special rights in accordance with Chapter 10 Section
1 of the Finnish Companies Act as well as upon the related compensation, subscription and pay-
ment periods and upon the registering of the subscription price into the share capital or invested
non-restricted equity fund within the limits of the Finnish Companies Act.
The authorization will be valid until the next Annual General Meeting but will however expire at
the latest on June 30, 2021.
The Annual General Meeting approved the Board of Directors’ proposal to authorize the Board of
Directors to decide upon acquisition of a maximum of 2,000,000 own shares of the company with
assets belonging to the company’s non-restricted equity, which amounts to approximately 5.2
percent of the company’s total shares. The shares can also be acquired otherwise than in propor-
tion to the holdings of the existing shareholders. The maximum compensation to be paid for the
acquired shares shall be the market price at the time of purchase, which is determined in the
public trading.
The Board of Directors proposes that the authorization for the acquiring of the company’s own
shares would be used, inter alia, in order to strengthen the company's capital structure, to finance
and realize corporate acquisitions and other arrangements, to realize the share-based incentive
programs of the company or otherwise to be kept by the company, to be transferred for other
purposes or to be cancelled. The acquisition of shares reduces the company’s distributable non-
restricted equity.
Decision concerning the acquiring of own shares cannot be made so that the combined amount
of the own shares, which are in the possession of, or held as pledges by, the company or its sub-
sidiaries exceeds one-tenth of all shares. The Board of Directors shall decide upon all other mat-
ters related to the acquisition of shares.
The authorization will be valid until the next Annual General Meeting but will however expire at
the latest on June 30, 2021.
SHARE-BASED PAYMENTS
The share-based payments of SSH Communications Security are stock options. Stock option pro-
grams have been in effect in the reporting period or in the comparison year.
10
SSH Communications Security Group
The Board of Directors decided on January 20, 2020 on a new stock option program 2020 A. The
maximum number of stock options is 980,000. The share subscription period will be from Decem-
ber 1, 2022 to March 31, 2024. The share subscription price for the shares is EUR 0.93.
Each option gives the right to subscribe to one new share at a price and at a time specified in the
terms of the stock option plan. The option rights will be canceled in case the employee leaves the
company before the subscription time has begun. There are no other conditions to the beginning
of the option rights.
The shares subscribed with the granted option rights include the rights to any dividend payable
for the reporting period during which the shares were subscribed. Other shareholder rights com-
mence as soon as the increase in the share capital has been registered in the Trade Register. More
information on stock option plans is given in note 19 in the consolidated financial statements.
RELATED PARTY TRANSACTIONS
During the reporting period, there have not been any significant transactions with related parties.
EVENTS AFTER THE BALANCE SHEET DATE
On January 29, 2021 SSH Communications Security Corporation’s subsidiary Kyberleijona Oy has
agreed to acquire all shares of Deltagon Oy from Leijonaverkot Oy, a subsidiary of Suomen Eril-
lisverkot Oy.
Deltagon Oy develops and sells secure messaging and transaction solutions to various industries,
including finance and the public sector. The acquisition strengthens SSH’s position as a provider
of secure networking and messaging solutions that safeguard key national cybersecurity inter-
ests and offer security-critical networking, encryption, and other solutions to the public sector in
a coordinated manner. After closing, Deltagon becomes a subsidiary of Kyberleijona and part of
the SSH group. The acquisition is expected to close during the first half of 2021, subject to regu-
latory approvals and fulfillment of customary closing conditions.
The total acquisition price is approximately EUR 15.4 million. The cash flow impact of the acquisi-
tion price to SSH is EUR 10 million over the next four years. The parties have also agreed on an
earnout payment of no more than EUR 1.3 million, subject to certain conditions being fulfilled in
the three-year period after the acquisition.
DIVIDEND AND OTHER DISTRIBUTION OF ASSETS
The parent company’s distributable funds are EUR -2,108,611.53, of which the loss for the finan-
cial year is EUR -2,392,977.94. The Board of Directors proposes to the Annual General Meeting on
March 25, 2021 that no dividend or return of capital shall be distributed. It is proposed that the
loss of the financial year shall be entered to the retained earnings in the shareholders’ equity.
11
SSH Communications Security Group
FINANCIAL INDICATORS
2020
2019
2018
Net sales
EUR
11 251 214
14 378 011
18 340 371
Operating profit/loss
EUR
-2 486 221
-1 207 515
544 239
% of net sales
%
-22.1
-8.4
3.0
EBITDA
EUR
-392 982
862 821
2 410 340
% of net sales
%
-3.5
6.0
13.1
Profit/loss before taxes
EUR
-3 090 264
-1 339 130
558 577
% of net sales
%
-27.5
-9.3
3.0
Return on equity
%
-30.0
-11.3
3.8
Return on investments
%
-27.3
-9.8
4.1
Net interest-bearing debt
EUR
-7 220 926
-11 112 723
-13 295 691
Gearing
%
-85.3
-92.3
-93.5
Equity ratio
%
69.7
78.0
81.6
Gross investments in tangible and intan-
gible assets
EUR
2 115 884
2 005 264
2 257 099
% of net sales
%
18.8
13.9
12.3
Research and development costs
EUR
-5 047 946
-4 893 415
-5 108 469
% of net sales
%
44.9
34.0
27.9
Average number of personnel
88
88
82
Number of personnel 31 Dec
94
90
85
Salaries and fees
EUR
-8 125 559
-8 315 829
-8 346 214
12
SSH Communications Security Group
INDICATORS PER SHARE
2020
2019
2018
Earnings per share
1
EUR
-0.11
-0.06
-0.01
Earnings per share, diluted
1
EUR
-0.11
-0.06
-0.01
Equity per share
EUR
0.22
0.31
0.37
Dividends
EUR
0
0
0
Dividends per share
EUR
0.00
0.00
0.00
Dividend payout ratio
%
0
0
0
Effective dividend yield
%
0
0
0
Return of capital
EUR
0
0
0
Return of capital per share
EUR
0
0
0
Adjusted average number of shares during
the period
1 000
38 802
38 802
38 578
Adjusted number of shares at the end of
the period
1 000
38 802
38 802
38 802
Adjusted average number of shares con-
sidering dilution effect
1 000
41 529
41 228
40 298
Price per earnings ratio (P/E)
neg.
neg.
neg.
Market capitalization 31 Dec
mEUR
65.8
40.2
65.2
1
Earnings per share is impacted by unpaid interest of hybrid capital securities.
Share performance at Nasdaq Helsinki
2020
2019
2018
2018
Average price
EUR
1.28
1.34
2.00
2.00
Share price, year end
EUR
1.70
1.04
1.68
1.68
Lowest quotation
EUR
0.65
0.97
1.60
1.60
Highest quotation
EUR
1.97
1.97
2.27
2.27
Volume of shares traded
millions
19.4
5.3
7.8
7.8
Volume of shares traded, % of total number
%
50.1
10.2
20.2
20.2
Volume of shares traded
mEUR
24.9
4.0
15.6
15.6
13
SSH Communications Security Group
ALTERNATIVE PERFORMANCE MEASURE
SSH Communications Security presents an alternative performance measure, which is not defined
by IFRS standards. Alternative performance measure should not be considered as substitute for
performance measures in accordance with the IFRS. From the first quarter of 2020 onwards, SSH
Communications Security has introduced the following new alternative performance measure:
EBITDA = Operating profit/loss + depreciation, amortization, and impairment
The following table presents the reconciliation of EBITDA to the operating profit/loss.
kEUR
2020
2019
EBITDA
-393
863
Depreciation, amortization,
and impairment
-2 093
-2 070
Operating profit/loss
-2 486
-1 208
14
SSH Communications Security Group
CALCULATION OF FINANCIAL RATIOS
Return on Equity, % (ROE)
=
Profit/loss for the financial year
x 100
Equity (average during the financial year)
Return on Investment, % (ROI)
=
Profit/loss before taxes + Interest and other financial costs
x 100
Balance sheet total - Non-interest-bearing debts (average dur-
ing the financial period)
Equity Ratio, %
=
Equity
x 100
Balance sheet total - Advance payments received
Earnings Per Share (EPS)
=
Profit/loss for the financial period - Interest on hybrid capital
securities
Average number of outstanding shares during the financial
period
Diluted Earnings Per Share (EPS)
=
Profit/loss for the financial period - Interest on hybrid capital
securities
Adjusted average number of shares considering dilution effect
Dividend Per Share
=
Dividend
Number of outstanding shares during the financial period
Dividend Pay-out Ratio, %
=
Dividend per share
x 100
Earnings per share
Equity Per Share
=
Equity
x 100
Number of outstanding shares on the financial statement date,
adjusted for share issue
Gearing, %
=
Interest-bearing debt - Liquid assets
x 100
Equity
15
SSH Communications Security Group
CONSOLIDATED FINANCIAL STATEMENTS
16
SSH Communications Security Group
CONSOLIDATED FINANCIAL STATEMENTS
CONSOLIDATED COMPREHENSIVE INCOME STATEMENT
EUR
Note
1 Jan-31 Dec
2020
1 Jan-31 Dec
2019
NET SALES
3
Cost of goods sold
-283 797
-451 282
GROSS MARGIN
Other operating income
4
Sales and marketing costs
5, 6
-6 698 629
-7 469 757
R&D costs
5, 6
-5 047 946
-4 893 415
Administrative costs
5, 6
-2 694 526
-2 851 216
OPERATING PROFIT/LOSS
-2 486 220
-1 207 515
Finance income
7
Finance costs
8
-604 675
-132 413
PROFIT/LOSS BEFORE TAXES
-3 090 264
-1 339 130
Income tax expense
9
-146 600
PROFIT/LOSS FOR THE YEAR
-3 078 102
-1 485 730
Profit/loss attributable to:
Owners of the parent company
-2 834 021
-1 264 498
Non-controlling interests
-244 081
-221 232
TOTAL
-3 078 102
-1 485 730
OTHER COMPREHENSIVE INCOME
Items that may be reclassified subsequently to profit or loss:
Translation differences
-31 084
TOTAL COMPREHENSIVE INCOME FOR THE YEAR
-2 812 064
-1 516 814
Total comprehensive income attributable to:
Owners of the parent company
-2 567 983
-1 295 581
Non-controlling interests
-244 081
-221 232
TOTAL
-2 812 064
-1 516 814
Earnings per share
Basic earnings per share (EUR)
10
-0,11
-0,06
Diluted earnings per share (EUR)
10
-0,11
-0,06
17
SSH Communications Security Group
CONSOLIDATED FINANCIAL STATEMENTS
CONSOLIDATED BALANCE SHEET
ASSETS
EUR
Note
31 Dec 2020
31 Dec 2019
NON-CURRENT ASSETS
Property, plant and equipment
11
Right-of-use assets
12, 22
Intangible assets
13
Investments
Total non-current assets
CURRENT ASSETS
Inventories
Trade receivables
14, 16
Other receivables
15
Prepaid expenses and accrued expenses
Total current assets
Cash and cash equivalents
TOTAL CURRENT ASSETS
TOTAL ASSETS
18
SSH Communications Security Group
CONSOLIDATED FINANCIAL STATEMENTS
CONSOLIDATED BALANCE SHEET
EQUITY AND LIABILITIES
EUR
NOTE
31 Dec 2020
31 Dec 2019
EQUITY ATTRIBUTABLE TO PARENT COMPANY
SHAREHOLDERS
Share capital
17
Translation differences
-1 171 419
-1 437 458
Unrestricted invested equity fund
Hybrid capital securities
Retained earnings
-26 603 569
-23 000 578
Equity attributable to parent company shareholders
Non-controlling interests
Total equity
NON-CURRENT LIABILITIES
Borrowings
18
Lease liabilities
18, 22
Advances received and deferred revenue
14
Total non-current liabilities
CURRENT LIABILITIES
Trade and other payables
14
Lease liabilities
18, 22
Advances received and deferred revenue
14
Total current liabilities
TOTAL LIABILITIES
TOTAL EQUITY AND LIABILITIES
19
SSH Communications Security Group
CONSOLIDATED FINANCIAL STATEMENTS
CONSOLIDATED CASH FLOW STATEMENT
EUR
Note
1 Jan-31 Dec
2020
1 Jan-31 Dec
2019
Cash flows from operating activities
Receipts from customers
3, 14
Payments to suppliers and employees
5, 20
-12 400 181
-14 373 570
Cash flows from operating activities before financial items and taxes
-164 427
Interest paid and payments on other financial costs
-73 456
-65 074
Interest received and other financial income
Income taxes paid
-45 376
Net cash flows from operating activities
-227 878
whereof change in working capital
-581 604
Cash flows from investing activities
Investments in tangible and intangible assets
11, 13
-2 115 884
-2 005 264
Receipt of government grants
4
Net cash flows from investing activities
-1 503 628
-1 082 923
Cash flows from financing activities
Proceeds from subordinated debt
18
Interest paid on hybrid capital securities
-900 000
-900 000
Principal portion of finance lease payments
21
-374 466
-304 277
Net cash flows from financing activities
-1 274 466
-784 277
Change in cash and cash equivalents
-3 005 973
-1 587 379
Cash and cash equivalents in beginning of period
Exchange rate effect
-445 214
Change in cash and cash equivalents
-3 005 973
-1 587 379
Cash and cash equivalents at end of period
20
SSH Communications Security Group
CONSOLIDATED FINANCIAL STATEMENTS
STATEMENT OF CHANGES IN CONSOLIDATED EQUITY
Attributable to the owners of the Company
EUR
Note
Share
capital
Hybrid capital
securities
Translation
differences
Unrestricted
invested
equity fund
Retained
earnings
Total
Non-
controlling
interests
Total equity
Equity 1 Jan 2019
17
-1 406 374
-21 077 384
Comprehensive profit/loss
Profit/loss for the year
-1 264 498
-1 264 498
-221 232
-1 485 730
Other comprehensive items
Translation differences
-31 084
-31 084
-31 084
Comprehensive profit/loss
for financial period, total
-31 084
-1 264 498
-1 295 581
-221 232
-1 516 814
Hybrid capital securities
-900 000
-900 000
-900 000
Share-based payment plans
Transactions with shareholders
-658 696
-658 696
-658 696
Equity 31 Dec 2019
-1 437 458
-23 000 578
21
SSH Communications Security Group
Attributable to the owners of the Company
EUR
Note
Share
capital
Hybrid
capital
securities
Translation
differences
Unrestricted
invested
equity fund
Retained
earnings
Total
Non-
controlling
interests
Total equity
Equity 1 Jan 2020
17
-1 437 458
-23 000 578
Comprehensive profit/loss
Loss for the period
-2 834 022
-2 834 022
-244 081
-3 078 102
Other comprehensive items
Translation differences
Comprehensive profit/loss
for financial period, total
-2 834 022
-2 567 983
-244 081
-2 812 064
Hybrid capital securities
-900 000
-900 000
-900 000
Share-based payment plans
Transactions with shareholders
-768 969
-768 969
-768 969
Equity 31 Dec 2020
-1 171 419
-26 603 569
22
SSH Communications Security Group
CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1. GENERAL INFORMATION
SSH Communications Security Corporation helps organizations access, secure and control their
digital core – their critical data, applications and services. In the rapidly growing global data econ-
omy, secure access that enables digital transformation at business velocity is the new competitive
advantage.
Our thousands of customers include Fortune 500 companies, the world’s largest financial institu-
tions, and major organizations in all verticals. Our solutions guard against the rapidly changing
threat landscape that includes both internal and external actors.
We generate shareholder value from a combination of our world-leading expertise, proven en-
terprise-class solutions, professional services, support offering, and from our strong IP portfolio
and well-established licensing operations.
The SSH Communications Security Group consists of SSH Communications Security Corporation
and its subsidiaries. SSH Communications Security Corporation (corporate id 1035804-9) is dom-
iciled in Helsinki, Finland and is a publicly traded company, whose share is quoted on NASDAQ
Helsinki Oy (SSH1V). SSH Communications Security Corporation has its registered office at address
Karvaamokuja 2B, 00380 Helsinki, Finland.
The SSH Communications Security Board of Directors approved this financial statement for pub-
lication at its meeting on 17 February 2021. Under the Finnish Limited Liability Companies Act,
the shareholders can accept or reject the financial statement at the AGM held after its publica-
tion. A copy of the financial statements is published as a part of the company’s annual report.
The annual report is available on the company website at www.ssh.com, or at the head office of
SSH Communications Security Corporation. All stock exchange bulletins are available on the com-
pany website www.ssh.com.
SSH Communications Security UK Ltd (registration number 09346221) is exempt from the require-
ments of the UK Companies Act relating to the audit of accounts under section 479A of the Com-
panies Act 2006.
SSH Communications Security Corporation has one reportable segment, the software business.
2. ACCOUNTING PRINCIPLES
Basis of Preparation
The consolidated financial statements have been prepared in compliance with the International
Financial Reporting Standards (IFRS). The aforementioned standards are the standards and inter-
pretations thereof approved for use in the EU pursuant to Regulation (EC) No. 1606/2002 imple-
mented in the Finnish Accounting Act and legislation based thereon. The notes to the consoli-
dated financial statements are also compliant with Finnish accounting and company legislation.
23
SSH Communications Security Group
The consolidated financial statements are based on original acquisition costs unless otherwise
noted in the accounting principles. The consolidated financial statements are presented in full
euros unless otherwise stated.
New and amended standards and interpretations
From the beginning of year 2020, the Group has applied the following amended standards:
• Amendments to IFRS 3 Business combinations. The amendments help companies to de-
termine whether an acquisition made is of a business or a group of assets. The amended
definition emphasizes that the output of a business is to provide goods and services to
customers, whereas the previous definition focused on returns in the form of dividends,
lower costs or other economic benefits to investors and others.
• Amendments to IFRS 9, IAS 39 and IFRS 7. The amendments are related to Interest Rate
Benchmark Reform and require qualitative and quantitative disclosures to enable users
of financial statements to understand how an entity’s hedging relationships are affected
by the uncertainty arising from interest rate benchmark reform.
• Amendments to IAS 1 and IAS 8: Definition of Material. The amendment clarifies the
definition of “material” and align the definition used in the Conceptual Framework and
the standard themselves.
• Amendments to References to the Conceptual Framework in IFRS standards. The revised
Conceptual Framework includes a new chapter on measurement; guidance on reporting
financial performance; improved definitions and guidance - particular the definition of a
liability; and clarifications in important areas, such as the roles of stewardship, prudence
and measurement uncertainty in financial reporting.
The IFRS standards and the amendments that entered into force in 2020 had no impact on the
Group’s result, the financial position, or the presentation of the financial statements.
Changes that become effective later
The Group will adopt new and amended standards and interpretations as of the effective date or,
if the date is other than the first day of the financial year, from the beginning of the subsequent
financial year. The Group has not yet adopted the following new and amended standards and
interpretations already issued by the IASB.
The following amendments have been endorsed for use by the European Union:
• Amendment to IFRS 16 Leases, Covid-19 -pandemic related rent concessions (effective
for financial years beginning on or after June 1, 2020). The amendment provides optional,
temporary Covid-19 related operational relief for lessees who benefit from lease payment
holidays without compromising the relevance and usefulness of financial information pro-
vided by companies.
The changes are not expected to have a material impact on SSH Communications Security’s con-
solidated financial statements.
Subsidiaries
The consolidated accounts include the parent company SSH Communications Security Corpora-
tion and all its subsidiaries. Subsidiaries are companies in which the Group has a controlling
24
SSH Communications Security Group
interest. A controlling interest is created when the Group has power over the investee, exposure,
or rights, to variable returns from its involvement with the investee and the ability to use its
power over the investee to affect the amount of the Group’s returns. In practice, controlling in-
terest is established when the Group owns more than half of the votes in a company.
Group-internal share ownership is eliminated using the purchase method. Subsidiaries are con-
solidated from the date on which control is transferred to the Group and are no longer consoli-
dated from the date on which that control ceases. All Group-internal transactions, receivables
and debts, unrealized profit, and profit distribution have been eliminated.
The share of the non-controlling interests of the subsidiaries’ profits and equity is presented as a
separate item in the consolidated income statement, comprehensive income statement, state-
ment of changes in equity, and in the balance sheet.
Converting Foreign Currency Transactions
Items of each subsidiary included in the consolidated financial statements are measured using
the currency of the operating environment of that subsidiary (‘functional currency’). The consol-
idated financial statements are presented in euros, which is the functional and reporting currency
of the parent company.
Transactions in Foreign Currency
Foreign currency denominated transactions are recognized at the exchange rate of the functional
currency on the transaction date. In practice, the exchange rate used is approximately the rate of
the transaction date. Outstanding receivables and liabilities in foreign currencies are measured
using the exchange rates on the balance sheet date. Exchange rate differences are recorded in
the income statement. Exchange rate gains and losses on financing are included in financing in-
come and costs.
Translation of Financial Statements of Foreign Subsidiaries
The comprehensive income statements and cash flow statements of subsidiaries whose func-
tional currency is other than EUR are translated into euros using the exchange rate of the trans-
action dates. In practice, the translations are done once a month using the monthly average ex-
change rate. Balance sheet items are translated into euros with the exchange rate of the balance
sheet date. The translation of the comprehensive profit/loss for the financial period using differ-
ent exchange rates in the comprehensive income statement on the one hand and in the balance
sheet on the other causes a translation difference recognized under Group equity under other
comprehensive profit/loss items.
Translation differences generated through elimination of the acquisition costs of foreign subsidi-
aries and translation of equity items accrued after acquisition are recognized under other com-
prehensive profit/loss items. When a subsidiary is sold, accumulated translation differences are
recognized in the income statement as part of the gain or loss on the sale.
Revenue Recognition
SSH Communications Security net sales derive mainly from software license sales and subscrip-
tions, related support and maintenance fees, and consulting fees. Net sales comprise the invoiced
25
SSH Communications Security Group
value for the sale of goods and services adjusted with any discounts given, sales taxes, and ex-
change rate differences.
The revenue from product sales is recognized at the time when significant risks and rewards of
the product or the right of use of the product have been transferred to the buyer and there is a
binding contract between the parties, the delivery has taken place in accordance with the con-
tract, the amount of revenue can be measured reliably, and it is probable that the economic ben-
efits associated with the transaction will accrue to the Group. Control is transferred to the buyer
at the point of time.
Maintenance sales, or revenue from support and maintenance contracts, are recognized evenly
on an accrual basis throughout the contract period. Revenues from services are recognized when
the service has been delivered and it is probable that the economic benefits associated with the
transaction will accrue to the Group.
The revenue of royalties from licenses is recognized according to the actual content of the con-
tract at the point of time.
The Group customarily receives short-term advance payments from customers, but also from
time to time substantial long-term advance payments for subscription or support and mainte-
nance fees. In these cases, the financing component is accounted for and interest expenses are
recorded for the duration of the advance payment.
Government Grants
Grants received from the government for purchase of tangible assets are entered as a deduction
of the book value of the asset when there is reasonable assurance that the company will receive
the grant and will comply with the conditions attaching to the grant. Grants are recognized as
income over the life of a depreciable asset by way of a reduced depreciation. Government grants
that are intended to compensate for costs are recognized as income over the same period as the
related costs are recognized. These government grants are presented under other operating in-
come.
Property, Plant, and Equipment
The property, plant, and equipment of Group companies are measured in the balance sheet at
cost less accumulated straight-line depreciation and eventual impairment losses. When a part of
a current assets item is treated as a separate asset, expenses related to its replacement are cap-
italized and any remaining book value is written off. Expenses incurring later are included in the
class of property, plant, and equipment only if it is probable that the property will provide future
economic benefits to the Group and that the acquisition cost can be reliably determined. Other
repair and maintenance expenses are recognized in profit/loss as and when incurred.
Depreciation is calculated on a straight-line basis to reduce the purchase value of each asset item
to its residual value over its estimated useful life.
• Machinery and equipment: 5 years from month of acquisition.
• Computer hardware: 3-5 years from month of acquisition.
• Leasehold improvements of rental premises: According to the lease term, though no
more than 7 years from year of acquisition.
26
SSH Communications Security Group
The residual value and useful life of assets are reviewed for each financial statement and, if nec-
essary, adjusted to indicate changes expected in the assets’ economic benefits. The depreciation
on property, plant, and equipment is ceased when the asset is classified as held for sale in accord-
ance with standard IFRS 5 Non-current Assets Held for Sale and Discontinued Operations.
Capital gains and losses are determined by comparing proceeds received with the book value of
sold assets. Impairment losses incurred through transfer are recognized under other operating
costs.
Intangible Assets
Research and Development Costs
Research costs are recognized as costs in the income statement. Development costs (related to
the design and testing of new or improved products) from incomplete projects are recognized as
intangible assets if capitalization criteria are fulfilled, to the extent of their probable economic
benefits to the company. The most significant development costs to be capitalized constitute R&D
personnel costs and sub-contracting costs. Other development costs are recognized directly as
costs. Development costs once recognized as costs are not capitalized in subsequent financial
periods.
Capitalized assets are tested annually for impairment. After initial recognition, capitalized devel-
opment costs are measured at cost less accumulated depreciation and impairment losses. Capi-
talized development costs are depreciated on a straight- line basis over their economic lifetime,
estimated at 5 years.
Software
Software includes acquired software licenses. These assets are entered in the balance sheet at
cost and depreciated on a straight-line basis over their economic lifetime. The residual value and
useful life of assets are reviewed for each financial statement and, if necessary, adjusted to indi-
cate changes expected in the assets’ economic benefits. The economic lifetime does not generally
exceed 5 years. The depreciation period for software acquired for internal use is 3–6 years.
Other Immaterial Rights
Immaterial rights include obtained technology patents, trademarks, customer registers, and tech-
nology rights. These are entered in the balance sheet at cost and depreciated on a straight-line
basis over their economic lifetime. The residual value and useful life of assets are reviewed for
each financial statement and, if necessary, adjusted to indicate changes expected in the assets’
economic benefits. The economic lifetime is generally 5 to 10 years.
Impairment of Tangible and Intangible Assets
The Group will review on each balance sheet date whether there is any indication of an impaired
asset. Whenever indicators of impairment exist, the book value of such an asset is compared with
its recoverable amount. The recoverable amount is the fair value of the asset less the costs of its
sale, or its value in use, whichever is higher. The value in use is the present value of the future
cash flows expected to be derived from an asset or cash-generating unit. The discount rate used
to calculate the above is pre-tax rate that reflects the current market assessments of the time
value of money and the risks specific to the asset.
27
SSH Communications Security Group
Whenever the book value of an asset exceeds its recoverable amount, an impairment loss will be
recognized for that asset. The impairment loss is recognized immediately in the income state-
ment. After the recognition of an impairment loss, the economic lifetime of an asset subject to
depreciation is re-evaluated. An impairment loss recognized in prior period for an asset other
than goodwill will be reversed if there is a change in the estimates that have been used in as-
sessing the recoverable amount of that asset.
Inventories
Inventories are valued at cost or at a net realizable value, whichever is lower. Inventories com-
prise finished goods for sale or for use in producing a service.
Financial Assets and Liabilities
Financial assets
The Group has classified its financial assets into the following categories: financial assets at fair
value through profit of loss, financial assets at fair value through comprehensive income state-
ment, and financial assets at amortized value.
The assets are classified at initial recognition; the classification is based on the business model
used in managing the financial assets and contractual terms of the cash flows. The assets are
initially recognized at fair value. Transaction costs are included in the original book value of an
asset if the asset is not to be recognized at fair value through profit or loss. Financial assets are
written off from the balance sheet when the contractual right to cash flows from an asset included
in financial assets ends or when the significant risks and rewards related to the asset are trans-
ferred outside the Group. All asset purchases and sales are recognized on the date of the trans-
action.
Financial assets through profit or loss include derivatives unless they are designated as effective
hedging instruments or warrants such as currency derivatives, and fund investments. Changes in
fair values of derivative financial instruments and realized and unrealized gains and losses are
recognized in the income statement during the period when they incur. The Group did not have
any derivatives during 2020 or 2019.
Loans and receivables are valued at cost at the time of acquisition and they are measured at
amortized acquisition cost using the effective interest rate method.
Cash and cash equivalents
Cash and cash equivalents include cash on hand, short-term deposits at banks, and other short-
term liquid investments. Assets classified as cash and cash equivalents have a maturity of three
months or less at the time of acquisition.
Impairment of financial assets
The Group applies the IFRS 9 simplified approach to measuring expected credit losses which uses
a lifetime expected loss allowance for all trade receivables and contract assets. Credit losses are
recognized in the income statement in other operating expenses.
28
SSH Communications Security Group
The Group assesses at each balance sheet date whether an individual financial asset or group of
financial assets is impaired. The Group recognizes an impairment loss on trade receivables when
it is expected that the receivable will not be recovered in full. Significant financial difficulties,
likelihood of bankruptcy, neglect of payments, or delay of payment by more than 90 days on part
of a debtor may be considered to constitute such evidence for an impairment loss on trade re-
ceivables.
Financial liabilities
The Group’s financial liabilities are classified into financing liabilities recognized at fair value
through profit/loss or other financial liabilities (financing liabilities recognized at amortized acqui-
sition cost). A financial liability is classified as current if the Group does not have the absolute
right to postpone repayment to at least 12 months from the end of the period under review. A
financial liability (or part thereof) will not be written off the balance sheet until it has ceased to
exist, i.e. when the obligation specified in the agreement has been discharged or reversed and its
period of validity has expired.
In the SSH Communications Security Group, financial liabilities recognized at fair value through
profit/ loss include the derivative instruments which do not fulfill the criteria for hedging account-
ing, and which are not warrants (currency derivatives). Unrealized and realized gains/losses due
to changes in the fair value of these derivatives are recognized in profit/loss in the financial period
during which they are generated. The Group did not have any derivative contracts during 2020 or
2019.
Other financial liabilities (financing liabilities recognized at amortized cost) include, most signifi-
cantly, trade payables. They are initially recognized at fair value. After the original recognition,
other financial liabilities are measured at amortized acquisition cost using the effective interest
rate method.
Leases
The Group leases mainly offices. Rental contracts are typically made for fixed periods from two
to three years but may have extension options. Extension options have not been included in the
lease liability, because the Group could replace the asset without significant cost or business dis-
ruption. The lease term is reassessed if the option is exercised.
Leases are recognized in the balance sheet as a right-of-use asset and a corresponding financial
liability at the date at which the lease asset is available for the use by the Group. Each lease pay-
ment is allocated between the liability and finance cost. The finance cost is recognized in the
income statement over the lease period. The right-of-use asset is depreciated over the shorter
of the asset’s useful life and the lease term on a straight-line basis. The right-of-use assets are
also subject to impairment.
In calculating the present value of lease payments, the Group uses its incremental borrowing
rate at the lease commencement date because the interest rate implicit in the lease is not read-
ily determinable. After the commencement date, the amount of lease liabilities is increased to
reflect the accretion of interest and reduced for the lease payments made. The carrying amount
of lease liabilities is remeasured if there is a modification, a change in the lease term, a change
in the lease payments or a change in the assessment of an option to purchase the underlying
asset.
Lease liabilities are included in interest-bearing loans and borrowings.
29
SSH Communications Security Group
The Group applies the short-term lease recognition exemption to the leases of 12 months or less
and the lease of low-value assets recognition exemption. Lease payments on short-term leases
and leases of low-value assets are recognized as expense on a straight-line basis over the lease
term.
Earnings per share
Earnings per share
Earnings per share is calculated by dividing the net profit/ loss for the financial year attributable
to the owners by the weighted average number of ordinary shares outstanding during the finan-
cial year. Earnings per share is impacted by unpaid interest of hybrid capital securities.
Diluted earnings per share
A dilutive effect caused by stock options exists when the subscription price of a share is lower
than the fair value of the share. In the calculation of diluted earnings per share, stock options are
only considered dilutive when their conversion to ordinary shares would decrease earnings per
share or increase the loss per share from continuing operations. In other words, when the Group
declares a loss, no dilutive effect will be calculated. Diluted earnings per share is impacted by
unpaid interest of hybrid capital securities.
Share capital
Share capital consists of ordinary shares of the parent company classified as equity. Dividends
paid on ordinary shares are deducted from equity in the period during which the decision to dis-
tribute dividends is made in the Annual General Meeting.
Share issue costs
Costs directly related to an issue of new shares, other than costs attributable to a business com-
bination, are deducted, net of tax, from the proceeds recognized under equity.
Own shares
If SSH Communications Security Corporation or its subsidiaries purchase parent company SSH
Communications Security Corporation’s shares, the compensation paid, including any related in-
cremental external costs, net of tax, is deducted from total equity as own shares until the shares
are canceled or transferred. If own shares are subsequently sold, any compensation received will
be recognized under equity. The Group companies held no shares in the parent company on De-
cember 31, 2020 or December 31, 2019.
30
SSH Communications Security Group
Hybrid capital securities
Hybrid capital securities is an instrument that is subordinated to the Company’s other debt obli-
gations and is treated as equity in the Group balance sheet. Unpaid interest is cumulated but
presented in the financial statements only after Board of Directors’ interest payment decision.
Gross Margin
Gross margin is equal to net sales less the acquisition costs of directly related materials and ser-
vices.
Operating Profit/Loss
IAS 1 Presentation of Financial Statements does not define operating profit/loss. The Group uses
the following definition: operating profit/loss is equal to earnings before interest and taxes.
Income tax
Tax expenses in the income statement comprise tax based on taxable income for the period and
deferred tax. Income tax is recognized in the income statement except for taxes related to items
recognized under comprehensive profit/loss or directly under equity, in which case the tax impact
will be incorporated in the aforementioned items. Tax based on taxable income for the period is
calculated using the corporate income tax rate (and tax laws) effective in each country, adjusted
for any tax from previous periods.
Deferred taxes are calculated on temporary differences between the book value and taxable
value. The largest temporary differences arise from unused tax losses which are deductible later.
Deferred taxes are calculated using the statutory tax bases with confirmed content announced
by the closing date or with generally accepted tax bases. Deferred tax assets are recognized to
the extent that it is probable that taxable income against which the temporary difference can be
applied will materialize in the future.
Employee Benefits
Pensions
The Group’s pension schemes comply with the relevant regulations and practices in each relevant
country. Pension security for the Group personnel is handled through external pension insurance
companies. The Group applies defined contribution pension plans, in which the Group pays fixed
contributions to an outside unit. The Group has no obligation to make additional payments in
case the recipient of the contributions cannot discharge its pension payment obligations. Contri-
butions under the defined contribution plan are recognized in the income statement for the fi-
nancial period during which the contributions were made.
Share-based payments
Option rights have been issued to the Group management and personnel. Option rights are issued
with a fixed subscription price determined in the terms and conditions of the option plan.
Option rights are measured at fair value on their date of issue and recognized as a cost in the
income statement on a straight-line basis over the vesting period. The expense determined at the
31
SSH Communications Security Group
time of issuing the stock options is based on the Group’s estimate of the number of stock options
to which it is assumed that rights will vest by the end of the vesting period. The fair value is de-
termined using the Black-Scholes pricing model. The non-market criteria are not included in the
fair value of the option but considered in the number of stock options that are assumed to vest
at the end of the vesting period. On the date of each financial statement, the Group updates its
estimate of the final amount of the stock options that will vest, and changes in this estimate are
recognized in the income statement. When the option rights are exercised, the proceeds re-
ceived, net of any transaction costs, are recognized under share capital and unrestricted invested
equity fund.
Provisions
Provisions are recognized when the Group has a present legal or constructive obligation as a re-
sult of past events, when it is probable that expenditure will be required to settle the obligation,
and when a reliable estimate of the amount can be made. If the Group expects an obligation to
be partly reimbursed by a third party, the reimbursement is recognized as a separate asset but
only when the reimbursement is certain in practical terms. The Group recognizes a provision on
loss-making agreements when the expected benefits of an agreement are less than the unavoid-
able costs of meeting the obligations under the agreement.
Provisions are measured at the current value of the costs required to discharge the obligation.
The discount rate is determined to reflect current market assessments of the time value of money
and the risks specific to the obligation.
Use of estimates
Preparation of the consolidated financial statements in accordance with IFRS requires manage-
ment to make estimates and assumptions affecting the reported amounts of assets, liabilities,
income and expenses, as well as the disclosure of contingent assets and liabilities. The estimates
and assumptions are based on historical experience and other factors that are believed to be
reasonable under the circumstances, which form the basis of making the judgments about carry-
ing values. These estimates and assumptions are reviewed on an ongoing basis and possible ef-
fects of changes in estimates and assumptions are recognized during the period they are changed.
The estimates and assumptions that have a significant risk of causing adjustment to the carrying
value of assets within next financial year relate to restructuring plans, impairment testing, claims,
onerous contracts, pending patent litigations, and the probability of deferred tax assets being
recovered against future taxable profits.
The Group determines the lease term as the non-cancellable term of the lease, together with any
periods covered by an option to extend the lease if it is reasonably certain to be exercised, or any
periods covered by an option to terminate the lease, if it is reasonably certain not to be exercised.
32
SSH Communications Security Group
3. NET SALES
EUR
2020
2019
BY OPERATION
Subscription sales
768 755
711 123
License sales
2 245 939
4 463 337
Maintenance sales
7 800 367
8 627 826
Professional services and other
436 153
575 725
Total
11 251 214
14 378 011
BY GEOGRAPHICAL SEGMENT
AMERICAS
5 943 849
7 808 912
APAC
2 124 979
2 928 543
EMEA
3 182 386
3 640 556
Total
11 251 214
14 378 011
Information about major customers
In 2020, no customer’s revenue accounted for more than ten percent of the Group’s net sales.
In 2019, revenue share from one customer was EUR 2.0 million, which was 14 % of the Group’s
net sales.
4. OTHER OPERATING INCOME
Other operating income includes EUR 1.0 million received government grants (2019: EUR 0.1
million).
5. OTHER OPERATING COSTS
EUR
2020
2019
Employee benefit expenses
Wages and salaries
-8 387 096
-8 393 843
Pensions, defined contribution plan
-796 193
-912 456
Other social security costs
-449 328
-351 755
Stock options issued
-131 031
-241 304
Total
-9 763 649
-9 899 357
Information about remuneration of the key management personnel is presented in note 24. Re-
lated party transactions and information on the options granted is presented in the note 19.
Share-based payments.
33
SSH Communications Security Group
Number of personnel
2020
2019
Average during the financial period
88
88
At the end of the financial period
94
90
Personnel distribution by function on 31 Dec
Sales, marketing, and customer support
31
32
Research and development
48
46
Administration
15
12
Total
94
90
Research and development costs recognized as costs
EUR
2020
2019
Total
-5 047 946
-4 893 415
Other operating costs
EUR
2020
2019
External services
-3 016 512
-3 767 236
Depreciation
-2 093 238
-2 070 336
Other costs
-1 205 792
-1 060 986
Total
-6 315 542
-6 898 559
Auditor’s fees
Auditor’s fees categorized into service groups were:
EUR
2020
2019
Principal auditor (Ernst & Young Oy)
Statutory auditing
-65 720
-44 000
Other auditing
-5 625
-19 100
Other services
-2 009
-1 812
Other auditing firms:
Statutory auditing
-7 050
-8 091
Tax guidance
-15 158
-14 881
Total
-95 562
-87 884
34
SSH Communications Security Group
6. DEPRECIATIONS AND IMPAIRMENTS
EUR
2020
2019
BY ASSET CATEGORY
Machinery and equipment
76 136
67 629
Right-of-use assets
393 566
318 951
Software & other tech assets
336 704
395 328
Capitalized development costs
1 286 832
1 288 429
Total
2 093 238
2 070 336
BY FUNCTION
Sales and marketing
12 063
13 782
Research and development
1 501 520
1 543 740
Administration
579 655
512 815
Total
2 093 238
2 070 336
7. FINANCIAL INCOME
EUR
2020
2019
Interest revenue
631
798
Total
631
798
8. FINANCIAL COSTS
EUR
2020
2019
Exchange rate losses, loans,
and other receivables
-458 289
-33 547
Interest arising from sales contracts
-72 222
-52 904
Interest from leasing contracts
-48 314
-33 232
Other interest costs
-25 850
-12 730
Total
-604 675
-132 413
35
SSH Communications Security Group
9. INCOME TAXES
EUR
2020
2019
Income taxes
12 162
-146 600
Total
12 162
-146 600
Reconciliation of income taxes and profit/loss before taxes
EUR
2020
2019
Profit/loss before taxes
-3 090 264
-1 339 130
Tax at parent company tax rate (20 %)
618 053
267 826
Effect of foreign subsidiaries' differing tax rates
-7 877
-2 702
Non-deductible expenses
-19 351
-4 322
Tax exempt revenue
72 299
2 041
Tax deductible hybrid loan interest expenses
180 000
180 000
Use of previously unrecognized tax losses
297 264
347 979
Tax assets not recognized for reported losses
-28 247
-125 776
Tax assets not recognized for unused tax depreciations
-1 124 324
-679 566
Income taxes from previous years
25 938
-30 471
Other direct taxes
-1 593
-101 609
Income taxes
12 162
-146 600
The amount of Group’s unused tax losses, for which no deferred tax asset has been recognized
based on the prudence principle, is EUR 8.1 million (2019: EUR 10.1 million). EUR 2.8 million
(2019: EUR 4.4 million) of the tax losses are in Finland, and EUR 5.2 million (2019: EUR 5.7 mil-
lion) in the USA. The tax losses expire in Finland between the years 2022–2030, and in the USA
between the years 2022–2035. The amount of unrecognized deferred tax assets from the tax
losses is EUR 1.7 million (2019: EUR 2.1 million). The figures include use of losses in 2020 which
have not yet been confirmed in taxation.
In addition, the parent company has EUR 36.8 million (2019: EUR 31.6 million) research and
development expenses and depreciations not deducted in taxation and the amount of unrecog-
nized deferred tax assets resulting from those is EUR 7.3 million (2019: EUR 6.3 million).
The Group’s subsidiaries do not have earnings that would cause tax consequences when repat-
riated.
36
SSH Communications Security Group
10. EARNINGS PER SHARE
EUR
2020
2019
Profit/loss for the year attributable to shareholders
of the parent company
-2 834 022
-1 264 498
Hybrid loan interest expense
-1 260 000
-900 000
Weighted average number of
shares in issue, 1,000
38 802
38 802
Earnings per share
-0.11
-0.06
Adjusted average number of shares
considering dilution effect, 1,000
41 529
41 228
Earnings per share, diluted
-0.11
-0.06
11. PROPERTY, PLANT AND EQUIPMENT
EUR
2020
2019
Machinery and equipment
Acquisition cost 1 Jan
2 054 825
2 002 996
Exchange rate effect
-22 420
5 157
Increase
61 777
46 672
Decrease
-
-
Acquisition cost 31 Dec
2 094 182
2 054 825
Accumulated depreciation 1 Jan
1 936 735
1 874 456
Exchange rate effect
-21 367
-4 026
Depreciation for the financial period
64 486
66 305
Accumulated depreciation on decrease
-
-
Accumulated depreciation 31 Dec
1 979 855
1 936 735
Book value 31 Dec
114 327
118 090
EUR
2020
2019
Other tangible assets
Acquisition cost 1 Jan
52 876
51 878
Exchange rate effect
-4 468
997
Increase
23 982
-
Decrease
-
-
Acquisition cost 31 Dec
72 389
52 876
Accumulated depreciation 1 Jan
35 918
25 620
Exchange rate effect
-3 710
459
Depreciation for the financial period
11 650
9 839
Accumulated depreciation on decrease
-
-
Accumulated depreciation 31 Dec
43 857
35 918
Book value 31 Dec
28 532
16 958
Book value of tangible assets 31 Dec
142 859
135 048
37
SSH Communications Security Group
12. RIGHT-OF-USE ASSETS
EUR
2020
2019
Buildings
Acquisition cost 1 Jan
581 008
-
Adoption of IFRS 16 standard
-
510 004
Exchange rate effect
-34 943
5 600
Increase
829 623
69 233
Decrease
-
-3 829
Acquisition cost 31 Dec
1 375 688
581 008
Accumulated depreciation 1 Jan
318 870
-
Exchange rate effect
-23 153
-81
Depreciation for the financial period
364 343
318 951
Impairment
29 223
-
Accumulated depreciation on decrease
-
-
Accumulated depreciation 31 Dec
689 283
318 870
Book value 31 Dec
686 405
262 138
Right-of-use assets include leased offices and software. The lease for the Helsinki office expired
at the end of April 2020 and the company moved to new premises from the beginning of April.
The new lease contract is for the period of three years and added right-of-use assets and lease
liabilities with EUR 0.6 million in 2020. Subsidiary in the United States moved at the end of 2020
to New York City. Right-of-use assets and lease liabilities of EUR 0.1 million have been recog-
nized for the new office. Lease agreement for the old office expires in September 2021 and an
impairment loss of EUR 29.2 thousand was recognized in the financial statements.
More information on leases is presented in the note 22. Leases.
38
SSH Communications Security Group
13. INTANGIBLE ASSETS
EUR
2020
2019
Software
Acquisition cost 1 Jan
2 065 632
2 061 841
Exchange rate effect
1 401
3 790
Increase
58 255
-
Decrease
-
-
Acquisition cost 31 Dec
2 125 288
2 065 632
Accumulated depreciation 1 Jan
2 057 842
2 052 938
Exchange rate effect
1 523
3 615
Depreciation for the financial period
7 667
1 290
Accumulated depreciation on decrease
-
-
Accumulated depreciation 31 Dec
2 067 033
2 057 842
Book value 31 Dec
58 255
7 789
EUR
2020
2019
Immaterial rights
Acquisition cost 1 Jan
15 235 306
13 267 829
Increase
1 537 826
1 967 477
Decrease
-
-
Acquisition cost 31 Dec
16 773 132
15 235 306
Accumulated depreciation and impairment 1 Jan
9 764 636
8 082 170
Depreciation for the financial period
1 618 751
1 632 655
Impairment
-
49 811
Accumulated depreciation on decrease
-
-
Accumulated depreciation and impairment 31 Dec
11 383 387
9 764 636
Book value 31 Dec
5 389 744
5 470 669
Book value of intangible assets 31 Dec
5 447 999
5 478 458
Impairment testing
At the end of the year, the company has tested the value of Intangible assets using a moderate
growth rate compared to year 2020 net sales and year 2020 cost structure. The cash flow forecasts
of new products in the market are based on year 2021 budget. The discount rate used in the
testing was 12.4 %. As a result of the testing, no impairment risk was detected. According to the
sensitivity analyses carried out, even a significant change in key variables (net sales, profitability
and discount rate) would not create a situation where the carrying value of an asset would exceed
its recoverable amount.
39
SSH Communications Security Group
14. TRADE RECEIVABLES AND CONTRACT LIABILITIES
EUR
2020
2019
Total trade receivables
2 961 250
5 190 952
EUR
2020
2019
Deferred revenue
6 361 348
7 606 049
Government grants received
134 729
730 079
Total advances received and deferred revenue
6 496 077
8 336 128
By currency
EUR
2020
2019
EUR
417 572
1 136 999
USD
2 293 408
3 767 489
GBP
250 270
-
CHF
-
286 464
Total
2 961 250
5 190 952
By age
EUR
2020
2019
Non-matured
1 431 762
3 744 424
Matured
< 30 days
1 042 358
214 119
31−90 days
428 128
872 780
91-180 days
105 865
417 685
> 181 days
377 501
35 960
Impairment losses
-424 364
-94 017
Total
2 961 250
5 190 952
During the financial year, the Group has changed the calculation parameters of the bad debt
provision calculated based on the age distribution of trade receivables and recorded a single
larger impairment loss, taking into account the increased credit risk dur to the COVID-19 -pan-
demic. The Group does not fully record impairment losses on receivables older than 90 days, as
historically credit losses have been very small.
15. OTHER RECEIVABLES
€
2020
2019
VAT receivables
150 020
332 396
Deposits
157 669
84 807
Other short-term receivables
184 836
5 142
Total
492 525
422 345
40
SSH Communications Security Group
16. FAIR VALUES OF FINANCIAL ASSETS AND LIABILITIES
The book value of trade receivables and trade payables equals their fair value because the im-
pact of discounting is not significant considering the maturity of these items.
17. NOTES TO EQUITY
According to the Articles of Association, SSH Communications Security Corporation has a mini-
mum share capital of EUR 600,000 and a maximum share capital of EUR 2,400,000, within which
limits the share capital may be raised or lowered without amending the Articles of Association.
The nominal value of one share is EUR 0.03; hence, the minimum number of shares is 20 million
and maximum number is 80 million. The company has one series of shares; each share entitles
its holder to one vote at the shareholders’ meeting. The share capital of the company, registered
in the Trade Register and fully paid up as of 31 December 2020 was EUR 1,164,066.99 (2019:
EUR 1,164,066.99), and the number of shares was 38,802,233 (2019: 38,802,233).
Changes in the share capital
Number of
shares
Share capital,
EUR
31 Dec 2019
38 802 233
1 164 067
Subscriptions under stock option plan
-
-
Subscriptions under share issue
-
-
31 Dec 2020
38 802 233
1 164 067
DESCRIPTION OF THE EQUITY RESERVES:
Share capital
The share capital includes the share subscription prices from share issues and share subscriptions
through options unless the conditions of the share issue stipulate that the subscription price shall
be registered in the unrestricted invested equity fund. Expenses related to share issue are de-
ducted from retained earnings.
Translation differences
The translation differences fund comprises the exchange rate differences arising from the trans-
lation of the financial statements of the foreign subsidiaries.
Fair value and other reserves
The item ‘Fair value and other reserves’ consists of two different funds: a fair value reserve for
available-for-sale investments and a hedging reserve for changes in the fair value of cash flow
hedging instruments. In the 2020 and 2019 financial periods, SSH Communications Security had
no available-for-sale financial assets and did not apply hedge accounting.
Unrestricted invested equity fund
The unrestricted equity fund consists of the dissolved share premium fund formed by share sub-
scriptions under option rights and includes share subscription prices insofar as not registered as
share capital based on a specific decision.
41
SSH Communications Security Group
Hybrid capital securities
Hybrid capital securities is an instrument that is subordinated to the Company’s other debt obli-
gations and does not have maturity date (i.e. it is perpetual). It is treated as equity in the IFRS
financial statements. Hybrid capital securities do not confer to their holders any rights of share-
holders and do not dilute the holdings of the current shareholders.
The other equity fund consists of hybrid capital securities of EUR 12 million issued in March 2015,
subscribed by institutional investors. The principal owner of the parent company, Mr. Tatu Ylönen,
subscribed EUR 500,000 of the hybrid capital securities. The capital securities bear a fixed interest
rate of 7.5 per cent until 30 March 2020, after which the interest rate will increase by four per-
centage points to 11.5 per cent. The capital securities have no maturity date, but the issuer has
the right to redeem them after 3 but before 5 years from the issue date, upon certain conditions,
or after 5 years from the issue date. The investors had the right to convert the capital loan into
the Company’s shares at EUR 4.76 per share until 30 March 2020.
18. CAPITAL MANAGEMENT
The objective in managing Group capital is to secure the ability to continue operating. The struc-
ture of the capital can be managed through decisions concerning, for instance, dividends and
other distribution of assets, purchase of the company’s own shares, and share issues. Capital man-
agement concerns equity recognized in the balance sheet. There are no requirements imposed by
outside parties on the Group’s capital management. In March 2015 the Group issued hybrid cap-
ital securities which are included in the Group’s equity.
The indicators depicting the capital structure are the equity ratio and gearing.
Net liabilities
EUR
2020
2019
Borrowings
582 000
582 000
Lease liabilities
714 772
274 162
Cash and cash equivalents
8 517 698
11 968 885
Net liabilities
-7 220 926
-11 112 723
Equity total
8 492 206
12 046 059
Equity ratio
69,7 %
78,0 %
Gearing
-85,3 %
-92,3 %
The interest-bearing liabilities consist of the subordinated loan which Kyberleijona Oy has taken
out from the non-controlling interest holder State Security Networks Group Finland. The capital
and interest of the subordinated loan can only be repaid in circumstances permitted by Chapter
12 of the Finnish Limited Liability Companies Act. The capital of the subordinated loan can only
be repaid to the extent the unrestricted shareholders’ equity and the total amount of the subor-
dinated loan at the time of the repayment exceeds the loss that is to be confirmed for the com-
pany’s latest financial year or is included in the balance sheet of more recent financial statements.
The annual interest for the loan, three per cent (3 %), has been recognized as expense.
42
SSH Communications Security Group
19. SHARE-BASED PAYMENTS
In the company’s industry, it is common practice internationally that incentives are provided to
employees in the form of equity settled share-based instruments, such as options. Personnel of
the company belong to options plans. An employee leaving the company before the vesting of the
options forfeits their options.
On the balance sheet date, SSH Communications Security had 2,727,000 stock options outstand-
ing (2019: 2,425,575), representing 6.6 % of shares and 6.6 % of votes. The weighted average
exercise price of outstanding stock options was EUR 1.9 (2019: EUR 2.29). The weighted average
of the remaining subscription period was 2.2 years (2019: 1.0 years). The exercise price varies
from EUR 0.93 to EUR 2.09, and the remaining subscription period from 1.2 years to 3.3 years.
A person holding option rights is entitled to subscribe shares if employed by SSH at the beginning
of the subscription period.
Information about option plans:
Option
plan
Option
certificate
Release date
Subscription period
Subscription
price, EUR
Options not
exercised
Begin
End
I/2015
I/2015 A
4 Feb 2015
15 Mar 2018
30 May 2020
3.45
0
I/2015 B
4 Feb 2015
15 Mar 2019
30 May 2020
3.45
0
I/2015 C
4 Feb 2015
15 Mar 2020
30 May 2020
3.45
0
I/2016
I/2016 A
26 May 2016
15 Mar 2017
30 May 2020
3.45
0
2018
2018
22 Feb 2018
1 Dec 2020
31 Mar 2022
2.09
980 000
2019 A
2019 A
18 Dec 2018
1 Dec 2021
31 Mar 2023
1.56
980 000
2020 A
2020 A
13 Feb 2020
1 Dec 2022
31 Mar 2024
0.93
980 000
Total
2 940 000
Changes in outstanding stock options:
2020
2019
At the beginning
of the financial period
2 425 575
1 496 000
Stock options granted
1 688 000
1 034 000
Stock option forfeited
710 100
104 425
Stock options canceled
676 475
-
Stock options exercised
-
-
At the end of the financial period
2 727 000
2 425 575
Exercisable option rights at the end of the financial period
2 727 000
2 425 575
43
SSH Communications Security Group
The fair value is of option programs is determined at the time the options are granted and is
recorded as an expense in the profit/loss during the period of inception. The fair value is deter-
mined using the Black-Scholes pricing model. The parameters for options granted in 2020 are:
2020
Share price at grant, EUR
1.25
Share price at financial period end, EUR
1.70
Exercise price, EUR
1.32
Expected volatility
1
62.0 %
Maturity, years
2.9
Risk-free rate
-0.69 %
Expected dividends, EUR
0.00
Valuation model
Black & Scholes
Fair value 31 Dec 2020, EUR
767 763
1
The expected volatility has been determined by calculating the historical volatility of the company’s shares
using monthly observations over corresponding maturity.
Share-based payments recognized as an expense, EUR
2020
2019
Share-based payments
131 031
241 304
Liability from share-based payments 31 Dec
-
-
20. TRADE AND OTHER PAYABLES
EUR
2020
2019
Trade payables
398 156
430 047
Personnel related
1 559 165
1 499 585
Accruals
95 733
93 583
VAT liabilities
75 967
246 796
Other liabilities
248 029
262 314
Total
2 377 051
2 532 325
21. FINANCIAL RISK MANAGEMENT
The Group is exposed to financial risks in its normal business. The purpose of the Group’s risk
management is to minimize negative impacts of changes on financial markets to Group income.
Foreign Exchange Risk
The Group operates internationally and is exposed to foreign exchange risk, the most significant
currency being the U.S. dollar. The company reduces risk based on net position, using foreign
exchange forwards or options. Currently the net position is not hedged. The company decides on
44
SSH Communications Security Group
the hedging on case by case basis. Currently the Group is not using hedging accounting. Any gains
or losses realized through hedging actions are thus recognized in profit/loss.
A 10 % strengthening of the U.S. dollar against the Euro using with net position on 31 Dec 2020
would increase the pre-tax profit of the Group by 68,000 euros. Similarly, a 10 % weakening of
the U.S. dollar against the Euro would decrease the pre-tax profit of the Group by 55,000 euros.
Interest Rate Risk
The interest-bearing debt of the Group at the end of the review period was 582,000 euro and it
consisted of a subordinated loan taken by a subsidiary company from a non-controlling interest
holder. The annual interest of the loan is three per cent (3 %).
The money market investments of the Group expose the cash flow to interest rate risk, but their
impact is not material.
Market Risk Related to Investments
The Group’s cash reserves have been invested in accordance with the policy approved by the
Board of Directors. At the end of the financial reporting period, all the assets are invested in cash
in financial institutions with high credit ratings.
Credit Risk
The Group has no significant concentrations of credit risk. At the end of the financial year, the
Group recorded impairment losses of EUR 0.4 million to cover doubtful receivables (2019: EUR
0.1 million). The aging distribution of trade receivables is presented in note 14. Trade receivables.
Liquidity Risk
The Group’s cash and cash equivalents on 31 Dec 2020 were 8,517,698 euros (2019: 11,968,885
euros). The Group has no liquidity risks, since invested funds which are substantial compared to
the Group’s cash flows are available on a one-day notice.
The Group had trade payables and other short-term debts amounting 2,377,051 euros (2019:
2,532,325 euros).
The tables below present the Group’s maturity of the financial liabilities:
31 Dec 2020
EUR
Less than 1
year
1 to 5 years
Over 5
years
Total
Borrowings
-
-
582 000
582 000
Lease liabilities
329 417
385 355
-
714 772
Trade and other payables
2 377 051
-
-
2 377 051
Total
2 706 468
385 355
582 000
3 673 823
45
SSH Communications Security Group
31 Dec 2019
EUR
Less than 1
year
1 to 5 years
Over 5
years
Total
Borrowings
-
-
582 000
582 000
Lease liabilities
200 925
73 237
-
274 162
Trade and other payables
2 532 325
-
-
2 532 325
Total
2 733 250
73 237
582 000
3 388 486
The tables below present changes in liabilities arising from financing activities:
EUR
1 Jan
2020
Cash
flows
Foreign
exchange
movement
New
leases
Other
31 Dec
2020
Current lease liabilities
200 925
-374 466
-9 977
297 180
215 756
329 417
Non-current interest-bearing borrowings
582 000
-
-
-
-
582 000
Non-current lease liabilities
73 237
-
-4 569
532 443
-215 756
385 355
Total liabilities from financing activities
856 162
-374 466
-14 546
829 623
0
1 296 772
EUR
1 Jan
2019
Cash
flows
Foreign
exchange
movement
New
leases
Other
31 Dec
2019
Current lease liabilities
310 508
-304 277
5 667
-
189 027
200 925
Non-current interest-bearing borrowings
162 000
420 000
-
-
-
582 000
Non-current lease liabilities
199 496
-
-
74 255
-200 515
73 237
Total liabilities from financing activities
672 004
115 723
5 667
74 255
-11 488
856 162
Lease liabilities have been recognized on adoption of IFRS 16 on January 1, 2019. The column
“Other” includes non-cash movements, such as reclassification from non-current to current.
22. LEASES
Leases in the balance sheet
The Group has recognized the following amounts related to the leases in the balance sheet:
Right-of-use assets
EUR
2020
2019
Offices
554 973
262 138
Software
131 432
0
Total
686 405
262 138
46
SSH Communications Security Group
Lease liabilities
EUR
2020
2019
Current
329 417
200 925
Non-current
385 355
73 237
Total
714 772
274 162
Additions to the right-of-use assets during 2020 were in total EUR 0.8 million (2019: EUR 0.1
million). Changes in right-of-use assets have been presented in note 12. Right-of-use assets.
Leases in the income statement
The Group has recognized the following amounts related to the leases in the income statement:
The cash outflow for leases in 2020 was in total EUR 0.4 million (2019: EUR 0.3 million).
23. GUARANTEES GIVEN AND OTHER COMMITMENTS
EUR
2020
2019
Rental guarantees (pledged)
157 669
84 807
Hybrid Loan, Interest
1 035 000
675 000
EUR
2020
2019
Depreciation charge of right-of-use assets
-393 566
-318 951
Interest expenses (included in financial costs)
-48 314
-33 232
Expense relating to short-term leases (included in other operat-
ing costs)
-59 131
-52 533
Expense relating to leases of low-value assets (included in other
operating costs)
-1 791
-1 738
47
SSH Communications Security Group
24. GROUP COMPANIES AND RELATED PARTY TRANSACTIONS
SSH Communications Security Corporation, its subsidiaries, its CEO, and its Board members and
companies controlled by them belong to related party of the Group. The Group management
team is not considered as part of related party as they do not have direct decision-making author-
ity.
Group companies Dec 31 2020
Group company
Domicile
Group
holding, %
Votes, %
SSH Communications Security Oyj, Helsinki
Finland
SSH Communications Security Inc., New York City
USA
100
100
SSH Operations Oy, Helsinki
Finland
100
100
SSH Communications Security Ltd., Hong Kong
Hong Kong
100
100
Kyberleijona Oy, Helsinki
Finland
65
65
SSH Government Solutions Inc., New York City
USA
100
100
SSH Technology Oy, Helsinki
Finland
100
100
SSH Communications Security UK Ltd, London
United Kingdom
100
100
Employee benefits of the management
The key management personnel of the Group are defined consisting of the CEO of the parent
company. The employee benefits of the CEO are presented in the table below. The sums of em-
ployee benefits are shown on an accrual basis. The CEO of SSH Communications Security Corpo-
ration has been Mr. Teemu Tunkelo as of 24 March 2020.
Remuneration and fees - CEO
EUR
2020
2019
Salary and other short-term employee benefits
284 978
221 762
Termination benefits
111 451
-
Share-based payments
-
-
Total
396 428
221 762
Fees to Members of the Board of Directors
EUR
2020
2019
Curry Sam (until 26 March 2020)
7 500
32 500
Kellomäki Sampo (as of 26 March 2020)
18 000
-
Kiianmies Aino-Mari (as of 26 March 2020)
18 000
-
Kiuru Sauli (until 26 March 2020)
7 500
22 500
Kuivala Petri (until 26 March 2020)
8 750
35 000
Tavakka Kai (as of 26 June 2020)
12 286
-
Syrjälä Timo (until 26 March 2020)
7 500
30 000
Ylönen Tatu
7 500
30 000
Zettlemoyer Anne Marie (until 26 March 2020)
7 500
32 500
Österlund Henri (as of 26 June 2020, Chairman of the Board)
14 743
-
Total
109 279
182 500
48
SSH Communications Security Group
Share and stock option holdings of Board members
31 Dec 2020
31 Dec 2019
Shares
Options
Shares
Options
Kellomäki Sampo
-
-
-
-
Kiianmies Aino-Mari
-
-
-
-
Tavakka Kai
-
-
-
-
Ylönen Tatu
6 987 123
-
18 317 123
-
Österlund Henri
61 060
-
-
-
Total
7 048 183
-
18 317 123
-
Share and stock option holdings of the management
31 Dec 2020
31 Dec 2019
Shares
Options
Shares
Options
Tunkelo Teemu (CEO as of 24 March 2020)
20 300
475 000
-
-
Mononen Jussi
-
305 000
-
130 000
Nordström Niklas
-
370 000
-
95 000
Total
20 300
1 150 000
-
225 000
Compensation of the key management personnel of the group
EUR
2020
2019
Wages and other short-term employee benefits
1 179 520
1 446 330
Share-based payments
-
-
On 31 December 2020, the CEO and members of the Board of Directors of SSH Communications
Security owned 18.2 % (2019: 47.2 %) of the shares and votes in the company, either directly or
indirectly through companies they own.
Management group members including the CEO directly or indirectly held about 0.1 % (2019: 0
%) of company shares and have a total of 1,150,000 (2019: 225,000) option rights.
The key conditions of the option right arrangements are described in note 19. Share-based pay-
ments.
Related party transactions
During the reporting period, there have not been any significant transactions with related parties.
49
SSH Communications Security Group
25. EVENTS AFTER THE BALANCE SHEET DATE
On January 29, 2021 SSH Communications Security Corporation’s subsidiary Kyberleijona Oy has
agreed to acquire all shares of Deltagon Oy from Leijonaverkot Oy, a subsidiary of Suomen Eril-
lisverkot Oy.
Deltagon Oy develops and sells secure messaging and transaction solutions to various industries,
including finance and the public sector. The acquisition strengthens SSH’s position as a provider
of secure networking and messaging solutions that safeguard key national cybersecurity inter-
ests and offer security-critical networking, encryption, and other solutions to the public sector in
a coordinated manner. After closing, Deltagon becomes a subsidiary of Kyberleijona and part of
the SSH group. The acquisition is expected to close during the first half of 2021, subject to regu-
latory approvals and fulfillment of customary closing conditions.
The total acquisition price is approximately EUR 15.4 million. The cash flow impact of the acquisi-
tion price to SSH is EUR 10 million over the next four years. The parties have also agreed on an
earnout payment of no more than EUR 1.3 million, subject to certain conditions being fulfilled in
the three-year period after the acquisition.
50
SSH Communications Security Group
PARENT COMPANY FINANCIAL STATEMENTS
51
SSH Communications Security Group
PARENT COMPANY FINANCIAL STATEMENTS
PARENT COMPANY INCOME STATEMENT
EUR
Note
1 Jan-31 Dec
2020
1 Jan-31 Dec
2019
NET SALES
1
7 006 767,78
9 365 109,50
Purchasing and production costs
-451,33
-32 404,91
GROSS MARGIN
7 006 316,45
9 332 704,59
Other operating income
645 229,02
77 268,32
Research and development costs
2, 3, 6
-5 159 333,65
-5 136 015,12
Sales and marketing costs
2, 3, 6
-2 615 628,82
-2 968 791,29
Administrative costs
2, 3, 6
-2 369 383,91
-2 375 260,97
OPERATING PROFIT/LOSS
-2 492 800,91
-1 070 094,47
Financial income
7
Interest revenue and other financing income
548 857,58
529 494,18
Interest costs and other financing costs
-465 899,39
-14 432,45
PROFIT/LOSS BEFORE APPROPRIATIONS AND TAXES
-2 409 842,72
-555 032,74
Appropriations
8
Group contribution received
16 864,78
8 154,97
PROFIT/LOSS BEFORE TAXES
-2 392 977,94
-546 877,77
Taxes
0,00
-100 397,38
PROFIT/LOSS FOR THE FINANCIAL PERIOD
-2 392 977,94
-647 275,15
52
SSH Communications Security Group
PARENT COMPANY FINANCIAL STATEMENTS
PARENT COMPANY BALANCE SHEET
ASSETS
EUR
Note
31 Dec 2020
31 Dec 2019
NON-CURRENT ASSETS
Intangible assets
9
Immaterial rights
3 162 965,59
3 299 080,81
Intangible assets, total
3 162 965,59
3 299 080,81
Tangible assets
9
Machinery & equipment
116 918,81
84 049,23
Tangible assets, total
116 918,81
84 049,23
Investments
Shares in Group companies
9,17
3 889 689,01
3 889 689,01
Other shares
11 000,00
11 000,00
Investments, total
3 900 689,01
3 900 689,01
NON-CURRENT ASSETS, TOTAL
7 180 573,41
7 283 819,05
CURRENT ASSETS
Current receivables
Trade receivables
488 393,59
269 725,43
Receivables from Group companies
10
5 328 229,56
8 124 686,12
Prepaid expenses and accrued income
11
216 048,95
157 808,59
Other receivables
12
317 283,49
56 156,56
Current receivables, total
6 349 955,59
8 608 376,70
Cash and cash equivalents
2 744 865,26
3 979 808,06
CURRENT ASSETS, TOTAL
9 094 820,85
12 588 184,76
ASSETS, TOTAL
16 275 394,26
19 872 003,81
53
SSH Communications Security Group
PARENT COMPANY FINANCIAL STATEMENTS
PARENT COMPANY INCOME STATEMENT
EQUITY AND LIABILITIES
EUR
Note
31 Dec 2020
31 Dec 2019
EQUITY
13
Share capital
1 164 066,99
1 164 066,99
Unrestricted invested equity fund
22 720 155,85
22 720 155,85
Hybrid capital securities
14
12 000 000,00
12 000 000,00
Retained profit/loss
-20 410 104,85
-18 862 829,70
Profit/loss for financial period
-2 392 977,94
-647 275,15
EQUITY, TOTAL
13 081 140,05
16 374 117,99
LIABILITIES
CURRENT LIABILITIES
Advances received
1 080 577,73
1 266 366,60
Trade payables
326 744,86
278 721,43
Payables to Group Companies
398 369,66
589 223,21
Accrued expenses and deferred income
15
1 219 070,76
1 009 770,73
Other liabilities
169 491,20
353 803,85
CURRENT LIABILITIES, TOTAL
3 194 254,21
3 497 885,82
LIABILITIES, TOTAL
3 194 254,21
3 497 885,82
EQUITY AND LIABILITIES, TOTAL
16 275 394,26
19 872 003,81
54
SSH Communications Security Group
PARENT COMPANY FINANCIAL STATEMENTS
PARENT COMPANY CASH FLOW STATEMENT
EUR
1 Jan-31 Dec
2020
1 Jan-31 Dec
2019
Cash flow from business operations
Receipts from customers
9 461 880,39
7 582 734,85
Payments to suppliers and employees
-9 001 780,48
-8 960 731,37
Cash flow from business operations before financial items and taxes
460 099,91
-1 377 996,52
Interest and other financial costs
-26 641,36
-71 789,74
Interest and other financial revenue
507 457,58
506 856,44
Income tax paid
0,00
-397,38
Cash flow from business operations
940 916,13
-943 327,20
Cash flow from investing activities
Investments in tangible and intangible assets
-1 555 202,07
-1 206 587,10
Receipt of government grants
271 188,17
922 340,47
Cash flow from investing activities
-1 284 013,90
-284 246,63
Cash flow from financing activities
Interest on hybrid capital securities
-900 000,00
-900 000,00
Subordinated loan to related parties
-
-780 000,00
Group contribution received
8 154,97
11 658,14
Cash flow from financing activities
-891 845,03
-1 668 341,86
Change in liquid assets
-1 234 942,80
-2 895 915,69
Liquid assets in the beginning of period
3 979 808,06
6 875 723,75
Change in liquid assets
-1 234 942,80
-2 895 915,69
Liquid assets at the end of period
2 744 865,26
3 979 808,06
55
SSH Communications Security Group
PARENT COMPANY FINANCIAL STATEMENTS
NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS
The financial statement of the parent company, SSH Communications Security Corporation, is
drawn up in accordance with the Finnish Accounting Standards. Figures are given to an accu-
racy of one cent (EUR 0.01). All items in the balance sheet are recognized at original acquisi-
tion cost. Information on financial risk management is presented in the consolidated financial
statements (Note 21. Financial Risk Management).
Principles of revenue recognition
The revenue from product sales is recognized at the time when significant risks and rewards
of the product or the right of use of the product have been transferred to the buyer and there
is a binding contract between the parties, the delivery has taken place in accordance with the
contract, the amount of revenue can be measured reliably, and it is probable that the eco-
nomic benefits associated with the transaction will accrue to the Group. Control is transferred
to the buyer at the point of time.
Revenue from services rendered under maintenance agreements are amortized across the
agreement period. Revenues from services are recognized when the service has been deliv-
ered and it is probable that the economic benefits associated with the transaction will accrue
to the Group.
The revenue of royalties from licenses is recognized according to the actual content of the
contract at the point of time.
Apportioning of costs to functions
Costs are apportioned to functions according to the matching principle.
Leases
The parent company has rental agreement for office premises at Karvaamokuja 2B, Helsinki
and minor other assets. Leasing payments paid pursuant to these agreements are recognized
as costs over the rental or leasing period under agreements.
Income tax
The income tax in the income statement comprises direct taxes based on the taxable profit
for the financial period and adjustments to taxes on previous financial periods. The parent
company does not recognize deferred tax receivables or liabilities in its financial statement.
The parent company has confirmed tax losses of EUR 2.7 million (2019: EUR 4.2 million). In
addition, the parent company has EUR 36.8 million (2019: EUR 31.6 million) research and de-
velopment expenses and depreciations not deducted in taxation, whereof no deferred tax
asset has been recognized.
Fixed assets
Fixed assets are recognized in the balance sheet at acquisition cost less planned depreciation
and any impairment. Planned depreciations are calculated on a straight-line basis according
to the economic life of each asset category.
56
SSH Communications Security Group
The asset categories and their depreciation periods are:
Machinery and equipment
5 years from month of acquisition
Computer hardware
3 years from month of acquisition
Immaterial rights
5 years from month of acquisition
Development costs
5 years from month of capitalization
Other capitalized expenditure
5 years from year of capitalization
Leasehold approvements of rental
premises
Length of the rental agreement, though no more
than 7 years, from year of capitalization
Research and Development Costs
Research and development costs are recognized as costs in the financial period in which they
occurred except for those product development costs which are capitalized once certain cri-
teria have been met. Capitalized development expenses are depreciated systematically over
their useful lives.
Foreign currency transactions
Transactions denominated in foreign currencies are recognized at the exchange rate on the
transaction date. Outstanding receivables and liabilities in foreign currencies are recognized
using the exchange rates on the balance sheet date. Exchange rate gains and losses on actual
business operations are considered sales adjustment items or adjustment items to materials
and services. Exchange rate gains and losses on financing activities are recognized under fi-
nancing income and costs.
Option rights
Employees of the parent company and its subsidiaries have been granted option rights. The
option rights entitle their holders to subscribe shares in the parent company at a fixed sub-
scription price specified in the terms of the option plan. No costs are recognized in the income
statement or balance sheet regarding the granting of option rights.
Hybrid capital securities
Hybrid capital securities is an equity-related instrument that is presented as a separate item
in equity. Interest payments on hybrid capital securities are decided by the Board. Unpaid
interest accumulated at the balance sheet date is presented in note 16. Other commitments.
57
SSH Communications Security Group
NOTES TO THE INCOME STATEMENT
1. NET SALES BY MARKET AREA
EUR
2020
2019
Finland
2 432 052,63
2 742 375,86
Rest of Europe
1 214 151,04
1 596 088,03
Other
3 360 564,11
5 026 645,61
Total
7 006 767,78
9 365 109,50
2. OPERATING COSTS
EUR
2020
2019
Other operating costs
External services
-1 832 280,68
-2 153 629,70
Depreciation
-1 221 521,35
-1 424 148,88
Other
-1 766 820,27
-1 801 478,13
Total
-4 820 622,30
-5 379 256,71
Auditor’s fees
EUR
2020
2019
Principal auditor (Ernst & Young Oy)
Statutory auditing
-65 720,00
-44 000,00
Other auditing
-7 305,00
-20 719,00
Other services
-329,00
-192,60
Total
-73 354,00
-64 911,60
3. PERSONNEL COSTS AND AVERAGE NUMBER OF EMPLOYEES
EUR
2020
2019
Wages and salaries
-5 507 723,65
-4 865 593,85
Pension costs
-765 499,67
-886 875,37
Other ancillary personnel costs
-184 601,46
-220 415,32
Total
-6 457 824,78
-5 972 884,54
2020
2019
Average number of employees
66
63
58
SSH Communications Security Group
4. PERSONNEL DISTRIBUTION BY BUSINESS AREA AT THE END OF THE FINANCIAL PERIOD
2020
2019
Research and development
47
43
Sales and marketing
13
11
Administration
13
10
Total
73
64
5. SALARIES AND FEES PAID TO MANAGEMENT AND MEMBERS OF THE BOARD OF DIRECTORS
See note 24 in the consolidated financial statements.
6. DEPRECIATION AND IMPAIRMENT
EUR
2020
2019
Immaterial rights
195 229,45
260 229,51
Capitalized development costs
977 883,03
1 119 307,90
Machinery and equipment
48 408,87
44 611,47
Total
1 221 521,35
1 424 148,88
In 2019, impairment of immaterial rights related to patents totaled EUR 49,811.32.
In 2020, the company did not record any impairments.
7. FINANCIAL INCOME AND COSTS
EUR
2020
2019
Interest revenue
56 284,71
68 791,00
Received payments of impaired internal loan
492 572,87
468 695,03
Exchange rate gains and losses (net)
-460 208,29
-21 681,83
Interest and other financial costs
-5 691,10
-742,47
Total
82 958,19
515 061,73
8. APPROPRIATIONS
EUR
2020
2019
Group contribution from SSH Technology Oy
16 864,78
8 154,97
Total
16 864,78
8 154,97
59
SSH Communications Security Group
NOTES TO THE BALANCE SHEET
9. INTANGIBLE AND TANGIBLE ASSETS AND LONG-TERM INVESTMENTS
EUR
2020
2019
Immaterial rights
Acquisition cost 1 Jan
13 806 553,00
12 631 531,34
Increase
1 039 879,33
1 175 021,66
Decrease
-
-
Acquisition cost 31 Dec
14 846 432,33
13 806 553,00
Accumulated depreciation 1 Jan
10 507 472,19
9 127 934,94
Depreciation for the financial period
1 175 994,55
1 379 537,25
Accumulated depreciation on decreases
-
-
Accumulated depreciation 31 Dec
11 683 466,74
10 507 472,19
Book value 31 Dec
3 162 965,59
3 299 080,81
Machinery and equipment
Acquisition cost 1 Jan
1 769 775,43
1 738 210,15
Increase
81 278,45
31 565,28
Decrease
-
-
Acquisition cost 31 Dec
1 851 053,88
1 769 775,43
Accumulated depreciation 1 Jan
1 685 726,20
1 641 114,73
Depreciation for the financial period
48 408,87
44 611,47
Accumulated depreciation on decreases
-
-
Accumulated depreciation 31 Dec
1 734 135,07
1 685 726,20
Book value 31 Dec
116 918,81
84 049,23
Investments
Book value 1 Jan
3 900 689,01
3 120 689,01
Increase
-
780 000,00
Decrease
-
-
Book value 31 Dec
3 900 689,01
3 900 689,01
The parent company has granted a subordinated loan in total of EUR 1,080,000 (2019: EUR 1,080,000)
to Kyberleijona Oy. The capital and interest of the subordinated loan can only be repaid in circumstances
permitted by Chapter 12 of the Finnish Limited Liability Companies Act. The capital of the subordinated
loan can only be repaid to the extent the unrestricted shareholders’ equity and the total amount of the
subordinated loan at the time of the repayment exceeds the loss that is to be confirmed for the com-
pany’s latest financial year or is included in the balance sheet of more recent financial statements. The
annual interest for the loan is three per cent (3 %). As part of the cooperation agreement between SSH
and State Security Networks Group Finland, SSH has strengthened the equity of Kyberleijona in 2018 by
EUR 2,532,022.86.
60
SSH Communications Security Group
10. RECEIVABLES FROM GROUP COMPANIES
EUR
2020
2019
Trade receivables
5 311 364,78
8 116 531,15
Group contribution receivable
16 864,78
8 154,97
Total
5 328 229,56
8 124 686,12
11. PREPAID EXPENSES AND ACCRUED INCOME
EUR
2020
2019
Prepaid expenses
216 048,95
157 808,59
Total
216 048,95
157 808,59
12. OTHER RECEIVABLES
EUR
2020
2019
VAT receivables
-
-
Other receivables
317 283,49
56 156,56
Total
317 283,49
56 156,56
13. EQUITY
EUR
2020
2019
Share capital 1 Jan
1 164 066,99
1 164 066,99
Increase in share capital
-
-
Share capital 31 Dec
1 164 066,99
1 164 066,99
Unrestricted invested equity fund
22 720 155,85
22 720 155,85
Hybrid capital securities
12 000 000,00
12 000 000,00
Retained earnings
-20 410 104,85
-18 862 829,70
Profit/loss for the financial period
-2 392 977,94
-647 275,15
Total
13 081 140,05
16 374 117,99
Statement on Distributable Funds, EUR
2020
2019
Retained earnings
-20 410 104,85
-18 862 829,70
Profit/loss for the financial period
-2 392 977,94
-647 275,15
Unrestricted invested equity fund
22 720 155,85
22 720 155,85
Capitalized development costs
-2 025 684,59
-2 288 661,49
Total
-2 108 611,53
921 389,51
61
SSH Communications Security Group
14. HYBRID CAPITAL SECURITIES/SHAREHOLDERS' EQUITY
A hybrid capital security is an instrument that is subordinated to the Company’s other debt obli-
gations and It does not have maturity date (i.e. it is perpetual). It is treated as equity in the finan-
cial statements. Hybrid capital securities do not confer to their holders any shareholder rights and
do not dilute the holdings of the current shareholders.
Hybrid capital securities in the amount of EUR 12 million were issued in March 2015 and sub-
scribed by institutional investors. The capital securities bear a fixed interest rate of 7.5 per cent
until 30 March 2020, after which the interest rate will increase by four percentage points. The
capital securities have no maturity date, but the issuer has the right to redeem them after 3 but
before 5 years from the issue date, upon certain conditions, or after 5 years from the issue date.
The investors had the right to convert the capital loan into the Company’s shares at EUR 4.76 per
share until 30 March 2020.
Paid interest from hybrid capital securities reduce the amount of retained earnings. Unpaid inter-
est from hybrid capital securities is presented in note 16. Other commitments. Paid interest in the
financial year 2020 was EUR 900,000 (2019: EUR 900,000).
15. ACCRUED LIABILITIES AND DEFERRED INCOME
EUR
2020
2019
Personnel related
1 159 848,13
980 770,73
Accruals
59 222,63
29 000,00
Total
1 219 070,76
1 009 770,73
16. OTHER COMMITMENTS
EUR
2020
2019
Non-cancellable lease agreements for
office facilities - future rent payments
Within one year
262 020,78
243 907,27
Within more than one year
but no more than 5 years
362 049,24
543 125,25
Total
624 070,02
787 032,52
Guarantees given and other commitments
EUR
2020
2019
Rental guarantees (pledged)
130 696,90
55 390,40
Hybrid Loan, Interest
1 035 000,00
675 000,00
62
SSH Communications Security Group
17. GROUP COMPANIES
Parent and subsidiary relationships of the Group 31 December 2020
Group companies
Domicile
Group
holding, %
Votes, %
SSH Communications Security Oyj, Helsinki
Finland
SSH Communications Security Inc., New York City
USA
100
100
SSH Operations Oy, Helsinki
Finland
100
100
SSH Communications Security Ltd., Hong Kong
Hong Kong
100
100
Kyberleijona Oy, Helsinki
Finland
65
65
SSH Government Solutions Inc., New York City
USA
100
100
SSH Technology Oy, Helsinki
Finland
100
100
SSH Communications Security UK Ltd, London
United Kingdom
100
100
63
SSH Communications Security Group
DIVIDEND PROPOSAL AND SIGNATURES
DIVIDEND PROPOSAL
The parent company’s distributable funds are EUR -2,108,611.53, of which the loss for the finan-
cial year is EUR -2,392,977.94. The Board of Directors proposes to the Annual General Meeting on
25 March 2021 that no dividend or return of capital shall be distributed. It is proposed that the
loss of the financial year shall be entered to the retained earnings in the shareholders’ equity.
SIGNATURES FOR THE FINANCIAL STATEMENTS AND REPORT OF THE BOARD OF DIRECTORS
Helsinki, 17 February 2021
Henri Österlund
Chairman of the Board of Directors
Sampo Kellomäki Aino-Mari Kiianmies
Member of the Board of Directors Member of the Board of Directors
Kai Tavakka Tatu Ylönen
Member of the Board of Directors Member of the Board of Directors
Teemu Tunkelo
Chief Executive Officer
AUDITOR’S NOTE
Our auditors’ report has been issued today.
Helsinki, 17 February 2021
Ernst & Young Oy
Authorized Public Accountants
Erkka Talvinko
Authorized Public Accountant
