36
Basware 2020 Governance Financials
FINANCIAL
STATEMENTS
Financial Statements
Report of the Board of Directors ������������������������������������������������������������������������������������� 37
Consolidated Statement of Comprehensive Income (IFRS) ������������������������������ 46
Consolidated Statement of Financial Position (IFRS) ���������������������������������������� 47
Consolidated Statement of Cash Flows (IFRS) ����������������������������������������������������� 49
Consolidated Statement of Changes in Equity (IFRS) ���������������������������������������� 50
Notes to the Consolidated Statements (IFRS) ������������������������������������������������������ 51
Parent Company Income Statement (FAS) ����������������������������������������������������������� 86
Parent Company Statement of Financial Position (FAS) ����������������������������������� 86
Parent Company Cash Flows (FAS) ������������������������������������������������������������������������ 87
Notes to the Parent Company Financial Statements (FAS) ������������������������������ 88
Auditor’s Report ����������������������������������������������������������������������������������������������������������� 97
Key Figures �������������������������������������������������������������������������������������������������������������������������� 101
Share Indicators ����������������������������������������������������������������������������������������������������������������� 102
Calculation of Key Indicators �������������������������������������������������������������������������������������������103
Share and Shareholders �������������������������������������������������������������������������������������������������� 104
For Shareholders ��������������������������������������������������������������������������������������������������������������� 106
37
Basware 2020 Governance Financials
REPORT OF THE BOARD OF DIRECTORS:
JANUARY 1 – DECEMBER 31, 2020
Basware offers the largest open business network in the world and is the global leader in
providing networked purchase-to-pay solutions and e-invoicing services� Basware’s technology
empowers organisations with 100% spend visibility by enabling the capture of all financial data
across procurement, finance, accounts payable and accounts receivable functions� Basware
is a global company doing business in more than 100 countries and is traded on the Helsinki
exchange�
Basware’s results in 2020
Key figures
1
At the end of the period.
EUR THOUSAND 2020 2019 Change, %
Net sales 151,579 148,302 2�2
Cloud revenue 110,312 101,442 8�7
Cloud ARR order intake 19,250 23,694 -18�8
EBIT 4,667 -14,537
EBITDA 20,207 1,403
Gearing, %
1
53�0 48�9 8�4
Cash and cash equivalents
1
40,461 31,672 27� 8
Cash flows from operating activities 25,252 4,159
Free cash flow metric -6,590 -23,829 72�3
Earnings per share, diluted, EUR -0�51 -1�63 68�8
Personnel
1
1,336 1,325 0�8
Net sales
NET SALES BY REVENUE TYPE,
EUR THOUSAND 2020 2019 Change, %
Cloud 110,312 101,442 8�7
Consulting 26,875 24,962 7�7
Maintenance, license and other 14,392 21,899 -34�3
Total 151,579 148,302 2.2
NET SALES BY CUSTOMER LOCATION,
EUR THOUSAND 2020 2019 Change, %
Americas 35,013 31,796 10�1
Europe 52,176 50,687 2�9
Nordics 56,428 57, 4 41 -1�8
APAC 7,962 8,379 -5�0
Total 151,579 148,302 2.2
Basware’s net sales for the year 2020 amounted to EUR 151,579 thousand (EUR 148,302
thousand), an increase of 2�2 percent� This equated to 3�2 percent organic growth at constant
currencies�
In 2020 cloud revenue amounted to EUR 110,312 thousand (EUR 101,442 thousand), an increase
of 8�7 percent� This equated to 9�8 percent organic growth at constant currencies� The cloud
revenue growth rate was negatively impacted by the change in transaction volume mix towards
more electronic invoicing and less paper invoicing as a result of the Covid-19 situation� Basware
has not continued some non-strategic SaaS contracts which increased the cloud churn rate, and
which also has an effect on the cloud revenue growth rate� Cloud revenues accounted for 73
percent (68%) of total revenue�
Consulting revenues amounted to EUR 26,875 thousand (EUR 24,962 thousand), an increase of
7�7 percent� This equated to 8�8 percent organic growth at constant currencies�
Maintenance, license and other revenue declined in line with expectations as Basware transi
-
tions customers to the cloud� Maintenance, license and other revenue amounted to EUR 14,392
thousand (EUR 21,899 thousand), a decrease of 34�3 percent� This equated to 33�6 percent
organic decrease at constant currencies�
38
Basware 2020 Governance Financials
Cloud order intake
Americas accounted for 23�4 percent (21�4%), Europe 34�8 percent (34�2%), Nordics 37�0
percent (38�7%) and Asia-Pacific area for 4�9 percent (5�6%) of total revenues� A list of Basware
Corporation's subsidiaries is in Note 26 of the Financial Statements�
Financial performance
Basware’s total cloud annual recurring revenue (ARR) gross order intake in 2020 amounted to
EUR 19,250 thousand (EUR 23,694 thousand), a decrease of -18�8 percent� This equated to 19�6
percent decline on an organic constant currency basis� Due to the economic uncertainty caused
by the pandemic, there continued to be some cautiousness from especially new enterprise
customers in starting large IT projects� This had a negative impact on new customer acquisition
and therefore on the order intake�
There will be a time lag before order intake is visible in net sales� Typically, around one quarter
of new ARR order intake converts into revenues in the year that it is won, with roughly fifty to
sixty percent converting to revenues in the second year and the remainder thereafter�
EUR THOUSAND 2020 2019 Change, %
Cloud 19,250 23,694 -18�8
EUR THOUSAND 2020 2019 Change, %
Net sales 151,579 148,302 2.2
Cost of sales -65,941 -71,493 -7. 8
Gross profit 85,638 76,810 11.5
Sales and marketing -40,001 -45,190 -11�5
Research and development -25,930 -26,815 -3�3
General and administration -14,096 -14,572 -3�3
Total operating expenses -80,027 -86,577 -7. 6
Other operating income and expenses -944 -4,770 -80�2
Operating profit/loss 4,667 -14,537
Basware’s profitability development was positive throughout the year� In 2020 Basware’s
operating profit was EUR 4,667 thousand (EUR -14,537 thousand)�
In 2020, cost of sales amounted to EUR -65,941 thousand (EUR -71,493 thousand), a decrease of
7�8 percent�
Out of total operating expenses, sales and marketing expenses decreased 11�5 percent, research
and development expenses decreased 3�3 percent and general and administration expenses
decreased 3�3 percent� Sales and marketing costs reduced in comparison to 2019 as a result of
actions taken due to Covid-19�
Basware’s loss before tax was EUR -6,985 thousand (EUR -23,663 thousand) and loss for the
financial year EUR -7,329 thousand (EUR -23,440 thousand)� Taxes for the year impacted the
result by EUR -345 thousand (EUR 223 thousand)�
Diluted earnings per share were EUR -0�51 (EUR -1�63)�
Adjusted operating profit/loss and adjusted EBITDA
EUR THOUSAND 2020 2019 Change, %
Operating profit/loss 4,667 -14,537
Adjustments:
Acquisition, disposal and restructuring income (-)
and expenses (+)
-301 1,009
Efficiency related expenses 453 2,772 -83�7
Total adjustments 152 3,781 -96.0
Adjusted operating profit/loss 4,819 -10,756
Depreciation and amortization 15,540 15,941 -2�5
Adjusted EBITDA 20,359 5,185
% of net sales 13�4 3�5
39
Basware 2020 Governance Financials
Cash flows, financing and investments
Cash flows from operating activities were EUR 25,252 thousand (EUR 4,159 thousand)� The
improvement was driven by higher profitability and improved working-capital practices in 2020�
Basware’s cash and cash equivalents including short-term deposits were EUR 40,461 thousand
(EUR 31,672 thousand) at the end of the year�
Basware’s total assets on the balance sheet at the end of the year were EUR 224,862 thousand
(EUR 224,581 thousand)� Net cash flows from investments were EUR -9,464 thousand (EUR
-10,541 thousand)�
The equity ratio was 36�7 percent (41�9 %) and gearing 53�0 percent (48�9 %)� The company’s
interest-bearing liabilities excluding leasing liabilities EUR 68,837 thousand (EUR 60,885
thousand), of which current liabilities accounted for EUR 2,173 thousand (EUR 1,996 thousand)�
The return on investment was 3�1 percent (-8�6%) and return on equity -8�3 percent (-22�9%)�
Cash flows, financing and investments
The purpose of the free cash flow metric is to provide a clear view of all costs related to
Basware’s operations� From the second quarter of 2019 Basware published free cash flow metric
on a quarterly basis to enable investors to track the progress towards the expectation that
Basware reaches positive free cash flow on a run-rate basis by the end of 2020� The definition
for free cashflow metric is disclosed in Definition of Alternative Performance Measures�
Research and development
In 2020 Basware’s research and development focused on improving scalability in networked AP
solution and user experience in Procurement� In addition, Basware developed its data platform
and REST API-based integrations�
In general, the focus of Basware’s R&D activities is to strengthen the networked Purchase-to-
Pay offering by extending the business coverage and the underlying system intelligence with AI
in addition to continuous development of an integrated user experience across the individual
business solutions�
In 2020 Basware’s research and development investments including capitalizations but exclud
-
ing amortizations were EUR 24,819 thousand (EUR 27,967 thousand)� Research and develop-
ment investments were 16�4 percent (18�9%) of net sales in 2020� A total of 273 (283) people
worked in research and development at the end of 2020�
EUR THOUSAND 2020 2019 Change, %
EBITDA 20,207 1,403
Capitalizations -9,877 -10,617 -7�0
Finance expenses -12,271 -9,091 35�0
Taxes, excl� deferred taxes -951 -1,341 -29�1
Payment of lease liabilities -4,257 -4,372 -2�6
Share based compensation, share part 560 188
Free cash flow metric -6,590 -23,829 72.3
The free cash flow metric amounted to EUR -6,590 thousand (EUR -23,829 thousand) in 2020�
The free cash flow metric improved in comparison to 2019 mainly due to improved profitability�
Personnel
PERSONNEL ON AVERAGE BY AREA 2020 2019 Change, %
Americas 106 121 -12�2
Europe 373 374 -0�4
Nordics 425 437 -2�7
APAC 430 417 3�1
Total 1,334 1,349 -1.1
Basware employed 1,334 (1,349) people on average during 2020 and 1,336 (1,325) at the end
of the year� On December 31, 2020, 13�6 percent (13�9%) of the personnel worked in sales and
marketing, 33�2 percent (33�7%) in R&D and production and products, 42�4 percent (42�4%) in
consulting and customer services and 10�7 percent (10�0%) in administration�
Information about salaries and employee benefits in Note 5 of the Financial Statements and
other employee related metrics in the Non-financial statement�
40
Basware 2020 Governance Financials
Basware had 11,864 (14,615) shareholders at the end of the year, including nominee-registers�
Nominee-registered holdings accounted for 56�4 percent (52�4%) of the total number of shares�
More information on share-based key figures, Basware share and shareholders available in
sections Share Indicators, Calculation of Key Indicators, and Share and Shareholders of the
Financial Statements�
Share and shareholders Flagging notifications in 2020
During the review period, Basware Corporation received the following notifications from major
shareholders:
ANNOUNCEMENT DATE Shareholder Threshold Total holding, %
February 11
Briarwood Chase
Management LLC Above 5% 5�00%
September 3
Arrowgrass Capital
Partners LLP Below 25% 22�6%
October 9 Bregal Milestone LP Below 5% 0�0%
October 9
Briarwood Chase
Management LLC Above 10% 14�43%
October 22 Lannebo Fonder AB Above 5% 7�48%
October 23
Arrowgrass Capital
Partners LLP Below 20% 18�5%
December 11
Briarwood Chase
Management LLC Below 5%
1
11�35%
1
Briarwood Chase Management LLC’s direct holding of shares decreased below 5% threshold but total
holding through both shares and warrants remained above 10% threshold.
SHARE INDICATORS 2020 2019
Share price performance, EUR
- lowest price 15�66 16�76
- highest price 42�85 41�10
- average price 29�58 23�61
- closing price 42�00 23�75
Market capitalization at end of period
1
, EUR 605,679,312 341,943,926
Number of shares
1
- at end of the period 14,415,460 14,397,639
- average during the period 14,407,595 14,388,469
- average during the period, diluted 14,638,935 14,473,519
Number of traded shares (share issue adjusted) in Nasdaq
Helsinki 4,817,685 4,204,444
% of average number of shares 33�4% 29�2%
Treasury shares held by the Company 5,476 4,297
% of total shares 0�0% 0�0%
Share capital, EUR 3,528,368 3,528,368
Earnings per share, undiluted, EUR -0�51 -1�63
Earnings per share, diluted, EUR -0�51 -1�63
Adjusted earnings per share, undiluted, EUR -0�50 -1�37
Adjusted earnings per share, diluted, EUR -0�50 -1�37
Equity per share, EUR 5�73 6�53
Price per earnings (P/E) -82�56 -14�58
1
Excluding treasury shares
More information in sections ‘Share indicators’ and ‘Share and shareholders’� See also Remu-
neration report for information on Basware’s share-based incentive plans�
Annual General Meeting and authorizations of the Board of Directors
Basware Corporation’s Annual General Meeting 2020 was held on June 4, 2020� The Annual
General Meeting adopted the financial statements and discharged the responsible parties from
liability for the financial period January 1-December 31, 2019� The remuneration policy was
adopted, and the Annual General Meeting decided that no dividend will be paid for the year
2019�
The Annual General Meeting decided the number of members of the Board of Directors to be
five� Mr� Ilkka Sihvo, Mr� Michael Ingelög, Mr� Daryl Rolley and Mr� Asko Schrey were re-elected
as members of the Board of Directors and Ms� Minna Smedsten was elected as a new member�
In its organizing meeting, the Board of Directors elected Michael Ingelög as the Chair and Ilkka
Sihvo as the Vice Chair of the Board� Minna Smedsten was elected as the Chair of the Audit
Committee and Asko Schrey and Michael Ingelög as its members� Ilkka Sihvo was elected as the
Chair of the Remuneration Committee and Daryl Rolley and Michael Ingelög as its members�
41
Basware 2020 Governance Financials
Ernst & Young Oy, Authorized Public Accounting Firm, was elected as the company’s auditor�
The Board of Directors was authorized to decide on repurchasing a maximum of 1,420,000
company’s own shares� The company’s own shares shall be repurchased otherwise than in
proportion to the holdings of the shareholders by using the non-restricted equity through
trading on regulated market organized by Nasdaq Helsinki Ltd at the market price prevailing at
the time of acquisition� The repurchase authorization shall be valid for 18 months and it shall
revoke the previous authorizations for repurchasing the company’s own shares�
The Board of Directors was authorized to decide on issuing new shares or conveying the
company’s own shares held by the company or granting special rights entitling to shares� The
Board of Directors may grant special rights, which carry the right to receive, against pay
-
ment, new shares of the company or the company’s own shares held by the company� A total
maximum of 260,000 new shares may be issued or company's own shares held by the company
may be conveyed for the purposes of company’s incentive program, and in addition, a total
maximum of 720,000 new shares may be issued or company's own shares held by the company
may be conveyed for other purposes than company’s incentive program� The subscription
price of the new shares and the consideration payable for the company’s own shares shall be
recorded under the invested non-restricted equity fund� The Board of Directors shall decide on
all other terms and conditions related to the authorizations� The authorizations shall be valid
for 18 months�
On June 4, 2020 Basware announced via stock exchange release the resolutions of the Annual
General Meeting� The resolutions from Annual General Meetings are available on Basware’s
investor website at https://investors.basware.com/en/annual-general-meeting
Changes in Executive Team
On August 13, 2020, Basware announced that it had appointed Mogens Pedersen as Chief
Technology Officer and Perttu Nihti as Chief Product Officer� Appointments were effective as of
September 1, 2020 when both became members of the Executive Team, reporting to the CEO
Klaus Andersen�
Other events of the period
Share issue to the company itself without consideration
On June 4, 2020 Basware announced that the Board of Directors had resolved on an issue of
19,000 new shares in the company to the company itself without consideration� The new shares
to be issued are of the same class as the existing shares in the company� The total number of
the company's shares after the share issue is 14,420,936 shares, of which 23,297 shares in
total are held by the company� The new shares issued to the company will be used for reward
payments under the company's incentive programs�
As a result of the share issue, the Board of Directors also decided upon the adjustment of
the number of shares that can be subscribed on the basis of the 1,000 freely transferable
warrants issued by the company to Bregal Milestone in March 2019� Following such adjustment,
the warrants entitle their holder to subscribe for a total of 1,001,000 shares in the company
(before the adjustment, 1,000,000 shares) at an adjusted subscription price of EUR 29�8764 per
share (before the adjustment, the subscription price per share was EUR 29�9158)� To increase
the number of shares that may be subscribed for with the warrants, the Board of Directors
exercised the authorization granted by the Annual General Meeting of shareholders by deciding
upon issuance of special rights that entitle their holder to subscribe for 1,000 new shares in
the company� These adjustments to the terms and conditions of the warrants became effective
upon registration with the Finnish Trade Register, which took place on June 17, 2020�
Conveyances of Basware Corporation’s own shares
On June 23, 2020 Basware announced that the Board of Directors decided on a directed share
issue for the reward payment of Basware Corporation's Performance Share Plan 2017-2019,
Matching Share Plan 2017 and Restricted Share Plan 2017� In the share issue 16,821 Basware
Corporation shares were issued and conveyed without consideration to the key persons
participating in the plans according to the terms and conditions of the incentive schemes� After
the directed share issue, the company held 6,476 own shares�
On October 8, 2020, Basware announced that the Board of Directors decided on a directed
share issue for the reward payment of Basware Corporation's Restricted Share Plan 2017� In the
share issue 1,000 Basware Corporation shares were issued and conveyed without consideration
to the key persons participating in the plan according to the terms and conditions of the plan�
After the directed share issue, the company held 5,476 own shares�
Events after the period
Share issue to the company itself without consideration
On January 14, 2021, the Board of Directors of Basware Corporation has resolved on an issue
of 43,000 new shares in the company to the company itself without consideration pursuant
to the share issue authorization granted to it by the Annual General Meeting held on June 4,
2020� The new shares to be issued to the company will be used for reward payments under
the company's incentive programs� The new shares to be issued are of the same class as the
42
Basware 2020 Governance Financials
existing shares in the company� The total number of the company's shares after the share issue
is 14,463,936 shares, of which 48,476 shares in total are held by the company�
Strategy
Basware is a global market leader in networked Purchase-to-Pay with the largest open
e-invoicing network in the world� The market opportunity is estimated to be worth EUR 15 billion
annually and its driven by global megatrends such as digitalization and automation, increased
regulation, rapid technological development and sustainability� Basware is focused on sustain
-
able growth and profitability, increasing operational efficiency in the strategic business and
simplifying operations�
Basware’s key growth markets are the US, UK, Germany and France, where the company sees
the greatest opportunity to win new customers� Each of Basware’s top 200 key customers
brought on average approximately EUR 300 thousand annual recurring cloud revenue in 2020�
Through add-on sales and geographical expansions, there is potential to increase the average
revenue from customers�
Once Basware wins a new customer they typically stay with the company for many years� In
2020 Basware’s gross renewal rate was 94 percent and net renewal rate was 104 percent� The
gross margin for cloud revenues at the end of 2020 was 68 percent� Together these make the
lifetime value of customer contracts high� In 2020 Basware had a customer lifetime value to
customer acquisition cost ratio of 5 times�
Basware’s long-term ambition is to become the networked Purchase-to-Pay vendor of choice
for large global enterprises� Basware moves forward to its vision through six Must-Wins,
which define strategic priorities for the period 2020-2022� The Must-Wins relate to customer
satisfaction, project delivery capabilities, procurement solution, growing with partners, cloud
transformations and Network business� First Must-Win relates to customer satisfaction, which
is a priority across all functions, from first contact to project delivery, products and support�
Second Must-Win is enhancing delivery capabilities internally and together with partners to
meet customer needs for continuous improvement and change agility� Thirdly, Basware’s aim
is to further strengthen its procurement solution and entire Source-to-Pay offering through
partnerships and open API architecture� Fourthly, Basware aims to accelerate cloud growth
through partnering� The fifth Must-Win battle is to complete the last phase in customer cloud
transformations and reallocate resources to long-term strategic areas� Finally, as part of the
2020 strategy process, Basware also identified accelerating Network business as one of the key
strategic focus areas from 2021 onwards�
Risks and uncertainty factors
Basware operates in a market where technological innovation plays a key role� While Basware is
recognized as a leader within its segments by independent analysts, it is critical that Basware
continues to innovate and develop its offering� Basware invests in product development to
ensure the competitiveness of its product portfolio and good end-to-end quality, which impacts
customer satisfaction, customer retention and expansion�
Basware has a growth strategy with high net sales growth expectations for the cloud business�
Executing the strategy requires significant investments in sales and marketing and related
resources in addition to optimized pricing model and efficient customer delivery� At the same
time, the industry transformation from an on-premise license-based business model to a SaaS
model will accelerate the decline of certain Basware revenue streams, including license sales
and maintenance� The transformation will also make consulting revenues more volatile� Until
the transformation is fully complete, this will act as a drag on Group net sales growth� The
churn rate may increase as Basware consolidates its product portfolio to focus on strategic high
gross margin business�
Market disruptions such as consolidation of significant competitors, aggressive entries of new
competitors or emergence of disruptive technologies may be a risk to Basware’s position as a
market leader and to Basware’s market share�
The Group's international business involves customary financial risks such as foreign exchange
risk, interest rate risks, liquidity risks, refinancing risks and credit risks� The risk management
principles are defined in the Treasury Policy approved by the Board of Directors� The fact that
more than 50 percent of the company’s sales are expected to come from non-euro countries
exposes the Group’s net sales growth to foreign exchange rate movements� In case there is
a significant movement of USD, GBP, NOK, SEK or AUD against the euro, reported net sales
may be affected� In addition, a proportion of Basware’s costs are denominated in INR and RON�
Political risks may have a negative effect on Basware� This includes the uncertainty around
the status of the UK in relation to the European Union which may have a negative impact on
Basware’s business in the UK, and additionally the uncertainty related to taxation and legisla
-
tion in India which may have a negative impact on Basware’s business in India�
Basware considers acquisitions as part of its strategy� Acquisitions entail risks, such as failure in
integrating acquisitions or in ensuring that the planned financial benefits and synergies of the
acquisitions materialize�
43
Basware 2020 Governance Financials
Basware’s biggest operational risks relate to service disruption as a result of for example data
centre failures, various data security threats and non-compliance risks related to Basware’s
solutions and services, the company’s activities or its employees’ behaviour� Operational risks
are actively managed by continuous improvement in risk monitoring and protection practices,
external assessments as well as internal training of Basware’s personnel�
The Covid-19 pandemic may have an impact on the timing of organisations’ IT project decisions
and implementations and on the global volume of invoices sent and received� This may impact
Basware’s order intake, revenues, operating profit and cash flow� Basware has a business
continuity plan in place including extensive remote working capabilities across all functions,
however, should the Covid-19 situation materially affect employees’ ability to work, this may
disturb Basware’s ability to serve its customers�
Corporate governance statement
The Corporate Governance Statement is issued separately from the Report of Board of Direc-
tors� Basware Corporation's Corporate Governance Statement is available on the company's
investor website: https://investors.basware.com/en
Non-financial statement
Basware is a supplier of networked purchase-to-pay solutions and e-invoicing services; and has
the largest open business network in the world� Basware’s technology empowers organisations
with 100% spend visibility by enabling the capture of all financial data across procurement,
finance, accounts payable and accounts receivable functions� Basware operates globally and has
1,336 employees in 14 countries� Basware is committed to operating responsibly and sustainably,
helping customers move to paperless processes, fostering employee welfare and taking care of
cybersecurity and data privacy�
Social responsibility and respect of human rights
Employees are Basware’s most important resource� Basware unconditionally supports and
promotes human rights and is committed to act in accordance with the United Nations’
Universal Declaration of Human Rights and the United Nations’ Global Compact principles�
Basware complies with the standards of the International Labour Organization as well as with
all relevant local employment legislation� Basware does not tolerate in any context the use of
servitude, child labor, forced labor, human trafficking, or slavery in our operations in any region
we operate�
2020 2019
Code of Conduct training completion rate 100% 95%
EMPLOYEE AND SOCIAL METRICS 2020 2019
Women, of total employees 32% 31%
Women, of managers 29% 26%
Full-time employees 98% 98%
Permanent employees 99% 99%
Employees average years of service 5�5 4�9
Attrition rate 7�1% 15�3%
CEO-to-employee pay ratio 6�19-to-1 6�04-to-1
In addition, Basware has a global Code of Conduct that applies to all employees� The Code of
Conduct describes the ethical principles according to which Basware operates and expects its
suppliers and partners to operate� Code of Conduct training is mandatory for all employees�
Basware’s ability to attract, retain and develop the right type of talent at all levels is critical
for the company’s success� People are employed based on the principle of equal opportunity
and without distinction to race, color, gender, religion, affiliation or origin� In 2020 Basware’s
employees were of 33 different nationalities, of which three largest were Indian, Finnish and
Romanian�
Basware organizes YourVoice employee engagement survey annually and follows up the results
through action points each year� In 2020 the survey had a response rate of 94 percent� Survey
results in questions measuring employee engagement increased significantly in comparison
to previous year, particularly in questions measuring confidence in the Executive Team and
consistent strategy execution�
44
Basware 2020 Governance Financials
Prevention of corruption and bribery
As part of Basware’s commitment to conducting its business in an honest and ethical manner,
Basware takes a zero-tolerance approach to bribery and corruption, and upholds all relevant
laws to countering bribery and corruption in all jurisdictions it operates in� Basware has an
Anti-Bribery and Corruption Policy, which sets out the responsibilities of Basware employees
in observing and upholding the company’s position on bribery and corruption and provides
guidance for Basware employees on how to recognize and deal with bribery and corruption
issues� The policy was reviewed and updated in 2020�
2020 2019
Reported bribery or corruption incidents 0 0
Whistle-blowing practice
Basware encourages its employees to report any violation of its Code of Conduct policies
immediately� Employees may contact Basware Whistleblowing Committee, which will ensure
that the identity of the person making the report will be confidential and known only to the
people necessary to ensure case is handled properly� Any Basware employee who makes a
whistleblowing report is protected from any repercussions, such as dismissal or other forms of
reprisal�
Cyber and information security
As a cloud-based service provider, Basware recognizes cyber and information security risks
related to its industry� Basware acknowledges responsibility to ensure confidentiality, integrity,
and availability of customers data and Basware’s information assets� Basware takes any threat
to its customers’ and its own information assets and data seriously and is continuously develop
-
ing processes and technologies to meet the requirements and mitigate the risks� Information
security risks are integrated into the company’s multi-disciplinary risk assessment�
In 2020 the appointment of Director of Security (CISO) strengthened the information security
management ensuring Cyber and Information security is handled and developed in accordance
with Basware strategy� The Director of Security develops and drives the global implementation
and operationalization of the group-wide information security strategy, protecting Basware and
its customers data and assets� Security governance forums oversee security activities, including
potential escalations�
Basware has an Information Security Management System (ISMS) to oversee the development
in the security domain� International standards and best practices are employed to structure
Basware information security policy� The ISMS and cybersecurity programs are regularly
enhanced to ensure that security policies and standards continuously follow emerging cyber
threats, and evolving business and regulatory requirements�
Basware’s service control environments are externally audited annually by the ISAE 3402
standard and the reports are available to customers upon request� Basware co-operates with
a leading security company to carry out penetration testing annually and manages potentially
identified threats accordingly� Basware has in place a Responsible Disclosure channel for
security researchers to report any found issues in Basware services�
Awareness training play a key role in assuring security of its customers’ and its own informa
-
tion assets and data� Employees are regularly educated through mandatory Global Security
e-learning for all employees�
Basware is also committed to data privacy compliance across its operations� This means that
Basware processes personal data of its employees, customers, and partners with due care and
in accordance with the Global Data Protection Regulation (GDPR) and other applicable data
protection laws�
Basware conducts an extensive data privacy program, which is led by the Global Data Protec
-
tion Officer (DPO) and reviewed within the Privacy Steering Committee� The program identifies
personal data processing activities, maintains the mandatory privacy process register, performs
impact assessments, builds compliance documentation, and follows up on compliance improve
-
ment actions� Basware also ensures that employees who process personal data are trained to
comply with the privacy policy and guidelines�
Environmental responsibility
Basware’s corporate environmental responsibility is incorporated into the company’s business
strategy and operations� In its day-to-day activities, Basware complies with all applicable
environmental laws and regulations and expects all its suppliers and partners to obey all
relevant legal and industry-specific environmental requirements�
EMPLOYEES BY AGE GROUP 2020 2019
Under 25 4% 5%
25-34 36% 38%
35-44 37% 36%
45-54 18% 17%
Over 55 6% 5%
45
Basware 2020 Governance Financials
Basware’s most material environmental exposures are energy consumption at our office
locations, third-party data centres and the impact of business travel and commuting� Basware
tracks its greenhouse gas emissions annually and reports them to CDP� Basware has committed
to reduce its emissions footprint and to improve the energy efficiency of its office locations�
Basware aims to reduce its office based per employee greenhouse gas emissions by 20% by
2020 from 2016 levels� At the time of publication, the emissions data was not yet available for
the year 2020� Company employees are encouraged to reduce the need for business travel by
using collaborative technologies and online meeting tools�
The direct environmental impact of Basware’s services is estimated to be immaterial to moder
-
ate due to the nature of Basware’s business� Basware’s digital solutions and services have the
potential to decrease customers carbon emissions by improving efficiency in invoice handling,
which reduces required electricity and commuting� Basware is working towards a clearer
understanding of the environmental impacts of its solutions and services and is committed
to full transparency in communicating about the environmental benefits and burdens of its
business�
Future outlook
Themes affecting revenues and EBIT
Basware aims for consistent cloud revenue growth� Cloud revenues are impacted by cloud order
intake, churn and network transaction volume driven revenues� Approximately thirty percent of
Basware’s network transaction services revenues are subscription based� Cloud churn continues
to be affected by non-strategic contracts which are not renewed� Cloud order intake may be
negatively affected by economic uncertainty caused by Covid-19, however in the long run the
pandemic is expected to accelerate digitalisation megatrends which would support order intake
for Basware�
Demand for consulting services is driven primarily by new customer wins and expansion sales
to existing customers�
Revenues from maintenance and license will continue to decline as Basware transitions existing
license customers to cloud services� The rate of decline has been increased by end-of-life
actions taken during 2019�
2020 2019
Air travel emissions, CO2e ton 669 2,483
Overall improvements in scalability and operational efficiency are expected to continue�
However due to the Covid-19 situation there may be some impact to the timing of these
improvements�
Guidance for 2021
Basware expects uncertainty in the demand environment to continue in the first half of 2021
and guides the following for the full year 2021:
• Modest positive Net sales growth on an organic constant currency basis
• EBIT approximately at the same level or better than the previous year
Constant currencies mean that the effects of any changes in currencies are eliminated by calcu
-
lating the figures for the period using 2020 exchange rates� Organic means that the figures are
adjusted to remove the effects of any acquisitions or disposals within the past 12 months�
Board of Directors’ proposal for dividend
On December 31, 2020, the Group’s parent company’s distributable funds were EUR 30,080
thousand� The Board of Directors proposes to the Annual General Meeting that no dividend be
paid for 2020�
Basware Corporation’s Annual General Meeting is planned to be held on March 18, 2021�
Espoo, Finland , Wednesday, February 3, 2021
BASWARE CORPORATION
Board of Directors
46
Basware 2020 Governance Financials
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (IFRS)
EUR THOUSAND Notes 1.1.-31.12.2020 1.1.-31.12.2019
NET SALES 2 151,579 148,302
Cost of sales -65,941 -71,493
GROSS PROFIT 85,638 76,810
Sales and marketing -40,001 -45,190
Research and development -25,930 -26,815
General and administration -14,096 -14,572
Total operating expenses -80,027 -86,577
Other operating income 4 309 398
Other operating expenses 6 -1,253 -5,168
OPERATING PROFIT/LOSS 4,667 -14,537
Finance income 7 619 665
Finance expenses 7 -12,271 -9,790
PROFIT/LOSS BEFORE TAX -6,985 -23,663
Income tax 8 -345 223
PROFIT/LOSS FOR THE PERIOD -7,329 -23,440
EUR THOUSAND Notes 1.1.-31.12.2020 1.1.-31.12.2019
Other comprehensive income
Other comprehensive income that will not be
reclassified to profit or loss
Remeasurement of employee benefits 17 -5 -2
Other comprehensive income that may be
reclassified subsequently to profit or loss
Exchange differences on translating foreign
operations -4,964 1,974
Cash flow hedges 18 -435 -162
Income tax relating to components of other
comprehensive income 8 112 -86
Other comprehensive income for the year net of
tax -5,292 1,723
TOTAL COMPREHENSIVE INCOME -12,621 -21,716
Profit/loss attributable to:
Equity holders of the parent company -7,329 -23,440
Total comprehensive income attributable to:
Equity holders of the parent company -12,621 -21,716
Earnings per share
undiluted, EUR 9 -0,51 -1,63
diluted, EUR 9 -0,51 -1,63
47
Basware 2020 Governance Financials
CONSOLIDATED STATEMENT OF FINANCIAL POSITION (IFRS)
EUR THOUSAND Notes 31.12.2020 31.12.2019
ASSETS
Non-current assets
Intangible assets 10 41,927 44,402
Goodwill 3 76,676 80,345
Tangible assets 11 1,023 1,075
Right-of-use assets 11 14,322 15,842
Non-current financial assets 14 13 38
Other receivables 15 3,541 4,193
Contract assets 2 6 168
Deferred tax assets 8 10,592 9,654
Non-current assets 148,101 155,716
Current assets
Trade receivables 15 26,602 27,424
Other receivables 15 8,714 7,842
Contract assets 2 818 1,561
Income tax receivables 8 166 366
Cash and cash equivalents 16 40,461 31,672
Current assets 76,761 68,865
TOTAL ASSETS 224,862 224,581
48
Basware 2020 Governance Financials
CONSOLIDATED STATEMENT OF FINANCIAL POSITION (IFRS)
EUR THOUSAND Notes 31.12.2020 31.12.2019
EQUITY AND LIABILITIES
Shareholder's equity
Share capital 19 3,528 3,528
Share premium account 19 1,187 1,187
Treasury shares 19 0 -98
Invested unrestricted equity fund 19 110,290 110,388
Other reserves 19 289 653
Translation differences 19 -13,137 -8,226
Retained earnings 19 -19,600 -13,347
Shareholders' equity 82,557 94,086
Non-current liabilities
Deferred tax liabilities 8 5,071 5,003
Interest-bearing liabilities 22 66,665 58,889
Leasing liabilities, interest-bearing 12 11,647 13,412
Contract liabilities 2 2,791 3,184
Liabilities from employee benefits 17 388 377
Non-current liabilities 86,562 80,864
Current liabilities
Interest-bearing liabilities 22 2,173 1,996
Leasing liabilities, interest-bearing 12 3,727 3,392
Trade payables and other payables 20 30,470 28,468
Contract liabilities 2 19,177 15,260
Income tax liabilities 8 196 249
Current provisions 21 0 266
Current liabilities 55,743 49,631
TOTAL EQUITY AND LIABILITIES 224,862 224,581
49
Basware 2020 Governance Financials
CONSOLIDATED STATEMENT OF CASH FLOWS (IFRS)
EUR THOUSAND 1.1.-31.12.2020 1.1.-31.12.2019
Cash flows from operating activities
Profit/loss for the period -7,329 -23,440
Adjustments for profit:
Depreciation and amortisation 15,540 15,941
Unrealised foreign exchange gains and losses 690 -12
Financial income and expenses 11,068 9,088
Tax on income from operations 345 -223
Other adjustments 1,566 635
Total adjustments 29,208 25,428
Changes in working capital:
Increase (-) / Decrease (+) in trade and other receivables 810 557
Increase (+) / Decrease (-) in trade and other payables 5,069 4,794
Increase (+) / Decrease (-) in provisions -211 123
Total changes in working capital 5,668 5,474
Financial items in operating activities -1,301 -2,472
Income taxes paid (-) / received (+) -994 -832
Cash flows from operating activities 25,252 4,159
EUR THOUSAND 1.1.-31.12.2020 1.1.-31.12.2019
Cash flows used in investing activities
Purchase of tangible and intangible assets -9,470 -10,587
Net proceeds from sale of tangible and intangible assets 7 46
Cash flows from investing activities -9,464 -10,541
Cash flows from financing activities
Proceeds from current borrowings 176 0
Repayment of current borrowings -1,996 -22,296
Proceeds from non-current borrowings 0 43,880
Repayment of non-current borrowings 0 -20,000
Payment of lease liabilities -4,257 -4,372
Cash flows from financing activities -6,076 -2,788
Net change in cash and cash equivalents 9,712 -9,170
Cash and cash equivalents at the beginning of period 31,672 40,747
Net foreign exchange difference -922 94
Cash and cash equivalents at the end of period 40,461 31,672
50
Basware 2020 Governance Financials
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (IFRS)
EUR THOUSAND Share capital
Share premium
account
Treasury
shares
Invested
unrestricted
equity Other reserves
Translation
differences
Retained
earnings To tal
SHAREHOLDERS’ EQUITY Jan. 1, 2020 3,528 1,187 -98 110,388 653 -8,226 -13,347 94,086
Comprehensive income -4,912 -7,340 -12,253
Share based payments 98 -98 1,092 1,092
Defined benefit plans -5 -5
Cash flow hedges -363 -363
SHAREHOLDERS' EQUITY Dec. 31, 2020 3,528 1,187 0 110,290 289 -13,137 -19,600 82,557
EUR THOUSAND Share capital
Share premium
account
Treasury
shares
Invested
unrestricted
equity Other reserves
Translation
differences
Retained
earnings To tal
SHAREHOLDERS’ EQUITY Jan. 1, 2019 3,528 1,187 -638 110,928 832 -10,131 5,042 110,749
Comprehensive income 1,905 -23,442 -21,536
Share based payments 540 -540 362 362
Defined benefit plans -2 -2
Cash flow hedges -178 -178
Warrants 4,691 4,691
SHAREHOLDERS' EQUITY Dec. 31, 2019 3,528 1,187 -98 110,388 653 -8,226 -13,347 94,086
51
Basware 2020 Governance Financials
NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS (IFRS)
Basic information of the Group
company Basware Oyj is a public Finnish company founded under Finnish law� Business ID of
its subsidiaries for the Basware Group ("Basware" or "the Group")� The shares of the parent
company Basware Corporation have been listed on NASDAQ Helsinki Ltd� since 2000�
The consolidated financial statements for the year ended December 31, 2020 were author
-
ized for issue in accordance with a resolution of the Board of directors on February 3, 2021�
Shareholders may adopt or reject the financial statements at the Annual General Meeting�
Basware’s financial statements, Board of Directors’ report as well as the Auditor’s report are
available on the Internet at https://investors.basware.com/en or parent company's head office
at Linnoitustie 2, 02601 Espoo.
1. Accounting principles
Basis of preparation
Basware’s consolidated financial statements have been prepared according to the International
Financial Reporting Standards (IFRS), approved for use in EU countries, in accordance with the
IAS and IFRS standards, as well as IAS and IFRIC interpretations valid on December 31, 2020�
The Group’s Financial Statements are presented in euros, which is the primary and reporting
currency of the Group's parent company, and they are based on acquisition costs unless
otherwise stated in the accounting principles� The amounts presented in the financial state
-
ments are rounded, so the sum of individual figures may differ from the sum reported�
New and revised standards and interpretations
As of January 1, 2020, the Group has applied the following new and revised standards and
interpretations which did not materially impact Group reporting:
• Amendments to IFRS 9, IAS 39 and IFRS 7 Interest Rate Benchmark Reform (Effective for
annual periods beginning on or after January 1, 2020): In September 2019, the IASB issued
amendments to IFRS 9, IAS 39 and IFRS 7, which provide temporary reliefs which enable
hedge accounting to continue during the period of uncertainty before the replacement of an
existing interest rate benchmark with an alternative nearly risk-free interest rate (an RFR)�
The amendments had no impact on the Group's financial statements�
• Amendments to IFRS 3 Definition of a Business (Effective for annual periods beginning on or
after January 1, 2020): The IASB issued amendments to the definition of a business in IFRS
3 Business Combinations to help entities determine whether an acquired set of activities
and assets is a business or not� The amendments had no impact on the Group's financial
statements�
• Amendments to IAS 1 and IAS 8 Definition of Material (Effective for annual periods beginning
on or after January 1, 2020): The amendments aim to align the definition of ‘material’ across
the standards and to clarify certain aspects of the definition� The amendments clarify that
materiality will depend on the nature or magnitude of information, or both� The amendments
had no impact on the Group's financial statements�
• Amendments to IFRS 16 Covid-19 Related Rent Concessions (Effective for annual periods
beginning on or after June 1, 2020): The amendments provide relief to lessees from applying
IFRS 16 guidance on lease modification accounting for rent concessions arising as a direct
consequence of the Covid-19 pandemic� As a practical expedient, a lessee may elect not to
assess whether a Covid-19 related rent concession from a lessor is a lease modification� A
lessee that makes this election accounts for any change in lease payments resulting from
the Covid-19 related rent concession the same way it would account for the change under
IFRS 16, if the change were not a lease modification� This amendment had no impact on the
consolidated financial statements of the Group�
Amendments that will enter into force during the financial year 2021 or later
In addition to the standards and interpretations presented in the financial statements for 2020,
the Group will adopt the following standards, interpretations and amendments to standards
published by the IASB during financial periods beginning on or after January 1, 2021� The Group
will adopt each standard on the effective date, or if the effective date is not the first day of a
reporting period, as of the beginning of the following reporting period, provided that they are
approved by the EU�
• Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 Interest Rate Benchmark Reform
– Phase 2 (Effective for annual periods beginning on or after January 1, 2021)� On 27 August
2020, the IASB published Interest Rate Benchmark Reform – Phase 2, Amendments to IFRS
9, IAS 39, IFRS 7, IFRS 4 and IFRS 16� The amendments provide temporary reliefs which
address the financial reporting effects when an interbank offered rate (IBOR) is replaced
with an alternative nearly risk-free interest rate (RFR)� According to the Group's current
estimate, the amendments will have no impact on the Group's future financial statements,
and it is continuing its assessment of the impact of the amendments�
• Amendments to IFRS3 Business Combinations - Reference to the Conceptual Framework
(Effective for annual periods beginning on or after 1 January 2022)� The amendments are
intended to replace a reference to a previous version of the IASB’s Conceptual Framework
52
Basware 2020 Governance Financials
(the 1989 Framework) with a reference to the current version issued in March 2018 (the
Conceptual Framework) without significantly changing its requirements� According to
the Group's current estimate, the amendments will have no impact on the Group's future
financial statements, and it is continuing its assessment of the impact of the amendments�
• Amendments to IAS 37 Onerous Contracts – Costs of Fulfilling a Contract (Effective for
annual periods beginning on or after 1 January 2022)� In May 2020, the IASB issued
amendments to IAS 37 Provisions, Contingent Liabilities and Contingent Assets to specify
which costs an entity needs to include when assessing whether a contract is onerous or
loss-making� According to the Group's current estimate, the amendments will have no impact
on the Group's future financial statements, and it is continuing its assessment of the impact
of the amendments�
• Amendments to IAS 16 Property, Plant and Equipment: Proceeds before Intended Use –
Amendments to IAS 16 (Effective for annual periods beginning on or after 1 January 2022)�
The amendment prohibits entities from deducting from the cost of an item of property,
plant and equipment (PP&E), any proceeds of the sale of items produced while bringing that
asset to the location and condition necessary for it to be capable of operating in the manner
intended by management� Instead, an entity recognises the proceeds from selling such items,
and the costs of producing those items, in profit or loss� According to the Group's current
estimate, the amendments will have no impact on the Group's future financial statements,
and it is continuing its assessment of the impact of the amendments�
Basis of consolidation
The consolidated financial statements comprise the parent company Basware Corporation and
the subsidiaries controlled by it at the end of reporting period� Control is achieved when the
Group is exposed, or has rights, to variable returns from its involvement with the investee and
has the ability to affect those returns through its power over the investee� Being in control
means the power to govern the financial and operating policies of the company to obtain ben
-
efits from its activities� The subsidiaries have been included in the Group financial statements
as of the acquisition date� Intra-group holding is eliminated using the acquisition cost method�
Acquired companies are accounted for using the purchase method according to which the
assets and liabilities of the acquired company are measured at their fair value when it has been
possible to determine the value reliably� Deferred taxes of the acquisition cost adjustments are
recognized according to the valid tax rate and the remainder is recognized as goodwill on the
balance sheet� When circumstances indicate that there are changes in elements of control the
consolidation is re-assessed�
Intra-group business transactions, internal liabilities and receivables, and internal profit
distribution are eliminated in the Group financial statements�
Transactions in foreign currencies
Transactions in foreign currencies are recorded in the operating currency at the approximate
exchange rates prevailing at the transaction dates� Monetary items in foreign currencies have
been translated into the operating currency using the exchange rates at the end of the report
-
ing period� Non-monetary items denominated in foreign currencies are carried at the exchange
rate at the date of the transaction�
In the Group financial statements, the income statements of foreign subsidiaries are translated
into euros at the average rate for the financial period and balance sheets at the exchange
rate of the balance sheet date� Average rate difference due to different exchange rates on the
statement of comprehensive income and balance sheet are entered in other comprehensive
income� Translation differences arising from the elimination of foreign subsidiaries and transla
-
tion of equity items accumulated after the acquisition are entered in other comprehensive
income� Foreign currency gains and losses from monetary items part of the net investment in
a foreign unit are recognized in other comprehensive income and entered on the statement of
comprehensive income when the foreign unit is divested�
Segment information
Basware reports one operating segment� The reported segment is comprised of the entire
Group, and the segment figures are consistent with the Group figures�
Entity-wide disclosures are presented in Note 2 and 13�
Government grants
Government grants are recognized when there is reasonable assurance that the grant will be
received� The grants received are recognized as offsetting items of the expenses incurred� When
the grant relates to capitalized R&D projects it will reduce the carrying amount of the asset, and
they are recognized in profit and loss by way of lower depreciation charge over the useful life of
the intangible asset�
Research and development costs
Research expenses are booked as an expense as they are incurred� Development expenditures
on an individual project are recognized as an intangible asset when the Group can demonstrate:
• The technical feasibility of completing the intangible asset so that the asset will be available
for use or sale
• Its intention to complete and its ability and intention to use or sell the asset
• How the asset will generate future economic benefits
• The availability of resources to complete the asset
• The ability to measure reliably the expenditure during development�
53
Basware 2020 Governance Financials
Costs related to the adoption of new technology or development of a new generation of prod-
ucts are capitalized and recognized and amortized over the useful life of 3–5 years� In determin-
ing the useful life, the obsolescence of technology and the typical life cycle of products in the
industry are taken into consideration� Amortization begins when development is complete, the
asset is available for use and the product is ready for commercial utilization� Maintenance of
existing products and minor enhancements are expensed when they are incurred� Government
grants related to research and development are recognized through profit or loss in the periods
during which the corresponding costs are recognized as expenses�
Accounting principles requiring management’s judgement and key uncertainties relating to the
use of estimates
Preparation of financial statements in accordance with the IFRS standards requires Basware's
management to make estimates and assumptions that have an effect on the amount of assets
and liabilities on the balance sheet at the closing date as well as the amounts of income and
expenses for the financial period� In addition, the management must exercise its judgment
regarding the application of accounting policies� Since the estimates and assumptions are
based on the views at the date of the Financial Statements, they include risks and uncertainties�
The actual results may differ from the estimates and assumptions�
More information on the most significant items requiring management’s judgement:
Goodwill (Note 3)
Development expenses (Note 10)
Leases (Note 12)
Trade receivables (Note 15)
Deferred tax assets (Note 8)
Share-based payments (Note 5)
Financial risk management (Note 18)
Warrants (Note 19)
Alternative performance measures
Basware presents the following financial measures to supplement its Consolidated Financial
Statements which are prepared in accordance with IFRS� These measures are designed to
measure growth and provide insight into the company’s underlying operational performance�
The Group has applied the recent guidance from ESMA (the European Securities and Markets
Authority) on Alternative Performance Measures which is applicable as of July 3, 2016 and
defined alternative performance measures as follows�
Cloud revenue includes net sales from SaaS and other subscription revenues, transactions
services and financing services excluding alliance fees�
Organic revenue growth is calculated by comparing net sales between comparison periods in
constant currencies excluding alliance fees as well as net sales from acquisitions and disposals
that have taken place in the past 12 months�
Net sales in constant currencies is calculated by eliminating the impact of exchange rate
fluctuations by calculating the net sales for the comparable period by using the current period’s
exchange rates�
Gross investments are total investments made to non-current assets including acquisitions and
capitalized research and development costs�
Other capitalized expenditure consists of investments in property, plant and equipment and
intangible assets excluding acquisitions and capitalized research and development costs�
EBITDA is calculated as operating result plus depreciation and amortization�
Adjusted EBITDA is calculated from EBITDA excluding any adjustments related to alliance
fees, acquisitions and disposals, restructuring and efficiency measures, impairment losses and
litigation fees and settlements�
Adjusted operating result (Adjusted EBIT) is calculated from operating result excluding any
adjustments related to alliance fees, acquisitions and disposals, restructuring and efficiency
measures, impairment losses and litigation fees and settlements�
Adjusted earnings per share (Adjusted EPS) is calculated by excluding from the profit/loss any
adjustments related to alliance fees, acquisitions and disposals, restructuring and efficiency
measures, impairment losses and litigation fees and settlements�
Annual recurring revenue gross order intake is calculated by summing the total order intake in
the period expressed as an annual contract value� For cloud order intake this includes all SaaS
and Network recurring revenues including transaction revenues� Gross order intake covers
new cloud customers, add-ons and renewal uplifts but excludes churn� There will be a time lag
before this order intake is visible in net sales�
Free cash flow metric is defined as EBITDA minus capitalizations, total debt service costs, tax
and payment of lease liabilities, and excluding the share part of share-based compensation and
any impact from acquisitions or disposals�
54
Basware 2020 Governance Financials
2. Revenue and contract balances
Accounting principles
Net sales
Net sales are presented net of discounts and exchange rate differences of foreign
currency sales�
Revenue recognition
Basware reports net sales by type� Net sales by type is divided into two groups: cloud
and non-cloud revenue� Cloud revenue consists of net sales from SaaS and other
subscription types and transaction revenue and non-cloud revenue includes net sales
from licences, maintenance and consulting� SaaS and transaction services are sold
together with consulting services and e-invoicing services include also work related to
set-up activities which are charged separately as Start up fee�
IFRS 15 Revenue from Contracts with Customers is based on the principle that sales
are recognized when the control of the goods or service is transferred to the customer�
According to IFRS 15 the contract qualifies as a customer contract when each party's
general and specific rights and obligations are described, contract is approved by
the parties, each party's enforecable rights and obligations exists, the contract has
commercial substance and it is probable that the consideration to which the entity is
entitled to in exchange for the goods or services will be collected� Group does not have
a significant financing components in its contracts with customers or sale with a right
of return�
Basware revenue for different revenue types is recognized over time except for
licenses which is recognized at a point in time� SaaS and transaction service fees are
fixed and are invoiced on a monthly or annual basis, or monthly based on user and
transaction volumes� Both fees are recognized on a monthly basis over the term of
the contract� Revenue from set up activities are deferred and recognized over time
throughout the contract term�
Revenue from the license sales is recognized when contractual criteria of IFRS 15
has been fulfilled and when license has been delivered to the customer� Maintenance
services which includes new version releases and customer support are recognized
over the contract period�
Revenue of professional services are recognized during the reporting period in which
service is provided� Revenue of fixed-price consulting projects are recognized as revenue
and expenditure on the basis of the percentage of completion when the outcome of the
project can be reliably estimated� If the resulting costs and recognized profits exceed the
amount invoiced for the transaction, the difference is presented in “contract assets” on
the balance sheet� If the resulting costs and recognized profits are lower the invoicing for
the transaction, the difference is presented in “contract liabilities” on the balance sheet�
When it is likely that the total costs required for completing the project exceed the total
revenue from the transaction, the expected loss is recognized as an expense immediately�
Basware reports geographical areas Americas, Europe, Nordics and APAC� Americas
includes business operations in North and South America� Europe includes operations
in Europe and Russia, excluding the Nordic countries (Denmark, Finland, Norway and
Sweden), which are reported separately� APAC includes operations in Asia and the Pacific
region�
EUR THOUSAND
Timing of revenue
recognition 1.1.-31.12.2020 1.1.-31.12.2019
Cloud Revenue
SaaS Over time 58,344 49,133
Transaction services Over time 47,272 47,876
Other cloud revenue Over time 4,696 4,434
Cloud Revenue total 110,312 101,442
Non-Cloud Revenue
Maintenance Over time 14,687 20,720
License sales At a point in time 348 1,202
Consulting services Over time 26,875 24,962
Other non-cloud revenue Over time -644 -23
Non-Cloud Revenue Total 41,267 46,861
Group total 151,579 148,302
Net sales by type
55
Basware 2020 Governance Financials
EUR THOUSAND 1.1.-31.12.2020 1.1.-31.12.2019
Americas 35,013 31,796
Europe 52,176 50,687
Nordics 56,428 57, 441
APAC 7,962 8,379
Group total 151,579 148,302
EUR THOUSAND 31.12.2020 31.12.2019
Trade receivables 26,602 27, 4 24
Contract assets:
Non-current 6 168
Current 818 1,561
Contract liabilities:
Non-current 2,791 3,184
Current 19,177 15,260
During 2019-2020 the Group has not recognized significant impairment losses on contract assets.
EUR THOUSAND 1.1.-31.12.2020 1.1.-31.12.2019
Revenue recognized from amounts included in contract
liabilities at the beginning of the period: 15,203 9,678
% 1.1.-31.12.2020 1.1.-31.12.2019
EUR 52�8 51�5
USD 21�3 20�8
GBP 7� 2 7�7
Other 18�6 20�0
Group total 100 100
Net sales by customer location
Summary of contract balances:
Set out below is the amount of revenue recognized from amounts included in
contract liabilities at the beginning of period:
Net sales by currency
Contract assets and liabilities
The timing of invoicing may differ from the timing of revenue recognition� The Group
recognizes an contract asset when revenue is recognized prior to invoicing, and a
contract liability when revenue is recognized subsequent to invoicing�
Revenue of professional services are recognized during the reporting period in which
service is provided� Revenue of fixed-price consulting projects are recognized as
revenue and expenditure on the basis of the percentage of completion when the
outcome of the project can be reliably estimated� If the resulting costs and recognized
profits exceed the amount invoiced for the transaction, the difference is presented in
“contract assets” on the balance sheet� If the resulting costs and recognized profits
are lower the invoicing for the transaction, the difference is presented in “contract
liabilities” on the balance sheet�
The majority of contract liabilities arise from:
• SaaS and Transactions services invoiced in advance and recognized as revenue on
monthly basis over the contract term
• setup activities invoiced in advance and recognized as revenue during the contract
period
• maintenance revenue invoiced in advance and recognized as revenue over the
maintenance period
Transaction price allocated to the remaining performance obligations
The Group has elected to use the practical expedient in IFRS 15�121 in disclosing the transaction
price allocated to remaining performance obligations as its related performance obligations are
a part of a contract that have a original expected duration of less than one year, or the revenue
recognition from performance obligations is done according to IFRS 15�B16�
56
Basware 2020 Governance Financials
3. Goodwill
Accounting principles
Goodwill is measured as the excess of the cost of the acquisition over the Group's
share of the fair values of the acquiree's net assets at the time of the acquisition� After
initial recognition, goodwill is measured at cost less any accumulated impairment
losses�
Goodwill impairment testing
Goodwill is not amortised, but is tested for impairment annually, and when circum-
stances indicate that the carrying value may be impaired� Impairment is determined
for goodwill by assessing the recoverable amount of each cash generating unit (CGU)
to which the goodwill relates� When the recoverable amount of the CGU is less than its
carrying amount, an impairment loss is recognised� An asset’s recoverable amount is
the higher of CGU’s fair value less costs of disposal and its value in use� In assessing
value in use, the estimated future cash flows are discounted to their present value
using a pre-tax discount rate that reflects current market assessments of the time
value of money and the entity specific risks� Impairment losses relating to goodwill
cannot be reversed in future periods�
EUR THOUSAND 31.12.2020 31.12.2019
Acquisition cost Jan� 1 80,345 78,939
Translation difference -3,669 1,405
Business disposals 0 0
Acquisition cost Dec. 31 76,676 80,345
Book value Dec. 31 76,676 80,345
Goodwill is tested according to IAS 36� The Group does not possess any other intangible assets
than Goodwill that has indefinite economical life� Unfinised intangible assets are also subjected
to impairment testing during reporting period� Impairment testing is carried out at group level
as the Group has centralised steering model and reporting structure� Goodwill is monitored
at group level internally�
Goodwill has been tested for impairment in the last quarter of 2020� The recoverable amounts
from the cash generating unit (CGU) are determined based on value-in-use calculations� The
calculations are prepared on a discounted cash flow method basis, derived from the board
approved estimates for the following year and subsequent development derived from the
strategic plans, covering five years� Terminal year value has been defined based on the long
term strategic financials�
Cash flows beyond the 10-year period are calculated using the terminal value method� The
terminal growth rate of 2�5 percent (2�5%) used in projections is based on management’s
assessment on conservative long term growth� Key driver for the valuation is the revenue
growth based on the Group’s performance and future strategic growth plans, market position as
well as the potential in key markets�
The applied discount rate is the weighted average pre-tax cost of capital (WACC)� The
components of the WACC are risk-free rate, market risk premium, company specific factor, and
industry specific beta, cost of debt and debt/equity ratio� The WACC of 11�2 percent (11�3%) has
been used in the calculations�
As a result of the impairment test, no impairment loss for the CGU were recognized for the
financial periods ended 31 December 2020 and 2019 respectively�
A sensitivity analysis was conducted and there is no indication that the changes in the assump
-
tions could be so substantial that the carrying amount would exceed the recoverable amount�
The impairment testing is influenced by how the Group will meet the targets set for year 2021
and beyond� In a sensitivity analysis the impacts of substantial changes to the most significant
assumptions like terminal growth, average EBIT-margin and the discount rate was assessed�
Terminal year growth should decrease more than 400 percentage points, pre-tax discount rate
should increase more than 19 percentage points or the average EBIT-margin during the forecast
period should decrease more than 10 percentage points for an impairment to take place� Value
in use exceeds the carrying amount by more than 100 percent�
57
Basware 2020 Governance Financials
EUR THOUSAND 1.1.-31.12.2020 1.1.-31.12.2019
Gain on sale of assets 26 48
Other operating income 283 350
Other operating income 309 398
4. Other operating income
Accounting principles
Other operating income includes proceeds from the sale of business operations and
property, plant and equipment�
In financial years 2019 and 2020 respectively, other operating income mainly consists of other
proceeds related to divestment�
58
Basware 2020 Governance Financials
5. Personnel and employee benefits
Accounting principles
The Group has exclusively defined contribution pension arrangements, and the related
payments are expensed in the year they are incurred�
The Group also has a defined benefit based incentive scheme to commit personnel in
accordance with local regulations and practices in India� The calculations for defined
benefit plan are done according to same principles as defined benefit plans for
pensions and they predispose the Group to actuary risks like payroll risk, interest risk
and risk related to expected lifetime� Amounts of the defined benefit plans are based
on the yearly calculations submitted by independent actuaries� The present value of
the defined benefit obligations is determined by discounting the estimated future cash
flows using interest rates of Government issued bonds, if interest rate of high quality-
corporate bonds is not available� The plan is unfunded and more information on the
defined benefit plan is presented in Note 17�
The Group's related parties include parent company (Basware Corporation) and its
subsidiaries, the members of the Board of Directors, the members of the Corporate
Executive Team, CEO and their family members and their controlled companies�
Basware Corporation's subsidiaries are disclosed in Note 25� No loans have been given
to the related parties of the Group, except subsidiaries, and no guarantees or other
collateral have been issued on their behalf�
AVERAGE NUMBER OF PERSONNEL 1.1.-31.12.2020 1.1.-31.12.2019
Americas 106 121
Europe 373 374
Nordics 425 437
APAC 430 417
Personnel, total 1,334 1,349
EUR THOUSAND 1.1.-31.12.2020 1.1.-31.12.2019
Salaries and fees -74,171 -76,578
Share-based incentive plans -1,409 -914
Expenses from defined benefit plans -74 -122
Pension expenses, defined contribution plans -5,690 -6,187
Other employee benefits -6,268 -6,474
Employee benefits expense, total -87,613 -90,275
EUR THOUSAND 1.1.-31.12.2020 1.1.-31.12.2019
CEO of the parent company
Vesa Tykkyläinen (until March 10, 2019) -836
Klaus Andersen (from March 11, 2019) -519 -354
Compensation of the members of the Board of Directors
Michael Ingelög -80 -52
Ilkka Sihvo -59 -83
Daryl Rolley -74 -81
Asko Schrey -44 -44
Minna Smedsten (from June 4, 2020) -37
Tuija Soanjärvi (until August 21, 2019) -4 -52
Total -817 -1,501
Employee benefits expense
Management and Board salaries, fees and benefits
Group's key employees are defined as CEO, members of the Board of Directors and Executive
team�
59
Basware 2020 Governance Financials
EUR THOUSAND 1.1.-31.12.2020 1.1.-31.12.2019
Salaries and other short-term employee benefits -1,862 -2,378
Benefits in connection with termination of employment 0 -629
Share-based payments -523 -660
Total -2,385 -3,667
Key management employee benefits
Total salaries and benefits of the CEO Klaus Andersen for the period January 1 - December 31,
2020 were EUR 519 thousand (EUR 354 thousand in March 11-December 31, 2019)� Salary in
money was EUR 410 thousand (EUR 318 thousand), including fringe benefits of EUR 19 thousand
(EUR 15 thousand)� Andersen was paid a bonus of EUR 99 thousand from the financial year
2019 (EUR 5 thousand in 2019 from the financial year 2018)�
In 2020, Andersen was conveyed a total of 354 shares (1,500 shares in 2019) on the basis of
the share-based incentive schemes� Of these, 177 shares (750 shares in 2019) were conveyed to
Andersen, the value of which was approximately EUR 5 thousand (EUR 15 thousand) based on
the average share price of the payment days, and EUR 5 thousand (EUR 16 thousand) was paid
in cash to cover the withholding tax�
The accrued pension cost of Klaus Andersen amounted to EUR 61 thousand (EUR 35 thousand
in March 11 - December 31, 2019)� The CEO's pension plan is pursuant to the employment
pension legislation� The CEO has 3 month period of notice, in addition to which he is entitled
to severance pay equivalent of 12 months’ fixed salary�
Vesa Tykkyläinen stepped down as the CEO of Basware Corporation on March 10, 2019� Total
salaries and benefits of the Vesa Tykkyläinen for the period January 1 - December 31, 2019 were
EUR 836 thousand� Salary in money including salary for 3 month notice period was EUR 161
thousand, including fringe benefits of EUR 4 thousand� Severance pay was EUR 360 thousand�
Tykkyläinen was paid a bonus of EUR 156 thousand from the financial year 2018� In 2019, Tykky
-
läinen was conveyed a total of a total of 7,684 shares on the basis of the incentive schemes� Of
these, 3,824 shares were conveyed to Tykkyläinen, the value of which was approximately EUR
79 thousand based on the average share price of the payment days, and EUR 80 thousand was
paid in cash to cover the withholding tax�
Share-based payments
Accounting principles
Share-based incentive schemes are valued at fair value on the grant date based on the
gross number of shares awarded, recognized as an expense in the consolidated statement
of comprehensive income during the period in which the conditions are met (the vesting
period) and with a corresponding adjustment to the equity� The withholding paid by the
company to the tax authority is recognized directly in equity�
Matching Share Plan 2017-2019
The Board of Directors resolved on March 1, 2017 to establish a matching share plan for 2017-
2019 for Basware Executive Team members�
The prerequisite for receiving reward on the basis of the matching share plan is that the
member of the Basware Executive Team in question acquires Basware shares� The Basware
Executive Team member will, as a reward, receive matching shares for each share subject to the
share ownership prerequisite after a matching period of three (3) years�
Receipt of matching shares is contingent on the continuation of employment or service upon
reward payment and that the shares in question are still held by the member� The Board of
Directors resolved that the rewards to be paid in aggregate to the Basware Executive Team on
the basis of the matching share plan correspond to the value of a maximum total of 75,000
Basware Corporation shares, including also the proportion to be paid in cash�
Members of Basware Executive Team have acquired or allocated a total of 7,752 Basware Corpo
-
ration shares based on the plan� The rewards to be paid to Basware Executive Team members
on the basis of the plan thus corresponds to a maximum of 15,504 Basware Corporation shares,
including also the proportion to be paid in cash� The plan ended in March 2020�
Matching Share Plan 2018-2020
The Board of Directors resolved on July 17, 2018 to establish a new matching share plan for
2018-2020 for the Group's key employees�
The prerequisite for receiving reward on the basis of the matching share plan is that the plan
member acquires Basware shares� The plan member will, as a reward, receive matching shares
for each share subject to the share ownership prerequisite after a matching period of three (3)
60
Basware 2020 Governance Financials
years� Receipt of matching shares is contingent on the continuation of employment or service
and on the plan member holding the acquired shares upon reward payment�
The rewards to be paid in aggregate to plan members on the basis of the matching share plan
correspond to the value of a maximum total of 77,714 Basware Corporation shares, including
also the proportion to be paid in cash�
The Group's key employees acquired or allocated a total of 32,178 Basware Corporation shares
based on the plan� The rewards to be paid to the key employees on the basis of the plan thus
corresponds to a maximum of 64,356 Basware Corporation shares, including also the propor
-
tion to be paid in cash� At the end of 2020, the matching share plan included 34 key employees�
Restricted Share Plan 2017
The Board of Directors resolved on March 1, 2017 to establish a restricted share plan for 2017�
The restricted share plan is directed to selected key employees at Basware� Receipt of the
reward is contingent on the continuation of employment or service upon reward payment� The
reward from the restricted share plan will be paid after a vesting period of one to three years�
The total rewards to be allocated on the basis of the plan amount to a maximum of 20,000
Basware Corporation shares, including also the proportion to be paid in cash�
In June 2020, 3,000 shares were conveyed on a directed share issue related to the reward
payment for the restricted share plan 2017� In October 2020, 1,000 shares were conveyed
on a directed share issue related to the reward payment for the restricted share plan 2017�
The rewards paid on the basis of the plan in 2020 corresponded to a total of 4,000 Basware
Corporation shares, including also the proportion to be paid in cash� The plan ended in 2020�
Performance Share Plan 2017-2019
The Board of Directors resolved on March 1, 2017 to establish a performance share plan for
2017-2019 for key employees�
The performance share plan includes three performance periods, calendar years 2017-2018,
2018-2019 and 2019-2020� The Board of Directors decides on the performance criteria and on
the required performance levels for each criterion at the beginning of each performance period�
The potential reward for the performance period 2018-2019 was based on the Group’s key
performance measures in 2018� The rewards to be paid on the basis of the performance period
2018-2019 corresponded to the value of a maximum total of 116,950 Basware Corporation
shares, including also the proportion to be paid in cash� The plan was directed to approximately
75 key employees, including the members of the Basware Executive Team�
In June 2020, 8,069 shares were conveyed on a directed share issue related to the reward
payment for the performance period 2018-2019 of the performance share plan 2017-2019,
closing the performance period 2018-2019 of the plan� The rewards paid on the basis of the
plan in 2020 corresponded to a total of 16,135 Basware Corporation shares, including also the
proportion to be paid in cash�
The potential reward for the performance period 2019-2020 is based on the Group’s key
performance measures in 2019� The rewards to be paid on the basis of the performance period
2019-2020 correspond to the value of a maximum total of 60,225 Basware Corporation shares,
including also the proportion to be paid in cash� The plan is directed to approximately 45 key
employees, including the members of the Basware Executive Team�
At the end of 2020, the performance share plan included 44 key employees for the perfor
-
mance period 2019-2020�
Performance Share Plan 2020-2021
The Board of Directors resolved on December 18, 2019 to establish a performance share plan
for 2020-2021 for key employees�
The Performance Share Plan includes one performance period, calendar years 2020-2021� The
Board of Directors have resolved on the performance criteria at the required performance
levels for each criterion� The plan is directed to approximately 45 key employees, including the
members of the Basware Executive Team�
The potential reward from the performance period 2020-2021 will be based on the company´s
relative Total Shareholder Return (TSR), the Group's total revenue and ARR order intake
during 2020-2021� The rewards to be paid on the basis of the performance period 2020-2021
correspond to the value of a maximum total of 320,000 Basware Corporation shares (including
also the proportion to be paid in cash)�
At the end of 2020, the performance share plan included 53 key employees�
Restricted Share Plan 2020
The Board of Directors resolved on December 18, 2019 to establish a restricted share plan 2020�
The restricted share plan is directed to selected for selected key contributors in key markets�
61
Basware 2020 Governance Financials
Receipt of the reward is contingent on the continuation of employment or service upon reward
payment�
The reward from the restricted share plan will be paid after a vesting period of one to three
years� The total rewards to be allocated on the basis of the plan amount to a maximum of
10,000 Basware Corporation shares, including also the proportion to be paid in cash�
At the end of 2020, the restricted share plan included 3 key employees�
Effect on the result for the period and on the financial
position in 2020
Expenses for the financial year, share-based payments 1,409,287
Liabilities arising from share-based payments December 31, 2020 235,508
Future cash payment to be paid to the tax authorities from share-based
payments, estimated at the end of the period 3,088,582
Effect of Share-based Incentives on the result and financial position during
the period
Valuation parameters for instruments granted during the period
Information on share-based incentive plans
Performance
Period 2020-2021 RSP 2020
Share price at grant 25�80 35�80
Share price at December 31, 2020 42�00 42�00
Expected dividends 0 0
Fair value at December 31, 2020 1,093,964 59,070
Matching Share Plan
2017-2019
Matching Share Plan
2018-2020
Maximum number of shares 75,000 77,714
Initial grant date 2�3�2017 18�7�2018
Vesting date 31�3�2020 31�3�2021
Vesting conditions
Share ownership and
employment
Share ownership and
employment
Maximum contractual life, years 3�1 2�7
Remaining contractual life, years 0�0 0�2
Number of persons at December 31,
2020 0 34
Payment method Shares & Cash Shares & Cash
Restricted Share Plan
2017
Restricted Share Plan
2020
Maximum number of shares 20,000 10,000
Initial grant date 2�3�2017 19�12�2019
Vesting date
12 month Restriction
Period
12-36 month Restriction
Period
Vesting conditions Employment Employment
Maximum contractual life, years - -
Remaining contractual life, years - -
Number of persons at December 31,
2020 0 3
Payment method Shares & Cash Shares & Cash
62
Basware 2020 Governance Financials
Changes in 2020
Performance share plans:
Performance
Period 2018-2019
Performance
Period 2019-2020
Performance
Period 2020-2021
Outstanding at January 1, 2020 64,700 60,225 0
Granted 0 584 354,100
Forfeited -48,565 -1,400 0
Exercised, gross 16,135 0 0
Outstanding December 31, 2020 0 59,409 354,100
Matching Share Plan
2017 - 2019
Matching Share Plan
2018-2020
Outstanding at January 1, 2020 15,504 68,556
Granted 0 0
Forfeited 0 -4,200
Exercised, gross -15,504 0
Outstanding December 31, 2020 0 64,356
Performance share plans:
Performance
Period 2018-2019
Performance
Period 2019-2020
Performance
Period 2020-2021
Maximum number of shares 116,950 60,225 320,000
Initial grant date 1�2�2018 20�6�2019 19�12�2019
Vesting date 31�3�2020 31�3�2021 31�5�2022
Vesting conditions
Group's key
performance
measures and
employment
Group's key
performance
measures and
employment
Group's key
performance
measures and
employment
Maximum contractual life, years 2�2 1�8 2�4
Remaining contractual life, years 0�0 0�2 1�4
Number of persons at December
31, 2020
0 44 53
Payment method Shares & Cash Shares & Cash Shares & Cash
Restricted Share Plan
2017
Restricted Share
Plan 2020
Outstanding at January 1, 2020 4,000 0
Granted 0 1,650
Forfeited 0 0
Exercised, gross -4,000 0
Outstanding December 31, 2020 0 1,650
63
Basware 2020 Governance Financials
6. Other operating expenses
7. Finance income and expenses
EUR THOUSAND 1.1.-31.12.2020 1.1.-31.12.2019
Impairment losses on trade receivables -745 -933
Acquisition, disposal and restructuring expenses -8 -1,408
Efficiency related expenses -453 -2,772
Other operating expenses -47 -56
Other operating expenses total -1,253 -5,168
EUR THOUSAND 1.1.-31.12.2020 1.1.-31.12.2019
Finance income
Interest income on instruments valued at amortized cost 25 30
Foreign exchange gain on instruments valued at amortized
cost 548 549
Other financing income 46 87
Total 619 665
Finance expenses
Interest expenses on debt instruments valued at amortized cost -10,196 -8,315
Foreign exchange loss on instruments valued at amortized cost -1,167 -586
Interest expenses on lease liabilities -881 -888
Other financing expenses -27 0
Total -12,271 -9,790
Finance income and expenses total -11,652 -9,125
Accounting principles
The Group recognizes borrowing costs as an expense in the period during which they
are incurred�
EUR THOUSAND 1.1.-31.12.2020 1.1.-31.12.2019
Exchange differences included in net sales -644 -23
Exchange differences included in purchases and expenses -5 39
Foreign exchange gains 548 549
Foreign exchange losses -1,167 -586
Exchange differences recognized on income statement -1,267 -22
Exchange differences recognized on income statement
8. Income taxes
Accounting principles
Income taxes comprise of tax recognized on the taxable income for the financial
year and deferred taxes� Taxes for the items recognised in the income statement are
included in taxes in the income statement� For items recognised directly in equity or
other comprehensive income, the income tax effect is similarly recognised�
Taxes based on taxable income are recorded according to the local tax rules of each
country using the applicable tax rate�
When uncertainty is included in interpretation of income tax rules, the Group
estimates, if a company is able to fully utilize the tax position that is stated in income
tax computation� If necessary, tax bookings are adjusted to reflect the changes in tax
position� At reporting date booked income tax amounts reflect the estimates of future
tax payments�
64
Basware 2020 Governance Financials
EUR THOUSAND 1.1.-31.12.2020 1.1.-31.12.2019
Income tax on operations -1,027 -1,293
Tax for previous accounting periods 76 -48
Change in deferred tax liabilities and tax assets 607 1,564
Income tax total -345 223
EUR THOUSAND 1.1.-31.12.2020 1.1.-31.12.2019
Taxes on foreign exchange gains from net investments 41 -71
Taxes on derivatives 72 15
EUR THOUSAND 31.12.2020 31.12.2019
Income tax receivables 166 366
Income tax liabilities 196 249
EUR THOUSAND 1.1.-31.12.2020 1.1.-31.12.2019
Profit/loss before taxes -6,985 -23,663
Tax calculated at domestic tax rate 1,397 4,733
Tax for previous years 76 -48
Effect of different tax rates of foreign subsidiaries -384 -543
Effect of change in tax rate 0 0
Non-deductible expenses -2,099 -1,166
Losses for which no deferred tax asset is recognised 0 -3,751
Other 528 -18
Income not subject to tax 65 0
Taxable profit not included in the accounting profit 0 -180
Utilization of previous year losses 839 574
Previous year losses for which deferred tax asset is booked -766 622
Income taxes -345 223
Direct taxes
Taxes relating to other comprehensive income
Income tax receivables and payables
Tax rate reconciliation
Deferred taxes
Accounting principles
Deferred taxes are calculated from all temporary differences between the carrying
amount and taxable value at the corporate income tax rates prevailing at the reporting
date� The most significant temporary differences arise from depreciation of property,
plant and equipment, unused tax losses, research and development adjustments,
and adjustments for fair values in connection with acquisitions� Deferred tax is not
recognized for goodwill that is permanently non-taxable� Deferred tax is not recognized
for non-distributed profits of subsidiaries in so far as the difference is not likely to be
discharged in the foreseeable future� Deferred tax assets are recognised for all other
deductible temporary differences� A deferred tax asset is recognized to the extent
that it is likely that there will be future taxable income against which it is deductible�
The requirements for the recognition of deferred tax assets are reassessed at each
reporting date�
EUR THOUSAND 1.1.2020
Recognized
in profit or
loss
Business
acquisitions
/ disposals
Period
change
booked in
equity 31.12.2020
Tax losses 5,613 -766 0 0 4,848
Deferred expenses 3,516 1,652 0 0 5,168
Other items 525 51 0 0 576
Total 9,654 938 0 0 10,592
Deferred tax assets 2020
65
Basware 2020 Governance Financials
EUR THOUSAND 1.1.2019
Recognized
in profit or
loss
Business
acquisitions
/ disposals
Period
change
booked in
equity 31.12.2019
Tax losses 4,991 622 0 0 5,613
Deferred expenses 2,254 1,262 0 0 3,516
Other items 565 -40 0 0 525
Total 7,810 1,844 0 0 9,654
EUR THOUSAND 1.1.2020
Recognized
in profit or
loss
Exchange
rate differ-
ences
Period
change
booked in
equity 31.12.2020
Allocation of fair value on
purchases 4,987 335 -195 0 5,127
Fair valuation of deriva-
tives
15 0 0 -72 -56
Total 5,003 335 -195 -72 5,071
EUR THOUSAND 1.1.2019
Recognized
in profit or
loss
Exchange
rate differ-
ences
Period
change
booked in
equity 31.12.2019
Allocation of fair value on
purchases 4,660 277 50 0 4,987
Fair valuation of deriva-
tives 0 0 0 15 15
Total 4,660 277 50 15 5,003
Deferred tax assets 2019
Deferred tax liabilities 2020
Deferred tax liabilities 2019
The Group has recognised total of EUR 4,848 thousand (EUR 5,613 thousand) of deferred tax
assets for unused tax losses, of which EUR 1,928 thousand will expire during 2026–2028, while
the rest have no expiry period� According to the transfer pricing principle, subsidiaries accumu
-
late taxable income against which confirmed losses can be utilized in the future� The Group has
total of EUR 22,197 thousand of tax losses and EUR 17,198 thousand of non-deductible interests
from which deferred tax asset has not been recognized� The Group will reassess the amount of
deferred tax assets if there are changes in the expectations for accumulation of future taxable
profit�
66
Basware 2020 Governance Financials
9. Earnings per share
EUR THOUSAND 1.1.-31.12.2020 1.1.-31.12.2019
Profit/loss for the period -7,329 -23,440
Average number of shares (1,000)
Undiluted 14,408 14,388
Diluted 14,639 1 4 , 474
Earnings per share (EUR)
Undiluted -0�51 -1�63
Diluted -0�51 -1�63
10. Intangible assets
Accounting principles
Other intangible assets are measured at cost less accumulated amortisation and
possible impairment� Government grants related to the acquisition of an intangible
asset are deducted from the acquisition cost of the asset and recognized as income
by reducing the depreciation charge of the asset they are related to� Amortisation is
calculated on a straight-line basis over the estimated useful lives of the assets� The
estimated useful lives of intangible assets are 3–10 years� Each financial year end
useful lives are reviewed and adjusted prospectively, if appropriate�
Assets relating to customer relationships and technology that are acquired through
business combinations are measured at fair value at the time of acquisition and
depreciated over the useful life�
Accounting principles
Undiluted earnings per share is calculated by dividing the profit for the period attribut-
able to the owners of the parent company by the weighted average number of shares
outstanding during the year� The average number of shares has been adjusted with
the treasury shares� Diluted earnings per share reflect the impact of the share-based
incentive plans�
67
Basware 2020 Governance Financials
EUR THOUSAND
Development
costs
Intangible
rights
Other
long-term
investments
Assets,
unfinished
projects Tot al
Acquisition cost Jan� 1 64,741 48,068 2,858 8,118 123,785
Translation difference
(+/-) -36 -1,003 -241 0 -1,280
Additions 692 650 0 7, 578 8,920
Disposals 0 0 0 -46 -46
Reclassifications between
items 1,405 0 0 -1,405 0
Acquisition cost Dec. 31 66,802 47,716 2,617 14,246 131,380
Cumulative amortisation
Jan� 1 -39,003 -39,401 -980 0 -79,384
Translation difference
(+/-) 48 658 92 0 799
Cumulative amortisation
on disposals and reclas-
sifications 0 0 0 0 0
Amortisation -8,220 -2,280 -368 0 -10,868
Cumulative amortisa-
tion Dec. 31 -47,175 -41,023 -1,256 0 -89,453
Book value Dec. 31,
2020 19,627 6,693 1,361 14,246 41,927
Intangible assets 2020 Intangible assets 2019
EUR THOUSAND
Development
costs
Intangible
rights
Other
long-term
investments
Assets,
unfinished
projects Tot al
Acquisition cost Jan� 1 51,338 47,278 1,090 13,995 113,701
Translation difference
(+/-) -3 410 -10 12 409
Additions 2,738 380 459 6,098 9,676
Disposals 0 -1 0 0 -1
Reclassifications between
items 10,668 0 1,319 -11,987 0
Acquisition cost Dec. 31 64,741 48,068 2,858 8,118 123,785
Cumulative amortisation
Jan� 1 -31,953 -35,952 -699 0 -68,604
Translation difference
(+/-) -7 -200 -4 0 -211
Cumulative amortisation
on disposals and reclas-
sifications 0 28 0 0 28
Amortisation -7,043 -3,278 -276 0 -10,597
Cumulative amortisa-
tion Dec. 31 -39,003 -39,401 -980 0 -79,384
Book value Dec. 31,
2019 25,739 8,667 1,878 8,118 44,402
Goodwill is presented in Note 3.
68
Basware 2020 Governance Financials
11. Tangible assets
Accounting principles
Tangible assets are measured at cost less accumulated depreciation and possible
impairment� The useful lives of tangible assets are 3–10 years� The useful life of an
asset is reviewed at least at the end of each financial year and adjusted, if appropriate�
Sales gains and losses on disposal or transfer of tangible assets are presented in other
operating income and expenses� Sales gains or losses are calculated as the difference
between the sales price and the remaining acquisition cost�
EUR THOUSAND
Right-of-
use-assets,
buildings
Right-of-
use-assets,
machinery
and equip-
ment
Machinery
and equip-
ment
Other
tangible
assets Tota l
Acquisition cost Jan� 1 18,778 1,865 11,069 152 31,865
Translation difference (+/-) -501 4 -121 0 -617
Additions 2,990 298 435 0 3,723
Disposals -180 -19 -732 0 -931
Acquisition cost Dec. 31 21,088 2,148 10,651 152 34,040
Cumulative amortisation
Jan� 1 -4,024 -689 -10,147 0 -14,860
Translation difference (+/-) 146 -4 122 0 264
Cumulative amortisation
on disposals and reclas-
sifications
0 0 714 0 714
Depreciation -3,689 -654 -469 0 -4,812
Cumulative amortisation
Dec. 31
-7,567 -1,347 -9,780 0 -18,694
Book value Dec. 31, 2020 13,521 802 871 152 15,346
Tangible assets 2020 Tangible assets 2019
EUR THOUSAND
Right-of-
use-assets,
buildings
Right-of-
use-assets,
machinery
and equip-
ment
Machinery
and equip-
ment
Other
tangible
assets Tota l
Acquisition cost Jan� 1 15,826 1,186 11,341 145 28,499
Translation difference (+/-) 145 -1 13 0 157
Additions 3,152 841 934 7 4,935
Disposals -345 -161 -1,220 0 -1,725
Acquisition cost Dec. 31 18,778 1,865 11,069 152 31,865
Cumulative amortisation
Jan� 1 0 0 -10,695 0 -10,695
Translation difference (+/-) -8 -1 -9 0 -18
Cumulative amortisation
on disposals and reclas-
sifications
0 0 1,203 0 1,203
Depreciation -4,015 -689 -645 0 -5,350
Cumulative amortisation
Dec. 31
-4,024 -689 -10,147 0 -14,860
Book value Dec. 31, 2019 14,755 1,087 923 152 16,917
69
Basware 2020 Governance Financials
12. Leases
Accounting principles
The group has lease contracts for office spaces, vehicles and various items of office
equipment (e�g�, coffee machines, copy machines, water machines, servers etc)� All
Group's real estate contracts and car leasing contracts were analyzed to belong in the
scope IFRS 16� The Group has elected to use the exemptions applicable to the stand
-
ard on short-term lease contracts (lease period less than 12 months), and for lease
contracts for which the underlying asset is of low value� The Group is not subleasing
any of its leased assets�
There are several lease contracts that include extension and termination options�
The Group applies judgement in evaluating whether it is reasonably certain whether
or not to exercise the option to extend or terminate the lease� That is, it considers
all relevant factors that create an economic incentive for it to exercise either the
extension or termination� The Group applied the following practical expedients in
determining lease period:
• if both parties have the right to terminate the contract on a certain date and after
this certain date the contract is valid until further notice the contract is interpreted
to be terminated on the date when both parties have right to terminate the
contract;
• if the Group has right to terminate the contract before the lessor, each contract is
separately analyzed: what is the most likely outcome taking into consideration the
future prospects and investments made to the premises�
The Group is not exposed to any potential cash outflows that are not reflected in the
measurement of lease liabilities�
The carrying amounts of right-of-use assets recognised and the movements during
the period are presented in Note 11� Tangible Assets�
The maturity analysis of lease liabilities is disclosed in Note 18� Management of
financial risk�
EUR THOUSAND 1.1.-31.12.2020 1.1.-31.12.2019
Depreciation expense of right-of-use assets -4,203 -4,704
Interest expense on lease liabilities -881 -888
Expense relating to leases of low-value assets -530 -528
Total amount recognised in profit or loss: -5,613 -6,120
70
Basware 2020 Governance Financials
13. Entity-wide disclosures
Of the entity-wide information assets are shown by their location�
Assets presented below consists mainly of goodwill, intangible assets, right-of-use assets and
other non-current receivables�
EUR THOUSAND 1.1.-31.12.2020 1.1.-31.12.2019
Finland 51,834 53,380
Americas 28,895 32,844
Europe 43,828 46,958
Nordics 9,292 8,592
APAC 3,661 4,288
Group total 137,509 146,062
EUR THOUSAND 31.12.2020 31.12.2019
Acquisition cost Jan� 1 13 38
Acquisition cost Dec. 31 13 38
Non-current assets based on the location of the assets
The sales shown by the location of customers is presented in Note 2�
The Group doesn't have customers whose share of the revenue exceeds 10% of total revenue�
14. Non-current financial assets
Non-current financial assets include unquoted equity shares�
71
Basware 2020 Governance Financials
15. Current trade and other receivables
Accounting principles – Expected credit losses on trade receivables
The Group recognizes loss allowances for expected credit losses (ECL) on trade receiva-
bles in accordance with IFRS 9� For analyzing and recognition of ECL regarding trade
receivables, the simplified approach for determining the expected credit losses of IFRS
9 is applied� In this approach the credit losses are based on predetermined credit loss
rates by category� The rates are determined by past events and external sources� Loss
allowances for trade receivables are always measured at an amount equal to lifetime ECL�
For measurement of ECL for trade receivables the Group uses a provision matrix� The
provision matrix is based on historical observed default rates over the expected life of the
trade receivables and is adjusted for forward-looking estimates specific to the geographic
region and the economic environment� At every reporting date the historical observed
default rates are updated and changes in the forward-looking estimates are analyzed�
Expected credit losses have not been recorded from the value added tax that is included
in trade receivables�
Loss allowances for ECL are presented in the statement of financial position as a deduc
-
tion from the gross carrying amount of the assets� In profit or loss, the amount of ECL
(or reversal) is recognised as an impairment gain or loss in other operating expenses
category�
Contract costs
The incremental costs of obtaining a contract with a customer includes sales com-
missions related to long-term service contracts� Contracts costs are capitalized if the
recognition criteria are satisfied and the entity expects to recover those costs� The
capitalized costs are amortized on a straight-line basis over the contract term in which
the services are transferred and the revenue is recognized� Below table describes the
changes in capitalized contract costs�
EUR THOUSAND 31.12.2020 31.12.2019
Non-current receivables
Contract assets 6 168
Capitalized contract costs 2,854 3,335
Other non-current receivables 688 857
Non-current trade and other receivables total 3,547 4,361
Current receivables
Trade receivables 26,602 2 7,4 24
Contract assets 818 1,561
Capitalized contract costs 3,271 3,300
Other receivables 5,443 4,542
Current receivables total 36,134 36,827
EUR THOUSAND 31.12.2020 31.12.2019
Capitalized contract costs, opening balance 6,636 5,695
Capitalized during the period 3,204 3,819
Recognized as an expense during the period -3,715 -2,878
Capitalized contract costs, ending balance 6,125 6,636
The fair values of financial assets and liabilities are presented in Note 22 and definitions for
contract assets presented in Note 2�
72
Basware 2020 Governance Financials
16. Cash and short-term deposits
Accounting principles
Cash and cash equivalents consist of cash, short-term bank deposits that can be with-
drawn on demand and other current highly liquid investments that can be exchanged
to an amount of cash assets that is known in advance, and with a low risk of changes in
value� Items classified as cash and cash equivalents have a maximum maturity of three
months from acquisition�
17. Defined benefit plans
The Group has in Indian subsidiary an incentive scheme to commit employees, where benefit is
paid to the employee after five years in service, in case of the employment is ending�
The calculations for defined benefit plans are done according to same principles as defined
benefit plans for pensions and they predispose the Group to actuary risks like wage risk,
interest risk and risk related to expected lifetime� These plans are unfunded�
EUR THOUSAND 31.12.2020 31.12.2019
Cash and cash equivalents 40,461 31,672
Cash and short-term deposits 40,461 31,672
EUR THOUSAND 31.12.2020 31.12.2019
Opening value Jan� 1 - liability 377 327
Amounts recognised in profit and loss
Service cost, benefits earned during the year 70 70
Interest expense (+) / income (-) 25 27
Changes due to currency fluctuation -43 -3
Amounts recognised in other comprehensive income
Acturial losses (+) / gains (-) 4 2
Other changes
Benefits paid -46 -47
Ending value Dec. 31 - liability 388 377
The most significant actuarial assumptions
Discount rate (%) 6�6 % 7�2 %
Increase of wages (%) 7�0 % 7�0 %
In addition to the standard company practice of provisioning for credit losses the Group
estimates an additional provision of EUR 600 thousand related to increased uncertainty of
economic conditions in countries where the Group operates due to Covid-19 pandemic�
No significant concentrations of credit risk are associated with the receivables� The balance
sheet values equal the best to the maximum amount of the credit risk� Principles of the Group's
credit risk management are presented in Note 18�
The aging analysis of trade receivables and impairment loss
EUR
THOUSAND 2020
Impairment
provision Net 2020 2019
Impairment
provision Net 2019
Not due 20,026 -9 20,017 18,441 -8 18,433
Overdue
1-180 days 7,009 -70 6,939 8,394 -100 8,293
181-360 days 454 -212 242 873 -378 495
Over 360 days 577 - 5 74 4 879 -677 202
Additional
provision
-600 -600
Total 28,066 -1,464 26,602 28,587 -1,164 27, 4 24
73
Basware 2020 Governance Financials
18. Management of financial risk
The Group's international business involves customary financial risks such as foreign exchance
risk, interest rate risks, liquidity risks and credit risks� The risk management principles are
defined in the Treasury Policy approved by the Board of Directors� Basware Treasury is respon
-
sible for the centralized management of the financial risk�
Foreign currency risk
Basware's net sales increased by 3�2 percent (5�9%) in organic constant currencies in 2020� The
Group's main currency is euro, accounting for approximately 53 percent of net sales in
2020 (approximately 52% in 2019)� In addition to the euro area, Basware has sales in various
areas, the most significant being the United States, the United Kingdom, Sweden and Norway� In
addition, Basware has internal operations in India and Romania�
Sales in subsidiaries are carried out mainly in local currencies and do not expose the Group to
significant foreign currency transaction risk� Operational expenses, such as IT services, and
other purhaces that takes the place in non-functional currency expose the Group to foreign
exchange risk, and is considered as significant risk to profit and loss statement� In addition, the
Group is exposed to foreign currency risk through intra-company trade and funding� Internal
loans are primarily in the functional currency of the subsiadiary letting the parent company to
carry the foreign exchange risk� All outstanding interest-bearing liabilites on the reporting date
were in Euros� The most relevant transaction risk exposures arising from business operations
are in US dollar and the British pound� The Group hedged substantial foreign currency items in
the financial period according to the Policy�
The Group strategy is to hedge foreign exchange exposures of contractual and other highly
probable recurring expenses and sales according to guidelines set within the treasury policy�
Foreign currency cash flow hedges are conducted at parent company level� For hedging is
mainly used foreign currency forward and non-delivarable forward contracts� The hedged
exposures consist of future forecasted contracted cash flows in next 12 months� During 2020
the Group did not hedge translation risk� Accounting principles are presented in Note 22�
The effective portion of changes in the fair values of derivatives are recognized in other
comprehensive income�
Currency risk arises mainly from external purchases in foreign currencies (transaction risk),
net investment to foreign subsidiaries (translation risk) as well as foreign currency deniminated
items on the balance sheet�
The table below presents the fair values of foreign currency derivatives at year-end which are
recognized to Other Comprehensive Income (OCI) within equity�
The foreign exchange risk sensitivity analysis shows the impact of a change in the foreign
exchange rates of 5 percent against euro on income statement and balance sheet at the end of
2020� According to IFRS 7 sensitivity analysis of currency risk there would have had an impact
of EUR -0�4/+0�4 million (EUR -0�4/+0�4 million) on the profit before tax at the closing date�
The calculation includes foreign currency trade payables and accounts receivables and internal
loans to subsidiaries�
Changes in the equity are caused by net investment loans and foreign currency contracts
relating to and designated in cash flow hedge accounting� The sensitivity analysis on foreign
currency would have the impact of -/+ EUR 0�03 million (EUR 0�04 million) on other compre
-
hensive income� The most important currency pairs are disclosed in the table below�
2020 2019
EUR THOUSAND
Nominal
value
Positive
fair
value
Negative
fair
value
Net fair
value
Nominal
value
Positive
fair
value
Negative
fair
value
Net fair
value
Foreign-currency
derivatives 14,162 55 -413 -358 14,044 144 -66 77
74
Basware 2020 Governance Financials
EUR THOUSAND Profit & Loss Other comprehensive income
2020 +5% -5 % +5% -5 %
EUR/USD -103 103 -204 204
EUR/GBP -236 236 -20 20
EUR/SEK -11 11 0 0
EUR/NOK -1 1 0 0
EUR/INR 86 -86 -10 10
EUR/RON -13 13 -11 11
Other currencies -135 135 211 -211
-413 413 -34 34
EUR THOUSAND USD AUD GBP SEK DKK NOK RON INR
Non-current assets 26,369 823 2,713 1,362 336 1,158 415 2,907
Current assets
Cash and cash
equivalents 3,791 1,201 1 13 40 188 1,719 204
Trade and other
receivables 6,394 1,507 4,331 2,016 885 1,293 155 661
Current liabilities
Non-interest bearing
liabilities 7,463 1,959 4,230 1,265 1,593 1,682 984 820
Nominal values 2020
Nominal values 2019
2019 +5% -5 % +5% -5 %
EUR/USD -275 275 -357 357
EUR/GBP -131 131 -46 46
EUR/SEK -26 26 0 0
EUR/NOK -36 36 0 0
EUR/INR 89 -89 -11 11
EUR/RON -2 2 -11 11
Other currencies -29 29 382 -382
-410 410 -43 43
EUR THOUSAND USD AUD GBP SEK DKK NOK RON INR
Non-current assets 30,085 443 3,535 1,156 446 603 667 3,783
Current assets
Cash and cash
equivalents 3,277 2 ,774 2 1,912 38 295 1,255 176
Trade and other
receivables 7,663 1,506 3,239 2,096 770 1,865 315 563
Current liabilities
Non-interest bearing
liabilities 8,119 1,647 2,773 1,540 1,009 2,124 897 862
Foreign currency-denominated assets and liabilities translated into the euros at the exchange
rates of the closing date are as follows:
75
Basware 2020 Governance Financials
Interest rate risk
The objective of the risk management with regard to interest rate risk is to diminish the
negative impacts of changes in interest rates on the Group's financial performance� Changes in
market rates are impacting interest rates of loan portfolio as well as interest-bearing payables
and receivables�
The Group is exposed to cash flow interest rate risk through its loan portfolio which arises
from floating rate loans� In order to manage and diversify the risk the Group has both fixed
and floating rate loans and possibility to apply interest rate derivatives for hedging� In the last
financial period the Group has not used derivatives against the interest rate risk�
On December 31, 2020 the Group had a total of EUR 68�8 million (EUR 65�0 million) interest-
bearing liabilities, excluding leasing-liabilities, of which a total of EUR 55�7 million variable-rate
loans� At the closing date all external loans have been in Euro with the average cost of debt of
14�16 percent (12�16 %) and average maturity of 3�5 years�
According to IFRS 7 standard calculated sensitivity analysis represents the effect of variable
rate interest-bearing liabilities on profit before taxes if interest rate would have increased
or decreased by 1 percentage with all other variables constant� For interest rate analysis the
impact would have been -0�2/+0�0 million euros (-0�3/+0�0 million)� At the closing date the
Group didn’t have significant interest-bearing assets or other financial items that would be
exposed to market rate changes�
The following table illustrates the effect of a sensitivity analysis on interest rates�
Liquidity risk and refinancing risk
Liquidity risk is the risk that current funds and existing loan facilities are insufficient which
may affect the Group's ability to deliver on the long-term strategy� Liquidity risk managed by
securing the availability of long-term funding and maintaining sufficient cash reserves� The
refinancing risk is managed by using various funding sources and distributing maturities of
loans� The Group maintains sufficient liquidity and its cash and cash equivalents was EUR 40�5
million on 31 December 2020�
Below is presented changes in the Group's debt portolio in the financial year�
The Group’s liquidity remained stable during the financial year� The Group's ability to secure
financing may affect its ability to deliver on the strategy� The tables below describe the maturity
structure of the interest-bearing liabilities� The figures are revealed with inclusion of interest
and principal repayment, figures have not been discounted�
EUR THOUSAND 2020 2019
Change in interest rates +1% -1% +1% -1%
Interest-bearing liabilities -237 0 -338 0
EUR
THOUSAND 2019
Cash flow
(+/-)
Non-cash
flow (+/-) 2020
Non-current
Loans from financial
institutions 48,947 7,76 0 56,706
Bond 9,943 16 9,958
Current
Loans from financial
institutions 1,996 -1,819 1,996 2,173
Leasing liabilities 16,804 -4,257 2,827 1 5, 374
Total 77,690 84,212
76
Basware 2020 Governance Financials
EUR THOUSAND
Balance
sheet
value Cash flow
less
than
1 year 1-3 years 3-5 years
over 5
years
Loans, interest-
bearing 68,837 115,881 5,148 22,728 88,005 0
Leasing liabilities,
interest-bearing 1 5, 374 17,875 4,608 6,925 4,351 1,990
Foreign currency
derivatives 357 357 357 0 0 0
Trade and other
payables 10,196 10,196 10,196 0 0 0
Total 94,765 144,309 20,309 29,654 92,356 1,990
Maturity distribution of financial liabilities 2020
Maturity distribution of financial liabilities 2019
Credit risk
The sales receivables of the Group are widely spread among a customer base and do not
include significant concentration of credit risks� Business management regularly monitors the
payment of sales receivables as part of the management of customer accounts� The Group has
not used surety bonds to secure sales receivables�
Impairment losses recognized during the financial period and the age distribution of accounts
receivables are presented in Note 15�
Capital management
Shareholders’ equity reported in the Group balance sheet is managed as capital� The Group's
capital management aims to ensure the continuity of its operations (going concern) and
increase the value of shareholder’s investment�
The capital structure can be adjusted by decisions on, e�g�, distribution of dividend, share
repurchase and share issues� The resolutions of the Annual General Meeting and the authoriza
-
tions of the Board of Directors are presented in the Annual Report� Additional information on
the share and share issue is presented under Share and Shareholders�
The Group monitors the financial covenants as part of its business and strategy planning� In
order to ensure sufficient headroom in relation to covenant thresholds and maximum levels
the group forecasts the future values and provide the management with the information on
financial and risk positions� Any covenant was not breached in the financial period ending 31
December 2020�
The Group aims to maintain a strong equity ratio and a moderate gearing ratio� At the end of
2020 the equity ratio was 36�7 percent (41�9%) and gearing ratio 53�0 percent (48�9%)� Gearing
ratio excluding leasing liabilities was 34�4 percent (31�1%)�
EUR THOUSAND
Balance
sheet
value Cash flow
less
than
1 year 1-3 years 3-5 years
over 5
years
Loans, interest-
bearing 60,885 118,163 2,334 11,965 103,863 0
Leasing liabilities,
interest-bearing 16,804 19,562 4,165 6,279 4,880 4,238
Foreign currency
derivatives 77 77 77 0 0 0
Trade and other
payables 10,998 10,998 10,998 0 0 0
Total 88,764 148,800 17,574 18,244 108,744 4,238
77
Basware 2020 Governance Financials
EUR THOUSAND
Shareholders'
equity
Share
premium
account
Invested
non-restricted
equity
Other
reserves
Own
shares Total
1�1�2020 3,528 1,187 110,388 653 -98 115,659
Decrease of
treasury shares -98 98 0
Transactions that
do not affect the
number of shares /
Cash flow hedges -363 -363
31.12.2020 3,528 1,187 110,290 290 0 115,296
Shareholders’ equity 2020
Shareholders’ equity 2019
19. Shareholders’ equity
Accounting principles
Costs related to the issue or purchase of equity instruments are recorded as a reduc
-
tion of shareholders' equity� Own equity instruments that are reacquired (treasury
shares) are recognised at cost and deducted from equity�
2020 2019
Number of outstanding shares Jan� 1 14,397,639 14,370,476
Incentive plan (+) 17,821 27,163
Number of outstanding shares Dec. 31 14,415,460 14,397,639
Treasury shares Jan� 1 4,297 31,460
Share issue without consideration (+) 19,000 0
Incentive plan (-) -17,821 -27,163
Treasury shares Dec. 31 5,476 4,297
Number of shares
Other reserves
Other reserves include the fair value reserve, which includes the cash flow hedges and the
increase in the value of the Analyste deal shares between the publication and realization of the
deal in 2006�
Treasury shares
The treasury shares reserve includes the acquisition cost of own shares held by the Group�
Warrants
Basware entered into a loan agreement with Bregal Milestone LLP with detachable warrants
entered into at the same time (On November 23, 2020 the loan was transferred to Macquarie
Principal Finance PTY Limited, UK Branch)� On October 9, 2020, Basware received flagging
notifications from Bregal Milestone and Briarwood Chase Management LLC according to which
Briarwood Chase Management LLC had acquired all warrants from Bregal Milestone�
The management used judgement in valuing the warrants at fair value� The loan is calculated
at amortized cost applying EIR� As a result of the share issue in June 2020 the warrants were
adjusted to entitle their holder to subscribe for a total of 1,001,000 shares in the company
(before the adjustment, 1,000,000 shares) at an adjusted subscription price of EUR 29�8764 per
share (before the adjustment, the subscription price per share was EUR 29�9158)� The warrants
are exercisable at any time until 20 business days prior to the 19 September 2024�
Dividends
The Board of Directors proposes to the Annual General Meeting that no dividend will be paid for
the year 2020 (2019: 0 euros per share)�
EUR THOUSAND
Shareholders'
equity
Share
premium
account
Invested
non-restricted
equity
Other
reserves
Own
shares Total
1�1�2019 3,528 1,187 110,928 832 -638 115,837
Decrease of
treasury shares -540 540 0
Transactions that
do not affect the
number of shares /
Cash flow hedges -178 -178
31.12.2019 3,528 1,187 110,388 653 -98 115,659
The nominal value of one share is not determined�
78
Basware 2020 Governance Financials
20. Trade and other liabilities
EUR THOUSAND 31.12.2020 31.12.2019
Long-term trade and other liabilities
Contract liabilities 2,791 3,184
Long-term trade and other liabilities total 2,791 3,184
Short-term trade and other liabilities
Trade liabilities 6,178 7,600
Contract liabilities 19,177 15,260
Other liabilities 24,292 20,867
Short-term trade and other liabilities total 49,648 43,727
EUR THOUSAND 31.12.2020 31.12.2019
Opening balance Jan� 1 266 198
Additions 0 1,656
Disposals -266 -1,588
Closing balance Dec. 31 0 266
Accrued expenses include personnel related expenses EUR 17,054 thousand (EUR 14,739
thousand)�
The fair values of financial assets and liabilities are presented in Note 22 and definitions for
contract liabilities presented in Note 2�
21. Provisions
Accounting principles
A provision is recognized when the Group has a present legal or constructive obliga
-
tion as a result of a past event, it is probable that the obligation will have to be settled,
and the amount of the obligation can be reliably estimated� Provisions are measured
at the present value required in order to cover the obligation� The present value
factor used in the calculation of the present value is selected so that it represents the
market insight into the time value of money and liability-related risks at the time of the
assessment�
At the end of April 2019, Basware launched a productivity programme� Organizational changes
and optimization resulted in a headcount reduction of 64 employees globally� Negotiations with
employees have been carried out in accordance with local legislation in each location affected�
79
Basware 2020 Governance Financials
22. Financial assets and liabilities
Accounting principles
A financial instrument is any contract that gives rise to a financial asset of one entity
and a financial liability or equity instrument of another entity�
Financial assets
The financial assets are categorized as follows:
• financial asset measured at amortised costasset measured at amortised cost
• financial asset measured at fair value through other comprehensive income
• financial asset measured at fair value through profit or loss
A financial asset is measured at amortised cost when both of the following conditions are met:
• the objective is to hold financial assets to collect contractual cash flows and
• the contractual terms of the financial asset give rise on specified dates to cash flows that are
solely payments of principal and interest on the principal amount outstanding�
A financial asset is measured at fair value through other comprehensive income when both of
the following conditions are met:
• the objective is to collect contractual cash flows and to sell financial assets and
• the contractual terms of the financial asset give rise on specified dates to cash flows that are
solely payments of principal and interest on the principal amount outstanding�
A financial asset is measured at fair value through profit or loss unless it is measured at
amortised cost or at fair value through other comprehensive income� On initial recognition of
an equity instrument that is not held for trading, the Group may irrevocably elect to present
subsequent changes in fair value in other comprehensive income� This election is made on an
investment by investment basis�
The categorization is based on the purpose of the acquisition of the financial assets and it
is performed in connection with the original acquisition� Financial assets are classified as
non-current assets if they mature in more than 12 months� If they are to be held for less than 12
months financial assets are disclosed as current assets�
All purchases and sales of financial assets are recognized at the transaction date, which is the
date on which the Group commits to purchase or sell the financial instruments� A financial asset
is derecognised when the rights to receive cash flows from the asset have expired the Group
has transferred substantially all the risks and rewards of the asset�
Impairment of financial assets
Trade receivables are measured at amortised cost less impairment losses� The principles for
impairment of trade receivables are presented in Note 15� For the other financial assets the
impairments are recognized based on Expected Credit Losses� In addition, the Group assesses
at each reporting date whether there is objective evidence that a financial asset is impaired�
Financial liabilities
The Group's financial liabilities include trade and other payables and financial liabilities that are
measured at amortised cost� Financial liabilities are classified as non-current liabilities if they
mature in more than 12 months� Liabilities maturing in less than 12 months are classified as
current�
Derivates
Derivative financial instruments are recognized at fair value on the trade date and subsequently
revalued at the fair value on each reporting date� For all derivatives the fair value calculation
is based on using the observable market data for foreign currency and interest rate price
quotation on the reporting date� Derivatives are included in current assets or liabilities and on
the reporting date, except derivatives maturities greater than 12 months after the balance sheet
date, which are classified as non-current assets or liabilities�
The Group applies hedge accounting for foreign currency cash flow hedging� For foreign
exchange forwards and swaps not qualifying for hedge accounting changes in fair values are
recognised in income statement in financial income and expenses�
Hedge relationship qualifies for hedge accounting only if the specific requirements are met� At
inition the hedge relationships have to be formally documented and consist of eligible hedge
instrument and hedged item(s)� The documentation defines the relationship between the
designated hedging instrument(s) and the designated hedged item(s), the nature of the risk
being hedged with the company’s risk management objective and strategy� The designated
items have to be identifiable and reliably measurable� In addition, analysis of the sources for the
ineffectiveness are documented�
The hedge effectiveness is assessed at inception and after that ongoing basis considering the
economic relationship, credit risk and the hedge ratio� Effectiveness is assessed using qualita
-
tive methodology� In cash flow hedge accounting is used foreign currency forward and non-
deliverable forward contracts to hedge exposures in foreign currency cash flows which ensures
80
Basware 2020 Governance Financials
economic relationship� Economic relationship exist between the designated hedged item and
the designated hedging instrument which means that the values of these items move in the
opposite directions because of the common underlying risk� Selecting appropriate stakeholders
enables assessment of credit risk and ensuring that the effect of credit risk is not dominating
the value changes in the fair values� The hedge ratio in hedge accounting is the same used for
actual hedging�
Forward contracts are designated with the full fair value to hedge relationships, meaning spot
and forward elements are not separated� For cash flow hedges the effective portion of changes
in the fair value of hedging instruments are recognised through other comprehensive income
(OCI) to hedge reserve within equity� When the hedged transaction affects the income state
-
ment the hedging instruments recognised in OCI are transferred to income statement� Accumu-
lated changes in fair values within equity are recognised in income statement in adjustment of
purchases or sales in the same period when the hedged item affects income statement�
Any ineffective portion of hedges under hedge accounting treatment are reclassified imme
-
diately to income statement in financial gain or expense� If hedging instrument designated in
the cash flow hedge accounting is no longer valid or a hedge relationship doesn't meet the
criteria for hedge accounting, the cumulative change in the fair value the hedging instrument
will remain in the equity until a recognition of the hedged item in the income statement� The
cumulative change in the fair value of the hedging instrument is reclassified to income state
-
ment to adjustment item immediately if the hedged cash flow is not firm or highly probable and
not expected to realize in the future�
Changes in the fair values of foreign exchange derivatives are recognized in financing income
and expenses if hedged items are recognized as assets or liabilities�
Cash flow hedging resulted in the net profit of EUR 23 thousand in the income statement and
the balance sheet impact (OCI) was EUR 358 thousand at the end of 2020�
81
Basware 2020 Governance Financials
EUR THOUSAND Note
Derivatives, hedge
accounting
Fair value through
profit or loss Amortized cost
2020 Carrying
amount 2020 Fair value
Financial assets non-current
Unlisted share investments 14 13 13 13
Other receivables 14 688 688 688
Financial assets current
Trade and other receivables 15 27,807 27,807 27,807
Derivatives 18 55 55 55
Cash and cash equivalents 16 40,461 40,461 40,461
Financial assets 69,024 69,024
Financial liabilities non-current
Loans, interest-bearing
Leasing liabilities, interest-bearing 66,665 66,665 77,299
11,647 11,647 11,647
Financial liabilities current
Loans, interest-bearing 2,173 2,173 2,173
Leasing liabilities, interest-bearing 3,727 3,727 3,727
Trade and other payables 20 10,196 10,196 10,196
Derivatives 18 413 413 413
Financial liabilities 94,821 105,455
82
Basware 2020 Governance Financials
EUR THOUSAND Note
Derivatives, hedge
accounting
Fair value through
profit or loss Amortized cost
2019 Carrying
amount 2019 Fair value
Financial assets non-current
Unlisted share investments 14 38 38 38
Other receivables 14 857 857 857
Financial assets current
Trade and other receivables 15 27,642 27,642 27,642
Derivatives 18 144 144 144
Cash and cash equivalents 16 31,672 31,672 31,672
Financial assets 60,353 60,353
Financial liabilities non-current
Loans, interest-bearing
Leasing liabilities, interest-bearing 58,889 58,889 70,059
13,412 13,412 13,412
Financial liabilities current
Loans, interest-bearing 1,996 1,996 1,996
Leasing liabilities, interest-bearing 3,392 3,392 3,392
Trade and other payables 20 10,989 10,989 10,989
Derivatives 18 66 66 66
Financial liabilities 88,678 99,848
83
Basware 2020 Governance Financials
Financial instruments that are measured at fair value in the balance sheet are presented
according to fair value measurement hierarchy:
Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities�
Level 2: inputs other than quoted price included within Level 1 that are observable for the
assets or liability, either directly (that is, as prices) or indirectly (that is, derived from prices)
Level 3: inputs for the assets or liability that is not based on observable market data (unobserv
-
able inputs)�
In determining the values of the financial assets and liabilities, the following price quotations,
assumptions and valuation models have been used�
Long-term financial assets
Long-term financial assets consist of unlisted share investments and other receivables�
Unquoted equity shares of EUR 13 thousand are classified as level 3 in the fair value measure
-
ment hierarchy�
Short-term financial assets
Trade and other receivables are measured at amortized cost less impairment losses� Financial
assets arising from derivative financial instruments of EUR 55 thousand are classified as level 2�
Long-term financial liabilities
Long-term loans from financial institutions consist of a loan from Macquarie Principal Finance
PTY Limited, UK Branch (the Loan was transferred from Bregal Milestone LLP on November
23, 2020 with no changes made to the terms and conditions of the loan) and other institutions�
Fair value of the loan from Macquarie Principal Finance PTY is measured to reflect the amount
the Group would need to pay if it would repay the loan in full at the end of reporting period�
The loan is classified as level 2 in the fair value measurement hierarchy� The loan has an exit
fee which accrues evenly over the loan period� The value of the exit fee at maturity equals 40
percent of the loan amount� The value of the loan as of 31 December, 2020 would approximately
be 76�7 million euros if calculated based on discounted cash flows� Other loans are at fixed or
variable rate and their fair values are considered to correspond to the book values as diver
-
gences between the values are assessed as immaterial�
Short-term financial liabilities
The fair values of short-term loans from financial institutions are considered to correspond to
the book values� Trade payables and other liabilities are measured at amortised cost� Financial
liabilities arising from derivative financial instruments of EUR 413 thousand are classified as
level 2�
The maturity distribution of financial liabilities is presented in Note 18�
84
Basware 2020 Governance Financials
23. Auditor fees
24. Commitments and contingent liabilities
EUR THOUSAND 1.1.-31.12.2020 1.1.-31.12.2019
Audit fees -258 -291
Tax consultancy 0 0
Other fees and services -4 0
Auditor fees total -262 -291
EUR THOUSAND 31.12.2020 31.12.2019
Own guarantees
Guarantees 1,262 1,149
Commitments on behalf of subsidiaries
Guarantees 822 298
Other commitments
Maturing in less than 1 year 3,455 3,173
Maturing in 1-5 years 2,876 4,899
Total 6,331 8,072
Commitments and contingent liabilities total 8,415 9,518
Other commitments include leases and other rental not in scope of IFRS 16, as well as commit-
ments arising from license agreements� Obligations from long term service agreements are
not included� The group does not have pledges, mortgages or guarantees on behalf of external
parties�
The Group’s Indian subsidiary is in receipt of Show Cause Notice pertaining to Indian financial
year 2017-2018 and 2018-2019 for goods and service tax liability and if services are considered
to be Intermediary services or export of services� This issue is related to a substantial number
of global IT companies operating in India� The Group has not recorded any provision related to
the Notice as the Group considers it to be more likely than not that it will not realize�
25. Related party transactions
Domicile Country
Parent company
holding, %
Basware International Oy Espoo Finland 100
Basware GmbH Düsseldorf Germany 100
Basware AB Stockholm Sweden 100
Basware B�V� Amsterdam Netherlands 100
Basware A/S Herlev Denmark 100
Basware, Inc� Delaware United States 100
Basware SAS Paris France 100
Basware AS Oslo Norway 100
Basware Pty Ltd Chatswood Australia 100
Basware SRL Iasi Romania 100
Basware India Private Limited Chandigarh India 100
Basware Belgium NV Aalst Belgium 100
Basware Holdings Ltd� London Great Britain 100
Basware Shared Services Ltd� London Great Britain 100
Foreign branches
The parent company has branches in India, Chandigarh (reg� no F03347) and Russia, Moscow
(reg� no 16926�1)�
Basware UK subsidiaries, Basware Holdings Ltd� and Basware Shared Services Ltd� have applied
exemption from the local statutory audit requirements under section 479A of the Companies
Act 2006�
Basware GmbH is exempt from the duty of corporations to audit and disclose financial state
-
ments pursuant to German legislation (§ 264 III HGB)�
85
Basware 2020 Governance Financials
26. Events after the reporting period
On January 14, 2021, the Board of Directors of Basware Corporation has resolved on an issue
of 43,000 new shares in the company to the company itself without consideration pursuant
to the share issue authorization granted to it by the Annual General Meeting held on June 4,
2020� The new shares to be issued to the company will be used for reward payments under
the company's incentive programs� The new shares to be issued are of the same class as the
existing shares in the company� The total number of the company's shares after the share issue
is 14,463,936 shares, of which 48,476 shares in total are held by the company�
86
Basware 2020 Governance Financials
Parent company income statement (FAS) Parent company balance sheet (FAS)
EUR Note 1.1.-31.12.2020 1.1.-31.12.2019
NET SALES 2 76,404,254.64 76,190,873.76
Other operating income 3 104,306�00 237,475�36
Materials and services 4 -16,603,144�76 -18,205,324�20
Employee benefits expenses 5 -27,577,060�55 -28,327,442�68
Depreciation and amortization 6 -9,754,876�74 -8,855,304�69
Other operating expenses 7 -24,205,080�20 -42,491,162�05
Operating profit/loss -1,631,601.61 -21,450,884.50
Financial income 8 886,438�27 1,375,862�55
Financial expenses 8 -11,530,950�03 -8,712,567�29
Dividend from group companies 200,000�00 2,380,429�88
Impairment on investments 12 -17,884�00 0�00
Profit/loss before appropriation and taxes -12,093,997.37 -26,407,159.36
Income tax expense 9 0�00 0�00
PROFIT/LOSS FOR THE PERIOD -12,093,997.37 -26,407,159.36
EUR Note 31.12.2020 31.12.2019
ASSETS
Non-current assets
Intangible assets 10 36,566,585�97 37,406,093�16
Tangible assets 11 677,978�80 819,306�74
Investments 12 107,583,005�73 113,964,386�64
Long-term trade and other receivables 13 645,316�57 1,005,066�23
Non-current assets 145,472,887.07 153,194,852.77
Current assets
Short-term trade and other receivables 14 23,008,460�06 25,841,027�28
Cash and cash equivalents 32,370,471�67 21,481,183�60
Current assets 55,378,931.73 47,322,210.88
TOTAL ASSETS 200,851,818.80 200,517,063.65
EQUITY AND LIABILITIES
Shareholders' equity
Share capital 3,528,368�70 3,528,368�70
Share premium account 1,118,161�00 1,118,161�00
Fair value reserve -357,511�42 77,322�04
Other reserves 115,939,220�13 116,036,928�54
Retained earnings -35,149,288�89 -8,839,837�94
Result for the period -12,093,997�37 -26,407,159�36
Shareholders' equity 15 72,984,952.15 85,513,782.98
Current provisions 16 0�00 0�00
Liabilities
Long-term liabilities 17 68,901,805�96 59,066,354�54
Short-term liabilities 18 58,965,060�69 55,936,925�98
Total liabilities 127,866,866.65 115,003,280.52
TOTAL EQUITY AND LIABILITIES
200,851,818.80 200,517,063.65
87
Basware 2020 Governance Financials
Parent company cash flow statement (FAS)
EUR 1.1.-31.12.2020 1.1.-31.12.2019
Cash flow from operating activities
Result for the period -12,093,997�37 -26,407,159�36
Adjustments for result
Planned depreciations 9,754,876�74 8,855,304�69
Proceeds from sale of non-current assets 46,177�46 0�00
Unrealized exchange gains and losses 810,886�35 -278,222�43
Finance income and expenses 9,684,729�72 5,185,653�32
Other non-cash items -766,477�46 -94,818�79
Working capital changes -8,736,187�40 -1,973,293�44
Interest paid -72,669�22 -1,258,435�10
Dividends received 700,000�00 1,880,813�74
Interest received 381,335�11 974,902�50
Other financial items in operating activities -426,385�25 -517,874�02
Net cash from operating activities -717,711.32 -13,633,128.89
Cash flow from investing activities
Purchase of tangible and intangible assets -8,816,475�72 -10,056,028�22
Proceeds from sale of tangible and intangible assets 6,500�00 -16,659�09
Proceeds from repayments of loans 6,356,996�74 4,501,767�59
Addition / deduction of cash equivalents 817,979�14 5,682,708�57
Net cash used in investing activities -1,634,999.84 111,788.85
Cash flow before financing activities -2,352,711�16 -13,521,340�04
EUR 1.1.-31.12.2020 1.1.-31.12.2019
Cash flow from financing activities
Repayment of current borrowings -1,995,972�00 -22,295,972�00
Addition / deduction of current borrowings 13,791,066�35 5,688,827�57
Proceeds from borrowings 1,446,904�88 43,879,726�76
Repayment of non-current borrowings 0�00 -20,000,000�00
Net cash used in financing activities 13,241,999.23 7,272,582.33
Net change in cash and cash equivalents 10,889,288.07 -6,248,757.71
Cash and cash equivalents at the beginning of period 21,481,183�60 27,729,941�31
Cash and cash equivalents at the end of period 32,370,471.67 21,481,183.60
The company includes intra-group accounts in the financing activities�
88
Basware 2020 Governance Financials
NOTES TO THE PARENT COMPANY FINANCIAL
STATEMENTS (FAS)
1. Accounting principles
Basware Corporation’s financial statements have been prepared in accordance with the Finnish
Accounting Act�
Transactions in foreign currencies
Transactions in foreign currencies are recorded at the exchange rates prevailing at the transac
-
tion dates� The unsettled balances on foreign currency receivables and liabilities are valued
at the rates of exchange prevailing at the end of the accounting period� Foreign exchange
gains and losses related to normal business operations are entered in the appropriate income
statement account before operating profit and foreign exchange gains and losses associated
with financing are entered as a net amount under financial income and expenses�
Revenue recognition
Parent company applies the same revenue recognition principles as the Group� Revenue
recognition principles of the Group are presented in Note 2�
Other operating income
Other operating income includes proceeds from the sale of business operations and property,
plant and equipment and rental income�
Research and development costs
Research expenses are booked as an expense as they are incurred� Costs related to the
adoption of new technology or development of a new generation of projects are capitalized,
recognized and amortized over the useful life of 3–5 years� In determining the useful life, the
obsolescence of technology and the typical life cycle of products in the industry are taken
into consideration� Amortization starts once the product is ready for commercial utilization�
Maintenance of existing products and minor enhancements are recognized as they are incurred�
Public subsidies related to research and development are recognized through profit or loss in
the periods during which the corresponding costs are recognized as expenses�
Pensions
The statutory pension coverage for employees is provided through insurance policies taken out
with a pension institution� The statutory pension expenses are recognized as expenses in the
year they are incurred�
Intangible assets
Intangible assets are recognized at the original acquisition cost less accumulated depreciation
according to plan and possible impairment� Public subsidies related to the acquisition of an
intangible asset are deducted from the acquisition cost of the asset and recognized as income
by reducing the depreciation charge of the asset they are related to� The expected useful lives
of intangible assets are 3–10 years� The useful lives are reviewed at the end of each financial
year and are adjusted if needed�
Tangible assets
Tangible assets are recognized in the balance sheet at the original acquisition cost less accumu
-
lated depreciation�
The useful lives of tangible assets are 3–5 years�
Investments
The company’s subsidiary shares and other shares in the investments in non-current assets are
valued at acquisition cost or, if lower, at fair value�
Financial instruments
Financial instruments are recognized at fair value in accordance with Accounting Act section
5: 2a� The accounting principles of hedge accounting are presented in Note 18 and Note 22
of group financial statements�
Provisions
A provision is recognized when the Group has a present legal or constructive obligation as a
result of a past event, it is probable that the obligation will have to be settled, and the amount
of the obligation can be reliably estimated�
Leases
Leasing payments are recognized as annual expenses�
Income taxes
Income taxes have been recognized in accordance with Finnish tax legislation�
Income taxes include the income tax payments for the period based on the profit for the period,
taxes for prior periods and tax refunds� Deferred taxes are not included in the parent’s income
statement and balance sheet�
89
Basware 2020 Governance Financials
2. Net sales
Net sales by revenue type
Below is breakdown of revenue by type� Revenue by type is not directly comparable with group
revenue because figures reported by parent company include intra-group revenue�
3. Other operating income
4. Materials and services
EUR THOUSAND 1.1.-31.12.2020 1.1.-31.12.2019
Cloud revenue
SaaS 35,349 29,919
Transaction services 23,871 25,731
Other cloud revenue 60 46
Cloud revenue total 59,281 55,696
Non-cloud revenue
Maintenance 9,682 13,010
License sales 193 736
Consulting services 7,518 6,678
Other non-cloud revenue -269 71
Other than cloud revenue total 17,124 20,495
Revenue total 76,404 76,191
EUR THOUSAND 1.1.-31.12.2020 1.1.-31.12.2019
Gain on sale of assets 23 0
Other operating income 81 237
Other operating income total 104 237
EUR THOUSAND 1.1.-31.12.2020 1.1.-31.12.2019
Purchases during the financial period -15,614 -1 7,0 74
Services purchased -989 -1,132
Total -16,603 -18,205
EUR THOUSAND 1.1-31.12.2020 1.1-31.12.2019
Finland 36,315 35,300
Export 40,089 40,891
Total 76,404 76,191
Net sales by location of customer
In 2019 and 2020, other operating income mainly consists of other proceeds related to divestment�
Salaries and fees paid to each member of the management are detailed in Note 5 to the
consolidated financial statement�
5. Personnel and employee benefits
EUR THOUSAND 1.1-31.12.2020 1.1-31.12.2019
Salaries paid to CEO and the Board of Directors -817 -1,501
Salaries paid to other personnel -22,715 -22,304
Pension expenses -3,139 -3,732
Other personnel expenses -906 -790
Total -27, 57 7 -28,327
Personnel expenses
90
Basware 2020 Governance Financials
1.1-31.12.2020 1.1-31.12.2019
Personnel average for the period 347 353
Personnel at the end of the period 346 341
Number of personnel
6. Depreciation and amortization
8. Finance income and expenses
7. Other operating expenses
EUR THOUSAND 1.1.-31.12.2020 1.1.-31.12.2019
Intangible assets -9,565 -8,631
Tangible assets -190 -224
Total -9,755 -8,855
EUR THOUSAND 1.1.-31.12.2020 1.1.-31.12.2019
Other interest and financial income
From group companies 845 1,233
From others 41 143
Other interest and financial income 886 1,375
Interest and financial expenses
To group companies -1,283 -297
To others -10,248 -8,416
Impairment on investments -18 0
Other interest and financial expenses total -11,549 -8,713
Total -10,663 -7, 3 37
EUR THOUSAND 1.1.-31.12.2020 1.1.-31.12.2019
Income taxes from previous financial periods 0 0
Total 0 0
EUR THOUSAND 1.1.-31.12.2020 1.1.-31.12.2019
Rents -1,376 -1,162
Non-statutory employee benefits -387 -451
Travelling -313 -843
Marketing -3,531 -3,598
IT and telephone -904 -1,007
Auditor fees -171 -206
Other expenses -17,523 -35,224
Other operating expenses total -24,205 -42,491
Audit fees -167 -206
Tax consultancy 0 0
Other fees and services -4 0
Audit fees total -171 -206
9. Direct taxes
The deferred tax asset arising from accumulated losses total of 4�0 (6�9) million euros, and from
non-deductible interests total of 17�2 (6�6) million euros, has not been recognized on the balance
sheet� The postponed R&D amortizations are booked as deferred tax asset on the Group
balance sheet�
91
Basware 2020 Governance Financials
10. Intangible assets
Intangible assets 2020
Intangible assets 2019
EUR THOUSAND Development costs Intangible rights Goodwill/merger loss
Other long-term
investments
Assets, unfinished
projects Tot al
Acquisition cost Jan� 1 63,503 17,846 17,625 288 8,118 107,380
Additions 74 4 650 0 0 7, 330 8,725
Disposals 0 0 0 0 0 0
Reclassifications between items 1,405 0 0 0 -1,405 0
Acquisition cost Dec. 31 65,652 18,496 17,625 288 14,044 116,104
Cumulative amortisation Jan� 1 -37, 551 -14,726 -17,625 -72 0 -69,973
Cumulative amortisation on disposals and reclassifications 0 0 0 0 0 0
Amortisation -8,220 -1,309 0 -35 0 -9,565
Cumulative amortisation Dec. 31 -45,771 -16,035 -17,625 -107 0 -79,538
Book value Dec. 31 19,881 2,460 0 182 14,044 36,566
EUR THOUSAND Development costs Intangible rights Goodwill/merger loss
Other long-term
investments
Assets, unfinished
projects Tot al
Acquisition cost Jan� 1 50,053 17,437 17,625 64 12,895 98,0 74
Additions 2,782 408 0 224 5,890 9,306
Disposals 0 0 0 0 0 0
Reclassifications between items 10,668 0 0 0 -10,668 0
Acquisition cost Dec. 31 63,503 17,846 17,625 288 8,118 107,380
Cumulative amortization Jan� 1 -30,508 -13,161 -17,625 -48 0 -61,342
Cumulative amortisation on disposals and reclassifications 0 0 0 0 0 0
Amortisation -7,043 -1,565 0 -24 0 -8,632
Cumulative amortisation Dec. 31 -37, 5 5 1 -14,726 -17,625 -72 0 -69,973
Book value Dec. 31 25,952 3,119 0 217 8,118 37,406
92
Basware 2020 Governance Financials
11. Tangible assets 12. Investments
Tangible assets 2020
Tangible assets 2019
EUR THOUSAND
Machinery and
equipment
Other tangible
assets Total
Acquisition cost Jan� 1 6,954 152 7,1 07
Additions 49 0 49
Disposals -106 0 -106
Acquisition cost Dec. 31 6,898 152 7,050
Cumulative amortization Jan� 1 -6,287 0 -6,287
Cumulative amortisation on disposals
and reclassifications
106 0 106
Amortization -190 0 -190
Cumulative amortization Dec. 31 -6,372 0 -6,372
Book value Dec. 31 526 152 678
EUR THOUSAND 1.1.-31.12.2020 1.1.-31.12.2019
Shares in group companies
Book value Jan� 1 98,075 98,075
Book value Dec. 31 98,075 98,075
Other shares
Book value Jan� 1 13 38
Book value Dec. 31 13 38
Receivables from group companies
Loan receivables from group companies 9,495 15,852
Investments total 107,583 113,965
EUR THOUSAND
Machinery and
equipment
Other tangible
assets Total
Acquisition cost Jan� 1 6,196 145 6,341
Additions 771 7 778
Disposals -13 0 -13
Acquisition cost Dec. 31 6,954 152 7,1 07
Cumulative amortization Jan� 1 -6,073 0 -6,073
Cumulative amortisation on disposals
and reclassifications
10 0 10
Amortization -224 0 -224
Cumulative amortization Dec. 31 -6,287 0 -6,287
Book value Dec. 31 667 152 819
93
Basware 2020 Governance Financials
Subsidiary shares
Foreign branches
The parent company has branches in India, Chandigarh (reg�no� F03347) and Russia, Moscow
(reg�no� 16926�1)�
Basware UK subsidiaries, Basware Holdings Ltd� and Basware Shared Services Ltd� have applied
exemption from the local statutory audit requirements under section 479A of the Companies
Act 2006�
Basware GmbH is exempt from the duty of corporations to audit and disclose financial state
-
ments pursuant to German legislation (§ 264 III HGB)�
13. Non-current receivables
14. Current receivables
EUR THOUSAND 31.12.2020 31.12.2019
Rent deposits 7 7
Accrued employee expenses and other prepaid expenses 638 998
Total 645 1,005
EUR THOUSAND 31.12.2020 31.12.2019
Accounts receivables 5,662 5,967
Receivables from group companies
Accounts receivables 10,262 7,100
Interest receivables 0 0
Loan receivables 317 1,135
Other receivables 2,910 8,393
Total 13,488 16,628
Prepaid expenses and accrued income 3,698 2,867
Other receivables 159 380
Total 3,858 3,247
Current receivables total 23,008 25,841
Prepaid expenses and accrued income
Accrued employee expenses 7 0
Other prepaid expenses and accrued income 3,692 2,867
Total 3,698 2,867
Domicile Country
Parent company
holding, %
Basware International Oy Espoo Finland 100
Basware GmbH Düsseldorf Germany 100
Basware AB Stockholm Sweden 100
Basware B�V� Amsterdam Netherlands 100
Basware A/S Herlev Denmark 100
Basware Inc� Delaware United States 100
Basware SAS Paris France 100
Basware AS Oslo Norway 100
Basware Pty Ltd Chatswood Australia 100
Basware SRL Iasi Romania 100
Basware India Private Limited Chandigarh India 99
Basware Belgium NV Aalst Belgium 99
Basware Holdings Ltd� London Great Britain 100
Basware Shared Services Ltd� London Great Britain 100
94
Basware 2020 Governance Financials
15. Shareholder’s equity
EUR THOUSAND 31.12.2020 31.12.2019
Share capital Jan� 1 3,528 3,528
Share capital Dec. 31 3,528 3,528
Share premium account Jan� 1 1,118 1,118
Share premium account Dec. 31 1,118 1,118
Fair value reserve Jan� 1 77 240
Increase or decrease -435 -163
Fair value reserve Dec. 31 -358 77
Restricted Equity Dec. 31 4,289 4,724
Invested non-restricted equity Jan� 1 116,037 111,885
Decrease of treasury shares -98 -540
Warrants 0 4,691
Invested non-restricted equity Dec. 31 115,939 116,037
Retained earnings Jan� 1 -35,246 -9,379
Decrease of treasury shares 98 540
Profit for the period -12,094 -26,407
Retained earnings Dec. 31 -47,243 -35,246
Non-restricted equity Dec. 31 68,696 80,790
Shareholders' equity Dec. 31 72,985 85,514
EUR THOUSAND 31.12.2020 31.12.2019
Specification of distributable funds
Profit for the period -12,094 -26,407
Retained earnings -35,148 -8,839
Other distributable funds 115,939 116,037
Warrants -4,691 -4,691
Development expenses, capitalized* -33,925 -34,070
Distributable funds Dec. 31 30,080 42,029
* According to Accounting Act 5:8 capitalized development expenses are deducted from distributable
funds.
Warrants are detailed in Note 19. Shareholders' equity in the consolidated financial statement.
16. Provisions
EUR THOUSAND 1.1.-31.12.2020 1.1.-31.12.2019
Opening balance Jan� 1 0 106
Additions 0 767
Disposals 0 -873
Closing balance Dec. 31 0 0
95
Basware 2020 Governance Financials
17. Non-current liabilities 19. Commitments and contingent liabilities
18. Current liabilities
EUR THOUSAND 31.12.2020 31.12.2019
Loans from financial institutions 66,665 58,889
Deferred income 613 0
Debts to group companies 1,624 177
Non-current liabilities total 68,902 59,066
EUR THOUSAND 31.12.2020 31.12.2019
Own guarantees
Guarantees 398 398
Commitments on behalf of subsidiaries
Guarantees 822 298
Other own contingent liabilities
Leasing liabilities
Current lease liabilities 299 297
Lease liabilities maturing in 1–5 years 190 341
Total 489 638
Rental liabilities*
Current rental liabilities 4,380 3,998
Rental liabilities maturing in 1- 5 years 7,278 8,734
Rental liabilities maturing over 5 years 1,048 2,096
Total 12,706 14,829
Other own contingent liabilities total 13,196 15,467
Commitments and Contingent Liabilities total 14,416 16,162
*Value added tax is only included in vehicle leasing liabilities. The other liabilities are exclusive of value
added tax. The lease agreements are ordinary lease agreements. The finance lease agreements are
ordinary finance lease agreements and have no associated leaseback clauses. The group does not have
pledges, mortgages or guarantees on behalf of external parties.
EUR THOUSAND 31.12.2020 31.12.2019
Accounts payable 5,145 5,338
Liabilities to group companies
Accounts payable 2,345 1 ,881
Other debts 34,709 33,380
Total 37,054 35,261
Loans from financial institutions 1,996 2,001
Other debts 1,363 1,083
Accrued expenses and deferred income 13,408 12,253
Total 16,767 15,338
Current liabilities total 58,965 55,937
Accrued expenses and deferred income
Accrued employee expenses 7,787 6,721
Deferred income 3,683 3,848
Other accrued expenes 1,938 1,684
Total 13,408 12,253
96
Basware 2020 Governance Financials
SIGNATURES FOR THE BOARD OF DIRECTORS’ REPORT
AND FINANCIAL STATEMENTS
In Espoo, February 3, 2021
Daryl Rolley
Board member
Klaus Andersen
CEO
Asko Schrey
Board member
Minna Smedsten
Board member
Michael Ingelög
Chairman of the Board
The Auditor's Note
A report on the audit performed has been issued today�
In Helsinki, February 3, 2021
Ernst & Young Oy
Authorized Public Accountant Firm
Terhi Mäkinen
Authorized Public Accountant
Ilkka Sihvo
Vice Chairman of the Board