Group		Innofactor
	Explanation of change in name of reporting entity or other means of identification from end of preceding reporting period		No
	Domicile of entity		Espoo
	Legal form of entity		PLC
	Country of incorporation		Finland
	Address		Keilaranta 9 Espoo
	Principal place of business		Espoo
	Description of nature of entitys operations and principal activities		Computer programming activities
	Parent		Innofactor Plc
	Name of parent entity		Innofactor Plc

Innofactor Plc Annual Report January 1 to December 31, 2021

Report of the Board of Directors

Consolidated Financial Statements

Comprehensive Consolidated Profit
and Loss Statement, IFRS

Consolidated Balance Sheet

Consolidated Cash Flow Statement

Consolidated Statement of Change
in Shareholders’ Equity

Financial Statements

Parent Company Financial Statement (FAS)

Signatures

Auditor’s Report

Additional Information

Key Figures per Share

Shareholding

Calculation of Key Figures

	Innofactor Plc
	Annual Report and Financial Statement
	January 1 to December 31, 2021
	Report of the Board of Directors
	Innofactor Group
	Innofactor is one of the leading software providers focused on Microsoft solutions in the Nordic countries. Innofactor delivers to its customers IT projects as a system integrator and develops its own software products and services. The focus of Innofactor’s product development is on cloud solutions for
	Microsoft and its ecosystem. Approximately half of Innofactor’s net sales come from recurring contracts related to Innofactor’s own products and from other recurring service contracts. Innofactor’s customers include approximately 1,000 companies and public administration and third sector organizations. In its
	operations, Innofactor strives for long-term customer relationships. Innofactor has approximately 500 motivated and skilled employees in approximately 15 locations in Finland, Sweden, Denmark and Norway. The structure of the Innofactor Group at the end of the financial period 2021 is presented below.
	Financial Performance and Position	2021	2020	2019	2018	2017
	Net Sales, EUR thousand	66364	66164	64198	63144	66088
	Operating profit before depreciation and amortization (EBITDA), EUR thousand	10111	7164	5089	-1029	1308
	percentage of net sales	15,2 %	10,8 %	7,9 %	-1,6 %	2,0 %
	Operating profit (EBIT), EUR thousand	6519	2501	795	-3872	-1461
	percentage of net sales	9,8 %	3,8 %	1,2 %	-6,1 %	-2,2 %
	Earnings before taxes, EUR thousand	5730	2050	12	-3811	-1579
	percentage of net sales	8,6 %	3,1 %	0,0 %	-6,0 %	-2,4 %
	Earnings, EUR thousand	4504	1761	418	-3462	-2007
	percentage of net sales	6,8 %	2,7 %	0,7 %	-5,5 %	-3,1 %
	Shareholders’ equity, EUR thousand	25404	23444	22145	21303	24764
	Interest-bearing liabilities, EUR thousand	9818	15386	16853	15418	14228
	Cash and cash equivalents, EUR thousand	1963	3066	963	258	910
	Deferred tax assets, EUR thousand	4830	6413	5602	5602	5668
	Return on equity	18,4 %	7,7 %	1,9 %	-13,8 %	-5,3 %
	Return on investment	20,6 %	11,1 %	2,3 %	-7,7 %	-2,4 %
	Net gearing	30,9 %	52,5 %	71,8 %	71,2 %	53,8 %
	Equity ratio	51,1 %	42,2 %	40,2 %	41,2 %	43,2 %
	Balance sheet total, EUR thousand	51057	56607	55720	51875	58272
	Research and development, EUR thousand	3504	3618	2795	2860	3298
	percentage of net sales	5,3 %	5,5 %	4,4 %	4,5 %	5,0 %
	Personnel on average during the year	516	544	534	591	610
	Personnel at the end of the year	500	541	538	550	601
	Number of shares at the end of the yeara	37388225	37388225	37388225	36188225	36188225
	Earnings per share (EUR)	0,1208	10,0471	0,0113	-0,0880	-0,0262
	Shareholders’ equity per share (EUR)	0,6813	0,5627	0,592	0,589	0,684
	Net Sales
	Innofactor’s net sales in 2021 were EUR 66,364 thousand (2020: 66,164), representing growth of 0.3 percent. Excluding the Prime business sold on March 31, 2021, the comparable change would have been growth of 3.5%, which was entirely organic growth.
	Financial Performance
	Innofactor’s operating margin (EBITDA) in 2021 was EUR 10,111 thousand (2020: 7,164), representing growth of 41.1 percent. EBITDA represented 15.2 percent of net sales (2020: 10.8%). Excluding the Prime business sold on March 31, 2021, the comparable EBITDA would have been EUR 7.5 million, which shows an increase of 5.0%. Innofactor’s operating profit in 2021 was EUR 6,519 thousand (2020: 2,501), representing growth of 160.7 percent. Operating profit represented 9.8 percent of net sales (2020: 3.8%).
	Financial Position, Liquidity and Investments
	Innofactor’s balance sheet total at the end of 2021 was EUR 51,057 thousand (2020: 56,607). The Group’s liquid assets totaled EUR 1,963 thousand (2020: 3,066), consisting entirely of cash funds. Operating cash flow in 2021 was EUR 8,855 thousand (2020: 5,010). The cash flow from investing activities was EUR -643 thousand (2020: -89). The equity ratio at the end of 2021 was 51.1 percent (2020: 42.2%) and net gearing was 30.9 percent (2020: 52.5%). At the end of 2021, the company had EUR 1,873 thousand in current interest-bearing liabilities to financial institutions (2020: 2,540) and EUR 4,683 thousand in non-current interest bearing liabilities to financial institutions (2020: 8,890). The company had
	lease liabilities in accordance with IFRS 16 (leases for the duration of fixed-term leases) EUR 3,261 thousand (2020: 3,956) of which EUR 1,603 thousand in current leases (2020: 1,738) and EUR 1,658 thousand in noncurrent leases (2020: 2,218). The total amount of interest-bearing liabilities was EUR 9,818 thousand (2020: 15,386). The return on investment for the period January 1– December 31, 2021, improved year-on-year and was 20.6 percent (2020: 11.1%). The return on equity for the period January 1–December 31, 2021, improved year-on-year and was 18.4 percent (2020: 7.7%). The non-current assets on Innofactor’s balance sheet at the end of 2021 were EUR 35,691 tho
	- Tangible assets and right-of-use assets EUR 3,701 thousand - Goodwill EUR 26,393 thousand* - Other intangible assets EUR 633 thousand* - Shares and holdings EUR 5 thousand - Receivables EUR 129 thousand - Deferred tax assets EUR 4,830 thousan
	Innofactor’s gross investments in tangible and intangible assets in 2021 were EUR 402 thousand (2020: 311), consisting of normal additional and replacement investments required by growth. Write-offs on intangible assets amounted to EUR 1,457 thousand (2020: 2,538). * Goodwill and intangible assets arising from acquiring foreign companies are considered as assets of the foreign unit, and they are converted at the closing date’s rate. The resulting exchange differences are recognized in comprehensive income
	Mergers, Acquisitions and Changes in Group Structure
	No acquisitions or changes in the Group structure were carried out in 2021.
	Personnel
	Innofactor primarily monitors the number of active personnel. The number of active personnel does not include employees who are on leave for more than 3 months. The average number of active personnel in 2021 was 516 (2020: 534), representing a decrease of 5.1 percent, which was in part attributable to the sale of the Prime business. At the end of review period, the number of active personnel was 500 (2020: 541), representing a decrease of 7.6 percent. The total amount of salaries and fees for the financial period was EUR 34,761 thousand (2020: 35,668). At the end of 2021, the average age of the personnel was 42.5 (2020: 41.4). Women accounted for 27 percent (2020: 27%) of the personnel. Men accounted for 73 percent (2020: 73%) of the personnel
	Strategy and its Realization in 2021
	Innofactor is the leading driver of the modern digital organization in the Nordic countries for its approximately 1,000 customers in the commercial, public and third sector. Innofactor has the widest solution offering and leading know-how in the Microsoft ecosystem in the Nordics. Innofactor has approximately 500 enthusiastic and motivated top specialists in Finland, Sweden, Denmark, and Norway. The focus of our strategy on the Nordic level is even stronger in our six updated application areas listed under Business Operations and for which Innofactor strives to create a uniform operating model and offering in the Nordic countries. Unifying the offering may take place through organic growth and selected acquisitions.
	Our purpose: Innovating to make the world work better Our mission: Driving the modern digital organization Our vision: Leading Nordic digital transformation partner in the Microsoft ecosystem
	Our Strategic Choices: - The most competent Nordic teams - Productized and specialized offering - Proactive and agile way of working - Innovation with top customers Our Values: - Accountability - Empowerment - Innovation - Customer Our Working Principle: Our principle is to put people first in everything we do. We want to provide solutions that make our customers’ everyday work and life run smoothly and bring a smile to their faces.
	Our Long-Term Financial Goals:
	- To achieve annual growth of about 20 percent, the majority of which is intended to be achieved by organic growth
	- To achieve about 20 percent EBITDA in relation to the net sales
	- To keep the cash flow positive and secure good financial standing in all situations.
	The Main Actions for Reaching the Approximately 20 Percent Growth and 20 Percent Operating Margin:
	- Focus on selected industries and solution areas that provide the highest growth opportunities and allow us to best scale existing offering in the Nordics - Focus on current customers and cross sales to get a bigger share of wallet of customers’ digital transformation budgets - Improving modern digital marketing and sales skills to achieve better and more cost-effective sales results
	- Focus on competence planning, recruiting, and resource optimization across the Nordics - Shifting revenues from projects and professional services toward products, IP-based and continuously managed services that support selected solution areas and industries - Strengthening continuously our specialists’ professional skills and improving our leading offering in order for our customers to pay an hour price above market average -Aiming to move to self-organized teams and to reduce organizational layers achieving better communication and faster decision making - Continuously improving our flexible valueadding delivery model, minimizing the number of non-invoiced hours and maximizing customer satisfaction
	Innofactor’s net sales in 2021 totaled EUR 66.4 million (2020: 66.2), representing year-on-year growth of 0.3 percent. Excluding the Prime business sold on March 31, 2021, the comparable change would have been growth of 3.5%, which was entirely organic growth The strategic goal of getting net sales to grow is also supported by the favorably developed order backlog of EUR 72.8 million (2020: 60.4). As a result of thorough strategy work in 2021, we decided to revise our offering and organizational structure to focus on six spearheads and revise our operating models to provide stronger support for growth from 2022 onwards.
	The operating margin (EBITDA) grew in 2021 from EUR 7.2 million in the corresponding period of the previous year to EUR 10.1 million (15.2 percent of net sales), which includes proceeds of EUR 2.6 million from the sale of the Prime business. As regards profitability, Innofactor was able to further improve its performance substantially. However, a significant amount of management effort and work are still needed in order to reach the long-term goal of approximately 20 percent. The required actions are clear and known, so we believe that reaching this goal is entirely possible.
	Innofactor’s operating cash flow in 2021 was EUR 8.9 million negative (2017: EUR 5.0 million) and the equity ratio at the end of the review period was 51.1 percent (2020: 42.2%). The strong operating cash flow supports Innofactor’s strategic goal of profitable growth and securing solid financial standing in all situations.
	Business Operations
	Innofactor focuses on the Microsoft ecosystem in its business operations. Innofactor both operates as a system integrator and develops its own software products and services, which offers Innofactor significant competitive edge and synergy benefits. System integrator operation increases Innofactor’s understanding of the customers’ product and service needs and also acts as a delivery channel for its own products and services. Focusing on the Microsoft ecosystem creates insurmountable know-how for Innofactor and also makes it the most desirable partner in the Nordic countries for Microsoft, which helps Innofactor to get the best deals.
	Our comprehensive solutions, which are integrated into each other, are based on real customer needs and on utilizing the latest technology. We achieve highquality deliveries and provide our customers with fast benefits due to our experience and understanding of our customers combined with our knowledge of the latest cloud services. Over 15 years of cooperation with Microsoft and leading operators in its ecosystem ensure the best possible support for our customers. Innofactor provides its solutions through the Microsoft Cloud or installed in the Innofactor Service Center or on the customer’s own servers. Typically based on annual or monthly charges, service agreements, such as SaaS and cloud, play an important role in Innofactor’s business activities. Recurring services essentially decrease cyclicality in the business operations.
	Innofactor’s business operations were focused on Finland, Sweden, Denmark and Norway. In 2021, approximately 66 percent of the Group’s net sales came from Finland, approximately 18 percent from Sweden, approximately 10 percent from Norway, and approximately 6 percent from Denmark. Net sales decreased in Finland and Sweden, but increased in Denmark and Norway. Of the net sales in 2021, approximately 43 percent came from commercial clients, approximately 43 percent from public sector clients and approximately 14 percent from third sector clients.
	Innofactor’s net sales in 2021 came from the following sources:
	- approximately 3 percent from licenses, of which the share of licensing income to third parties was approximately 3 percent of net sales - approximately 23 percent from services based on recurring service contracts, such as SaaS, cloud and hosting services, and from software maintenance - approximately 33 percent from specialist work based on recurring service contracts, such as smaller customer-specific changes and further development of IT systems - approximately 41 percent from IT system delivery projects and consulting
	Innofactor’s 10 largest clients accounted for about 28.2 percent of the net sales in 2021'
	Major Events in the Financial Period
	On January 21, 2021, Innofactor announced in a stock exchange release that the Finnish Tax Administration selected Innofactor as the primary provider of IT specialist services in the area of Azure programming. The procurement consists of project manager and ICT specialist resources to support the project management, defining, programming, management and service design of the Tax Administration’s systems and other technical know-how to support the Tax Administration’s ICT. On the basis of the volume stated by the customer in connection with the procurement, the total value in this area is approximately EUR 15–25 million. The duration of the framework agreement is 6 years, and assignments started during the framework agreement period may continue 4 years after the expiration of the framework agreement.
	On January 29, 2021, Innofactor announced in a stock exchange release that Innofactor and a Norwegian financial services company have signed an agreement concerning the migration and implementation of services to Microsoft Azure. The solution will be built on the Innofactor Virtual Data Center solution. The value of the agreement (excluding VAT) is approximately EUR 500,000 and the services will be delivered during the year 2021.
	On March 11, 2021, Innofactor announced in a stock exchange release that the Finnish Institute of Occupational Health had selected Innofactor as the provider for the renewal of the enterprise resource planning system. The procurement covers the delivery, implementation, and maintenance of the information system. The system is based on Microsoft Dynamics 365 for Finance & Supply Chain Management. Innofactor estimates the total value of the procurement to be approximately EUR 1,600,000.
	On March 30, 2021, Innofactor announced in a stock exchange release that Metsähallitus had selected Innofactor as its case management system provider as SaaS. The procurement comprises of the delivery of the case management system, as well as support and maintenance services. The system will be based on Innofactor’s Dynasty 10 solution. The service agreement related to the procurement will be valid for fixed period of four years after which it will be valid until further notice. The agreement value is approximately EUR 700,000.
	On April 6, 2021, Innofactor announced in a stock exchange release that the joint municipal authority for the county of Ostrobothnia has selected Innofactor in a public procurement competition as the supplier of case and document management solutions as SaaS. The procurement consists of the delivery of the case and document management solutions, as well as support and maintenance services. The system suite will be based on Innofactor’s Dynasty 10 solution. The total value of the procurement (excluding VAT) stated by the joint municipal authority for the county of Ostrobothnia in the procurement decision for a period of four years is EUR 860,240.
	On April 27, 2021, Innofactor announced in a stock exchange release that Kela has terminated the contract for the administrative case management solution for reasons not attributable to Innofactor. The termination is due to changes in Kela’s internal cloud service policies. According to the new policies, Kela deems that it cannot transfer the planned amount of data into a cloud service. Due to Kela’s termination decision, Innofactor estimates that out of the original estimated total value it will not receive approximately 0,5 MEUR from maintenance services. This does not affect Innofactor’s guidance for the year 2021 or its long-term financial goals.
	On May 20, 2021, Innofactor announced in a stock exchange release that Metropolia University of Applied Sciences Ltd, Turku University of Applied Sciences Ltd, Haaga-Helia University of Applied Sciences Ltd, Novia University of Applied Sciences, Arcada University of Applied Sciences Ltd and Finnish University of Applied Sciences and Arts Ltd have selected Innofactor in a joint public procurement competition as the supplier of a case management solution. The public procurement competition was divided into SaaS and On-Premise areas, and Innofactor was selected as the supplier for both of these. The procurement consists of the delivery of Innofactor’s Dynasty 10 system to these universities of applied sciences, support and maintenance services, specialist services, as well as integrations and migrations specific to each university of applied sciences. The agreement will be valid for a fixed period of four years after which it will be valid until further notice. The estimated total value of the procurement (excluding VAT) stated by the universities of applied sciences in the procurement decision for a period of four years is EUR 850,000.
	On May 31, 2021, Innofactor announced in a stock exchange release that the Finnish Forest Centre has selected Innofactor in a public procurement competition as the supplier of a case management application. The procurement includes the access rights to Innofactor’s Dynasty product family’s case management, archival and information management system, the delivery project, and support and maintenance. The total value of the procurement (excluding VAT) stated by the Finnish Forest Centre in the procurement decision for the four-year contract period is EUR 588,960. The customer also reserves an option for extending the service one year at a time.
	On September 7, 2021, Innofactor issued a stock exchange release after Rimonne Baltic OÜ informed Innofactor Plc that its holdings of Innofactor’s shares and voting rights fell below the 5% disclosure limit on September 6, 2021.
	On October 5, 2021, Innofactor issued a stock exchange release announcing that, at its meeting on October 4, 2021, the Board of Directors of Innofactor Plc had decided to commence the acquisition of the company’s own shares for the purpose of developing the company’s capital structure. The company will acquire a maximum of 800,000 shares, which corresponds to approximately 2.2% of the total number of shares. The maximum amount to be used for the acquisition of shares is EUR 1,600,000. The decision was made on the basis of the authorization given by Innofactor Plc’s Annual General Meeting on March 30, 2021, to acquire a maximum of 3,600,000 shares. The repurchase of shares will commence on October 5, 2021, at the earliest and will end at the latest on March 31, 2022, or at an earlier Annual General Meeting.
	On November 11, 2021, Innofactor issued a stock exchange release announcing that Innofactor Plc had been granted approximately EUR 2.3 million in damages in Stockholm Chamber of Commerce (SCC) arbitration proceedings for breach of contract. The damages relate to the purchase of Lumagate in 2016, as part of which Innofactor had agreed on an option to acquire Ironstone companies. Due to the uncertainty of recovery related to the damages, the receivable from the damages is not recognized as a receivable at this stage and has no immediate effect on profit and loss. The damages will be recognized as income when and to the extent that the claim can be recovered.
	On December 17, 2021, Innofactor announced in a stock exchange release that Innofactor and a large Finnish globally operating manufacturing industry company have signed a contract for the further development work of digitizing the company’s quotation process. Innofactor will continue the development work that began in 2020, aiming to design and implement, using agile methods, a cloudbased solution for managing the quotation process and handling and storing related information and documents. The solution is implemented using Microsoft Azure PaaS cloud services. The value of the agreement (excluding VAT) is approximately EUR 1,200,000 and the services will be delivered during the year 2022.
	Major Events After the Financial Period
	On January 4, 2022, Innofactor announced in a stock exchange release that it had completed the share repurchase program. Repurchases of treasury shares began on October 26, 2021, and ended on January 3, 2022. During this period, Innofactor acquired 800,000 treasury shares at an average price of EUR 1.5045. The shares were acquired at the current market price in public trading arranged by Nasdaq Helsinki Ltd.
	On January 18, 2022, Innofactor announced in a stock exchange release that the Ministry of Social Affairs and Health selected Innofactor in a public procurement competition as the provider of the 43 Case Management, Document Management, Services and Reference Price Information System and the related maintenance and further development tasks of the Pharmaceuticals Pricing Board. The total value of the procurement (excluding VAT) stated by the Ministry of Social Affairs and Health in the procurement decision for the four-year contract period is approximately EUR 1,190,000
	On January 20, 2022, Innofactor announced in a stock exchange release that the Housing Finance and Development Centre of Finland (ARA) had selected Innofactor in a public procurement competition as the supplier of the Sequence Number Register. The procurement includes the planning and implementation of the Sequence Number Register, the support, maintenance and further development services for the implemented solution, as well as system operation and control. The solution is based on Microsoft Azure cloud services. Innofactor’s share of the total value of the procurement is approximately EUR 680,000. The minimum agreement period is three years.
	On February 16, 2022, Innofactor announced in a stock exchange release that The Finnish Safety and Chemicals Agency (Tukes) selected Innofactor in a public procurement competition as a supplier of the “Agile development of services, servicing and maintenance” section of the framework agreement on IT system development and maintenance. The framework agreement includes three sections, for which a total of four framework agreement suppliers were selected. For the section “Agile development of services, servicing and maintenance”, a total of two framework agreement suppliers were selected. The Agile development of services, servicing and maintenance section focuses on the implementation of Tukes’ systems in accordance with an agile approach, service validation, the servicing and maintenance of applications, and processing and repair of disruptions. The anticipated total value of the procurement (excluding VAT) indicated by Tukes in the procurement decision for all three sections of the frame agreement is approximately EUR 6.8 million. The duration of the framework agreement is four years, plus an option for two additional years.
	Innofactor had no other significant events after 2021.
	Future Outlook
	Innofactor’s net sales and operating margin (EBITDA) in 2022 are estimated to increase from 2021, during which net sales were EUR 66.4 million. Innofactor’s operating margin (EBITDA) for 2022 is estimated to increase from EUR 7.5 million, which would have been the operating margin for 2021 without the proceeds of EUR 2.6 million from the sale of the Prime business.
	Major Risks and Uncertainties
	Innofactor’s operations and finances involve risks that may be significant for the company and its share value. These risks are assessed by Innofactor Plc’s Board of Directors four times a year as part of the strategy and business planning process
	Risks Related to Operations
	The risks related to the operation of the Innofactor Group are primarily business risks related to the group companies that carry on its business operations.
	Skilled personnel and its availability: The development of Innofactor’s operations and deliveries depends greatly on the Group having skilled personnel and being able to replace persons, who are leaving, with properly skilled persons. In Innofactor’s field of business, there is a lack of and competition for certain personnel resources, which may lead to short employment relationships and high personnel turnover. If Innofactor fails at motivating its personnel, keeping the personnel’s skills on a high level and keeping the personnel in its service, that could cause problems for the Group’s business operations. The success of the Group depends heavily on the employed personnel and their success in their work. Innofactor invests in the continuous development of its personnel and in high personnel satisfaction, a good employer image, efficient recruitment and, if necessary, the use of subcontracting.
	Increase in personnel costs: The main part of Innofactor’s costs consists of salaries and other personnel costs (in 2021, about 69% of all the costs, including depreciations). Currently, all of Innofactor’s own employees work in the Nordic countries, whereas some competitors rely heavily on workforce in countries with cheap labor. If the personnel costs continue rising in the Nordic countries at the same rate as before, it will create a risk for Innofactor, if the prices paid for IT services will not rise correspondingly. Innofactor is monitoring the situation constantly and strives to affect the moderate development of personnel costs via interest groups. It also aims at increasing the share of work done by subcontractors and abroad, when it makes sense from the point of view of business operations, for example, in large product development projects.
	Profitability of projects: A Significant part of Innofactor’s net sales comes from project business. Profitable implementation of Innofactor’s delivery projects requires that project calculation and planning before submitting a tender are done successfully as regards the amount of work and the delivery schedule, and also that the deliveries can be made in a cost-effective manner. It is possible that Innofactor fails at correctly estimating the profitability of a project and, thus, the delivery could cause losses to the company. Correspondingly, it is possible that projects may have to be sold cheaper because of competition, which leads to lower profit margins. Innofactor pays special attention to the profitability of project business and has included it as a central part of the monitored key performance indicators. The relative share of project business has decreased and it will be further decreased, which reduces the risks associated to project business.
	Competition: Innofactor’s main competitors are companies offering traditional information technology services and software in the Nordic countries. Some competitors have larger financial resources, wider product selection, cheaper workforce and larger existing customer base than Innofactor does and also notable legal resources, and they can use these when competing with Innofactor for the same deliveries. Additionally, new startup companies increase competition in certain deliveries. The price competition in the field is expected to remain tough. If the competition becomes tougher, it may have an adverse effect on Innofactor’s business, operating result and financial position. Innofactor continuously strives to improve its competitiveness.
	Research and product development: In Innofactor’s operation, research and product development play a central role. In 2021, approximately 5.3% of net sales was used for it. Each research and product development project carries the risk that the end results are not as successful financially as planned and that the investment in the project does not pay itself back. By constantly updating its offering and organizing its operations, Innofactor aims at minimizing the risks inherent in research and product development.
	Changes in the technology and field of business: Fast development is characteristic for Innofactor’s field of business. There can be quick changes in the customers’ requirements and choices concerning software technology. Important changes under way include, for example, the transfer of software into cloud technologies, digitalization, artificial intelligence, blockchain and Internet of Things (IoT). If Innofactor cannot react to these changes, it may have an adverse effect on Innofactor’s business, operating result and financial position. Innofactor strives to actively invest in new technologies and central areas of know-how and agree on customer deliveries in new areas.
	Information security and data protection From the point of view of Innofactor’s business, it is important to ensure adequate data security and data protection for customers. The realization of the risks relating to data security and data protection may lead to losses in net sales or, in the worst case, penalties imposed by a supervisory authority. Innofactor has acknowledged the risks related to data security and data protection, on the basis of which the company has implemented standardbased data security and data protection management processes. Innofactor has a data security policy approved by the management, defining Innofactor’s key data security objectives and means of implementation, as well as the organization of data security and related responsibilities. The data security policy is written in accordance with the ISO 27001 data security standard and legislation.
	Risk of a pandemic: An epidemic spreading into a global pandemic may hinder Innofactor’s business operations. If there is no significant pandemic in Innofactor’s operating area in the Nordic countries, the detriment will be limited mostly to a decrease in the availability of tools, especially computers, which are needed in Innofactor’s business operations. If there is a significant pandemic also in Innofactor’s operating area in the Nordic countries, it could mean introducing remote work, either for a part of or the entire personnel, a temporary decrease in customers’ purchases, and delays in some customer deliveries, increasing absence rates connected directly to the disease caused by the pandemic, quarantine or mental symptoms caused indirectly by isolation and increased personnel turnover due to remote work.
	The risk of a pandemic materialized with the coronavirus (COVID-19) in 2020 and 2021, and the pandemic will continue in 2022. It is estimated that it has been possible to perform over 98% of tasks remotely at Innofactor, when necessary. As concerns some customers, a decrease of deliveries and purchases or delaying them until a later date has been observed. This has so far had a minor effect on Innofactor’s business. In 2021, absence increased to some extent, particularly with regard to the indirect effects of the pandemic. The pandemic is also estimated to have caused an increase in personnel turnover after the summer in 2021. The planning of our current operation is based on the presupposition that the effects of the COVID-19 pandemic on Innofactor’s business operations will remain minor in 2022 as well.
	Reaching the growth goals: Realizing the desired growth requires a growth rate that is clearly faster than the growth in the IT market in general. This has the risk that it cannot be realized in the future, although it has been done often in the past. Also, it is possible that the IT market in Innofactor’s market area will not grow or may even shrink. Ensuring growth has a central part in planning Innofactor’s operations and setting its goals. Innofactor strives to lessen this operational risk by focusing on the growing Microsoft solution areas, which grow faster than the IT market in general, and by focusing on sales to keep the order backlog on a sufficient level as regards the business operations.
	Globalization: In accordance with its strategy, Innofactor is seeking for more growth also in the global markets, outside of Finland, especially in the Nordic countries. Global operations typically always involve higher risks than operation at home. Innofactor strives to make sure that the investments in becoming a global player will not be so great that it would jeopardize the Group’s ability to make profit and to grow. Additionally, the company strives to create a management model, common processes and systems that will decrease the risks in global operations.
	Uncertainties and risks related to acquisitions: The growth has partly been based on acquisitions. With acquisitions, there are uncertainties about finding suitable companies to acquire and in making the acquisitions at the desired price level and schedule. If acquisitions cannot be made as planned, the growth goal may be jeopardized. In acquisitions, Innofactor focuses on high-level know-how and good processes. Each acquisition, after it has been made, also carries some risks, which include the success of the integration, the stability of the key personnel, formation of the business value, and possible related needs for depreciations. Innofactor’s strategy is primarily based on integrating the acquired companies in a fast schedule as part of the whole in the country in question. Innofactor invests in the integration process.
	Success of the organizational changes: Rapid growth may occasionally require making significant changes in the organization. Starting a new organization typically includes challenges before the desired improvement in operation can be achieved. Typically, the operation can be at least restored to the previous level of efficiency within a few months from starting the new organization. If the improvement in operation for some parts does not take place within the planned schedule, there is a risk that it will not happen at all or that the delay may lead to extra costs or loss of net sales. The reasons for this include, for example, incorrect planning in placing units and personnel. Innofactor strives to pay attention to controlling organization changes and to prepare for them also financially
	Financial Risks
	General financial uncertainty and changes in the customers’ financial situations affect customers’ investment decisions and purchasing policies. It is possible that changes in the general financial situation will be reflected in Innofactor’s customers’ software purchases by delaying the decision-making or timing of purchases.
	Financing risks: In its normal business operations, the Innofactor Group is susceptible to normal financing risks. In total at the end of the review period, Innofactor had approximately EUR 6.6 million in interest bearing debts to financial institutions, which have been taken out to finance acquisitions and working capital. Of the debts, approximately EUR 4.7 million is non-current and approximately EUR 1.9 million current liabilities. Additionally, the company had lease liabilities in accordance with the IFRS 16 standard (leases for the duration of fixed-term leases) for EUR 3.3 million, of which EUR 1.7 million was current and EUR 1.6 million non-current. The total of interest-bearing liabilities was EUR 9.8 million. Innofactor is committed to the following covenants: Equity ratio calculated every 6 months is at least 38% until June 30, 2022 and 40% afterwards; interest bearing liabilities calculated every 6 months divided by the 12-month operating margin (EBITDA) is a maximum of 2.75 until June 30, 2022, and 2.5 afterwards; and certain other normal conditions for loans.
	The goal of managing the financing risks is to minimize the negative effects of the changes in the financial markets to the result of the Group. Financing risk management has been centralized to the CFO, who is responsible for the Group’s financing and regularly reports to the company’s Executive Board, CEO, and Board of Directors. It is possible that, in the future, the Group will not get the financing it needs and this would have a negative effect on the Group’s business and its development, especially on making acquisitions.
	Interest risk: An interest risk in mainly due to the Group’s short-term and long-term loans and the derivatives used for protecting them. Loans with fluctuating rates pose an interest risk to the Group’s cash flow. This risk is decreased, for example, by using interest rate swap agreements. Exchange rate risk: The Innofactor Group operates globally and is susceptible to risks related to the currencies of the countries in which it operates. Changes in exchange rates, especially the rates of Swedish krona and Norwegian krone, affect the Group’s net sales and profitability as Innofactor has significant operations based on Swedish krona and Norwegian krone. The exchange rate risk is mainly due to the assets and liabilities registered in the balance sheet and the net investments made in the subsidiaries abroad. Also, the business contracts made by subsidiaries pose an exchange rate risk, although these contracts are mainly made in the currency the business unit uses in its operation. The management of exchange rate risks in the Group aims at minimizing the uncertainty that changes in exchange rates cause in the result through cash flows and assessment of receivables and liabilities.
	Risks related to the cash position: The Innofactor Group handles management of liquid assets with the help of centralized payments and cash management. The Group strives for continuous monitoring and assessment of the needed business financing in order to ensure that the Group has enough liquid assets in its use. Additionally, the Group has checking account limits with an overdraft facility in order to cover any seasonal variations in liquid assets. Excess cash balance is placed on savings accounts or funds with capital guarantee.
	Risks related to receivables from projects: A large part of Innofactor’s net sales comes from project business. A significant part of projects consists of long-term projects in which scheduled payments and their terms may be agreed on with the customer beforehand. When Innofactor performs work in customer projects, which is scheduled to be invoiced afterwards, project receivables are accrued. Especially in public administration projects, scheduled payments often take place nearer to the end of the project, which means increased project receivables and related risks. In customer negotiations, Innofactor pays special attention to scheduling the payments and the size of payments, and in customer projects, to project management and steering in accordance with the scheduled payments. Project receivables are monitored regularly.
	Credit risk: Credit decisions related to sales receivables are monitored centrally by the Group’s management. Large part of Innofactor’s cash flow comes through established customer relationships as payments from the public sector and financially sound companies, which have not presented essential credit risks in the past, and the Group has not suffered any significant credit losses. Should credit risks realize, it would weaken the Group’s financial standing and liquidity. Sales receivables are monitored regularly.
	Risks related to deferred tax assets: Innofactor’s balance sheet includes deferred tax assets that are based on previous financial periods. Should the company’s profitability decrease significantly in the long run, it is possible that the Group would not be able to utilize in full the receivables currently activated in the balance sheet
	Corporate Governance Report
	Innofactor Plc complies with the recommendations of the Corporate Governance Code 2020 for Finnish listed companies, published by the Securities Market Association. The Annual General Meeting of March 30, 2021, decided that the Board of Directors shall have four members. Mr. Sami Ensio, Ms. Anna Lindén and Mr. Risto Linturi and Mr. Heikki Nikku were re-elected as members to the Board of Directors. At the organizing meeting held after the General Meeting, the Board of Directors elected Anna Lindén as the Chairman of the Board. The General Meeting approved the proposal to appoint Ernst & Young Oy, an auditing firm authorized by the Central Chamber of Commerce, again as the auditor for the company, with Juha Hilmola as the main responsible auditor. Innofactor has drawn up a separate Corporate Governance Statement for the financial period of 2021.
	Innofactor Plc’s entire Corporate Governance policy and statements are available on the company’s web site at: https://www.innofactor.com/invest-in-us/ corporate-governance
	Research and Product Development
	In product development in 2021, the focus was on the renewal of existing products and services and continuous further development to support the growth of productbased business. Innofactor’s research and development costs recognized in profit or loss for January 1–December 31, 2021, were approximately EUR 3,504 thousand (2020: 3,618), representing 5.3 percent of net sales (2020: 5.5%).
	Reporting Non-financial Information
	This statement describes Innofactor’s corporate responsibility in accordance with the Chapter 3a, Sections 1–6 of the Finnish Accounting Act
	Business Model
	Innofactor’s business model is based on offering aimed at the IT service market and on Innofactor’s strong partnership with Microsoft, with the focus on solutions developed on Microsoft platforms and solutions that use them. In accordance with its strategy, Innofactor is increasingly focusing on implementing cloud solutions and digitalization. Innofactor is a system integrator and software development company. Thus, the core of the business model and enabler of company growth and development is the competent personnel with the ability to advance. The digital solutions delivered by Innofactor help the customers to reach their sustainability related goals and reduce their environmental impacts. Innofactor can impact the environmental effects of its own operation by developing even more environmentally friendly work environment.
	Principles Guiding Sustainability
	Our operation is steered by our Code of Conduct and environmental policy, in addition to which we comply with the leading international sustainability standards, such as the ILO Declaration on Fundamental Principles and Rights at Work, UN Universal Declaration of Human Rights, UN Sustainable Development Goals, and the principles of the ICC Business Charter for Sustainable Development.
	Innofactor’s internal operations are managed through predefined core processes and standards. Innofactor’s quality system describes the company’s business model and it is divided into eight documented business processes and nine support service processes. These processes are monitored by means of process indicators and audits, for example. The company’s support service processes related to human resources management, risk management and legal issues define the main issues with regard to corporate responsibility. Each process has its own Process Performance Indicators that are monitored within the company and set annually for the process owner. The framework for Innofactor’s operations is provided by the ISO 9001, ISO 27001, ISO 13485 and AQAP2110 standards, which the company’s various processes adhere to. In external audits in 2021, no deviations were observed.
	Environmental Responsibility
	As an organization operating in the IT sector, Innofactor has a unique opportunity to be part of the solution in reducing environmental impacts. The digital solutions we deliver to our customer organizations play an important role in mitigating and adapting to climate change. Digitalization of manual processes and digital healthcare are examples of solutions through which Innofactor promotes its customers’ – and thereby the entire society’s – sustainable development. Innofactor Plc’s entire Corporate Governance policy and statements are available on the company’s web site at: https://www.innofactor.com/invest-in-us/ corporate-governance/ 47 For example, in 2021, we developed a food waste application for Servica in collaboration with Istekki Oy to enable Service to monitor the volume of food waste as well as the associated costs and carbon footprint. The food waste application and reporting solution streamline the work of Servica’s food service production personnel as well as the work of the management as a strategic planning tool.
	Our environmental policy guides the actions we take to reduce our adverse environmental impacts and respond to the challenges caused by climate change. Our environmental policy defines the principles we always follow in our own operations and in the deliveries to our customers. The principles of Innofactor’s environmental policy include continuous development, improvement of preventative actions, and reacting to the changing operating environment. Innofactor complies to all applicable environmental laws and regulations and expects its partners and suppliers to comply with them as well. The environmental policy concerns the entire Innofactor Group and is available on Innofactor’s website. We monitor our energy consumption regularly and aim to actively identify further energy saving opportunities within our organization. As the use of electric and hybrid cars becomes increasingly common, we recognized the need for charging stations at our Espoo Campus. In spring 2020, we installed four charging stations at our Campus.
	Innofactor has a policy for extending the lifecycle of computers. Factors considered in the renewal of computer hardware include the user’s needs and the possibility of updating existing devices. We recycle all recyclable materials such as cardboard, organic waste, metal, plastic and glass. Our electronic waste is recycled by Kuusakoski Recycling. Remote work is an essential part of the operations of a modern digital organization. In 2020, the global pandemic forced many organizations to switch to remote work extensively and accelerated the digital transformation of organizations. We provide our employees with good opportunities for location-independent work. Use of Teams as a meeting tool brings added value to the operations of both Innofactor and its customers. Innofactor employees also carried out various sustainability actions in their teams during the year. In Finland, we participated in the Kilometrikisa cycling campaign and the Finnish Red Cross Chain Reaction fundraiser, which saw us donate one euro for each 25 kilometers of cycling to help people adapt and prepare for the impacts of climate change. We also organized a Beach Clean Up afternoon in the area around our Espoo Campus to clean the shoreline near our office from waste carried in by the sea.
	Social Responsibility
	In accordance with our PeopleFirst theme, we put people first in everything we do. This applies to our customers — who are the focus of our operations — and our employees and investing in their well-being and development. We created quarterly PeopleFirst challenges for our employees, various training activities, events and other activities, as well as separate training events for managers. In Denmark, for example, we organized a lecture focused on stress management and recovery for our personnel. Innofactor’s In House Coaching program is still available to all employees in Finland.
	In 2021, we focused on managerial work in even more diverse ways than before. For example, through Innofactor Academy, we organized early intervention training for managers to focus on preventative managerial work in collaboration with our occupational health care partner. We also conducted a 360° feedback survey in which managers conducted a self-evaluation and received feedback from their subordinates, colleagues and manager. The results help the managers develop their leadership skills and practices. In 2021, we also focused on building a Nordic manager community to establish a consistent leadership culture and practices. In 2021, Innofactor continued the recruitment and training of students nearing their graduation, with 14 new participants recruited in Finland for the Innofactor DigiStar Trainee Program in spite of the COVID-19 pandemic. In 2021, Innofactor recruited and trained a total of 20 undergraduate students
	The IT industry is constantly evolving, and an innovative operating environment plays a key role in the success of organizations. At Innofactor, we are increasingly focused on harnessing the potential and strategic capabilities of our employees and giving them the freedom to apply their skills in the workplace. Selforganization is a strategic choice that empowers our teams. This gives them the opportunity to change the world and innovate with our customers. Each employee can participate in the discussion about sustainability through a Microsoft Teams-based discussion forum, Innofactor Game Changers. In the forum, we initiate discussions and share ideas about sustainability
	Information Security and Data Protection
	Innofactor’s customers require appropriate information security in their services and that the services enable operation in accordance with the EU General Data Protection Regulation (GDPR). Innofactor’s management has identified several critical cyber risk scenarios against which a company needs to protect itself. The company is committed to protecting its customers’ and partners’ information and systems, and naturally, Innofactor itself as a company. In order to ensure the level of information security corresponding to the risks, Innofactor maintains a certified information security management system in accordance with the ISO 27001 standard
	In its operations, Innofactor is committed to maintaining a high level of data protection and respects the privacy and rights of its personnel, customers and users. Through regular internal audits and the continuous development of information security, we aim to continuously develop data protection and information security in our operations and processes. Information REPORT OF THE BOARD OF DIRECTORS 48 INNOFACTOR PLC ANNUAL REPORT 2021 security and data protection are mandatory parts of induction training in addition to continuous training on information security and data protection. Innofactor’s information security group meets regularly to guide the development and implementation of information security and data protection at Innofactor. The company has a designated information security manager and a data protection officer. Additionally, the company’s main personal data registers have been assigned to the persons responsible for them.
	Anti-Corruption and Anti-Bribery
	Innofactor’s Code of Conduct sets out the general principles and guidelines that the company’s employees and partners adhere to. We arrange training activities concerning the Code of Conduct at regular intervals. Innofactor’s Code of Conduct prohibits all types of corruption and bribery. In the Nordic countries, Innofactor operates in a very regulated environment, and in 2021, all subcontracting took place within the EEA or USA. This operating environment and in Finland, for example, the strict compliance to the Act on Contractor’s Obligations and Liability, training the employees, continuous dialog within the company’s management, and monitoring subcontractors are important factors related to preventing the risk of corruption and bribery. Transparent business in accordance with the highest ethical standards is the basis of our company’s operations. We use our anonymous whistleblowing channel for reporting suspected infringements that are against our Code of Conduct. All reports received via the channel are processed in strict confidence.
	Risks Related to Corporate Responsibility
	Innofactor’s main risks related to corporate responsibility can be divided into five categories: personnel turnover, risks to reputation regarding data protection and information security, risks to reputation due to corruption and bribery, and risk of being cut off from public procurement competitions. Innofactor’s operations do not include actual significant environmental risks, even though the energy consumption is being monitored and there is a continuous effort to decrease it. The risks related to personnel turnover, data protection and information security are described under the heading ”Major risks and uncertainties.”
	EU Taxonomy Disclosures
	The EU Taxonomy Regulation aims to steer investments towards environmentally sustainable investments and to contribute to the achievement of the EU’s environmental objectives. The disclosure requirement for 2021 concerns climate change mitigation and adaptation.
	Innofactor has reviewed its economic activities against the criteria set by the EU. Innofactor has not identified activities aligned with the first two environmental objectives of the taxonomy. Therefore, Innofactor’s taxonomy-eligible activities account for 0 percent of the company’s net sales and capital expenditure.
	Share and Shareholders
	At the end of 2021, Innofactor Plc’s share capital was EUR 2,100,000.00 and the total number of shares was 37,388,225. Innofactor Plc has one series of shares. Each share confers one vote. During the period January 1–December 31, 2021, the highest price of the company’s share was EUR 2.07 (2020: 1.44), the lowest price was EUR 1.24 (2020: 0.51), and the average price was EUR 1.61 (2020: 1.00). The closing price for the review period on December 31, 2021, was EUR 1.52 (2020: 1.28). In public trading during the period of January 1–December 31, 2021, a total of 32,546,031 shares were traded (2020: 20,099,421), which corresponds to 87.0 percent (2020: 53.8%) of the average number of shares in the said period. In January 1–December 31, 2021, there were 37,388,225 shares on the average (2020: 37,388,225). The share trading increased by 61.9 percent compared to the corresponding period in 2020.
	The market value of the share capital at the closing price of EUR 1.52 on December 31, 2021, was EUR 56,643,161 (2020: 47,669,987), which shows an increase of 18.8 percent. On December 31, 2021, the company had a total of 12,343 shareholders (2020: 11,456), including nominee-registered shares. On December 31, 2021, the company held 762,0000 treasury shares.
	The Board of Directors has been given the following authorizations:
	-Until June 30, 2021, to decide on a share issue and granting of special rights entitling to shares, concerning a maximum of 3,600,000 new shares (decided by the General Meeting of March 30, 2021); the authorization has not been used.
	- Until June 30, 2021, to decide on the acquisition of a maximum of 3,600,000 treasury shares (decided by the General Meeting of March 30, 2021); under the authorization, Innofactor has repurchased 800,000 company shares between October 4, 2021 and January 3, 2022.
	Own Shares
	The General Meeting of March 30, 2021, authorized the Board of Directors to decide on acquiring of a maximum of 3,600,000 of the company’s own shares in one or several parts with the company’s unrestricted equity. The authorization entitles the Board to deviate from the shareholders’ proportional shareholdings (directed acquisition). Own shares may be acquired at the purchase price formed for them in public trading on the day of purchase or at another market price. The number of treasury shares at a time may be, at the maximum, one tenth of the total number of shares in the company. Shares may be purchased to be used in company acquisitions or implementing other arrangements relating to the company’s business operations, improving the company’s capital or financing structure, as a part of the company’s incentive system, or otherwise to be handed over or voided. In connection with the share repurchase, ordinary derivative, stock lending and other agreements may be made in the market in accordance with the laws and regulations. The authorization includes the right of the Board of Directors to decide on all other matters related to the acquisition of shares. The authorization will be valid until June 30, 2022. This authorization replaces the Board’s earlier authorizations concerning share repurchase.
	On October 4, 2021, the Board of Directors decided to commence the acquisition of the company’s own shares. The repurchase program was completed on January 3, 2022. During the repurchase program, Innofactor repurchased 800,000 shares held by the company. The average purchase price of the shares was EUR 1.5045. The shares were acquired at the current market price in public trading arranged by Nasdaq Helsinki Ltd. At the end of 2021, the company held 762,000 treasury shares (2.04% of all shares).
	Shareholdings of the Management
	Shareholdings of the Board of Directors on December 31, 2021: - Sami Ensio and his related parties, 7,886,142 shares, 21.10% - Sami Ensio, 5,712,382 shares, 15.28% - minor under guardianship, 724,588 shares, 1.94% - minor under guardianship, 724,586 shares, 1.94% - minor under guardianship, 724,586 shares, 1.94% - Anna Lindén, 79,150 shares, 0.21% - Risto Linturi and companies he has control over, 826,411 shares, 2.21% - Heikki Nikku, 20,138 shares, 0.05%
	Shareholdings of the CEO on December 31, 2021:
	-Sami Ensio and his related parties, 7,886,142 shares, 21.10% - Sami Ensio, 5,712,382 shares, 15.28% - minor under guardianship, 724,588 shares, 1.94% - minor under guardianship, 724,586 shares, 1.94% - minor under guardianship, 724,586 shares, 1.94%
	Shareholdings of the Other Members of the Executive Board:
	- Jørn Ellefsen, 80,500 shares, 0.22% - Marcus Hasselblad, 8,300 shares, 0.02% - Janne Heikkinen, 123,044 shares, 0.33% - Markku Puolanne, 10,000 shares, 0.03% - Vesa Syrjäkari, 60,000 shares, 0.16% - Martin Söderlind, 0 shares, 0.00%
	Largest Shareholders
	According to the share register maintained by Euroclear Finland Oy, the share ownership of the 20 largest Innofactor Plc shareholders at the end of the year, on December 31, 2021, was as follows.
	Name, Number of shares, % of share capital 1. Ensio Sami 7,886,142 21.10% 1. Ensio Sami 5,712,382 15.28% Minor under guardianship 724,588 1.94% Minor under guardianship 724,586 1.94% Minor under guardianship 724,586 1.94% 2. Ilmarinen Mutual Pension Insurance Company 1,800,000 4.81% 3. Linturi Kaija ja Risto 1,256,411 3.36% R. Linturi Oyj 489,107 1.31% Linturi Kaija Anneli 430,000 1.15% Linturi Risto Erkki Olavi 337,304 0.90% 4. Laiho Rami Tapani 1,158,694 3.10% 5. Ärje Matias Juhanpoika 854,253 2.28% 6. Mäki Antti-Jussi 613,725 1.64% 7. Tilman Tuomo Tapani 563,538 1.51% 8. Hellen Stefan Andreas 486,000 1.30% 9. Ingman Finance Oy Ab 450,000 1.20% 10. Muukkonen Teemu Heikki 410,357 1.10% 11. Järvenpää Janne-Olli 289,586 0.77% 12. Rausanne Oy 270,000 0.72% 13. Kukkonen Heikki-Harri 213,606 0.57%
	14. Puolakka Petri Yrjö Emil 202,511 0.54% 15. Laiho Jari Olavi 200,371 0.54% 16. Varsio Jussi Ilari 190,000 0.51% 17. Kannisto Jaakko Mikael 183,051 0.49% 18. Mäkinen Antti Vilho Juhani 164,000 0.44% 19. Heikki Tervonen Oy 150,000 0.40% 20. Mandatum Life Insurance Company Limited 149,027 0.40% Total 17,491,272 46.78%
	Shareholders by shareholder group December 31, 2021
		Number of shares	% of share capital
	Private households	28 234 297	75,52 %
	Enterprises	3 491 913	9,34 %
	Administratively registered	3 010 739	8,05 %
	Public entities	1 800 000	4,81 %
	Financial and insurance institutions	763 399	2,04 %
	Other foreign	44 607	0,12 %
	Non-profit organizations	43 270	0,12 %
	Total	37 388 225	100,00 %
	Board of Directors and the Company’s Management
	Board of Directors
	In 2021, the members of Innofactor Plc’s Board of Directors were: - Pekka Eloholma (until March 30, 2021) - Sami Ensio - Anna Lindén (Chairman of the Board of Directors) - Risto Linturi - Nikku Heikki
	The Chairman of the Board of Directors for Innofactor’s Finnish group companies is Sami Ensio, and the member of the Board of Directors is Executive Vice President, Business Development and Operational Excellence Vesa Syrjäkari with General Counsel Michaela Skrabb as the deputy member.
	The Board members of Innofactor Plc’s Swedish, Danish and Norwegian holding companies are the Group CEO Sami Ensio (Chairman) and Executive Vice President, Business Development and Operational Excellence Vesa Syrjäkari with General Counsel Michaela Skrabb as the deputy member in the Swedish and Danish companies. The Board members of Innofactor Plc’s Swedish, Danish and Norwegian operative country companies are the Group CEO Sami Ensio (Chairman) and Executive Vice President, Business Development and Operational Excellence Vesa Syrjäkari and the local Managing Directors of the country companies. In the operative company in Norway (Innofactor AS), also the General Counsel Michaela Skrabb has been a Board member
	CEO
	Innofactor Plc’s CEO is Sami Ensio. Mr. Ensio also acts as the CEO of the Innofactor Plc’s Finnish group companies. In Sweden, Denmark, and Norway, the local Country Managers act as the CEOs of the operative companies.
	Executive Board
	In 2020, Innofactor Group’s Executive Board consisted of: - Sami Ensio, CEO, Country Manager in Finland and Chairman of the Executive Board - Jørn Ellefsen, Country Manager for Norway and Denmark - Marcus Hasselblad, Country Manager for Sweden - Janne Heikkinen, Executive Vice President, Products and Services - Markku Puolanne, CFO - Vesa Syrjäkari, EVP, Business Development and Operational Excellence - Martin Söderlind, Chief Innovation and Talent Officer (as of April 1, 2021)
	Loans of Related Parties
	The company’s managers considered to be related parties have EUR 96 thousand of liabilities from the company’s personnel issues to the company. The term of the loan is five years, and the loan is repaid monthly in equal instalments. The interest rate is the 12-month Euribor 360 interest rate. However, the interest rate is always 0% at a minimum. The accrued interest is paid monthly to the company. The company has no other significant related party transactions.
	Auditor
	The auditor of Innofactor Plc was Ernst & Young Oy Authorized Public Accounting Firm, with Juha Hilmola (APA) as the auditor with principal responsibility
	Board of Directors’ Proposal on the Distribution of Profits
	Innofactor is a growing company and intends to use its operating profit on actions promoting growth, for example, on realizing mergers. According to the dividend policy, Innofactor aims to pay a dividend regularly each year. The target is to pay about half of the result for the financial period in dividends, taking into account the company’s financial position, possible corporate reorganizations, and other development needs. For 2021, the Group’s result for the financial period was EUR 4,503,784.55. In making the proposal on the dividend, the Board of Directors takes into account the company’s financial situation, profitability and near-term outlook. At the end of the financial period 2021, the distributable assets of the Group’s parent company amounted to EUR 27,016,921.29. The Board of Directors proposes that Innofactor Plc distributes EUR 0.08 per share as a repayment of capital. The Board of Directors further proposes that the Annual General Meeting authorize the Board to decide on a repayment of capital amounting to a maximum of EUR 3,279,058 (EUR 0.08 per share, taking into account the share issue authorization proposed to the Board of Directors).

Comprehensive Consolidated Profit and Loss Statement, IFRS
EUR thousand		1.1.2021-31.12.2021	1.1.2020-31.12.2020
Net sales		66 364	66 164
Other operating income		2 681	282
Materials and services		-8 874	-6 214
Employee benefits/expenses		-43 453	-43 551
Depreciation		-3 592	-4 663
Other operating expenses		-6 607	-9 517
Operating profit		6 519	2 501
Financial income		359	1 329
Financial expenses		-1 148	-1 780
Profit before taxes		5 730	2 050
Income taxes		-1 226	-288
Profit/loss for the period		4 504	1 761
Other comprehensive income
Items that may be later recognized in profit or loss:
Exchange differences		97	-462
Total comprehensive income		4 601	1 299
Distribution of the profit and comprehensive income
To shareholders of the parent company		4 601	1 299
Earnings per share calculated from the profit attributable to equity holders of the parent:
basic earnings per share (EUR)		0,1208	0,0471
diluted earnings per share (EUR)		0,1208	0,0471
Consolidated Balance Sheet, IFRS
ASSETS
EUR thousand		31.12.2021	31.12.2020
Non-current assets
Other tangible assets		535	473
Buildings and structures		3 166	3 865
Goodwill		26 393	26 531
Other intangible assets		633	2 084
Shares and holdings		5	5
Non-current assets		129	245
Deferred tax assets		4 830	6 413
Total non-current assets		35 691	39 616
Current assets
Trade and other receivables		13 403	13 925
Cash and cash equivalents		1 963	3 066
Total current assets		15 366	16 991
TOTAL ASSETS		51 057	56 607
SHAREHOLDERS’ EQUITY AND LIABILITIES
EUR thousand		31.12.2021	31.12.2020
Equity attributable to the shareholders of the parent company
Share capital		2 100	2 100
Share premium reserve		72	72
Reserve fund		59	59
Fund for invested unrestricted equity		20 174	20 921
Treasury shares		-1 146	0
Retained earnings		5 496	1 739
Exchange differences		-1 351	-1 448
Total shareholders’ equity		25 404	23 444
Non-current liabilities
Loans from financial institutions		4 683	8 890
Lease liabilities		1 658	2 218
Deferred tax liabilities		1 487	1 824
Total non-current liabilities		7 828	12 932
Current liabilities
Loans from financial institutions		1 873	2 540
Lease liabilities		1 603	1 738
Deferred tax liabilities		14 349	15 953
Total current liabilities		17 825	20 231
Total liabilities		25 653	33 163
Total shareholders’ equity and liabilities		51 057	56 607
Consolidated cash flow statement, IFRS
EUR thousand	Share capital	Share premium reserve	Reserve fund	Fund for invested unrestricted equity	Own share	Retained earnings	Exchange differences	Total shareholders equity													ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember	ifrs-full:EquityMember
Shareholders' equity Jan 1, 2021	2 100	72	59	20 921	0	1 739	-1 447	23 444
Comprehensive income
Result for the financial period						4 504		4 504
Other comprehensive income:
Exchange differences							97	97
Total comprehensive income						4 504	97	4 601
Dividend distribution						-748		-748
Repayment of capital				-748				-748
Purchase of own shares					-1 146			-1 146
Shareholders' equity Dec 31, 2021	2 100	72	59	20 174	-1 146	5 495	-1 351	25 404
Tuhatta euroa	Share capital	Share premium reserve	Reserve fund	Fund for invested unrestricted equity	Own share	Retained earnings	Exchange differences	Total shareholders equity
Shareholders' equity Jan 1, 2020	2 100	72	59	20 921	0	-22	-986	22 145
Comprehensive income
Result for the financial period						1 761		1 761
Other comprehensive income:
Exchange differences							-462	-462
Total comprehensive income						1 761	-462	1 299
Shareholders' equity Dec 31, 2020	2 100	72	59	20 921	0	1 739	-1 447	23 444
Consolidated cash flow statement, IFRS
EUR thousand		1.1.– 31.12.2021	1.1.– 31.12.2020
Cash flow from operating activities
Operating Profit		6 519	2 501
Other transactions with no related cash flow:		-108	-683
Depreciation		3 592	4 663
Changes in working capital:
Change in non-interest-bearing current receivables		479	-9
Change in non-interest-bearing current liabilities		-1 204	-813
Interest paid		6	43
Interest received		-430	-682
Taxes paid		0	-10
Net cash flow from operating activities		8 855	5 010
Investment cash flow
Acquisition of subsidiaries		0	-97
Investments in intangible and tangible assets		-402	-311
Other receivables		-400	0
Change in loan receivables		159	319
Net cash flow from investments		-643	-89
Cash flow from financing
Loans withdrawn		0	3 000
Loans paid		-4 873	-3 965
Lease liability payments		-1 801	-1 853
Share issue		-1 496	0
Purchase of treasury shares		-1 146	0
Net cash flow from financing		-9 316	-2 818
Change in cash and cash equivalents		-1 104	2 103
Cash and cash equivalents, opening balance		3 066	963
Cash and cash equivalents, closing balance		1 963	3 066

	Konsernitilinpäätöksen liitetiedot, IFRS
	Notes to the Consolidated Financial Statements (IFRS
	Innofactor Plc is a Finnish public company established in accordance with Finnish legislation. The domicile of the parent company is Espoo and its registered address is Keilaranta 9, 02150 Espoo. Innofactor Group is one of the leading software providers focused on Microsoft solutions in the Nordic countries. Innofactor delivers to its customers IT projects as a system integrator and develops its own software products and services. A copy of the consolidated financial statements is available at the company’s Internet address www. innofactor.com or at the head office at Keilaranta 9, 02150 Espoo, Finland. Innofactor Plc’s Board of Directors has approved these financial statements for publishing in its meeting on March 9, 2022. According to the Finnish Companies Act, shareholders may approve or reject the financial statements at a General Meeting held after their publication. The Meeting may also decide to amend the financial statements.
	2. Accounting Policies
	Accounting Policies
	Innofactor Plc’s consolidated financial statements have been prepared in compliance with the International Financial Reporting Standards (IFRS), observing the IAS and IFRS standards as well as SIC and IFRIC interpretations valid on December 31, 2021. In the Finnish Accounting Act and provisions issued thereunder, International Financial Reporting Standards refer to standards and related interpretations approved for adoption within the EU in accordance with the procedure laid down in regulation (EC) No. 1606/2002. The notes to the consolidated financial statements also comply with the provisions of Finnish accounting and corporate legislation that supplement the IFRS provisions. The consolidated financial statements have been prepared on a historical cost basis, unless otherwise stated in the accounting policies. The consolidated financial statements are presented in thousands of euros unless otherwise stated. As the figures are presented in thousands of euros, rounding may cause differences.
	Application of New and Amended IFRS Norms
	As of January 1, 2021, the Group has applied the following new and amended standards and interpretations which have not had a material effect on the Group’s reporting: - Rent reliefs related to COVID-19 - Amendments to FIRS 9, IAS 39. IFRS 7, IFRS 4 and IFRS 16: Interest rate benchmark reform – Phase 2
	Changes That Will Take Effect During the Financial Period 2022 or Later
	In addition to the standards and interpretations presented in the financial statements for 2021, 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, 2022. 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.
	Muutokset IFRS3:een: Viittaukset käsitteelliseen viitekehykseen - Muutos standardiin IAS 16: Aineelliset käyttöomaisuushyödykkeet, tulot ennen aiottua käyttöä - Muutos standardiin IAS 37: Tappiolliset sopimukset – sopimuksen täyttämisestä aiheutuvat menot - AIP IFRS 1 Ensimmäinen IFRS-standardien käyttöönotto: Tytäryritys ensilaatijana - Vuosittaiset parannukset IFRS 9 Rahoitusinstrumentit: Palkkiot ”10 prosentin” testissä rahoitusvelkojen poiskirjaamisesta - IFRS 17 Vakuutussopimukset - Muutos standardiin IAS 1: Velkojen luokittelu lyhyt- ja pitkäaikaisiksi - Muutos standardiin IAS 8: Olennaisen määritelmä - Muutokset standardeihin IAS 1 ja IFRS Practice Statement 2: Laatimisperiaatteiden noudattaminen ja lisätietojen antaminen - Muutos Standardiin IAS 12: Laskennalliset verot jotka liittyvät yksittäisestä liiketoimesta syntyviin saamisiin ja velkoihin - Muutos IFRS 10:n Konsernitilinpäätös ja IAS 28 Sjoitukset osakkuus ja yhteisyritys: Tytäryritys myydään osakkuus- tai yhteisyrityksille tai annetaan siihen panoksena
	- Amendments to IFRS3: Reference to the Conceptual Framework - Amendment to IAS 16: Property, plant and equipment: Proceeds before Intended Use - Amendment to IAS 37: Onerous Contracts – Cost of Fulfilling a Contract - AIP IFRS 1 First-time Adoption of International Financial Reporting Standards, Subsidiary as a first-time adopter - Annual improvements IFRS 9 Financial Instruments: Fees in the ’10 per cent’ test for derecognition of financial liabilities. - IFRS 17 Insurance Contracts - Amendment to IAS 1: Classification of Liabilities as Current or Non-Current - Amendment to IAS 8: Definition of Material - Amendments to IAS 1 and IFRS Practice Statement 2: Disclosure of Accounting Policies - Amendment to IAS 12: Deferred Tax related to Assets and Liabilities arising from a Single Transaction - Amendment to IFRS 10 Consolidated Financial Statements and IAS 28 Investments in Associates and Joint Ventures: Sales or contributions of assets between an investor and its associate/joint venture
	Other amended IFRS standards or IFRIC interpretations have not had an effect on Innofactor’s consolidated financial statements. New or amended IFRS standards or IFRIC interpretations that are not yet effective are not expected to have a material impact on the consolidated financial statements in the current reporting period or future reporting periods
	The preparation of the financial statements in accordance with the IFRS standards requires that the management makes certain assessments and judgmentbased solutions. Information on the judgment-based solutions, which the management has used when applying the accounting policies and which have the most significant impact on the figures presented in the financial statements, is given under the section ”Critical accounting judgments and key sources of estimation uncertainty.”
	Segment Structure
	Innofactor Group provides comprehensive solutions in a Microsoft-based environment. The Group has one reportable segment. The operations are reviewed as a whole to estimate the profitability and to manage the resource
	Subsidiaries
	Subsidiaries are companies over which the Group exercises control. This control arises from the Group holding more than half of the voting rights or otherwise being in a position to exercise control. The existence of potential control has also been taken into account in assessing the conditions under which control arises when instruments entitling to potential control are currently exercisable. Control refers to the right to stipulate the principles of the company’s finances and business operations to gain from the operations.
	Mutual holdings in the Group are eliminated using the acquisition cost method. The consideration transferred and the acquired company’s identifiable assets and assumed liabilities are measured at fair value at the acquisition date. The acquisition costs, excluding the costs to issue debt or equity securities, have been recognized as a cost. The consideration transferred does not include transactions treated separately from the acquisition. The impact of these is recognized in profit or loss in connection with the acquisition. Possible contingent additional consideration has been measured at fair value at the acquisition date and has been classified as liability or equity. Contingent additional consideration classified as debt is measured at fair value at the closing date, and the gain or loss arising is recognized in profit or loss or in other comprehensive income. Contingent additional consideration classified as equity is not remeasured.
	The subsidiaries acquired are consolidated from the date when control commences, and the subsidiaries disposed of are included in the consolidated financial statements until control ceases. All internal transactions, receivables, liabilities and unrealized profits, as well as internal profit distribution are eliminated in the consolidated financial statements. In a phased acquisition, the previously held equity interest is measured at fair value, and the resulting gain or loss is recognized in profit or loss. If the Group no longer has a controlling stake in a subsidiary, the remaining asset is measured at fair value at the date the control is lost, and the resulting gain or loss is recognized in profit or loss.
	Tangible Assets
	Tangible assets have been measured at acquisition value less accumulated depreciation and impairment losses. If an item of tangible assets consists of several parts with economic lives of different lengths, the parts are treated as separate assets. When a part is renewed, the costs are capitalized and the possible remaining carrying amount is written off. In other cases, subsequent costs are included in the carrying amount of the item of tangible assets only when it is probable that the future economic benefits that are attributable to it will flow to the Group and the acquisition cost of the item can be determined reliably. Other repair and maintenance costs are recognized in profit or loss as incurred. Depreciation of assets is calculated using the straight-line method over the estimated useful lives. The estimated useful lives are as follows:
	Machinery and equipment 3–10 years
	The residual values and useful lives of assets are reviewed at the end of each financial period and, if necessary, adjusted to reflect the changes in the expected economic benefits. The sales gains or losses from the sale or disposition of items of tangible assets are recognized in profit or loss under other operating income or expenses. The sales profit is defined as the difference between the sales price and the remaining purchase price.
	Government Grants
	Government grants received for realized costs are recognized in profit or loss as income for the period that the grant becomes receivable. These grants are recognized in other income.
	Intangible Assets
	Goodwill
	Goodwill arising in business combinations is recognized at the amount exceeding the Group’s share of the fair value of the net assets of the acquired company at the time of acquisition. Goodwill is not subject to depreciation, but it is tested annually for impairment. Goodwill is measured at original acquisition cost less impairment losses.
	Research and Development Costs
	Research and development costs are recognized as costs in profit or loss. The development costs incurred by the design of new or advanced products are capitalized in the balance sheet as intangible assets from the date on which the product is regarded as technically feasible, commercially utilizable and able to generate future economic benefits. Capitalized development costs include the material, work and testing expenses that result directly from completing an asset for the intended purpose. The development costs recognized as expenses are not capitalized later. Depreciation is recognized from the date the asset is ready for use. An asset which is not ready for use is tested annually for impairment. After initial recognition, capitalized development costs are measured at cost less accumulated depreciation and impairment losses. The useful life of capitalized development costs is 3-5 years, during which time capitalized costs are amortized on a straight-line basis. In 2021 and 2020, no development costs were capitalized as the requirements were not met.
	Other Intangible Assets
	An intangible asset is recognized in the balance sheet at acquisition cost, if the cost can be reliably determined and it is likely that the expected economic benefit from the asset will flow to the Group. Intangible assets with a limited useful life are recognized in profit or loss and amortized on a straightline basis over their known or estimated useful lives. The major part of other intangible assets has been formed in relation to business acquisitions and consists of customer relationships and technology. The amortization period is defined separately for each acquisition and is 5–9 years. The amortization period for software is 3–5 years.
	Leases
	Group as a Lessee
	Lease agreements, which fulfill the requirements of the IFRS 16 standard, are recognized in the balance sheet as right-of-use assets and corresponding lease liabilities. Initially, lease liabilities are measured at the commencement date at the present value of the lease payments, discounted using the interest rate implicit in the lease, if it can be readily determined. If the rate can’t be readily determined, such as in real estate leases, the incremental borrowing rate is used. The incremental borrowing rate reflects the rate of interest that the Group would have to pay to borrow over a similar term, and with a similar security, the funds necessary to obtain an asset of a similar value to the right-of-use asset in a similar economic environment. The lease term covers the non-cancellable period during which the Group has the right to use the underlying asset. For leases that are valid indefinitely, the probable minimum lease term is estimated. Subsequently, lease liabilities are measured at amortized cost by increasing or reducing the carrying amount to reflect interest on the lease liability or the lease payments made. Lease liabilities are remeasured for lease reassessments, amendments to lease agreements or to reflect revised in-substance fixed lease payments. Interest expenses are recognized in profit or loss. Right-of-use assets are amortized over the shorter of the lease term or economic useful life of the asset.
	Impairment of Tangible Assets and Intangible Assets
	The Group assesses at the closing date of each reporting period whether there is any indication of impairment of an asset. If there are such indications, the asset’s recoverable amount is estimated. In addition, the recoverable amount is estimated annually for the following assets regardless of whether there are any indications of impairment: goodwill and intangible assets with an infinite useful life. The recoverable amount is the asset’s fair value less costs to sell or its value in use, whichever is higher. Value in use refers to the estimated future net cash flows, discounted to their present value, expected to be derived from the said asset or cash-generating unit. The discount rate used is the interest rate before tax that represents the market’s view of the time value 61 value of money and special risks associated with the asset. An impairment loss is recognized, if the carrying amount of the asset is higher than its recoverable amount. The impairment loss is recognized immediately in profit or loss. An impairment loss of a cash-generating unit is first allocated to reduce the carrying amount of any goodwill allocated to the cash-generating unit and then to reduce the carrying amounts of the other assets of the unit pro rata. The useful life of the depreciated asset is re-evaluated in connection with the recognition of an impairment loss. An impairment loss recognized for an asset other than goodwill is reversed, if a change has taken place in the estimates used to determine the recoverable amount of the asset. However, the maximum reversal of an impairment loss amounts to the carrying amount of the asset had no impairment loss been recognized. An impairment loss recognized for goodwill is not reversed in any situation. No impairment losses were recognized in 2021 and 2020
	Employee Benefits
	Pension Obligations
	Pension arrangements are classified as benefit pension plans or contribution plans. In the contribution plans, the Group makes fixed payments to an external unit. The Group does not have a legal or constructive obligation to make additional payments, if the recipient is not able to pay the pension benefits concerned. All such arrangements that do not meet these conditions are benefit pension plans. The Group’s pension arrangements have been implemented through a pension insurance company, and they are based on contribution plans. In the contribution plan arrangement, payments are recognized in the profit and loss statement during the period to which the payment applies.
	Taxes Based on Taxable Income and Deferred Taxes for the Financial Period
	The tax expense comprises taxes on taxable income and deferred taxes for the financial period. Taxes are recognized in profit or loss, except when they are directly connected with items recognized in shareholders’ equity or other items of the comprehensive income. In this case, also the tax is recognized in the items concerned. The tax based on taxable income for the financial period is calculated on taxable income according to the tax rate in the country concerned. Deferred taxes are calculated on temporary differences between the carrying amount and the taxable value. However, deferred tax liabilities are not recognized for taxable temporary differences when the deferred tax liability arises from the initial recognition of goodwill, or if the liabilities arise from the initial recognition of an asset or liability in a transaction which is other than a business combination and which affects neither accounting nor taxable profit (or loss recognized in taxation) at the time of the transaction. The largest temporary differences arise from the depreciation of tangible assets, previously unrecognized tax losses, and adjustments based on fair value measurement on business combinations. Deferred taxes are calculated by using the tax rates enacted or approved in practice by the closing date of the reporting period. Deferred tax assets are recognized to the extent that it is probable that such future taxable profit will be available against which the temporary difference can be utilized. An estimate is made at the closing date of the reporting period on whether the conditions for recognizing deferred tax assets are met.
	Revenue Recognition Principles
	Revenue from the sale of products and services is presented as net sales measured at fair value and adjusted for indirect taxes, discounts and currency translation differences from sales in foreign currencies. Revenue is measured based on the consideration to which the Group expects to be entitled in a contract with a customer and excludes consideration collected on behalf of third parties. The Group recognizes revenue when it transfers control of a good or service to a customer.
	Services Sold
	Revenue from services is recognized when the service has been provided and the economic benefit from the service is probable. Man-hour work is recognized monthly as it progresses.
	Long-Term Projects
	Long-term projects include planning, implementation, project management and commissioning services related to software and solutions to be implemented for the customer. Long-term fixed-price projects are recognized using the percentage of completion method when the outcome of the project can be estimated reliably. For contracts comprising fixed-price projects, revenue is recognized based on the actual service provided by the reporting date as a proportion of the total services to be provided. This is determined based on the cost of actual labor hours spent relative to the total expected cost of labor hours, as it best reflects the transfer of control to the customer. Estimates of revenues, costs or progress towards completion are revised if circumstances change and any resulting increases or decreases in estimated revenues or costs are reflected in profit or loss in the period in which the circumstances that give rise to the revision become known by the management. Invoicing and customer payments in fixed-price projects follow the payment schedule defined in the customer contract. If the services rendered by the Group exceed the payment, a contract asset is recognized. I the payments exceed the services rendered, a contract liability is recognized. If the estimate of the outcome of the project changes, the recognized sales are adjusted in the financial period during which the change is discovered and can be estimated. An expected loss on a project is recognized in profit or loss immediately when it is identified. The Group does not have any contracts where the period between the transfer of the promised goods or services to the customer and payment by the customer exceeds one year. Consequently, the Group does not adjust any of the transaction prices for the time value of money. The management exercises judgment in estimating the recognition of revenue from fixed-price projects and the amount of retrospective discounts.
	Maintenance Fees
	Maintenance fees are recognized over the contract period.
	Licenses
	License revenue is recognized at a point in time when the license is delivered, the legal title has passed, the customer has accepted the license, and has access to the licensed software. Distinct licenses that provide a right to access the software are recognized over the contract period. Contract assets or liabilities do not typically arise in the businesses described above.
	Financing
	Innofactor’s financial assets have been categorized according to IFRS 9 into the following categories: financial assets at allocated acquisition cost and financial assets at fair value through profit or loss. The financial assets are categorized as they are first registered, and the categorization is based on the business model applied by the company as regards financial assets and nature of contract-based cash flows. Valuing an instrument, which belongs to financial assets, at allocated acquisition cost requires that the contract-based cash flows consist entirely of an interest and capital reimbursement (the so called SPPI criteria). The fulfilling of the SPPI criteria is assessed separately for each financial instrument. If the SSPI criteria are not fulfilled, the financial assets are valued at fair value through profit or loss. Financial assets are presented as current assets, if their maturity is under 12 months, or if the investment is planned to be relinquished within 12 months. In other cases, the asset is presented as a non-current asset. Transaction costs are included in the original carrying amounts of the financial assets, when the asset has been valued at allocated acquisition cost. The purchases and sales of financial instruments are registered at the clearance date. The fair values of financial instruments have been defined through discounted cash flows.
	Cash and Cash Equivalents
	Cash and cash equivalents comprise bank deposits. Bank overdrafts are included in the current liabilities in the balance sheet.
	Impairment of Financial Assets
	In estimating the losses for write-offs of sales receivables, a customer classification is used in which the reservation for credit loss is calculated based on experience, that is, based on expected credit losses from different customer groups. The Group’s realized credit losses have historically been very small due to the large share of net sales coming from public administration, third sector and large companies. Sales receivables and assets based on contracts are written off the profit or loss as final credit losses, when it is not reasonable to expect a payment to be received for them. If the amount of the impairment loss decreases during a future financial period and the deduction can be objectively considered to be related to a transaction taking place after the impairment entry, the recognized loss will be reversed as incurred in profit or loss.
	Financial Liabilities
	Initially, financial liabilities are measured at fair value. Transaction costs are included in the original carrying amount of financial liabilities measured at amortized cost. Financial liabilities are rated as current liabilities when they are planned to be settled within 12 months from the reporting time.
	The lending costs that are directly attributable to the acquisition, construction or production of a qualifying asset are recognized as part of the cost of that asset, if it is probable that future economic benefits that are attributable to the asset will flow to the Group and the costs can be determined reliably. Other lending costs are recognized as expenses in the period in which they have incurred. Fees paid on the establishment of loan facilities are recognized as transaction costs of the loan to the extent that it is probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the draw-down occurs. When the draw-down occurs, the fees paid on the establishment of loan facilities are recognized as part of transaction costs. To the extent there is no evidence that it is probable that some or all of the facility will be drawn down, the fee is capitalized as a pre-payment for liquidity services and amortized over the period of the facility to which it relates.
	Derivative Agreements
	Initially, derivative agreements are recognized at fair value on the date when the Group becomes a party of the agreement, and later they will continue to be valued at fair value. Profit and loss for valuing at fair value are treated in the accounting in a way defined by the purpose of use of the derivative agreement. Initially, derivative agreements are recognized at fair value on the date when the Group becomes a party of the agreement, and later they will be valued at fair value at the time of reporting. Changes in fair value are recognized in financial income or expenses in the profit and loss statement. The Group has no derivate agreements in effect.
	Shareholders’ Equity
	Ordinary shares are presented as share capital. Costs relating to the issue or acquisition of equity instruments are presented as a deduction in shareholders’ equity. If Innofactor repurchases its own equity instruments, the purchase price of such instruments is deducted from the shareholder’s equity
	Operating Profit
	The IAS 1 Presentation of Financial Statements standard does not define the concept of operating profit. The Group has defined the concept as follows: Operating profit is the net total which is formed when other operating income is added to the net sales and the following items are deducted: materials and services, cost of employee benefits, depreciation and possible impairment losses, and other operating expenses. All other items of the profit and loss statement are presented below the operating profit. Currency translation differences are included in operating profit if they arise from business related items; otherwise they are recognized in financial items.
	Critical Accounting Judgments and Key Sources of Estimation Uncertainty
	The preparation of financial statements requires estimates and assumptions concerning the future. The end results may deviate from these estimates and assumptions. The application of the accounting policies also requires judgment. The estimates made in the preparation of the financial statements are based on the best view of the management at the closing date of the reporting period. The estimates are based on the previous experiences and on assumptions concerning the future that are considered the most probable at the closing date. They may be related to the expected development of the Group’s financial operating environment in terms of sales and cost level. The Group regularly monitors the realization of the estimates and assumptions and the factors behind them by using several both internal and external sources of information. Possible changes in the estimates and assumptions are recognized in the financial period during which the estimate or assumption is adjusted and in the subsequent financial periods. The key assumptions concerning the future and those key sources of estimation uncertainty at the closing date of the reporting period that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are presented later in this report. The Group management considers these sections of the financial statements the most essential, because the accounting policies concerning them are the most complicated and their application requires the use of the most significant estimates and assumptions concerning, for example, the measurement of financial assets. In addition, the impact of possible changes in the assumptions and estimates used in these sections of the financial statements is estimated as the most significant.
	Determination of the Fair Value of Assets Acquired in Business Combinations
	The estimation of the fair value of intangible assets is based on an estimate of the cash flows related to the assets as there is no information available in the market concerning the purchase of similar assets. The Group management believes that the used estimates and assumptions are sufficiently exact for determining fair value. Additionally, the Group examines at every closing date of a reporting period or, if necessary, more frequently, if there are any indications of impairment in tangible and intangible assets.
	3. Net Sales
	EUR thousand	2021	2020
	Licenses	2 369	3 168
	Services	45 470	46 433
	Long-term projects	3 486	2 864
	Maintenance fees	15 040	13 699
	Total	66 364	66 164
	Innofactor revised the method of presenting the classification of net sales in 2021. The comparison figures for 2020 have been adjusted to comply with the new disclosure method. From long-term projects in progress at the balance sheet date, a total of EUR 2.7 million (EUR 1.2 million in 2020) of realized revenues had been recognized. For advance payments for long-term projects in progress, the balance sheet included EUR 85 thousand on December 31, 2021 (EUR 123 thousand on December 31, 2020). The items that were included in the contract liability in the previous financial statements were recognized in full as revenue in the reporting period. On January 1–December 31, 2021, approximately 66 percent of the net sales came from Finland, approximately 18% from Sweden, approximately 6% from Denmark, and approximately 10% from Norway. The warranty period for system deliveries is 6–12 months and work under warranty is usually carried out during maintenance.
	Unfulfilled Customer Contracts
	EUR thousand	2021	2020
	Total transaction price for partially or entirely unfulfilled customer contracts	72 837	60 402
	Estimated recognition within the next year	45 002	35 689
	Estimated recognition later	27 835	24 713
	Total	72 837	60 402
	For continuing service contracts, the value of longterm customer contracts is calculated as the value of the net sales in one year. On December 31, 2021, this was EUR 17,939 thousand and on December 31, 2020, it was EUR 15,958 thousand
	Net Sales by Customer Location
	EUR thousand	2021	2020
	Finland	43 845	44 718
	Rest of Europe	22 519	21 446
	Rest of the world	0	0
	Total net sales	66 364	66 164
	Other Operating Income
	Innofactor sold the business operations focusing on the Innofactor Prime ERP software in Finland to Total Specific Solutions (TSS) The business operations were transferred as of April 1, 2021. Prime is a flexible and versatile software solution for parishes and public sector organizations. It allows the optimization and efficient management of organizations’ resources and offers a comprehensive suite of diverse off-the-shelf and customized modules, such as billing, calendar management, graveyard management, enterprise resource planning system and electronic services. The result for 2021 includes a sales gain of approximately EUR 2.6 million from the sale of the Prime business. The capital gain is recognized in other operating income. The last installment of the sale will be paid on March 31, 2022. The installment to be paid includes a claim for redress on the part of the buyer. Innofactor does not consider a redress to the purchase price probable.
	4. Other Operating Expenses
	EUR thousand	2021	2020
	The following table shows three of the most significant items included in other operating expenses:
	Voluntary indirect employee costs	1 385	1 229
	Expenses for business premises	651	582
	Marketing expenses	561	490
	Total	2 597	2 301
	Other unspecified operating expenses	4 010	7 217
	Other operating expenses, total	6 607	9 518
	Remuneration of the Auditors
	EUR thousand	2021	2020
	Auditing	122	159
	Other services	10	20
	Total	132	179
	5. Depreciationand and Impairment
	EUR thousand	2021	2020
	Depreciation by asset group Intangible Assets	1 457	2 478
	Total	1 457	2 478
	Tangible assets Real estate	1 806	1 804
	Machinery and equipment	330	381
	Total	2 135	2 185
	Total depreciation	3 592	4 663
	6. Employee Benefits/Expenses
	EUR thousand	2021	2020
	Wages and salaries	34 760	35 668
	Pension expenses – defined contribution plans	5 339	4 632
	Other indirect employee costs	3 353	3 251
	Total	43 453	43 551
	Group personnel	2021	2020
	Average in the financial period	516	544
	At the end of the financial period	500	541
	Information on management benefits is presented in Note 24. Related party transactions.
	7. Research and Development Costs
	In 2021, the research and development costs recognized as expenses totaled EUR 3,504 thousand (EUR 3,618 thousand in 2020). The Group did not capitalize any research and development costs during the financial period 2021.
	8. Financial Income
	EUR thousand	2021	2020
	Interest income	2	29
	Other financial income *	357	1300
	Rahoitustuotot yhteensä	359	1329
	* Other financial income includes EUR 232 thousand in unrealized exchange rate gains that are primarily intra-Group.
	9. Financial Expenses
	Items recognized in profit or loss
	EUR thousand	2021	2020
	Interest and other financial expenses *	1043	1634
	Change in fair value registered from interest rate derivatives	0	4
	Interest expenses for right-of-use assets	106	142
	Financial expenses, total	1148	1780
	* Other interest and financial income includes EUR 542 thousand in unrealized exchange rate losses that are primarily intra-Group.
	10. Income Taxes
	EUR thousand	2021	2020
	Tax based on the taxable income of the financial period	0	-10
	Other taxes	-3	0
	Deferred tax related to the creation or cancellation of temporary differences	-1223	-278
	Total	-1226	-288
	Reconciliation between the income tax expense and the taxes calculated at the 20.0% tax rate valid in the Group’s home country
	EUR thousand	2021	2020
	Earnings before taxes	5730	2050
	Taxes calculated at the domestic tax rate	-1146	-410
	Non-deductible expenses	-45	-121
	Tax-free income	52	12
	Difference in foreign tax rate	3	31
	Other	-90	200
	Taxes in the profit and loss statement	-1226	-288
	11. Earnings per Share
	Basic earnings per share are calculated by dividing the profit attributable to the shareholders of the company by the weighted average number of outstanding shares during the financial period.
		2021	2020
	Profit for the year attributable to shareholders of the parent company (EUR	4 503 785	1 761 496
	Weighted average of the number of shares during the financial period	37 289 660	37 388 225
	Basic earnings per share (EUR/share)*	0,1208	0,0471
	*There is no dilution effect in the Group
	12. Tangible assets
	EUR thousand	Koneet ja kalusto	Rakennukset ja rakennelmat	Total
	Acquisition cost, Jan 1, 2021	4900	7088	11987
	Additions in 2021	386	1106	1492
	Deductions in 2021	-8	0	-8
	Acquisition costs, Dec 31, 2021	5277	8194	13471
	Accumulated depreciation, amortization and impairment, Jan 1, 2021	-441	-3239	-7650
	Depreciation related to deductions/exchange differences of tangible assets	0	15	15
	Depreciation in 2021	-330	-1806	-2135
	Carrying amount, Jan 1, 2021	489	3850	4338
	Carrying amount, Dec 31, 2021	537	3164	3701
	Acquisition cost, Jan 1, 2020	4559	6194	10753
	Additions in 2020	341	893	1234
	Acquisition cost, Dec 31, 2020	4900	7088	11987
	Accumulated depreciation, amortization and impairment, Jan 1, 2020	-4030	-1435	-5465
	Depreciation in 2020	-381	-1804	-2185
	Carrying amount, Jan 1, 2020	529	4760	5289
	Carrying amount, Dec 31, 2020	489	3850	4338
		Jan 1, 2021	Dec 31, 2021
	Tangible assets	472	535
	Right-of-use assets	3865	3166
	Total	4338	3701
		Jan 1, 2020	Dec 31, 2020
	Tangible assets	455	472
	Right-of-use assets	4835	3865
	Total	5290	4338
	Right-of-use assets
	EUR thousand	Machinery and equipment	Buildings and structures	Total
	Acquisition cost, Jan 1, 2021	16	3850	3866
	Additions in 2021		1106	1106
	Depreciation in 2021	-14	-1793	-1807
	Carrying amount, Dec 31, 2021	1	3164	3166
	Acquisition cost, Jan 1, 2020	74	4760	4835
	Additions in 2020	30	893	924
	Depreciation in 2020	-89	-1804	-1893
	Carrying amount, Dec 31, 2020	16	3850	3865
	Lease liabilities are described in Note 21
	13. Intangible Assets
	EUR thousand	Liikearvo	Muut aineettomat hyödykkeet	Total
	Acquisition cost, Jan 1, 2021	27743	16438	44180
	Additions in 2021			0
	Change in value from exchange rate changes	-134	8	-126
	Acquisition cost, Dec 31, 2021	27609	16446	44055
	Accumulated depreciation, amortization and impairment, Jan 1, 2021	-1216	-14357	-15573
	Depreciation in 2021	0	-1457	-1457
	Accumulated depreciation, amortization and impairment, Dec 31, 2021	-1216	-15813	-17029
	Carrying amount, Jan 1, 2021	26531	2084	28616
	Carrying amount, Dec 31, 2021	26393	633	27026
	Acquisition cost, Jan 1, 2020	27214	15621	42835
	Additions in 2020	186	702	887
	Change in value from exchange rate changes	343	115	458
	Acquisition cost, Dec 31, 2020	27743	16438	44180
	Accumulated depreciation, amortization and impairment, Jan 1, 2020	-1216	-11879	-13095
	Depreciation in 2020	0	-2478	-2478
	Accumulated depreciation, amortization and impairment, Dec 31, 2020 -	-1216	-14357	-15573
	Carrying amount, Jan 1, 2020	26003	3745	29748
	Carrying amount, Dec 31, 2020	26521	2084	28616
	Intangible Assets
	Impairment Testing
	The Group has one cash-generating unit (CGU), software business, to which all the goodwill created in business acquisitions is allocated. In impairment testing, all the Group’s recoverable amounts are determined on the basis of value in use. The cash flow forecasts are based on the forecasts approved by the management and they cover a period of three years. The cash flows after the forecast period approved by the management have been extrapolated by using a growth factor of 1.0% The essential variables in the calculation of value in use are the following
	1. Budgeted operating margin – The value of the variable is based on the budget approved by the Board of Directors and the management's estimate on the development of the operating margin during the next three years. During the forecast period, no essential changes are expected in the operating margin.
	2. Change in working capital – The value of the variable is based on the average working capital in relation to the net sales and the management's estimate on changes in the working capital during the next three years. During the forecast period, no essential changes are expected in the change in the working capital.
	3. Discounting rate – Determined by using Weighted Average Cost of Capital (WACC), which defines the overall cost of equity and debt, taking the special risks concerning the items into consideration. The discount rate has been determined before taxes. The discount rate used in the calculations is 11.7% (12.8% in 2020). The discount rate after taxes is 9.5% (9.5% in 2020).
	4. Growth rate in the forecast period – the company considers the used net sales to be conservative, considering the realized longterm growth of the field and of Innofactor's business
	According to the impairment testing, the recoverable amounts exceed the corresponding balance sheet values by approximately EUR 47 million. No impairment losses were recognized in 2021 and 2020
	The Group has prepared a goodwill sensitivity analysis. Based on the analysis, it was found that no reasonably possible change in any key variable would lead to a situation where the recoverable amount of a unit would be lower than its carrying amount
	Recognition of Goodwill
	EUR thousand	2021	2020
	IT service business	26393	26531
	Goodwill	26393	26531
	14. Deferred Tax Assets and Liabilities
	Changes in deferred taxes in 2021:
	EUR thousand	Dec 31, 2020	Recognized in profit or loss	Exchange differences	Reversal of net deferred tax assets and liabilities	Dec 31, 2021
	Deferred tax assets
	From Group combinations *	6413	-1560	-23	0	4830
	Total	6413	-1560	-23	0	4830
	Deferred tax liabilities
	Measurement of intangible assets and tangible assets at market value in business combinations	1834	-338	0	0	1487
	Total	1834	-338	0	0	1487
	* Of the deferred tax assets, approximately EUR 4,593 thousand consist of historical, confirmed losses
	At the end of 2021, the amount of losses, which have not been used in the Group’s taxation and which have not been recognized as deferred taxes in accordance with the prudence concept, is EUR 3.8 million. These losses are from the other Nordic countries outside Finland. The losses in other Nordic countries will not expire, but strong evidence of their utilization in the next few years is required. The figures do not include the losses to be used in the taxation for 2021, which have not yet been confirmed. To assess whether the convincing evidence threshold per IAS 12 is met, the company has prepared profit and tax forecasts for future periods that take into consideration the tax regulations in effect at the time of calculation. The management has recognized a deferred tax asset from the Group’s operations in Sweden, Denmark and Norway based on the forecast of taxable income in these calculations
	15. Trade and Other Receivables
	EUR thousand	2021	2020
	Trade receivables	8040	9882
	Receivables from customers for project agreements	2934	2012
	Loan receivables	98	141
	Accrued income	1939	1890
	Other receivables	393	0
	Total	13403	13925
			Credit loss provision for receivables
	EUR thousand	2021		2021	2020
		After credit loss provision		Before credit loss provision
	Breakdown of trade receivables by age
	Not past due	7514	8	7522	3001
	Past due
	Past due 1–90 days	516	1	517	5600
	Past due over 90 days	10	1	11	1282
	Total	8040	9	8049	9882
	Trade receivables have been adjusted by a credit loss provision in accordance with IFRS 9. The balance sheet values correspond best to the maximum amount of the credit risk, excluding the fair value of collateral, in cases where the other parties to the agreement are unable to fulfill their obligations related to financial instruments. The Group’s operating practices do not include the acquisition of collateral for trade and other receivables. The principles for managing credit risks are described in Note 18.
	Assets Based on Customer Contracts
	EUR thousand	2021	2020
	Receivables based on project contracts	2934	2012
	Total	2934	2012
	EUR thousand	2021	2020
	Liabilities based on project contracts	1353	1078
	Total	1353	1078
	Liabilities and receivables based on project contracts are stated in the accrued income and liabilities in the balance sheet. Innofactor does not expect to enter into contracts in which the time between the handover of projects or services to the customer and the payment made by the customer would be longer than one year. For this reason, the transaction prices are not adjusted to take the time value of money into account
	16. Cash and Cash Equivalents
	EUR thousand	2021	2020
	Bank accounts	1963	3066
	Total	1963	3066
	Current deposits have a maturity of three months at most. Cash and cash equivalents are presented at nominal value, which corresponds to their fair value.
	17. Notes Concerning Shareholders’ Equity
	Number of Shares in 2020	2021	2020
	Outstanding shares, Jan 1	37 388 225	37 388 225
	Share issue
	Own shares held by the company	762 000
	Outstanding shares, Dec 31	36 626 225	37 388 225
	Innofactor Plc has one class of shares. The share has no nominal value. All the issued shares have been paid in full.
	The equity funds are described below:
	Share Premium Reserve
	In the cases in which option rights have been decided upon while the old Companies Act (29.9.1978/734) was in force, the cash payments received for subscriptions have been recognized in the share capital and share premium reserve in accordance with the conditions of the arrangement, with the transaction costs deducted
	Reserve Fund
	The reserve fund is a fund for unrestricted equity formed on the basis of the decision of the General Meeting.
	Fund for Invested Unrestricted Equity
	The fund for invested unrestricted equity contains other equity type investments and the subscription price of shares to the extent that they are not, based on a specific decision, recognized in the share capital. For the option programs that have been decided on after the new Companies Act (21.7.2006/624) entered into force (September 1, 2006), the fees for subscriptions are recognized in full in the fund for invested unrestricted equity.
	Dividends and Capital Repayment
	In 2021, a dividend of EUR 0.02 per share and a capital repayment of EUR 0.02 per share were distributed. The Board of Directors has proposed that Innofactor Plc distribute EUR 0.02 per share repayment of capital for the financial period 2021. The Board of Directors further proposes that the Annual General Meeting authorize the Board to decide on a repayment of capital amounting to a maximum of EUR 3,279,058 (EUR 0.08 per share, taking into account the share issue authorization proposed to the Board of Directors).
	Own Shares
	The General Meeting of March 30, 2021, authorized the Board of Directors to decide on acquiring a maximum of 3,600,000 of company’s own shares in one or several parts with the company’s unrestricted equity. The authorization entitles the Board to deviate from the shareholders’ proportional shareholdings (directed acquisition). Own shares may be acquired at the purchase price formed for them in public trading on the day of purchase or at another market price. The number of treasury shares at a time may be, at the maximum, one tenth of the total number of shares in the company. Shares may be purchased to be used in company acquisitions or implementing other arrangements relating to the company’s business operations, improving the company’s capital or financing structure, as a part of the company’s incentive system, or otherwise to be handed over or voided. In connection with the share repurchase, ordinary derivative, stock lending and other agreements may be made in the market in accordance with the laws and regulations. The authorization includes the right of the Board of Directors to decide on all other matters related to the acquisition of shares. The authorization will be valid until June 30, 2022. This authorization replaces the Board’s earlier authorizations concerning share repurchase. At the end of the review period, the company held 762,000 treasury shares.
	18. Financial Risk Management
	In its normal business operations, the Group is susceptible to several financial risks. The goal of the Group’s risk management is to minimize the negative effects of the changes in the financial markets on the result of the Group. The main financial risks are credit risks, exchange rate risks, and interest risks. The general principles of the Group’s risk management are approved by the Board of Directors and the practical implementation of financial risk management is the responsibility of the Group’s financial department.
	Interest Risk
	At the closing date, the company had fluctuating rate bank loans totaling EUR 6.6 million (EUR 11.4 million on December 31, 2020). The company has been subjected to the cash flow interest risk through the loan portfolio. The goal of the company’s risk management as concerns the interest risk is to minimize the negative impacts of interest rate changes on the company’s result. The average interest rate of the loans was 3.1 percent (3.9% in 2020). The realized average balances of the fluctuating rate loans during the financial period have been used in the sensitivity analysis. At the closing date, the effect of the fluctuating rate interest-bearing loans on the result before taxes would have been EUR +/- 91 thousand (2020: EUR +/- 131 thousand) had the interest rate been increased or decreased by 1 percentage point.
	Exchange Rate Risk
	Innofactor Group operates globally and is exposed to risks related to the currencies of the countries in which it operates. Changes in exchange rates, especially the rates of Swedish krona and Norwegian krone, affect the Group’s net sales and profitability. Innofactor has significant business operations based on Swedish krona and Norwegian krone. The exchange rate risk is mainly due to the assets and liabilities registered in the balance sheet and the net investments made in the subsidiaries abroad. Also, the business contracts made by subsidiaries pose an exchange rate risk, although these contracts are mainly made in the currency the unit uses in its operation. The management of exchange rate risks in the Group aims at minimizing the uncertainty that changes in exchange rates cause in the result through cash flows and assessment of receivables and liabilities.
	Credit Risk
	Credit decisions related to sales receivables are monitored centrally by the Group’s management. Large part of Innofactor’s cash flow comes through established customer relationships as payments from the public sector and financially sound companies, which have not presented essential credit risks in the past, and the Group has not suffered any significant credit losses. Should credit risks realize, it would weaken the Group’s financial standing and liquidity. Sales receivables are monitored regularly. The aging analysis of the trade receivables is presented in Note 15. Trade and Other Receivables.
	Risks Related to Receivables from Projects
	A large part of Innofactor’s net sales comes from project business. A significant part of projects consists of long term projects in which scheduled payments and their terms are typically agreed on with the customer beforehand. When Innofactor performs work in customer projects, which is scheduled to be invoiced afterwards, project receivables are accrued. Especially in public administration projects, scheduled payments often take place nearer to the end of the project, which means increased project receivables and related risks. In customer negotiations, Innofactor pays special attention to scheduling the payments and the size of payments, and in customer projects, to project management and steering in accordance with the scheduled payments. Project receivables are monitored regularly
	Risks Related to the Cash Position
	The Group continually estimates and monitors the amount of financing required for the business operations, for example, by analyzing cash flow forecasts monthly to ensure that the Group has sufficient liquid funds to finance its operations. The Group analyzes the liquidity forecasts regularly and assesses the effect of possible acquisitions on the cash position. The Group has not identified significant liquidity risk concentrations in the financial assets
	EUR thousand
	Balance sheet value	0-6 month	6 month-1 year	over 1 year	2 -4 years
	Dec 31, 2021
	Maturity distribution of financial liabilities
	Loans from financial institutions
	6557	937	937	1873	2810
	Accounts payable and other debts
	14349	12368	1981	0	0
	tasearvo	0-6 month	6 month-1 year	over 1 year	2 -4 years
	Dec 31, 2020
	Maturity distribution of financial liabilities
	Loans from financial institutions
	11430	1270	1270	2540	5080
	Accounts payable and other debts
	15952	13864	2088	0	0
	Lease liabilities are described in Note 21.
	Capital Structure Management
	The shareholders’ equity in the consolidated balance sheet is managed as capital assets. The goal of capital structure management is to ensure operational preconditions of the Group and increase shareholder value in the long term. The capital structure can be managed through decisions concerning, for example, dividend distribution, acquisition and transfer of treasury shares, and share issues. The shareholders’ equity in the consolidated balance sheet is managed as capital assets. No external capital requirements are applied to the Group. The development of the capital structure of the Group is monitored continually by means of Net Gearing.
	EUR thousand	2021	2020
	Interest-bearing loans from financial institutions	6557	11430
	Lease liabilities	3261	3955
	Cash and cash equivalents	1963	3066
	Total shareholders’ equity	25404	23444
	Net Gearing	30,90 %	52,50 %
	Financial Risk Management
	In its normal business operations, Innofactor Group is exposed to normal financing risks. In total at the end of the review period, Innofactor had approximately EUR 5.6 million in interest bearing debts to financial institutions, which have been taken out to finance acquisitions and working capital. Of the debts, approximately EUR 4.7 million is non-current and approximately EUR 1.9 million current liabilities. Additionally, the company had lease liabilities in accordance with the IFRS 16 standard (leases for the duration of fixed-term leases) for EUR 3.3 million, of which EUR 1.7 million was current and EUR 1.6 million non-current. The total of interest-bearing liabilities was EUR 9.8 million. Innofactor is committed to the following covenants: Equity ratio calculated every 6 months is at least 38% until June 30, 2022 and 40% afterwards; interest bearing liabilities calculated every 6 months divided by the 12-month operating margin (EBITDA) is a maximum of 2.75 until June 30, 2022, and 2.5 afterwards; and certain other normal conditions for loans. The goal of managing the financing risks is to minimize the negative effects of the changes in the financial markets to the result of the Group. Financing risk management has been centralized to the CFO, who is responsible for the Group’s financing and regularly reports to the company’s Executive Board, CEO, and Board of Directors. It is possible that, in the future, the Group will not get the financing it needs and this would have a negative effect on the Group’s business and its development, especially on making acquisitions.
	19. Fair Values of Financial Assets and Liabilities
	The table below shows the fair value and carrying amount of each item in financial assets and liabilities. These values correspond with the consolidated balance sheet values.
	EUR thousand	Liitetieto	Dec 31, 2021	Dec 31, 2020
	Trade and Other Receivables	15	13 403	13 925
	Cash and Cash Equivalents	16	1963	3066
	Total		15366	16991
	Loans from financial institutions		6557	11430
	Lease liabilities		3261	3956
	Total		9818	15386
	Trade and other payables:
	Received advances		1353	1078
	Trade payables		1341	1559
	Other liabilities		4884	4766
	Accrued expenses		6771	8550
	Interest rate swap agreements, not in hedge accounting *		0	0
	Total		14349	15953
	* fair value hierarchy level 2
	Trade and other receivables
	The original carrying amount of the receivables corresponds to their fair values, as the effect of discounting is not essential considering the maturity of the receivables.
	Loans From Financial Institutions
	The carrying amount of loans corresponds with their fair value.
	Trade and Other Payables
	The original carrying amount of the trade and other payables corresponds to their fair values, as the effect of discounting is not essential considering the maturity of the payables.
	Derivatives
	Fair value of derivative agreements has been defined based on available market information.
	20. Government Grants
	Comprehensive Consolidated Profit and Loss Statement, IFR
	Government grants recognized during the financial period
	EUR thousand	2021	2020
	Grants received for wages and employee expenses	1	407
	Other grants	77	302
	Total	78	709
	Payments of government grants related to the COVID-19 pandemic
	EUR thousand	2021	2020
	Government grants received	78	513
	Government grants receivable	8	196
	Deferred payments	0	275
	During the 2021 financial period, the Innofactor Group received subsidies from the Swedish state related to COVID-19.
	21. Lease Liabilities
	Maturity
	EUR thousand	Total	alle 1 v	1 - 5 vuotta	yli 5 vuotta
	Dec 31, 2021
	Lease liabilities (IFRS 16)	3261	1603	1658	0
	Other lease liabilities	47	47	0
	Total	3308	1650	1658	0
	Tase
	EUR thousand	2021	2020
	Non-current lease liabilities	1658	2216
	Current lease liabilities	1603	1740
	Total	3261	3956
	Comprehensive Consolidated Profit and Loss Statement, IFRS
	EUR thousand	2021	2020
	Deduction of other expenses (lease liabilities)	1907	1994
	Addition of right-of-use asset deductions	-1806	-1893
	Addition of operating profit	101	101
	Addition of financial expenses	-106	-142
	Result for the financial period	-5	-41
	Current lease liabilities recognized in 2021		178
	Low value lease liabilities recognized in 2021		71
	The cash flow effect of the company’s lease agreements was EUR -2,155 thousand in 2020 (EUR -2,207 thousand in 2021). Interest on lease liabilities is shown in Note 9. Financial Expenses. Right-of-use assets are described in Note 12.
	22. Contingent Liabilities and Assets and Acquisition Commitment
	Collateral
	EUR thousand	2021	2020
	Collateral given for own commitments
	Lease collateral	126	121
	Mortgages on company assets	16350	17017
	Mortgages on company assets have been given as collateral for the credit limit and a loan.
	Bank guarantees	309	296
	Bank guarantees have been given as collateral for lease agreements.
	23. Statement of Changes in Interest Bearing Debts
	EUR thousand	Non-current	Current	Total
	Liabilities Jan 1, 2021	11108	4278	15386
	Loans withdrawn	0	0	0
	Loans paid	-2000	-2873	-4873
	Changes with no related cash flow: Changes between non-current and current	-2206	2206	0
	Change in lease liabilities *	-560	-135	-695
	Liabilities Dec 31, 2021	6342	3476	9818
	EUR thousand	Non-current	Current	Total
	Liabilities Jan 1, 2020	6953	9900	16853
	Loans withdrawn	3000	0	3000
	Loans paid	0	-3588	-3588
	Changes with no related cash flow: Changes between non-current and current	2206	-2206	0
	Change in lease liabilities *	-1051	172	-879
	Liabilities Dec 31, 2020	11108	4278	15386
	* IFRS 16 lease liabilities (Note 21)
	24. Related Party Disclosures
	Innofactor’s related parties include persons referred to in the description of the related parties of a listed company in the Limited Liability Companies Act and legal persons (IAS Regulation 24). The company’s financial administration maintains a list of the company’s related parties. The company’s financial administration defines Innofactor’s related parties, when the status as a related party is not due to the IAS related party definition concerning persons. The company sends an annual query to the company’s key management persons, as defined in IAS 24, about the natural and legal persons which are their related parties.Persons discharging managerial duties in the company, who are considered related parties, owe EUR 96 thousand to the company (EUR 107 thousand in 2020) as a result of personnel share issues. The loan period is five years, and the loan is repaid in fixed monthly installments. The interest rate for the loan is 12-month Euribor 360. However, the interest rate is always a minimum of 0%. The accrued interest is paid to the company monthly. The company has no other significant related party transactions
	Management’s Employment Benefits
	EUR thousand	2021	2020
	Salaries and fees paid to the CEO and Group management during the financial period, including benefits in kind, as follows:
	CEO (including Board fees)	363	344
	Other Group management	1263	882
	Total	1626	1226
	Management’s Employment Benefits
	EUR thousand	2021	2020
	Short-term employee benefits	1626	1226
	Post-employment benefits	0	0
	Other long-term benefits	0	0
	Benefits paid upon termination	0	0
	Share-based payments	0	0
	Total	1626	1226
	Management’s employment benefits include the salaries and fees of the Executive Board.
	EUR thousand		2021	2020
	Board members and deputy members
	Lindén Anna	Chairman of the Board in 2021	48	45
	Eloholma Pekka	Board member in 2020	0	27
	Ensio Sami	Board member in 2021	24	24
	Linturi Risto	Board member in 2021	24	24
	Heikki Nikku	Board member in 2021	24	20
	Total		120	140
	The CEO’s retirement age and the basis for calculating the pension comply with the effective Employee Pensions Act. The mutual term of notice of the CEO is 6 months. If the company terminates the CEO’s contract, the CEO will be paid the salary for the period of notice and also, as a compensation for the termination, a one-time payment equaling to the CEO’s 12 months’ salary.
	25. Group Companies
	At the end of the financial period, the Innofactor Group included the following companies:
	- Innofactor Plc, Finland (parent company) - Innofactor Software Oy, Finland, Espoo, 100% - Innofactor HRM Oy (Technology Oy), Finland, Espoo, 100% - Innofactor Holding AB, Sweden, 100% - Innofactor AB, Sweden, 100% - Innofactor Holding ApS, Denmark, 100% - Innofactor A/S, Denmark, 100% - Innofactor Holding AS, Norway, 100% - Innofactor AS, Norway, 100%
	26. Events After the Closing Date
	Events After the Review Period
	On January 4, 2022, Innofactor announced in a stock exchange release that it had completed the share repurchase program. Repurchases of treasury shares began on October 26, 2021, and ended on January 5, 2022. During this period, Innofactor acquired 800,000 treasury shares at an average price of EUR 1.5045. The shares were acquired at the current market price in public trading arranged by Nasdaq Helsinki Ltd.
	On January 18, 2022, Innofactor announced in a stock exchange release that the Ministry of Social Affairs and Health selected Innofactor in a public procurement competition as the provider of the Case Management, Document Management, Services and Reference Price Information System and the related maintenance and further development tasks of the Pharmaceuticals Pricing Board. The total value of the procurement (excluding VAT) stated by the Ministry of Social Affairs and Health in the procurement decision for the four-year contract period is approximately EUR 1,190,000.
	On January 20, 2022, Innofactor announced in a stock exchange release that the Housing Finance and Development Centre of Finland (ARA) had selected Innofactor in a public procurement competition as the supplier of the Sequence Number Register. The procurement includes the planning and implementation of the Sequence Number Register, the support, maintenance and further development services for the implemented solution, as well as system operation and control. The solution is based on Microsoft Azure cloud services. Innofactor’s share of the total value of the procurement is approximately EUR 680,000. The minimum agreement period is three years.
	On February 16, 2022, Innofactor announced in a stock exchange release that the Finnish Safety and Chemicals Agency (Tukes) selected Innofactor in a public procurement competition as the supplier of the “Agile development of services, servicing and maintenance” section of the framework agreement on for IT system development and maintenance. The framework agreement comprises a total of three areas for which a total of four framework contract suppliers were selected. A total of two framework contract suppliers were selected for the “Agile development of services and Servicing and maintenance” are. The Agile development of services, servicing and maintenance section focuses on the implementation of Tukes’ systems in accordance with an agile approach, service validation, the servicing and maintenance of applications, and processing and repair of disruptions. The anticipated total value of the procurement indicated by Tukes in the procurement decision for all three covered areas, without value added tax, is EUR 6,800,000. The duration of the framework agreement is four years, plus an option for two additional years.
	Innofactor had no other significant events after the end of the review period
	Parent Company Financial Statement, FAS
	EUR
	PARENT COMPANY PROFIT AND LOSS STATEMENT	Liitetieto	Jan 1–Dec 31, 2021	Jan 1–Dec 31, 2020
			12 months	12 months
	NET SALES	1	9 870 192	9 378 502
	Other operating income	2	31 844	12 500
	Materials and services
	Purchases during the financial period	3	-4 162 571	-2 028 509
	Personnel expenses	4	-2 596 458	-2 394 223
	Depreciation
	Planned depreciation		-310 841	-315 047
	Other Operating Expenses	6	-2 816 488	-4 634 977
	OPERATING RESULT		15 678	18 246
	Financial income and expenses	7
	Dividend income		0	0
	Interest and financial income		608 237	2 147 857
	Interest and other financial expenses		-354 792	-887 966
	Total financial income and expenses		253 445	1 259 891
	RESULT BEFORE APPROPRIATIONS AND TAXES		269 123	1 278 137
	Group contribution		-400 878	272 944
	EARNINGS BEFORE TAXES		-131 755	1 551 081
	RESULT FOR THE FINANCIAL PERIOD		-131 755	1 551 081
	Balance Sheet, FAS
	ASSETS	Note	Dec 31, 2021	Dec 31, 2020
	NON-CURRENT ASSETS
	Intangible rights	8	179 560	359 962
	Goodwill	8	0	120 768
	Tangible assets
	Machinery and equipment	8	16 809	26 479
	Investments
	Shares in Group companies	9	32 198 940	29 384 334
	Other shares and holdings		0	0
	TOTAL NON-CURRENT ASSETS		32 395 308	29 891 544
	CURRENT ASSETS
	Receivables	10
	Non-current
	Loan receivables		128 517	245 202
	Other receivables		26 119 556	27 289 298
	Current
	Trade receivables		11 797 963	12 876 104
	Loan receivables		73 178	115 972
	Accrued income	11	814 343	457 433
	Cash and bank receivables		1 587 548	2 867 927
	TOTAL CURRENT ASSETS		40 521 104	43 851 937
	ASSETS		72 916 412	73 743 481
	LIABILITIES
	SHAREHOLDERS’ EQUITY	12
	Share capital		2 100 000	2 100 000
	Revaluation fund		2 000 000	2 000 000
	Fund for invested unrestricted equity		28 267 517	29 015 281
	Profit from previous financial periods		-1 118 840	-776 443
	Profit/loss for the financial period		-131 755	1 551 081
	Total shareholders’ equity		31 116 921	33 889 919
	LIABILITIES	13
	Non-current
	Loans from financial institutions		4 683 333	8 890 000
	Non-current total		4 683 333	8 890 000
	Current
	Loans from financial institution		1 873 333	2 540 000
	Trade payables		659 988	372 771
	Other liabilities		33 622 634	26 887 845
	Accrued expenses	14	960 202	1 162 945
	Current total		37 116 158	30 963 561
	Total liabilities		41 799 491	39 853 561
	LIABILITIES		72 916 412	73 743 481
	Parent Company Cash Flow Statement
	EUR	Jan 1–Dec 31, 2021	Jan 1–Dec 31, 2020
	Operating activities cash flow
	Operating profit/loss	15 678	18 246
	Adjustments
	Depreciation	310 841	315 047
	Transactions with no related cash flow	-37 217	120 566
	Change in working capital
	Change in trade and other receivables	721 232	-247 826
	Change in trade and other payables	-5 635 176	-2 451 830
	Interest received	605 625	991 801
	Paid interest and other financial expenses	-314 963	-420 227
	Total operating activities cash flow	-4 333 981	-1 674 222
	Investment cash flow
	Investments in subsidiary shares	0	-103 727
	Proportional share of the dissolution of a subsidiary	0	1 065 926
	Investments in subsidiaries	0	-682 237
	Loan receivables repaid	159 479	255 813
	Loans paid	726 043	0
	Loans granted	0	-3 428 792
	Total investment cash flow	885 523	-2 893 017
	Cash flow before financing	-3 448 458	-4 567 239
	Financing cash flow
	Loans withdrawn	0	3 535 836
	Loans paid	-4 873 333	0
	Group account debt withdrawn	9 682 655	4 624 899
	Group account debt repaid	0	-726 043
	Purchase of own shares	-1 145 714
	Dividends paid	-1 495 529
	Total financing cash flow	2 168 079	7 434 692
	Change in cash and cash equivalents as per cash flow statement	-1 280 379	2 867 453
	Change in cash and cash equivalents	-1 280 379	2 867 453
	Cash and cash equivalents, opening balance	2 867 927	475
	Cash and cash equivalents, closing balance	1 587 548	2 867 927
	Notes to the Parent Company’s Financial Statements
	Accounting Principles Used in the Parent Company’s Financial Statements
	The financial statements of Innofactor Plc for the financial period of 2021 have been prepared in accordance with the Finnish accounting regulations.
	Intangible and Tangible Assets
	The intangible and tangible assets have been recognized at historical cost less planned depreciation. Planned depreciation has been calculated on the basis of the assets’ economic lives as follow
		- intangible rights		3–5 years
		- goodwill		5 years
		- tangible assets		3–5 years
	Acquisition costs for non-current asset items, which have a probable economic life of under three years, and small purchases (under EUR 850) have been recognized as cost in their entirety in the financial period in which they were purchased.
	Securities Included in Financial Assets
	Securities included in financial assets have been measured at the acquisition price or the market price, whichever is lower
	Items in Foreign Currency
	Items in foreign currency have been converted using the weighted average rate quoted by the European Central Bank at the closing date.
	Derivatives
	Fair value of derivative agreements has been defined based on available market information
	Notes to the Financial Statements (EUR)
	1. Net sales (EUR) by market area				2021	2020
		Finland			8 898 033	8 471 444
		Rest of Europe			972 160	907 058
		Total net sales			9 870 192	9 378 502
	2. Other operating income				2021	2020
		Lease revenue			31 844	12 500
		Other operating income			0	0
		Total other operating income			31 844	12 500
	3. Materials and services				2021	2020
		Purchases during the financial period			4 162 571	2 028 509
		Total			4 162 571	2 028 509
	4. Personnel expenses				2021	2020
		Salaries and fees			2 162 399	2 083 488
		Pension expenses			365 921	253 852
		Other indirect employee costs			68 138	56 882
		Total personnel expenses			2 596 458	2 394 223
		Management salaries and fees
		CEO and Board Member Sami Ensio			363 000	344 069
		Board members and deputy members			100 000	116 000
		Total			463 000	460 069
		The CEO’s retirement age and the basis for calculating the pension comply with the effective Employee Pensions Act. The mutual term of notice of the CEO is 6 months. If the company terminates the CEO’s contract, the CEO will be paid the salary for the period of notice and also, as a compensation for the termination, a one-time payment equaling the CEO’s 12 months’ salary
		Average number of personnel			29	26
	5. Planned depreciation				2021	2020
		On intangible rights			180 403	182 852
		On goodwill			120 768	120 768
		On machinery and equipment			9 670	11 427
		Total			310 841	315 047
	6. Other operating expenses				2021	2020
		Leases and other expenses for premises			891 433	919 107
		IT hardware, licenses and communications			1 133 742	1 738 968
		Travel expenses			25 863	52 807
		Training expenses			20 167	17 500
		Entertainment expenses			5 212	20 507
		Other operating expenses			740 070	1 886 088
					2 816 488	4 634 977
		The Group’s internal expenses			0	0
		Other operating expenses, total			2 816 488	4 634 977
		Remuneration of the Auditors			2021	2020
		Auditing			60 095	133 002
		Other services			6 855	4 200
		Total			66 950	137 202
		Fees in total			66 950	137 202
	7. Financial income and expenses
					2021	2020
		Total interest and other financial income
			Dividend income from Group companies		0	0
			From Group companies		605 617	991 787
			From others		2 619	1 156 069
		Total interest and other financial income			608 237	2 147 857
		Interest and other financial expenses
			To Group companies		0	-24 519
			Interest expenses to others		-354 792	-863 447
		Total interest and other financial expenses			-354 792	-887 966
		Total financial income and expenses			253 445	1 259 891
		Group contributions received/granted			-400 878	272 944
	Balance Sheet Notes (EUR)
	8. Intangible and tangible assets
						Aineelliset
				Aineettomat	Liikearvo	hyödykkeet
	Acquisition cost, Jan 1, 2021			1 047 111	603 840	138 163
	Additions			0	0	0
	Acquisition cost, Dec 31, 2021			1 047 111	603 840	138 163
	Accumulated depreciation, amortization and impairment, Jan 1, 2021			687 149	483 072	111 684
	Depreciation for the financial period			180 402	120 768	9 670
	Accumulated depreciation, Dec 31, 2021			867 551	603 840	121 354
	Carrying amount, Dec 31, 2021			179 560	0	16 809
						Aineelliset
				Aineettomat	Liikearvo	hyödykkeet
	Acquisition cost, Jan 1, 2020			1 047 111	603 840	138 163
	Additions			0	0	0
	Acquisition cost, Dec 31, 2020			1 047 111	603 840	138 163
	Accumulated depreciation, amortization and impairment, Jan 1, 2020			504 296	362 304	100 257
	Depreciation for the financial period			182 852	120 768	11 427
	Accumulated depreciation, Dec 31, 2020			687 149	483 072	111 684
	Carrying amount, Dec 31, 2020			359 962	120 768	26 479
	9. Investments
		Acquisition cost, Jan 1, 2021		29 384 334
		Acquisition cost, Dec 31, 2021		32 198 940
		Carrying amount, Dec 31, 2021		32 198 940
		Acquisition cost, Jan 1, 2020		28 696 532
		Acquisition cost, Dec 31, 2020		29 384 334
		Carrying amount, Dec 31, 2020		29 384 334
	10. Receivables
					2021	2020
		Non-current assets
			Loan receivables		128 517	245 202
			Receivables from associated companies		0	0
			Other receivables from Group companies		26 119 556	27 289 298
			Non-current receivables total		26 248 073	27 534 500
		Current receivables
			Trade receivables		0	17 220
			Loan receivables		73 178	115 972
			Trade receivables from Group companies		11 797 963	12 858 884
			Current receivables total		11 871 140	12 992 076
		Total receivables from Group companie			37 917 518	40 148 182
					201 695
	11. Accrued income				2021	2020
		Pre-paid licenses			783 267	425 913
		Periodical personnel expenses			22 354	23 781
		Other			8 721	7 739
		Accrued income in total			814 343	457 433
	12. Shareholders’ equity				2021	2020
		Shareholders’ equity, opening balance			2 100 000	2 100 000
		Shareholders’ equity, closing balance			2 100 000	2 100 000
		Revaluation fund, opening balance			2 000 000	2 000 000
		Revaluation fund, closing balance			2 000 000	2 000 000
		Unrestricted shareholders’ equity
		Fund for invested unrestricted equity opening balance			29 015 281	29 015 281
		Pääoman palautus			-747 765	0
		Repayment of capital			0	0
		Fund for invested unrestricted equity closing balance			28 267 517	29 015 281
		Profit from previous financial periods, opening balance			774 638	-776 443
		Dividend payment			-747 765	0
		Purchase of own shares			-1 145 713	0
					0	0
		Profit from previous financial periods, closing balance			-1 118 840	-776 443
		Result for the financial period			-131 755	1 551 081
		Total unrestricted shareholders’ equity			27 016 921	29 789 919
		Total shareholders’ equity			31 116 921	33 889 919
		Calculation of distributable funds			2021	2020
		Result from previous financial periods			-1 118 840	-776 443
		Result for the financial period			-131 755	1 551 081
		Fund for invested unrestricted equit			28 267 517	29 015 281
		Total			27 016 921	29 789 919
	13. Liabilities				2021	2020
		Non-current liabilities
		Loans from financial institution			4 683 333	8 890 000
		Total non-current liabilities			4 683 333	8 890 000
		Current liabilitie
		Loans from financial institutions			1 873 333	2 540 000
		Trade payables			659 988	372 771
		Trade payables to Group companies			0	8 301
		Trade payables in total			659 988	381 072
		Other liabilities			1 887 734	1 906 907
		Other payables to Group companies			31 734 900	24 972 637
		Other liabilities in total			33 622 634	26 879 544
		Accrued expenses			960 202	1 162 945
		Liabilities to Group companies			31 734 900	24 980 938
		Total current liabilities			37 116 158	30 963 561
		Total liabilities			41 799 491	39 853 561
	14. Accrued expenses				2021	2020
		Periodical personnel expenses			445 402	520 714
		Rent			106 526	159 196
		Other			408 275	483 035
		Accrued expenses in total			960 202	1 162 945
	15. Commitments and contingent liabilities				2021	2020
		Bank guarantees
		A bank guarantee has been given as collateral for a lease agreement.			256 331	252 960
		Lease liabilities
		To be paid in the next financial period			0	0
		To be paid later			0	0
		Total			0	0
		Lease liabilities
		To be paid in the next financial period			1 023 250	1 023 250
		To be paid in the next financial period			1 023 250	2 046 499
		Total			2 046 499	3 069 749
		Mortgages on company assets as collateral for loan
		Mortgages on company assets as collateral for loan			4 000 000	4 000 000
	Board of Directors’ Proposal on the Distribution of Profits
	At the end of the financial period of 2021, the distributable assets of Innofactor Plc are EUR 27,016,921. The Board of Directors proposes that Innofactor Plc distributes EUR 0.08 per share as a repayment of capital. The Board of Directors further proposes that the Annual General Meeting authorize the Board to decide on a potential additional dividend or additional repayment of capital amounting to a maximum of EUR 3,279,058 (EUR 0.08 per share, taking into account the share issue authorization proposed to the Board of Directors).
	Company Shares
	Innofactor Plc has one series of shares. The number of shares is 37,388,225. The share has no nominal value. One share entitles the holder to one vote at the General Meeting. All shares entitle their holders to dividends of equal value. Innofactor Plc’s share capital, paid in full and entered in the Trade Register, is EUR 2,100,000.00. On December 31, 2021, the company held 762,000 treasury shares.
	Location of Accounting Records
	Innofactor Plc, Keilaranta 9, 02150 Espoo
	Auditor’s Report (Translation of the Finnish Original)
	To the Annual General Meeting of Innofactor Plc
	Report on the Audit of Financial Statements
	Opinion
	We have audited the financial statements of Innofactor Corporation (business identity code 0686163-7) for the year ended 31 December, 2021. The financial statements comprise the consolidated balance sheet, statement of comprehensive income, statement of changes in equity, statement of cash flows and notes, including a summary of significant accounting policies, as well as the parent company’s balance sheet, income statement, statement of cash flows and notes.
	In our opinion
	the consolidated financial statements give a true and fair view of the group’s financial position as well as its financial performance and its cash flows in accordance with International Financial Reporting Standards (IFRS) as adopted by the EU.
	the financial statements give a true and fair view of the parent company’s financial performance and financial position in accordance with the laws and regulations governing the preparation of financial statements in Finland and comply with statutory requirements.
	Our opinion is consistent with the additional report submitted to the Board of Directors.
	Basis for Opinion
	We conducted our audit in accordance with good auditing practice in Finland. Our responsibilities under good auditing practice are further described in the Auditor’s Responsibilities for the Audit of Financial Statements section of our report. We are independent of the parent company and of the group companies in accordance with the ethical requirements that are applicable in Finland and are relevant to our audit, and we have fulfilled our other ethical responsibilities in accordance with these requirements. In our best knowledge and understanding, the non-audit services that we have provided to the parent company and group companies are in compliance with laws and regulations applicable in Finland regarding these services, and we have not provided any prohibited non-audit services referred to in Article 5(1) of regulation (EU) 537/2014. The non-audit services that we have provided have been disclosed in 4 to the consolidated financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
	Key Audit Matters
	Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We have fulfilled the responsibilities described in the Auditor’s responsibilities for the audit of the financial statements section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the financial statements. The results of our audit procedures, including the procedures performed to address the matters below, provide the basis for our audit opinion on the accompanying financial statements. We have also addressed the risk of management override of internal controls. This includes consideration of whether there was evidence of management bias that represented a risk of material misstatement due to fraud.
	Key Audit Matter
	Revenue Recognition of Fixed Price Projects
	Refer to note summary of significant accounting policies and note 3
	The company provides its customer with services based on fixed price contracts. Revenue is recognized over time which involves the use of management judgement when determining the percentage of completion of the projects. The group focuses on revenue as a key performance measure which could create an incentive for revenue to be recognized before the control has been transferred. Revenue recognition of fixed price projects was determined to be a key audit matter and a significant risk of material misstatement referred to in EU Regulation No 537/2014, point (c) of Article 10(2) due to the management’s judgement used when determining the percentage of completion of the projects.
	How our audit addressed the Key Audit Matter
	Pitkäaikaisten projektien tuloutukseen liittyvän olennaisen virheellisyyden riskin huomioon ottamiseksi suoritimme muun muassa seuraavat tarkastustoimenpiteet:
	Our audit procedures to address the significant risk of material misstatement related to revenue recognized over time, included amongst other: - assessing the Group’s accounting policies over revenue recognition of long-term projects. - gaining an understanding of the Percentage of Completion (PoC) revenue recognition process. - examination of the project documentation and testing the PoC calculations and inputs of estimates in the calculations and comparing the estimates to actuals. analytical procedures - assessing the progress and overall situation of the fixed price projects and key ratios by performing inquiries to persons on different levels in the organization. - analyzing key elements of the estimates, for instance, estimated revenue and estimated hours to complete. - Assessing the Group’s disclosures in respect of revenue recognition
	Key Audit Matter
	Valuation of Goodwill
	Refer to note summary of significant accounting policies and note 13
	At the balance sheet date 31 December 2021, the value of goodwill amounted to 26.4 M€ representing 52 % of the total assets and 104 % of the total equity. Valuation of goodwill was a key audit matter because:
	- goodwill represents a significant proportion of the balance sheet - annually performed impairment testing estimation process is complex and is judgmental - it is based on assumptions relating to market and economic conditions.
	Valuation of goodwill is tested annually through goodwill impairment test. Innofactor has allocated goodwill to one cash generating unit (CGU) which is the level for goodwill impairment test. The recoverable amount of the cash generating unit is based on value in use calculations, and the outcome could vary significantly if different assumptions were applied. There are a number of assumptions used to determine the value in use of the cash generating units, including revenue growth, EBITDA and the discount rate applied. Changes in the above-mentioned assumptions may result in an impairment of goodwill
	How our audit addressed the Key Audit Matter
	In our audit procedures related to valuation of goodwill we involved our internal valuation specialist to assist us in evaluating the assumptions and methodologies used by the management. Procedures included comparison of management assumptions with external market data and peer group average calculated by us focusing particularly on
	-forecasted revenue growth - EBITDA percentage and - weighted average cost of capital used in discounting cash flows.
	We reviewed the goodwill impairment test performed by the management and compared the discounted cash flows to the company’s market value. We also assessed the historical accuracy of managements’ estimates. In addition, we assessed the Group’s disclosures in the financial statements regarding the impairment test.
	Key Audit Matter
	Valuation of Deferred tax assets
	Refer to note summary of significant accounting policies and note 14.
	As of balance sheet date 31 December 2021, the group had deferred tax assets arising from the unused tax losses carry forward amounting to 4.6 M€ and from the consolidation entries 0,2 M€
	The amount of deferred tax asset is material to financial statements. Management assessment related to the recognition of deferred tax assets and the likelihood of future income is judgmental and based on assumptions affected by future market and economic developments. Due to above mentioned judgmental factors, valuation of deferred tax assets was determined to be a key audit matter
	How our audit addressed the Key Audit Matter
	When auditing deferred tax assets we evaluated company’s evidence that there will be future taxable income available to utilize the deferred tax assets.
	As part of our audit procedures we
	- assessed the key assumptions in the calculations prepared by the management focusing on forecasted future economic development and the company’s ability to generate taxable income. - tested deferred tax assets including the assessment of recognizing judgmental tax positions. We reviewed the communication with tax authorities. - assessed disclosures related to deferred taxes.
	Responsibilities of the Board of Directors and the Managing Director for the Financial Statements
	The Board of Directors and the Managing Director are responsible for the preparation of consolidated financial statements that give a true and fair view in accordance with International Financial Reporting Standards (IFRS) as adopted by the EU, and of financial statements that give a true and fair view in accordance with the laws and regulations governing the preparation of financial statements in Finland and comply with statutory requirements. The Board of Directors and the Managing Director are also responsible for such internal control as they determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the Board of Directors and the Managing Director are responsible for assessing the parent company’s and the group’s ability to continue as going concern, disclosing, as applicable, matters relating to going concern and using the going concern basis of accounting. The financial statements are prepared using the going concern basis of accounting unless there is an intention to liquidate the parent company or the group or cease operations, or there is no realistic alternative but to do so.
	Auditor’s Responsibilities for the Audit of Financial Statements
	Our objectives are to obtain reasonable assurance on whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with good auditing practice will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the financial statements.
	As part of an audit in accordance with good auditing practice, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
	- Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. - Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the parent company’s or the group’s internal control.
	- Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management. - Conclude on the appropriateness of the Board of Directors’ and the Managing Director’s use of the going concern basis of accounting and based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the parent company’s or the group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the parent company or the group to cease to continue as a going concern.
	- Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events so that the financial statements give a true and fair view. - Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.
	We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence and communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards. From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
	Other Reporting Requirements
	Information on our audit engagement
	We were first appointed as auditors by the Annual General Meeting on 2 April 2019 and our appointment represents a total period of uninterrupted engagement of three years.
	Other information
	The Board of Directors and the Managing Director are responsible for the other information. The other information comprises the report of the Board of Directors and the information included in the Annual Report, but does not include the financial statements and our auditor’s report thereon. Our opinion on the financial statements does not cover the other information. In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated. With respect to the report of the Board of Directors, our responsibility also includes considering whether the report of the Board of Directors has been prepared in accordance with the applicable laws and regulations.
	In our opinion, the information in the report of the Board of Directors is consistent with the information in the financial statements and the report of the Board of Directors has been prepared in accordance with the applicable laws and regulations. If, based on the work we have performed, we conclude that there is a material misstatement of the other information, we are required to report that fact. We have nothing to report in this regard. Helsinki 9.3.2022 Ernst & Young Oy Authorized Public Accountant Firm
	Juha Hilmola
	Authorized Public Accountant
	Additional Information
	Key Figures per Share
					2021	2020
	Earnings per share (EUR)				0,1232	0,0471
	Shareholders’ equity per share (EUR)				0,6796	0,6271
	Highest price of the share (EUR)				2,07	1,44
	Lowest price of the share (EUR)				1,24	0,51
	Market value of the shares (EUR thousand)				56 643	47 670
	Turnover of shares (pcs)				32 546 031	20 099 421
	Turnover of shares (%)				87 %	53,80 %
	Weighted average of the number of shares during the financial period				37 388 225	37 388 225
	Own shares held by the company				762 000	0
	Number of shares at the end of the financial period				37 388 225	37 388 225
	Shareholding
	On December 31, 2021, Innofactor Plc had 12,343 shareholders including the administrative registers (10). The share of administratively registered shares was 8.05% of the total number of shares.
	Distribution of shareholding at December 31, 2021
	Shares	Number of shareholders	Percentage of shareholders	Number of shares	Percentage of shares
	1-100	6251	50,64	188121	0,5
	101-1000	3687	29,87	1662179	4,45
	1001-10000	2090	16,93	6704086	17,93
	10001 - 100000	277	2,24	6744601	18,04
	over 100000	38	0,31	22089238	59,08
	Total	12343	100	37388225	100
	Shareholders by shareholder group December 31, 2021 (% of shares)
	Private households	75,52
	Enterprises	9,34
	Administratively registered	8,05
	Public entities	4,81
	Financial and insurance institutions	2,04
	Other foreign	0,12
	Non-profit organizations	0,12
	Total	100
	Calculation of Key Figures
	Percentage of Return on Equity:
	Profit or loss before taxes - Taxes
	Shareholders’ equity
	Percentage of Return on Investment:
	Profit or loss before taxes + Interest and other financial expenses
	Shareholders’ equity + Interest bearing financial liabilities
	Net Gearing:
	Interest bearing liabilities - Cash funds
	Shareholders’ equity
	Equity Ratio, %:
	Shareholders’ equity
	Balance sheet total - Advances received
	Result / Share:
	Profit before taxes attributable to equity holders of the parent - Taxes
	Average number of shares on the financial period adjusted after the share issue
	Shareholders’ Equity / Share:
	Shareholders’ equity attributable to equity holders of the parent
	Undiluted number of shares on the date of the financial statement
	Dividend payout and return of capital, total of result, %
	(Dividend/share) + (return of capital/share)
	Earnings / share
	Effective dividend yield, %
	(Dividend + return of capital) / share
	Share price at balance sheet date
	Price/earnings ratio (P/E)
	Share price at balance sheet date
	Earnings per share, basic