Notes to the Consolidated Financial Statements (IFRS)

The presentation of group accounting principles, key estimations and judgements has been made more informative by moving accounting principles to be part of the notes.

Basic information of the Group

Basware is a leading supplier of e-Invoicing and Purchase-to-pay solutions. Parent company Basware Oyj is a public Finnish company founded under Finnish law. Business ID of Basware Oyj is 0592542-4 and company's domicile is Espoo, Finland. The shares of the parent company Basware Corporation have been listed on NASDAQ Helsinki Ltd. since 2000. 

The consolidated financial statements for the year ended 31 December 2018 were authorized for issue in accordance with a resolution of the Board of directors on January 30th, 2019. Shareholders may adopt or reject the financial statements at the Annual General Meeting. Basware’s financial statements, Board of Directors’ report as well as the Auditor’s report are available on the Internet at www.basware.com/investors or parent company's head office at Linnoitustie 2, 02601 Espoo.

 1. Accounting principles 

Basis of preparation

Basware Corporation’s consolidated financial statements have been prepared according to the International Financial Reporting Standards (IFRS), approved for use in EU countries, in accordance with the IAS and IFRS standards, as well as IAS and IFRIC interpretations valid on December 31, 2017. The Group’s Financial Statements are presented in euros, which is the primary and reporting currency of the Group's parent company, and they are based on acquisition costs unless otherwise stated in the accounting principles. 

The amounts presented in the financial statements are rounded, so the sum of individual figures may differ from the sum reported.

Basware has adopted IFRS 15 Revenue from Contracts with Customers as of January 1, 2018 (mandatory application), with full retrospective application. In connection with the IFRS 15 application, the Group has also made certain changes to revenue allocation between Cloud and Non-cloud. Comparatives for 2017 presented in the financial statements have been updated to include IFRS 15 restatements and revenue reallocations. The effects of IFRS15 are described in more detail below in section 'New and revised standards and interpretations.' Due to retrospective application of IFRS 15 the Group has presented a third balance sheet 1.1.2017. 

During 2018, Basware has made certain changes in the presentation of its financial information. The company has adopted a functional income statement showing the company’s cost of sales, gross profit and operating expenses by function.

In February 2018 Basware completed the divestment of Financial Performance Solutions and Banking businesses. Divestments decrease both revenues and profitability, and it is important to take into account the effects of divestments when comparing 2018 financials to 2017 financials. In 2017, the combined net sales of Financial Performance Solutions and Banking businesses were approximately EUR 15 million and combined direct costs approximately EUR 7 million.

New and revised standards and interpretations

As of January 1, 2018, the Group has applied the following new and revised standards and interpretations with the following impacts to Group financial statements: 

  • Basware has adopted IFRS 15 Revenue from Contracts with Customers (mandatory application), with full retrospective application. Revenue for different revenue types are recognized over time except for licenses which is recognized at a point in time. As the new standard affected only a minority of the Group’s customer contracts, the impact of the standard on the Group’s 2017 restated total revenue is not material, being EUR -74 thousand in total. However, as a result of the application of the standard, part of Cloud revenue will be recognized later and part of Non-cloud revenue earlier compared to the previous revenue recognition standard. Due to this, 2017 restated IFRS 15 Cloud revenue is EUR 1 667 thousand lower and Non-cloud revenue EUR 1 596 thousand higher compared to the reported revenue.

    In connection with the IFRS 15 application, the Group has made certain changes in the revenue allocation between Cloud and Non-cloud. Revenues related to dedicated customer services as part of SaaS subscriptions will now be allocated as Cloud revenues. This reallocation does not impact total Group revenue. However, for 2017 a total of EUR 2 830 thousand of revenues reported as part of Non-cloud is now recorded as Cloud revenue.

    The total net impact of IFRS 15 restatements and the changes in revenue allocation between Cloud and Non-cloud for full year 2017 is EUR -74 thousand on Group level, with Cloud revenue increasing EUR 1 163 thousand and Non-cloud revenue decreasing EUR 1 236 thousand. As a result, the share of Cloud revenue of the Group’s total 2017 revenue has increased slightly.

    IFRS 15 restatements increased the Group’s non-current assets on December 31, 2017 by EUR 2 082 thousand, current assets by EUR 1 181 thousand, non-current liabilities by EUR 2 374 thousand, current liabilities by EUR 3 525 thousand, and decreased equity by EUR 2 636 thousand. IFRS 15 restatements had no material impact on basic or diluted EPS, and no impact on cash flows.
  • Amendments to IFRS 2 share-based payment (effective date January 1, 2018). The amendment concerns incentive schemes with “net settlement” features to cover withholding tax obligations and where the employer has an obligation to withhold tax from the received benefit of the share-based payment in the country in question. From 2018 onwards, a compensation cost pursuant to IFRS 2 will be recognized for such payments, based on the entire scheme being an equity-settled payment. The impact of implementation has been presented in the statement of changes in equity and in note 5 of Group financial statements.   
  • IFRS 9 Financial Instruments (effective date January 1, 2018), which replaced the previous IAS 39 Financial Instruments: Recognition and Measurement. The main impact of IFRS 9 concerns the timing of recording expected credit losses. IFRS 9 includes new guidance on financial instruments classification, measurement, impairment and hedging. Group has updated the classification of financial assets and liabilities accordingly. Reclassifications did not impact carrying values. Below table illustrates classifications of financial assets and liabilities under IFRS 9 and IAS 39. IFRS 9 has not been applied retrospectively. The impact of implementation has been presented in the statement of changes in equity. 

IFRS 9 measurement category

EUR thousand

IAS 39 measurement categoryEUR thousandIFRS 9: Fair value through profit or lossIFRS 9: Amortized costsIFRS 9: Fair value through OCI
Loans and other receivables1,582-1,582-
Trade receivables *24,534-24,406-
Long-term investments38--38
Total -25,98838

* The change in carrying amount is a result of additional impairment allowance.

As of January 1, 2018, the Group has applied the following new and revised standards and interpretations which did not materially impact Group reporting: 

  • Interpretation: IFRIC 22 Foreign Currency Transactions and Advance Consideration (effective date January 1, 2018). The interpretation clarifies the exchange rate to be used in receipt or in payment of advance consideration and in recognizing equivalent non-monetary asset or non-monetary liability arising from the receipt or payment of advance consideration. The non-monetary asset or liability is valued by using the exchange rate when the non-monetary balance sheet item is recognized. 
  • Annual Improvements to IFRS 2014-2016. Minor, non-urgent amendments to standards are collected and adopted in the annual improvement procedure once a year. The effects of the changes vary by standard. The amendments concern the following standards: IFRS 1, IAS 28 and IFRS 12. 

Amendments that will enter into force during the financial year 2019 or later

In addition to the standards and interpretations presented in the financial statements for 2018, 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, 2019. 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.

  • IFRS 16 Leases (estimated effective date January 1, 2019). The EU has approved the standard. IFRS 16 specifies the requirements for recognition, measurement, presentation and disclosure of leases. The standard provides a single lessee accounting model. IFRS 16’s approach to lessor accounting is substantially unchanged from current standards. As a general rule, all leases with a term of over 12 months are recognized in the balance sheet unless the underlying asset has a low value. At the commencement date of a lease, a lessee will recognise a liability to make lease payments (i.e., the lease liability) and an asset representing the right to use the underlying asset during the lease term (i.e., the right-of-use asset). Lessees will be required to separately recognise the interest expense on the lease liability and the depreciation expense on the right-of-use asset. Lessees will be also required to remeasure the lease liability upon the occurrence of certain events (e.g., a change in the lease term, a change in future lease payments resulting from a change in an index).  
  • The Group has elected to use modified retrospective approach in implementing IFRS16, and accordingly will not restate comparative figures. Instead, the Group will recognize the cumulative effect of initially applying IFRS 16 as an adjustment to the opening balance of retained earnings and other related balance sheet items. The Group will elect to use the exemptions applicable to the standard on short-term lease contracts (lease period less than 12 months), and for lease contracts for which the underlying asset is of low value.
  • During 2018 the Group has performed detailed impact assessment. In summary, the estimated impact of IFRS 16 adoption to 2019 financials will be:
    - Opening balance sheet for 2019 will increase by estimated EUR 17,5 - 19,5 million due to increase in lease liabilities and right-of-use assets. 
    - Operating profit will increase due to increase in interest expenses 
    - Depreciation will increase significantly and correspondingly rent expenses will decrease significantly
    - Reclassifications within cash flow statement as the principal payments of lease liabilities is presented in the cash flow from financing activities
  • Annual improvements to IFRS 2015-2017 (estimated effective date January 1, 2019). The EU has not yet approved the changes. The Minor, non-urgent amendments to standards are collected and adopted in the annual improvement procedure once a year. The effects of the changes vary by standard. The amendments concern the following standards: IFRS 3, IFRS 11, IAS 12 and IAS 23. According to the Group's current estimate, the amendments will have no impact on the Group's future financial statements, and it is continuing its assessment of the impact of the amendments.
  • Interpretation: IFRIC 23 Uncertainty over Income Tax Treatments (estimated effective date January 1, 2019). The interpretation clarifies the requirements of IAS 12 Income Taxes in situations, where there is uncertainty over income tax treatments under IAS 12. The interpretation addresses the following issues:
    - Whether the entity should consider each tax treatment independently or whether tax treatments    should be considered collectively
    - The entity’s assumptions for taxation authorities’ actions and information concerning uncertain tax        positions
    - How the entity considers uncertain tax positions when determining taxable profit (or loss), tax bases,      unused tax losses and credits and tax rates
    - How the entity accounts for changes in facts and circumstances

According to the Group's current estimate, the interpretation will have no impact on the Group's future financial statements, and it is continuing its assessment of the impact of the interpretation.

  • Amendments to IAS 19: Plan Amendment, Curtailment or Settlement (estimated effective date January 1,2019). The EU has not yet approved the amendments. The amendments address the accounting when a plan amendment, curtailment or settlement occurs during a reporting period. According to the Group's current estimate, the amendments will have no material impact on the Group's future financial statements, and it is continuing its assessment of the impact of the amendments.
  • Amendments to IFRS 9: Prepayment Features with Negative Compensation (effective date January 1,2019). The amendments address accounting treatment for debt instruments in financial assets in cases of early termination of the contract. According to the Group's current estimate, the amendments will have no material impact on the Group's future financial statements, and it is continuing its assessment of the impact of the amendments.

Basis of consolidation

The consolidated financial statements comprise the parent company Basware Corporation and the subsidiaries controlled by it at the end of reporting period. Control is achieved when the Group is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. Being in control means the power to govern the financial and operating policies of the company to obtain benefits from its activities. The subsidiaries have been included in the Group financial statements as of the acquisition date. Intra-group holding is eliminated using the acquisition cost method. Acquired companies are accounted for using the purchase method according to which the assets and liabilities of the acquired company are measured at their fair value when it has been possible to determine the value reliably. Deferred taxes of the acquisition cost adjustments are recognized according to the valid tax rate and the remainder is recognized as goodwill on the balance sheet. When circumstances indicate that there are changes in elements of control the consolidation is re-assessed.

Intra-group business transactions, internal liabilities and receivables, and internal profit distribution are eliminated in the Group financial statements.

Basware has a 50 percent interest in a joint venture which was established with Arrowgrass Capital Partners LLP in the UK. Basware has determined its interest in the joint venture to be accounted for using the equity method. Basware’s share of results of the joint venture is presented as a separate line item in the financial items of the consolidated statement of comprehensive income and in investments in the consolidated statement of financial position. The Group does not have interests in other joint ventures or associates. 

Transactions in foreign currencies

Transactions in foreign currencies are recorded in the operating currency at the approximate exchange rates prevailing at the transaction dates. Monetary items in foreign currencies have been translated into the operating currency using the exchange rates at the end of the reporting period. Non-monetary items denominated in foreign currencies are carried at the exchange rate at the date of the transaction.

In the Group financial statements, the income statements of foreign subsidiaries are translated into euros at the average rate for the financial period and balance sheets at the exchange rate of the balance sheet date. Average rate difference due to different exchange rates on the statement of comprehensive income and balance sheet are entered in other comprehensive income. Translation differences arising from the elimination of foreign subsidiaries and translation of equity items accumulated after the acquisition are entered in other comprehensive income. Foreign currency gains and losses from monetary items part of the net investment in a foreign unit are recognized in other comprehensive income and entered on the statement of comprehensive income when the foreign unit is divested. 

Segment information

Basware reports one operating segment. The reported segment is comprised of the entire Group, and the segment figures are consistent with the Group figures. Entity-wide disclosures are presented in Note 2 and Note 12.

Government grants

Government grants are recognized when there is reasonable assurance that the grant will be received. The grants received are recognized as offsetting items of the expenses incurred. When the grant relates to capitalized R&D projects it will reduce the carrying amount of the asset, and they are recognized in profit and loss by way of lower depreciation charge over the useful life of the intangible asset.

Research and development costs

Research expenses are booked as an expense as they are incurred. Development expenditures on an individual project are recognized as an intangible asset when the Group can demonstrate:

  • the technical feasibility of completing the intangible asset so that the asset will be available for use or sale
  • its intention to complete and its ability and intention to use or sell the asset 
  • how the asset will generate future economic benefits
  • the availability of resources to complete the asset
  • the ability to measure reliably the expenditure during development.

Costs related to the adoption of new technology or development of a new generation of products are capitalized and recognized and amortized over the useful life of 3–5 years. In determining the useful life, the obsolescence of technology and the typical life cycle of products in the industry are taken into consideration. Amortization begins when development is complete, the asset is available for use and the product is ready for commercial utilization. Maintenance of existing products and minor enhancements are expensed when they are incurred. Government grants related to research and development are recognized through profit or loss in the periods during which the corresponding costs are recognized as expenses.

Leases

Leases on property, plant and equipment are classified as finance leases if they transfer substantially the risks and rewards incidental to ownership to the Group. Finance leases are capitalized at the beginning of the lease as assets and liabilities at the lower of the fair value of the leased asset and the present value of the minimum lease payments. A leased asset is depreciated over the useful life of the asset. Lease payments are apportioned between finance charges and reduction of the lease liability to achieve a constant rate of interest on the remaining balance of the liability. Finance lease liability is presented in current and non-current interest-bearing financial liabilities.

An operating lease is a lease other than a finance lease. Operating lease payments are recognised as an operating expense in the statement of profit or loss on a straight-line basis over the lease term.

Contract costs

The incremental costs of obtaining a contract with a customer including significant sales commissions related to long-term service contracts are capitalized if the recognition criteria are satisfied and the entity expects to recover those costs. The capitalized costs are amortized on a straight-line basis over the contract term in which the services are transferred and the revenue is recognized.

Accounting principles requiring management’s judgement and key uncertainties relating to the use of estimates

Preparation of financial statements in accordance with the IFRS standards requires Basware's management to make estimates and assumptions that have an effect on the amount of assets and liabilities on the balance sheet at the closing date as well as the amounts of income and expenses for the financial period. In addition, the management must exercise its judgment regarding the application of accounting policies. Since the estimates and assumptions are based on the views at the date of the Financial Statements, they include risks and uncertainties. The actual results may differ from the estimates and assumptions. More information on the most significant items requiring management’s judgement:

  • Goodwill, note 3
  • Development expenses, note 10
  • Trade receivables, note 15
  • Deferred tax assets, note 8
  • Share-based payments, note 5
  • Financial risk management, note 18

Alternative performance measures

Basware presents the following financial measures to supplement its Consolidated Financial Statements which are prepared in accordance with IFRS. These measures are designed to measure growth and provide insight into the company’s underlying operational performance. The Group has applied the recent guidance from ESMA (the European Securities and Markets Authority) on Alternative Performance Measures which is applicable as of July 3, 2016 and defined alternative performance measures as follows.

Cloud revenue includes net sales from SaaS and other subscription revenues, transactions services and financing services excluding alliance fees. Non-cloud revenue includes net sales from licences, maintenance and consulting, as well as alliance fees.

Organic revenue growth is calculated by comparing net sales between comparison periods in constant currencies excluding alliance fees as well as net sales from acquisitions and disposals that have taken place in the past 12 months.

Net sales in constant currencies is calculated by eliminating the impact of exchange rate fluctuations by calculating the net sales for the comparable period by using the current period’s exchange rates.

Gross investments are total investments made to non-current assets including acquisitions and capitalized research and development costs.

Other capitalized expenditure consists of investments in property, plant & equipment and intangible assets excluding acquisitions and capitalized research and development costs.

EBITDA is calculated as operating result plus depreciation and amortization.

Adjusted EBITDA is calculated from EBITDA excluding any adjustments related to alliance fees, acquisitions and disposals, restructuring and efficiency measures, impairment losses and litigation fees and settlements.

Adjusted operating result (Adjusted EBIT) is calculated from operating result excluding any adjustments related to alliance fees, acquisitions and disposals, restructuring and efficiency measures, impairment losses and litigation fees and settlements.

Adjusted earnings per share (Adjusted EPS) is calculated by excluding from the result any adjustments related to alliance fees, acquisitions and disposals, restructuring and efficiency measures, impairment losses and litigation fees and settlements.

Subscription annual recurring revenue gross order intake is calculated by summing the total order intake in the period expressed as an annual contract value. This includes SaaS and other subscription types. Transaction revenue is not included. Gross new order intake covers new cloud customers, add-ons and renewal uplifts but excludes churn. There will be a time lag before this order intake is visible in net sales.

 

 

2. Revenue and contract balances 

Accounting principles

Net sales

Net sales are presented net of discounts and exchange rate differences of foreign currency sale.

Revenue recognition

Basware reports net sales by type. Net sales by type is divided into two groups: cloud and con-cloud revenue. Cloud revenue consists of net sales from SaaS and other subscription types and  transaction revenue and non-cloud revenue includes net sales from licences, maintenance and consulting. SaaS and transaction services are sold together with consulting services and e-invoicing services include also work related to set-up activities which are charged separately as Start up fee.

Basware has adopted IFRS 15 Revenue from Contracts with Customers as of January 1, 2018 with full retrospective application.  IFRS 15 Revenue from Contracts with Customers is based on the principle that sales are recognized when the control of the goods or service is transferred to the customer. According to IFRS 15 the contract qualifies as a customer contract when each party's general and specific rights and obligations are decsribed, contract is approved by the parties, each party's enforecable rights and obligations exists, the contract has commercial substance and it is probable that the consideration to which the entity is entitled to in exchange for the goods or services will be collected. Group does not have a significant financing components in its contracts with customers or sale with a right of return. 

Basware revenue for different revenue types are recognized over time except for licenses which is recognized at a point in time. SaaS and transaction services fees are fixed and are invoiced monthly or annual basis, or monthly basis based on user and transaction volumes. Both fees are recognized monthly basis over the term of the contract. Revenue from set up activities are deferred and recognized over time throughout the contract term.

Revenue from the license sales is recognized when contractual criteria of IFRS 15 has been fulfilled and when license has been delivered to the customer. Maintenance services which includes new versio releases and customer support are recognized over the contract period.

Revenue of professional services are recognized during the reporting period in which service is provided.  Revenue of fixed-price consulting projects are recognized as revenue and expenditure on the basis of the percentage of completion when the outcome of the project can be reliably estimated. If the resulting costs and recognized profits exceed the amount invoiced for the transaction, the difference is presented in “contract assets” on the balance sheet. If the resulting costs and recognized profits are lower the invoicing for the transaction, the difference is presented in “contract liabilities” on the balance sheet. When it is likely that the total costs required for completing the project exceed the total revenue from the transaction, the expected loss is recognized as an expense immediately.

Basware reports geographical areas Americas, Europe, Nordics and APAC.  Americas includes business operations in North and South America. Europe includes operations in Europe and Russia, excluding the Nordic countries (Denmark, Finland, Norway and Sweden), which are reported separately. APAC includes operations in Asia and the Pacific region. 

Net Sales by type

EUR thousand

Timing of revenue recognition1.1.-31.12.20181.1.-31.12.2017 Restated
Cloud Revenue    
SaaSOver time40,28234,808
Transaction servicesOver time44,16339,689
Other cloud revenue Over time5,0365,835
Cloud Revenue total 89,48280,332
   
Non-Cloud Revenue   
MaintenanceOver time26,11137,026
License salesAt a point in time2,2514,192
Consulting servicesOver time23,56727,746
Other non-cloud revenue Over time6-129
Non-Cloud Revenue Total 51,93568,836
   
Total 141,417149,167

 

Net sales by customer location

EUR thousand

1.1.-31.12.20181.1.-31.12.2017 Restated
Americas26,74124,403
Europe47,70945,401
Nordics59,75471,818
APAC7,2147,545
Total141,417149,167

 

Net sales by currency

% of total

1.1.-31.12.20181.1.-31.12.2017 Restated
EUR52.754.9
USD18.416.3
GBP8.68.4
Other20.320.4
Total100100

 

Contract assets and liabilities

The timing of invoicing may differ from the timing of revenue recognition. The Group recognizes an contract asset when revenue is recognized prior to invoicing, and an contract liability when revenue is recognized subsequent to invoicing. 

Revenue of professional services are recognized during the reporting period in which service is provided.  Revenue of fixed-price consulting projects are recognized as revenue and expenditure on the basis of the percentage of completion when the outcome of the project can be reliably estimated. If the resulting costs and recognized profits exceed the amount invoiced for the transaction, the difference is presented in “contract assets” on the balance sheet. If the resulting costs and recognized profits are lower the invoicing for the transaction, the difference is presented in “contract liabilities” on the balance sheet.

The majority of contract liabilities arise from:

  • SaaS and Transactions services invoiced in advance and recognized as revenue on monthly basis over the contract term
  • setup activities invoiced in advance and recognized as revenue during the contract period  
  • maintenance revenue invoiced in advance and recognized as revenue over the maintenance period 

Summary of contract balances

EUR thousand

Dec 31, 2018Dec 31, 2017 restatedJan 1, 2017 restated
Trade receivables24,99224,53424,638
   
Contract assets:   
Non-current1,0522,4502,474
Current2,2983,4462,964
   
Contract liabilities:    
Non-current2,4582,3744,979
Current11,85210,65610,984

 

During 2017-2018 Group has not recognized significant impairment losses on contract assets.

Disposals in contract liabilities due to divestments of Banking and Financial Performance Solutions businesses amounted to EUR 4310 thousands. Out of this balance EUR 575 thousand has been included in contract liabilities at the end of 2017, and EUR 3 735 thousand has not been included in contract liabilities at the end of 2017 but had been recognized from maintenance invoicing made during 2018. 

Set out below is the amount of revenue recognized from amounts included in contract liabilities at the beginning of period: 

1.1.-31.12.20181.1.-31.12.2017
Revenue recognized from amounts included in contract liabilities at the beginning of the period8,8618,693

 

The Group has elected to use the practical expedient in IFRS 15.121 in disclosing the transaction price allocated to remaining performance obligations as its related performance obligations are a part of a contract that have a original expected duration of less than one year, or the revenue recognition from performance obligations is done according to IFRS 15.B16. 

 

 

3. Goodwill

Accounting principles

Goodwill is measured as the excess of the cost of the acquisition over the Group's share of the fair values of the acquiree's net assets at the time of the acquisition. After initial recognition, goodwill is measured at cost less any accumulated impairment losses.

Goodwill impairment testing

Goodwill is not amortised, but is tested for impairment annually, and when circumstances indicate that the carrying value may be impaired. Impairment is determined for goodwill by assessing the recoverable amount of each cash generating unit (CGU) to which the goodwill relates. When the recoverable amount of the CGU is less than its carrying amount, an impairment loss is recognised. An asset’s recoverable amount is the higher of CGU’s fair value less costs of disposal and its value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the entity specific risks. Impairment losses relating to goodwill cannot be reversed in future periods.

Goodwill

EUR thousand

20182017
Acquisition cost Jan 191,96196,811
Translation difference998-4,850
Business disposals-14,0200
Acquisition cost Dec 3178,93991,961
  
Book value Dec 3178,93991,961

 

Goodwill is tested according to IAS 36. Basware does not possess any other intangible assets. Goodwill that has indefinite economical life. Unfinised intangible assets are also subjected to impairment testing during reporting period. Impairment testing is carried out at Group level as the Basware has centralised steering model and reporting structure. Goodwill is monitored at group level internally.  

Goodwill has been tested for impairment in the last quarter of 2017. The recoverable amounts from the cash generating unit (CGU) are determined based on value-in-use calculations. The calculations are prepared on a discounted cash flow method basis, derived from the management approved estimates for the following year and subsequent development derived from the strategic plans.

Cash flows beyond the 5-year period are calculated using the terminal value method. The terminal growth rate of 2.5 percent (2.0%) used in projections is based on management’s assessment on conservative long term growth. Key driver for the valuation is the revenue growth based on group’s performance and future strategic growth plans, market position as well as the potential in key markets.

The applied discount rate is the weighted average pre-tax cost of capital (WACC). The components of the WACC are risk-free rate, market risk premium, company specific factor, and industry specific beta, cost of debt and debt/equity ratio. The WACC of 12.8 percent (10.5 %) has been used in the calculations.

As a result of the impairment test, no impairment loss for the CGU were recognized for the financial periods ended 31 December 2018 and 2017 respectively. The recoverable amount exceeds the total carrying amount of fixed assets.

A sensitivity analysis was conducted and there is no indication that the changes in the assumptions could be so substantial that the carrying amount would exceed the recoverable amount. In the future impairment testing is influenced by how the Group will meet the targets set for year 2020 and beyond. In a sensitivity analysis the impacts of substantial changes to the most significant assumptions like revenue growth, EBIT-margin percentage and the discount rate was assessed. Terminal year revenue should decrease more than 65 percentage, pre-tax discount rate should increase more than 8 percentage points or the terminal year EBIT-margin should decrease more than 9 percentage points for an impairment to take place. 

 

 

4. Other operating income 

Accounting principles

Other operating income includes proceeds from the sale of business operations and property, plant and equipment and rental income.

1.1.-31.12.20181.1.-31.12.2017
Gain on sale of assets16,2760
Other operating income1,576134
Other operating income17,852134

 

Group recognized a gain on sale of assets amounting to EUR 16.3 million in the first quarter 2018  as a result of  to the sale of Banking and Financial Performance Solutions businesses. The combined sale price of the two businesses was EUR 35.0 million, and after purchase price adjustments related mainly to net working capital, the net cash proceeds from the divestments are estimated to be EUR 30.1 million. In addition, EUR 14.0 million of consolidated goodwill has been allocated to the divested businesses, and EUR 4.8 million of fixed assets, mainly capitalized research and development expenses, was written down. 

Other operating income EUR 1.5 million consists of other proceeds related to divestment.

 

 

5. Personnel and employee benefits 

Accounting principles

The Group has exclusively defined contribution pension arrangements, and the related payments are expensed in the year they are incurred.The Group has exclusively defined contribution pension arrangements, and the related payments are expensed in the year they are incurred.

Group also has a defined benefit based incentive scheme to commit personnel in accordance with local regulations and practices in India. The calculations for defined benefit plan are done according to same principles as defined benefit plans for pensions and they predispose the Group to actuary risks like payroll risk, interest risk and risk related to expected lifetime. Amounts of the defined benefit plans are based on the yearly calculations submitted by independent actuaries. The present value of the defined benefit obligations is determined by discounting the estimated future cash flows using interest rates of Government issued bonds, if interest rate of high quality-corporate bonds is not available. The plan is unfunded and more information on the defined benefit plan is presented in Note 17.

Average number of personnel

1.1.-31.12.20181.1.-31.12.2017
Americas139131
Europe442475
Nordics490558
APAC605673
Total1,6761,838

 

In the first quarter of 2018 Basware sold its Financial Performance Solutions and Banking businesses. Divestment concerned a total of 95 employees in Finland and India. In July Basware announced the outsourcing of scanning services to Xerox. Outsourcing process to Xerox was closed in October and the deal had an effect on 387 employees in Romania, India and Finland.

Employee benefits expenses

EUR thousand

1.1.-31.12.20181.1.-31.12.2017
Salaries and fees-77,680-81,505
Share-based incentive plans-2,372-1,161
Expenses from defined benefit plans-41-114
Pension expenses, defined benefit plans-6,194-6,809
Other employee benefits-7,350-9,494
Total-93,637-99,083

 

Management and Board salaries, fees and benefits

Group's key employees are defined as CEO, members of the Board of Directors and Executive team.

EUR thousand

1.1.-31.12.20181.1.-31.12.2017
CEO of parent company  
Vesa Tykkyläinen-486-426
  
Compensation of the members of the Board of Directors  
Ilkka Sihvo-70-39
Michael Ingelög-44-35
Daryl Rolley-320
Asko Schrey-320
Tuija Soanjärvi-44-40
Hannu Vaajoensuu-7-62
Anssi Vanjoki-5-33
Total-720-635

 

Key management employee benefits

EUR thousand

1.1.-31.12.20181.1.-31.12.2017
Salaries and other short-term employee benefits-2,779-1,618
Post-employment benefits0-629
Share-based payments-532-403
Total-3,310-2,650

 

The salary of the CEO Vesa Tykkyläinen for the period January 1-December 31, 2018, including benefits, was EUR 486 thousand (EUR 426 thousand). Salary in money was EUR 361 thousand (EUR 359 thousand), including fringe benefits of EUR 13 thousand (EUR 16 thousand). Tykkyläinen was paid a bonus EUR 126 thousand from the financial year 2017 (no bonus from the financial year 2016).

In 2018, Tykkyläinen was not conveyed any shares on the basis of the incentive schemes. (During 2017, Tykkyläinen was granted a total of 1,500 shares on the basis of the incentive schemes. Of these, 750 shares were conveyed to Tykkyläinen, the value of which was approximately EUR 26 thousand based on the average share price of the payment days, and EUR 26 thousand was paid in cash to cover the withholding tax.)

The accrued pension costs of Vesa Tykkyläinen amounted to EUR 93 thousand (EUR 82 thousand). The CEO's pension plan is pursuant to the employment pension legislation. The CEO has 3 months’ period of notice, in addition to which he is entitled to severance pay equivalent of 12 months’ fixed salary. 

Share-based payments

Accounting principles 

On January 1, 2018 Group implemented amendments to IFRS 2. The amendment concerned incentive schemes with “net settlement features” to cover withholding tax obligations and where the employer has an obligation to withhold a tax from the received benefit of the share-based payment in the country in question. Group has solely share-based incentive schemes that contain a net settlement feature. Within these share-based incentive schemes the employees are awarded with net number of shares and the proportion paid in cash is withheld to cover tax obligations. The previous IFRS 2 treatment required the entity to divide these payments into an equity-settled component and a cash-settled component. 

Starting from beginning of 2018, a compensation cost pursuant to IFRS 2 has been recognized for share-based schemes based on the entire scheme being an equity-settled payment. Share-based incentive schemes are valued at fair value on the grant date based on the gross number of shares awarded, recognized as an expense in the consolidated statement of comprehensive income during the period in which the conditions are met (the vesting period) and with a corresponding adjustment to the equity. The withholding paid by the company to the tax authority is recognized directly in equity.

The previous IFRS 2 treatment, in 2017 and earlier periods, required share-based incentives to be valued at fair value on the grant date, recognized as an expense in the consolidated statement of comprehensive income during the period in which the conditions were met (the vesting period) and with a corresponding adjustment to the equity or liability. The liability of the part settled in cash was revalued at each balance sheet date with changes in fair value recognized in the consolidated statement of comprehensive income. In connection with implementation of IFRS 2 amendment, the previously recognized liability for the part to be settled in cash and withheld for tax obligations, has been transferred from liabilities to equity on 1.1.2018.  

Matching Share Plan 2015-2018

The Board of Directors resolved on March 23, 2015 to establish a new matching share plan for 2015-2018. The restricted share plan was directed to selected key employees at Basware and the total rewards to be allocated on the basis of the plan amounted to a maximum total value of 11,000 Basware Corporation shares. In addition to the share reward, employees included in the plan will also be paid a cash portion to cover the taxes resulting from the reward.

The prerequisite for receiving reward on the basis of the matching share plan is that the employee in question acquires Basware Corporation shares at the beginning of the plan. The participating employee can, as a reward, receive matching shares for each share subject to the share ownership prerequisite after a matching period of three years. Receipt of matching shares is contingent on the continuation of employment or service upon reward payment and that the shares in question are still held by the participating employee.

In 2018, the matching share plan 2015-2018 included four Basware key employees. The rewards to be paid on the basis of the plan corresponded to a maximum total value of 5,148 Basware Corporation shares. The plan ended in January 2018.

Matching Share Plan 2017-2019

The Board of Directors resolved on March 1, 2017 to establish a matching share plan for 2017-2019 for Basware Executive Team members.

The prerequisite for receiving reward on the basis of the matching share plan is that the member of the Basware Executive Team in question acquires Basware shares. The Basware Executive Team member will, as a reward, receive matching shares for each share subject to the share ownership prerequisite after a matching period of three years. Receipt of matching shares is contingent on the continuation of employment or service upon reward payment and that the shares in question are still held by the member.

The Board of Directors resolved that the rewards to be paid in aggregate to the Basware Executive Team on the basis of the matching share plan correspond to the value of a maximum total of 75,000 Basware Corporation shares, including also the proportion to be paid in cash.

Members of Basware Executive Team acquired or allocated a total of 35,017 Basware Corporation shares in the beginning of the plan. The rewards to be paid to Basware Executive Team members on the basis of the plan thus corresponds to a maximum of 70,034 Basware Corporation shares, including also the proportion to be paid in cash.

Matching Share Plan 2018-2020

The Board of Directors resolved on July 17, 2018 to establish a new matching share plan for 2018-2020 for the Group’s key employees.

The prerequisite for receiving reward on the basis of the matching share plan is that the plan member acquires Basware shares. The plan member will, as a reward, receive matching shares for each share subject to the share ownership prerequisite after a matching period of three years. Receipt of matching shares is contingent on the continuation of employment or service and on the plan member holding the acquired shares upon reward payment.

The rewards to be paid in aggregate to plan members on the basis of the matching share plan correspond to the value of a maximum total of 77,714 Basware Corporation shares, including also the proportion to be paid in cash.

The plan as a whole entails an aggregate share ownership interest of approximately 116,571 shares for the plan members, via personal share acquisitions and the right to future share ownership through the matching share plan.

Restricted Share Plan 2017

The Board of Directors resolved on March 1, 2017 to establish a restricted share plan for 2017. The restricted share plan is directed to selected key employees at Basware. Receipt of the reward is contingent on the continuation of employment or service upon reward payment.

The reward from the restricted share plan will be paid after a vesting period of one to three years. The total rewards to be allocated on the basis of the plan amount to a maximum of 20,000 Basware Corporation shares, including also the proportion to be paid in cash.

At the end of 2017, the restricted share plan 2017 included 6 key employees. The rewards paid on the basis of the plan in May 2018 corresponded to a total of 5,750 Basware Corporation shares, including also the proportion to be paid in cash.

Performance Share Plan 2017-2019

The Board of Directors resolved on March 1, 2017 to establish a performance share plan for 2017-2019 for key employees.


The performance share plan includes three performance periods, calendar years 2017-2018, 2018-2019 and 2019-2020. The Board of Directors decides on the performance criteria and on the required performance levels for each criterion at the beginning of each performance period.

The potential reward from the performance period 2017-2018 is based on Group’s key performance measures in 2017 & 2018. During 2018 management modified the performance criteria for the 2017-2018 performance periods. For 2017 measurement period target for Total Shareholder Return (TSR) was modified to be more beneficial to to the employees, and for 2018 measurement period TSR criteria was removed and replaced with Order Intake. As TSR is a market condition, the aforementioned modifications resulted in a increase in fair value. The increase in fair value is recognized as an expense during the remaining vesting period. 

The rewards to be paid on the basis of the performance period 2017-2018 correspond to the value of a maximum total of 156,000 Basware Corporation shares, including also the proportion to be paid in cash. The plan is directed to approximately 60 key employees, including the members of the Basware Executive Team.

The potential reward for the performance period 2018-2019 will be based on the Group’s key performance measures in 2018. The rewards to be paid on the basis of the performance period 2018-2019 correspond to the value of a maximum total of 156,000 Basware Corporation shares, including also the proportion to be paid in cash. The plan is directed to approximately 75 key employees, including the members of the Basware Executive Team.

In June 2018, 2,128 shares were conveyed on a directed share issue related to the reward payment for the performance period 2017-2018 of the performance share plan 2017-2019.

At the end of 2018, the performance share plan included 50 employees for the performance period 2017-2018 and 70 employees for the performance period 2018-2019. 

Effect on the profit for the period on the financial position in 2018

EUR thousand

Matching Share Plan 2015 - 2018Matching Share Plan 2017 - 2019Matching Share Plan 2018-2020
Expense for the reporting period-11667359
Recognized in equity 2018-11667359

 

Restricted Share Plan 2017Performance Period 2017-2018Performance Period 2018-2019
Expense for the reporting period53987315
Recognized in equity 2018-65961315

 

Information on share-based incentive plans

EUR thousand

Matching Share Plan 2015 - 2018Matching Share Plan 2017 - 2019Matching Share Plan 2018-2020
Maximum number of shares11,00075,00077,714
Initial grant date23.3.20152.3.201718.7.2018
Vesting date31.1.201831.3.202031.3.2021
Vesting conditionsShare ownership and employmentShare ownership and employmentShare ownership and employment
Maximum contractual life, years2.93.12.7
Remaining contractual life, years01.22.2
Number of persons at 31.12.20180840
Payment methodShares & CashShares & CashShares & Cash

 

Restricted Share Plan 2017Performance Period 2017-2018Performance Period 2018-2019
Maximum number of shares20,000156,000116,950
Initial grant date2.3.20172.3.20171.2.2018
Vesting date16.3.201831.3.201916.3.2018
Vesting conditionsEmploymentGroup's key performance measures and employmentGroup's key performance measures and employment
Maximum contractual life, years12.12.2
Remaining contractual life, years00.21.2
Number of persons at 31.12.201806173
Payment methodShares & CashShares & CashShares & Cash

 

Changes in 2018

EUR thousand

Matching Share Plan 2015-2018Matching Share Plan 2017-2019Matching Share Plan 2018-2020
Outstanding at the beginning of the period5,14870,0340
Granted0071,532
Forfeited000
Exercised5,14800
Outstanding at the end of the period070,03471,532

 

Restricted Share Plan 2017Performance Period 2017-2018Performance Period 2018-2019
Outstanding at the beginning of the period5,750109,6100
Granted00116,950
Forfeited03,0700
Exercised5,7504,2560
Outstanding at the end of the period5,750102,283116,950

 

 

 

6. Other operating expenses 

Other operating expenses

EUR thousand

1.1.-31.12.20181.1.-31.12.2017
Impairment losses on trade receivables-339121
Acquisition, disposal and restructuring expenses-2,996-416
Efficiency related expenses-1,275-2,023
Other operating expenses0-409
Total-4,610-2,727

 

 

 

7. Finance income and expenses

Accounting principles

The company recognizes borrowing costs as an expense in the period during which they are incurred.

Finance income and expenses

EUR thousand

1.1.-31.12.20181.1.-31.12.2017
Finance income  
Interest income1728
Other financial income161644
Total178672
  
Finance expenses  
Interest expenses -2,048-967
Other finance expenses-32-1,423
Total-2,080-2,391
  
Finance income and expenses total-1,902-1,719

Other finance income is comprised of the proceeds of fund investments and realized exchange gains and other finance expenses are mainly comprised of realized exchange losses.

Exchange differences recognized on income statement

EUR thousand

1.1.-31.12.20181.1.-31.12.2017
Exchange differences included in net sales7-129
Exchange differences included in purchases and expenses-35-19
Foreign exchange gains54541
Foreign exchange losses-163-1,419
Exchange differences recognized on income statement-137-1,026

 

 

8. Income tax and deferred taxes 

Income taxes 

Accounting principles

Income taxes comprise of tax recognized on the taxable income for the financial year and deferred taxes. Taxes are recognized in the statement of comprehensive income except for the expenses entered directly to shareholders’ equity when they are entered on the balance sheet as part of shareholders’ equity.

Taxes based on taxable income are recorded according to the local tax rules of each country using the tax rate in force. 

When uncertainty is included to interpretation of income tax rules, Group estimates, if a company is able to fully utilize the tax position that is stated in income tax computation. If necessary, tax bookings are adjusted to reflect the changes in tax position. At reporting date booked income tax amounts reflect the estimates of future tax payments. 

Direct taxes

EUR thousand

1.1.-31.12.20181.1.-31.12.2017
Income tax on operations-721-1,169
Tax for previous accounting periods-240-276
Change in deferred tas liabilities and tax assets-2,5892,196
Income tax total-3,551752

 

Tax rate reconciliation

EUR thousand

1.1.-31.12.20181.1.-31.12.2017
Profit before taxes-3,526-12,276
  
Tax calculated at domestic tax rate7052,455
Tax for previous years-240-276
Effect of different tax rates of foreign subsidiaries-418-414
Effect of change in tax rate7-183
Non-deductible expenses-3,801-85
Other-228-139
Income not subject to tax19327
Profit not included in the accounting profit1015
Unrecognized deferred tax assets from tax losses221-439
Share of profit of a joint venture0-210
Income taxes-3,551752

 

Taxes relating to other comprehensive income

EUR thousand

1.1.-31.12.20181.1.-31.12.2017
Taxes on foreign exchange gains from net investments-73289

 

Deferred taxes

Accounting principles

Deferred taxes are calculated from all temporary differences between the carrying amount and taxable value at the tax rates confirmed at the reporting date. The most significant temporary differences arise from depreciation of property, plant and equipment, unused tax losses, and adjustments for fair values in connection with acquisitions. Deferred tax is not recognized for non-tax deductible goodwill. In respect of deductible temporary differences associated with investments in subsidiaries, and interests in joint arrangements, deferred tax assets are recognised only to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be utilised. Deferred tax is not recognized for non-distributed profits of subsidiaries in so far as the difference is not likely to be discharged in the foreseeable future. Deferred tax assets are recognised for all other deductible temporary differences. A deferred tax asset is recognized to the extent that it is likely that there will be future taxable income against which it is deductible. The requirements for the recognition of deferred tax assets are reassessed at each reporting date.

Income tax receivables and payables

EUR thousand

1.1.-31.12.20181.1.-31.12.2017
Income tax receivables579358
Income tax liabilities98177

Deferred tax assets 2018

EUR thousand

Jan 1, 2018In income statementBusiness acquisitions/disposalsPeriod change booked in equityDec 31, 2018
Tax losses8,777-3,786004,991
Deferred expenses1,1321,123002,254
Other items45311200565
Total10,362-2,552007,810

 

Deferred tax liabilities 2018

EUR thousand

Jan 1, 2018In income statementExchange rate differencesBusiness acquisitions and disposalsDec 31, 2018
Allocation of fair value on purchases4,56917340-1234,660
Total4,56917340-1234,660

 

Deferred tax assets 2017

EUR thousand

Jan 1, 2017In income statementBusiness acquisitions Period change booked in equityDec 31, 2017
Tax losses *8,118659008,777
Deferred expenses *911,041001,132
Other items19525800453
Total8,4041,9580010,362

* In connection with preparation of 2017 tax return, Basware Plc decided to defer research and development expenses in taxation causing a temporary difference. Notes information for comparative period has been restated to reflect the change. This change does not affect the total amount of deferred tax assets or balance sheet totals. 

Deferred tax liabilities 2017

EUR thousand

Jan 1, 2017In income statementExchange rate differencesBusiness acquisitions and disposalsDec 31, 2017
Allocation of fair value on purchases4,885-207-10904,569
Other temporary differences19-19000
Total4,904-226-10904,569

 

The Group has a total of EUR 4 991 thousand (EUR 8 777 thousand) of deferred tax assets for unutilized tax losses, of which EUR 1 928 thousand will expire during 2026–2028, while the rest have no expiry period. According to the transfer pricing principle, subsidiaries accumulate taxable income against which confirmed losses can be utilized in the future. The Group has total of EUR 6 362 thousand of tax losses from which deferred tax asset has not been recognized. The Group will reassess the amount of deferred tax assets if there are changes in the expectations for accumulation of future taxable profit.

During the fourth quarter of 2017 United States and Belgium enacted new corporate income tax rates for 2018 onwards. In 2017 Basware measured its deferred tax liabilities and deferred tax assets applying the enacted, reduced tax rates. The reduction of corporate income tax rates did not have a material impact on Group’s income tax expenses in 2017 or 2018.

 

 

9. Earnings per share

Earnings per share

EUR thousand

1.1.-31.12.20181.1.-31.12.2017
Result for the period-7,077-11,451
  
Average sharenumber, 1,000 pieces  
undiluted14,36814,357
diluted14,46114,407
  
Earnings per share  
Undiluted, EUR-0.49-0.8
Diluted, EUR-0.49-0.79

 

 

 

10. Intagible assets

Accounting principles

Other intangible assets are measured at cost less accumulated amortization and possible impairment. Government grants related to the acquisition of an intangible asset are deducted from the acquisition cost of the asset and recognized as income by reducing the depreciation charge of the asset they are related to. Amortization is calculated on a straight-line basis over the estimated useful lives of the assets. The estimated useful lives of intangible assets are 3–10 years. Each financial year end useful lives are reviewed and adjusted prospectively, if appropriate.

Customer relationships and technology acquired through business combinations are measured at fair value at the time of acquisition and depreciated over the useful life.

Intangible assets 2018

EUR thousand

Development costsIntangible rights *Other long-term investmentsAssets, unfinished projectsTotal
Acquisition cost Jan 149,21146,3981,10112,359109,069
Translation difference (+/-)-7105-1114100
Additions227813-9,71210,751
Disposals-4,507-36--1,675-6,218
Reclassifications between items6,4130--6,4130
Acquisition cost Dec 3151,33847,2781,09013,995113,701
     
Cumulative amortization Jan 1-27,685-31,775-5680-60,029
Translation difference (+/-)92112-42
Other1,33525--1,360
Amortization-5,611-4,223-143--9,977
Cumulative amortization Dec 31-31,953-35,952-6990-68,604
     
Book value Dec 31, 201819,38511,32739113,99545,097


Intangible assets 2017

EUR thousand

Development costsIntangible rights *Other long-term investmentsAssets, unfinished projectsTotal
Acquisition cost Jan 130,00545,7541,00522,29799,061
Translation difference (+/-)-68-1,238-69--1,375
Additions2,0052,1323317,33811,806
Disposals-1100-166--276
Reclassifications between items17,379-250--17,276-147
Acquisition cost Dec 3149,21146,3981,10112,359109,069
     
Cumulative amortization Jan 1-23,006-28,187-5430-51,736
Translation difference (+/-)6856135-664
Cumulative amortisation on disposals-5120874-231
Amortization-4,696-4,357-135--9,188
Cumulative amortization Dec 31-27,685-31,775-5680-60,029
     
Book value Dec 31, 201721,52614,62353312,35949,040

Goodwill is presented in Note 3.

 

 

11. Tangible assets 

Accounting principles

Tangible assets are measured at cost less accumulated depreciation and possible impairment. The useful lives of tangible assets are 3–10 years. The useful life of an asset is reviewed at least at the end of each financial year and adjusted, if appropriate. Sales gains and losses on disposal or transfer of tangible assets are presented in other operating income and expenses. Sales gains or losses are calculated as the difference between the sales price and the remaining acquisition cost. 

Tangible assets 2018

EUR thousand

Machinery and equipmentMachinery and equipment, finance leaseOther tangible assetsTotal
Acquisition cost Jan 112,32812713312,588
Translation difference (+/-)-191--18
Additions169-13182
Decreases-1,137-400-1,177
Acquisition cost Dec 3111,3418814511,575
    
Cumulative amortization Jan 1-11,170-1270-11,297
Translation difference (+/-)19-1-18
Decreases1,11040-1,149
Amortization-652---652
Cumulative amortization Dec 31-10,695-880-10,783
    
Book value Dec 31, 20186460145792

 

Tangible assets 2017

EUR thousand

Machinery and equipmentMachinery and equipment, finance leaseOther tangible assetsTotal
Acquisition cost Jan 111,90313013312,166
Translation difference (+/-)-204-3 --207
Additions691 - -691
Decreases-108 - --108
Reclassifications46 - -46
Acquisition cost Dec 3112,32812713312,588
    
Cumulative amortization Jan 1-10,451-1300-10,581
Translation difference (+/-)1573 -160
Other-8-8
Decreases5252
Amortization-920-920
Cumulative amortization Dec 31-11,170-1270-11,297
    
Book value Dec 31, 20171,15801331,291

 

 

12. Entity-wide disclosures

Of the entity-wide information assets are shown by their location.

Assets presented below consists mainly of goodwill, intangible assets and other non-current receivables.

Non-current assets based on the locations of the assets 

EUR thousand

Dec 31, 2018Dec 31, 2017
America32,21831,912
Europe40,95843,049
Nordics54,62272,185
APAC2,1761,403
Total129,973148,548

 

The sales shown by the location of customers is presented in Note 2. 

Basware Group doesn't have customers whose share of the revenue exceeds 10 % of total revenue.

 

 

13. Shares in joint ventures 

Accounting principles

Basware has determined its interest in the joint venture with Arrowgrass Capital Partners LLP:n to be accounted for using the equity method. Basware’s share of results (50 %) of the joint venture is presented as a separate line item in the financial items of the consolidated statementof comprehensive income and in investments in the consolidated statement of financial position.

During 2018 Basware decided to write down its share of the joint venture Clear Funding Limited. The loss impact of the joint venture Clear Funding Limited totalled EUR -153 thousand for 2018. Basware does not expect to recognize any further gains from the joint venture in the coming years. 

The joint ventures' financial information presented below is based on the financial statements of Clear Funding Limited for 2018.

Shares in joint ventures

EUR thousand

Dec 31, 2018Dec 31, 2017
Non-current assets05
Current assets0201
  
Long-term liabilities0854
Short-term liabilities0110
  
Net Sales00
Result for the period760-2,097

 

Joint ventures Dec 31, 2018

NameRegistered locationShare of ownership (%)
Clear Funding LimitedLondon, United Kingdom50

 

 

 

14. Non-current financial assets 

Non-current assets include shares of unlisted companies.

Non-current assets

EUR thousand

Dec 31, 2018Dec 31, 2017
Investments available for sale3838
Total3838


 

 

15. Trade and other receivables 

Accounting principles - Expected credit losses on trade receivables 

In the beginning of 2018 the Group implemented IFRS 9 which had an impact on recognition of impairment provision for trade receivables. The Group recognizes loss allowances for expected credit losses (ECL) on trade receivables in accordance with IFRS 9. Loss allowances for trade receivables are always measured at an amount equal to lifetime ECL. For measurement of ECL for trade receivables the Group uses a provision matrix. The provision matrix is based on historical observed default rates over the expected life of the trade receivables and is adjusted for forward-looking estimates. At every reporting date the historical observed default rates are updated and changes in the forward-looking estimates are analyzed. Expected credit losses have not been recorded from the value added tax that is included in trade receivables.

Loss allowances for ECL are presented in the statement of financial position as a deduction from the gross carrying amount of the assets. In profit or loss, the amount of ECL (or reversal) is recognised as an impairment gain or loss in other operating expenses category. 

Trade and other receivables

EUR thousand

Dec 31, 2018Dec 31, 2017 RestatedJan 1, 2017 Restated
Non-current receivables   
Contract assets1,0522,4502,474
Capitalized contract costs3,2652,5851,577
Other non-current receivables7901,0321,011
Total5,1076,0675,062
   
Current receivables   
Trade receivables24,99224,53424,638
Contract assets2,2983,4462,964
Capitalized contract costs2,4291,6041,474
Other receivables6,8595,2774,769
Total36,57934,86033,845

The fair values of financial assets and liabilities are presented in Note 22 and definitions for contract assets presented in Note 2. 

Accounting principles - Contract costs

The incremental costs of obtaining a contract with a customer includes sales commissions related to long-term service contracts. Contracts costs are capitalized if the recognition criteria are satisfied and the entity expects to recover those costs. The capitalized costs are amortized on a straight-line basis over the contract term in which the services are transferred and the revenue is recognized. 

Below table describes the changes in capitalized contract costs.  

 Capitalized contract costs

EUR thousand 

20182017
Capitalized contract costs Jan 14,1893,051
Capitalized during the period3,5492,417
Recognized as an expense during the period-1,821-1,279
Disposals*-2220
Capitalized contract costs Dec 315,6954,189

* Capitalized sales commission related to divestments of Banking and Financial Performance Solutions businesses.

The ageing analysis of trade receivables and impairment loss

EUR thousand

2018Impairment provisionNet 20182017Impairment provisionNet 2017
Non-overdue sales receivables16,195-716,18816,565016,565
Overdue sales receivables      
1-180 days7,879-707,8097,89107,891
181- 360 days1,119-250869404-300104
Over 360 days703-577126247-274-27
Total25,896-90424,99225,108-57424,534

 

In addition to the provision for credit losses which is netted off against trade receivables, Group has recognized additional provisions related to trade receivables amounting to EUR 418 thousand which are recognized on the balance sheets short-term liabilities. 

No significant concentrations of credit risk are associated with the receivables. The balance sheet values equal the best to the maximum amount of the credit risk. Principles of the Group's credit risk management are presented in note 18.

 

 

16. Cash and cash equivalents 

Accounting principles

Cash and cash equivalents consist of cash, short-term bank deposits that can be withdrawn on demand and other current highly liquid investments that can be exchanged to an amount of cash assets that is known in advance, and with a low risk of changes in value. Items classified as cash and cash equivalents have a maximum maturity of three months from acquisition.

Cash and short-term deposits

EUR thousand

Dec 31, 2018Dec 31, 2017
Cash and cash equivalents40,74720,683
Total40,74720,683

 

 

 

17. Defined benefit plans  

Accounting principles  

The calculations for defined benefit plans are done according to same principles as defined benefit plans for pensions and they predispose the Group to actuary risks like wage risk, interest risk and risk related to expected lifetime. These plans are unfunded.

Group has in Indian subsidiary an incentive scheme to commit employees, where benefit is paid to the employee after five years in service, in case the employment is ending. 

Defined benefit plans

EUR thousand

20182017
Opening value Jan 1434506
Amounts recognised in Profit & Loss  
Service cost, benefits earned during the year64102
Interest expense (+)/income (-)3133
-18-31
Amounts recognised in other comprehensive income  
Acturial losses (+)/gains (-)-57-155
Other changes  
Benefits paid-127-22
Ending value Dec 31
327433
  
The most significant actuarial assumptions  
Discount interest (%)7,6 %7,5 %
Increase of wages (%)7,0 %9,0 %

In July 2018 Group announced the outsourcing of scanning services to Xerox. The deal closed at the beginning of October and 387 employees transferred to Xerox from Basware during the fourth quarter of 2018. In connection with the transfer of employees Basware paid out the defined benefit liability related to tranferred employees.  

 

 

18. Management of financial risks 

Accounting principles

The company's international business involves customary financial risks. The management of financial risks and monitoring together with the limitations of the risks is defined in the Treasury policy. The objectives of the risk management are ensuring the availability of sufficient funding and hedging of the foreign currency and interest rate risk cost-efficiently. Risk management is centralized in the Group’s finance department.

Foreign currency risk

Basware's net sales increased by 5,4 percent (1,5 %) in organic constant currencies during 2018. The Group's main currency is euro, accounting for approximately 53 percent of net sales in 2018 (approximately 55% in 2017). In addition to the euro area, Basware has net sales in various areas, the most significant being the United States, the United Kingdom, Sweden and Norway. In addition, Basware has internal operations in India and Romania.

Sales in subsidiaries are carried out mainly in local currencies and thus do not expose the Group to significant foreign currency transaction risk. Investments and purchases are carried out both in Euro and foreign currencies. The currency risk exposures arising from non-euro purchases are considered significant and part of forecasted future net cashflows are hedged. The currency risk arises mainly from external purchases in foreign currencies (transaction risk), net investment to foreign subsidiaries (translation risk) as well as foreign currency differences in the balance sheet. In addition, the Group is exposed to the currency risk through intra-company trade.

The company hedged substantial foreign currency cashflows in the financial period. In the foreign currency cash flow hedging and in applying of the hedge accounting the company uses mainly foreign currency forward contracts which ensures economic relationship between the hedged item and the hedging instrument and full effectiveness as the values of these items move in the opposite directions because of the common underlying. The hedged exposures consist of future forecasted contracted cash flows in next 12 months. During 2018 the company did not use derivatives to hedge the net investments in subsidiaries denominated in other currency than euro. Accounting principles are presented in Note 22.

The table below presents the fair values of foreign currency derivatives at year-end which are recognized to other comprehensive income.

Foreign-currency derivatives 2018 and 2017

EUR thousand

20182017
Nominal valuePositive fair valueNegative fair valueNet fair valueNominal valuePositive fair valueNegative fair valueNet fair value
Foreign-currency derivatives13,977266-26240----


According to IFRS 7 sensitivity analysis of currency risk there would have had an impact of EUR -/+ 0.7 million (EUR -/+ 0.3 million) on the profit before tax at the closing date, assuming currency rates change of +/- 5 percentage against the euro. Other variables are assumed to remain unchanged. The calculation includes foreign currency trade payables and accounts receivables and internal loans to subsidiaries.

A sensitivity analysis on currency risk in foreign currency denominated net investments loans and foreign currency hedges would have had an impact of -/+ EUR 0.9 million (EUR 0.6 million) on other comprehensive income. Other variables are assumed to remain unchanged.

 

Profit & LossOther Comprehensive income
20185 %-5 %5 %-5 %
EUR/USD-337337-275275
EUR/GBP-251251-131131
EUR/SEK -22 22   0   0
EUR/NOK  -5  5   0   0
EUR/INR  4 -4-226226
EUR/RON -30 30-240240
Other currencies -49 49 -22 22
-691691-893893
    
20175 %-5 %5 %-5 %
EUR/USD-225225-350350
EUR/GBP-121121-186186
EUR/SEK 52-52   0  0
EUR/NOK 34-34   0  0
EUR/INR -25 25   0  0
EUR/RON  23 -23  -7  7
Other currencies -13 13 -53 53
-276276-596596

 

The effective portion of changes in the fair values of derivatives are recognized in other comprehensive income. Any ineffective portion of hedging is recognized as gain or loss in the income statement and classified within finance expenses.

Foreign currency-denominated assets and liabilities translated into the euro at the exchange rates of the closing date are as follows:

Nominal values 2018

EUR thousand

USDAUDGBPSEKDKKNOKRONINR
Non-current assets29,5115356411,2481595091421,579
Current assets        
Cash and cash equivalents2,617697 1,6644243,2291,234312
Trade and other receivables7,1871,5792,4241,9088111,352314354
Current liabilities        
Non-interest bearing liabilities7,9681,2623,3831,4437661,717626747

 

Nominal values 2017

EUR thousand

USDAUDGBPSEKDKKNOKRONINR
Non-current assets28,5904331,8871,194170759198395
Current assets        
Cash and cash equivalents1,997169667430208950677479
Trade and other receivables5,5729942,9141,9809181,247360458
Current liabilities        
Non-interest bearing liabilities5,8028573,3901,1627481,1687271,407

 

Interest rate risk

The objective of the risk management with regard to interest rate risk is to diminish the negative impacts of changes in interest rates on the company’s financial performance. Changes in market rates have an impact to the rates of loan portfolio as well as interest-bearing payables and receivables.

The company is exposed to a cash flow interest rate risk through its loan portfolio which arises from floating rate loans. In order to manage and diversify the risk the company has both fixed and floating rate loans and possibility to apply interest rate derivatives for hedging. In the last financial period the company has not use derivatives against the interest rate risk.

On 31 December the company had a total of EUR 57.2 million (EUR 49.3 million) interest-bearing liabilities of which a total of EUR 40.3 million variable-rate loans. At the closing date all external loans have been in Euro with the average interest rate of 3.17 percent (2.85) and average maturity of 2.2 years.

According to IFRS 7 standard calculated sensitivity analysis represents the effect of variable rate interest-bearing liabilities on profit before taxes if interest rate would have increased or decreased by 1 percentage with all other variables constant. For interest rate analysis the impact would have been -0.3/+0.0 million (+/-0.4 million) euros. At the closing date the company didn’t have significant interest-bearing assets or other financial investments that would be exposed to the market rate changes. 

The following table illustrates the effect of a sensitivity analysis on interest rates.

Change in interest rates

EUR thousand

20182017
+1%-1%+1%-1%
Interest-bearing liabilities-285.90-431.6431.6

 

Liquidity risk and refinancing risk

The liquidity risk is managed by securing the availability of long-term funding and maintaining sufficient cash reserves. The refinancing risk is managed by using various funding sources and by distributing the maturities of loans. The company maintains sufficient liquidity through centralized Group-level cash management, payments, and committed facilities.

 In the end of the financial period the company had the unused EUR 10 million revolving credit facility. In the third quarter of 2018, in order to extend the debt maturity profile, the company participated in a guaranteed multi-issuer bond with a loan share totaling EUR 10 million. The bond carries a fixed rate and its maturity is five years.

Below is presented changes in the company's loans in the financial year.

Changes in the company's loans 2018

EUR thousand

2017Cash flow (+/-)Non-cash flow (+/-)2018
Loans from financial institutions, non current47,286 -17,09630,190
Bond 9,992-659,927
Loans from financial institutions, current1,996-1,99617,09617,096
Total49,282  57,213

 

The Group’s liquidity remained good during the financial year. The cloud transformation process requires cash investment. The company’s ability to secure financing for this transformation may affect its ability to deliver on the strategy. The tables below describe a maturity structure of financial contracts. The figures have not been discounted and they included loan rate and repayments of capital.

Maturity distribution of financial liabilities 2018

EUR thousand

Balance sheet valueCash flow0-6 months6 months - 1 year1-5 year
Interest-bearing liabilities57,21362,2244,61914,69342,912
Foreign currency derivatives24024015287 
Trade and other payables12,47812,47812,47800
Total69,93174,94217,24914,78042,912

 

Maturity distribution of financial liabilities 2017

EUR thousand

Balance sheet valueCash flow0-6 months6 months - 1 year1-5 year
Interest-bearing liabilities49,28253,5051,7091,70850,088
Foreign currency derivatives     
Trade and other payables12,53212,53211,8626700
Total61,81466,03713,5712,37850,088

Credit risks

The Group’s sales receivables are spread to a vast clientele and do not include significant concentration of credit risks. Business management regularly monitors the payment of sales receivables as part of the management of customer accounts. The Group has not used surety bonds to secure sales receivables.

Impairment losses recognized during the financial period and the age distribution of accounts receivables are presented in Note 15. 

Capital management

Shareholders’ equity reported in the Group balance sheet is managed as capital. The company’s capital management aims to ensure the continuity of the company’s operations (going concern) and increase the value of shareholder’s investment.

The capital structure can be adjusted by decisions on, e.g. distribution of dividend, share repurchase and share issues. The resolutions of the Annual General Meeting and the authorizations of the Board of Directors are presented in the Board of Directors’ Report. Additional information on the share and share issue is presented under Share and Shareholders.

The group continuously monitors the actual values of the financial covenants as a part of its business and strategy planning. In order to ensure sufficient headroom in relation to the covenant thresholds and maximum levels the group forecasts the future values and provide the management with the information on the financial and risk position. Any covenant was not breached in the financial period ending 31 December 2018.

The company’s objective is to maintain a strong equity ratio and a moderate gearing ratio. The company's equity ratio is 51.3 % (52.7 %) and gearing ratio is 14.9 % (24.7 %).

 

 

19. Shareholders' equity 

Accounting principles

Costs related to the issue or purchase of equity instruments are recorded as a reduction of shareholders' equity. Own equity instruments that are reacquired (treasury shares) are recognised at cost and deducted from equity.

Shareholders' equity 2018

EUR thousand

Shareholders' equityShare premium accountInvested non-restricted equityOther reservesOwn sharesTotal
Jan 1, 20183,5281,187111,132592-842115,597
Decrease of treasury shares  -204 2040
Transactions that do not affect the number of shares / Cash flow hedges   240 240
Dec 31, 20183,5281,187110,928832-638115,837

 

Shareholders' equity 2017

EUR thousand

Shareholders' equityShare premium accountInvested non-restricted equityOther reservesOwn shareTotal
Jan 1, 20173,5281,187111,334540-1,044115,545
Share issue     0
Decrease of treasury shares  -202 2020
Transactions that doesn't affect the number of shares   52 52
Dec 31, 20173,5281,187111,132592-842115,597

 

Number of shares 2018

20182017
Number of outstanding shares Jan 114,359,70314,343,314
Incentive plan (+)10,77316,389
Number of outstanding shares Dec 3114,370,47614,359,703
  
Treasury shares Jan 142,23358,622
Incentive plan (-)10,77316,389
Treasury shares Dec 3131,46042,233

 

Other reserves

Other reserves include the fair value reserve, which includes the increase in the value of the Analyste deal shares between the publication and realization of the deal in 2006.

Treasury shares

The treasury shares reserve includes the acquisition cost of own shares held by the Group. 

Dividends

The Annual General Meeting resolved in accordance with the proposal of the Board of Directors that no dividend will be paid for the year 2018 (2017: 0 euros per share). No substantial changes has taken place in the company's financial position after the end of the financial period. 

 

 

 20. Trade and other liablities 

Trade and other liabilities 

EUR thousand

Dec 31, 2018Dec 31, 2017
Long-term trade and other liabilities  
Contract liabilities2,4582,374
Other liabilities1001,693
Long-term trade and other liabilities total2,5584,068
  
Short-term trade and other liabilities  
Trade liabilities8,3548,284
Contract liabilities11,85210,656
Other Liabilities19,68623,125
Short-term trade and other liabilities total39,89342,065

Accrued expenses includes personnel related expenses EUR 13,057 thousand (EUR 16,064 thousand).

The fair values of financial assets and liabilities are presented in Note 22 and definitions for contract liabilities presented in Note 2. 

 

 

21. Current provisions 

Accounting principles

A provision is recognized when the Group has a present legal or constructive obligation as a result of a past event, it is probable that the obligation will have to be settled, and the amount of the obligation can be reliably estimated. Provisions are measured at the present value required in order to cover the obligation. The present value factor used in the calculation of the present value is selected so that it represents the market insight into the time value of money and liability-related risks at the time of the assessment.  

Reorganisation provision

EUR thousand

20182017
Opening balance Jan 19285,072
Additions1,1160
Disposals-1,846-4,144
Closing balance Dec 31198928

 

Basware announced on May 24, 2018 that the company would move to a functional organizational structure as of June 1, 2018. Restructuring included personnel reductions and concerned a total of 30 employees globally.

At the end of financial year 2017 group announced a productivity program in order to simplify operations and improve productivity. The measures announced included also personnel reductions  and concerned a total of 130 employees globally. Both negotiations with employees have been carried out in accordance with local legislation in each affected location.      

 

 

22. Financial assets and liabilities 

Accounting principles

A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.

Financial assets

The financial assets are categorized as follows:                                                           

  •  financial asset measured at amortised cost                                                   
  •  financial asset measured at fair value through other comprehensive income
  •  financial asset measured at fair value through profit or loss"                                                                                 

A financial asset is measured at amortised cost when both of the following conditions are met:      

  • the objective is to hold financial assets to collect contractual cash flows and                                                     
  • the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.  

A financial asset is measured at fair value through other comprehensive income when both of the following conditions are met:                                                           

  • the objective is to collect contractual cash flows and to sell financial assets and                                      
  • the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.  

A financial asset is measured at fair value through profit or loss unless it is measured at amortised cost or at fair value through other comprehensive income. On initial recognition of an equity instrument that is not held for trading, the Group may irrevocably elect to present subsequent changes in fair value in other comprehensive income. This election is made on an investment by investment basis.                                                                                     

Financial assets held by the Group are:                                                           

  • Long-term financial assets                                                                   
  • Long-term other receivables                                                               
  • Short-term other receivables                                                              
  • Cash equivalents                                                                                                 

The categorization is based on the purpose of the acquisition of the financial assets and it is performed in connection with the original acquisition. Financial assets are classified as non-current assets if they mature in more than 12 months. If they are to be held for less than 12 months financial assets are disclosed as current assets.        

All purchases and sales of financial assets are recognized at the transaction date, which is the date on which the Group commits to purchase or sell the financial instruments. A financial asset is derecognised when the rights to receive cash flows from the asset have expired the Group has transferred substantially all the risks and rewards of the asset.                                                               

Impairment of financial assets                                                            

Trade receivables are measured at amortised cost less impairment losses. The principles for impairment of trade receivables are presented in note 15. For the other financial assets, the impairments are recognized based on Expected Credit Losses. In addition, the Group assesses at each reporting date whether there is objective evidence that a financial asset is impaired.                            

Financial liabilities                                                                   

Group's financial liabilities include trade and other payables and financial liabilities that are measured at amortised cost. Financial liabilities are classified as non-current liabilities if they mature in more than 12 months. Liabilities maturing in less than 12 months are classified as current.

Derivates                                                                    

Derivative contracts are recognized at fair value. Gains and losses resulting from fair value measurement are treated in accounting as specified by the purpose of the derivative contract.                                                    

At the inception of a hedge relationship, the Group formally designates and documents the hedge relationship to which it wishes to apply hedge accounting, the risk management objective and the hedging strategy. For cash flow hedges the effective portion of changes in the fair value of hedging instruments are recognised in the hedge reserve in other comprehensive income (OCI). Hedging instruments recognised in OCI are recognised to profit or loss when the hedged transaction affects the income statement. Any ineffective portion or derivatives outside the hedge accounting are recognised immediately in the income statement.                                                            

Financial assets and liabilities

EUR thousand

Note2018 Book value2018 Fair value2017 Book value2017 Fair value
Financial assets non-current     
Unlisted share investments1438383838
Other receivables147907901,4001,400
     
Financial assets current      
Trade and other receivables1525,25125,25124,71624,716
Cash and cash equivalents1640,74740,74720,68320,683
     
Financial liabilities non-current     
Loans, interest-bearing 40,11740,11747,28647,286
     
Financial liabilities current     
Loans, interest-bearing 17,09617,0961,9961,996
Trade and other payables2012,47812,47812,53212,532

 

In determining the fair values of the financial assets and liabilities, the following price quotations, assumptions and valuation models have been used.

Long-term financial assets

Long-term financial assets consist of unlisted share investments valued at cost less any impairment. Unlisted shares do not have an active market and therefore the fair value of the investments cannot be specified reliably. Financial assets arising from derivative financial instruments of EUR 240 thousand are classified as level 2 and unquoted equity shares of EUR 38 thousand as level 3 in the fair value measurement hierarchy.

Trade and other receivables

Trade and other receivables are measured at amortized cost less impairment losses.

Trade payables, other liabilities and financial liabilities

All bank loans are at floating rate and the fair values of is considered to correspond to the book values. Trade payables and other liabilities are measured at amortised cost.

The maturity distribution of financial liabilities is presented in Note 18.

 

 

23. Auditor fees 

Auditor fees

EUR thousand

20182017
Audit fees-259-216
Tax consultancy00
Other fees and services0-207
Auditor fees total-259-423

 

 

 

 24. Commitments and contingent liabilities 

Commitments and contingent liabilities

EUR thousand

Dec 31, 2018Dec 31, 2017
Own guarantees  
Business mortgage of own debt01,200
Guarantees1,106202
  
Commitments on behalf of subsidiaries  
Guarantees327100
  
Other own contingent liabilities  
Lease liabilities  
Current lease liabilities943850
Lease liabilities maturing in 1- 5 years981847
Total1,9241,697
  
Rental liabilities *  
Current rental liabilities6,9136,424
Rental liabilities maturing in 1- 5 years10,29811,368
Rental liabilities maturing over  5 years2,800180
Total20,01017,973
  
Other own contingent liabilities total21,93419,670
  
Commitments and contingent liabilities total23,36721,172

*Value added tax is only included in vehicle leasing liabilities. The other liabilities are exclusive of value added tax. The lease agreements are ordinary lease agreements. The finance lease agreements are ordinary finance lease agreements and have no associated leaseback clauses. The Group does not have pledges, mortgages or guarantees on behalf of external parties.

 

 

25. Related party transactions 

Basware Group’s related parties include the subsidiaries, joint venture Clear Fund Ltd and the co-owner of joint venture, Arrowgrass Capital Partners LLP. In addition, the related parties of Basware include the members of the Board of Directors, the members of the Corporate Executive Team, CEO and their family members and their controlled companies. Basware Corporation's subsidiaries are disclosed in Note 26, key management compensations are disclosed in Note 5 and shares in joint ventures are disclosed in Note 13.

No loans have been given to the related parties of the group, except subsidiaries, and no guarantees or other collateral have been issued on their behalf.

Loans from related parties

EUR thousand

Dec 31, 2018Dec 31, 2017
Arrowgrass Master Fund LTD10,00010,000

Loans from related parties includes the share of Arrowgrass Master Fund LTD of the Group's term loan financing signed in September 2017 and totaling EUR 30 million. The other lenders are Nordea Bank AB, OP Corporate Bank Plc and Ilmarinen Mutual Pension Insurance Company. Loans from related parties have been provided at commercial interest rates.

 

 

 26. Shares in subsidiaries

Shares in subsidiaries

DomicileCountryGroup holding, %
Basware International OyEspooFinland100
Basware GmbHDüsseldorfGermany100
Basware ABStockholmSweden100
Basware B.V.AmsterdamNetherlands100
Basware A/SHerlevDenmark100
Basware, Inc.DelawareUnited States100
Basware SASParisFrance100
Basware ASOsloNorway100
Basware Pty LtdChatswoodAustralia100
Basware SRLIasiRomania100
Basware India Private LimitedChandigarhIndia100
Basware Belgium NVAalstBelgium100
Basware Holdings Ltd.LondonGreat Britain100
Basware UK Ltd.StaffordshireGreat Britain100
Basware Shared Services Ltd.LondonGreat Britain100
Basware Supplier Solutions Ltd.LondonGreat Britain100
Procserve Solutions Ltd.LondonGreat Britain100
Procserve Services Ltd.LondonGreat Britain100
Basware Technology LLC*Fort MillUnited States100

* Basware Technology LLC has been merged to Basware Inc as of October 1, 2018.

 

Foreign branches

The parent company has branches in India, Chandigarh (reg. no F03347) and Russia, Moscow (eg. no 16926.1).

Basware UK subsidiaries, Basware UK Ltd and Basware Holdings Ltd sub-group entities have applied exemption from the local statutory audit requirements under section 479A of the Companies Act 2006.

Basware GmbH is exempt from the duty of corporations to audit and disclose financial statements pursuant to German legislation (§ 264 III HGB).

 

 

 

27. Events after the reporting period 

After the balance sheet date, no significant events have taken place within the Group.

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