Report by the Board of Directors and Financial Statements 2020 Report by the Board of Directors and financial statements REPORT BY THE BOARD OF DIRECTORS Tokmanni’s business ..................................................................................................................................................................................... 3 Highlights 2020 ............................................................................................................................................................................................. 3 Operating environment and market development ......................................................................................................................................... 4 Operational development .............................................................................................................................................................................. 5 Financial development .................................................................................................................................................................................. 6 Acquired businesses ..................................................................................................................................................................................... 7 Tokmann's long-term financial targets and achievements ............................................................................................................................ 8 Strategy ......................................................................................................................................................................................................... 8 Personnel ...................................................................................................................................................................................................... 9 Corporate responsibility .............................................................................................................................................................................. 10 Shares and shareholders ............................................................................................................................................................................ 12 Repurchase of own shares for the company’s incentive programmes ........................................................................................................ 13 Share-based incentive programs ................................................................................................................................................................ 14 Flagging notifications .................................................................................................................................................................................. 14 Governance ................................................................................................................................................................................................. 15 Information contained in the notes to the financial statements ................................................................................................................... 16 Risk management ....................................................................................................................................................................................... 17 Events after the review period ..................................................................................................................................................................... 19 Tokmanni’s outlook for 2021 ....................................................................................................................................................................... 19 Board of directors dividend proposal ........................................................................................................................................................... 20 Statement of non-financial information ........................................................................................................................................................ 21 Group key figures and calculation of financial ratios ................................................................................................................................... 28 Calculation of the Group’s key figures ........................................................................................................................................................ 30 Shares and share capital ............................................................................................................................................................................ 32 FINANCIAL STATEMENTS CONSOLIDATED FINANCIAL STATEMENTS (IFRS) Consolidated income statement .................................................................................................................................................................. 34 Consolidated statement of financial position ............................................................................................................................................... 35 Consolidated statement of cash flows ......................................................................................................................................................... 36 Consolidated statement of changes in equity ............................................................................................................................................. 37 Notes to the consolidated financial statements ........................................................................................................................................... 38 1. Accounting policies used in the consolidated financial statements ................................................................................................... 38 1.1 Basic information on the Group ......................................................................................................................................................... 38 1.2 Accounting policies used in the financial statements ........................................................................................................................ 38 1.3 Accounting policies used in the consolidated financial statements ................................................................................................... 38 1.4 Accounting policies requiring management judgement and major sources of estimation uncertainty .............................................. 39 1.5 Application of new and revised IFRS standards ................................................................................................................................ 40 1.6 Forthcoming IFRS standards ............................................................................................................................................................. 40 2. Business performance ....................................................................................................................................................................... 41 2.1 Segment information ......................................................................................................................................................................... 41 2.2 Income ............................................................................................................................................................................................... 41 2.3 Materials and services ....................................................................................................................................................................... 42 2.4 Other operating expenses ................................................................................................................................................................. 42 2.5 Depreciation ...................................................................................................................................................................................... 43 2.6 Employee benefit expenses .............................................................................................................................................................. 43 2.7 Financial income and expenses ........................................................................................................................................................ 44 2.8 Income taxes for the financial period and deferred tax balances ...................................................................................................... 45 3. Assets and liabilities .......................................................................................................................................................................... 47 3.1 Property, plant and equipment .......................................................................................................................................................... 47 3.2 Intangible assets ................................................................................................................................................................................ 54 3.3 Inventories ........................................................................................................................................................................................