SATO ANNUAL REPORT 2020
SATO's Annual report 2020
2
HALLITUKSEN TOIMINTAKERTOMUSSATO LYHYESTI TILINPÄÄTÖSTOIMITUSJOHTAJAN KATSAUS
SATON VASTUULLISUUSRAPORTTI 2020
CONTENTS
SATO in brief and key gures ............................................. 5
CEO’s review ....................................................................... 7
Report of the Board of Directors ........................................ 8
Financial statements ......................................................... 20
The Sustainable SATO ........................................................ 3
Our sustainability work in 2020 .......................................... 5
Key gures ........................................................................ 25
Reporting Principles ......................................................... 32
Sustainability management ................................................ 3
Risk management ...............................................................4
Corporate Governance Statement 2020 .............................8
Remuneration statement 2020 ..........................................14
Board of Directors ............................................................. 15
Corporate Management Group ......................................... 17
ANNUAL REPORT SUSTAINABILITY GOVERNANCE
SATO ANNUAL REPORT 2020
REPORT OF BOARD OF DIRECTORSSATO IN BRIEF FINANCIAL STATEMENTSCEO'S REVIEW
SATO's Annual report 2020
4
CONTENTS
6
SATO in brief and key gures ............................................. 5
CEO’s review ....................................................................... 7
Report of the Board of Directors ........................................ 8
Operating environment ...................................................................8
Strategy ...........................................................................................9
Net sales and prot ........................................................................ 10
Financial position and nancing .................................................... 10
Group structure .............................................................................. 10
Housing business ........................................................................... 10
Investment properties .................................................................... 12
Fair value ....................................................................................... 12
Investments, divestments and property development .................. 12
Sustainability ................................................................................. 15
Development activities .................................................................. 16
Events after the review period ....................................................... 16
Risk management ...........................................................................17
Pending legal actions .....................................................................17
Shares ............................................................................................. 17
Personnel ........................................................................................17
Shareholders’ Nomination Committee ...........................................17
Board of Directors, CEO and auditors ........................................... 18
Members of the Management Group ............................................ 18
Outlook ......................................................................................... 18
Proposal of the Board of Directors
for the distribution of prot ........................................................... 18
Financial statements ......................................................... 20
Consolidated nancial statements, IFRS .......................................20
Financial statements of the parent company, FAS .........................63
Auditor’s report ..............................................................................73
Five year indicators ........................................................................76
Information for shareholders .........................................................78
7
8
20
5
REPORT OF BOARD OF DIRECTORS FINANCIAL STATEMENTSCEO'S REVIEW
SATO's Annual report 2020
55
SATO IN BRIEF
SATO's Annual report 2020
SATO IN BRIEF AND KEY FIGURES
As cities and populations change, we believe
that housing also needs to change. SATO is one
of Finland’s leading rental housing providers.
Our goal is to build thriving and vibrant cities
and neighbourhoods where people enjoy a high
level of well-being. We oer our residents homes
in cities, along good transport routes, and we
develop services to make their daily lives easier.
We own, build, buy and renovate urban homes to
ensure safe, carefree and pleasant living for our
customers. Our service promise to our customers is:
A home the way you want it.
We own approximately 26 800 SATOhomes
in Finland’s largest growth centres and in
St. Petersburg. As a major housing provider, we
bear responsibility for urban development and
the environmental impacts of housing. We invest
in rental apartments that meet our residents’
needs and are near good transport connections,
and we grow protably. We increase the value of
our housing stock through investments, divest-
ments and repairs.
242
SATO employees
At the end of the year, SATO had
242 employees.
Four stars once again in global real
estate sustainability benchmark
We participated in the Global Real Estate
Sustainability Benchmark (GRESB) for the
sixth time, and we retained our four stars
out of ve. Compared to other northern
European housing investors in its peer
group, SATO’s result is above average.
Residents at the end of the year
50,000870
new SATOhomes at year-end
870 new SATOhomes were completed
during the reporting year
What makes
a home is that
you have your
own space and
you feel good.
REPORT OF BOARD OF DIRECTORS FINANCIAL STATEMENTSCEO'S REVIEW
SATO's Annual report 2020
66
SATO IN BRIEF
SATO's Annual report 2020
FINANCIAL KEY FIGURES
Operating prot, MEUR
2016 2017 2018 2019 2020
179.6
800
700
600
500
400
300
200
100
0
During the reporting
year, 769 new rental
apartments, 63 own-
er-occupied apart-
ments and 36 Flex-
Home apartments
were completed, all
in the Helsinki area.
43.8%
Our solvency ratio strengthened
The Group’s solvency ratio was 43.8 per
cent at the end of the year.
2,155.7
MEUR
Shareholders’ equity strengthened
Shareholders’ equity was over EUR 2
billion.
96.7%
Our economic occupancy rate
declined
The uncertainty caused by the coronavirus pan-
demic during the reporting year was reected
in SATO’s business operations as an increase in
tenant turnover and, in turn, as a decline in the
economic occupancy rate.
Net sales, MEUR
2016 2017 2018 2019 2020
303.4
350
300
250
200
150
100
50
0
Prot before taxes, MEUR
2016 2017 2018 2019 2020
800
700
600
500
400
300
200
100
0
129.5
SATO's Annual report 2020
7
REPORT OF BOARD OF DIRECTORSSATO IN BRIEF FINANCIAL STATEMENTS
CEO'S REVIEW
CEO’S REVIEW
The coronavirus pandemic that emerged in early 2020
was challenging for us and inuenced our work espe-
cially in the exceptional arrangements we made to try to
ensure the safety and well-being of both our employees
and our residents. We nevertheless managed to cope
well with the exceptional year. The savings measures
launched as part of risk management related to the
pandemic were reected in the favourable development
of net rental income. We did not have to temporarily lay
o personnel due to the pandemic, and we recruited a
signicant number of new employees during the year.
The uncertainty caused by the coronavirus pandemic
during the reporting year was reected in SATO’s busi-
ness operations as an increase in tenant turnover and, in
turn, as a decline in the economic occupancy rate. The
occupancy rate at year end was 96.7 per cent. Besides
the general uncertainty caused by the pandemic, the
lower occupancy rate can be attributed to the increased
oering of rental housing in the market, as well as the
decline in our customer satisfaction rating.
We did not succeed in improving the Net Promoter Score
(NPS) given to us by our residents during the year. Our
customer satisfaction weakened because some of the
planned repair projects had to be postponed due to the
coronavirus pandemic, and our opportunities to serve our
customers were more limited during the pandemic.
We strongly moved forward with our Customer First
development programme and focussed on adapting our
organisation and our service processes to respond to our
customers’ needs even better. We aim to be closely present
in our customers’ daily lives in order to serve them in the
best possible way. We reinforced our organisation by
increasing our personnel, mainly those who work in our
buildings close to residents. We believe that this will show
as an increase in customer satisfaction in the medium term.
During the reporting year, we continued our sustainabili-
ty work, which is guided by SATO’s strategy and our sus-
tainability programme for 2019–2022. The programme
emphasises carbon-neutral cities and the well-being of
residents and neighbourhoods. In our own sustainability
goals, we have committed to the UN sustainable devel-
opment goals (SDG).
In spring 2020, we launched the Green Finance Frame-
work, which integrates SATO’s sustainability targets with
its nancing arrangements. In September, we issued
the rst green bond under our Euro Medium Term Note
(EMTN) programme.
In 2020, we initiated city planning projects and signed
preliminary agreements and letters of intent subject to
zoning conditions covering altogether close to 65,000
oor square metres, and we reinforced our housing
portfolio with investments valued at EUR 120.6 million.
During the reporting year, 769 new rental apartments, 63
owner-occupied apartments and 36 FlexHome apart-
ments were completed, all in the Helsinki area.
SATO’s rst FlexHome was completed in the Tali neigh-
bourhood of Helsinki on 1 June. FlexHome is a new
short-term ownership concept that enables home own-
ership with a small initial capital outlay and a ve-year
part-ownership period.
SATO had a total of 242 employees at the end of the
year. According to the personnel survey, our internal
employer image is strong, and interest in SATO as an
employer was also reected in our recruitment.
I wish to thank SATO employees for their commendable
work and for doing everything they could to ensure the
comfort of our residents, also during this uncertain and
challenging time. Thank you also to our partners for their
good collaboration and our customers for their patience
during this exceptional period.
Antti Aarnio, CEO
We aim to be closely present
in our customers’ daily lives
in order to serve them in
the best possible way.
SATO's Annual report 2020
8
REPORT OF BOARD OF DIRECTORS
SATO IN BRIEF FINANCIAL STATEMENTSCEO'S REVIEW
Bank, the EU and the Finnish Government are
being applied in an eort to limit the pandemic’s
negative impacts on Finland’s economy.
The uncertainty caused by the coronavirus pan-
demic during the reporting year has been reect-
ed in SATO’s business operations as an increase
in tenant turnover and, in turn, as a decline in the
economic occupancy rate.
Despite the coronavirus pandemic that erupted
in 2020, there is demand for rental apartments,
and the urbanisation trend continues. Dense
urban living along good public transport connec-
tions is becoming increasingly popular in Finland.
The Helsinki metropolitan area, Tampere and Turku
continue to enjoy strong growth, while according
to Statistics Finland’s population projection, Fin-
land’s population will start declining in 2031. The
Helsinki area is expected to grow by over 200,000
new residents by 2040. Close to 80 per cent of the
area’s residents already live in one- to two-person
homes, and the number of small households
continues to rise. As a result of immigration, the
proportion of people with foreign background
living in the capital area is predicted to grow from
the current 17 per cent to 25 per cent by 2030. The
aging population typically moves closer to growth
centres and the services they oer, and hous-
ing-related services are increasingly expected.
The change in the population structure and devel-
opment in the prices of owner-occupied apart-
ments create a stable foundation for demand for
rental housing especially in the capital area and
in Tampere and Turku. Outside of growth centres,
OPERATING ENVIRONMENT
SATO’s operating environment was aected dur-
ing the reporting year by continued urbanisation,
growth in the popularity of rental housing and, in
particular, the restrictions related to the coronavi-
rus pandemic. In SATO’s operational area in the
capital area and in Tampere and Turku, nearly
half of the permanently occupied apartments are
already made up of rental apartments.
The coronavirus pandemic that started in 2020
has had a major impact on the Finnish economy.
According to the Bank of Finland’s December
forecast, Finland’s economy will contract by just
under 4 per cent in 2020. The economy will begin
to recover as the uncertainty caused by the pan-
demic clears in the course of 2021, and the GDP
is expected to grow by more than 2 percent in
2021. There is, however, major uncertainty in the
economic outlook concerning how fast the pan-
demic can be brought under control. The support
measures introduced by the European Central
REPORT OF THE BOARD OF DIRECTORS
1 JANUARY–31 DECEMBER 2020
In SATO’s operational
area in Helsinki metro-
politan area, Tampere
and Turku, nearly half
of the permanently
occupied apartments
are already made up of
rental apartments.
SATO's Annual report 2020
9
REPORT OF BOARD OF DIRECTORS
SATO IN BRIEF FINANCIAL STATEMENTSCEO'S REVIEW
forecast, housing starts in 2021 will decrease by
11% compared to 2020. There are remarkable re-
gional dierences in granted construction permits
and projected housing starts.
Thanks to the low interest rate level, housing
remains an appealing investment. Investment in
rental housing continues to increase in popularity
in both Finland and globally, and the coronavirus
crisis that hit several other real estate sectors hard
further reinforces the status of housing investment.
Foreign housing investors that landed on Finland’s
shores in recent years continued to strengthen their
investment portfolios during the reporting year.
Finland targets carbon neutrality by 2035. Mitigat-
ing emissions from the construction sector plays
a signicant role in achieving both national and
international climate targets and in preparing for
climate change. Construction and the use of build-
ings currently account for over a third of Finland’s
greenhouse gas emissions. In addition to energy
consumption during use, the sector has started
taking note of the carbon footprint of buildings
throughout their life cycle.
STRATEGY
As cities and populations change, we believe
that housing also needs to change. SATO’s goal
the real prices of homes are declining, which
makes acquiring an owner-occupied apartment in
growth centres even more challenging for people
coming from those areas.
The rental housing markets in major cities have
been characterised in recent years by a sharp
growth in supply. The growth largely stems from
the brisk production of rental housing. During
the 2020 pandemic, previously short-term rental
apartments were oered for longer rental periods,
which boosted supply in some cities, even to a
considerable degree. However, demand for rental
apartments was partly negatively aected by up-
per secondary schools and universities switching
to remote teaching due to the pandemic.
The pandemic has slightly shifted the focus of de-
mand for rental apartments to larger apartments
and areas with lower rent levels. Behind both of
these developments is the increase in telework-
ing: people need more space when they also use
their home for working.
KTI Kiinteistötieto Oy’s rental benchmarking, which
provides information on new rental agreements,
indicated average annual growth of 0.7 per cent in
the capital city region in the third quarter of 2020.
Espoo and Vantaa have experienced a somewhat
greater increase in rents than Helsinki. In major
cities outside the Helsinki metropolitan area, rents
increased by an average of 0.5 per cent, but there
were considerable dierences between cities.
In Statistics Finland’s December report, the
year-on-year change in construction permits was
-12.4% in October. According to the Confedera-
tion of Finnish Construction Industries’ November
is to build thriving and vibrant cities and neigh-
bourhoods where people enjoy a high level of
well-being. We oer our residents homes in cities,
along good transport routes, and we develop
services to make their daily lives easier.
Our customers are at the heart of our strategy, and
we want to develop homes with increasingly better
services for them. In addition to services to help
them day to day, we look after their well-being
and support good neighbourly relations. We pay
attention to home health and energy eciency.
Strategic goals Realisation in 2020
Continuously improving NPS during living Unfullled
• We aim for a continuously improving Net Promoter Score (NPS) from our residents. The Custom-
er First development programme, friendly and professional service and more active presence
serving residents in SATO buildings help us reach our goal
Maintaining credit rating Fullled
• SATO has a target-oriented nancing programme that aims to strengthen the company' s eq-
uity ratio and increase the share of unsecured nancing. SATO's strategic target is to maintain
the credit rating. During the reporting year, we maintained our current credit rating BBB with a
stable outlook that we obtained last year. The better credit rating helps us to further expand our
nancing base and lower our nancing costs.
Return on equity target Unfullled
• Our third strategic target is our return on equity target which was 8 per cent during the strategy
period.
Our vision:
In thriving cities,
people enjoy
a high level of
well-being
Our mission:
We are
revolutionising
housing –
it is more than
just walls
SATO's Annual report 2020
10
REPORT OF BOARD OF DIRECTORS
SATO IN BRIEF FINANCIAL STATEMENTSCEO'S REVIEW
Our sustainability work is guided by SATO’s strate-
gy and our sustainability programme for 2019–
2022, which emphasises carbon-neutral cities and
the well-being of residents and neighbourhoods. In
our own sustainability goals, we have committed to
the UN sustainable development goals (SDG).
We operate protably and with a long-term view. We
increase the value of our housing stock by
investing in homes that are in central locations and
near convenient trac connections, and through sys-
tematic repairs. SATO’s strategy focusses on expand-
ing its housing stock in the Helsinki metropolitan
area, Tampere and Turku – all areas where demand
for apartments is the highest and the increase in
value is expected to be stable over the longer term.
SATO’s operations are guided by its strategic
development programmes: Customer First, digital
development and diverse housing solutions.
SATO has set as a strategic goal maintaining its
investment grade credit rating. Our return on eq-
uity target is 8 per cent. In addition, our strategic
goal is to achieve a continuously improving Net
Promoter Score (NPS) from our residents.
According to SATO’s dividend policy, a maximum
of 40 per cent of the cash ow from operations
will be paid in annual dividends, depending on
the market situation, investment level, the devel-
opment of the equity ratio and the solvency ratio.
NET SALES AND PROFIT
In 2020, consolidated net sales were EUR 303.4
(295.6) million.
Operating prot was EUR 179.6 (725.6) million.
Operating prot without the change in the fair
value of investment properties was EUR 192.6
(173.3) million. The change in fair value was EUR
-13.0 (552.2) million. The weakened occupancy
rate had a negative impact on the change in fair
value. In the comparison period, the change in the
fair value was aected by the change of valuation
method to income value method in the fair value
measurement of investment properties on 31
December 2019.
Financial income and expenses totalled EUR
-50.0 (-55.1) million.
Prot before taxes was EUR 129.5 (670.5) million.
Cash ow from operations (free cash ow after
taxes excluding changes in fair value) amounted
to EUR 132.1 (91.2) million.
Earnings per share were EUR 1.80 (9.45).
FINANCIAL POSITION AND FINANCING
The consolidated balance sheet totalled EUR
5,104.7 (4,718.2) million at the end of December.
Equity was EUR 2,155.7 (2,055.8) million. Equity
per share was EUR 38.07 (36.31).
The Group’s equity ratio was 42.2 (43.6) per cent
at the end of the year. EUR 766.5 million in new
long-term nancing was withdrawn and the
solvency ratio was 43.8 (44.4) per cent at the
end of December.
The Group’s return on equity was 4.8 (29.6) per cent.
The return on investment was 4.1 (18.9) per cent.
Interest-bearing liabilities at the end of December
totalled EUR 2,381.5 (2,098.4) million, of which
loans subject to market terms accounted for EUR
2,170.2 (1,830.1) million. The loan itemisation is in
note 26 of the nancial statements. At the end of
the reporting year, the average loan interest rate
was 1.8 (1.7) per cent. Net nancing costs totalled
EUR -50.0 (-55.1) million. The average maturity of
loans was 4.2 (4.0) years.
The calculated impact of changes in the market
value of interest hedging on equity was EUR -1.9
(-5.3) million.
During the reporting year, SATO increased the
proportion of loans without asset-based securities
to 82.6 per cent of all loans. At the end of the
year, the proportion of unencumbered assets was
84.1 per cent of the balance sheet.
GROUP STRUCTURE
SATO Corporation is the parent company of SATO
Group. At the end of the reporting year, the parent
company had a total of 24 (25) subsidiaries engaged
in business operations. Mergers took place during
the year in order to clarify the Group structure.
SATO Corporation’s majority shareholder is
Balder Finska Otas AB, whose parent company
is Fastighets AB Balder, which is quoted on the
Stockholm Stock Exchange.
HOUSING BUSINESS
Our housing business includes rental activities, customer
service, lifecycle management and maintenance. Eective
rental activities and digital services provide home-seekers
with quick access to a home, and the Group with a
steadily increasing cash ow. High-quality maintenance
operations ensure the comfort of residents and that the
apartments stay in good condition and maintain their
value. We serve our customers in daily housing issues
through our customer-oriented service organisation.
In accordance with our Customer First devel-
opment programme, we focussed on adapting
our organisation and our service processes to
respond to our customers’ needs even better. We
aim to be closely present in our customers’ daily
lives in order to serve them in the best possible
way. We expanded our House Experts operating
model in the Helsinki metropolitan area. Under
the operating model, SATO’s own House Experts
handle some of the tasks previously handled by
our maintenance partners, for instance technical
building work on homes and buildings.
We recruited nine new house experts during
the year. Twelve new employees started working
in our Housing business in a new kind of Service
Manager role that combines the tasks of service
managers, apartment inspectors and infrastruc-
ture managers. Service managers ensure that
SATO’s residents are happy and that the rental
homes remain in good condition.
SATO’s operations
are guided by its
strategic development
programmes:
Customer First,
digital development
and diverse housing
solutions.
SATO's Annual report 2020
11
REPORT OF BOARD OF DIRECTORS
SATO IN BRIEF FINANCIAL STATEMENTSCEO'S REVIEW
Cash earnings, MEUR
2016 2017 2018 2019 2020
132.1
150
125
100
75
50
25
0
Balance sheet, MEUR
2016 2017 2018 2019 2020
5,104.7
6,000
5,000
4,000
3,000
2,000
1,000
0
Equity ratio, %
Target > 40%
2016 2017 2018 2019 2020
42.2
50
40
30
20
10
0
Solvency ratio, %
Target < 50%
60
50
40
30
20
10
0
2016 2017 2018 2019 2020
43.8
Shareholders’ equity, MEUR
2016 2017 2018 2019 2020
2,500
2,000
1,500
1,000
500
0
2,155.7
Unencumbered assets, %
Target > 60
_
2017 2018 2019 2020
84.1
90
80
70
60
50
40
30
20
10
0
Interest coverage ratio
5
4
3
2
1
0
Target > 1.8 x
2016 2017 2018 2019 2020
4.0
Työnumero 19
Secured solvency ratio, %
XX
2016 2017 2018 2019 2020
50
40
30
20
10
0
8.2
SATO's Annual report 2020
12
REPORT OF BOARD OF DIRECTORS
SATO IN BRIEF FINANCIAL STATEMENTSCEO'S REVIEW
SATO had approximately 50,000 customers at the
end of the reporting year. The Net Promote Score
(NPS) measuring customer satisfaction decreased
slightly from the previous years. Our customer
satisfaction weakened because some of the planned
repair projects had to be postponed due to the
coronavirus pandemic and our opportunities to serve
our customers were limited during the pandemic.
The economic occupancy rate weakened, particu-
larly on account of the pandemic, and in Finland
averaged 96.7 (98.1) per cent. The external tenant
turnover rate for rental apartments was 32.6 (29.6)
per cent. Rental income increased by 2.6 per cent
to EUR 303.4 (295.6) million. The weakened occu-
pancy rate can be attributed largely to the general
uncertainty caused by the coronavirus pandemic,
the increased oering of rental housing, and the
slight decline in customer satisfaction.
The average monthly rent of SATO’s rental apart-
ments in Finland at the end of the review period
was EUR 17.51 (17.23) per m
2
.
Net rental income for apartments was EUR 220.3
(207.1) million.
INVESTMENT PROPERTIES
On 31 December 2020, SATO owned a total of
26,792 (26,074) apartments. Altogether 769 rental
apartments were acquired or completed. The total
number of divested rental apartments and shared
ownership apartments redeemed by the owner-
occupants was 113.
Fair value
The development of the value of rental apartments is a key
factor for SATO. Its housing stock is concentrated in areas
and apartment sizes which are expected to be the focus, in
the long term, of increasing rental apartment demand. The
allocation of building repairs is based on life-cycle plans
and repair need specications.
The fair value of investments totalled EUR 4,753.5
(4,657.9) million at the end of December. The
change in the value of investment properties,
including investments and divestments, was
EUR 95.7 (782.7) million.
The external expert JLL Finland Oy (JLL) issues
a quarterly statement on the valuation methods
applied by SATO, the appropriateness of sources
of information used and the quality and credibility
of the valuation for Finnish investment properties.
JLL’s latest statement was issued on the valuation
carried out on 31 December 2020. The criteria for
the determination of the fair value are presented in
the notes to the consolidated nancial statements.
The change in value was also aected by invest-
ments and divestments, and by the change in
market prices and the value of the rouble.
Debt portfolio, Nominal values 31 Dec 2020,
total MEUR 2,398
Corporate bonds 1,249
Bank loans 933
Interest subsidsed 169
State subsidised (ARAVA) 43
Commercial papers 6
83% of loans without
asset-based securities
83%
In accordance with our
Customer First devel-
opment programme,
we focussed on adapt-
ing our organisation
and our service pro-
cesses to respond to
our customers’ needs
even better.
Maturity prole of long term debt, MEUR
500
400
300
200
100
0
Corporate bonds
Other loans
2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 ›
At the end of the year, the Helsinki metropolitan
area accounted for some 85 per cent, Tampere
and Turku for approximately 11 per cent, Jyväskylä
and Oulu for 2 per cent and St. Petersburg for
roughly 2 per cent of the value of apartments.
Investments, divestments and property
development
Investment activities are used to manage the housing
portfolio and prepare the ground for growth. Since
2000, SATO’s net investments in non-subsidised rental
apartments total more than EUR 2.5 billion. SATO
acquires and builds entire rental buildings and single
rental apartments. Property development allows for new
investments in rental apartments in Finland. The rental
potential and value of rental apartments owned by
SATO are developed through renovation activities.
Investments in rental apartments were EUR 120.6
(185.9) million. Investments in the Helsinki metropol-
itan area accounted for 93.2 per cent of the invest-
ments during the review period. And investments
in new apartments represented 48.6 per cent of all
investments in the review period. In addition, on
SATO's Annual report 2020
13
REPORT OF BOARD OF DIRECTORS
SATO IN BRIEF FINANCIAL STATEMENTSCEO'S REVIEW
SATOhomes 2020 2019
Number of properties 748 745
Total number of apartments 26,792 26,074
Avarage size of apartment, m
2
54.2 54.6
Fair value of investment property MEUR 4,753.5 4,657.9
Net rental income MEUR 220.3 207.1
SATOhomes in St Petersburg 2020 2019
Number of properties 13 13
Total number of apartments 533 534
Avarage size of apartment, m
2
70.12 70.24
Fair value of investment property MEUR 102.7 124.0
Net rental income MEUR 2.8 3.0
Rental activities in Finland 2020 2019
Average rent of rental apartments, EUR/m2/month,
at the end of review period
17.51 17.23
Economic occupancy rate, % 96.7 98.1
Turnover of rental apartments, % 32.6 29.6
Plot reserves 2020 2019
Plot reserves MEUR 59.0 63.1
Plot purchased MEUR 3.0
37
Total permitted building volume in the plot reserve, oor-m
2
145,400 141,900
Owned plots transferred to production or sold MEUR 10.6 12.2
New production 2020 2019
Completed in Finland, units 868 353
Rental apartments 769 321
Owner-occupied apartments 63 32
FlexHomes 36
Under Construction on 31 December, units 385 868
Rental apartments 314 769
Owner occupied apartments 71 99
Unsold owner-occupied apartments, by 31 December, units 71 36
Completed 0 0
Under construction 71 36
Repairs 2020 2019
Apartments and property repairs, MEUR 73.7 73.9
Repair investments, MEUR 57.0 54.6
Repair subsidies received, MEUR 0.2 0
Key nancial indicators Target 2020 2019
Average loan maturity, years 2.5–6 4.2 4.0
Average interest xing period, years*
3–10 3.3
2.4
Average interest rate, at the end of period, % – 1.8 1.7
Proportion of xed rate debt, % > 60 73.6 62.0
* SATO aims to optimize the interest risk by maintaining the average interest xing period between 3 to
5 years when market interest rates (ECB key rate) are above 1%, and between 3 to 10 years when market
interest rates are equal to or below 1%
SATO's Annual report 2020
14
REPORT OF BOARD OF DIRECTORS
SATO IN BRIEF FINANCIAL STATEMENTSCEO'S REVIEW
Regional distribution of the housing portfolio,
31 Dec 2020
Helsinki metropolitan area 85%
Tampere region 6%
Turku region 5%
St. Petersburg 2%
Oulu region 1%
Jyväskylä region 1%
Total housing portfolio MEUR 4,615
External tenant turnover, %
40
30
20
10
0
2017 2018 2019 2020
29.6
32.6
Financial occupancy rate of rental housing, %
100
98
96
94
92
90
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
Q1/2020
Q2/2020
Q3/2020
Q4/2020
96.5
96.9
97. 6
95.8
3 383
Trend in the investment property portfolio value, MEUR
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
5,000
4,000
3,000
2,000
1,000
0
4,754
Housing investments and divestments, MEUR
600
500
400
300
200
100
0
-100
-200
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
Investments Divestments
6
121
SATO’s owned rental homes 31 Dec 2020, %
Studio 22%
1 br 49%
2 br 22%
3 br 6%
4 br 0%
On 31 December 2020, SATO had 314 rental apartments
under construction in Finland, and 769 rental apartments
were completed for the SATO Group in Finland
during the year.
SATO's Annual report 2020
15
REPORT OF BOARD OF DIRECTORS
SATO IN BRIEF FINANCIAL STATEMENTSCEO'S REVIEW
December 2020, binding purchase agreements
in Finland totalled EUR 55.3 (40.9) million.
During the review period, 68 (29) rental apartments
were divested in Finland. Their total value was
EUR 5.7 (5.9) million.
The book value of plot reserves totalled EUR 59.0
(63.1) million at the end of December. The value of
new plots acquired by the end of December totalled
EUR 3.0 (37.0) million.
The permitted building volume for about 2,300
apartments is being developed for the plots in the
company’s housing portfolio. This allows SATO to
utilise existing infrastructure, create a denser urban
structure and thus bring more customers closer to
services and public transport connections.
We collaborate with cities when areas are being
developed and new housing is planned for them.
During the reporting year, we continued to develop
the Soukka area of Espoo and the “Myyr York
Downtown” Myyrmäki and Hakunila areas of Vantaa.
In 2020, we concluded a preliminary contract to ac-
quire three plots located in the Lasihytti area, south
of the railway line, in the Kauklahti district of Espoo.
Under a local plan revision, an urban residential
area for which SATO is planning to build rental
apartments is being planned for the current Lasi-
hytti industrial area. We also signed a preliminary
contract on a property transaction for a future block
of apartment buildings in the Viikki area of Helsinki.
Once the city plan is approved, the intention is
to build roughly 200 new rental homes and 100
FlexHomes. A proposal called ITIS SITI by SATO’s
working group won second prize in the international
idea and architecture competition organised by the
City of Helsinki, and it was chosen as the basis for
continuing the development of Puhos and Puotila.
During the year under review, 769 (321) rental
apartments, 63 (32) owner-occupied apartments
and 36 FlexHome apartments were completed in
Finland. On 31 December 2020, a total of 314 (769)
rental apartments and 71 (99) owner-occupied
apartments were under construction.
A total of EUR 73.7 (73.9) million was spent on
repairing apartments and improving their quality.
SATO had a total of 533 (534) apartments in St.
Petersburg at the end of the year. The economic
occupancy rate of rental apartments in St. Peters-
burg was 91.8 (92.8) per cent on average. For
the time being, SATO will refrain from making
new investment decisions in Russia. The share
of investments in Russia is limited to a maximum
of 10 per cent of the Group’s housing assets.
SUSTAINABILITY
Our sustainability work is guided by SATO’s strate-
gy and our sustainability programme for 2019–
2022, which emphasises carbon-neutral cities and
the well-being of residents and neighbourhoods.
We focussed on improving residents’ living com-
fort and reducing energy consumption with the
help of articial intelligence. During the reporting
year, we installed some 3,000 sensors to measure
temperature and humidity in apartments. Our
building electricity during the year was generated
from wind power and was emission-free.
Our goal is to reduce mixed waste and increase
recycling and sorting. We did not fully succeed
in this goal during the year under review, as pro-
viding residents with guidance in recycling and
sorting in the buildings was not possible due to
the pandemic. In addition, the increase in online
shopping during the pandemic meant higher
volumes of, for instance, board waste.
During the reporting year, in our xed furniture in
dry spaces we switched to Finnish furniture that
takes the product’s life cycle and the low emis-
sions of the indoor air classication into account.
In our product development, we also designed a
new set of Finnish furniture for SATO’s club rooms.
During the reporting year, we continued to devel-
op an operating model related to housing health
and safety. The operating model focusses particu-
larly on a quick response rate, keeping customers
informed, and the ow of information.
During the reporting year, we collaborated on
a project with the non-prot organisations No
Fixed Abode and the Rehabilitation Foundation
to help participants in the project nd two of life’s
essentials – a home and a job. By the end of the
reporting year, 13 people who had participated in
the project were living in a SATOhome.
We were again successful in the Global Real Estate
Sustainability Benchmark (GRESB) and retained
our four out of ve stars with 78 points.
SATO reports on its sustainability annually in accord-
ance with the Global Reporting Initiative’s (GRI) re-
porting guidelines, and the environmental sustainabil-
ity gures presented in the report have been veried
by an independent third party, i.e. KPMG Oy Ab.
In spring 2020, we launched the Green Finance
Framework, which integrates SATO’s sustainability
targets with its nancing arrangements. The frame-
work is based on the company’s strategy and the
sustainability programme that was launched in 2019.
In September 2020, SATO issued a EUR 350
million unsecured green bond with a maturity of
seven years. This is our rst green bond, and we
are using the cash proceeds from the bond to
nance and/or renance sites in accordance
with our Green Finance Framework.
In addition, in December 2020, we concluded
new committed credit facilities without as-
set-based securities valued at a total of EUR 350
million with ve nancial institutions; the credit
facilities have a three-year maturity with two
one-year extension options, and their interest rate
margin is tied to the achievement of SATO’s main
sustainability objectives.
The Corporate Governance Statement is pub-
lished separately from the Report of the Board
of Directors. SATO’s Corporate Governance
Statement, Code of Conduct and sustainability
programme are available at sato..
ENVIRONMENTAL IMPACTS
We reduce the load on the environment by
regularly taking care of and repairing homes and
properties according to the life-cycle principle, and
by building properties primarily in existing urban
environments and near good transport connections.
Legislation governing the energy eciency of
residential buildings requires an energy eciency
gure of 90 for new buildings. SATO is commit-
SATO's Annual report 2020
16
REPORT OF BOARD OF DIRECTORS
SATO IN BRIEF FINANCIAL STATEMENTSCEO'S REVIEW
during the reporting year on further improving
our customer-care processes with the goal of
serving our customers in the best possible way.
We also developed new housing concepts.
We launched a new form of short-term part own-
ership housing, called FlexHome, which opens the
door to home ownership with a small initial capital
outlay. The rst FlexHome was completed in the
Tali neighbourhood of Helsinki in summer 2020.
We continued the planning principle that was in-
troduced last year, according to which studios are
no longer bordered with supporting walls. This
means that apartment distribution in the building
can later be modied by joining studios with two-
or three-bedroom apartments if demand shifts to
larger apartments.
In digital development, we unied our online ser-
vices for our customers for even more uent service.
The digital OmaSATO service allows our residents,
for example, to check their contract and payment
details, read their building’s notices, report defects
and send messages to customer service.
A total of EUR 1.4 (1.2) million was spent on devel-
opment, corresponding to approximately 0.5 per
cent of net sales.
EVENTS AFTER THE REVIEW PERIOD
There are no signicant events following the
review period.
ted to building markedly more energy-ecient
buildings, with our energy eciency gure target
being 81 for new buildings.
We are committed to the Energy Eciency Agree-
ment targets for the property sector, aiming for
a reduction in the total consumption of electricity
and heat of 10.5 per cent between 2015 and 2025.
During the reporting year, we continued to invest
in energy eciency and water conservation in
SATOhomes. We did not, however, succeed in
our water-saving objectives during the reporting
year. Because of the pandemic, we were not able
to implement all savings measures, in addition to
which, water consumption grew as residents spent
more time in their homes than usual.
During the year under review, specic energy
consumption decreased by 3.8 per cent, specic
electricity consumption increased by 8.2 per cent
and specic water consumption increased by
1.2 per cent compared to 2019. Rated emissions
from SATO’s apartments fell by 12.1 per cent
compared to 2019 and were 23.2 (26.4) carbon
dioxide equivalent kilograms per square metre.
Emissions are calculated according to the absolute
consumption of district heating. Electricity was
generated from emission-free wind power.
The Group’s environmental programme has been
incorporated into the sustainability programme
and is available in its entirety at sato..
DEVELOPMENT ACTIVITIES
SATO’s development activities were focussed
SATO's Annual report 2020
17
REPORT OF BOARD OF DIRECTORS
SATO IN BRIEF FINANCIAL STATEMENTSCEO'S REVIEW
RISK MANAGEMENT
Risk management is used to ensure that risks
impacting the company’s business are identied,
managed and monitored.
The main risks of SATO’s business are risks related
to the business environment and nancial risks.
A risk aecting the operating environment in
the immediate future is the coronavirus pandemic,
whose duration and impact on the Finnish
economy are dicult to estimate. A prolonged
coronavirus pandemic may have a major negative
impact on economic growth, business activity
and employment in Finland, not to mention work
productivity. Such economic or business deterio-
ration, as well as quarantines or other restrictive
measures, may have an adverse impact on the
nancial result or operations of SATO’s properties,
not to mention on nancing costs or values. In an
eort to minimise the negative business impacts
of the pandemic, the company has focussed on
maintaining a safe work environment, boosting
sales and strict cost control.
The most signicant risks in the renting of
apartments are related to economic cycles and
uctuations in demand. A clear weakening in
the housing market could have a negative impact
on the market value of SATO’s housing portfolio.
In accordance with its strategy, SATO focusses its
investments on growth centres, thus ensuring
the rental potential of its apartments and the
development of their value.
Changes in ocial regulations and legislation,
as well as the uncertainty stemming from them,
may have a signicant impact on the reliability of
the investment environment and thus on SATO’s
business. SATO monitors and anticipates these
changes and also calls attention to what it considers
to be negative impacts of regulation.
The management of nancial risks is steered
by the Group’s nancial policy. Our nancial risk
management principles have been dened in the
nancial policy approved by SATO’s Board of Di-
rectors. Our most signicant nancial risks relate to
liquidity, renancing and interest rates. We manage
our liquidity and renancing risks by diversifying
the nancing sources and maturity of our loan
portfolio, and by holding sucient liquidity re-
serves in the form of committed credit facilities
and other long-term nancing commitments. The
company established a EUR 1.5 billion Euro Medium
Term Note (EMTN) bond programme in 2019.
The means for managing the liquidity risk at
SATO include cash assets, a bank account limit,
committed credit facilities of EUR 600 million
and a commercial paper programme of EUR 400
million. We increase the amount of reserves as
the funding requirements grow. Our objective is
to keep the liquidity requirements of the next 12
months covered by committed agreements.
Floating rate loans form an interest rate risk which
we manage by balancing the share of xed and
oating rate loans either by issuing xed rate
loans or by interest rate hedges. According to our
treasury policy, our objective is to keep the ratio
of xed rate loans at over 60 per cent of debt
portfolio after interest hedging.
There are risks related to the business environ-
ment in our St. Petersburg operations, includ-
ing currency risk. The consolidation of foreign
currency-denominated assets in the consolidated
nancial statements also involves a translation
risk. Possibilities of hedging the translation risk
are evaluated in accordance with our nancial
policy. For the time being, SATO will refrain from
making new investments in Russia.
A more detailed description of risks and risk
management is available on the Group’s website
www.sato..
PENDING LEGAL ACTIONS
SATO has no ocial procedures, legal actions or
arbitration proceedings pending that would have
a signicant impact on the company’s nancial
standing or protability, and SATO is not aware
of any threat of such proceedings.
SHARES
On 31 December 2020, the share capital of SATO
Corporation was EUR 4,442,192.00 and there were
56,783,067 shares. The company has one series of
shares. The shares are included in the book-entry
system maintained by Euroclear Finland Oy.
SATO Corporation holds 160,000 treasury shares.
This represents 0.3 per cent of all shares and the
votes they confer.
On 31 December 2020, the Board of Directors
did not have authorisation to acquire or issue
the company’s own shares.
On 31 December 2020, the Board members or
the CEO of SATO Corporation did not hold any
shares in the company.
PERSONNEL
At the end of December, the Group employed
242 (229) people, 226 (212) of whom had a perma-
nent employment contract. The average number of
personnel was 229 (223) during the reporting year.
The Group’s salaries and remunerations in 2020
totalled EUR 15.3 (15.8) million.
SHAREHOLDERS’ NOMINATION
COMMITTEE
The Shareholders’ Nomination Committee consists of
representatives of SATO’s four largest shareholders
registered in the book-entry system on 1 October.
If a shareholder chooses not to exercise their nomi-
nation right, the right will pass on to the next largest
shareholder. The State Pension Fund, the company’s
fourth largest shareholder, did not exercise its nomi-
nation right, and the right was passed to the Finnish
Construction Trade Union, the fth largest share-
holder. The Committee consisted of representatives
of the following shareholders: Balder Finska Otas AB
(Erik Selin), Stichting Depositary APG Strategic Real
Estate Pool (Hans Spikker), Elo Mutual Pension Insur-
ance Company (Hanna Hiidenpalo) and the Finnish
Construction Trade Union (Matti Harjuniemi).
SATO is committed
to building markedly
more energy-ecient
buildings that
legislation requires.
SATO's Annual report 2020
18
REPORT OF BOARD OF DIRECTORS
SATO IN BRIEF FINANCIAL STATEMENTSCEO'S REVIEW
BOARD OF DIRECTORS, CEO
AND AUDITORS
The Annual General Meeting held on 23 June
2020 conrmed that the Board of Directors con-
sists of six members.
In 2020, the members of SATO’s Board of Direc-
tors were chairman Erik Selin, deputy chairman
Jukka Hienonen and ordinary members Esa Lager,
Tarja Pääkkönen, Johannus (Hans) Spikker and
Timo Stenius. In addition, Marcus Hansson was
a member of the Board until the Annual General
Meeting on 23 June 2020.
The Board of Directors convened 14 times in 2020.
The Board’s work is supported by the Nomination
and Remuneration Committee.
SATO Corporation’s CEO until 18 December 2020
was Sharam Rahi, and as of 18 December 2020,
SATO’s CEO has been Antti Aarnio, M.Sc. (Tech.).
As the company’s auditor, the Annual General
Meeting selected the audit rm Deloitte Oy, which
appointed APA Eero Lumme as the auditor in
charge. The auditor’s term in oce is the nancial
year, and the auditor’s duties end at the closing of
the next Annual General Meeting.
MEMBERS OF THE
MANAGEMENT GROUP
During the 2020 reporting year, the members
of SATO’s Management Group were CEO Sharam
Rahi (until 18 December 2020); EVP, Rental Hous-
Continuous
urbanisation
provides good
long-term
conditions for
sustained
investments
in SATO’s main
operating areas
in Finland.
ing Business and investments, and CEO as of 18
December 2020, Antti Aarnio; Antti Asteljoki (VP
Housing business until 4 February 2020); Miia Elor-
anta (EVP, Marketing and Communications until 3
December 2020); and CFO Markku Honkasalo.
OUTLOOK
In the operating environment, SATO’s business
activities are mainly aected by urbanisation,
housing policies, consumer condence, the devel-
opment of purchasing power, the rent and price
development for apartments, general competition
and interest rates.
Finland’s economy will begin to recover once
the uncertainty caused by the pandemic
subsides, which is expected to take place in
the course of 2021. According to the Bank of
Finland’s December forecast, Finland’s economy
will contract by just under 4 per cent in 2020.
Economic recovery is expected to begin in the
course of 2021, and the GDP is expected to grow
by more than 2 per cent during the year. There
is, however, major uncertainty in the economic
outlook concerning how fast the pandemic can
be brought under control. As a consequence of
the uncertainty, SATO’s economic occupancy rate
weakened slightly in 2020 compared to 2019.
SATO’s investments to develop digital services
and increase its customer presence are expected
to have a positive impact on the occupancy rate
in the medium term. Interest rates are expected
to remain low in 2021, which will have a positive
impact on SATO’s nancing costs.
Continuous urbanisation provides good long-term
conditions for sustained investments in SATO’s main
operating areas in Finland. Net migration is expected
to represent the largest share of the population
increase in SATO’s operating areas. Some 80 per cent
of SATO’s housing stock is located in the Helsinki met-
ropolitan area, where price development is expected
to be more positive than in the rest of Finland.
Record-high housing construction will decrease
in the coming years as a consequence of a drop
in the number of construction permit applications,
however with major regional dierences.
In line with its majority shareholder’s operating
model, SATO Corporation will not publish guidance
on its 2021 earnings. The parent company of Balder
Finska Otas AB is Fastighets AB Balder, which is
quoted on the Stockholm Stock Exchange.
PROPOSAL OF THE BOARD OF
DIRECTORS FOR THE DISTRIBUTION
OF PROFIT
On 31 December 2020, the parent company’s
distributable equity was EUR 370,154,150.83, of
which prot for the period was EUR 58,039,315.77.
The company had 56,623,067 outstanding shares
entitling to dividends for year 2020.
According to our dividend policy, annual
dividends are at most 40 per cent of our cash
ow from operations, depending on the market
situation, investment level, the development of the
equity ratio and the solvency ratio.
The Board of Directors proposes to the Annual
General Meeting that EUR 0.50 per share is paid in
dividends for the 2020 nancial period (EUR 0.00/
share for 2019), EUR 28,311,533.50 in total, and
that EUR 29,727,782.27 be transferred to retained
earnings.
No material changes have taken place in the
company’s nancial position since the end of the
nancial year. The company’s liquidity is good,
and in the Board of Directors’ view, the proposed
distribution of prot will not compromise the
company’s solvency.
SATO's Annual report 2020
19
REPORT OF BOARD OF DIRECTORS
SATO IN BRIEF FINANCIAL STATEMENTSCEO'S REVIEW
DISTRIBUTION OF SHARES ON 31 DECEMBER 2020
Shareholder Number of shares %
Balder Finska Otas AB (Fastighets AB Balder) 31,696,745 55.8
Stichting Depositary APG Strategic Real Estate Pool 12,811,647 22.6
Elo Mutual Pension Insurance Company 7,233,081 12.7
The State Pension Fund 2,796,200 4.9
Valkila Erkka 390,000 0.7
Hengityssairauksien tutkimussäätiö 227,000 0.4
SATO Corporation 160,000 0.3
Entelä Tuula 159,000 0.3
Heinonen Erkki 156,684 0.3
Tradeka Invest Ltd 126,500 0.2
Others (110 shareholders) 1,020,210 1.8
On 31 December 2020, the Group had 120 shareholders entered in the book-entry register. The turnover
of SATO Corporation's shares was 1.88 per cent during the reporting year.
SATO's Annual report 2020
20
REPORT OF BOARD OF DIRECTORSSATO IN BRIEF
FINANCIAL STATEMENTS
CEO'S REVIEW
CONSOLIDATED FINANCIAL STATEMENTS, IFRS
CONSOLIDATED INCOME STATEMENT, IFRS CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME, IFRS
MEUR note 1 Jan–31 Dec 2020 1 Jan–31 Dec 2019
Net sales 3 303.4 295.6
Property maintenance expenses -83.0 -88.5
Net rental income 220.3 207.1
Fair value change of investment properties, realised 4, 13 3.0 1.0
Fair value change of investment properties, unrealised 13 -13.0 552.2
Sales, marketing and administrative expenses 6, 7, 8, 9 -30.6 -32.6
Other operating income 5 1.7 1.9
Other operating expenses 5 -2.0 -4.3
Share of prot of associated companies and joint ventures 0.0 0.2
Operating prot 179.6 725.6
Financial income 10 0.6 0.9
Financial expenses 10 -50.7 -56.0
-50.0 -55.1
Prot before tax 129.5 670.5
Income tax expenses 11 -27.6 -135.5
Prot for the period 101.9 534.9
Prot for the period attributable to
Equity holders of the parent 101.9 535.0
Non-controlling interests 0.0 0.0
Earnings per share attributable to equity holders of the parent
12
Basic, EUR 1.80 9.45
Diluted, EUR 1.80 9.45
Average number of shares, million 56.6 56.6
MEUR 1 Jan–31 Dec 2020 1 Jan–31 Dec 2019
Other comprehensive income
Remeasurement of dened benet liability, net of tax 0.0 0.0
Related tax 0.0 0.0
Items that will never be reclassied to income statement
Cash ow hedges 27 -2.4 -6.7
Translation dierences -0.1 0.1
Related tax 0.5 1.3
Items that may be reclassied subsequently to income statement -2.0 -5.2
Other comprehensive income, net of tax -2.0 -5.2
Total comprehensive income 99.9 529.7
Comprehensive income attributable to
Equity holders of the parent 99.9 529.7
Non-controlling interest 0.0 0.0
SATO's Annual report 2020
21
REPORT OF BOARD OF DIRECTORSSATO IN BRIEF
FINANCIAL STATEMENTS
CEO'S REVIEW
CONSOLIDATED STATEMENT OF FINANCIAL POSITION, IFRS
MEUR note 31 Dec 2020 31 Dec 2019
ASSETS
Non-current assets
Investment property 13 4,753.5 4,657.9
Tangible assets 14 2.8 3.2
Intangible assets 9, 15 4.0 3.7
Investments in associated companies 17 0.1 0.2
Other non-current investments 18, 19 1.0 1.1
Other right-of-use assets 16 6.6 7.7
Non-current receivables 20, 27 2.8 6.3
Deferred tax assets 21 14.2 14.2
Total 4,785.1 4,694.4
Current assets
Account and other receivables 22 58.6 10.9
Current tax assets 2.9 7.9
Cash and cash equivalents 18, 23 258.0 5.0
Total 319.6 23.8
TOTAL ASSETS 5,104.7 4,718.2
SHAREHOLDERS' EQUITY AND LIABILITIES
Equity attributable to equity holders of the parent
Share capital 4.4 4.4
Fair value and other reserves -31.7 -29.8
Reserve fund 43.7 43.7
Reserve for invested non-restricted equity 114.8 114.8
Retained earnings 2,024.6 1,922.8
Total
24
Non-controlling interests -0.2 -0.2
TOTAL SHAREHOLDERS' EQUITY 2,155.7 2,055.8
MEUR note 31 Dec 2020 31 Dec 2019
LIABILITIES
Non-current liabilities
Deferred tax liabilities 21 387.2 387.4
Provisions 28 1.9 1.6
Lease liabilities 16 54.0 53.0
Derivative liabilities 18, 27 39.1 46.7
Long-term non-interest bearing liabilities 25 0.9 0.0
Long-term interest bearing liabilities 18, 26 2,075.6 1,673.8
Total 2,558.7 2,162.4
Current liabilities
Accounts payable and other liabilities 29 72.4 65.3
Provisions 28 1.7 2.8
Lease liabilities 16 4.9 4.7
Current tax liabilities 5.4 2.6
Short-term interest bearing liabilities 18, 26 305.9 424.6
Total 390.3 500.0
TOTAL LIABILITIES 2,949.0 2,662.4
TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES 5,104.7 4,718.2
SATO's Annual report 2020
22
REPORT OF BOARD OF DIRECTORSSATO IN BRIEF
FINANCIAL STATEMENTS
CEO'S REVIEW
CONSOLIDATED STATEMENT OF CASH FLOWS, IFRS
MEUR note 1 Jan–31 Dec 2020 1 Jan–31 Dec 2019
Cash ow from operating activities
Prot for the period 101.9 534.9
Adjustments:
Non-cash items included in the prot 31 15.3 -549.3
Gains and losses on sales of investment properties and xed assets -3.1 -1.1
Other adjustments 0.1 0.4
Interest expenses and other nancial expenses 10 50.7 56.0
Interest income 10 -0.6 -0.8
Dividend income 0.0 0.0
Income taxes 11 27.6 135.5
Cash ow before change in net working capital 191.7 175.6
Change in net working capital:
Changes in accounts receivable and other receivables -8.7 2.3
Change in accounts payable and other liabilities -2.1 0.2
Interest paid -44.5 -58.8
Interest received 1.3 0.7
Taxes paid -19.6 -27.3
Net cash ow from operating activities 118.3 92.8
Cash ow from investing activities
Investments in investment properties -130.4 -211.3
Net investment in tangible and intangible assets -1.7 -3.4
Cash receipts from loans receivable and debt securities -4.1 0.8
Loans granted and investments in debt securities -33.4 0.0
Disposals of investment property 21.7 28.1
Net cash ow from investing activities -147.9 -185.9
MEUR note 1 Jan–31 Dec 2020 1 Jan–31 Dec 2019
Cash ow from nancing activities
Repayments (–) / withdrawals (+) of current loans -227.5 50.1
Withdrawals of non-current loans 766.5 657.2
Repayments of non-current loans -254.5 -583.9
Repayments of lease liabilities -1.8 -2.5
Repayment of capital and dividends paid 24 0.0 -28.3
Net cash ow from nancing activities 282.7 92.6
Change in cash and cash equivalents 253.1 -0.5
Cash and cash equivalents at the beginning of period 5.0 5.4
Eect of exchange rate uctuations on cash held -0.1 0.1
Cash M&A 0.0 0.0
Cash and cash equivalents at the end of period 258.0 5.0
SATO's Annual report 2020
23
REPORT OF BOARD OF DIRECTORSSATO IN BRIEF
FINANCIAL STATEMENTS
CEO'S REVIEW
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS EQUITY, IFRS
Attributable to owners of the parent
MEUR Share capital
Fair value and
other reserves Reserve fund
Reserve for
invested non-
restricted equity
Retained
earnings Total
Non-controlling
interests Total equity
Shareholders’ equity 1 Jan 2019 4.4 -24.4 43.7 114.8 1,416.1 1,554.6 -0.1 1,554.5
Comprehensive income:
Cash ow hedges, net of tax - -5.3 - - - -5.3 - -5.3
Translation dierences - - - - 0.1 0.1 - 0.1
Prot for the period - - - - 535.0 535.0 0.0 534.9
Total comprehensive income 0.0 -5.3 0.0 0.0 535.0 529.7 0.0 529.7
Transactions with shareholders:
Dividend - - - - -28.3 -28.3 - -28.3
Transaction with shareholders, total 0.0 0.0 0.0 0.0 -28.3 -28.3 0.0 -28.3
Other adjustments - 0.0 - - - 0.0 - 0.0
Total of equity movements 0.0 -5.4 0.0 0.0 506.7 501.4 0.0 501.4
Shareholders' equity 31 Dec 2019 4.4 -29.8 43.7 114.8 1,922.8 2,055.9 -0.2 2,055.8
Attributable to owners of the parent
MEUR Share capital
Fair value and
other reserves Reserve fund
Reserve for
invested non-
restricted equity
Retained
earnings Total
Non-controlling
interests Total equity
Shareholders’ equity 1 Jan 2020 4.4 -29.8 43.7 114.8 1,922.8 2,055.9 -0.2 2,055.8
Comprehensive income:
Cash ow hedges, net of tax - -1.9 - - - -1.9 - -1.9
Translation dierences - - - - -0.1 -0.1 - -0.1
Prot for the period - - - - 101.9 101.9 0.0 101.9
Total comprehensive income 0.0 -1.9 0.0 0.0 101.8 99.9 0.0 99.9
Transactions with shareholders:
Dividend - - - - 0.0 0.0 - 0.0
Transaction with shareholders, total 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Other adjustments - - - - 0.0 0.0 - 0.0
Total of equity movements 0.0 -1.9 0.0 0.0 101.8 99.9 0.0 99.9
Shareholders' equity 31 Dec 2020 4.4 -31.7 43.7 114.8 2,024.6 2,155.9 -0.2 2,155.7
SATO's Annual report 2020
24
REPORT OF BOARD OF DIRECTORSSATO IN BRIEF
FINANCIAL STATEMENTS
CEO'S REVIEW
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, IFRS
1. ACCOUNTING PRINCIPLES
General company information
SATO Corporation is a Finnish public limited com-
pany domiciled in Helsinki, Finland. SATO’s regis-
tered address is Panuntie 4, 00600 Helsinki. SATO
Corporation and its subsidiaries together form the
consolidated SATO Group (“SATO” or “the Group”).
The Board of Directors has approved the consoli-
dated nancial statements on 10 February 2021. A
copy of the consolidated nancial statements may
be obtained from the abovementioned address
and at www.sato..
SATO provides housing solutions and its opera-
tions primarily consist of investment in housing
properties. The focus of the Group’s operations is in
the largest growth centres, and approximately 80
per cent of its investment property is located in the
Helsinki region. The rest of the operations are
located in Tampere, Turku, Oulu, Jyväskylä and
St. Petersburg.
SATO’s housing investments include both privately
nanced and state-subsidised housing assets. In
respect of the latter SATO’s business is aected by
special features of non-prot activities, which are
the result of restrictions set on the company’s busi-
ness for state-subsidised housing construction. The
non-prot restrictions aect owner organisations
through, inter alia, restrictions on distribution of the
prot, divestment and risk-taking as well as through
the prohibition on lending and providing collateral.
Housing is also aected by property-specic, xed-
term restrictions, which apply to matters such as
the use and handover of apartments, the selection
of the residents, and the setting of rent. In respect
of non-prot activities, SATO’s supervisory author-
ities are the Housing Fund of Finland (ARA), the
State Treasury and the Ministry of the Environment,
as well as local authorities in matters concerning
the selection of residents.
General accounting principles
SATOs consolidated nancial statements have been
prepared in accordance with the International
Financial Reporting Standards (IFRS) as adopted
by the European Union observing the standards
and interpretations eective on 31 December 2020.
The notes to the consolidated nancial statements
are also in compliance with the Finnish accounting
principles and corporate legislation.
The information in the nancial statements is stated in
millions of euros. Figures presented in these nancial
statements have been rounded from exact gures
and therefore the sum of gures presented individu-
ally can deviate from the presented sum gure.
The preparation of IFRS nancial statements requires
judgement by the management in applying the
accounting principles and making certain estimates
and assumptions that are subject to uncertainty.
In note 2, information is given on key areas where
management judgements or uncertainty factors
in estimates and assumptions may cause the most
signicant eects on the gures presented.
New accounting standards and changes in ac-
counting principles
From the beginning of the year 2020, the Group
has adopted new or amended IFRS's and IFRIC
interpretations, as described in the section “New and
amended standards applied in nancial year ended”.
Principles of consolidation
The consolidated nancial statements are a con-
solidation of the nancial statements of the parent
company and the subsidiaries. Subsidiaries are
companies over which the parent company has
control. Control over a subsidiary is presumed to
exist when the investor is exposed, or has rights,
to variable returns from its involvement with the
investee and has the ability to aect those returns
through its power over the investee.
Acquired subsidiaries are included in the consolidat-
ed nancial statements from the date of acquisitions
until the control ends. Acquired companies are
included in the nancial statements using the acqui-
sition cost method. The net assets of the acquired
company at the acquisition date are booked at the
fair value of the land areas and buildings. Acqui-
sitions of real property are generally treated as
acquisitions of asset items.
All intra-group transactions, internal receivables and
payables, in addition to prot on internal transac-
tions and the distribution of prot between Group
companies are eliminated as part of the consolida-
tion process.
Mutual property companies and housing compa-
nies, in which the rights of control over specied
apartments are determined by shareholdings,
are treated as joint operations in the consolidated
nancial statements. In a joint operation, SATO has
rights to the assets and obligations for the liabilities
of the arrangement. Joint operations are accounted
for in the consolidated nancial statements in the
manner prescribed in the IFRS 11 Joint Arrange-
ments standard, by recognising SATO’s assets and
liabilities in the arrangement, including its share
of joint assets and liabilities, and its revenue and
expenses, including its share of joint revenue and
expenses. Joint ventures, in which the Group and
another party have joint control in the arrangement
and which give the Group rights to the net assets of
the arrangement, are consolidated in SATO’s consol-
idated nancial statements in accordance with IFRS
11, i.e. by the equity method.
In SATO’s consolidated nancial statements, the
housing companies that own so-called shared own-
ership apartments are treated as structured entities.
These are not included in the consolidated nancial
statements insofar as the companies are considered
to be arrangements outside of SATO's operations,
the purpose of which is to act on behalf of the
people who have invested in shared ownership
apartments. Those involved in the ownership ar-
rangements are entitled to purchase the apartment
for themselves after an agreed period and thus to
benet from any rise in the apartment’s value. SATO
handles the governance and building management
of the shared ownership properties.
Transactions denominated in
foreign currencies
The nancial statements of the Group entities are
based on their primary functional currencies of
the economic environment where the companies
are operating. The presentation currency of the
nancial statements is the euro, which is also the
functional currency of the parent company.
SATO's Annual report 2020
25
REPORT OF BOARD OF DIRECTORSSATO IN BRIEF
FINANCIAL STATEMENTS
CEO'S REVIEW
Transactions in foreign currencies are translated in
the functional currency using the exchange rate of
the date of transactions. At the end of the account-
ing period all open balances of assets and liabilities
denominated in foreign currencies are translated
into euros at the closing date exchange rate.
Receivables and liabilities denominated in
a foreign currency are translated using peri-
od-end exchange rates. Foreign exchange gains
and losses related to the primary business are
treated as adjustments to income or expenses.
Investment-related foreign exchange gains and
losses are treated as adjustments to investments.
Financial foreign exchange gains and losses are
reported under nancial income and expenses.
Foreign exchange gains and losses from transla-
tion of other assets and liabilities are reported in
income statement. Unrealised gains and losses
related to cash ow hedges are reported in other
comprehensive income.
The statements of income of foreign subsidiar-
ies, whose functional currency is not the euro,
are translated into euros based on the average
exchange rate of the accounting period. Items in
the statement of nancial position, with the ex-
ception of income for the accounting period, are
translated into euros at the closing-date exchange
rate. Exchange rate dierences arising from
investments in subsidiaries with non-euro currency,
as well as the exchange rate dierences resulting
from translating income and expenses at the av-
erage rates and assets and liabilities at the closing
rate, are recorded in translation dierences under
equity. Respective changes during the period are
presented in other comprehensive income.
Translation dierences from acquisition cost
eliminations and post-acquisition prots and
losses of foreign operations outside the euro area
are recognised in the statement of comprehensive
income. The cumulative translation dierences
related to foreign operations are reclassied from
equity to statement of income upon the disposal
of the foreign operation.
Investment property
As dened in the IAS 40 Investment Property standard,
investment properties are properties of which the
Group retains possession to obtain rental income or
appreciation in value and which are not occupied
for use by the Group or for its operations, nor for
sale in the ordinary course of business. Investment
properties also include right-of-use assets that are
classied as investment property based on their
nature (right-of-use investment property), such as
land leases. Housing companies that own so-called
shared ownership apartments are treated by the
Group as structured entities and thus not classied
as investment property under IAS 40.
At initial recognition, owned investment properties
are measured at acquisition value, which includes
transaction costs. Subsequently, investment proper-
ties are valued at fair value in accordance with IAS
40 and IFRS 13 Fair value measurement. Gains and loss-
es from changes in fair value are recorded through
prot and loss in the period when they are incurred.
Fair value of an investment property represents
the price that would be received for the property
in an orderly transaction, taking place in the local
(principal) market at the reporting date, considering
the condition and location of the property.
Some of SATO’s investment properties are subject
to legislative and usage restrictions. The so-called
non-prot restrictions apply to the owning compa-
ny and the so-called property-specic restrictions
apply to the investment owned. The non-prot
restrictions include, among other things, permanent
limitations on the company’s operations, distribution
of prot, lending and provision of collateral, and the
divestment of investments. The property-specic
restrictions include the use of apartments, the selec-
tion of residents, the setting of rent and divestment
of apartments, and they are xed-term.
Investment properties nanced with ARAVA loans and
interest-subsidised loans, are initially measured at
acquisition cost, including the transaction costs. Sub-
sequently, they are valued at the acquisition cost, plus
accumulated investments and less accumulated de-
preciation and impairments. Unbuilt land and devel-
opment projects, whose realisation is uncertain, are
valued at cost or probable value, whichever is lower,
if their fair value cannot be determined reliably.
Right-of-use investment properties are measured at
cost upon their recognition, and subsequently at fair
value in accordance with IFRS 16 and IAS 40 stand-
ards. The valuation is based on the present value of
future contractual lease payments, which is deemed
to represent the fair value of the right-of-use assets
arising from the lease agreements.
The fair values of owned investment properties are
based on the following:
• the income value method is used for investment
properties in Finland that are currently let to
tenants and can be sold without restrictions or
that can be sold as entire properties and to a
restricted group of buyers;
• sales comparison method is used for the in-
vestment properties in St Petersburg (valuation
prepared by an external appraiser); and
• the fair values of properties funded with ARAVA
loans or interest-subsidised loans, as well as
unbuilt land and development projects, whose
realisation is uncertain, are estimated to be same
as the remaining acquisition cost.
See further information on investment property valua-
tion methods and related assumptions in notes 2 and 13.
An investment property is derecognised from the
balance sheet when it is handed over or when the
investment property is permanently removed from use
and no future economic use can be expected from the
handover. The prots and losses from divestments or
removals from use of investment properties are pre-
sented on separate lines in the prot and loss account.
Tangible assets
Tangible assets are valued at the original acquisition
cost less accumulated depreciation and impairments.
Other tangible assets are depreciated with the
straight-line method over their estimated economic
lives, which are as follows:
Machinery and equipment 5–10 years
Other tangible assets 3–6 years
The economic life and residual value of assets are
reassessed at each year-end. Changes in the future
economic benets found in the assessment are taken
into account by adjusting the economic life and resid-
ual value of the assets. Prots and losses arising from
sales and divestments of tangible assets are booked
in the prot and loss account and presented as other
income and expenses of business operations.
SATO's Annual report 2020
26
REPORT OF BOARD OF DIRECTORSSATO IN BRIEF
FINANCIAL STATEMENTS
CEO'S REVIEW
Intangible assets
An intangible asset is recognised in the balance sheet
only if the asset is identiable, its cost can be meas-
ured reliably and it is likely that an expected economic
benet attributable to the asset will ow to the Group.
An intangible asset is valued at the original acquisition
cost less amortisation and any impairment. Intangible
assets consist largely of computer software, which is
subjected to straight-line amortisation over 3–6 years.
Lease agreements (SATO as lessee)
SATO applies IFRS 16 Leases in its accounting for
lease agreements. The Group makes assessment
of whether an agreement is a lease agreement in
the scope of the standard, and recognises, at the
commencement date of the lease, a right-of-use
asset and a lease liability (except for short-term
leases and leases of low-value assets).
Based on their purpose, right-of-use assets are
recognised either in investment properties, to the
extent that they are classied as investment proper-
ty, or in other leased assets.
Other right-of-use assets than those classied
as investment property are recognised in the
statement of nancial position at the amount of
the lease liability, including any initial direct costs
and excluding any lease incentives received, and
they are depreciated over their expected economic
lives. The economic life is estimated separately for
each asset, based on the duration of the lease and
other key terms of the contract, such as extension
or purchase options, if applicable. The right-of-
use assets classied as investment property are
subsequently measured at fair value (see section
“Investment property” above). The lease liability is
recognised in the statement of nancial position at
an amount equal to the discounted present value of
future lease payments.
If any extension or purchase options are included in
the contract, the Group assesses whether such an op-
tion is reasonably certain to be exercised and considers
its eect on the economic life and cost of the asset.
The Group applies the recognition exemptions allowed
by IFRS 16 and does not recognise short-term lease
agreements and lease agreements of low-value assets
in the statement of nancial position. Leases with a
duration of 12 months or less are considered short-
term. The lease payments from these agreements are
expensed in prot and loss over the lease term.
Further information of the initial application of IFRS
16 can be found below in section “New and amend-
ed standards applied in nancial year ended”.
Lease agreements (SATO as lessor)
Rental income from investment properties is
recognised in prot and loss over the lease period
and presented in net sales in the income statement.
As a lessor, SATO has no agreements classied as
nancial lease agreements.
Impairment
At the end of each reporting period it is assessed
whether there is any indication that an asset may
be impaired. If any such indication exists, the re-
coverable amount from the asset item is estimated.
An asset is impaired if the carrying value exceeds
the recoverable amount. An impairment loss is
recognised in prot or loss.
When an impairment loss is booked, the economic
life of the asset item subject to depreciation is
reassessed. The impairment loss booked against
the asset item is cancelled if there is an increase in
the value of the assessment used to determine the
recoverable amount from the asset item.
However, the increased carrying amount of an asset
attributable to a reversal of an impairment loss shall
not exceed the carrying amount that would have
been determined (net of amortisation or deprecia-
tion) had no impairment loss been recognised for
the asset in prior years.
Financial instruments
SATO’s nancial assets are classied, in accordance
with IFRS 9 Financial Instruments, into the following
categories: nancial assets at fair value through
prot and loss (FVTPL), nancial assets at fair value
through other comprehensive income (FVTOCI)
and nancial assets at amortised cost. The classi-
cation is made at the time of the initial recognition
and is based on the contractual terms of the instru-
ment and the Group’s business model for the type
of nancial instruments.
Financial liabilities are classied to nancial lia-
bilities at amortised cost and nancial liabilities at
fair value through prot and loss under IFRS 9. The
instruments are classied at the time of the initial
recognition, based on the purpose of the instru-
ment. Sales and purchases of nancial instruments,
other than those associated with derivatives, are
booked on the clearance date. All derivatives are
booked on the balance sheet on the trade date.
Financial assets and liabilities at fair value through
prot and loss
The category includes derivative instruments for
which hedge accounting in accordance with IFRS
9 is not applied and are hence classied in trading
portfolio. These instruments are valued at fair value
and gains and losses arising from changes in the
fair value, both realised and unrealised, are recog-
nised in the income statement for the period.
Financial assets at fair value through other
comprehensive income
Financial assets at fair value through other compre-
hensive income are principally stocks and shares,
and they are presented in the statement of nancial
position in other non-current investments. Invest-
ments in listed securities are valued in the nancial
statements at the prices quoted in an active market
at the closing date of the reporting period. Unlisted
shares, the fair value of which cannot be determined
reliably, are valued at acquisition cost. Unrealised
changes in the value of the assets in this class are
booked in other comprehensive income, with allow-
ance for the deferred tax. Accumulated changes in
fair value are not booked from the fair value reserve
to prot and loss until the investment is sold.
Financial assets at amortised cost
Financial assets at amortised cost are non-deriv-
ative assets, for which the cash ows consist of
payments of principal and interest, as applicable,
and which are not held for trading purposes. On
the statement of nancial position, they are includ-
ed in non-current receivables, accounts receivable
and other receivables or cash and cash equivalents,
according to their terms.
At initial recognition, loan receivables are meas-
ured at fair value including any transaction costs,
and they are subsequently measured at amortised
cost, using the eective interest rate method. Short-
term accounts receivable are initially measured at
the transaction value. For impairment of accounts
receivable, the Group applies the simplied
approach allowed by IFRS 9, whereby it makes an
SATO's Annual report 2020
27
REPORT OF BOARD OF DIRECTORSSATO IN BRIEF
FINANCIAL STATEMENTS
CEO'S REVIEW
assessment of the lifetime expected credit losses
for its accounts receivable at each reporting date,
and based on this assessment, recognises the
impairment through prot and loss.
Cash and cash equivalents are comprised of cash
in hand, bank accounts and liquid investments
with maturities of three months or less at the date
of initial recognition. Any credit balances of bank
accounts with an overdraft facility are included in
current liabilities. The cash and cash equivalents of
non-prot companies are kept separate from those
of companies not subject to non-prot restrictions.
Financial liabilities at amortised cost
Financial liabilities are initially recognised at
fair value of the proceeds less transaction ex-
penses. Subsequently, interest-bearing liabilities
are valued at amortised cost using the eective
interest method. Financial liabilities are included in
non-current and current liabilities and they may be
interest-bearing or non-interest-bearing. Interest is
accrued in the income statement for the accounting
period by the eective interest method.
Derivatives and hedge accounting
All derivatives are originally booked at fair value at
the trade date and are subsequently measured at
fair value. The accounting treatment of prots and
losses depends on the intended use of the deriv-
atives. The Group documents the designation of
hedging instruments to hedged items and makes
its assessment as to whether the derivatives used
for hedging are highly eective in negating the
changes in the cash ows of the hedged items. The
eectiveness is reviewed both when starting the
hedging and at each reporting date. The fair value
of derivatives is calculated by discounting the con-
tractual cash ows. The fair value of interest-rate op-
tions is calculated by using the market prices at the
balance sheet date and option valuation models.
The Group treats derivatives either as cash ow
hedges for oating-rate loans or as derivatives
for which hedge accounting under IFRS 9 is not
applied. Changes in value of derivatives subject to
hedge accounting are recorded in other compre-
hensive income. Gains and losses are transferred
to the interest expenses in the income statement
at the same time as the interest expenses on the
hedged item. Any ineective part of a hedging
relationship is booked immediately in nancial ex-
penses. Changes in value of derivatives, for which
hedge accounting is not applied, are recorded in
prot and loss.
Provisions
Provisions are recognised when the Group has a
legal or constructive obligation as a result of past
events, it is probable that settling the obligation
will require a payment or cause an economic loss,
and the amount can be reliably estimated.
The Group recognises a provision for statutory
10-year guarantees related to new apartments sold.
The 10-year provision is measured based on prior
experience of the realisation of these obligations.
In addition, a warranty provision is recognised
upon the recognition of revenue from the project.
The amount of the warranty provision is based on
prior experience of the actual warranty costs and
the specic risks related to the project.
A provision for onerous contracts is recognised
when the unavoidable costs of settling the obliga-
tions exceed the benets received from the contract.
Principles of income recognition
SATO recognises those income items that are not in
the scope of any other standard, according to the
revenue recognition principles of IFRS 15 Revenue
from Contracts with Customers. In addition, the rules
in IAS 40 regarding disposals are applied to sale
of investment properties. Under IFRS 15, a ve-step
model is applied to determine when, and at which
amount, revenue is recognised. SATO makes an as-
sessment of the performance obligations included
in the contract, after which income is recognised
when (or as) control is transferred, either over time
or at a point in time.
Principles of income recognition for sales of
investment property
Sales of the Group’s investment property normally
consist of a single performance obligation, for which
income is recognised at a point in time, when control
of the asset is transferred to the buyer. SATO assess-
es for each transaction whether the contract includes
other performance obligations, such as a material
nancing component, and determines the expected
income from them. Income from any additional per-
formance obligations are recognised over time or at
a point in time, depending on their nature.
Principles of income recognition for sales of
new homes
Income from sales of new homes is recognised
at a point in time, when control of the sold asset
is transferred to the buyer. The sale of an apart-
ment is considered to form a single performance
obligation. In respect of the homes sold during the
construction, the risks and benets are deemed
to be transferred on the completion date of the
property, whereas for completed homes, they are
transferred on the sale date.
Income from services
Income from services, such as property manage-
ment, is recognised as the service is performed.
Borrowing costs
Borrowing costs are capitalised as part of an asset’s ac-
quisition cost when they are due to acquisition, con-
struction or manufacture of a qualifying asset. A qualify-
ing asset is one for which the completion for its intend-
ed use or sale will necessarily take a substantial period
of time. Other borrowing costs are expensed in the -
nancial year when they have been incurred. Direct trans-
action costs from the raising of loans, which can be at-
tributed to a particular loan, are included in the cost of
the loan and amortised as an interest expense using the
eective interest rate method.
Public grants
For SATO, the main form of public support is
state-supported interest-subsidised loans and ARAVA
loans, in which state-backed housing is funded by
low-interest debt subsidised by the government.
The real interest on these loans is lower than the
interest expenses would be on loans with market
terms. The interest benet obtained through public
support is therefore netted into interest expenses
in accordance with IAS 20 Accounting for Government
Grants and Disclosure of Government Assistance and is
not separately presented as interest income.
Other direct public grants, such as investment
grants, are recorded as reductions in the book
values of the subsidised assets. The grants received
therefore reduce the original acquisition cost of
those assets.
SATO's Annual report 2020
28
REPORT OF BOARD OF DIRECTORSSATO IN BRIEF
FINANCIAL STATEMENTS
CEO'S REVIEW
Pension arrangements
SATO’s current pension arrangements are classied
as dened-contribution arrangements. Contribu-
tions to dened-contribution pension arrangements
are recorded as expenses in prot and loss for the
period when they are incurred. The Group has no
legal or actual obligation to make further payments
if the recipient of the payments is unable to perform
the payment of these pension benets.
Income taxes
Income taxes include the taxes based on the
taxable prot for the current year, adjustments to
previous years’ taxes, and changes in deferred tax-
es. Deferred tax assets and liabilities are calculated
from the dierences between the taxational values
of assets and liabilities and their carrying values
under IFRS. The tax rate approved by the nancial
statement date is used to determine the deferred
taxes. For SATO, the largest temporary dierences
arise from investment properties measured at fair
value through prot and loss and from nancial
instruments measured at fair value through other
comprehensive income. Deferred tax assets are
recorded up to the amount, for which it is likely that
there will be taxable income in the future, against
which the temporary dierence can be used.
Net operating income
Net operating income is the sum of net sales less
property maintenance expenses.
Operating prot
Operating prot is the net sum obtained from net
operating income, by adding gains from divest-
ments of investment properties, the share of the
prot of joint ventures and associated companies,
and other operating income, and deducting the
sales, marketing and administrative expenses,
losses from divestments of investment properties
and other operating expenses. Also, it includes the
gain or loss from unrealised fair value changes of
investment properties. Exchange gains and losses
are included in operating prot when they arise
from items related to ordinary business operations.
Exchange gains and losses attributable to nancing
are recorded in nancial income and expenses.
New and amended standards applied
in nancial year ended
SATO has applied from 1 January 2020 the
following new and amended standards that
have become eective:
Interest Rate Benchmark Reform amendments to
IFRS 9 and IFRS 7
In September 2019, the IASB issued Interest Rate
Benchmark Reform (Amendments to IFRS 9, IAS 39
and IFRS 7). These amendments modify specic
hedge accounting requirements to allow hedge
accounting to continue for aected hedges during
the period of uncertainty before the hedged items
or hedging instruments aected by the current
interest rate benchmarks are amended as a result
of the on-going interest rate benchmark reforms.
The amendments are relevant to the Group given
that it applies hedge accounting to its benchmark
interest rate exposures. The application of the
amendments impacts the Group’s accounting in
the following ways:
• The Group has oating rate debt, linked to
EURIBOR and STIBOR, which are subject to
cash ow hedges using interest rate swaps.
The amendments permit continuation of hedge
accounting even though there is uncertainty
about the timing and amount of the hedged
cash ows due to the interest rate benchmark
reforms.
• The Group will retain the cumulative gain or loss
in the cash ow hedge reserve for designated
cash ow hedges that are subject to interest rate
benchmark reforms even though there is uncer-
tainty arising from the interest rate benchmark
reform with respect to the timing and amount of
the cash ows of the hedged items. Should the
Group consider the hedged future cash ows
are no longer expected to occur due to reasons
other than interest rate benchmark reform, the
cumulative gain or loss will be immediately
reclassied to prot or loss.
The amendments also introduce new disclosure
requirements to IFRS 7 for hedging relationships
that are subject to the exceptions introduced by the
amendments to IFRS 9.
COVID-19-Related Rent Concessions Amendment
to IFRS 16
In May 2020, the IASB issued COVID-19-Related
Rent Concessions (Amendment to IFRS 16) that
provides practical relief to lessees in accounting for
rent concessions occurring as a direct consequence
of COVID-19, by introducing a practical expedient
to IFRS 16. The practical expedient permits a lessee
to elect not to assess whether a COVID-19-re-
lated rent concession is a lease modication. A
lessee that makes this election shall account for
any change in lease payments resulting from the
COVID-19-related rent concession the same way
it would account for the change applying IFRS 16
if the change were not a lease modication. The
practical expedient applies only to rent concessions
occurring as a direct consequence of COVID-19 and
only if all of the following conditions are met:
a) The change in lease payments results in revised
consideration for the lease that is substantially
the same as, or less than, the consideration for
the lease immediately preceding the change;
b) Any reduction in lease payments aects only
payments originally due on or before 30 June
2021 (a rent concession meets this condition if it
results in reduced lease payments on or before
30 June 2021 and increased lease payments that
extend beyond 30 June 2021); and
c) There is no substantive change to other terms
and conditions of the lease.
In the current nancial year, the Group has applied
the amendment to IFRS 16 (as issued by the IASB
in May 2020) in advance of its eective date. The
amendment has not had an impact on SATO’s consol-
idated nancial statements as at 31 December 2020.
Amendments to References to the Conceptual
Framework in IFRS Standards
The amendments included in Amendments to
References to the Conceptual Framework in IFRS
Standards include consequential amendments to
aected Standards so that they refer to the new
Framework.
Not all amendments, however, update those
pronouncements with regard to references to and
quotes from the Framework so that they refer to the
revised Conceptual Framework. Some pronounce-
ments are only updated to indicate which version
of the Framework they are referencing to (the IASC
Framework adopted by the IASB in 2001, the IASB
Framework of 2010, or the new revised Framework
of 2018) or to indicate that denitions in the Stand-
ard have not been updated with the new denitions
developed in the revised Conceptual Framework.
SATO's Annual report 2020
29
REPORT OF BOARD OF DIRECTORSSATO IN BRIEF
FINANCIAL STATEMENTS
CEO'S REVIEW
The Standards which are amended are IFRS 2, IFRS 3,
IFRS 6, IFRS 14, IAS 1, IAS 8, IAS 34, IAS 37, IAS 38,
IFRIC 12, IFRIC 19, IFRIC 20, IFRIC 22, and SIC-32.
Amendments to IFRS 3: Denition of a Business
The amendments in Denition of a Business (Amend-
ments to IFRS 3) bring clarications to Appendix A
Dened terms, the application guidance, and the
illustrative examples of IFRS 3. The amendments are
eective for business combinations for which the
acquisition date is on or after the beginning of the
rst annual reporting period beginning on or after
1 January 2020. The amendments do not have an
impact on SATO’s consolidated nancial statements.
Amendments to IAS 1 and IAS 8:
Denition of Material
The amendments to IAS 1 and IAS 8 clarify the
denition of “material” and align the denition used
in the Conceptual Framework and the standards.
The amendments do not have an impact on SATO’s
consolidated nancial statements.
Adoption of new and amended standards
and interpretations applicable in upcoming
nancial years
SATO has not yet adopted the following new and
amended standards and interpretations already
issued by the IASB. The Group will adopt them as
of the eective date or, if the date is other than the
rst day of the nancial year, from the beginning of
the subsequent nancial year.
IFRS 17 Insurance Contracts* (eective for nancial
years beginning on or after 1 January 2023) and
Amendments to IFRS 4 – deferral of IFRS 9
The new standard for insurance contracts will help
investors and others better understand insurers’ risk
exposure, protability and nancial position. This
standard replaces the IFRS 4 standard. In June 2020,
the IASB issued Amendments to IFRS 17 to address
concerns and implementation challenges that were
identied after IFRS 17 was published. The amend-
ments defer the date of initial application of IFRS 17
(incorporating the amendments) to annual reporting
periods beginning on or after 1 January 2023. At the
same time, the IASB issued an amendment to IFRS 4
granting extension of the temporary exemption from
applying IFRS 9 extending the xed expiry date of the
temporary exemption from applying IFRS 9 in IFRS
4 to annual reporting periods beginning on or after
1 January 2023. The standard is expected to have no
impact on SATO’s consolidated nancial statements.
Amendments to IFRS 10 Consolidated Financial
Statements and IAS 28: Sale or Contribution of
Assets between an Investor and its Associate or
Joint Venture
The amendments to IFRS 10 and IAS 28 deal with sit-
uations where there is a sale or contribution of assets
between an investor and its associate or joint venture.
Specically, the amendments state that gains or losses
resulting from the loss of control of a subsidiary that
does not contain a business in a transaction with an
associate or a joint venture that is accounted for using
the equity method, are recognised in the parent’s
prot or loss only to the extent of the unrelated inves-
tors’ interests in that associate or joint venture. Similar-
ly, gains and losses resulting from the remeasurement
of investments retained in any former subsidiary (that
has become an associate or a joint venture that is ac-
counted for using the equity method) to fair value are
recognised in the former parent’s prot or loss only
to the extent of the unrelated investors’ interests in
the new associate or joint venture. The eective date
of the amendments has yet to be set by the IASB;
however, earlier application of the amendments is
permitted. The amendments are expected to have no
impact on SATO’s consolidated nancial statements.
Amendments to IAS 1: Classication of Liabilities
as Current or Non-current*
The amendments to IAS 1 aect only the presenta-
tion of liabilities as current or non-current in the
statement of nancial position and not the amount
or timing of recognition of any asset, liability,
income or expenses, or the information disclosed
about those items. The amendments clarify that the
classication of liabilities as current or non-current
is based on rights that are in existence at the end
of the reporting period.
The amendments are applied retrospectively for
annual periods beginning on or after 1 January
2023, with early application permitted. The amend-
ments are expected to have no impact on SATO’s
consolidated nancial statements.
Amendments to IFRS 3: Reference to
the Conceptual Framework*
The amendments update IFRS 3 so that it refers to
the 2018 Conceptual Framework instead of the 1989
Framework. They also add to IFRS 3 a requirement
that, for obligations within the scope of IAS 37, an
acquirer applies IAS 37 to determine whether at
the acquisition date a present obligation exists as
a result of past events. For a levy that would be
within the scope of IFRIC 21 Levies, the acquirer
applies IFRIC 21 to determine whether the obli-
gating event that gives rise to a liability to pay the
levy has occurred by the acquisition date. Finally,
the amendments add an explicit statement that
an acquirer does not recognise contingent assets
acquired in a business combination.
The amendments are eective for business
combinations for which the date of acquisition
is on or after the beginning of the rst annual
period beginning on or after 1 January 2022. Early
application is permitted if an entity also applies all
other updated references (published together with
the updated Conceptual Framework) at the same
time or earlier. The amendments are expected to
have no impact on SATO’s consolidated nancial
statements.
Amendments to IAS 16: Property, Plant and
Equipment – Proceeds before Intended Use*
The amendments prohibit deducting from the
cost of an item of property, plant and equipment
any proceeds from selling items produced before
that asset is available for use, i.e. proceeds while
bringing the asset to the location and condition
necessary for it to be capable of operating in the
manner intended by management. Consequently,
an entity recognises such sales proceeds and relat-
ed costs in prot or loss.
The amendments are applied retrospectively, but
only to items of property, plant and equipment
that are brought to the location and condition
necessary for them to be capable of operating in
the manner intended by management on or after
the beginning of the earliest period presented
in the nancial statements in which the entity rst
applies the amendments. The amendments are
eective for annual periods beginning on or after
1 January 2022, with early application permitted.
The amendments are expected to have no impact
on SATO’s consolidated nancial statements.
Amendments to IAS 37: Onerous Contracts –
Cost of Fullling a Contract*
The amendments specify that the ‘cost of fullling’
a contract comprises the ‘costs that relate directly to
the contract’. Costs that relate directly to a contract
consist of both the incremental costs of fullling
SATO's Annual report 2020
30
REPORT OF BOARD OF DIRECTORSSATO IN BRIEF
FINANCIAL STATEMENTS
CEO'S REVIEW
that contract and an allocation of other costs that
relate directly to fullling contracts.
The amendments apply to contracts for which
the entity has not yet fullled all its obligations
at the beginning of the annual reporting period
in which the entity rst applies the amendments.
The amendments are eective for annual periods
beginning on or after 1 January 2022, with early ap-
plication permitted. The amendments are expected
to have no impact on SATO’s consolidated nancial
statements.
Annual Improvements to IFRS Standards 2018–
2020 Cycle: Amendments to IFRS 1, IFRS 9,
IFRS 16 and IAS 41*
The Annual Improvements include amendments to
four Standards:
IFRS 1 First-time Adoption of International Financial
Reporting Standards
The amendment provides additional relief to a
subsidiary which becomes a rst-time adopter
later than its parent in respect of accounting for
cumulative translation dierences. The amendment
is eective for annual periods beginning on or after
1 January 2022, with early application permitted.
The amendment is expected to have no impact on
SATO’s consolidated nancial statements.
IFRS 9 Financial Instruments
The amendment claries that in applying the ‘10
per cent’ test to assess whether to derecognise
a nancial liability, an entity includes only fees
paid or received between the entity (the borrower)
and the lender, including fees paid or received by
either the entity or the lender on the other’s behalf.
The amendment is applied prospectively to
modications and exchanges that occur on or after
the date the entity rst applies the amendment.
The amendment is eective for annual periods
beginning on or after 1 January 2022, with early
application permitted. The amendment is expected
to have no impact on SATO’s consolidated nancial
statements.
IFRS 16 Leases
The amendment removes the illustration of the
reimbursement of leasehold improvements. As the
amendment to IFRS 16 only regards an illustrative
example, no eective date is stated. The amend-
ment is expected to have no impact on SATO’s
consolidated nancial statements.
IAS 41 Agriculture
The amendment removes the requirement in IAS 41
for entities to exclude cash ows for taxation when
measuring fair value. The amendment is applied
prospectively, i.e. for fair value measurements
on or after the date an entity initially applies the
amendment. The amendment is eective for annual
periods beginning on or after 1 January 2022, with
early application permitted. The amendment is
expected to have no impact on SATO’s consolidat-
ed nancial statements.
Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4
and IFRS 16 Interest Rate Benchmark Reform –
Phase 2*
In September 2020, the IASB issued the second
phase of the two-phase project on Interest Rate
Benchmark Reform. The amendments enable
entities to reect the eects of transitioning from
benchmark interest rates, such as interbank oer
rates (IBORs) to alternative benchmark interest
rates without giving rise to accounting impacts that
would not provide useful information to users of
nancial statements.
The amendments aect the following key areas:
changes in the basis for determining the contractu-
al cash ows as a result of benchmark interest rate
reform, hedge accounting and disclosures.
The amendments provide specic guidance on
how to treat nancial assets and nancial liabilities
where the basis for determining the contractual
cash ows changes as a result of interest rate
benchmark reform. This can include cases where
the contractual terms are amended, cases where
the contractual terms are not amended but for
example where the method for calculating the
interest rate benchmark is altered, and cases where
an existing contractual term is activated such as
when a fallback clause is triggered. As a practical
expedient, the amendments require an entity to
apply IFRS 9.B5.4.5, such that the change in the
basis for determining the contractual cash ows
is applied prospectively by revising the eective
interest rate (when specic criteria are met).
A similar practical expedient is included in IFRS 16.
The practical expedient applies when the interest
rate benchmark on which lease payments are
based is changed as a direct consequence of inter-
est rate benchmark reform and the change is done
on an economically equivalent basis.
An entity may apply the hedge accounting require-
ments of either IFRS 9 or IAS 39 and therefore both
Standards have been amended. The amendments
to IFRS 9 and IAS 39 introduce an exception to
the existing requirements so that changes in the
formal designation and documentation of a hedge
accounting relationship that are needed to reect
the changes required by interest rate benchmark
reform do not result in the discontinuation of
hedge accounting or the designation of a new
hedging relationship. These changes to the hedge
relationship must be made by the end of the
reporting period during which a change required
by interest rate benchmark reform occurs (when
specic criteria are met).
The amendments also introduce new disclosure
requirements to IFRS 7 requiring that an entity pro-
vide disclosures that enable a user to understand
the nature and extent of risks arising from interest
rate benchmark reform, how the entity is managing
those risks, its progress in completing the transition
from interest rate benchmarks to alternative
benchmark interest rates and how it is managing
the transition.
The amendments have an impact on the group
as the group has nancial assets and nancial
liabilities that are subject to interest rate benchmark
reform and applies the hedge accounting require-
ments in IFRS 9 to hedging relationships that are
aected by the reform.
The amendments are eective for annual periods
beginning on or after 1 January 2021 with early ap-
plication permitted. The amendments are applied
retrospectively and include reinstatement of hedge
relationship that were discontinued solely due to
changes directly required by the reform.
* not yet endorsed for use by the European Union
as of 31 December 2020.
SATO's Annual report 2020
31
REPORT OF BOARD OF DIRECTORSSATO IN BRIEF
FINANCIAL STATEMENTS
CEO'S REVIEW
2. MANAGEMENT JUDGEMENTS AND
KEY ESTIMATES AND ASSUMPTIONS
UNDERLYING THE CONSOLIDATED
FINANCIAL STATEMENTS
When the nancial statements are prepared,
making of judgements, estimates and assumptions
is required in certain matters, aecting the amounts
of assets, liabilities and conditional liabilities on
the consolidated statements of nancial position as
well as the amount of income and expenses in the
income statement. The judgements, estimates and
assumptions that have the most signicant eects on
preparation of the nancial statements, are present-
ed in the following.
Management judgements
In the process of applying the Group's accounting
principles, management has made the following
judgements, which have a signicant eect on the
amounts recognised in the consolidated nancial
statements.
• Classication of acquisitions. The Group
acquires subsidiaries that own real estate.
At the time of acquisition, the Group considers
whether each acquisition represents the acqui-
sition of a business or the acquisition of assets.
The Group considers whether the acquisition
represents a business as dened in IFRS 3
Business combinations, i.e. whether an integrated
set of activities and processes is acquired in
addition to the property. When the acquisition
of subsidiaries does not represent a business, it
is accounted for as an acquisition of a group of
assets and liabilities. The cost of the acquisition
is allocated to the assets and liabilities acquired
based upon their relative fair values, and no
goodwill or deferred tax is recognised.
• Classication of properties. The Group deter-
mines whether a property is classied as invest-
ment property or a tangible asset. Investment
property comprises land and buildings (primarily
housing units) that are not occupied for use by
the Group or for its operations, nor for sale in the
ordinary course of business, but are held primari-
ly to earn rental income and capital appreciation.
These buildings are substantially rented to ten-
ants. Property in tangible assets comprises other
than investment property and they are occupied
for use by the Group or for its operations.
Key estimates and assumptions
Estimates and assumptions underlying the nancial
statements are based on the management’s his-
torical experience, the best available information
about the events at the reporting date, and other
factors, such as expectations concerning the future
that are considered reasonable under current cir-
cumstances. Due to the uncertainty involved, actual
amounts may dier signicantly from the estimates
used in the nancial statements. The changes in es-
timates, assumptions and the factors aecting them
are followed in the Group by using both internal
and external sources of information.
Revisions of accounting estimates are recorded for
the period in which the estimate is revised if the
change in the estimate only aects that period. If
the change in the estimate aects both the period
in which it is made and subsequent periods, the
eect arising from the change in the estimate is
correspondingly recorded in current and subse-
quent periods.
The key estimates and assumptions, which are
considered to involve a signicant risk of caus-
ing a material adjustment in future periods, are
described below.
• The fair value of investment property is deter-
mined using recognised valuation techniques and
the principles of IFRS 13 Fair Value Measurement.
Due to the fact that market prices for properties
are not observable on a quoted market, the fair
value measurement for investment property is
performed using indirect valuation techniques
that require the use of several assumptions by
the Group management. For the majority of
the Group’s investment property, the fair value
measurement is done with income value meth-
od, whereby the expected future cash ows of
the assets are discounted to their present value.
The cash ow forecasts require making esti-
mates and assumptions concerning the future
rental income, vacancy, operating expenses
and renovation needs of the properties. The
discount rate is comprised of the estimated
yield and the ination assumption.
More information of the methods and assump-
tions used by the Group in fair value measure-
ment of investment property are presented in
note 13.
• The amount of provisions recognised on prop-
erty development projects requires estimates
of the obligations arising from the projects. The
amounts recorded as provisions are based on
the management’s assessment of the specic
risks in each project. Key considerations in the
management’s assessment include technical,
contractual and legal aspects related to the
project, as well as the Group’s prior experience
on similar projects.
SATO's Annual report 2020
32
REPORT OF BOARD OF DIRECTORSSATO IN BRIEF
FINANCIAL STATEMENTS
CEO'S REVIEW
MEUR 1 Jan–31 Dec 2020 1 Jan–31 Dec 2019
Net sales by geographical region
Finland 297.9 289.3
Russia 5.4 6.2
Total 303.4 295.6
31 Dec 2020 31 Dec 2019
MEUR Finland Russia Total Finland Russia Total
Non-current assets by
geographical region
Investment property 4,650.8 102.7 4,753.5 4,533.8 124.0 4,657.9
Tangible assets 2.7 0.0 2.8 3.2 0.1 3.2
Intangible assets 4.0 0.0 4.0 3.7 0.0 3.7
Other right-of-use assets 6.6 - 6.6 7.7 - 7.7
Investments in associated
companies 0.1 - 0.1 0.2 - 0.2
Total 4,664.3 102.8 4,767.0 4,548.6 124.1 4,672.8
MEUR 1 Jan–31 Dec 2020 1 Jan–31 Dec 2019
Gains and losses on sales of investment properties
Gains on sales of investment properties 3.2 1.6
Losses on sales of investment properties -0.1 -0.7
Total 3.0 1.0
MEUR 1 Jan–31 Dec 2020 1 Jan–31 Dec 2019
Other operating income
Sales income, new production 18.7 13.3
New production expenses -17.6 -11.8
Other income 0.6 0.4
Total 1.7 1.9
MEUR 1 Jan–31 Dec 2020 1 Jan–31 Dec 2019
Other operating expenses
Bad debts expensed in the period -3.3 -3.6
Post-collection income 1.6 1.3
Other expenses -0.3 -1.9
Total -2.0 -4.3
MEUR 1 Jan–31 Dec 2020 1 Jan–31 Dec 2019
Sale of residential investment properties
Proceeds from disposal of residential investment properties 8.3 9.0
Carrying value of investment properties sold -5.8 - 9.1
Total 2.5 0.0
MEUR 1 Jan–31 Dec 2020 1 Jan–31 Dec 2019
Sale of land plots
Sales income, land plots 8.5 12.1
Carrying value of land plots sold - 7.9 -11.1
Total 0.6 1.0
3. SEGMENT INFORMATION
SATO has one operating segment. Signicant oper-
ational decisions at SATO are made by the Board of
Directors, which reviews the operating results and
protability as a single operating segment.
The Group operates in two geographic regions,
Finland and Russia.
SATO does not have any single external custom-
ers that would account for 10 per cent or more of
SATO's revenues.
4. RESULT ON DISPOSAL OF INVESTMENT PROPERTIES
5. OTHER OPERATING INCOME AND EXPENSES
Proceeds from the disposal of investment prop-
erties include the disposal price received, net of
disposal costs. The carrying value of disposed-of
assets includes the fair value recognised on the
prior period statement of nancial position and any
capitalised expenses for the period.
Specication of signicant investments and dispos-
als are presented in note 13.
SATO's Annual report 2020
33
REPORT OF BOARD OF DIRECTORSSATO IN BRIEF
FINANCIAL STATEMENTS
CEO'S REVIEW
MEUR 1 Jan–31 Dec 2020 1 Jan–31 Dec 2019
6. Personnel expenses
Salaries and wages 13.0 13.3
Dened contribution pension plans 2.0 2.2
Other personnel expenses 0.4 0.3
Total 15.3 15.8
MEUR 1 Jan–31 Dec 2020 1 Jan–31 Dec 2019
Auditors' fees
Audit 0.2 0.2
Other audit related assignments 0.1 0.1
Tax advisory 0.0 0.0
Other services 0.0 0.0
Total 0.3 0.3
MEUR 1 Jan–31 Dec 2020 1 Jan–31 Dec 2019
Financial expenses
Interest expense on nancial liabilities measured at amortised cost -28.8 -23.9
Interest expense on eective cash ow hedges -11.5 -11.7
Interest expense on non-hedge accounted derivatives 0.0 0.0
Foreign exchange losses -0.3 0.0
Interest expense on lease liabilities* -3.1 -3.1
Change in fair value, non-hedge accounted derivatives 0.0 0.0
Other nancial expenses** -6.9 -17.3
Total -50.7 -56.0
Financial income and expenses, net -50.0 -55.1
MEUR 1 Jan–31 Dec 2020 1 Jan–31 Dec 2019
Financial income
Interest income on loans and other receivables 0.6 0.7
Dividend income on other non-current investments 0.0 0.0
Foreign exchange gains 0.0 0.1
Total 0.6 0.9
MEUR note 1 Jan–31 Dec 2020 1 Jan–31 Dec 2019
Depreciation, amortisation and impairment charges by asset class:
Tangible assets 14 0.9 0.7
Intangible assets 15 1.0 0.9
Other right-of-use assets 16 1.2 1.8
Total 3.1 3.4
Research and development expenses during 2020 were EUR 0.5 (0.2) million and capitalised development
costs were EUR 1.0 (1.0) million.
6. PERSONNEL EXPENSES
7. AUDITORS' FEES
10. FINANCIAL INCOME AND EXPENSES
8. DEPRECIATION, AMORTISATION AND IMPAIRMENT CHARGES
9. RESEARCH AND DEVELOPMENT
Management employee benets are presented
in note 33. Related party transactions. Average
number of personnel during the period has been
229 (223).
* Includes the nancial expense component from lease agreements recognised in accordance with
IFRS 16 Leases. See notes 1 and 16 for further information.
** For 2019, other nancial expenses include a one-o cost of EUR 11.8 million due to the repurchase of
outstanding bonds with maturities in 2020 and 2021.
Deloitte Oy, Authorised Public Accountants, have
acted as SATO's auditors.
The audit fees include fees relating to audits
of SATO, its subsidiaries and the consolidated
nancial statements of the Group. Other audit
related assignment fees include assurance and
other services related to audit.
SATO's Annual report 2020
34
REPORT OF BOARD OF DIRECTORSSATO IN BRIEF
FINANCIAL STATEMENTS
CEO'S REVIEW
MEUR 1 Jan–31 Dec 2020 1 Jan–31 Dec 2019
Prot before taxes
129.5 670.5
Income tax calculated with domestic corporate tax rate of the parent 25.9 134.1
Non-deductible expenses and tax-exempt income 0.0 0.1
Eect of dierent tax rates in foreign operations 0.8 0.9
Valuation of deferred tax assets 0.5 0.0
Taxes from prior periods 0.1 -0.2
Other items 0.3 0.6
Total adjustments 1.7 1.4
Income tax expense in income statement 27.6 135.5
Eective tax rate, per cent 21.3 20.2
MEUR note 2020 2019
Fair value of investment properties, 1 January 4,657.9 3,922.4
Acquisitions of properties 2.7 31.1
New construction and other investments in properties 133.4 180.0
Disposals of investment properties -31.2 -32.2
Capitalised borrowing costs 34 1.6 2.6
Reclassied from other items -0.2 0.8
Gains and losses from changes in fair value* -13.0 552.2
Remeasurement of right-of-use investment properties, no P/L eect 16 2.4 0.9
Fair value of investment properties, 31 December 4,753.5 4,657.9
* Gains and losses from changes in fair value include foreign exchange gains and losses of EUR -29.3 (14.8)
million, and for 2019, the eect of the change of valuation method, approx. EUR 430 million.
MEUR 1 Jan–31 Dec 2020 1 Jan–31 Dec 2019
Prot attributable to equity holders of the parent 101.9 535.0
Weighted average of shares 56.6 56.6
Earnings per share (EUR)
Basic 1.80 9.45
Diluted 1.80 9.45
Undiluted earnings per share is calculated by dividing
parent company prot attributable to equity holders
with weighted average number of shares outstand-
ing. The total number of SATO’s shares at 31 Decem-
ber 2020 was 56,783,067. At the end of the reporting
period, SATO held 160,000 of its own shares.
Signicant acquisitions of investment
properties during the period:
SATO did not make signicant acquisitions of
completed investment properties or plots during
the reporting period.
Signicant disposals of investment
properties during the period:
In total, 68 (31) rental apartments and commercial
premises were divested in Finland, with a combined
value of EUR 5.8 (9.1) million. Of other property
divestments, the most signicant were the sale of
two plots in Niittykumpu, Espoo, to Lujatalo Oy
and sales of owner-occupied HITAS apartments in
Verkkosaari, Helsinki.
Valuation methods
SATO's investment properties mainly comprise of
residential properties. In addition, the investment
properties include commercial and parking space,
unbuilt land and development projects as well as
right-of-use investment properties.
MEUR note 1 Jan–31 Dec 2020 1 Jan–31 Dec 2019
Income taxes recognised in income statement
Current tax from accounting period 26.5 20.6
Current tax from previous period 0.9 0.7
Changes in deferred tax assets and liabililties 21 0.2 114.2
Total 27.6 135.5
The housing properties are located in the largest
growth centres, with approximately 84 per cent of
them located in the Helsinki region. The quality of in-
vestment properties is maintained by renovation and
repair activities based on their lifecycle and repair
plans. Change in the fair value of SATO's investment
property was mainly due to market price levels,
reclassications from measurement group to another
when legal restrictions have ended and changes
in parameters used in valuation, and the change in
valuation method (see below section "Income value
method").
Some of the residential investment properties are
subject to legislative and usage restrictions. The
so-called non-prot restrictions apply to the owning
company and the so-called property-specic restric-
tions apply to the investment owned. The non-prot
restrictions include, among other things, permanent
limitations on the company’s operations, distribution
of prot, lending and provision of collateral, and the
divestment of investments. The property-specic re-
13. INVESTMENT PROPERTIES
12. EARNINGS PER SHARE
Reconciliation between the income tax expense recognised in income statement and tax expense
calculated with domestic corporate tax rate (20 per cent) of the parent company:
11. INCOME TAXES
SATO's Annual report 2020
35
REPORT OF BOARD OF DIRECTORSSATO IN BRIEF
FINANCIAL STATEMENTS
CEO'S REVIEW
strictions include the use of apartments, the selection
of residents, the setting of rents and divestment of
apartments, and they are xed-term.
The valuation of investment properties in SATO’s
ownership is based on a method which has been
prepared by SATO in co-operation with a third party
expert (currently: JLL). The external expert quarterly
issues a statement on the applicability of SATO’s
valuation methods, the appropriateness of sources of
information used and the credibility of the valuation.
As part of the valuation process, the external expert
also reviews each SATO's property on site every three
years. Existing properties located in St. Petersburg
are valuated by third party expert (JLL). The princi-
ples and methods used in the fair value measurement
are approved by the Corporate Management Group.
During the valuation process all the periodical chang-
es are analysed. The result of the valuation and the
periodic change in fair value recorded through prot
and loss are reported to the Corporate Management
Group and Board of Directors.
At inception, owned investment properties are
recognised at acquisition value, which includes
transaction costs. Thereafter, they are recorded at fair
value. Gains and losses from changes in fair value
are recorded through prot and loss in the period
when they are incurred. Fair value of an investment
property represents the price that, according to the
Group's estimate, would be received for the property
in an orderly transaction taking place in the local
(principal) market at the reporting date, considering
the condition and location of the property. Unbuilt
land and development projects, whose realization
is uncertain, are valued at cost or probable value,
whichever is lower, if their fair value cannot be de-
termined reliably. The valuation methods for SATO's
owned investment properties are income value
MEUR note 2020 2019
Investment property classied by valuation method
Income value method 4,337.9 4,226.6
Sales comparison method 102.7 124.0
Acquisition cost 261.2 257.5
Owned investment property, total 4,701.7 4,608.1
Right-of-use investment properties 16 51.8 49.7
Total 4,753.5 4,657.9
MEUR Helsinki area Rest of Finland Average
Average yield requirement, % 4.0 4.9 4.3
Long-term economic occupancy rate, % 98.0 97.7 97.9
Operating expenses, EUR/sqm/month 4.4 4.1 4.3
Growth assumption of operating expenses, % 2.0 2.0 -
Growth assumption of market rents, % 2.0 1.8
-
Ination assumption, % 1.5 1.5 1.5
method, sales comparison method and acquisition
cost method.
SATO's right-of-use investment properties include
land plots leased for residential construction. From
1 January 2019. the land lease agreements, which
were previously treated as other lease agreements,
are accounted for as right-of-use assets classied
as investment property and measured at fair value
in accordance with the IFRS 16 Leases and IAS 40
Investment property standards. They are valued at the
present value of future lease payments of the underly-
ing agreements, which is considered to be equivalent
to their fair value. Further details about the Group's
lease portfolio are presented in note 16.
Income value method
Most of the Group's investment properties that are
currently let to tenants are valued using the income
value method. SATO changed, at 31 December
2019, its valuation method from sales comparison
method to income value method, for investment
properties located in Finland that can be sold with-
out restrictions, or can be sold as entire properties
and to a restricted group of buyers. The method is
based on a cash ow analysis, whereby forecasted
10-year cash ows are discounted to their present
value. The cash ows are based on forecasts on
rent levels, vacancy, operating expenses and reno-
vation needs of the properties. The discount rate is
comprised of the yield and the ination assump-
tion. The yields are determined based on location,
age and technical condition of the properties.
An external expert (JLL) has issued a statement
regarding the SATO's valuation method, and
the statement is consistent with the valuation of
investment properties in the consolidated nancial
statements.
The following table presents the key inputs used in valuation of investment properties by income
value method, as at 31 December 2020.
Sales comparison method
SATO's investment properties located in
St. Petersburg are valued by a external expert (JLL)
with sales comparison method.
Acquisition cost
Properties funded with ARAVA loans or interest-
subsidised loans are valued at cost less any
impairments, which is estimated to represent their
fair value. Unbuilt land and development projects,
whose realization is uncertain, are valued at cost
or probable value, whichever is lower, if their fair
value cannot be determined reliably.
SATO's Annual report 2020
36
REPORT OF BOARD OF DIRECTORSSATO IN BRIEF
FINANCIAL STATEMENTS
CEO'S REVIEW
14. TANGIBLE ASSETS
2020
MEUR note
Machinery
and
equipment
Other
tangible assets 2020 total
Acquisition cost, 1 January
6.1 1.6 7.7
Additions 0.5 0.0 0.5
Disposals -0.2 0.0 -0.2
Transfers between items 0.0 0.0 0.0
Acquisition cost, 31 December 6.4 1.6 8.0
Accumulated depreciation, 1 January
3.8 0.7 4.5
Disposals -0.2 0.0 -0.2
Depreciation and impairments for the period 8 0.8 0.2 0.9
Transfers between items 0.0 0.0 0.0
Accumulated depreciation, 31 December 4.3 0.9 5.2
Carrying value, 1 January 2.4 0.9 3.2
Carrying value, 31 December 2.1 0.7 2.8
2019
MEUR note
Machinery
and
equipment
Other
tangible assets 2019 total
Acquisition cost, 1 January
4.9 1.4 6.4
Additions 1.5 0.2 1.6
Disposals -0.3 0.0 -0.3
Transfers between items 0.0 0.0 0.0
Acquisition cost, 31 December 6.1 1.6 7. 7
Accumulated depreciation, 1 January
3.4 0.6 4.0
Disposals -0.2 0.0 -0.2
Depreciation for the period 8 0.6 0.1 0.7
Transfers between items 0.0 0.0 0.0
Accumulated depreciation, 31 December 3.8 0.7 4.5
Carrying value, 1 January 1.5 0.8 2.4
Carrying value, 31 December 2.3 0.9 3.2
All SATO's investment properties are classied in
hierarchy level 3 under IFRS 13. Items which are
included in the hierarchy level 3 are measured
using input data which is not based on observable
market data.
Sensitivity analysis of investment property fair values, income value method
The following table illustrates how changes in key parameters used in fair value measurement by income
value method would aect the fair value of the property portfolio, when one parameter at a time is
changed. In practice, changes in real estate markets are often reected in more than one parameter
simultaneously.
Change % -10% -5% 0% 5% 10%
MEUR MEUR MEUR MEUR MEUR
Yield requirement 468.8 222.1 - -200.1 -382.0
Gross rental income -605.2 -302.6 - 302.6 605.1
Change %-points -1% 0% 1%
MEUR MEUR MEUR
Economic occupancy rate -63.4 - 63.7
SATO's Annual report 2020
37
REPORT OF BOARD OF DIRECTORSSATO IN BRIEF
FINANCIAL STATEMENTS
CEO'S REVIEW
15. INTANGIBLE ASSETS
2020
MEUR note
Intangible
rights
Other intangible
assets 2020 total
Acquisition cost, 1 January
0.0 10.2 10.2
Additions 0.0 1.4 1.4
Disposals 0.0 0.0 0.0
Transfers between items 0.0 0.0 0.0
Acquisition cost, 31 December 0.0 11.5 11.5
Accumulated amortisation, 1 January
0.0 6.5 6.5
Disposals 0.0 0.0 0.0
Amortisation for the period 8 0.0 1.0 1.0
Transfers between items 0.0 0.0 0.0
Accumulated amortisation, 31 December 0.0 7.5 7.5
Carrying value, 1 January 0.0 3.7 3.7
Carrying value, 31 December 0.0 4.0 4.0
2019
MEUR note
Intangible
rights
Other intangible
assets 2019 total
Acquisition cost, 1 January
0.0 8.2 8.2
Additions 0.0 2.0 2.0
Disposals 0.0 0.0 0.0
Transfers between items 0.0 0.0 0.0
Acquisition cost, 31 December 0.0 10.2 10.2
Accumulated amortisation, 1 January
0.0 5.6 5.6
Disposals 0.0 0.0 0.0
Amortisation for the period 8 0.0 0.9 0.9
Transfers between items 0.0 0.0 0.0
Accumulated amortisation, 31 December 0.0 6.5 6.5
Carrying value, 1 January 0.0 2.6 2.6
Carrying value, 31 December 0.0 3.7 3.7
SATO's Annual report 2020
38
REPORT OF BOARD OF DIRECTORSSATO IN BRIEF
FINANCIAL STATEMENTS
CEO'S REVIEW
16. LEASES
Lease liabilities
MEUR 31 Dec 2020 31 Dec 2019
Non-current
From land lease agreements 48.5 46.4
From other lease agreements 5.5 6.6
Total 54.0 53.0
MEUR 31 Dec 2020 31 Dec 2019
Current
From land lease agreements 3.7 3.5
From other lease agreements 1.2 1.2
Total 4.9 4.7
Total 58.9 57.7
Right-of-use assets
MEUR note
Right-of-use
investment
properties*
Other
right-of-use
assets
2020
total
Carrying value, 1 January
49.7 7.7 57.5
Additions 2.5 0.0 2.5
Disposals -1.9 0.0 -1.9
Remeasurement of lease agreements 2.4 0.0 2.4
Changes of fair value in prot and loss 13 -0.9 - -0.9
Depreciation for the period 8 - -1.2 -1.2
Carrying value, 31 December 51.8 6.6 58.4
MEUR note
Right-of-use
investment
properties*
Other
right-of-use
assets
2019
total
Carrying value, 1 January
47.3 7.6 54.9
Additions 2.1 0.2 2.3
Remeasurement of lease agreements 0.9 1.8 2.8
Changes of fair value in prot and loss 13 -0.7 - -0.7
Depreciation for the period 8 - -1.8 -1.8
Carrying value, 31 December 49.7 7.7 5 7.5
* Right-of-use investment properties are measured at fair value and presented under investment properties in
the statement of nancial position. See further details in note 13.
SATO recognises leases in accordance with the
IFRS 16 Leases standard. SATO has recognised
right-of-use assets in scope of the standard under
investment properties, to the extent that they are
classied as investment property (right-of-use
investment properties, see note 13), and otherwise
under a new balance sheet item "Other right-of-use
assets".
The right-of-use investment properties include land
lease agreements, which are related to residential
investment properties. At the end of reporting
period, the average remaining lease term of the
Group's land leases was 18.4 (19.6) years. Their lease
payments are index dependent. Other right-of-use
assets include leases for premises in SATO's own
use. All lease agreements for SATO's own premises
mature in less than ten years and their lease
payments are index-based.
The Group sublet some of its oce premises at
Panuntie, Helsinki, in 2019. The rental income
recognised in the income statement from these
sublease agreements amounted to EUR 0.4 million
in 2019.
In the current period, the Group has recorded
EUR 0.3 (0.2) million of lease expenses from short-
term lease agreements in the sales, marketing and
administrative expenses. Total cash outows for the
Group's leases during the period amounted to
EUR 5.5 (5.7) million.
SATO's Annual report 2020
39
REPORT OF BOARD OF DIRECTORSSATO IN BRIEF
FINANCIAL STATEMENTS
CEO'S REVIEW
17. INTERESTS IN OTHER ENTITIES
Group composition
SATO has 24 (25) subsidiaries that are individually
material to the Group. Subsidiaries are entities over
which SATO has control and they are consolidated
to the Group. There are no material non-controlling
interests in any of the Group's subsidiaries.
Mutual property companies and housing compa-
nies, in which the rights of control over specied
apartments are determined by shareholdings,
are treated as joint operations in the consolidated
nancial statements. None of these entities is
individually material to the Group. Joint operations
are accounted for in the consolidated nancial
statements in the manner prescribed in the IFRS 11
Joint Arrangements standard, by recognising SATO’s
assets and liabilities in the arrangement, includ-
ing its share of joint assets and liabilities, and its
revenue and expenses, including its share of joint
revenue and expenses.
A list of all entities owned by the Group or the
parent company is presented in note 36.
Signicant restrictions
The non-prot subsidiaries are subject to regulatory
restrictions limiting distribution of prot from those
entities. More information of the restrictions are
presented in note 24: Shareholders' equity.
Structured entities
The housing companies in SATO that own so-called
shared ownership apartments are treated as struc-
tured entities. These companies are not included
in the consolidated nancial statements insofar as
they are considered to be arrangements external
of SATO’s operations, and their purpose is to act on
behalf of the people who have invested in shared
ownership apartments.
The Group's interests in unconsolidated structured
entities are estimated to entail no signicant risks
to the Group. For more information on the shared
ownership entities, please refer to accounting
principles (note 1). Information on the Group's loan
receivables from, and purchase commitments re-
lated to, these entities is presented in notes 20 and
32, respectively. The structured entities do not have
a signicant impact on other items in the consoli-
dated nancial statements.
Joint ventures and associated companies
SATO did not have joint ventures or associated
companies material to the Group in 2020 or 2019.
SATO's Annual report 2020
40
REPORT OF BOARD OF DIRECTORSSATO IN BRIEF
FINANCIAL STATEMENTS
CEO'S REVIEW
18. FINANCIAL ASSETS AND LIABILITIES BY CATEGORY
31 Dec 2020
Fair value hierarchy
MEUR note
Fair value,
other
compre-
hensive
income
Assets
and
liabilities
at amor-
tised cost
2020
Carrying
amount
total
Level 1 Level 2 Level 3
Non-current nancial assets
Other non-current investments 19 1.0 - 1.0 - 1.0 -
Loans receivable 20 - 0.2 0.2 - 0.2 -
Derivative assets 27 - - 0.0 - 0.0 -
Total 1.0 0.2 1.2
Current nancial assets
Accounts receivable 22 - 5.3 5.3 - 5.3 -
Loans receivable 22
-
6.6 6.6 - 6.6 -
Commercial paper 22
-
37.0 37.0 - 37.0 -
Cash and cash equivalents 23 - 258.0 258.0 - 258.0 -
Total 0.0 306.9 306.9
Non-current nancial liabilities
Corporate bonds 26 - 1,094.0 1,094.0 1,111.0 24.0 -
Other loans 26 - 981.6 981.6 - 985.1 -
Derivative liabilities 27 39.1 - 39.1 - 39.1 -
Total 39.1 2,075.6 2,114.7
Current nancial liabilities
Corporate bonds 26 - 150.0 150.0 150.2 - -
Other loans 26 - 155.9 155.9 - 155.9 -
Derivative liabilities 27 9.3 - 9.3 - 9.3 -
Accounts payable 29 - 8.1 8.1 - 8.1 -
Total 9.3 314.0 323.2
31 Dec 2019
Fair value hierarchy
MEUR note
Fair value,
other
compre-
hensive
income
Assets
and
liabilities
at amor-
tised cost
2019
Carrying
amount
total
Level 1 Level 2 Level 3
Non-current nancial assets
Other non-current investments 19 1.1 - 1.1 - 1.1 -
Loans receivable 20 - 6.3 6.3 - 6.3 -
Derivative assets 27 - - 0.0 - 0.0 -
Total 1.1 6.3 7. 4
Current nancial assets
Accounts receivable 22 - 6.0 6.0 - 6.0 -
Loans receivable 22
-
0.0 0.0 - 0.0
-
Commercial paper 22
- - - - - -
Cash and cash equivalents 23 - 5.0 5.0 - 5.0 -
Total 0.0 11.0 11.0
Non-current nancial liabilities
Corporate bonds 26 - 546.5 546.5 537.0 24.0 -
Other loans 26 - 1,127.3 1,127.3 - 1,127.3 -
Derivative liabilities 27 46.7 - 46.7 - 46.7 -
Total 46.7 1,673.8 1,720.5
Current nancial liabilities
Corporate bonds 26 - 100.0 100.0 101.0 - -
Other loans 26 - 324.6 324.6 - 324.6 -
Derivative liabilities 27 1.9 - 1.9 - 1.9 -
Accounts payable 29 - 6.0 6.0 - 6.0 -
Total 1.9 430.6 432.5
The cash ow hedging derivatives are valued at fair
value through other comprehensive income.
The fair values of assets and liabilities at fair value
hierarchy level 1 are quoted market prices. Values
on hierarchy level 2 are based on discounted cash
ows, with market rates as calculation input.
SATO's Annual report 2020
41
REPORT OF BOARD OF DIRECTORSSATO IN BRIEF
FINANCIAL STATEMENTS
CEO'S REVIEW
SATO presents its other non-current investments
categorised into quoted shares and other hold-
ings. Unrealised valuation gains and losses from
other non-currents investments are recognised
in other comprehensive income and in fair value
reserve, after accounting for tax eects. Other
holdings include shares in unlisted companies,
and are valued at acquisition cost if their fair value
cannot be reliably determined.
The loans receivable are mainly receivables from
housing companies that own shared ownership
apartments. They are valued at amortised cost
in the consolidated nancial statements and,
according to the Group's assessment, they are not
exposed to signicant credit risk.
MEUR 31 Dec 2020 31 Dec 2019
Other non-current investments
Other holdings 1.0 1.1
Total 1.0 1.1
MEUR note 31 Dec 2020 31 Dec 2019
Non-current receivables
Loans receivable 18 0.2 6.3
Non-current receivables total 0.2 6.3
19. OTHER NON-CURRENT INVESTMENTS 20. NON-CURRENT RECEIVABLES
SATO's Annual report 2020
42
REPORT OF BOARD OF DIRECTORSSATO IN BRIEF
FINANCIAL STATEMENTS
CEO'S REVIEW
21. CHANGES IN DEFERRED TAX ASSETS AND LIABILITIES
MEUR 1 Jan 2020
Recognised
through prot
or loss
Transfers
between
items
Recognised
through other
comprehensive
income 31 Dec 2020
Deferred tax assets
Valuation of nancial instruments
at fair value
7.9 0.1 - 0.5 8.5
Periodisation and temporary
dierences 6.3 -0.5 - - 5.8
Total 14.2 -0.4 0.0 0.5 14.2
Deferred tax liabilities
Valuation of investment properties
at fair value
333.6 4.5 - - 338.1
Valuation of nancial instruments
at fair value
1.2 0.5 - 0.0 1.7
Reclassication of housing provisions
and depreciation dierences
51.0 -5.2 - - 45.7
Periodisation and temporary
dierences
0.0 - - - 0.0
Allocated acquisition costs 1.6 - - - 1.6
Total 387.4 -0.2 0.0 0.0 387.2
MEUR 1 Jan 2019
Recognised
through prot
or loss
Transfers
between
items
Recognised
through other
comprehensive
income 31 Dec 2019
Deferred tax assets
Valuation of nancial instruments
at fair value
6.6 0.0 - 1.3 7.9
Periodisation and temporary
dierences 6.3 0.0 - - 6.3
Total 12.9 0.0 0.0 1.3 14.2
Deferred tax liabilities
Valuation of investment properties
at fair value
215.2 118.4 - - 333.6
Valuation of nancial instruments
at fair value
1.0 0.2 - - 1.2
Reclassication of housing provisions
and depreciation dierences
55.4 -4.4 - - 51.0
Periodisation and temporary
dierences
0.0 - - - 0.0
Allocated acquisition costs 1.6 - - - 1.6
Total 273.2 114.2 0.0 0.0 387.4
SATO's Annual report 2020
43
REPORT OF BOARD OF DIRECTORSSATO IN BRIEF
FINANCIAL STATEMENTS
CEO'S REVIEW
The cash assets of group companies subject to
non-prot restrictions are kept separately from
other companies' cash assets. At the reporting
date, such restricted companies' cash assets
totalled EUR 18.5 (1.2) million.
Description of items in shareholders'
equity
Shares and share capital
As at 31 December 2020, the share capital of SATO
Corporation totalled EUR 4,442,192, fully paid and
divided to 56,783,067 shares. The number of own
shares held by the company at the reporting date
was 160,000. SATO has one class of shares, each
of which entitles to one vote at the Annual General
Meeting. The shares do not have a nominal value.
During the period, there were no changes in the
number of the company's shares or the number of
own shares held. At the reporting date 31 De-
cember 2020, the Board of Directors did not have
authorisations for arrangement of new share issues.
Reserve fund
Reserve fund includes share premium fund.
Fair value reserves
Fair value reserves include change in fair value
of nancial instruments used in cash ow hedge
accounting and fair valuation of available-for-sale
nancial assets.
Reserve for invested non-restricted equity
Reserve for invested non-restricted equity includes
other equity investments and the subscription price
of shares, to the extent that it is not recorded in
share capital.
MEUR note 31 Dec 2020 31 Dec 2019
Accounts receivable and other receivables
Accounts receivable 18 5.3 6.0
Loan receivables and commercial paper 18 43.6 0.0
Prepaid expenses and accrued income 2.3 2.2
Other receivables 7.4 2.7
Total 58.6 10.9
MEUR note 31 Dec 2020 31 Dec 2019
Cash and bank balances 18 258.0 5.0
Total 258.0 5.0
MEUR 31 Dec 2020 31 Dec 2019
The following dividend and repayment of capital were declared
and paid by the company:
Dividends, EUR 0.00 (0.50) per share 0.00 -28.3
Total 0.00 -28.3
No capital repayments were made by SATO in 2020 or 2019.
SATO recognises the allowance for bad debts for
accounts receivable according to IFRS 9. For measure-
ment of the impairment of accounts receivable, the
Group applies the simplied approach allowed by the
standard, whereby it makes an assessment of the life-
time expected credit losses for its accounts receivable
at each reporting date, and based on this assessment,
recognises the impairment through prot and loss.
The recorded allowance for bad debts amounted to
EUR 2.6 (2.2) million at the end of period.
MEUR 31 Dec 2020 31 Dec 2019
Specication of prepaid expenses and accrued income
Prepaid expenses and accrued income related to rental services 0.1 0.2
Prepaid expenses and accrued income related to new constructions 0.0 0.1
Prepayments 0.7 0.2
Purchase price receivable 0.8 1.1
Interest receivables 0.5 0.2
Other 0.2 0.5
Total 2.3 2.2
22. ACCOUNTS RECEIVABLE AND OTHER RECEIVABLES 23. CASH AND CASH EQUIVALENTS
24. SHAREHOLDERS' EQUITY
31 Dec 2020 31 Dec 2019
MEUR
Gross
amount
Expected
credit loss
Carrying
amount
Gross
amount
Expected
credit loss
Carrying
amount
Aging structure of accounts
receivable
Not due and less than one
month overdue
2.7 -0.3 2.3 3.7 -0.3 3.4
1 to 6 months overdue 2.4 -0.7 1.7 2.0 -0.6 1.4
More than 6 months
overdue 2.8 -1.6 1.3 2.6 -1.4 1.2
Total 7.9 -2.6 5.3 8.2 -2.2 6.0
SATO's Annual report 2020
44
REPORT OF BOARD OF DIRECTORSSATO IN BRIEF
FINANCIAL STATEMENTS
CEO'S REVIEW
Dividends
After the balance sheet date 31 December 2020,
the Board of Directors has proposed dividend
distribution of EUR 0.50 per share (2019: dividend
of EUR 0.00 per share).
Restrictions concerning SATO's shareholders' equity
SATO's retained earnings at the end of period,
EUR 2,024.6 (1,922.8) million, included distribution-
restricted capital totalling EUR 220.8 (292.7) million
attributable to subsidised, non-prot businesses.
The gure includes the share of the change in the
fair value reported in the income statement. Part of
the Group companies are under statutory, non- prot
restrictions according to which a company is allowed
to distribute only a regulated amount of capital.
MEUR 31 Dec 2020 31 Dec 2019
Non-current
Corporate bonds 1 094.0 546.5
Bank loans 818.0 917.2
Interest-subsidised loans 127.2 166.9
State-subsidised ARAVA loans 36.4 43.2
Total 2,075.6 1,673.8
26. FINANCIAL LIABILITIES
25. LONG-TERM NON-INTEREST-BEARING LIABILITIES
The long-term non-interest-bearing liabilities, EUR 0.9 (0.0) million, are related entirely to the Group's
property development projects.
During the reporting period, a total of EUR 766.5
(657.2) million of new long-term debt was drawn.
At the reporting date, the average interest on the
SATO debt portfolio was 1.8 (1.7) per cent.
For purposes of short-term nancing, SATO has a
commercial paper programme of EUR 400 (400)
million, committed credit limits of EUR 600 (400)
million, of which EUR 600 (400) million were un-
used, and a non-committed current overdraft limit
of EUR 5 (5) million, of which EUR 5 (1.5) million
were unused.
Corporate bonds include the following bonds
issued by SATO Corporation: EUR 150 million bond
without asset-based securities maturing on 23
January 2021 and carrying a xed annual coupon
of 2.375 per cent, EUR 300 million unsecured bond
maturing on 7 April 2023 and carrying a xed
annual coupon of 2.25 per cent, EUR 350 million
unsecured bond maturing on 31 May 2024 and
carrying a xed annual coupon of 1.375 per cent,
EUR 350 million unsecured bond maturing on 24
February 2028 and carrying a xed annual coupon
of 1.375 per cent and EUR 50 million unsecured
bond maturing on 12 June 2030 and carrying a
xed annual coupon of 2.45 per cent. The bonds
are listed on the Irish Stock Exchange and have a
public BBB credit rating from Standard & Poor's.
The bond maturing in 2021 is guaranteed by a sub-
sidiary. Corporate bonds also include the secured
bonds issued by SATO Corporation. The EUR 24
million and EUR 25 million secured bonds issued in
2013 will mature in December 2022 and June 2023,
and they both carry an annual interest consisting of
a margin and a oating Euribor rate. The secured
bonds are listed on Nasdaq Helsinki Ltd, and they
do not have credit ratings.
Management of capital structure
The aim of SATO's management of capital structure
is to support the growth targets and to secure the
ability to pay dividend. Another aim is to ensure
SATO's prospects of operating in the equity market.
SATO's targeted equity ratio measured at fair
value is at least 40 per cent. At the end of period,
SATO's equity ratio measured at fair value was 42.2
(43.6) per cent. The Board of Directors reviews and
assesses SATO's capital structure regularly.
Some of SATO's interest-bearing nancial agree-
ments include covenants relating to capital structure
and protability (see note 30). SATO complied with
the capital structure and protability covenants
during the reporting period.
MEUR 31 Dec 2020 31 Dec 2019
Current
Corporate bonds 150.0 100.0
Commercial papers 5.5 233.0
Bank loans 102.7 33.4
Interest-subsidised loans 41.5 51.4
State-subsidised ARAVA loans 6.2 6.8
Total 305.9 424.6
SATO's Annual report 2020
45
REPORT OF BOARD OF DIRECTORSSATO IN BRIEF
FINANCIAL STATEMENTS
CEO'S REVIEW
27. DERIVATIVES
28. PROVISIONS AND CONTINGENT LIABILITIES
29. ACCOUNTS PAYABLE AND OTHER LIABILITIES
Fair values of derivative instruments
MEUR Positive Negative
31 Dec 2020
net Positive Negative
31 Dec 2019
net
Non-current
Interest rate swaps, cash ow
hedge
- - 3 9.1 -39.1 - -32.7 -32.7
Cross-currency and interest
rate swaps, cash ow hedge
- - 0.0 - -14.0 -14.0
Foreign exchange forward
contracts, cash ow hedge - - 0.0 - - 0.0
Non-current derivatives, total 0.0 -39.1 - 3 9.1 0.0 -46.7 -46.7
Current
Interest rate swaps, cash ow
hedge
- -0.3 -0.3 - -1.9 -1.9
Cross-currency and interest
rate swaps, cash ow hedge
- - 9.0 -9.0 - - 0.0
Foreign exchange forward
contracts, cash ow hedge - - 0.0 0.0 - 0.0
Current derivatives, total 0.0 - 9.3 - 9.3 0.0 -1.9 -1.9
Derivatives, total 0.0 -48.4 -48.4 0.0 -48.6 -48.6
MEUR 31 Dec 2020 31 Dec 2019
Nominal values of derivative instruments
Interest rate swaps, cash ow hedge 555.0 658.4
Cross-currency and interest rate swaps, cash ow hedge 73.4 73.4
Foreign exchange forward contracts - 0.6
Total 628.4 732.4
MEUR
Provision for
refund claims Other provisions Total
Total provisions, 1 January 2020
2.6 1.8 4.4
Increases 1.0 0.7 1.7
Provisions used -0.4 -0.9 -1.3
Reversals -0.4 -0.9 -1.2
Total provisions, 31 December 2020 2.9 0.7 3.6
MEUR 31 Dec 2020 31 Dec 2019
Non-current provisions 1.9 1.6
Current provisions 1.7 2.8
Total 3.6 4.4
MEUR note 31 Dec 2020 31 Dec 2019
Accounts payable and other liabilities
Advances received 11.0 19.5
Accounts payable 18 8.1 6.0
Other liabilities 2.0 2.9
Accrued expenses and prepaid income 51.4 36.9
Total accounts payable and other liabilities 72.4 65.3
Change in fair value of designated interest rate hedges,
booked to hedge reserve in other comprehensive
income, totalled EUR -1.9 (-5.3) million and that of
foreign exchange hedges totalled EUR 0.0 (0.0)
million. Interest rate swaps are used to hedge interest
cash ows against uctuation in market interest rates.
SATO also hedges the interest rate risk with forward
start swaps. On the reporting date, the forward start
swaps amounted to EUR 125.0 (115.0) million in nominal
value. Cross-currency and interest rates swaps
additionally hedge the currency risks of interest and
repayment cash ows of loan contracts denominated
in foreign currency. Currency forward contracts are
used to hedge contractual cash ow relating to bind-
ing purchase agreements denominated in foreign
currency. Interest rate hedges have maturities rang-
The provision for refund claims includes guarantees
related to new construction business and a 10-year
warranty period after completion of the work. The
provision for refund claims is measured based on
previous claims and an assessment of previous
experience. The provision for refund claims will
be used, if applicable, within 10 years from the
reporting date.
Contingent liabilities
At the reporting date, the Group had a contingent
liability of EUR 0.7 million related to transfer taxes,
which the Finnish tax authority has, in December
2020, deemed to be payable due to certain trans-
fers of properties within the Group in 2017. SATO's
view is that the decision is baseless and it has
demanded a repeal of the tax authority's decision.
According to the Group's current assessment, the
criteria for recognition of a provision are not met.
The situation will be reassessed in the course of
proceedings.
ing between 1‒10 years and forward contracts within
one year. Typically netting agreements are applied
to derivative contracts, however the contracts are
represented in gross value in nancial statements.
The method of presentation has no signicant impact
on gures on reporting or comparative period.
SATO's Annual report 2020
46
REPORT OF BOARD OF DIRECTORSSATO IN BRIEF
FINANCIAL STATEMENTS
CEO'S REVIEW
MEUR note 31 Dec 2020 31 Dec 2019
Accrued expenses and prepaid income
Personnel expenses 3.8 5.5
Interest expenses 16.2 10.3
Derivative instruments 27 9.3 1.9
Accrued expenses and prepaid income related to new constructions 4.2 6.6
Accrued expenses and prepaid income related to rental services 15.8 8.7
Other accrued expenses 1.7 3.4
Other 0.4 0.4
Total accrued expenses and prepaid income 51.4 36.9
30. FINANCIAL RISK MANAGEMENT
The goal of SATO’s nancial risk management is to
protect the company from unfavourable changes
occurring in the nancial markets. The main prin-
ciples of nancing and nancial risk management
are set out in the Treasury Policy, approved by the
Board of Directors. SATO Treasury is responsible
for the management of nancial risks in accordance
with the Treasury Policy. SATO Treasury reports to
the CFO, who is responsible for organising and
managing the duties associated with the nancing
and nancial risk management, as well as ensuring
compliance with the principles set in the Treasury
Policy.
Interest rate risk
The most signicant of SATO market risks is the
impact of market interest rate uctuation on
interest cash ows. To manage interest rate risk, the
proportions of xed and oating rate instruments
are balanced in such a way that the risk of a rise
in interest expenses is on an acceptable level and
liquidity is secured. Interest rate risk is primarily
attributable to market-based loans, but the interest
rate risk of other types of nancial liabilities is also
monitored.
than for market-based loans. The deductible rate
on interest-subsidised loans varies between 2.75 to
3.50 per cent and on the so-called interim model
interest-subsidy loans, funded in years 2009 to
2011, is 3.40 per cent. A major part of the inter-
est-subsidised loans is tied to long reference rates,
ranging from 3 to 10 years. Due to the subsidies
and long reference rates, the interest rate risk on
these loans is not material. In accordance with the
Treasury Policy, SATO does not apply hedging to
interest-subsidised loans.
In operations nanced with state subsidies, rents
are based on absorption cost, and hence any
interest risk can be transferred to the rents. The
interest on state-subsidised ARAVA loans is pegged
to changes in Finnish consumer prices. The ARAVA
rate is xed in advance for the following nancial
period and hence there is no uncertainty of the
following period interest expense. Some state-sub-
sidised loans have an interest rate cap, the level of
which is based on the interest rate of government
10-year bonds. A risk in state-subsidised ARAVA
loans is a substantial increase in interest, which
would be dicult to transfer in its entirety to rents
without delay.
Currency risk
SATO is exposed to both transaction and trans-
lation risks due to investments in St. Petersburg.
Transaction risk arises mainly from rouble-de-
nominated purchase agreements. Committed
agreements are fully hedged with currency forward
contracts, which are accounted for as cash ow
hedges. On the nancial statement date, SATO
didn't have any rouble-denominated commitments
related to the investments. The translation risk, i.e.
the consolidation of foreign currency-denominated
subsidiary accounts, arises due to the investment
properties in St. Petersburg. The fair values of the
properties are translated to euros in consolidated
nancial statements using the closing exchange
rate on the reporting date.
The Group's foreign currency-denominated loans
are exposed to foreign exchange risk, which is
fully hedged with cross-currency and interest rate
swaps. The eect of changes in foreign exchange
rates on net nancial expenses is examined in the
"sensitivity analysis" table below.
Price risk
At present, SATO has no items which might be
subject to a signicant price risk.
Credit risk
SATO is not exposed to signicant concentrations
of credit risk. The majority of SATO’s accounts
receivable consists of rent receivables. SATO has
over 26,000 tenants, so the risk entailed in a single
receivable is insignicant. The use of security
deposit decreases the credit risk associated with
rent receivables. SATO’s actual credit losses have
averaged the equivalent of 1.0 (1.2) per cent of
rental income. In addition, treasury functions, such
as liquidity investments and derivative instruments,
involve a counterparty risk, which is reduced by
careful selection of counterparties and by diversi-
cation of contracts among a number of counter-
parties.
Liquidity risk
The Group constantly monitors the amount of
nancing demanded for business operations so
that the adequacy of nancing will be assured in all
circumstances. The cash ow of operative business
is steady and uctuation mainly arise from invest-
ment activities.
Market-based loans are primarily drawn at oating
rates. In accordance with the Treasury Policy, the
interest rate risk arising from these contracts is
hedged using derivative instruments, mainly inter-
est rate swaps and options, so that when hedging
is applied, the xed rate portion exceeds 60 per
cent of the nominal value of the total loan portfolio.
At 31 December 2020, the xed rate portion of the
loan portfolio after hedging is 73.6 (62.0) per cent,
the average maturity being 4.2 (4.0) years.
The interest rate derivatives are accounted for
as designated cash ow hedges. No ineec-
tiveness has occurred, as the hedged items and
the hedging instruments have the same interest
periods. The eect of changes in market interest
rates on net nancial expenses is examined in the
" sensitivity analysis" table below.
Changes in market interest rates also aect
interest expense on interest-subsidised loans.
However, in interest-subsidised loans, a subsidy
is received for the part exceeding the deductible
rate, so the risk of increases in interest rates for
interest-subsidised loans are considerably lower
SATO's Annual report 2020
47
REPORT OF BOARD OF DIRECTORSSATO IN BRIEF
FINANCIAL STATEMENTS
CEO'S REVIEW
Liquidity is managed with the commercial paper
programme of EUR 400 (400) million, committed
credit limits EUR 600 (400) million, and non-com-
mitted credit limits, EUR 5 (5) million. At 31 Decem-
ber 2020, the commercial papers issued amounted
to EUR 5.5 (233.0) million in nominal value. The
credit facilities in use were EUR 0 million (EUR 3.5
million in use at 31 December 2019). In liquidity
Sensitivity analysis, interest rate risk
2020 2019
Prot and Loss Equity Prot and Loss Equity
MEUR 0.1% -0.1% 0.1% -0.1% 0.1% -0.1% 0.1% -0.1%
Floating rate loans -0.4 0.4 - - -0.5 0.5 - -
Cross-currency and interest rate swaps 0.1 -0.1 0.0 0.0 0.1 -0.1 0.1 -0.1
Interest rate swaps 0.3 -0.3 3.1 -3.2 0.5 -0.5 3.2 -3.2
Total 0.0 0.0 3.2 -3.2 0.0 0.0 3.3 -3.3
Sensitivity analysis, currency risk
2020 2019
Prot and Loss Equity Prot and Loss Equity
MEUR 10% -10% 10% -10% 10% -10% 10% -10%
Foreign currency-denominated loans 5.9 -7.2 - - 5.7 -7.0 - -
Cross-currency and interest rate swaps -5.9 7.2 - - -5.7 7.0 - -
Foreign exchange forward contracts - - - - - - 0.0 -0.1
Total 0.0 0.0 0.0 0.0 0.0 0.0 0.0 -0.1
management, it is taken into account that the assets
of Group companies subject to non-prot restric-
tions due to interest subsidies or state-subsidised
ARAVA loans, are kept separately and allocated to
those non-prot operations.
Standard & Poor's has assigned SATO with BBB
credit rating with stable outlook. With the invest-
ment grade credit rating, SATO aims to widen the
investor base and to further limit depencency on
any single nancing counterparties.
SATO's funding agreements contain covenant
clauses relating to the Group's capital structure and
interest payment capacity. These clauses set a ratio
of unencumbered assets to total assets at least 42.5
per cent, a solvency ratio maximum of 65 per cent,
a secured solvency ratio maximum 45 per cent and
interest coverage ratio of at least 1.8. At the reporting
date, the ratio of unencumbered assets was 84.1
(80.8) per cent, the solvency ratio was 43.8 (44.4)
per cent, the secured solvency ratio was 8.2 (10.2)
per cent and the interest coverage ratio was 4.0 (3.3).
SATO's Annual report 2020
48
REPORT OF BOARD OF DIRECTORSSATO IN BRIEF
FINANCIAL STATEMENTS
CEO'S REVIEW
Maturity analysis on nancial instruments
31 Dec 2020
MEUR Within 1 year 2–5 years 6–10 years 11–15 years After 15 years 2020 total
Financial liabilities
Market-based loans -290.1 -1,285.3 -707.2 -22.2 -18.6 -2,323.3
Interest-subsidised loans -42.5 -45.7 -36.4 -40.9 -7.8 -173.2
State-subsidised ARAVA loans -6.5 -18.7 -14.1 -2.2 -0.2 -41.7
Accounts payable -8.1 - - - - -8.1
Financial liabilities total -347.2 -1,349.6 - 757.7 -65.3 -26.6 -2,546.3
Derivative contracts
Interest rate derivatives -8.1 -21.8 -7.2 -0.8 -0.9 -38.8
Derivative contracts total -8.1 -21.8 -7.2 -0.8 -0.9 -38.8
Lease liabilities
From land lease agreements -3.8 -15.1 -18.7 -18.7 -73.9 -130.2
From other lease agreements -1.2 -4.0 -1.9 0.0 0.0 -7.2
Lease liabilities total -5.0 -1 9.1 -20.6 -18.7 -73.9 -137.3
Total -360.3 -1,390.6 -785.4 -84.8 -101.3 -2,722.4
31 Dec 2019
MEUR Within 1 year 2–5 years 6–10 years 11–15 years After 15 years 2019 total
Financial liabilities
Market-based loans -384.4 -1,003.4 -515.6 -20.7 -18.6 -1,942.7
Interest-subsidised loans -52.7 -81.3 -38.4 -44.6 -11.9 -228.9
State-subsidised ARAVA loans - 7.1 -20.9 -17.4 -2.9 -0.2 -48.5
Accounts payable -6.0 - - - - -6.0
Financial liabilities total -450.2 -1,105.6 -571.5 -68.2 -30.7 -2,226.2
Derivative contracts
Interest rate derivatives -11.4 -24.7 -4.6 - - -40.7
Derivative contracts total -11.4 -24.7 -4.6 0.0 0.0 -40.7
Lease liabilities
From land lease agreements -3.6 -14.4 -17.8 -17.7 -70.8 -124.2
From other lease agreements -1.3 -4.3 -2.9 0.0 0.0 -8.4
Lease liabilities total -4.9 -18.6 -20.6 -17.7 -70.8 -132.7
Total -466.5 -1,149.0 -596.7 -85.8 -101.5 -2,399.6
The above gures represent contractual, non-discounted cash ows, including interest payments.
SATO's Annual report 2020
49
REPORT OF BOARD OF DIRECTORSSATO IN BRIEF
FINANCIAL STATEMENTS
CEO'S REVIEW
Housing companies which hold so-called shared
ownership apartments are treated as structured
entities, which are established for a xed period,
and are not included in the consolidation. On the
reporting date, the loans of such housing compa-
nies included in the shared ownership systems,
totalled EUR 6.9 (13.5) million.
MEUR 31 Dec 2020 31 Dec 2019
Mortgages and pledges for secured borrowings
Secured borrowings 404.3 466.2
Pledges and mortgages provided, fair value 809.4 905.9
Guarantees for others
Shared ownership apartment purchase commitments 4.5 5.9
Rs-guarantees 2.9 3.7
Other collateral provided
Mortgages provided to secure payment of rent and street maintenance 6.9 6.9
Guarantees and mortgages provided to secure payments of
land use contracts
14.1 18.2
Binding purchase agreements
For acquisitions of investment properties 55.3 40.9
Commitments for land use payments on zoned plots 0.7 4.3
Commitments to cleaning and removal charges 0.0 0.0
Letters of intent on land for which there is a zoning condition 44.7 9.2
MEUR note 1 Jan–31 Dec 2020 1 Jan–31 Dec 2019
Non-cash items included in the prot
Depreciation and amortisation 8 3.1 3.4
Gains and losses from changes in fair value of
investment properties
13 13.0 -552.2
Change in provisions 28 -0.9 -0.3
Share of prot of associated companies and joint ventures 0.0 -0.2
Total 15.3 -549.3
32. COLLATERAL, COMMITMENTS AND CONTINGENCIES
31. NOTES TO THE CASH FLOW STATEMENT
MEUR 2020 2019
Changes in interest-bearing debt during the period
Interest-bearing debt, 1 Jan 2,098.4 1,982.2
Cash changes in interest-bearing debt during the period, total 284.5 123.4
Non-cash changes:
Change in foreign exchange rates 2.6 -1.2
Interest accrued by the eective interest rate method 3.9 1.3
Transfers of debt to buyers upon disposals of investment
property and other adjustments -7.9 -7.3
Interest-bearing debt, 31 Dec 2,381.5 2,098.4
SATO's Annual report 2020
50
REPORT OF BOARD OF DIRECTORSSATO IN BRIEF
FINANCIAL STATEMENTS
CEO'S REVIEW
The following transactions were made with related parties:
MEUR 1 Jan–31 Dec 2020 1 Jan–31 Dec 2019
Transactions with related parties
Rental agreements 0.0 0.0
Other transactions 0.0 0.0
Total 0.0 0.0
33. RELATED PARTY TRANSACTIONS
SATO Group’s related party consists of SATO
Corporation, its parent company, sister companies,
subsidiaries, joint ventures and associated compa-
nies. SATO's related party includes shareholders
that have direct or indirect control or joint control
or signicant inuence or is a member of the key
management personnel of the reporting entity or of
a parent of the reporting entity or is a close family
member of the key management personnel. Share-
holders whose holding is 20 per cent or more are
automatically considered as a related party of SATO.
When ownership is below 20 per cent shareholders
are considered as a related party when they have
considerable inuence of the reporting entity, for ex-
ample through a position in the Board of Directors.
Shareholders that are considered as SATO's
related party in 2020 are Balder Finska Otas AB,
Erik Selin Fastigheter AB and Balder-group compa-
nies (owner: Fastighets Ab Balder, 100 per cent),
Stichting Depositary APG Strategic Real Estate Pool
(owner: Stichting Pensioenfonds ABP, >95 per cent;
manager: APG Asset Management NV) and Elo
Mutual Pension Insurance Company.
Persons employed by the Group are not paid sep-
arate remuneration when serving as a member of
the Board of Directors or as a President of a Group
company.
In addition to the members of the Corporate
Management Group, the PRP system covers around
80 SATO employees in executive, managerial and
expert roles. The terms and conditions of the PRP
system and the payment of performance bonuses
are approved by the Board of Directors. The aim
of the PRP system is to harmonise the objectives
of shareholders, management and key persons,
bolster the commitment of key persons, improve
competitiveness and promote long-term nancial
success.
MEUR 1 Jan–31 Dec 2020 1 Jan–31 Dec 2019
Extended Management Group employee benets
Salaries and other short-term employee benets 1.4 1.7
Other long-term employee benets 0.0 0.1
Total 1.4 1.8
EUR thousands 1 Jan–31 Dec 2020 1 Jan–31 Dec 2019
Compensation paid to the members of the Board of Directors
and the President & CEO
Managing Director (Saku Sipola from 1 Jan. 2019 till 31 Aug. 2019,
Sharam Rahi from 1 Sep. 2019 till 17 Dec. 2020, Antti Aarnio from 18.
Dec till 31. Dec 2020)
292 633
Erik Selin 46 43
Jukka Hienonen 31 29
Esa Lager 26 25
Tarja Pääkkönen 28 24
Timo Stenius 26 23
Marcus Hansson (till 26 June 2020) 14 25
Hans Spikker 25 23
Total 486 822
34. BORROWING COSTS
note 31 Dec 2020 31 Dec 2019
Capitalised expenses of borrowing costs during the period, MEUR 13 1.6 2.6
Financial expense index, % 2.0 2.1
The members of the Board of Directors of SATO, the
CEO and the members of the Extended Corpo-
rate Management Group and their close family
members and the entities controlled or jointly
controlled by them and joint venture SV-Asunnot
Oy are considered as SATO's related party. The
Extended Corporate Management Group comprises
of SATO Corporation’s President and CEO, Director
investments and new construction, Commercial Di-
rector, Chief Digital Ocer, Chief Financial Ocer,
Director of Human Resources and General Counsel.
The terms and conditions used in the related party
transactions are equivalent to the terms used in
transactions between independent parties.
On 18 March 2020, SATO Corporation has received
an unsecured revolving credit facility from Fas-
tighets AB Balder in the amount of EUR 250 million,
with the maturity at 31.3.2022. No withdrawals from
the facility were made during the period.
SATO's Annual report 2020
51
REPORT OF BOARD OF DIRECTORSSATO IN BRIEF
FINANCIAL STATEMENTS
CEO'S REVIEW
31 Dec 2020
Group's
holding, %
Parent company's
holding, %
Holding percentages are the same as voting rights.
Subsidiaries held by SATO Corporation
Sato-Asunnot Oy 100.0 100.0
Sato-Rakennuttajat Oy 100.0 100.0
Sato-Rakennuttajien Asunnot Oy 100.0 100.0
Sato-Joustokoti Oy 100.0 100.0
Sato-Hallintopalvelut Oy 100.0 100.0
SATOkoti Oy 100.0 100.0
SATOkoti 21 Oy 100.0 100.0
SATOkoti 23 Oy 100.0 100.0
SATOkoti 24 Oy 100.0 100.0
Suomen Vuokrakodit 3 Oy 100.0 100.0
Suomen Satokodit 19 Oy 100.0 100.0
Suomen Satokodit 21 Oy 100.0 100.0
Suomen Satokodit 22 Oy 100.0 100.0
Suomen Satokodit 24 Oy 100.0 100.0
Sato VK 19 Oy 100.0 100.0
Sato VK 20 Oy 100.0 100.0
Sato VK 21 Oy 100.0 100.0
Sato VK 22 Oy 100.0 100.0
Vatrotalot 2 Oy 100.0 100.0
Vatrotalot 5 Oy 100.0 100.0
Sato KT-Asunnot Oy 100.0 100.0
Uusi Sarfvik Oy 60.0 18.3
36. SUBSIDIARIES OWNED BY THE GROUP AND PARENT COMPANY
31 Dec 2020
Group's
holding, %
Parent company's
holding, %
Sarfvikin Vesialue Oy 60.0 18.3
Vantaan Sato-Kartano KOy 100.0 100.0
Joint ventures and associated companies
SV-Asunnot Oy 50.0 50.0
Other shares
Espoon Aallonrivi As Oy 100.0 100.0
Jyväskylän Lyseonlinna As Oy 6.8 2.2
Outakessa Koy 100.0 100.0
Companies held by subsidiaries
Sato-Asunnot Oy
As Oy Espoon Suvikäytävä 2 9.9 29.9
As Oy Kuhakartano 0.7 0.7
As Oy Tampereen Kuikankatu 2 9.7 9.7
As. Oy Järvenpään Kotokartano 100.0 100.0
As. Oy Kotipiennar 2.8 2.8
As. Oy Matinraitti 14 1.0 1.0
As. Oy Näkinkuja 2 2.5 2.5
As. Oy Näsinlaine 1.0 1.0
As. Oy Peltohuhta 1.2 1.2
As. Oy Turun Tallgreninkartano 37.1 37.1
As. Oy Urheilukatu 38 56.0 56.0
35. SUBSEQUENT EVENTS
No signicant events after the end of the reporting period.
SATO's Annual report 2020
52
REPORT OF BOARD OF DIRECTORSSATO IN BRIEF
FINANCIAL STATEMENTS
CEO'S REVIEW
31 Dec 2020
Group's
holding, %
Parent company's
holding, %
As. Oy Valtapolku 1.2 1.2
As. Oy Vantaan Lummepiha 100.0 100.0
Asunto - Oy 4 linja 24 33.6 33.6
Asunto O.Y. Kasarmikatu 14 - Bostads A.B. Kasärngatan 14 12.2 12.2
Asunto O.Y. Linjala 14 4.2 4.2
Asunto O/Y Pihlajatie N:o 23 3.0 3.0
Asunto Oy Agricolankuja 3 3.0 3.0
Asunto Oy Agricolankuja 8 80.7 80.7
Asunto Oy Agricolankulma 0.8 0.8
Asunto Oy Albertus 1.1 1.1
Asunto Oy Erkintalo 1.1 1.1
Asunto Oy Espoon Elosalama 100.0 100.0
Asunto Oy Espoon Hassel 4.4 4.4
Asunto Oy Espoon Honkavaarantie 5 10.3 10.3
Asunto Oy Espoon Interior 11.4 11.4
Asunto Oy Espoon Kaupinkalliontie 5 47.8 47.8
Asunto Oy Espoon Kivenhakkaajankuja 3 2.3 2.3
Asunto Oy Espoon Kuunkierros 2 13.5 13.5
Asunto Oy Espoon Lounaismeri 100.0 100.0
Asunto Oy Espoon Merituulentie 38 100.0 100.0
Asunto Oy Espoon Myötätuulenmäki 8.5 8.5
Asunto Oy Espoon Niittyhuippu 28.1 28.1
Asunto Oy Espoon Niittymaantie 3 100.0 100.0
Asunto Oy Espoon Numersinkatu 11 18.8 18.8
Asunto Oy Espoon Omenapuu 16.0 16.0
Asunto Oy Espoon Paratiisiomena 18.3 18.3
Asunto Oy Espoon Puropuisto 58.3 55.8
Asunto Oy Espoon Rastaspuistonpolku 22.6 22.6
Asunto Oy Espoon Rastaspuistontie 8 7.3 7.3
Asunto Oy Espoon Ristiniementie 22 8.2 5.4
Asunto Oy Espoon Runoratsunkatu 5 100.0 100.0
31 Dec 2020
Group's
holding, %
Parent company's
holding, %
Asunto Oy Espoon Ruorikuja 4 3.8 3.8
Asunto Oy Espoon Satokallio 11.6 11.6
Asunto Oy Espoon Saunalyhty 6.8 6.8
Asunto Oy Espoon Sokerilinnantie 1 5.9 4.3
Asunto Oy Espoon Vanharaide 90.1 90.1
Asunto Oy Espoon Vasaratörmä 5.2 5.2
Asunto Oy Espoon Yläkartanonpiha 10.9 10.9
Asunto Oy Haagan Pappilantie 13 2.6 2.6
Asunto Oy Hakaniemenranta 2.5 2.5
Asunto Oy Hannanpiha 1 9.1 1 9.1
Asunto Oy Harjulehmus 7.1 7.1
Asunto Oy Helkalax 1.3 1.3
Asunto Oy Helsingin Akaasia 13.9 13.9
Asunto Oy Helsingin Aleksis Kiven Katu 52–54 0.5 0.5
Asunto Oy Helsingin Ansaritie 1 100.0 100.0
Asunto Oy Helsingin Ansaritie 2–4 100.0 100.0
Asunto Oy Helsingin Ansaritie 3 100.0 100.0
Asunto Oy Helsingin Apollonkatu 19 38.2 38.2
Asunto Oy Helsingin Arabian Kotiranta 4.2 4.2
Asunto Oy Helsingin Arabiankatu 3 13.4 13.4
Asunto Oy Helsingin Aurinkotuulenkatu 6 100.0 100.0
Asunto Oy Helsingin Casa Canal 13.3 13.3
Asunto Oy Helsingin Cirrus 1.7 1.7
Asunto Oy Helsingin Corona 1 7.0 17.0
Asunto Oy Helsingin Eiranrannan Estella 30.8 30.8
Asunto Oy Helsingin Eliel Saarisen Tie 10 96.1 96.1
Asunto Oy Helsingin Finniläntalo 80.2 80.2
Asunto Oy Helsingin Gadolininkatu 1 100.0 100.0
Asunto Oy Helsingin Gerbera 12.7 12.7
Asunto Oy Helsingin Graniittitie 8 ja 13 100.0 100.0
Asunto Oy Helsingin Happiness 22.2 22.2
SATO's Annual report 2020
53
REPORT OF BOARD OF DIRECTORSSATO IN BRIEF
FINANCIAL STATEMENTS
CEO'S REVIEW
31 Dec 2020
Group's
holding, %
Parent company's
holding, %
Asunto Oy Helsingin Hildankulma 80.1 80.1
Asunto Oy Helsingin Isopurje 3.2 3.2
Asunto Oy Helsingin Kaivonkatsojantie 2 16.4 16.4
Asunto Oy Helsingin Kalevankatu 53 6.6 6.6
Asunto Oy Helsingin Kalliolinna 0.8 0.8
Asunto Oy Helsingin Kanavaranta 8.8 8.8
Asunto Oy Helsingin Kerttulinkuja 1 7.5 7.5
Asunto Oy Helsingin Kokkosaarenkatu 4 20.8 20.8
Asunto Oy Helsingin Koralli 4.1 4.1
Asunto Oy Helsingin Koroistentie 9.4 9. 4
Asunto Oy Helsingin Kultareuna 1 39.0 39.0
Asunto Oy Helsingin Kuusihovi 25.4 25.4
Asunto Oy Helsingin Kyläkirkontie 13 68.5 68.5
Asunto Oy Helsingin Köysikuja 2 9.5 9. 5
Asunto Oy Helsingin Laivalahdenkaari 1 85.4 85.4
Asunto Oy Helsingin Leikopiha 9.6 9.6
Asunto Oy Helsingin Leikosaarentie 31 18.7 18.7
Asunto Oy Helsingin Leikovuo 9.1 9.1
Asunto Oy Helsingin Lönnrotinkatu 32 55.1 55.1
Asunto Oy Helsingin Mariankatu 19 1.0 1.0
Asunto Oy Helsingin Merenkävijä 5.1 5.1
Asunto Oy Helsingin Minna Canthinkatu 24 1.1 1.1
Asunto Oy Helsingin Mustankivenraitti 5 94.6 94.6
Asunto Oy Helsingin Myllypellonpolku 4 5.1 5.1
Asunto Oy Helsingin Mylläri 2.3 2.3
Asunto Oy Helsingin Nautilus 26.0 26.0
Asunto Oy Helsingin Nukkeruusunkuja 3 15.5 15.5
Asunto Oy Helsingin Otto Brandtin Polku 4 4.4 4.4
Asunto Oy Helsingin Pasilantornit 53.4 53.4
Asunto Oy Helsingin Pasuunatie 8 3.8 2.2
Asunto Oy Helsingin Perustie 16 56.1 56.1
31 Dec 2020
Group's
holding, %
Parent company's
holding, %
Asunto Oy Helsingin Piispantie 3 100.0 100.0
Asunto Oy Helsingin Pirta 17.1 17.1
Asunto Oy Helsingin Porthaninkatu 4 0.7 0.7
Asunto Oy Helsingin Puuskarinne 1 98.2 98.2
Asunto Oy Helsingin Päivöläntie 72 7.7 7.7
Asunto Oy Helsingin Reginankuja 4 11.8 11.8
Asunto Oy Helsingin Rosas 9.6 9.6
Asunto Oy Helsingin Ruusutarhantie 2-4 30.7 30.7
Asunto Oy Helsingin Satoaalto 8.6 8.6
Asunto Oy Helsingin Satorinne 8.5 8.5
Asunto Oy Helsingin Serica 3.8 3.8
Asunto Oy Helsingin Solarus 5.9 5.9
Asunto Oy Helsingin Solnantie 22 71.0 71.0
Asunto Oy Helsingin Solnantie 22 (LT) 27.0 27.0
Asunto Oy Helsingin Ståhlbergintie 4 93.5 93.5
Asunto Oy Helsingin Taimistontie 9 2.8 2.8
Asunto Oy Helsingin Tapaninkulo 4.7 4.7
Asunto Oy Helsingin Tila 24.5 13.1
Asunto Oy Helsingin Topeliuksenkatu 29 4.6 4.6
Asunto Oy Helsingin Tulvaniitynpolku 5 2.0 2.0
Asunto Oy Helsingin Tunturinlinna 9.5 9.5
Asunto Oy Helsingin Töölön Oscar 25.3 25.3
Asunto Oy Helsingin Vanha Viertotie 16 68.8 68.8
Asunto Oy Helsingin Vanha Viertotie 18 42.8 42.8
Asunto Oy Helsingin Villa Kuohu 25.6 25.6
Asunto Oy Hervannan Juhani 14.9 14.9
Asunto Oy Hiihtomäentie 34 3.7 3.7
Asunto Oy Humalniementie 3-5 1.1 1.1
Asunto Oy Hämeenlinnan Aaponkuja 3 33.4 33.4
Asunto Oy Iidesranta 42 Tampere 10.0 6.6
Asunto Oy Jukolanniitty 7.7 7.7
SATO's Annual report 2020
54
REPORT OF BOARD OF DIRECTORSSATO IN BRIEF
FINANCIAL STATEMENTS
CEO'S REVIEW
31 Dec 2020
Group's
holding, %
Parent company's
holding, %
Asunto Oy Jukolantanner 7.8 7.8
Asunto Oy Jussinhovi 3.5 3.5
Asunto Oy Jyväskylän Harjukartano 23.0 23.0
Asunto Oy Jyväskylän Harjunportti 18.7 18.7
Asunto Oy Jyväskylän Lyseonlinna 6.8 4.6
Asunto Oy Jyväskylän Taitoniekansato 17.4 17.4
Asunto Oy Jyväskylän Tanhurinne 24.1 24.1
Asunto Oy Jyväskylän Torihovi 2.7 2.7
Asunto Oy Järvenpään Alhonrinne 18.4 18.4
Asunto Oy Kalasataman Fregatti, Helsinki 25.3 25.3
Asunto Oy Kangasalan Kukkapuisto 6.3 6.3
Asunto Oy Kasarminkatu 10 26.7 26.7
Asunto Oy Kaukotie 10–12 3.1 3.1
Asunto Oy Kauniaisten Ersintie 9–11 5.5 5.5
Asunto Oy Kauniaisten Konsuli Bostads Ab 7.4 7. 4
Asunto Oy Kauniaisten Ratapolku 6 100.0 100.0
Asunto Oy Ketturinne 1.3 1.3
Asunto Oy Kirkkonummen Sarvvikinrinne 4 100.0 100.0
Asunto Oy Kirkkosalmentie 3 0.9 0.9
Asunto Oy Kivisaarentie 2.7 2.7
Asunto Oy Kolehmaisentori 11.6 11.6
Asunto Oy Kukkolan Koivu 4.3 4.3
Asunto Oy Kulmavuorenrinne 1.0 1.0
Asunto Oy Kuovi 100.0 100.0
Asunto Oy Kupittaan Kotka, Turku 10.9 10.9
Asunto Oy Kupittaan Kurki, Turku 6.1 6.1
Asunto Oy Kupittaan Peippo, Turku 34.6 34.6
Asunto Oy Kupittaan Satakieli, Turku 6.1 6.1
Asunto Oy Kuuselanpuisto 23.0 23.0
Asunto Oy Kuusihalme 2.3 2.3
Asunto Oy Kuusitie 15 1.5 1.5
31 Dec 2020
Group's
holding, %
Parent company's
holding, %
Asunto Oy Kuusitie 3 1.8 1.8
Asunto Oy Lahden Jyrkkärinteenpuisto 41.2 41.2
Asunto Oy Lahden Kauppakatu 36 7.9 3.6
Asunto Oy Lahden Roopenkuja 25.6 25.6
Asunto Oy Lapinniemen Pallopurje 1.9 1.9
Asunto Oy Lapintalo 1.0 1.0
Asunto Oy Lappeenrannan Kanavansato 2 12.5 12.5
Asunto Oy Lauttasaarentie 11 1.6 1.6
Asunto Oy Lempäälän Moisionaukea 25 100.0 100.0
Asunto Oy Lielahdentie 10 9.1 9.1
Asunto Oy Läntinen Brahenkatu 8 0.8 0.8
Asunto Oy Mannerheimintie 108 3.0 3.0
Asunto Oy Mannerheimintie 148 2.5 2.5
Asunto Oy Mannerheimintie 77 1.2 1.2
Asunto Oy Mannerheimintie 83–85 0.7 0.7
Asunto Oy Mannerheimintie 93 0.3 0.3
Asunto Oy Mellunsusi 1.5 1.5
Asunto Oy Messeniuksenkatu 8 2.0 2.0
Asunto Oy Messilä 70.0 70.0
Asunto Oy Muotialantie 31 7.0 7.0
Asunto Oy Myllysalama 59.8 5 9. 8
Asunto Oy Naantalin Kastovuorenrinne 16.7 16.7
Asunto Oy Neulapadontie 4 1.2 1.2
Asunto Oy Nokian Miharintie 38–40 13.1 13.1
Asunto Oy Nokian Virran Ritari 100.0 100.0
Asunto Oy Nordenskiöldinkatu 8 2.5 2.5
Asunto Oy Näyttelijäntien Pistetalot 1.4 1.4
Asunto Oy Oskelantie 5 4.1 4.1
Asunto Oy Oskelantie 8 2.1 2.1
Asunto Oy Otavantie 4 1.8 1.8
Asunto Oy Oulun Aleksanteri 100.0 100.0
SATO's Annual report 2020
55
REPORT OF BOARD OF DIRECTORSSATO IN BRIEF
FINANCIAL STATEMENTS
CEO'S REVIEW
31 Dec 2020
Group's
holding, %
Parent company's
holding, %
Asunto Oy Oulun Arvolankartano 2.1 2.1
Asunto Oy Oulun Arvolanpuisto 9.0 9.0
Asunto Oy Oulun Laamannintie 1 12.8 12.8
Asunto Oy Oulun Laaniranta 6.0 6.0
Asunto Oy Oulun Marsalkka 5.7 5.7
Asunto Oy Oulun Notaarintie 1 24.4 24.4
Asunto Oy Oulun Notaarintie 3 5.0 5.0
Asunto Oy Oulun Tullikartano 17.0 17.0
Asunto Oy Oulun Tulliveräjä 40.7 40.7
Asunto Oy Pengerkatu 27 2.6 2.6
Asunto Oy Pohjanpoika 8.0 8.0
Asunto Oy Poutuntie 2 3.7 3.7
Asunto Oy Puistokaari 13 1.9 1.9
Asunto Oy Puolukkasato 5.9 5.9
Asunto Oy Puolukkavarikko 33.9 33.9
Asunto Oy Raikukuja II 100.0 100.0
Asunto Oy Raikurinne 1 1.3 1.3
Asunto Oy Raision Tasontorni 39.3 39.3
Asunto Oy Raision Toripuisto 57.0 20.8
Asunto Oy Rantasentteri 1.5 1.5
Asunto Oy Risto Rytin Tie 28 Bostads Ab 1.5 1.5
Asunto Oy Ristolantie 7 2.5 2.5
Asunto Oy Riviuhkola 4.4 4.4
Asunto Oy Ryytikuja 5 0.8 0.8
Asunto Oy Saarenkeskus 0.4 0.4
Asunto Oy Salpakolmio 31.3 31.3
Asunto Oy Satakallio 0.2 0.2
Asunto Oy Satokaunokki 7.5 7.5
Asunto Oy Satosorsa 19.9 1 9. 9
Asunto Oy Satosyppi 12.1 12.1
Asunto Oy Savilankatu 1 b 33.3 33.3
31 Dec 2020
Group's
holding, %
Parent company's
holding, %
Asunto Oy Solnantie 32 0.9 0.9
Asunto Oy Sulkapolku 6 0.4 0.4
Asunto Oy Säästökartano 0.3 0.3
Asunto Oy Taapuri 2.5 2.5
Asunto Oy Tallbergin Puistotie 1 2.0 2.0
Asunto Oy Tammitie 21 0.9 0.9
Asunto Oy Tampereen Charlotta 2.0 2.0
Asunto Oy Tampereen Haapalinnan Antintalo 66.7 50.7
Asunto Oy Tampereen Kanjoninkatu 15 56.3 56.3
Asunto Oy Tampereen Kokinpellonrinne 2 86.9 86.9
Asunto Oy Tampereen Kristiina 1 9.1 19.1
Asunto Oy Tampereen Kyyhky 11.1 8.1
Asunto Oy Tampereen Rotkonraitti 6 48.2 48.2
Asunto Oy Tampereen Siirtolapuutarhankatu 12 5.6 5.6
Asunto Oy Tampereen Strada 46.6 46.6
Asunto Oy Tampereen Waltteri 23.9 23.9
Asunto Oy Tapiolan Itäkartano, Espoo 53.6 53.6
Asunto Oy Tapiolan Tuuliniitty Espoo 6.8 6.8
Asunto Oy Tarkkampujankatu 14 44.1 44.1
Asunto Oy Tasatuomo 1.3 1.3
Asunto Oy Terhokuja 6 11.3 11.3
Asunto Oy Tikkamatti 9. 8 9.8
Asunto Oy Turun Asemanlinna 20.9 20.9
Asunto Oy Turun Eteläranta II 3.2 3.2
Asunto Oy Turun Eteläranta III 2.9 2.9
Asunto Oy Turun Eteläranta IV (ASSI) 3.0 3.0
Asunto Oy Turun Fregatinranta 4.7 4.7
Asunto Oy Turun Förinranta II 1.0 1.0
Asunto Oy Turun Hehtokatu 30.5 10.2
Asunto Oy Turun Ipnoksenrinne 6.7 6.7
Asunto Oy Turun Kivimaanrivi 6.5 6.5
SATO's Annual report 2020
56
REPORT OF BOARD OF DIRECTORSSATO IN BRIEF
FINANCIAL STATEMENTS
CEO'S REVIEW
31 Dec 2020
Group's
holding, %
Parent company's
holding, %
Asunto Oy Turun Kiviniemenpuisto 0.8 0.8
Asunto Oy Turun Linnanhuippu 1.1 1.1
Asunto Oy Turun Linnanpuisto 8.8 8.8
Asunto Oy Turun Mietoistenkuja 9.4 9.4
Asunto Oy Turun Pernon Kartanonlaakso 21.8 21.8
Asunto Oy Turun Puutarhakatu 50 13.1 13.1
Asunto Oy Turun Sipimetsä 8.5 8.5
Asunto Oy Turuntie 112 1.4 1.4
Asunto Oy Turuntie 63 1.6 1.6
Asunto Oy Tykkikuja 7 100.0 100.0
Asunto Oy Töölön Estradi, Helsinki 63.0 63.0
Asunto Oy Töölön Gaala 50.3 50.3
Asunto Oy Ulpukkaniemi 25.4 25.4
Asunto Oy Vaasankatu 15 0.8 0.8
Asunto Oy Vallinkyyhky 6.0 6.0
Asunto Oy Vantaan Albert Petreliuksen Katu 8 7.7 7.7
Asunto Oy Vantaan Kilterinpuisto 53.0 53.0
Asunto Oy Vantaan Kivivuorentie 8 A–B 100.0 100.0
Asunto Oy Vantaan Kivivuorentie 8 C 100.0 100.0
Asunto Oy Vantaan Käräjäkuja 3 19.8 19.8
Asunto Oy Vantaan Liesitorin Palvelutalo 2.5 2.5
Asunto Oy Vantaan Maarinrinne 12.0 12.0
Asunto Oy Vantaan Maarukanrinne 6 14.6 14.6
Asunto Oy Vantaan Minkkikuja 49.0 49.0
Asunto Oy Vantaan Orvokkitie 17 14.3 14.3
Asunto Oy Vantaan Pakkalanrinne 3 41.8 41.8
Asunto Oy Vantaan Pakkalanruusu 3.1 3.1
Asunto Oy Vantaan Ravurinmäki 33.2 33.2
Asunto Oy Vantaan Solkikuja 5 100.0 100.0
Asunto Oy Vantaan Talvikkitie 38 96.1 96.1
Asunto Oy Vantaan Tammiston Tringa 8.3 8.3
31 Dec 2020
Group's
holding, %
Parent company's
holding, %
Asunto Oy Vantaan Tammistonkatu 29 29.1 2 9.1
Asunto Oy Vantaan Tuurakuja 4 34.1 34.1
Asunto Oy Vantaan Tähkiö 33.2 33.2
Asunto Oy Vantaan Uomarinne 5 100.0 100.0
Asunto Oy Vantaan Varikkokaarre 2 100.0 100.0
Asunto Oy Vantaan Varikonaarre 3.3 3.3
Asunto Oy Viides Linja 16 1.1 1.1
Asunto Oy Viikinkisankari 31.1 31.1
Asunto Oy Vilhonvuorenkatu 8 - Bostads Ab Vilhelmsbergsgatan 8 1.1 1.1
Asunto Oy Vuomeren-Salpa 2.7 2.7
Asunto Oy Vuorastila 99.0 99.0
Asunto Oy Vuoreksen Vega, Tampere 83.8 83.8
Asunto Oy Vuosaaren Meripihka Helsinki 42.7 42.7
Asunto Oy Välkynkallio 0.8 0.8
Asunto-Osakeyhtiö Amos 0.5 0.5
Asunto-Osakeyhtiö Arabian Valo, Helsinki 52.2 52.2
Asunto-Osakeyhtiö Fredrikinkatu 38 2.7 2.7
Asunto-Osakeyhtiö Haagan Talontie 4 3.1 3.1
Asunto-Osakeyhtiö Kristianinkatu 2 1.7 1.7
Asunto-Osakeyhtiö Kulmakatu 12 2.1 2.1
Asunto-Osakeyhtiö Kuusitie 9 2.3 2.3
Asunto-Osakeyhtiö Merimiehenkatu 41 Bostadsaktiebolag 1.6 1.6
Asunto-Osakeyhtiö Minna Canthin Katu 22 2.4 2.4
Asunto-Osakeyhtiö Mursu 0.5 0.5
Asunto-Osakeyhtiö Nervanderinkatu 9 2.6 2.6
Asunto-Osakeyhtiö Otavantie 3 0.6 0.6
Asunto-Oy Laajalahdentie 26 6.5 6.5
Asunto-Oy Mannerheimintie 100 0.9 0.9
Asunto-Oy Mariankatu 21 1.3 1.3
Asunto-oy Turun Linnankatu 37 a 1.7 1.7
Asunto-Oy Ulvilantie 11 b 0.6 0.6
SATO's Annual report 2020
57
REPORT OF BOARD OF DIRECTORSSATO IN BRIEF
FINANCIAL STATEMENTS
CEO'S REVIEW
31 Dec 2020
Group's
holding, %
Parent company's
holding, %
Bostads Ab Björneborgsvägen 5 0.5 0.5
Bostads Ab Kajaneborg 7.3 7.3
Bostads Ab Kvarnhyddan 1.8 1.8
Bostads Ab Munksnäs N:o 25 Asunto Oy 14.1 14.1
Bostads Ab Spargäddan Asunto Oy 1.3 1.3
Bostadsaktiebolaget Lönegropen, Skidbacksvägen 18 1.6 1.6
Etelä-Hämeen Talo Oy 81.3 81.3
Kiinteistö Oy Espoon Heinjoenpolku 100.0 100.0
Kiinteistö Oy Espoon Henttaan puistokatu 6 100.0 100.0
Kiinteistö Oy Espoon Henttaan puistokatu 8 100.0 100.0
Kiinteistö Oy Espoon Hopeavillakko 100.0 100.0
Kiinteistö Oy Espoon Jousenkaari 5 100.0 100.0
Kiinteistö Oy Espoon Jousenkaari 7 100.0 100.0
Kiinteistö Oy Espoon Kala-Maija 4 100.0 100.0
Kiinteistö Oy Espoon Kilonkallionkuja 5 100.0 100.0
Kiinteistö Oy Espoon Kilvoituksentie 1 100.0 100.0
Kiinteistö Oy Espoon Kiskottajankuja 4 100.0 100.0
Kiinteistö Oy Espoon Kuunsirppi 100.0 100.0
Kiinteistö Oy Espoon Kyyhkysmäki 16 100.0 100.0
Kiinteistö Oy Espoon Kyyhkysmäki 9 100.0 100.0
Kiinteistö Oy Espoon Lansantie 3 100.0 100.0
Kiinteistö Oy Espoon Likusterikatu 1 D 100.0 100.0
Kiinteistö Oy Espoon Linnustajantie 17 100.0 100.0
Kiinteistö Oy Espoon Magneettikatu 8 100.0 100.0
Kiinteistö Oy Espoon Majurinkatu 3 100.0 100.0
Kiinteistö Oy Espoon Matinniitynkuja 8 100.0 100.0
Kiinteistö Oy Espoon Niittymaantie 1 100.0 100.0
Kiinteistö Oy Espoon Niittysillankulma 2 C–D 100.0 100.0
Kiinteistö Oy Espoon Perkkaankuja 3 100.0 100.0
Kiinteistö Oy Espoon Porarinkatu 2 D - E 100.0 100.0
Kiinteistö Oy Espoon Porarinkatu 2 F 100.0 100.0
31 Dec 2020
Group's
holding, %
Parent company's
holding, %
Kiinteistö Oy Espoon Puikkarinmäki 100.0 100.0
Kiinteistö Oy Espoon Pyhäjärventie 1 100.0 100.0
Kiinteistö Oy Espoon Rummunlyöjänkatu 11 D–E 100.0 100.0
Kiinteistö Oy Espoon Sepetlahdentie 6 100.0 100.0
Kiinteistö Oy Espoon Siniheinä 100.0 100.0
Kiinteistö Oy Espoon Soukanniementie 1 100.0 100.0
Kiinteistö Oy Espoon Taivalmäki 5 100.0 100.0
Kiinteistö Oy Espoon Taivalrinne 100.0 100.0
Kiinteistö Oy Espoon Tähtimötie 100.0 100.0
Kiinteistö Oy Espoon Viherlaaksonranta 3–5 100.0 100.0
Kiinteistö Oy Espoon Viherlaaksonranta 7 100.0 100.0
Kiinteistö Oy Espoon Zanseninkuja 6 100.0 100.0
Kiinteistö Oy Eura III 100.0 100.0
Kiinteistö Oy Helsingin Amiraalinkatu 2 100.0 100.0
Kiinteistö Oy Helsingin Atlantinkatu 12 100.0 100.0
Kiinteistö Oy Helsingin Capellan puistotie 21 100.0 100.0
Kiinteistö Oy Helsingin Castreninkatu 3 100.0 100.0
Kiinteistö Oy Helsingin Hakaniemenkatu 9 100.0 100.0
Kiinteistö Oy Helsingin Heikkiläntie 10 100.0 100.0
Kiinteistö Oy Helsingin Hämeenpenger 100.0 100.0
Kiinteistö Oy Helsingin Ida Aalbergin Tie 3 A 100.0 100.0
Kiinteistö Oy Helsingin Ida Aalbergintie 1b 100.0 100.0
Kiinteistö Oy Helsingin Juhani Ahon Tie 12–14 100.0 100.0
Kiinteistö Oy Helsingin Junonkatu 4 100.0 100.0
Kiinteistö Oy Helsingin Kaarenjalka 5 100.0 100.0
Kiinteistö Oy Helsingin Kaarenjalka 5a 100.0 100.0
Kiinteistö Oy Helsingin Kangaspellontie 1–5 100.0 100.0
Kiinteistö Oy Helsingin Kaustisenpolku 1 100.0 100.0
Kiinteistö Oy Helsingin Kiillekuja 4 100.0 100.0
Kiinteistö Oy Helsingin Kirjala 100.0 100.0
Kiinteistö Oy Helsingin Klaavuntie 8-10 100.0 100.0
SATO's Annual report 2020
58
REPORT OF BOARD OF DIRECTORSSATO IN BRIEF
FINANCIAL STATEMENTS
CEO'S REVIEW
31 Dec 2020
Group's
holding, %
Parent company's
holding, %
Kiinteistö Oy Helsingin Korppaanmäentie 17 100.0 100.0
Kiinteistö Oy Helsingin Korppaanmäentie 21 100.0 100.0
Kiinteistö Oy Helsingin Kristianinkatu 11–13 100.0 100.0
Kiinteistö Oy Helsingin Kutomotie 10a 75.5 75.5
Kiinteistö Oy Helsingin Kutomotie 12a 100.0 100.0
Kiinteistö Oy Helsingin Kutomotie 14 A 100.0 100.0
Kiinteistö Oy Helsingin Kutomotie 8a 100.0 100.0
Kiinteistö Oy Helsingin Lapponia 100.0 100.0
Kiinteistö Oy Helsingin Lauttasaarentie 19 58.3 58.3
Kiinteistö Oy Helsingin Leirikuja 3 100.0 100.0
Kiinteistö Oy Helsingin Lontoonkatu 9 100.0 100.0
Kiinteistö Oy Helsingin Malagankatu 7 100.0 100.0
Kiinteistö Oy Helsingin Mechelininkatu 12–14 100.0 100.0
Kiinteistö Oy Helsingin Meripellonhovi 98.3 98.3
Kiinteistö Oy Helsingin Mestari 100.0 100.0
Kiinteistö Oy Helsingin Navigatortalo 44.7 44.7
Kiinteistö Oy Helsingin Pajamäentie 6 100.0 100.0
Kiinteistö Oy Helsingin Pajamäentie 7 100.0 100.0
Kiinteistö Oy Helsingin Pakilantie 17 100.0 100.0
Kiinteistö Oy Helsingin Piispantie 5 100.0 100.0
Kiinteistö Oy Helsingin Piispantie 7 100.0 100.0
Kiinteistö Oy Helsingin Piispantie 8 100.0 100.0
Kiinteistö Oy Helsingin Pääskylänrinne 100.0 100.0
Kiinteistö Oy Helsingin Rikhard Nymanin Tie 3 100.0 100.0
Kiinteistö Oy Helsingin Riontähti 100.0 100.0
Kiinteistö Oy Helsingin Rusthollarinkuja 2 100.0 100.0
Kiinteistö Oy Helsingin Sateenkaari 100.0 100.0
Kiinteistö Oy Helsingin Siltavoudintie 20 100.0 100.0
Kiinteistö Oy Helsingin Snellmaninkatu 23 100.0 100.0
Kiinteistö Oy Helsingin Stenbäckinkatu 5 60.0 60.0
Kiinteistö Oy Helsingin Sähköttäjänkatu 6 100.0 100.0
31 Dec 2020
Group's
holding, %
Parent company's
holding, %
Kiinteistö Oy Helsingin Tilkankatu 15 100.0 100.0
Kiinteistö Oy Helsingin Tilkankatu 2 100.0 100.0
Kiinteistö Oy Helsingin Tilkankatu 6 100.0 100.0
Kiinteistö Oy Helsingin Tulisuontie 20 100.0 100.0
Kiinteistö Oy Helsingin Vanha Viertotie 6 100.0 100.0
Kiinteistö Oy Helsingin Vanha Viertotie 8 100.0 100.0
Kiinteistö Oy Helsingin Venemestarintie 4 100.0 100.0
Kiinteistö Oy Helsingin Vervi 100.0 100.0
Kiinteistö Oy Helsingin Vetelintie 5 100.0 100.0
Kiinteistö Oy Helsingin Viulutie 1 100.0 100.0
Kiinteistö Oy Helsingin Vuosaaren Helmi 100.0 100.0
Kiinteistö Oy Helsingin Välskärinkatu 4 100.0 100.0
Kiinteistö Oy Jyväskylän Ailakinraitti 100.0 100.0
Kiinteistö Oy Jyväskylän Yliopistonkatu 18 Ja Keskustie 17 100.0 100.0
Kiinteistö Oy Jyväskylän Äijälänrannan Ansaritie 4 100.0 100.0
Kiinteistö Oy Kaarinan Auranpihat 100.0 100.0
Kiinteistö Oy Kangasalan Unikkoniitty 100.0 100.0
Kiinteistö Oy Kapellimestarinparkki 9.1 9.1
Kiinteistö Oy Kastevuoren Palvelutalo 100.0 100.0
Kiinteistö Oy Keravan Papintie 1 100.0 100.0
Kiinteistö Oy Kulmavuorenpiha 100.0 100.0
Kiinteistö Oy Kupittaan Kyyhky 100.0 100.0
Kiinteistö Oy Lahden Mesisurri 100.0 100.0
Kiinteistö Oy Lahden Nuolikatu 9 100.0 100.0
Kiinteistö Oy Mannerheimintie 170 63.3 63.3
Kiinteistö Oy Matinkylän Poutapilvi 100.0 100.0
Kiinteistö Oy Myyrinhaukka 100.0 100.0
Kiinteistö Oy Nekalanpuisto 2.9 2.9
Kiinteistö Oy Niittaajankadun Klaava 100.0 100.0
Kiinteistö Oy Niittykummun Huippuparkki 36.5 36.5
Kiinteistö Oy Näkinkuja 6 100.0 100.0
SATO's Annual report 2020
59
REPORT OF BOARD OF DIRECTORSSATO IN BRIEF
FINANCIAL STATEMENTS
CEO'S REVIEW
31 Dec 2020
Group's
holding, %
Parent company's
holding, %
Kiinteistö Oy Oulun Aleksinranta 100.0 100.0
Kiinteistö Oy Oulun Hoikantie 14–22 100.0 100.0
Kiinteistö Oy Oulun Kalevalantie 100.0 100.0
Kiinteistö Oy Oulun Laanila I 100.0 100.0
Kiinteistö Oy Oulun Laanila IV 100.0 100.0
Kiinteistö Oy Oulun Paalikatu 23 100.0 100.0
Kiinteistö Oy Oulun Peltolantie 18 B 100.0 100.0
Kiinteistö Oy Oulun Rautatienkatu 74 100.0 100.0
Kiinteistö Oy Oulun Rautatienkatu 78 100.0 100.0
Kiinteistö Oy Sammon Parkki 21.2 21.2
Kiinteistö Oy Satulaparkki 53.3 53.3
Kiinteistö Oy Tampereen Aitolahdentie 22 100.0 100.0
Kiinteistö Oy Tampereen Aitolahdentie 24 100.0 100.0
Kiinteistö Oy Tampereen Alapeusonkatu 6 100.0 100.0
Kiinteistö Oy Tampereen Atanväylä 4A 100.0 100.0
Kiinteistö Oy Tampereen Atanväylä 4B 100.0 100.0
Kiinteistö Oy Tampereen Hannulanpolku 10 100.0 100.0
Kiinteistö Oy Tampereen Hervannan Puistokallio 100.0 100.0
Kiinteistö Oy Tampereen Härmälänrannan Aurinkokallio 100.0 100.0
Kiinteistö Oy Tampereen Härmälänrannan Sisu 100.0 100.0
Kiinteistö Oy Tampereen Iidesranta 18 100.0 100.0
Kiinteistö Oy Tampereen Jankanpuisto 100.0 100.0
Kiinteistö Oy Tampereen Kaidanpääty 100.0 100.0
Kiinteistö Oy Tampereen Kauppa-aukio 100.0 100.0
Kiinteistö Oy Tampereen Linnanherra 100.0 100.0
Kiinteistö Oy Tampereen Pappilan Herra 100.0 100.0
Kiinteistö Oy Tampereen Puistofasaani 100.0 100.0
Kiinteistö Oy Tampereen Ruovedenkatu 11 100.0 100.0
Kiinteistö Oy Tampereen Sammon Kalervo 100.0 100.0
Kiinteistö Oy Tampereen Tarmonkatu 6 100.0 100.0
Kiinteistö Oy Tampereen Tieteenkatu 14 100.0 100.0
31 Dec 2020
Group's
holding, %
Parent company's
holding, %
Kiinteistö Oy Tampereen Tuiskunkatu 7 100.0 100.0
Kiinteistö Oy Terhokuja 3 100.0 100.0
Kiinteistö Oy Tohlopinkontu (Sato-As.) 100.0 60.0
Kiinteistö Oy Turun Gränsbackankuja 3 100.0 100.0
Kiinteistö Oy Turun Joutsenpuisto 7 100.0 100.0
Kiinteistö Oy Turun Kaivokatu 10 100.0 100.0
Kiinteistö Oy Turun Marmoririnne 2 100.0 100.0
Kiinteistö Oy Turun Metallikatu 100.0 100.0
Kiinteistö Oy Turun Pryssinkatu 13 100.0 100.0
Kiinteistö Oy Turun Ratavahdinrinne 100.0 100.0
Kiinteistö Oy Turun Rauhankatu 8 100.0 100.0
Kiinteistö Oy Turun Sato-Koto 100.0 100.0
Kiinteistö Oy Turun Sukkulakoti 100.0 100.0
Kiinteistö Oy Turun Tervaporvari 100.0 100.0
Kiinteistö Oy Turun Uudenmaanlinna 100.0 100.0
Kiinteistö Oy Turun Veistämöntori 100.0 100.0
Kiinteistö Oy Turun Westparkin Tuija 100.0 100.0
Kiinteistö Oy Vallikallionpolku 100.0 100.0
Kiinteistö Oy Vantaan Aapramintie 4 100.0 100.0
Kiinteistö Oy Vantaan Havukoskenkatu 20 100.0 100.0
Kiinteistö Oy Vantaan Heporinne 4 100.0 100.0
Kiinteistö Oy Vantaan Hiekkaharjuntie 16 100.0 100.0
Kiinteistö Oy Vantaan Horsmakuja 4a 100.0 100.0
Kiinteistö Oy Vantaan Kaarenkunnas 100.0 100.0
Kiinteistö Oy Vantaan Kaarenlehmus 100.0 100.0
Kiinteistö Oy Vantaan Kesäniitty 100.0 100.0
Kiinteistö Oy Vantaan Kevätpuro 100.0 100.0
Kiinteistö Oy Vantaan Krassipuisto 100.0 100.0
Kiinteistö Oy Vantaan Kukinkuja 2 100.0 100.0
Kiinteistö Oy Vantaan Leksankuja 3 100.0 100.0
Kiinteistö Oy Vantaan Martinpääsky 100.0 100.0
SATO's Annual report 2020
60
REPORT OF BOARD OF DIRECTORSSATO IN BRIEF
FINANCIAL STATEMENTS
CEO'S REVIEW
31 Dec 2020
Group's
holding, %
Parent company's
holding, %
Kiinteistö Oy Vantaan Myyrinmutka 100.0 100.0
Kiinteistö Oy Vantaan Oritie 1 100.0 100.0
Kiinteistö Oy Vantaan Orvokkikuja 1a 100.0 100.0
Kiinteistö Oy Vantaan Orvokkikuja 1b 100.0 100.0
Kiinteistö Oy Vantaan Pakkalanportti 100.0 100.0
Kiinteistö Oy Vantaan Pakkalanrinne 5–7 100.0 100.0
Kiinteistö Oy Vantaan Peltolantie 14 100.0 100.0
Kiinteistö Oy Vantaan Pronssikuja 1 100.0 100.0
Kiinteistö Oy Vantaan Raikukuja 4B 100.0 100.0
Kiinteistö Oy Vantaan Ruostekuja 3 100.0 100.0
Kiinteistö Oy Vantaan Solkikuja 2 100.0 100.0
Kiinteistö Oy Vantaan Sompakuja 2-4 100.0 100.0
Kiinteistö Oy Vantaan Tempo 100.0 100.0
Kiinteistö Oy Vantaan Teodora 100.0 100.0
Kiinteistö Oy Vantaan Tykkikuja 11 100.0 100.0
Kiinteistö Oy Vantaan Vihvilätie 3 100.0 100.0
Kiinteistö Oy Ylöjärven Soppeenkataja 100.0 100.0
Kiinteistö Oy Ylöjärven Viljavainio 100.0 100.0
KiinteistöOy Espoon Ruusulinna 100.0 100.0
Kiinteisöt Oy Helsingin Nils Westermarckin kuja 18 100.0 100.0
Kiinteisöt Oy Helsingin Näyttelijäntie 24 100.0 100.0
OOO SATO RUS 100.0 100.0
Sato-Neva Oy 100.0 100.0
Sato-Pietari Oy 100.0 100.0
Työväen Asunto-osakeyhtiö Rauha 10.2 10.2
Ömsesidiga Fastighets Ab Malmeken 13.0 13.0
Sato-Rakennuttajien Asunnot Oy
Kiinteistö Oy Puutorin Pysäköinti 51.6 51.6
Asunto Oy Oulun Peltopyy 100.0 100.0
Asunto Oy Helsingin Tila 24.5 11.4
31 Dec 2020
Group's
holding, %
Parent company's
holding, %
Kiinteistö Oy Uudenmaantulli 24.3 24.3
Sato-Joustokoti Oy
Asunto-osakeyhtiö Talin Estelle, Helsinki 85.4 85.4
SATOkoti Oy
Kiinteistö Oy Ida Aalbergintie 1 100.0 100.0
Kiinteistö Oy Tohlopinkontu 100.0 40.0
SATOkoti 21 Oy
Asunto Oy Helsingin Keinulaudantie 7 100.0 100.0
Asunto Oy Helsingin Keinulaudantie 7a 100.0 100.0
SATOkoti 24 Oy
Asunto Oy Vantaan Neulansilmä 2.2 2.2
Suomen Vuokrakodit 3 Oy
Asunto Oy Turun Westparkin Eeben 100.0 100.0
Asunto Oy Vantaan Piparminttu 100.0 100.0
Asunto Oy Vantaan Rubiinikehä 1B 100.0 100.0
Suomen Satokodit 19 Oy
Pellervon Pysäköinti KOy 16.0 16.0
Suomen Satokodit 21 Oy
Asunto Oy Espoon Kaskenkaatajantie 5 100.0 100.0
Asunto Oy Helsingin Arhotie 22 100.0 100.0
Asunto Oy Helsingin Myllymatkantie 1 100.0 100.0
Suomen Satokodit 22 Oy
Vantaan Kortteeri As Oy 6.4 6.4
SATO's Annual report 2020
61
REPORT OF BOARD OF DIRECTORSSATO IN BRIEF
FINANCIAL STATEMENTS
CEO'S REVIEW
31 Dec 2020
Group's
holding, %
Parent company's
holding, %
Sato VK 19 Oy
Asunto Oy Jyväskylän Maalaiskunnan Kirkkotie 3 61.6 12.1
Asunto Oy Kaarinan Katariinankallio 35.8 23.5
Asunto Oy Kaarinan Kultarinta 39.9 26.5
Asunto Oy Tampereen Rantatie 13 E-G 44.6 41.6
Asunto Oy Turun Merenneito 24.7 14.6
Asunto Oy Turun Meripoika 40.8 26.0
Sato VK 20 Oy
As. Oy Helsingin Lintulahdenpuisto 100.0 100.0
Asunto Oy Espoon Säterinkatu 10 1 9.1 6.1
Asunto Oy Oulun Laamannintie 86.4 43.5
Helsingin Vanhanlinnantie 10 As Oy 14.0 10.2
Sato VK 21 Oy
Espoon Zanseninkuja 4 As Oy 78.2 17.4
Jyväskylän Vaneritori 4 As Oy 85.8 19.8
Kaarinan Mattelpiha As Oy 92.9 36.0
Turun Unikkoniitty As Oy 82.4 13.9
Vantaan Herttuantie 3 As Oy 82.3 31.2
Sato VK 22 Oy
Espoon Numersinkatu 6 As Oy 77.7 9. 2
Kaarinan Kiurunpuisto As Oy 86.6 29.6
Oulun Laamannintie 14 ja 17 As Oy 96.5 61.9
Tampereen Kyläleni As Oy 95.3 70.7
Turun Maarianportti As Oy 100.0 100.0
Sato-Osaomistus Oy
Asunto Oy Espoon Nostoväenkuja 1 3.8 3.8
Asunto Oy Espoon Numersinkatu 6 77.7 68.5
31 Dec 2020
Group's
holding, %
Parent company's
holding, %
Asunto Oy Espoon Puropuisto 58.3 2.5
Asunto Oy Espoon Ristiniementie 22 8.2 2.8
Asunto Oy Espoon Sokerilinnantie 1 5.9 1.6
Asunto Oy Espoon Säterinkatu 10 1 9.1 13.0
Asunto Oy Espoon Zanseninkuja 4 78.2 60.8
Asunto Oy Helsingin Pasuunatie 8 3.8 1.6
Asunto Oy Helsingin Taavetinaukio 4 3.9 3.9
Asunto Oy Helsingin Vanhanlinnantie 10 14.0 3.8
Asunto Oy Iidesranta 42 Tampere 10.0 3.4
Asunto Oy Jyväskylän Maalaiskunnan Kirkkotie 3 61.6 4 9.5
Asunto Oy Jyväskylän Vaneritori 4 85.8 66.0
Asunto Oy Kaarinan Katariinankallio 35.8 12.3
Asunto Oy Kaarinan Katariinanrinne 5.3 5.3
Asunto Oy Kaarinan Kiurunpuisto 86.6 57.0
Asunto Oy Kaarinan Kultarinta 39.9 13.4
Asunto Oy Kaarinan Mattelpiha 92.9 56.9
Asunto Oy Kaarinan Verkapatruuna 12.2 12.2
Asunto Oy Lahden Kauppakatu 36 7.9 4.3
Asunto Oy Oulun Laamannintie 86.4 42.9
Asunto Oy Oulun Laamannintie 14 ja 17 96.5 34.6
Asunto Oy Raision Toripuisto 5 7.0 36.2
Asunto Oy Tampereen Haapalinnan Antintalo 66.7 16.0
Asunto Oy Tampereen Kyläleni 95.3 24.6
Asunto Oy Tampereen Kyyhky 11.1 3.0
Asunto Oy Tampereen Rantatie 13 E–G 44.6 3.0
Asunto Oy Turun Hehtokatu 30.5 20.3
Asunto Oy Turun Merenneito 24.7 10.1
Asunto Oy Turun Meripoika 40.8 14.8
Asunto Oy Turun Seiskarinkulma 10.0 10.0
Asunto Oy Turun Unikkoniitty 82.4 68.5
Asunto Oy Tuusulan Naavankierto 10 23.9 23.9
SATO's Annual report 2020
62
REPORT OF BOARD OF DIRECTORSSATO IN BRIEF
FINANCIAL STATEMENTS
CEO'S REVIEW
31 Dec 2020
Group's
holding, %
Parent company's
holding, %
Asunto-Oy Vantaan Herttuantie 3 82.3 51.1
Vatrotalot 2 Oy
Sato-Osaomistus Oy 100.0 100.0
Vatrotalot 5 Oy
Helsingin Laivalahdenportti 5 As Oy 75.5 75.5
Helsingin Toini Muonan katu 8 As Oy 10.6 10.6
Kirkkonummen Riihipolku As Oy 100.0 100.0
Kylänpäänpelto As Oy 43.8 43.8
Laakavuorentie 4 As Oy 39.1 39.1
Meriramsi As Oy 25.56 25.6
Meri-Rastilan tie 5 As Oy 23.5 23.5
Meri-Rastilan tie 9 As Oy 9.1 9.1
Nurmijärven Kylänpäänkaari As Oy 45.0 45.0
Nurmijärven Kylänpäänniitty As Oy 35.2 35.2
Raudikkokuja 3 KOy 100.0 100.0
Vantaan Ravurinpuisto As Oy 61.1 61.1
Sato-Rakennuttajat Oy
Uusi Sarfvik Oy 60.0 41.7
Sarfvikin Vesialue Oy 60.0 41.7
SATO's Annual report 2020
63
REPORT OF BOARD OF DIRECTORSSATO IN BRIEF
FINANCIAL STATEMENTS
CEO'S REVIEW
FINANCIAL STATEMENTS OF THE PARENT COMPANY, FAS
PARENT COMPANY INCOME STATEMENT, FAS
PARENT COMPANY BALANCE SHEET, FAS
EUR note 1 Jan–31 Dec 2020 1 Jan–31 Dec 2019
Net sales 2 10,023,723.92 9,878,134.09
Other operating income 3 330,197.21 84,239.76
Materials and services 4 -101,934.65 -137,187.15
Persollel expenses 5, 6, 7 -2,277,919.43 -2,287,710.30
Depreciation, amortisation and impairment charges 8 -1,879,514.79 -1,602,873.86
Other operating expenses 9 -10,270,563.67 -14,082,460.84
Operating prot -4,176,011.41 -8,147,858.30
Financial income and expenses 10 -39,122,652.00 -48,021,878.59
Prot/loss before appropriations and taxes -43,298,663.41 -56,169,736.89
Group contribution 11 117,000,000.00 105,000,000.00
Income taxes 12 -15,662,020.82 -11,290,940.32
Prot for the period 58,039,315.77 37,539,322.79
EUR note 31 Dec 2020 31 Dec 2019
ASSETS
Non-current assets
Intangible assets 13 3,966,465.98 4,117,061.24
Tangible assets 14 2,439,794.83 2,570,289.37
Holdings in Group companies 15 1,066,962,748.58 1,066,931,475.81
Holdings in associated companies 16 1,250.00 1,250.00
Other holdings and shares 17 958,404.35 1,059,240.09
Total 1,074,328,663.74 1,074,679,316.51
EUR note 31 Dec 2020 31 Dec 2019
Current assets
Inventories 18 1,322,407.22 1,399,124.35
Long-term receivables, group 19 1,005,277,412.23 793,616,825.14
Long-term receivables, external 19 176,908.20 196,564.66
Short-term receivables, group 20 423,240,244.96 357,963,699.59
Short-term receivables, external 20 39,421,988.30 6,003,929.66
Cash and cash equivalents 235,344,373.71 568,025.28
Total 1,704,783,334.62 1,159,748,168.68
TOTAL ASSETS 2,779,111,998.36 2,234,427,485.19
SHAREHOLDERS' EQUITY AND LIABILITIES
Shareholders' equity
21, 22
Share capital 23 4,442,192.00 4,442,192.00
Reserve fund 43,683,500.96 43,683,500.96
Other funds 115,978,036.35 115,978,036.35
Retained earnings 196,136,798.71 158,597,475.92
Prot for the period 58,039,315.77 37,539,322.79
Total 418,279,843.79 360,240,528.02
Liabilities
Non-current liabilities, external 24 1,889,776,257.69 1,358,333,455.68
Current liabilities, group 25 271,788,748.48 138,681,987.33
Current liabilities, external 25 199,267,148.40 377,171,514.16
Total 2,360,832,154.57 1,874,186,957.17
SHAREHOLDERS' EQUITY AND LIABILITIES, TOTAL 2,779,111,998.36 2,234,427,485.19
SATO's Annual report 2020
64
REPORT OF BOARD OF DIRECTORSSATO IN BRIEF
FINANCIAL STATEMENTS
CEO'S REVIEW
PARENT COMPANY'S CASH FLOW STATEMENT, FAS
EUR 1 Jan–31 Dec 2020 1 Jan–31 Dec 2019
CASH FLOW FROM OPERATING ACTIVITIES
Net prot for the nancial year
58,039,315.77 37,539,322.79
Adjustments:
Depreciation 1,879,514.79 1,602,873.86
Financial income (-) and expenses (+) 39,122,652.00 48,021,878.59
Income tax 15,662,020.82 11,290,940.32
Proceeds (-) and losses (+) on sales of non-current assets -99,863.76 -62,891.98
Group contribution -117,000,000.00 -105,000,000.00
Cash ow before change in working capital -2,396,360.38 -6,607,876.42
Change in working capital
Decrease (+)/increase(-) in current non-interest bearing receivables -884,464.03 228,472.69
Decrease (+)/increase(-) in inventories 76,717.13 31,285.74
Decrease (-)/increase(+) in current loans -24,006,642.54 20,056,744.73
Cash ow before nancial items and taxes -27,210,749.82 13,708,626.74
Interest paid -31,135,198.75 -33,600,963.98
Dividends received 170,000.00 0.00
Interest received 17,101,113.07 10,889,658.90
Other nancial expenses -15,050,649.62 -19,447,942.48
Direct taxes paid -11,372,515.55 -18,279,766.07
Cash ow from operating activities (A) -67,498,000.67 -46,730,386.89
EUR 1 Jan–31 Dec 2020 1 Jan–31 Dec 2019
CASH FLOW FROM INVESTING ACTIVITIES
Investments in tangible and intangible assets -1,637,619.15 -3,411,809.19
Income from disposals of tangible assets 141,058.60 179,344.01
Placements in other investments -36,996,957.46 -52,888.04
Proceeds from other investments 120,492.20 -19,617.01
Loans granted -132,036,324.67 -256,987,915.54
Instalments on loan receivable 42,864,172.38 63,005,338.86
Cash ow from investing activities (B) -127,545,178.10 -197,287,546.91
CASH FLOW FROM FINANCING ACTIVITIES
Loans taken 1,071,933,898,63 1,443,268,869.10
Payments on loans -724,422,798,33 -1,218,051,733.59
Changes in short-term cash pool liabilities and receivables -22,691,573,10 -81,420,391.88
Group contributions (contribution-based) 105,000,000.00 127,150,000.00
Dividends paid and other distribution of prot 0.00 -28,311,533.50
Cash ow from nancing activities (C) 429,819,527.20 242,635,210.13
Change in cash equivalents 234,776,348.43 -1,382,723.67
Cash and cash equivalents at the beginning of the year 568,025.28 1,950,748.95
Cash and cash equivalents at the end of the year 235,344,373.71 568,025.28
SATO's Annual report 2020
65
REPORT OF BOARD OF DIRECTORSSATO IN BRIEF
FINANCIAL STATEMENTS
CEO'S REVIEW
NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS, FAS
1. PARENT COMPANY ACCOUNTING
PRINCIPLES
Basic information
Sato Corporation is domiciled in Helsinki and its
registered address is Panuntie 4, 00610 Helsinki.
Sato Corporation is a part of Fastighets Ab Balder
Group. The largest shareholder of Sato Corporation
is Balder Finska Otas Ab with 55,8 % shareholding.
Balder Finska Otas Ab is a subsidiary of Fastighets
Ab Balder Plc.
General principles
Sato Corporation’s nancial statements have been
prepared in accordance with the provisions of the
Finnish Accounting Act and the Finnish Limited
Liability Companies Act.
Income related to rental operations and
compensation for administration costs
Income related to rental operations and compensa-
tion for administration costs are recognised on an
accrual basis during the agreement period.
Valuation of xed assets
Tangible and intangible assets are recognised
in the balance sheet at original acquisition cost
less depreciation according to plan and possible
impairment. Depreciations according to plan are
calculated as straight-line depreciation on the basis
of the estimated useful life of the assets.
Depreciation periods:
Other intangible long-term expenses 10 years
Buildings 67 years
Structures 15 years
Machinery and equipment 5–10 years
Other tangible assets 3–6 years
Shelters 40 years
Vehicles 4 years
Shares in subsidiaries are valued based on acquisi-
tion costs less possible impairments.
Pension costs
The pension cover of Group companies is handled
by external pension insurance companies in all
respects. Pension costs are recogniced as costs in
the income statement on an accrual basis.
Development expenditues
Development costs are recogniced as expenses in
the income statement in the nancial year in which
they are generated.
Valuation of inventories
Inventories have been recogniced at the lower of
cost or probable sales price on the balance sheet
date.
Derivatives
Interest rate derivatives are used for hedging
against the interest rate risks of oating term loans.
The interest income and expenses based on deriv-
ative instruments are allocated over the agreement
period.
The company has recorded the negative fair values
of the derivates as a non-current and current liabili-
ty in full in its balance sheet. No deferred tax assets
have been recorded from the derivative liability.
Derivatives having positive fair values are not en-
tered into the balance sheet and positive fair values
are reported only in the notes to the nancial
statements.
Methods used in derivative fair valuations have
been discussed under the Group Financial State-
ments note number 27.
SATO's Annual report 2020
66
REPORT OF BOARD OF DIRECTORSSATO IN BRIEF
FINANCIAL STATEMENTS
CEO'S REVIEW
2. NET SALES
EUR 1 Jan–31 Dec 2020 1 Jan–31 Dec 2019
Rental income and compensation charges 1,908,602.31 2,497,811.92
Other income 653,276.82 618,727.17
Management service charges 7,461,844.79 6,761,595.00
Total 10,023,723.92 9,878,134.09
3. OTHER OPERATING INCOME
EUR 1 Jan–31 Dec 2020 1 Jan–31 Dec 2019
Other operating income 230,333.45 1,730.77
Commission, sold property 0.00 0.00
Prot on sales of xed assets 99,863.76 82,508.99
Total 330,197.21 84,239.76
4. MATERIALS AND SERVICES
EUR 1 Jan–31 Dec 2020 1 Jan–31 Dec 2019
Materials and consumables
Purchases 25,217.52 34,765.41
Change in inventories 76,717.13 102,421.74
Total 101,934.65 137,187.15
5. PERSONNEL EXPENSES
EUR 1 Jan–31 Dec 2020 1 Jan–31 Dec 2019
Salaries and wages 1,980,223.65 1,897,825.97
Pension expenses 247,741.99 353,572.17
Other personnel expenses 49,953.79 36,312.16
Total 2,277,919.43 2,287,710.30
6. MANAGEMENT SALARIES AND COMPENSATIONS
EUR 1 Jan–31 Dec 2020 1 Jan–31 Dec 2019
Presidents and members of the Board of Directors 485,632.93 821,682.51
7. AVERAGE NUMBER OF PERSONNEL
1 Jan–31 Dec 2020 1 Jan–31 Dec 2019
Employees 16 16
8. DEPRECIATION AND AMORTISATION
EUR 1 Jan–31 Dec 2020 1 Jan–31 Dec 2019
Amortisation of intangible assets 1,043,683.07 919,658.01
Depreciation of tangible assets 835,831.72 683,215.85
Total 1,879,514.79 1,602,873.86
9. OTHER OPERATING EXPENSES
EUR 1 Jan–31 Dec 2020 1 Jan–31 Dec 2019
Rents 231,640.69 481,446.76
Maintenance expenses 261,408.02 975,559.96
Other xed expenses* 9,617,726.69 11,160,209.37
Other operating expenses 159,788.27 1,465,244.75
Total 10,270,563.67 14,082,460.84
* Audit fees were EUR 96,476.74 (85.191,00) and audit related assignment fees were EUR 74,628.00 (73.720,00) in
2020 and 2019. Tax and other consultancy services purchased from auditors were EUR 8,073.30 in 2020 ja EUR
9,256.00 in 2019.
SATO's Annual report 2020
67
REPORT OF BOARD OF DIRECTORSSATO IN BRIEF
FINANCIAL STATEMENTS
CEO'S REVIEW
10. FINANCIAL INCOME AND EXPENSES
EUR 1 Jan–31 Dec 2020 1 Jan–31 Dec 2019
Interest income and other nancial income on long-term investments
From Group companies 17,280,915.77 10,932,118.22
Income from investments in associated companies 170,000.00 0.00
From others 294,413.74 3,372.09
Total 17,745,329.51 10,935,490.31
EUR 1 Jan–31 Dec 2020 1 Jan–31 Dec 2019
Interest expenses and other nancing expenses
To Group companies -5,658,626.32 0.00
To others:
Interest expenses -37,024,505.89 -32,828,475.18
Other nancial expenses -9,392,023.30 -18,360,704.72
Change of derivative fair values -4,792,826.00 -7,768,189.00
Total -56,867,981.51 -58,957,368.90
Financial income and expenses, total -39,122,652.00 -48,021,878.59
11. GROUP CONTRIBUTIONS
EUR 1 Jan–31 Dec 2020 1 Jan–31 Dec 2019
Group contributions received 117,000,000.00 105,000,000.00
Total 117,000,000.00 105,000,000.00
12. INCOME TAXES
EUR 1 Jan–31 Dec 2020 1 Jan–31 Dec 2019
Income taxes, business operations 15,662,020.82 11,290,940.32
Total 15,662,020.82 11,290,940.32
13. INTANGIBLE ASSETS
EUR 2020 2019
Other long-term expenditure
Acquisition cost, 1 Jan 10,322,109.21 8,303,960.70
Increases 893,087.81 2,018,148.51
Decreases 0.00 0.00
Acquisition cost, 31 Dec 11,215,197.02 10,322,109.21
Accumulated amortisation and impairment, 1 Jan 6,205,047.97 5,285,389.96
Accumulated amortisation of decreases 0.00 0.00
Amortisation, current year 1,043,683.07 919,658.01
Accumulated amortisation and impairment, 31 Dec 7,248,731.04 6,205,047.97
Book value, 31 Dec 3,966,465.98 4,117,061.24
Intangible assets, total 3,966,465.98 4,117,061.24
14. TANGIBLE ASSETS
EUR 2020 2019
Land and water areas
Acquisition cost, 1 Jan 19,595.69 19,595.69
Acquisition cost, 31 Dec 19,595.69 19,595.69
Book value, 31 Dec 19,595.69 19,595.69
Buildings and structures
Acquisition cost, 1 Jan 10,275.62 10,275.62
Acquisition cost, 31 Dec 10,275.62 10,275.62
Accumulated depreciation and impairment, 1 Jan 10,274.62 10,274.62
Accumulated depreciation and impairment, 31 Dec 10,274.62 10,274.62
Book value, 31 Dec 1.00 1.00
Connection fees
Acquisition cost, 1 Jan 3,139.28 3,139.28
Acquisition cost, 31 Dec 3,139.28 3,139.28
SATO's Annual report 2020
68
REPORT OF BOARD OF DIRECTORSSATO IN BRIEF
FINANCIAL STATEMENTS
CEO'S REVIEW
EUR 2020 2019
Machinery and equipment
Acquisition cost, 1 Jan 5,007,101.70 4,070,395.34
Increases 215,942.29 1,204,513.59
Decreases -227,287.87 -267,807.23
Acquisition cost, 31 Dec 4,995,756.12 5,007,101.70
Accumulated depreciation and impairment, 1 Jan 3,103,660.48 2,725,328.20
Accumulated depreciation of decreases -188,093.71 -170,972.21
Depreciation, current year 684,983.58 549,304.49
Accumulated depreciation and impairment, 31 Dec 3,600,550.35 3,103,660.48
Book value, 31 Dec
1,395,205.76 1,903,441.22
Other tangible assets
Acquisition cost, 1 Jan 1,553,686.53 1,381,818.05
Increases 0.00 171,868.48
Acquisition cost, 31 Dec 1,553,686.53 1,553,686.53
Accumulated depreciation and impairment, 1 Jan 940,152.95 806,241.59
Depreciation, current year
150,848.14 133,911.36
Accumulated depreciation and impairment, 31 Dec 1,091,001.09 940,152.95
Book value, 31 Dec 462,685.44 613,533.58
Assets in progress
Acquisition cost, 1 Jan 30,578.61 0.00
Increases 528,589.05 30,578.61
Acquisition cost, 31 Dec 559,167.66 30,578.61
Book value, 31 Dec 559,167.66 30,578.61
Tangible assets, total 2,439,794.83 2,570,289.38
15. HOLDINGS IN GROUP COMPANIES
EUR 2020 2019
Acquisition cost, 1 Jan 1,066,931,475.81 1,066,898,244.2
Transfers 31,272.77 33,231.58
Decreases 0.00 0.00
Acquisition cost, 31 Dec 1,066,962,748.58 1,066,931,475.81
Book value, 31 Dec 1,066,962,748.58 1,066,931,475.81
16. HOLDINGS IN ASSOCIATED COMPANIES
EUR 2020 2019
Acquisition cost, 1 Jan 1,250.00 1,250.00
Acquisition cost, 31 Dec 1,250.00 1,250.00
Book value, 31 Dec 1,250.00 1,250.00
17. OTHER STOCKS AND SHARES
EUR 2020 2019
Acquisition cost, 1 Jan 1,090,081.63 1,070,425.17
Increases 19,656.46 19,656.46
Decreases -120,492.20 0.00
Acquisition cost, 31 Dec 989,245.89 1,090,081.63
Accumulated depreciation and impairment, 1 Jan 30,841.54 30,841.54
Accumulated depreciation and impairment, 31 Dec 30,841.54 30,841.54
Book value, 31 Dec 958,404.35 1,059,240.09
Investments, total 1,067,922,402.93 1,067,991,965.90
18. INVENTORIES
EUR 2020 2019
Land areas and land area companies 1,080,722.75 1,157,439.88
Other inventories 241,684.47 241,684.47
Book value, 31 Dec 1,322,407.22 1,399,124.35
SATO's Annual report 2020
69
REPORT OF BOARD OF DIRECTORSSATO IN BRIEF
FINANCIAL STATEMENTS
CEO'S REVIEW
19. NON-CURRENT RECEIVABLES
EUR 2020 2019
Receivables from Group companies
Notes receivable 1,005,277,412.23 793,616,825.14
Total 1,005,277,412.23 793,616,825.14
MEUR
Receivables from others
Notes receivable 176,908.20 196,564.66
Total 176,908.20 196,564.66
Non-current receivables, total 1,005,454,320.43 793,813,389.80
20. CURRENT RECEIVABLES
EUR 2020 2019
Receivables from Group companies
Other receivables 422,502,973.31 357,841,228.51
Prepaid expenses and accrued income 737,271.65 122,471.08
Total 423,240,244.96 357,963,699.59
Receivables from others
Accounts receivable 314,151.96 227,603.97
Commercial paper 36,965,684.69 0.00
Prepaid expenses and accrued income 2,142,151.65 5,776,325.69
Total 39,421,988.30 6,003,929.66
Current receivables, total 462,662,233.26 363,967,629.25
Receivables total 1,468,116,553.69 1,157,781,019.05
EUR 2020 2019
Specication of prepaid expenses and accrued income
Current tax receivables 1,336,165.79 5,625,671.06
Other 805,985.86 150,654.63
Total 2,142,151.65 5,776,325.69
21. SHAREHOLDERS' EQUITY
EUR 2020 2019
Share capital, 1 Jan 4,442,192.00 4,442,192.00
Share capital, 31 Dec 4,442,192.00 4,442,192.00
Reserve fund, 1 Jan 43,683,500.96 43,683,500.96
Reserve fund, 31 Dec 43,683,500.96 43,683,500.96
Other funds, 1 Jan 1,132,319.33 1,132,319.33
Other funds, 31 Dec 1,132,319.33 1,132,319.33
Invested unrestricted equity fund, 1 Jan 114,845,717.02 114,845,717.02
Invested unrestricted equity fund, 31 Dec 114,845,717.02 114,845,717.02
Retained earnings, 1 Jan 196,136,798.71 186,909,009.42
Dividend payment 0.00 -28,311,533.50
Retained earnings, 31 Dec 196,136,798.71 158,597,475.92
Prot for the period 58,039,315.77 37,539,322.79
Shareholders' equity, total, 31 Dec 418,279,843.79 360,240,528.02
SATO's Annual report 2020
70
REPORT OF BOARD OF DIRECTORSSATO IN BRIEF
FINANCIAL STATEMENTS
CEO'S REVIEW
22. CALCULATION OF DISTRIBUTABLE FUNDS
EUR 2020 2019
Other funds 1,132,319.33 1,132,319.33
Invested unrestrited equity fund 114,845,717.02 114,845,717.02
Retained earnings 196,136,798.71 158,597,475.92
Prot for the period 58,039,315.77 37,539,322.79
Distributable funds, 31 Dec 370,154,150.83 312,114,835.06
23. SHARE CAPITAL AND SHARES
2020 2019
Total number of shares 56,783,067 56,783,067
SATO Corporation has one class of shares, each of which entitles to one vote at the Annual General Meeting.
The shares do not have a nominal value. The share capital of the company totalled EUR 4,442,192.00 at the
nancial statement date, and it was fully paid. The company held 160,000 of its own shares at the nancial
statement date.
24. LONG-TERM LIABILITIES
EUR 2020 2019
Loans from nancial institutions
Bonds * 1,099,000,000.00 549,000,000.00
Loans from nancial institutions 751,666,666.69 776,666,666.68
Derivative liabilities 39,109,591.00 32,666,789.00
Total 1,889,776,257.69 1,358,333,455.68
Long-term liabilities, total 1,889,776,257.69 1,358,333,455.68
* More information on Group nancial statements note 26.
Sensitivity analysis, interest rate risk
2020
Prot and Loss Equity
EUR 0.1% -0.1% 0.1% -0.1%
Interest rate swaps 3.1 -3.2 3.1 -3.2
Total 3.1 -3.2 3.1 -3.2
2019
Prot and Loss Equity
EUR 0.1% -0.1% 0.1% -0.1%
Interest rate swaps 3.2 -3.2 3.2 -3.2
Total 3.2 -3.2 3.2 -3.2
Hedge accounting is not applied on SATO Corporation level, therefore the sensitivity impact on equity and
prot and loss is the same.
Loans maturing in more than ve years 660 000 000,00 481 666 666,66
Derivatives
EUR 2020 2019
Nominal values of derivative instruments
Interest rate swaps, liabilities 554 978 388,00 658 378 388,00
Net 554 978 388,00 658 378 388,00
EUR 2020 2019
Fair values of derivative instruments
Interst rate swaps
Positive 0,00 0,00
Negative -39 392 207,00 -34 599 381,00
Net -39 392 207,00 -34 599 381,00
SATO's Annual report 2020
71
REPORT OF BOARD OF DIRECTORSSATO IN BRIEF
FINANCIAL STATEMENTS
CEO'S REVIEW
Interest rate risk arising from oating rate loans of Group companies is hedged using derivative instruments in
accordance with the Treasury Policy. The hedge ratio complies with the Treasury Policy, according to which the
ratio of xed-rate loans to the entire loan portfolio (excluding ARAVA loans) is kept above 60 per cent. SATO aims
to optimize the interest risk by maintaining the average interest xing period between 3 to 5 years when market
interest rates (ECB key rate) are above 1%, and between 3 to 10 years when market interest rates are equal to or
below 1%.
No deferred tax assets have been recorded in relation to derivative liabilities. The deferred tax asset would have
been EUR 7.9 million on 31 December 2020 and EUR 6.9 million on 31 December 2019.
25. CURRENT LIABILITIES
EUR 2020 2019
Loans to Group companies
Accounts payable 407,124.30 407,124.30
Other liabilities 271,350,975.40 138,247,323.41
Accrued expenses and prepaid income to 100% owned
housing companies 30,648.78 27,539.62
Total 271,788,748.48 138,681,987.33
EUR 2020 2019
Loans to others*
Loans from nancial institutions 30,483,240.33 261,470,599.95
Bonds 150,000,000.00 100,001,000.00
Advances received 67,518.12 191,708.00
Accounts payable 1,716,587.14 1,446,980.51
Other liabilities 47,073.73 1,652,120.48
Accrued expenses and prepaid income 16,952,729.08 12,409,105.22
Total 199,267,148.40 377,171,514.16
Current liabilities, total 471,055,896.88 515,853,501.49
Liabilities, total 2,360,832,154.57 1,874,186,957.17
*Short-term liabilities include derivative liabilities EUR 0.3 million (2019: EUR 1.9 million)
EUR 2020 2019
Specication of accrued expenses and prepaid income
Wages and salaries including employee benets 745,817.21 1,450,641.85
Interest payable 15,559,361.27 9,670,054.13
Others 678,199.38 1,315,948.86
Total 16,983,377.9 12,436,644.84
26. COLLATERALS, CONTINGENT LIABILITIES AND OTHER COMMITMENTS
EUR 2020 2019
Guarantees
Guarantees for debts, derivatives and other commitments of
Group companies 140,582,746.54 134,940,065.99
Bank guarantees for Group companies 11,248,154.01 12,593,999.76
Total 151,830,900.55 147,534,065.75
EUR 2020 2019
Other commitments
Lease agreements for oce premises, amounts due (incl. VAT)
Within one year 1,283,269.25 1,301,594.40
Later than one year but within ve years 4,102,039.54 4,435,950.16
Over ve years 1,859,500.33 2,786,428.80
Utilities and other commitments 512,752.10 512,752.10
Pledges and contingent liabilities, total 7,757,561.22 9,036,725.46
SATO has sublet oce premises at Panuntie, Helsinki in 2019. The minimim rent payments from these agreements
was EUR 0.5 million. The rental income recognised in the income statement from these sublease agreements
amounted to EUR 0.4 million. During 2020, SATO Corporation no longer acted as the main tenant of the Panuntie
business premises.
SATO has granted a community guarantee included in bank guarantee for Sato-Asunnot Oy, SATOkoti Oy and
Sato-Rakennuttajat Oy.
SATO’s funding agreements contain covenant clauses relating to the Group’s capital structure and interest
payment capacity. These clauses set a ratio of unencumbered assets to total assets at least 42.5 per cent,
a solvency ratio maximum of 65 per cent, a secured solvency ratio maximum 45 per cent and interest coverage
ratio of at least 1.8. At the reporting date, the ratio of unencumbered assets was 84.1 (80.8) per cent, the solvency
ratio was 43.8 (44.4) per cent, the secured solvency ratio was 8.2 (10.2) per cent and the interest coverage
ratio was 4.0 (3.3).
For purposes of short-term nancing, SATO has a commercial paper programme of EUR 400 (400) million, com-
mitted credit limits of EUR 600 (400) million, of which EUR 600 (400) million were unused, and a noncommitted
current overdraft limit of EUR 5 (5) million, of which EUR 5 (1.5) million were unused.
SATO's Annual report 2020
72
REPORT OF BOARD OF DIRECTORSSATO IN BRIEF
FINANCIAL STATEMENTS
CEO'S REVIEW
SIGNATURES TO THE FINANCIAL STATEMENTS AND THE REPORT OF THE
BOARD OF DIRECTORS
Helsinki, 10 February 2021
Jukka Hienonen
Timo Stenius
Antti Aarnio
CEO
The Auditors’ Note
Our report on the conducted audit has been issued today.
Helsinki, 10 February 2021
Deloitte Oy
Authorised Public Accountants
Eero Lumme
Authorised Public Accountant
Erik Selin
Tarja Pääkkönen
Esa Lager
Hans Spikker
SATO's Annual report 2020
73
REPORT OF BOARD OF DIRECTORSSATO IN BRIEF
FINANCIAL STATEMENTS
CEO'S REVIEW
AUDITOR’S REPORT
(Translation of the Finnish Original)
To the Annual General Meeting of SATO Oyj
REPORT ON THE AUDIT OF THE
FINANCIAL STATEMENTS
Opinion
We have audited the nancial statements of SATO
Oyj (business identity code 0201470-5) for the year
ended 31 December 2020. The nancial statements
comprise the consolidated balance sheet, income
statement, statement of comprehensive income,
statement of changes in equity, statement of cash
ows and notes, including a summary of signicant
accounting policies, as well as the parent compa-
ny’s balance sheet, income statement, statement of
cash ows and notes.
In our opinion
• the consolidated nancial statements give a true
and fair view of the group’s nancial position,
nancial performance and cash ows in ac-
cordance with International Financial Reporting
Standards (IFRS) as adopted by the EU
• the nancial statements give a true and fair view
of the parent company’s nancial performance
and nancial position in accordance with the
laws and regulations governing the preparation
of nancial statements in Finland and comply
with statutory requirements.
Our opinion is consistent with the additional report
submitted to the Board of Directors
Basis for Opinion
We conducted our audit in accordance with good
auditing practice in Finland. Our responsibilities
under good auditing practice are further described
in the Auditor’s Responsibilities for the Audit of the
Financial Statements section of our report.
We are independent of the parent company and
of the group companies in accordance with the
ethical requirements that are applicable in Finland
and are relevant to our audit, and we have fullled
our other ethical responsibilities in accordance with
these requirements.
In our best knowledge and understanding, the
non-audit services that we have provided to the par-
ent company and group companies are in compli-
ance with laws and regulations applicable in Finland
regarding these services, and we have not provided
any prohibited non-audit services referred to in Ar-
ticle 5(1) of regulation (EU) 537/2014. The non-audit
services that we have provided have been disclosed
in note 7 to the consolidated nancial statements.
We believe that the audit evidence we have
obtained is sucient and appropriate to provide a
basis for our opinion.
Key Audit Matters
Key audit matters are those matters that, in our pro-
fessional judgment, were of most signicance in our
audit of the nancial statements of the current pe-
riod. These matters were addressed in the context
of our audit of the nancial statements as a whole,
and in forming our opinion thereon, and we do not
provide a separate opinion on these matters.
We have also addressed the risk of management
override of internal controls. This includes consid-
eration of whether there was evidence of man-
agement bias that represented a risk of material
misstatement due to fraud.
Key audit matter
Refer to note 13 to the consolidated nancial
statements.
Consolidated nancial statements as of 31
December 2020 include investment proper-
ties amounting to EUR 4,753.5 million.
Investment properties, as dened in IAS 40,
are measured at fair value in accordance
with IFRS 13.
Fair value measurement of investment
properties requires management judgment
and assumptions, since market prices for
investment properties are not available in
publicly traded markets.
This matter is regarded as signicant risk of
material misstatement in accordance with
EU Audit Regulation (537/2014) Article 10
paragraph 2 c.
How our audit addressed
the key audit matter
We have assessed and challenged the prin-
ciples and methods applied in the fair value
measurement. Our audit procedures included
the following, among others:
• assessment of the appropriateness of valu-
ation methods and the reasonableness of
management assumptions
• testing the applied valuation model for
mathematical accuracy
• comparison of the valuation of investment
properties against externally available
market data sources
• evaluation of the appropriateness of the
input data used in the valuation
• evaluation of the competence and objectiv-
ity of the external valuation expert used by
the management
• testing the key controls for operating
eectiveness.
We have assessed the appropriateness of
the presentation in the consolidated nancial
statements.
Valuation of investment properties
SATO's Annual report 2020
74
REPORT OF BOARD OF DIRECTORSSATO IN BRIEF
FINANCIAL STATEMENTS
CEO'S REVIEW
Fair value measurement of derivative instruments and application of hedge accounting
Key audit matter
Refer to note 27 to consolidated nancial
statements and note 24 to the parent com-
pany’s nancial statements.
Derivative liabilities as of 31 Decem-
ber 2020 in the consolidated nancial
statements and in the parent company’s
nancial statements amount to EUR 48.4
million and EUR 39.4, respectively.
Management estimates are used in the fair
value measurement of derivatives and in the
application of hedge accounting. These es-
timates contain management assumptions.
How our audit addressed
the key audit matter
Our audit procedures included an assessment
of internal control environment and processes
over the hedge accounting documentation, ef-
fectiveness testing, and fair value measurement.
We have also assessed the procedures and
assumptions used by the management in fair
value measurement.
• We have assessed the appropriateness of
valuation methods and accounting polices
used against the requirements set in IFRS
9 and IFRS 13 for consolidated nancial
statements and against requirements of the
Finnish Accounting Act for parent company’s
nancial statements.
• We have compared the assumptions used
by management in valuation against exter-
nally available market data.
• We have assessed the existence and
completeness of outstanding derivative
contracts by requesting conrmations from
the counterparties.
• We have assessed that nancial instruments
included in hedge relationships are ac-
counted for in accordance with IFRS 9 in the
consolidated nancial statements.
We have assessed the appropriateness of the
presentation for derivative nancial instruments
and hedge accounting applied in the consol-
idated nancial statements and in the parent
company’s nancial statements.
Responsibilities of the Board of Directors
and the Managing Director for the Finan-
cial Statements
The Board of Directors and the Managing Director
are responsible for the preparation of consolidated
nancial statements that give a true and fair view in
accordance with International Financial Reporting
Standards (IFRS) as adopted by the EU, and of
nancial statements that give a true and fair view in
accordance with the laws and regulations gov-
erning the preparation of nancial statements in
Finland and comply with statutory requirements.
The Board of Directors and the Managing Director
are also responsible for such internal control as
they determine is necessary to enable the prepara-
tion of nancial statements that are free from mate-
rial misstatement, whether due to fraud or error.
In preparing the nancial statements, the Board of
Directors and the Managing Director are respon-
sible for assessing the parent company’s and
the group’s ability to continue as going concern,
disclosing, as applicable, matters relating to going
concern and using the going concern basis of
accounting. The nancial statements are prepared
using the going concern basis of accounting unless
there is an intention to liquidate the parent compa-
ny or the group or cease operations, or there is no
realistic alternative but to do so.
Auditor’s Responsibilities for the Audit of
Financial Statements
Our objectives are to obtain reasonable assurance
on whether the nancial statements as a whole
are free from material misstatement, whether due
to fraud or error, and to issue an auditor’s report
that includes our opinion. Reasonable assurance
is a high level of assurance, but is not a guarantee
that an audit conducted in accordance with good
auditing practice will always detect a material mis-
statement when it exists. Misstatements can arise
from fraud or error and are considered material if,
individually or in aggregate, they could reasonably
be expected to inuence the economic decisions of
users taken on the basis of the nancial statements.
As part of an audit in accordance with good audit-
ing practice, we exercise professional judgment
and maintain professional skepticism throughout
the audit. We also:
• Identify and assess the risks of material mis-
statement of the nancial statements, whether
due to fraud or error, design and perform audit
procedures responsive to those risks, and obtain
audit evidence that is sucient and appropriate
to provide a basis for our opinion. The risk of
not detecting a material misstatement resulting
from fraud is higher than for one resulting from
error, as fraud may involve collusion, forgery,
intentional omissions, misrepresentations, or the
override of internal control.
• Obtain an understanding of internal control
relevant to the audit in order to design audit
procedures that are appropriate in the circum-
stances, but not for the purpose of expressing
an opinion on the eectiveness of the parent
company’s or the group’s internal control.
• Evaluate the appropriateness of accounting pol-
icies used and the reasonableness of accounting
estimates and related disclosures made by
management.
• Conclude on the appropriateness of the Board
of Directors’ and the Managing Director’s use
of the going concern basis of accounting and
SATO's Annual report 2020
75
REPORT OF BOARD OF DIRECTORSSATO IN BRIEF
FINANCIAL STATEMENTS
CEO'S REVIEW
based on the audit evidence obtained, whether
a material uncertainty exists related to events
or conditions that may cast signicant doubt on
the parent company’s or the group’s ability to
continue as a going concern. If we conclude that
a material uncertainty exists, we are required
to draw attention in our auditor’s report to the
related disclosures in the nancial statements or,
if such disclosures are inadequate, to modify our
opinion. Our conclusions are based on the audit
evidence obtained up to the date of our audi-
tor’s report. However, future events or conditions
may cause the parent company or the group to
cease to continue as a going concern.
• Evaluate the overall presentation, structure and
content of the nancial statements, including the
disclosures, and whether the nancial state-
ments represent the underlying transactions and
events so that the nancial statements give a
true and fair view.
• Obtain sucient appropriate audit evidence re-
garding the nancial information of the entities or
business activities within the group to express an
opinion on the consolidated nancial statements.
We are responsible for the direction, supervision
and performance of the group audit. We remain
solely responsible for our audit opinion.
We communicate with those charged with govern-
ance regarding, among other matters, the planned
scope and timing of the audit and signicant audit
ndings, including any signicant deciencies in
internal control that we identify during our audit.
We also provide those charged with governance
with a statement that we have complied with rele-
vant ethical requirements regarding independence,
and communicate with them all relationships and
other matters that may reasonably be thought to
bear on our independence, and where applicable,
related safeguards.
From the matters communicated with those
charged with governance, we determine those
matters that were of most signicance in the audit
of the nancial statements of the current peri-
od and are therefore the key audit matters. We
describe these matters in our auditor’s report unless
law or regulation precludes public disclosure about
the matter or when, in extremely rare circum-
stances, we determine that a matter should not be
communicated in our report because the adverse
consequences of doing so would reasonably be
expected to outweigh the public interest benets of
such communication.
OTHER REPORTING REQUIREMENTS
Information on our audit engagement
We were rst appointed as auditors by the Annual
General Meeting on 23 March 2018, and our ap-
pointment represents a total period of uninterrupt-
ed engagement of three years.
Other Information
The Board of Directors and the Managing Director
are responsible for the other information. The other
information comprises the report of the Board
of Directors and the information included in the
Annual Report, but does not include the nancial
statements and our auditor’s report thereon. We
have obtained the report of the Board of Directors
prior to the date of this auditor’s report, and the
Annual Report is expected to be made available to
us after that date.
Our opinion on the nancial statements does not
cover the other information.
In connection with our audit of the nancial
statements, our responsibility is to read the other
information identied above and, in doing so,
consider whether the other information is mate-
rially inconsistent with the nancial statements or
our knowledge obtained in the audit, or otherwise
appears to be materially misstated. With respect to
the report of the Board of Directors, our responsi-
bility also includes considering whether the report
of the Board of Directors has been prepared in ac-
cordance with the applicable laws and regulations.
In our opinion, the information in the report of the
Board of Directors is consistent with the information
in the nancial statements and the report of the
Board of Directors has been prepared in accord-
ance with the applicable laws and regulations.
If, based on the work we have performed on the
other information that we obtained prior to the
date of this auditor’s report, we conclude that there
is a material misstatement of this other informa-
tion, we are required to report that fact. We have
nothing to report in this regard.
Helsinki, 10 February 2021
Deloitte Oy
Audit Firm
Eero Lumme
Authorised Public Accountant (KHT)
SATO's Annual report 2020
76
REPORT OF BOARD OF DIRECTORSSATO IN BRIEF
FINANCIAL STATEMENTS
CEO'S REVIEW
Key nancial indicators 2020 2019 2018* 2017* 2016
‹
*
Net sales, MEUR 303.4 295.6 290.4 280.1 262.7
Net rental income, MEUR 220.3 207.1 198.5 188.4 167.1
Operating prot, MEUR 17 9.6 725.6 273.3 230.1 267.2
Net nancing expenses, MEUR -50.0 -55.1 -42.5 -45.8 -47.8
Prot before taxes, MEUR 129.5 670.5 230.8 184.4 219.4
Balance sheet total, MEUR 5,104.7 4,718.2 3,922.4 3,693.1 3,562.2
Shareholders' equity, MEUR 2,155.7 2,055.8 1,554.5 1,397.6 1,252.6
Interest bearing liabilities, MEUR 2,381.5 2,098.4 1,982.2 1,931.7 1,943.0
Return on invested capital, % (ROIC) 4.1% 18.9% 7.9% 7.1% 9.1%
Return on equity, % (ROE) 4.8% 29.6% 12.4% 11.0% 15.6%
Equity ratio, % 42.2% 43.6% 3 9. 6 % 37.8% 35.2%
Personnel, average** 229 223 215 206 170
Personnel at the end of period 242 229 218 212 175
Key indicators per share
Earnings per share, EUR 1.80 9.45 3.26 2.55 3.22
Equity per share, EUR *** 38.07 36.31 27.46 24.68 22.12
Number of shares, million **** 56.6 56.6 56.6 56.6 56.6
Operational key gures and net asset value
Operational earnings, MEUR 109.0 91.4 98.7 82.8 69.5
Operational earnings per share, EUR 1.92 1.61 1.74 1.46 1.28
Net asset value, MEUR 2,577.2 2,477.7 1,855.7 1,678.7 1,517.5
Net asset value per share, EUR 45.52 43.76 32.77 29.65 26.80
Cash earnings, MEUR 132.1 91.2 97.9 92.4 86.2
Cash earnings per share, EUR 2.33 1.61 1.73 1.63 1.59
‹
Key gures since 2017 include the eects of adoption of IFRS 9 Financial Instruments. The gures of prior years are unadjusted.
* Key gures since 2019 include the eects of adoption of IFRS 16 Leases. The gures of prior years are unadjusted.
** Including summer trainees.
*** Equity excluding non-controlling interests.
**** The 160,000 shares held by the Group have been deducted from the number of shares.
FIVE YEAR INDICATORS
SATO's Annual report 2020
77
REPORT OF BOARD OF DIRECTORSSATO IN BRIEF
FINANCIAL STATEMENTS
CEO'S REVIEW
FORMULAS USED IN CALCULATION
Net rental income
Rental income
– Property, maintenance and reparation expenses
– Ground rents
Return on investment, %
=
(Prot or loss before taxes + interest expense and other nancing expenses)
x 100
Balance sheet total (average during the period) – non-interest-bearing debt (average during the period)
Return on equity, %
=
Prot or loss after taxes
x 100
Shareholders’ equity (average during the period)
Equity ratio, %
=
Shareholders’ equity
x 100
Balance sheet total
Earnings per share, EUR
=
Prot for the period attributable to owners of the parent
Adjusted number of shares (average during the period)
Equity per share, EUR
=
Shareholders' equity attributable to owners of the parent
Adjusted number of shares (at the end of the reporting period)
Operational earnings
= Prot for the period, IFRS
–/+ Gains and losses from valuation of investment properties
– Prot on sales of investment properties
+ Loss on sales of investment properties
–/+ Prot on sales of new apartments adjusted with sales and marketing expenses
–/+ Prot on sales of land areas
–/+ Fair value change of nancial instruments
–/+ Deferred taxed of above items
– Non-controlling interests
Net asset value
= Shareholders' equity attributable to owners of the parent
–/+ Fair value of nancial instruments (net), net of tax
–/+ Deferred tax assets and liabilities (net)
Cash earnings
= Operating prot
+/– Gains and losses from valuation of investment properties
+ Depreciations
+/– Change of provisions
+/– Dened benet plans
– Cash based nancial income and expenses
– Cash based taxes
+/– Other items
SATO's Annual report 2020
78
REPORT OF BOARD OF DIRECTORSSATO IN BRIEF
FINANCIAL STATEMENTS
CEO'S REVIEW
INFORMATION FOR SHAREHOLDERS
THE ANNUAL GENERAL MEETING OF
SATO CORPORATION
Notice is given to the shareholders of SATO
Corporation of the Annual General Meeting to be
held on Thursday 25 March 2021 at 13.00 in the
SATO building auditorium at the address Panuntie
4, FI-00610 Helsinki. The reception of registered
participants and the distribution of voting tickets
will commence at 12.30.
The matters dened in section 5 in SATO Corpora-
tions’s Articles of Association and the resolution on
the forfeiture of shares in the joint account and the
rights carried by the shares will be handled in the
Annual General Meeting.
DOCUMENTS OF THE GENERAL
MEETING
The notice of the meeting and the agenda with
the draft resolutions will be available on the SATO
Corporation’s website www.sato. as of 11 February
2021. SATO Corporation's nancial statements,
report of the Board of Directors and the auditor's
report will be available on the website no later
than on 18 March 2021. The draft resolutions and
the other above-mentioned documents will also be
available at the General Meeting. The minutes of
the General Meeting will be available on the said
website on 8 April 2021 at the latest.
INSTRUCTIONS FOR PARTICIPANTS OF
THE GENERAL MEETING
About organizing the meeting
SATO Corporation has a very serious attitude to the
circumstances due to corona virus and makes its
reasonable eorts to ensure the safety of those who
need to be present at the meeting. The meeting will
be held as short as possible, the number of compa-
ny’s representatives in the meeting shall be limited
to minimum and the presentations in the meeting
shall be limited to cover only the required matters.
The general meeting can be organized only if the
number of participants at the meeting is so low that
the meeting can be held in compliance with the
instructions given by the authorities. SATO Corpora-
tion will update the instructions regarding the Annu-
al General Meeting if needed. The shareholders can
attend the general meeting also with Teams-appli-
cation. In that case as a precondition for exercising
shareholder’s voting right is that the shareholder has
issued a proxy to his/her/its representative present
in the meeting. To limit the number of persons pres-
ent in the meeting it is recommended that share-
holders will use SATO Corporation’s Legal Counsel
Anna Saarinen (or her order) as a proxy representa-
tive in the meeting. The link to the Teams-application
will be sent to shareholders attending the meeting
to the e-mail address received in connection with
the registration to the meeting.
The shareholders may present written questions
to company in advance concerning the matters
to be handled at the Annual General Meeting.
The questions can be sent to the e-mail address
yhtiokokous@sato.. The questions shall be
delivered to the company on Friday 12 March 2021
at the latest. The company will aim to consider the
presented questions when preparing presenta-
tions for the Annual General Meeting. The written
presentation material will be available at company’s
website after the meeting.
To ensure the decision-making process in the meet-
ing SATO Corporation has received an announce-
ment that the shareholders holding the majority of
the shares and votes in SATO Corporation support
all the proposals made by the Board of Directors
and the Shareholders’ Nomination Committee to
the Annual General Meeting.
There will be no coee service at the meeting.
Right to attend and registration
Each shareholder who is on 15 March 2021 (record
date for the General Meeting) registered in the
shareholders register of the company maintained
by Euroclear Finland Ltd has the right to attend the
General Meeting. A shareholder whose shares have
been entered into his/her/its personal Finnish
book-entry account, is registered in the sharehold-
ers register of the company.
A shareholder who is entered into the sharehold-
ers register and who wish to attend the General
Meeting shall register for the meeting no later than
on Monday, 22 March 2021 at 16.00, by which time
the registration shall be received by the company.
The registration may be made as follows:
• by regular mail to the address
SATO Corporation, Kati Laakso,
PO Box 401, FI-00601 Helsinki
• by telephone (+358 201 34 4002/Kati Laakso)
Mon-Fri 9.00 – 16.00 or
• by e-mail to yhtiokokous@sato.
Personal information given by the shareholders to
SATO Corporation shall be used only in connection
with the General Meeting and the registrations
required for it.
If required, the shareholder, his/her/its authorized
representative or proxy representative shall prove
his/her/its identity and/or the right of representa-
tion at the meeting.
Holders of nominee registered shares
A holder of nominee registered shares is entitled
to attend the General Meeting by virtue of shares
on the basis of which he/she/it on 15 March 2021
(record date for the General Meeting) would be en-
titled to be registered in the shareholders register of
the company maintained by Euroclear Finland Ltd.
The attendance also requires that the shareholder is
temporarily entered into the shareholders register
maintained by Euroclear Finland Oy on the basis of
such shares by Monday, 22 March 2021 by 10.00. For
shares entered in the nominee register, this will be
deemed as registration for the General Meeting.
With regard to the nominee registered shares, the
holder of such shares is advised to request from
his/her/its custodian bank in time instructions for
entry on the temporary shareholders register, the
issuing of proxy documents and registration for
the General Meeting. The account management
organisation of the custodian bank shall request
temporary entry of the holder of the nominee
registered shares wishing to attend the General
Meeting into the company's shareholders register
no later than the above mentioned time.
Representatives and powers of attorney
A shareholder may attend the General Meeting and
exercise his/her/its rights by way of a representa-
tive. The shareholder’s representative shall present
a dated power of attorney or otherwise in a reliable
manner prove his/her/its right to represent the
SATO's Annual report 2020
79
REPORT OF BOARD OF DIRECTORSSATO IN BRIEF
FINANCIAL STATEMENTS
CEO'S REVIEW
DISTRIBUTION OF SHARES ON 31 DECEMBER 2020
Shareholder Number of shares Holdings %
BALDER FINSKA OTAS AB (Fastighets AB Balder, 100 %) 31,696,745 55.8
STICHTING DEPOSITARY APG STRATEGIC REAL ESTATE POOL 12,811,647 22.6
KESKINÄINEN TYÖELÄKEVAKUUTUSYHTIÖ ELO 7,233,081 12.7
VALTION ELÄKERAHASTO 2,796,200 4.9
ERKKA VALKILA 390,000 0.7
HENGITYSSAIRAUKSIEN TUTKIMUSSÄÄTIÖ 227,000 0.4
SATO OYJ 160,000 0.3
TUULA ENTELÄ 159,000 0.3
ERKKI HEINONEN 156,684 0.3
TRADEKA-SIJOITUS OY 126,500 0.2
OTHER SHAREHOLDERS 102,6210 1.8
On 31 December 2020, the Group had 120 shareholders entered in the book-entry register. The turnover of
SATO Corporation's shares was 1.88 per cent during the reporting year.
shareholder. In case a shareholder participates the
General Meeting by means of several representa-
tives, representing the shareholder with shares en-
tered into dierent book-entry accounts, the shares
on the basis of which each representative represents
the shareholder shall be identied in connection
with the registration for the General Meeting.
A shareholder may also issue a proxy to SATO
Corporation’s Legal Counsel Anna Saarinen (or her
order) to present the shareholder at the meeting.
Proxy documents, if any, should be delivered to
SATO Corporation, Kati Laakso, PO Box 401, FI-00601
Helsinki by the expiry of the registration period.
Other instructions
Pursuant to Chapter 5 Section 25 of the Finnish Lim-
ited Liability Companies Act a shareholder attending
the General Meeting is entitled to request informa-
tion concerning the issues on the Meeting agenda.
FINANCIAL PUBLICATIONS
Publication dates for interim reports and half year
nancial report:
Interim report January–March 12 May 2021
Half year nancial report January–June 16 July 2021
Interim report January–September 11 November 2021
The annual report for the nancial period, interim
reports and half year nancial report are issued in
Finnish and in English. They are available at the
company's website www.sato.. Further information
is available from viestinta@sato..
Articles of Association and shares
SATO Corporation's Articles of Association as in
force was registered on 19 April 2018. The Articles
of Association does not include any provisions on
redemption of shares.
On 31 December 2020, the company's share capital
was EUR 4,442,192. The company has 56,783,067
shares. The share has no par value.
The company has one series of shares. The shares
are included in the book-entry system maintained
by Euroclear Finland Oy.
Sustainability Report 2020
2
THE SUSTAINABLE SATO KEY FIGURES REPORTING PRINCIPLES
CONTENTS
The Sustainable SATO ........................................................ 3
Successes 2020 ................................................................................ 3
Challenges 2020 ..............................................................................4
Our Sustainability Work in 2020 ......................................... 5
Sustainability programme ...............................................................5
Sustainability goals and actions ......................................................7
Sustainability guides our operations ............................................. 10
We respond to climate change ...................................................... 14
We take care of our employees ......................................................17
We create well-being for
our residents and society ............................................................... 19
Key Figures ....................................................................... 25
Finances .........................................................................................25
Environment ..................................................................................26
Personnel .......................................................................................30
Reporting Principles ......................................................... 32
Our reporting principles ...............................................................32
GRI-index ......................................................................................33
Assurance report ............................................................................38
Sustainability Concepts .................................................................39
SATOn vastuullisuusraportti 2020
3
Sustainability Report 2020
3
THE SUSTAINABLE SATO
KEY FIGURES REPORTING PRINCIPLES
GREEN FINANCE FRAMEWORK AND
THE FIRST GREEN BOND
In spring 2020, we launched the Green Finance Framework,
Green Finance Framework.
RECOGNITION FOR
SUSTAINABILITY EFFORTS
SATO participated for the sixth time in the Global Real
Estate Sustainability Benchmark (GRESB), retaining its
European housing investors in its peer group, SATO’s
result is above average.
Read more
PRESENT IN OUR CUSTOMERS’ DAILY LIVES
In accordance with our Customer First development
programme, we focussed on adapting our organisation and
our service processes to respond to our customers’ needs
even better. We aim to be closely present in our customers’
daily lives in order to serve them in the best possible way.
We expanded our House Experts operating model within
the Helsinki metropolitan area, and 12 new employees
started working in our Housing business in a new kind of
Service Manager role. Read more
FIRST CIRCULAR
ECONOMY EVENT
Together with the Helsinki
Metropolitan Area Reuse Centre
we organised a recycling event in
which furniture from an apartment
block to be demolished in Helsinki’s
Oulunkylä neighbourhood was sold
and distributed. The recycled items
attracted a lot of people, and the
event received positive feedback
from the visitors.
Read more
10.2%
lower specic energy
consumption
During the year under review, we
were very successful in our energy-
the objective we had set for 2022
already by the end of 2020.
SATOn vastuullisuusraportti 2020
4
Sustainability Report 2020
4
THE SUSTAINABLE SATO
KEY FIGURES REPORTING PRINCIPLES
WATER CONSUMPTION
IN HOMES INCREASED
Water consumption increased from previous year
as residents spent more time at home during
the pandemic. Some water-saving measures
were postponed as only essential visits were
made to buildings.
NO IMPROVEMENT IN
CUSTOMER SATISFACTION
Our target of continuously improving our Net
Promoter Score (NPS) from our residents was not
realised during the year under review. Our cus-
tomer satisfaction weakened because some of the
planned repair projects had to be postponed due
to the coronavirus pandemic and our opportunities
to serve our customers were more limited during
the pandemic. In accordance with our Customer
First development programme, during the year
under review we focussed particularly on adapt-
ing our organisation and our service processes to
respond to our customers’ needs even better and
on our presence in our buildings. We believe that
this will show as an increase in customer satisfaction
in the medium term.
RECYCLING AND SORTING
CHALLENGES
Our goal is to reduce mixed waste and
increase recycling and sorting. Providing residents
with guidance in recycling and sorting in the
buildings was not possible due to the pandemic.
In addition, the increase in online shopping
during the pandemic meant higher volumes
of, among other things, board waste.
The coronavirus
pandemic was
challenging for us
and inuenced
our work during
the year 2020.
SATOn vastuullisuusraportti 2020
5
Sustainability Report 2020
5
THE SUSTAINABLE SATO
KEY FIGURES REPORTING PRINCIPLES
SUSTAINABILITY PROGRAMME
We bear our responsibility for homes, a fundamental
human need. We develop cities and residential
areas for decades ahead, supporting society,
business and industry. We take good care of our
assets and our skilled personnel. Sustainability
guides SATO employees in everything we do.
URBANISATION TREND CONTINUES
urbanisation and growth in the popularity of rental
housing. There is a growing need for rental housing
in growth centres. In the Helsinki metropolitan
area and in Tampere and Turku, nearly half of the
permanently occupied apartments are already
made up of rental apartments. As the population
ages, internal migration leans towards services, and
fewer and fewer young people are interested in
owning their own home.
Despite the coronavirus pandemic that erupted
in 2020, there is demand for rental apartments,
and the urbanisation trend continues. During the
work especially in the exceptional arrangements
we made to try to ensure the safety and well-
being of our employees and residents.
Our sustainability work is guided by SATO’s strategy
and our sustainability programme for 2019–2022,
which emphasises carbon-neutral cities and the
well-being of residents and neighbourhoods. In our
own sustainability goals, we have committed to the
UN sustainable development goals (SDG).
CLIMATE CHANGE CALLS FOR ACTION
Mitigating emissions from the construction sector
and international climate targets, as construction
and buildings currently account for over a third of
Finland’s greenhouse gas emissions. In addition
to energy consumption during use, the sector
has started taking note of the carbon footprint of
buildings throughout their life cycle. Sustainable
have increased in importance. SATO targets carbon
neutrality in terms of in-use energy by 2030.
We develop new rental apartments primarily in
existing urban structures with excellent connections
and services. This reduces the environmental
impact of construction and living.
WE MEET STAKEHOLDER
EXPECTATIONS
by our operations, as well as parties whose
stakeholders include our customers, employees,
providers, as well as the authorities and other
operators in society.
Open interaction with stakeholders helps us identify
topics that are material to our business operations
our goals and achieve them. We communicate on
a transparent and timely manner.
WE ACTIVELY PARTICIPATE AND
INFLUENCE THE DEVELOPMENT
OF THE SECTOR
We contribute to the development of the housing
and real estate sectors through our participation
in organisations and the Helsinki Region Chamber
of Commerce. At the start of the reporting year,
we joined the Green Building Council Finland
and took part in the sector’s discussions in its
various committees. SATO is represented on
the board of directors, the housing executive
group and many committees of the Finnish
Association of Building Owners and Construction
Clients (RAKLI). We are also part of the City of
Helsinki’s Climate Partners network. We are also
on the board of Suomen Asuntoliitto ry (Finnish
Housing Association), and we are a member of
Asuntoreformiyhdistys ry (Finnish Housing Reform
Association) and the FIBS network for corporate
social responsibility. We collaborate with players
who tackle homelessness and unemployment
and who promote the integration of immigrants
through various cooperation projects, such as
the #kämppäjaduuni (i.e. #homesandjobs), ‘Iisisti
töihin’ and ‘Living skills’ projects.
OUR BUSINESS OPERATIONS
ARE BUILT ON SUSTAINABLE
OPERATING METHODS
term, based on ethically sound and sustainable
operating methods with regard to the economy,
people, society and the environment. SATO’s
Code of Conduct, values and management
culture lay the framework for the company’s
operating methods and highlight a commitment
to sustainable business operations.
SATO wants to be worthy of its residents’ trust
and to operate sustainably. We follow good
rental practices and respect the privacy of our
customers. We are particularly careful when
The popularity of
rental housing is
growing especially
in the Helsinki
metropolitan area,
and in Tampere
and Turku, where
nearly half of
the permanently
occupied housing
is already made up
of rental homes.
processing personal information and payment
data covered by privacy laws and regulations.
Only designated employees are allowed to
process customers’ personal data, and only for
predetermined purposes. During the reporting
year, SATO received no complaints regarding the
processing of customer data, and there was no
misuse of customer information.
SATOn vastuullisuusraportti 2020
6
Sustainability Report 2020
6
THE SUSTAINABLE SATO
KEY FIGURES REPORTING PRINCIPLES
SATO’S SUSTAINABILITY FOCUS
SATOs
sustainability
programme
emphasises
carbon-neutral
cities and the
well-being of
residents and
neighbourhoods.
M
O
R
E
T
H
A
N
J
U
S
T
W
A
L
L
S
L
O
N
G
-
T
E
R
M
B
U
S
I
N
E
S
S
H
U
M
A
N
T
O
H
U
M
A
N
S
U
S
T
A
I
N
A
B
L
E
U
R
B
A
N
I
S
A
T
I
O
N
Sustainability guides
our operations
• Communication and reporting of
our operations are transparent
and up-to-date.
• Zero tolerance to the grey economy.
• Responsible service and
supply chain
We respond to
climate change
• Reduce greenhouse gas
emissions caused by our
operations and aim to
have buildings operated
carbon neutral by 2030.
• Build and repair our
properties considering
environmental and
health impact through
the whole lifecycle.
• Support our residents to
make environmentally
responsible day-to-day
choices in their life.
We create well-being for our
recidents and to the society
• While living in a SATO home,
one feels safe and healthy.
• In SATO buildings residents
respect each other.
• We take action together with cities
to prevent segregation.
• We participate in variety
social projects.
We take care of our
employees
• Good employee experience
in the entire organization.
• Employees experience
SATO as inspiring and
fair working place.
• Everyone feels safe at work.
OUR VISION
In thriving cities
people enjoy a high
level of well-being
SATOn vastuullisuusraportti 2020
7
Sustainability Report 2020
7
THE SUSTAINABLE SATO
KEY FIGURES REPORTING PRINCIPLES
SUSTAINABILITY GOALS AND ACTIONS
FOR SATO, SUSTAINABILITY IS
ABOUT CONCRETE ACTIONS
In 2020, we focussed on energy savings, reduced
the emissions caused by our operations and
improved the availability of our customer service.
During the year under review, we were very
successful in our energy-saving measures and
by the end of 2020. Thanks to our energy savings,
the emissions from our operations also decreased.
In 2020, we began charting our climate- related
risks and opportunities and made a commitment
to report on them in accordance with the
recommendations of the TCFD.
Water consumption increased due to the pandemic,
and we were not able to arrange some of the
events and guidance that we had planned for our
residents. In spite of the exceptional situation, we
improved the availability of our customer service
during the reporting year and recruited new House
Experts and Service Managers.
The table below summarises SATO’s sustainability
goals and initiatives, as well as their connection to
the UN’s Sustainable Development Goals.
SUSTAINABILITY GUIDES OUR OPERATIONS
Objective 2020 Measures taken Outcome Status of objective Objective 2021 Sustainable Development Goals
Identifying climate-related risks.
managed within SATO.
More in-depth reporting
under the TCFD frame-
work.
Ensuring a responsible service
service model in periodic supplier
meetings and by deepening our
cooperation.
Because of the coronavirus pandemic, we arranged
remote supplier meetings. Because of the pandemic,
not all meetings could be arranged.
We will arrange supplier
meetings and carry out
supplier audits.
WE RESPOND TO CLIMATE CHANGE
Objective 2020 Measures taken Outcome Status of objective Objective 2021 Sustainable Development Goals
Specific energy consumption
43.5 kWh/m
3
We installed geothermal and ground-source heat
pumps, increased the number of temperature
sensors, optimised indoor temperatures and piloted
needs-based ventilation control. New and renovated
(42.0 kWh/m
3
)
To reduce energy
consumption compared
to the previous year.
SATOn vastuullisuusraportti 2020
8
Sustainability Report 2020
8
THE SUSTAINABLE SATO
KEY FIGURES REPORTING PRINCIPLES
Objective 2020 Measures taken Outcome Status of objective Objective 2021 Sustainable Development Goals
Specific water consumption 403 l/m
3
Due to the pandemic, residents spent more time at
home, which led to increased water consumption.
Due to the coronavirus restrictions, we were not able
to implement all of our water-saving measures.
(414 l/m
3
)
403 l/m
3
GHG emission intensity of buildings
26.1 kg CO
2
-e/m
2
/year
Energy saving measures and cleaner district heat
reduced our emissions. Real estate electricity
consisted of emission-free wind power during
the reporting year.
(23.2 kg CO
2
-e/
m
2
/year)
22.7 kg CO
2
-e/m
2
/year
To mainly target new investments,
from a public transport connection
and urban structure perspective, to
areas that enable a car-free lifestyle.
The locations of the new construction investments
that we have decided on and the letters of intent
that we have concluded on development sites are in
line with our objectives. The sites are located either
municipal centres.
New investments targeted,
from a public transport
connection and urban
structure perspective, to
areas that enable a car-free
lifestyle.
To enhance the sorting of waste
by residents and reduce the volume
of mixed waste by 10%.
Due to the pandemic, we were not able to organise
guidance rounds. We improved sorting with new
signs at waste-collection points and we focussed on
equipping waste bins with stickers and information for
residents. Our Housing Advisors provided individual
waste guidance.
Enhance the sorting of
waste by residents and
reduce the volume of mixed
waste by 10% compared to
the previous year.
WE TAKE CARE OF OUR EMPLOYEES
Objective 2020 Measures taken Outcome Status of objective Objective 2021 Sustainable Development Goals
The results of SATO’s personnel
satisfaction survey at the same level or
higher than 2019 in all key categories.
The overall results of our personnel satisfaction survey
were down from last year, but our internal employer
image remained strong, with supervisors in particular
receiving positive feedback. We organised exercise
breaks, virtual tip sessions for working remotely and
virtual yoga and pilates for personnel. We held more
info sessions for personnel than before. We trained
supervisors in how to hold interactive online meetings.
The results of SATO’s
personnel survey at the
same level or higher than
2020 in all key categories.
SATOn vastuullisuusraportti 2020
9
Sustainability Report 2020
9
THE SUSTAINABLE SATO
KEY FIGURES REPORTING PRINCIPLES
WE CREATE WELL-BEING FOR OUR RESIDENTS AND SOCIETY
Objective 2020 Measures taken Outcome Status of objective Objective 2021 Sustainable Development Goals
Continuously developing
neighbourly living among
residents.
Due to the pandemic, the planned events for residents
were not organised. We reinforced our Housing Advisor
team with two new housing advisors. As a new operating
model, we adopted “Meet a housing advisor” events in
the yards of selected buildings. Our housing advisors
also met with customers in one-on-one customer visits.
Continuous development
of positive and safe
neighbourly relations with
the help of our housing
advisors.
Better availability of customer
service personnel.
We extended the opening hours of our customer ser-
vice in March 2020, so that customers could more easi-
ly reach us. We expanded the House Experts operating
model within the capital area and recruited nine new
House Experts during the year under review. Changes
were made within the service manager organisation,
and 12 new Service Managers were hired.
Making better use of digital
services in customer service
situations and increasing
the presence of customer
service personnel in SATO’s
buildings.
Utilising the data produced
by the housing health operating
and made use of the data obtained from the studies
in long-term planning (LTP). Our housing advisory
services were an important part of safe and healthy
housing. We trained personnel in identifying
housing health matters.
Making proactive use of
continuous condition meas-
urement within the housing
health operating model.
SATOn vastuullisuusraportti 2020
10
Sustainability Report 2020
10
THE SUSTAINABLE SATO
KEY FIGURES REPORTING PRINCIPLES
GREEN FINANCE FRAMEWORK AND THE FIRST GREEN BOND
/ CASE
FOUR STARS IN GRESB
We participated in the Global Real Estate
Sustainability Benchmark (GRESB) for the sixth
GRESB assessment, SATO’s strengths were, in
addition to sustainability management, resident
satisfaction and community, stakeholder
comprehensive monitoring, as well as transparent
operating principles and reporting. Read more.
operations for the long term. As a responsible,
operates sustainably and transparently. We take
care of the value of our homes, and we pay
taxes to Finland. We also expect our partners
to operate responsibly.
LONG-TERM AND TRANSPARENT
BUSINESS OPERATIONS
2020, we continued to strengthen our balance
sheet, and the Group’s equity ratio was 42.2
per cent, i.e. above our minimum strategic
target of 40 per cent. In line with the targets,
the interest coverage ratio must be at least 1.8x
and unencumbered assets at least 60 per cent.
Our long-term target is to have a loan-to-value
ratio of no more than 50 per cent.
TRANSPARENT COMMUNICATIONS
AND REPORTING
SATO’s sustainability management and key
guidelines and policies are described in the
Annual Report’s Governance section. We
communicate and report on our operations
transparently in accordance with international
accounting standards and the Finnish Corporate
Governance Code, and we prepare our
sustainability reports in accordance with the GRI
framework. During the year under review, we
charted climate-related risks in accordance with
In spring 2020, we launched the
Green Finance Framework, which
integrates SATO’s sustainability
arrangements. The framework is
based on the company’s strategy
and the sustainability programme
that was launched in 2019.
SUSTAINABILITY GUIDES
OUR OPERATIONS
In September 2020, SATO issued
a EUR 350 million unsecured
green bond with a maturity of
bond, and we are using the cash
Green Finance Framework.
Read more
WE TAKE RESPONSIBILITY FOR
OUR FINANCIAL IMPACT ON OUR
STAKEHOLDERS AND SOCIETY
stakeholders, including shareholders, employees,
customers, municipalities, the state, and goods
suppliers and service providers and their
employees. We support growth opportunities
apartments in Finland’s largest growth centres.
During the reporting year, SATO invested
approximately EUR 120.6 million in rental
apartments. Our housing stock is focussed on
areas and types of apartments that will grow in
demand and in value. During the year under
review, we repaired our homes and properties in
SATOn vastuullisuusraportti 2020
11
Sustainability Report 2020
11
THE SUSTAINABLE SATO
KEY FIGURES REPORTING PRINCIPLES
accordance with the life-cycle principle in order
to maintain or increase their value in use and
to EUR 73.7 million.
WE PAY TAXES TO FINLAND
SATO’s net sales in 2020 amounted to EUR 303.4
million. The total amount of taxes paid and tax-
added value that we generate for society,
the tax footprint of the company’s operations,
consists of direct and indirect taxes. SATO
20 per cent in 2020.
In addition to Finland, we pay income and
real estate taxes to Russia on our business in
pension expenses also include the personnel
NO TO THE GREY ECONOMY
Our operations comply with the Finnish Corporate
Governance Code and SATO’s internal guidelines,
principles and policies, which include guidelines
for combating the grey economy. SATO’s Code of
Conduct and the related whistleblowing channel
for our stakeholders and employees support long-
sound and sustainable operating methods with
regard to the economy, people, society and the
environment.
To combat the grey economy, we only work
Reliable Partner service. In line with the Finnish
Occupational Safety and Health Act, everyone
working at SATO’s construction sites must have a
photo ID with a tax number.
GLOBAL INVESTOR DIALOGUE
In 2020, we participated in several investor
meetings, which attracted both Finnish and
international (mainly European) investors
interested in our business. The meetings were
mainly held remotely.
SUSTAINABLE PROCUREMENT AND
SUPPLY CHAINS
We select suppliers that create value and good
experiences for our customers. We require
sustainable operating methods in terms of
work environments, occupational safety and
environmental responsibility. When selecting
new partners, we carry out a supplier assessment,
references, resources and equipment. It is
important to us that our partners are willing to
develop their operations.
When selecting suppliers through competitive
our goals and the product or service in question.
We also analyse the level of supervision, reporting
and delivery of potential suppliers.
We collaborate
with cities when
areas being
developed and
new housing is
planned for them.
During the review period, we continued to audit
our contractual suppliers to comprehensively
evaluate their processes and the current state
of their operations. Based on these audits, we
prepare scorecards for suppliers, including a
description of the current state of their operations
and suggestions for improvements.
We value responsible partners that support us
in our strategy of providing a diverse range of
services, high-quality urban living and smoothly
running maintenance. Good partners have clear
goals and are keen to develop with us – together
we can serve our customers even better.
SATOn vastuullisuusraportti 2020
12
Sustainability Report 2020
12
THE SUSTAINABLE SATO
KEY FIGURES REPORTING PRINCIPLES
SATO'S STAKEHOLDER GROUPS
Stakeholder group Stakeholders' expectations of SATO Channels of interaction SATO's actions in 2020
Customers
SATOhome residents approx. 50,000 • Healthy and safe homes
• A reliable housing provider
• Smooth customer service
• Open communication
• Customer service and communication in
various channels: phone service, chat, social
noticeboards
• Customer surveys and feedback,
Pulssi resident panel
•
maintenance visits, resident meetings,
resident forum, customer workshops,
customer events
• Development of customer service and communication
• Maintenance of the properties and apartments
• Concept and service development
• Development of digital services
• Development of operations and services together with
customers
• Customer surveys and measuring the customer experience
• Promoting neighbourly living
Personnel
242 employees • An open and inspiring workplace
• Good management and
supervisory work
• Challenging tasks and developing personal
competence
• Safe and enjoyable work conditions
• Regular employee events and
open internal communication
• Personnel work satisfaction surveys
• Interaction with supervisors and
personal performance reviews
• The Tarmo management/personnel group
• Exercise and recreational activities
• Operations of the OHS committee and
OHS representatives
• Looking after well-being at work: comprehensive occupa-
tional
healthcare and close cooperation with the occupational
healthcare service
• Increase in internal job rotation
• Comprehensive inductions
• Use of Microsoft Teams
• Support for LiiVi, SATO’s committee for recreation and
sports
• Ensuring occupational safety during the coronavirus pan-
demic
Partners and service providers
Approx. 1,400 service and material
providers
• Long-term partnerships
• Compliance with agreements
• Openness and equality
• Competitive bidding
• Supplier audits
• Negotiations
• Agreements and guidelines
• Partner cooperation steering groups
• Joint real estate industry development projects
• Long-term partnerships and service agreements
• Concentrating purchases
• Sustainable purchasing guidelines and criteria
• Audits and quality control
• Combating the grey economy
SATOn vastuullisuusraportti 2020
13
Sustainability Report 2020
13
THE SUSTAINABLE SATO
KEY FIGURES REPORTING PRINCIPLES
Stakeholder group Stakeholders' expectations of SATO Channels of interaction SATO's actions in 2020
Owners and nanciers
• Sustainable investment object
•
• Transparent practices
• Open communication
• Good management
• Shareholder meetings
•
• Annual general meeting
• Board meetings
• Financial reviews and releases
• GRI reporting
• Strategy work
• Board work
• Stakeholder events
• Transparent and comprehensive business reporting
• Sustainability programme for 2019–2022
• GRESB sustainability benchmark
• Good and transparent governance and communications
•
Society
Authorities, organisations, media, land
owners and neighbours
• Legal and responsible operations and
combating the grey economy
• Development of rental housing
• Employment
• Tax revenues
• Responding to climate change
• Prevention of housing segregation
• Reliable and timely communication
• Cooperation with authorities, partners
and residents
• Activities in industry associations
• Open and reliable communication in
various channels
• Providing and developing high-quality housing and asso-
ciated services
• Participating in urban development
• Opinion on the amendment of the Finnish Land Use and
Building Act
• Actively interacting with various stakeholders and a stake-
holder event
• Developing our industry in cooperation with industry as-
sociations
• Personnel’s participation in public projects
•
measures
•
of Helsinki
• Sustainability programme for 2019–2022 and GRESB sus-
tainability benchmark
• The “Home and Job” (#kämppäjaduuni) project (in collab-
oration with
No Fixed Abode and the Rehabilitation Foundation)
SATOn vastuullisuusraportti 2020
14
Sustainability Report 2020
14
THE SUSTAINABLE SATO
KEY FIGURES REPORTING PRINCIPLES
AI HELPS MONITORING
We monitor and regulate the heating of 20,000
SATOhomes through various IoT services. During
the reporting year, 3,000 measurement sensors
were installed. Our buildings’ heating systems are
can keep track of the temperature of their home
via the OmaSATO online service. These systems
provide us with more than two billion instances
of measurement data annually, which allows us to
successfully foresee problems and make repairs
on a needs basis, thereby further contributing to
the sustainability of our business. Temperature
sensors reduce energy consumption by roughly
7% and the need for peak power by some 20%.
We are looking into adjusting ventilation based
on needs through various pilot projects. Smart
ventilation has been used to eliminate draughts
and excessive underpressure. This has helped us
In our renovations, we have added heat recovery
to ventilation systems.
In every new building and renovation site, we
look into the possibility of geothermal heating.
Our objective in 2021 is to switch to either
geothermal heating or ground source heat pumps
in our buildings that use fossil heating. The use of
the in-use emissions of homes.
MORE ENERGY-EFFICIENT LIVING
We currently have four buildings that are carbon
neutral in terms of energy consumption. We have
from energy consumption during living, the
construction of apartments and building materials.
Responding to climate change and enabling
sustainable lifestyles are important parts of our
residents guidance, sustainable construction and
life-cycle management of homes and properties.
ENERGY EFFICIENCY THROUGH
INVESTMENTS AND PROACTIVE
MEASURES
Agreement targets for the property sector,
aiming for a reduction in the total consumption of
electricity and heat of 10.5 per cent between 2015
of the most important means of mitigating climate
change and reducing greenhouse gas emissions.
part of Finland’s energy and climate strategy.
SATO’s buildings decreased by 3.8 per cent,
decreased by 12.1 per cent in comparison with
2019. The rated consumption of electricity
increased by 8.2 per cent. Water-saving measures
were postponed during the year under review
due to the coronavirus pandemic. During
the pandemic, water consumption in homes
increased, as our residents spent more time
at home.
CIRCULAR ECONOMY EVENT WAS A SUCCESS
/ CASE
During the reporting year, we
participated in a circular economy
training project implemented by the
Green Building Council Finland and
Sitra. The pilot project improved
the utilisation rate of demolition
waste through a feasibility study
and sought concrete operating
methods that could be used in
demolition, for instance optimising
demolition waste logistics. As part
of the project, we also piloted
the sale of the demolition site’s
furniture to consumer customers
directly from the demolition site
in a pop-up circular economy
event that was arranged jointly
with the Helsinki Reuse Centre.
time, proved to be a success and
received positive feedback from
visitors. Read more
WE RESPOND TO CLIMATE CHANGE
SATOn vastuullisuusraportti 2020
15
Sustainability Report 2020
15
THE SUSTAINABLE SATO
KEY FIGURES REPORTING PRINCIPLES
Työnumero 24
500
400
300
200
100
0
Specic water consumption, dm
3
/rm
3
/a
* SATO’s target
414
403
397
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021*
2022*
Specic energy consumption, kWh/m
3
/year
60
50
40
30
20
10
0
Figures are adjusted for weather
* SATO’s target
42.0
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
rating for our residential buildings, taking into
each building. Using this rating, we are able
for action planning. We reported on energy
consumption monthly to SATO’s Corporate
Management Group. In 2020, building electricity
did not produce any emissions because it was
produced 100% by wind power.
below 81 for new buildings. We aim for at least
30% energy savings in all our renovations.
We measure energy and water consumption, as
well as waste volumes, for all our construction
sites for new and renovated buildings. During
the year under review, there were 23 active
construction sites. We also measure the waste
of demolition projects. There was 1 demolition
project during the reporting year.
NEW HOMES IN EXISTING
URBAN ENVIRONMENTS
Complementary planning, where new buildings
are built alongside or in place of existing buildings,
supports not only the creation of denser urban
structures in line with the objectives of master
apartments in areas where homes are in demand.
Complementary construction gives SATO good
prerequisites for reducing emissions and targeting
-
cient and respond to the demand for housing.
Our planning development projects are situated
in excellent locations in terms of services and
public transport, for instance, along the routes of
the West Metro and the Raide-Jokeri tramline.
parking solutions combined with cycling and
We invest in supplementing and developing
the urban structure, for example, by acquiring
plots, developing city plans, investing in public
utility services and remediating soil. In 2020,
our investments in infrastructure totalled EUR 5.7
(40.4) million.
A precondition for the creation of balanced
and socially sustainable residential areas is
the construction of homes with various
management forms.
During the reporting year, plots in complementary
planning areas developed by SATO were sold
to construction companies and other partners,
enabling the construction of approximately 65
owner-occupied apartments and roughly 40 state-
subsidised rental apartments, thus promoting
a diverse residential area and urban structure.
For example, in Sarvvik, Kirkkonummi, a total of
13 plots for detached houses were sold to private
households.
A LIFE-CYCLE APPROACH AND
SUSTAINABLE MATERIALS
We reduce SATO’s load on the environment
by regularly maintaining and repairing homes
and properties according to the life-cycle
principle. When we select building materials for
indoor spaces, our intention is to minimise their
lower specic energy
consumption
3.8%
less specic
greenhouse gas
emmission
12.1%
energy saving target in
major renovations.
30%
SATOn vastuullisuusraportti 2020
16
Sustainability Report 2020
16
THE SUSTAINABLE SATO
KEY FIGURES REPORTING PRINCIPLES
Specic
consumption Target
Reference
year
Emissions -18.5% 2018
Water -6% 2018
Electricity -9% 2015
Greenhouse gas emission intensity of buildings,
kg CO
2
-e/m
2
/year
* SATO’s target
22.7
23.2
22.2
40
30
20
10
0
2015 2016 2017 2018 2019 2020 2021* 2022*
environmental impacts and promote circular
economy. At the same time, we lower the life-
cycle and maintenance costs of our residential
buildings and properties by investing in quality
products and materials. Properly installed, long-
lasting materials save natural resources, and in
most cases, they can be recycled or disposed of
after use.
in dry spaces we switched to Finnish furniture
that takes the product’s life cycle and the low
account. In our product development, we also
designed a new set of Finnish furniture for SATO’s
club rooms.
WE ENCOURAGED OUR RESIDENTS
TO ADOPT MORE SUSTAINABLE
DAILY HABITS
We encouraged and guided our residents to
actively recycle their waste, as their actions
In 2020, plastic recycling was possible in all
SATOhomes in Turku and the Helsinki area. We
also helped our residents declutter and recycle
by bringing recycling skips and cages to the yards
of our buildings. Some 12,100 kilos of electronics,
bicycles, furniture, clothes and other items were
collected in 25 recycling skips and cages.
Our housing advice service was reinforced
during the reporting year with two new housing
advisors. Housing advisors, together with our
Service Managers and customer service, help our
customers navigate various day-to-day challenges.
During the reporting year, our housing advisors
provided our residents with personal guidance in
daily housing matters mainly remotely due to
the pandemic.
We took part in Motiva’s energy-saving week
by giving our residents tips on how to conserve
energy.
SATO REPORTED on climate-related risks and opportunities in accordance with the
recommendations of the Task Force on Climate-Related Financial Disclosures (TCFD) for
Governance
Housing advisors
help and guide
our residents in
their day-to-day
challenges.
SATOn vastuullisuusraportti 2020
17
Sustainability Report 2020
17
THE SUSTAINABLE SATO
KEY FIGURES REPORTING PRINCIPLES
quickly made exceptional arrangements whereby
employees whose workload had decreased due
to the pandemic were temporarily transferred
to help out other teams that were in need of
additional resources.
During the reporting year, we focused on improv-
ing customer satisfaction by taking further meas-
ures to strengthen our Customer First programme.
Twelve new employees started working in our
Housing business in a new kind of Service Man-
ager role. We furthermore expanded our House
Experts model in the Helsinki area and recruited
nine new SATO House Experts. We aim to provide
even better services to our tenants and be closer
to their everyday lives. Digital development has
been one of our priorities for several years now,
and we will continue to invest in it in the coming
years. In autumn 2020, we recruited four new
SATO employees for our Digital & IT team.
During the reporting year, SATO recruited 57 new
employees, 38 of whom on a permanent basis.
A total of 22 SATO employees were assigned to
a new task within the company during the year.
SATO EMPLOYEE AND
SATO TEAM OF THE YEAR
HR specialist Sarianna Saksa was voted SATO
Employee of the Year by the employees. The
customer service Contact Center was voted the
SATO Team of the Year, and the work input of
all SATO employees during a challenging year
was chosen as the deed of the year. As a reward
SATO employees carry out their work with
Openness, teamwork and the joy of succeeding
together carry us to our shared goals. Genuine
interaction, human to human, is at the heart of our
work culture. For us that means caring, bearing
responsibility, listening and putting ourselves
in someone else’s shoes. We want to help our
EMPLOYEES RECOMMEND SATO
AS A WORKPLACE
In a personnel survey carried out by Accountor
HR4 Oy, employees described SATO as a reliable,
stable and progressive employer. According to
the survey, our internal employer image is strong.
The majority of SATO employees would either
very highly recommend or highly recommend
the company to others 4.17/5. Overall, the ratings
in the survey declined slightly compared to the
previous year. The average rating given to SATO as
an employer was 3.93/5 (4.24/5). The work of
supervisors was considered a strength, and
received a rating of 3.96/5 (4.03/5). Areas in need
of improvement cited by SATO employees were
making use of best practices in their own work and
open communication in management. 93% per
cent of SATO employees took part in the survey.
WE RECRUITED NEW EMPLOYEES
IN SPITE OF THE EXCEPTIONAL
SITUATION
We made it through the highly exceptional year
of 2020 and recruited additional personnel during
personnel due to the pandemic. In spring, we
A SENSE OF SATISFACTION FROM HELPING RESIDENTS
/ CASE
In 2020, we continued to move
forward with the Customer First
operating model in our Housing
business, and we made changes in
our organisation to better respond
to customers’ needs. It is important
for SATO employees to be available
and part of our residents’ day-to-day
lives. For that reason, SATO recruited
Service Managers for a new kind
of role that combines the tasks
of Service Managers, apartment
inspectors and infrastructure
managers. Twelve new Service
Managers started working at SATO
in autumn 2020. Service Managers
ensure that SATO’s residents are
happy and that the rental homes
remain in good condition.
Maija Saarni is one of the new
Service Managers, and she loves
helping out residents.
Read about Maija’s workday
WE TAKE CARE OF OUR EMPLOYEES
SATOn vastuullisuusraportti 2020
18
Sustainability Report 2020
18
THE SUSTAINABLE SATO
KEY FIGURES REPORTING PRINCIPLES
THE EXCEPTIONAL PERIOD
SHOWED IN OUR WORK
During the year under review, the pandemic
arrangements we made to try to ensure the safety
and well-being of both our employees and our
residents. As a result, we postponed non-urgent
maintenance and repair work during the year
and only visited buildings when it was absolutely
necessary.
In spring, we organised several tip sessions and
where our team members caught up with one
another and shared useful tips for working
remotely. We permanently adopted exercise
breaks led by a SATO employee in our weekly
opportunity to take part in virtual yoga classes
in the spring.
We organised weekly virtual info sessions for
personnel in the spring to catch up on the latest
news. We continued this practice in the autumn
with monthly info sessions.
WE TRAIN, WE LISTEN,
WE INVIGORATE
During the year under review, we introduced
a new online learning environment that allows
us to interactively induct and train our employees.
We are building the course package for the
online learning environment ourselves. Due to the
teleworking recommendation, we also arranged
remote inductions more than before.
SATO employees participated in 3.9 training
days (men 4.6/women 3.3) in 2020. Around 0.9
working days per employee were spent in training
provided by a third party. The number of training
days for supervisors was 4.7 days per person and
for employees 2.8 days per person. The number
of training days decreased year on year due to
the exceptional situation caused by the pandemic.
The Tarmo group, consisting of members of man-
agement and personnel, convened nine times dur-
ing the reporting year. The group focuses on well-
being-at-work themes raised by personnel. During
the year under review, special consideration was
given to how to maintain employees’ well-being at
work during the exceptional circumstances. SATO’s
committee for recreation and sports activities,
called LiiVi, arranges activities that maintain and
improve employees’ work ability. LiiVi arranged the
opportunity to participate in virtual Pilates classes
and various virtual exercise breaks.
Personnel tuned in for some May Day vibes in a
joint virtual May Day celebration that included
games and performances. In October, we
celebrated SATO’s 80th anniversary together with
personnel also in the virtual world. Besides music
and impersonations, the event featured anecdotes
from SATO employees over the years.
OCCUPATIONAL SAFETY PLAYS AN
IMPORTANT ROLE
Occupational safety played an especially
important role during the reporting year, on
account of the coronavirus pandemic. We made
sure to keep our communications up to date,
and we guided our employees in working safely
customers.
to focus on occupational safety, and we will
continue working on this going forward. During
the reporting year, we arranged Occupational
Safety Card training for Service Managers, House
Experts and Project Managers. In autumn, we
arranged “speech-judo training”, the aim of which
is to develop the participants’ skills in managing
customer service and communication situations and
situations involving a threat, as well as to increase
well-being and the ability to cope at work.
SAFE CONSTRUCTION SITES
Every year, we spend approximately EUR 120.6
million on the construction and repair of our
buildings. The occupational health and safety
of the people working on our construction sites
and the construction of healthy and high-quality
homes are extremely important to us. Although
occupational safety on the work sites of buildings
and renovation sites commissioned by SATO
is primarily the contractors’ responsibility,
we nevertheless develop it together with the
contractors. We monitor compliance with
occupational safety practices and we keep track
of the accident frequency rate. We aim for zero
accidents. In 2020, a total of 5 (18) accidents were
recorded on 23 (20) SATO sites, and the rolling
accident frequency rate was 10 (25.5). Working
hours on our construction sites amounted to
roughly 501,178.
We regularly report and analyse any accidents
that occur on our construction sites. We monitor
the quality of apartment repairs carried out by
our contractors by performing spot checks. We
prepare six-month summary reports on the spot
checks, and their results have an impact on the
fees paid to contractors.
number of training days
per SATO employee,
average
(men 4.6/women 3.3)
3.9
new SATO employees
57
SATO employees
assigned to a new task
within the company
22
SATOn vastuullisuusraportti 2020
19
Sustainability Report 2020
19
THE SUSTAINABLE SATO
KEY FIGURES REPORTING PRINCIPLES
a positive impact on SATO residents’ service expe-
rience. During the year, we kept our residents in-
formed of the latest housing news with a newsletter
that was delivered to 11 recipients either by post or
electronically. In addition, we sent eight customer
bulleting related to the coronavirus pandemic
during the year and held discussions with our cus-
tomers in SATO’s social media channels. During the
exceptional period of 2020, we asked our residents
how they were enjoying their home through our
Pulssi resident panel.
We actively communicated the coronavirus pan-
demic recommendations and procedures to our
residents. In spring, at the start of the exceptional
period, we encouraged our residents to help their
neighbours in need through the “Help your neigh-
bour” campaign.
OUR CUSTOMER SERVICE IS
HERE TO HELP
We serve our customers via several channels: by
phone, in the website’s chat service, in OmaSATO,
by email and in social media. During the year
under review, our customer service experts
responded to 215,487 queries. The average
telephone wait time was two minutes and in chat,
46 seconds. Our customer service received an
NPS score of 53.4.
As one of Finland’s leading housing providers,
well-being of thousands of people. Dense urban
structures create more diverse and multicultural
neighbourhoods. We participate in home- and
housing-related projects, and we aim to prevent
the segregation of areas and to support good
neighbourly relations.
A BETTER CUSTOMER
EXPERIENCE
We aim to be closely present in our customers’
daily lives in order to serve them better. We
measure our successes in customer encounters
using the Net Promoter Score (NPS). In line with
our Customer First development programme,
during the year under review we focussed
particularly on adapting our organisation and our
service processes to respond to our customers’
needs even better. In 2020, we expanded
our House Experts model within the Helsinki
metropolitan area, and 12 new employees
started working in our Housing business in a
new kind of Service Manager role. We did not,
however, manage to improve the net promoter
score (NPS) given to us by our customers during
the reporting year. Our customer satisfaction
weakened because some of the planned repair
projects had to be postponed due to the
coronavirus pandemic and our opportunities to
serve our customers were more limited during
the pandemic.
FOR DECADES TO COME
/ CASE
In October, our employees planted
80 spruces in the yards of our
buildings in honour of SATO’s 80th
anniversary. The trees enhance
the yards of the buildings and can
be lit up during the dark days of
winter. The planting of these 80
trees is one of SATO’s sustainability
programme initiatives, as the
trees will bind carbon from the
atmosphere.
“We wanted to celebrate our
80-year history with
a sustainable solution that will bring
joy for decades to come,” says
SATO’s Corporate Responsibility
Advisor Tiina Lehti.
Read more
WE CREATE WELL-BEING FOR
OUR RESIDENTS AND SOCIETY
SATOn vastuullisuusraportti 2020
20
Sustainability Report 2020
20
THE SUSTAINABLE SATO
KEY FIGURES REPORTING PRINCIPLES
Multiculturalism is an established part of our cus-
tomer service. We are able to serve our customers
in roughly 20 languages thanks to the Túlka trans-
lation service that we introduced in 2018.
In spring, when the exceptional period began,
the number of contacts made by customers
concerning rental payments increased
managed to have our customer service personnel
switch to working remotely on short notice, and
our specialists were able to serve customers from
During the reporting year, we also extended our
customer service working hours, and particularly
focused on our chat service.
WE PROMOTE NEIGHBOURLY LIVING
Our neighbour mentor pilot programme wrapped
up in spring of the reporting year. After the pilot,
based on a survey of the neighbour mentors,
we decided to include the neighbour mentor
programme as part of our regular community-
oriented work. In October, the neighbour mentor
programme became part of the housing advice
service, and the recruitment of new mentors began.
Also in October, we launched ‘Get to know
our housing advisors’ events in the yards of
SATOhomes. More than 20 such events were
arranged, and they were attended by more
than 100 residents.
SATO’s Resident of the Year for 2020 is Maila
Saarikangas of Kontula, Helsinki. Maila has lived
in SATO’s buildings in Kontula since 1971. Maila
fosters conviviality in her building, and helps
and guides her neighbours. She has actively
maintained the building committee’s activities and
looked after the yard of the building.
MORE OPTIONS IN HOUSING
We are creating new housing concepts for
residents in an increasingly urbanised Finland.
neighbourhood of Helsinki in 2020. As the name
implies, FlexHome is a concept developed to help
requires a small initial capital outlay, after which the
tenant pays rent that is below the market level for
the home, thus allowing the tenant to simultaneously
year rental period, the tenant has the option of
purchasing the home in full. Alternatively, the tenant
can sell the apartment back to SATO but continue to
live in the home and pay rent.
In 2019, SATO agreed on a policy according
to which studio apartments will no longer be
bordered with load-bearing walls in new rental
housing production. This was realised during the
year under review, making it possible to modify
connection with larger renovations.
In 2018, we launched StudioHome, a compact and
reasonably priced form of social urban housing.
WE DEVELOP CITIES FOR
DECADES AHEAD
We take care of our buildings and prudently grow
our housing stock. We acquire existing rental
apartments and buildings, build new homes and
take part in developing entire residential areas.
We collaborate with cities when areas are being
developed and new housing is planned for them.
The parties involved share common interests:
as a long-term housing provider, SATO wants to
build nice homes and pleasant urban areas for
decades to come. During the year under review,
we concentrated on planning and building new
homes and on renovating existing buildings.
WE INVEST RESPONSIBLY
SATO acquires and builds rental apartments.
We focus our housing stock on Finland’s largest
cities, near good services and transport routes.
We prepare an investment sustainability
evaluation before trading. The evaluation
environmental impact of the investment, transport
connections and the execution of the procurement
process in accordance with good corporate
governance, among other aspects.
During the year under review, SATO invested
EUR 120.6 million in its housing portfolio. We
completed 868 new apartments.
DURING OUR JUBILEE YEAR
WE DONATED TO CHILDREN AND
OUR RESIDENTS
In the year under review, we donated more
than 100,000 euros to charity. In spring, we gave out
food gift cards to our residents who were struggling
due to the coronavirus situation. In honour of our
80th anniversary, in autumn we donated to SOS
Children’s Villages to give as many young people
as possible the opportunity to create a better future
for themselves and for all of us. In December, we
made a Christmas donation to No Fixed Abode, an
advocacy organisation for the homeless.
SATO’s 80-year
history dates back
to the period of
post-war recon-
struction: Half
a million more
homes were need-
ed in Finland.
SATOn vastuullisuusraportti 2020
21
Sustainability Report 2020
21
THE SUSTAINABLE SATO
KEY FIGURES REPORTING PRINCIPLES
MANAGEMENT APPROACH
Sustainable operations – Transparent operating practices, a sustainable procurement and service chain, and combating the grey economy
Approach
We require our service providers to be registered with Suomen Tilaajavastuu’s Reliable Partner service. We report on our tax policies and our tax foot-print, and we pay
taxes to Finland.
Main topics and key indicators
to be reported
• Ethics and integrity (GRI 102-16, 102-17)
• Economic performance (GRI 201-1, 201-4)
• Procurement practices (GRI 204-1)
• Indirect economic impacts (GRI 203-1, 203-2)
• Anti-corruption and anti-bribery (GRI 205-3)
• Labour/management relations (GRI 402-1)
• Customer privacy (GRI 418-1)
• Environmental compliance (GRI 307-1)
• Supplier environmental assessment (GRI 308-1)
• Socioeconomic compliance (GRI 419-1)
• Land degradation, contamination and remediation (CRE5)
Objectives
• Transparent and up-to-date communications and reporting
• Combating the grey economy
• Responsible service and procurement chain
Operating principles,
guidelines and policies
SATO complies with the Finnish Corporate Governance Code and with SATO’s internal guidelines, principles and policies. The most important of these are the
sustainability programme, the Code of Conduct, guidelines on personal data processing, guidelines on data privacy, guidelines on combating the grey economy, and
The procurement principles are written in the Code of Conduct, procurement policy and guidelines for combating the grey economy.
The guidelines for preventing money laundering, related party guidelines, stakeholder policy, and cooperation agreements supplement the principles.
Evaluation of the management
approach
The management approach is evaluated continuously as part of operations and the partnership management system. Changes that take place in the operating
environment and within SATO are responded to by adjusting the operating principles, monitoring systems and resources. On a Group level, changes in situations and
Boundaries
SATOn vastuullisuusraportti 2020
22
Sustainability Report 2020
22
THE SUSTAINABLE SATO
KEY FIGURES REPORTING PRINCIPLES
Customers and society with a high level of well-being – we take care of housing health and promote neighbourly living
Approach
importance on responding quickly and on communicating with our customers, and we develop our internal analyses and reporting. We promote interaction
Main topics and key indicators to be reported
• Approach to stakeholder engagement (GRI 102-43, 102-44)
• Indirect economic impacts (GRI 203-1, 203-2)
• Customer health and safety (GRI 416-1, 416-2)
• Customer service and satisfaction
Objectives
• People feel safe and enjoy healthy living in a SATO home
• In SATO’s buildings, neighbours respect one another
• Cooperation with cities to prevent the segregation of areas
• We participate in public projects
Operating principles, guidelines and policies
Housing health operating model, customer promises, service principles, partnership policy and principles, good rental practices
Evaluation of the management approach
The management approach is evaluated continuously as part of operations. Changes that take place in the operating environment and within SATO are
responded to by adjusting the operating principles, monitoring systems and resources.
Boundaries
SATO Group customers
SATOn vastuullisuusraportti 2020
23
Sustainability Report 2020
23
THE SUSTAINABLE SATO
KEY FIGURES REPORTING PRINCIPLES
Taking care of personnel – a fair and inspiring workplace, evolving competence and occupational safety
Approach
SATO’s organisation is developed in a way that ensures that our personnel’s competence corresponds to business needs, now and going forward. We focus
on personnel’s overall well-being through good supervisory work and an inspiring work atmosphere. Personnel’s ability to cope at work and occupational
leisure time. All of SATO’s employees in Finland are covered by occupational health care. We are committed to a high level of occupational safety in our op-
erations and in our subcontracting chain, and we monitor occupational safety practices and related indicators. Every new SATO employee receives
occupational safety induction. Everyone also receives occupational safety training if their work task requires it.
Main topics and key indicators to be reported
• Employment (GRI 401-1)
• Labour/management relations (GRI 402-1)
• Occupational health and safety (GRI 403-1, 403-2, 403-3, 403-4, 403-5, 403-6, 403-7, 403-9, CRE-6)
• Training and education (GRI 404-1, 404-3)
• Diversity and equal opportunity (GRI 405-1, 405-2)
• Indirect economic impacts (GRI 203-2)
Objectives
• A positive employee experience throughout the organisation
• SATO is seen as an inspiring and responsible workplace
• Every SATO employee feels safe at work
Operating principles, guidelines and policies
HR management is based on the company’s values and sustainable operating principles. The objective of HR management is to ensure SATO’s ability to
equal and non-discriminatory operations are expressed in SATO’s Code of Conduct, HR management principles and gender equality plan.
-
tee draws up an action plan once a year. The occupational health care provider has an action plan for 2020–2022 that is monitored and developed in regu-
lar meetings between SATO and the occupational health care provider.
Evaluation of the management approach
The management approach is evaluated continuously as part of operations. Changes that take place in the operating environment and within SATO are
responded to by adjusting the operating principles, monitoring systems and resources.
Boundaries
SATO Group personnel
SATOn vastuullisuusraportti 2020
24
Sustainability Report 2020
24
THE SUSTAINABLE SATO
KEY FIGURES REPORTING PRINCIPLES
Responding to climate change – Energy-ecient buildings and targeting carbon-neutrality, a sustainable life cycle for properties and environmental responsibility in day-to-day living
Approach
We work with our stakeholders to reduce the environmental load from living and to mitigate climate change. The biggest impact of SATO’s environmen-
monthly, making water-saving investments, performing repairs quickly, communicating on the importance of saving water to our residents and invoicing
residents for water consumption based on the number of people living in the home. SATO guides residents and increases recycling opportunities in order to
reduce the volume of waste. In land acquisition and planning, we evaluate possible soil impurities, on the basis of which we implement remediation meas-
ures. When making new investments, we strive to situate the sites we build near good transport connections and public transport routes, and we encourage
our residents to use public transport.
Main topics and key indicators to be reported
• Energy (GRI 302-1, 302-4, CRE1, CRE8)
•
• Emissions (GRI 305-1, 305-2, 305-3, 305-5, CRE3)
•
• Land degradation, contamination and remediation (CRE5)
• Indirect economic impacts (GRI 203-1)
• Location of investments
• Maintenance and repair operations
Objectives
• Reduction in greenhouse gas emissions from operations and sights set on carbon neutrality by 2030 in terms of carbon dioxide emissions related to
the energy consumption of properties
•
• Supporting our residents in making sustainable choices in day-to-day living in terms of the environment
Operating principles, guidelines and policies
SATO’s investment criteria and planning guidelines determine the location of acquired plots, complementary construction projects and new investments.
SATO’s partnership policy and principles and sustainability programme guide the servicing and maintenance of properties. Maintenance partners monitor
water consumption monthly and contractors are obligated to use water-saving products in renovations.
Evaluation of the management approach
The management approach is evaluated continuously as part of operations and the partnership management system. Energy reports are drawn up regularly
on properties. Changes that take place in the operating environment and within SATO are responded to by adjusting the operating principles, monitoring
systems and resources.
Boundaries
SATOn vastuullisuusraportti 2020
25
Sustainability Report 2020
25
THE SUSTAINABLE SATO
KEY FIGURES
REPORTING PRINCIPLES
Total €81.4 mill.
Taxes paid
to Finland
€79.1 mill.
Indirect
Energy and insurance tax €0.8 mill.
VAT included in investments that is not deducted, €23.9 mill.
VAT included in purchases that is not deducted, €15.6 mill.
Direct
Income tax €23.4 mill.
Employer contributions €2.4 mill.
Transfer tax on investments €1.1 mill.
Property tax €9.3 mill.
• Net sales 303.4
CUSTOMERS
• Withdrawal of loans 539 • Equity issued 0
FINANCIERS, INVESTORS
• Divestments of housing property 5.7 • Other operating income 1.7
OTHER MARKET PARTICIPANTS
• Purchases 95.2
• Investments 134
SUPPLIERS
• Direct taxes 36.2
• Indirect taxes 40.3
• Land rents and land use fees 7.5
PUBLIC SECTOR
• 47.1
• Repayments 254.5
• Dividend 0
FINANCIERS, INVESTORS
• 15.3
PERSONNEL
Tax withheld on salaries €4.2 mill.
Net VAT on sales €0.7 mill.
Total
€40.3
mill.
Total
€36.2
mill.
Total
€4.9
mill.
FINANCES
KEY FIGURES
SATOn vastuullisuusraportti 2020
26
Sustainability Report 2020
26
THE SUSTAINABLE SATO
KEY FIGURES
REPORTING PRINCIPLES
ENVIRONMENT
ENERGY
Energy consumption within the organisation 2015 2016 2017 2018 2019 2020
Changes,
2019–2020
Changes, %
2019–2020
Total, MWh 238,263 283,484 264,874 263,465 256,624 236,480 -20,144 -7.8 %
Share of purchased energy:
Electricity, MWh 23,689 24,531 23,624 24,285 24,243 27,033 2,790 11.5 %
District heating, MWh 214,056 258,299 240,427 238,493 231,701 208,884 -22,817 -9.8 %
Share of own production:
Oil, MWh 518 654 823 687 680 563 -116 -17.1 %
Building energy intensity 2015 2016 2017 2018 2019 2020
Changes,
2019–2020
Changes, %
2019–2020
Changes, %
2015–2020
Consumption of heating energy, adjusted for weather, kWh/rm3/a 42.9 41.5 41.8 40.7 39.8 37.8 -2.0 -5.0 % -11.9 %
Consumption of electricity. kWh/m3/a 3.9 3.9 3.9 3.9 3.9 4.2 0.3 8.2 % 8.5 %
Total, kWh/m3/a 46.8 45.4 45.7 44.6 43.7 42.0 -1.7 -3.8 % -10.2 %
EMISSIONS
Greenhouse gas emissions 2015 2016 2017 2018 2019 2020
Changes,
2019–2020
Changes, %
2019–2020
GRI 305-1 Direct greenhouse gas emissions, t CO2-e (scope 1)
135 170 214 179 177 147 -30 -17.1 %
GRI 305-2 Indirect greenhouse gas emissions*, t CO2-e (scope 2)
Indirect greenhouse gas emissions, t CO2-e (market-based) 37,674 48,560 39,430 36,728 35,682 32,168 -3,514 -9.8 %
Indirect greenhouse gas emissions, t CO2-e (location-based) 41,962 52,583 43,163 40,152 39,100 35,980 -3,120 -8.0 %
GRI-305-3 Other indirect greenhouse gas emissions, t CO2-e (scope 3)
1,834 948 240 49 46 37 -9 -20.5 %
Total emissions of greenhouse gases, t CO2-e 39,643 49,678 39,884 36,955 35,905 32,351 -3,554 -9.9 %
for the year in question. Due to a possible recalculation, the emissions data reported for the preceding year may deviate from the data reporting in the previous emissions report. Electricity does not produce any emissions because it is produced 100% by wind power.
** Emissions from residents’ waste"
The following SATO environmental sustainability indicators have been assured by an independent third party. See
Sustainability concepts
SATOn vastuullisuusraportti 2020
27
Sustainability Report 2020
27
THE SUSTAINABLE SATO
KEY FIGURES
REPORTING PRINCIPLES
GHG emission intensity of buildings 2015 2016 2017 2018 2019 2020
Changes,
2019–2020
Changes, %
2019–2020
Changes, %
2018–2020
kg CO
2
-e/m
2
32,2 35,5 29,9 27,3* 26,4 23,2 -3,2 -12,1 % -15,0 %
kg CO
2
-e/person 903,7 1 033,6 851,0 781,2 725,7 649,9 -75,8 -10,4 % -16,8 %
*
WATER
Total water withdrawal 2015 2016 2017 2018 2019 2020
Changes,
2019–2020
Changes, %
2019–2020
Total, 1,000 m
3
2,329 2,622 2,507 2,537 2,578 2,674 96 3.7 %
All SATO properties use municipal water supply.
Building water intensity 2015 2016 2017 2018 2019 2020
Changes,
2019–2020
Changes, %
2019–2020
Changes, %
2018–2020
dm
3
/rm
3
/a 418 412 414 411 409 414 5 1.2 % 0.7 %
WASTE
Total weight of waste from tenants 2015 2016 2017 2018 2019 2020
Changes,
2019–2020
Changes, %
2019–2020
tonnes 21,578 23,985 23,573 24,124 27,269 28,131 862 3.2 %
t CO
2
-e 1,834 948 240 49 46 37 -9 -20.5 %
Distribution of waste from tenants by disposal method 2020, % 2020, t
For recycling 29.3 % 8,249
For energy 55.6 % 15,631
1.0 % 267
Composting 14.1 % 3,978
Incineration without energy recover 0.0 % 6
SATOn vastuullisuusraportti 2020
28
Sustainability Report 2020
28
THE SUSTAINABLE SATO
KEY FIGURES
REPORTING PRINCIPLES
Iniatives to reduce energy consumption, and their impact 2016 2017 2018 2019 2020
1.3 1.5 1.5 1.5 0.8
GRI 302-4 Reduction of energy consumption as a result of initiatives, MWh 4,070 7,750 7,200 820 3,100
GRI 305-5 Reduction of greenhouse gas emissions as a result of initiatives, t CO
2
-e 721 1,364 1,113 126 477
Land remediated or in need of remetiation m
2
Remediated soil 0
Soil known to be in need of remediation 2,500
SATOn vastuullisuusraportti 2020
29
Sustainability Report 2020
29
THE SUSTAINABLE SATO
KEY FIGURES
REPORTING PRINCIPLES
ENERGY & WATER CONSUMPTION AND WASTE VOLUMES
*only applies to construction sites for new and renovated buildings that were started in or after 2018
Basic information
Number of apartments 1,872
Gross floor area, m
2
134,373
Net floor area, m
2
91,226
Volume, m
3
421,065
Number of months
136
Water
Water consumption, m
3
1,646
Water consumption, Ltr/brm
2
/month 3.48
Energy
Electricity consumption, MWh 4,067
Electricity consumption, brm
2
/month 4.06
District heating consumption, MWh 3,474
District heating consumption, kWh/gm
2
/month 5.14
Waste
Total waste volume, t 4,938
Mixed waste, t 1,311
Wood, t 1,039
Stone, t 175
Concrete waste, t 1,952
Plaster, t 128
Energy, t 49
Metal, t 103
Other, t 11
Asbestos, t 139
Soil, t 386
Impregnated wood, tn 4
Other hazardous materials, t 640
WASTE VOLUMES OF
DEMOLISHED BUILDINGS
Total waste volume, tn 5,588
Mixed waste, tn 1,469
Wood, tn 628
Concrete waste, tn 117
Metal, tn 229
Other waste, tn 2,442
Asbestos, tn 30
Impregnated wood, tn 7
SATOn vastuullisuusraportti 2020
30
Sustainability Report 2020
30
THE SUSTAINABLE SATO
KEY FIGURES
REPORTING PRINCIPLES
Direct and indirect employment impact Person-years
Investments in construction and renovations 1,469
Maintenance and upkeep services 628
Other purchased services 117
Personnal 229
Total 2,442
Gender distribution of personnel groups and board of directors, 31 Dec 2020
Board of directors
Senior managers
Line managers
Senior salaried employees
Salaried employees
Blue-collar
All employees
Women Men Age under 30 Age 30–50
Age over 50
In 2020, 12% of SATO’s personnel were under 30, 66% were between 30 and 50, and 22%
were over 50. By personnel group, those under 30 were represented the most in the salaried
employees group (23%) and in the blue-collar group (17%).
The 30–50 age group represented 71% of those working in senior management positions,
75% of supervisors, 69% of senior salaried employees, and 60% of salaried employees.
The over-50 age group was represented the most in senior management positions (29%),
and in senior salaried employee positions (26%). One quarter of all supervisors and 18% of
salaried employees are over the age of 50.
3%
5%
23%
12%
29%
75%
22%
26%
18%
17%
66%
69%
60%
83%
22%
100%
71%
33% 67%
44% 56%
45% 55%
80%
0%
20%
100%
57% 43%
17% 83%
Työnumero 29
We recruited new employees in
2020 in spite of the exceptional
situation.
During the reporting year,
SATO recruited 57 new
employees
PERSONNEL
SATOn vastuullisuusraportti 2020
31
Sustainability Report 2020
31
THE SUSTAINABLE SATO
KEY FIGURES
REPORTING PRINCIPLES
INFORMATION ABOUT PERSONNEL
GRI 102-8
Total number of personnel at end of 2020 (2019)
Number of personnel permanent xed-term men women men, % women, %
total 242 (229) 226 (212) 16 (17) 105 (96) 137 (133) 43% 57%
of which the number
of personnel in Russia
12 (12) 10 (10) 2 (2) 4 (3) 8 (9) 33% 67%
During the year, the Group had an average of 229 (223) employees.
Total number and rates of new employee hires and employee turnover by
age group, gender and region. (GRI-401-1)
New employment contracts total 57 under 30 30–50 over 50
permanent employment contracts 38 10 27 1
men 22 2 20 0
women 16 8 7 1
New xed-term employment
contracts
total 11 under 30 30–50 over 50
men 4 3 1 0
women 7 2 4 1
Summer trainees total 9 under 30 30–50 over 50
men 4 4 0 0
women 5 4 1 0
Terminated employment contracts total 33 under 30 30–50 over 50
permanent employment contracts 26
2 14 10
men 11 0 6 5
women 15 2 8 5
Employment contracts terminated
by the employer
11
Total personnel turnover, %
(summer trainees excluded) 14,4
Work accidents, occupational diseases, sick leave and deaths entire personnel (GRI 403-2)
absentee rate (AR) 1.3%
lost day rate 0.1%
See Sustainability concepts
Sustainability Report 2020
32
THE SUSTAINABLE SATO KEY FIGURES
REPORTING PRINCIPLES
SUSTAINABILITY BASED
ON MATERIALITY
Our sustainable operating principles lay the
operations over the long term. Our sustainability
reporting is based on the material aspects related
cooperation with our stakeholders and processed
material aspects on stakeholders are described in
the sections Sustainable Business, Environment,
Personnel and Customers. The comparison of the
content of the report with the GRI standards is
indicated in the GRI content index.
TRANSPARENT AND
ASSURED INFORMATION
The information concerning environmental
responsibility in the report has been assured
by an independent third party. The following
information has been assured by KPMG Oy Ab:
The indicators presented in the tables of
the Annual Report’s The Sustainable SATO/
Environment section:
• Energy (GRI 302-1, 302-4, CRE1)
•
• Emissions (GRI 305-1, 305-2, 305-3, 305-5, CRE3)
•
• Land degradation, contamination and
remediation (CRE5)
Key indicators presented in GRI index table:
• Environmental compliance (GRI 307-1)
• Supplier environmental assessment (GRI 308-1)
Sustainability is an integral part of SATO’s
business, and we have combined traditional
annual report contents and corporate
sustainability information into one integrated
report. The aim of the Sustainability Report is to
openly provide our stakeholders with information
about our operations and our value creation.
SATO’s annual Sustainability Report has now been
drawn up for the seventh consecutive year in line
with the GRI guidelines: GRI-G3 2014, GRI-G4
2015 and 2016, GRI Standards 2017–2018. The
report has been prepared in accordance with the
international Global Reporting Initiative Standards
Core option. It is also compliant with the industry-
estate sector (CRESS).
The report covers the universal standards of
standards, which consist of descriptions of
management practices and indicators for
additionally reported on information related to
SATO’s own sustainability topics in accordance
with the GRI Standards.
are mainly based on information concerning the
SATO Group and the rental apartments it owns in
Finland. Descriptions of management practices,
reporting indicators and calculation boundaries
are described in the management approach
table. The report is published electronically in
Finnish and in English.
SUSTAINABILITY REPORTING PRINCIPLES
Sustainability Report 2020
33
THE SUSTAINABLE SATO KEY FIGURES
REPORTING PRINCIPLES
Sustainability focus areas Disclosure Location and additional information
GRI 102 Organisational prole 2016
102-1
Name of the organisation Contact information
102-2
Primary activities, brands, products and services Report of the Board of Directors
102-3 Location of headquarters Contact information
102-4 Location of operations Report of the Board of Directors
102-5
Ownership and legal form Information for shareholders
102-6 Markets served Report of the Board of Directors
102-7
Scale of the organisation Financial statements
102-8 Information on employees and other workers Personnel
102-9 Supply chain Partners, Finances
102-10
SATO in brief
Report of the Board of Directors, Information for shareholders, Partners
102-11
Precautionary principle or approach Risk management
102-12 External initiatives Sustainability focus areas, Environment, Corporate governance statement
102-13 Membership of associations Sustainability focus areas
GRI 102 Strategy 2016
102-14 Statement from senior decision-maker CEO's review
102-15 Key impacts, risks and opportunities Sustainability focus areas, Report of the Board of Directors (Operating environment),
Risk management
GRI 102 Ethics and integrity 2016
102-16 Values, principles, standards, and norms of behaviour Report of the Board of Directors (Strategy)
Sustainability focus areas, Customers
102-17
Mechanisms for advice and concerns about ethics Sustainability management
GRI 102 Governance 2016
102-18 Governance structure Corporate governance statement, Sustainability management
102-19
Delegating authority for economic, environmental and social topics Sustainability management
102-20 Executive-level responsibility for economic, environmental and
social topics and reporting lines
Sustainability management
102-22 Composition of the highest governance body and its committees Board of Directors, Members of the Management Group
102-23 The role of Chair of the highest governance body The Chairman of the Board of Directors is not the CEO, and the CEO is not a member of
the Board of Directors
102-24 Nominating and selecting the highest governance body Corporate governance statement
102-26 The highest governance body’s and senior executives’ roles in the
development, approval, and updating of the organisation’s purpose, val-
ue or mission statements, strategies, policies, and goals related to
economic, environmental and social impacts
Sustainable operating principles, Corporate governance statement,
Rules of procedure of the Board of Directors
GRI-INDEX
Sustainability Report 2020
34
THE SUSTAINABLE SATO KEY FIGURES
REPORTING PRINCIPLES
102-28 Evaluating the highest governance body’s performance Corporate governance statement, Rules of procedure of the Board of Directors
102-29
management of risks and opportunities
Sustainable operating principles, Corporate governance statement,
Rules of procedure of the Audit Committee
102-30
the organisation’s risk management processes for economic,
environmental and social topics
Corporate governance statement, Rules of procedure of the Audit Committee
102-31 The frequency of the highest governance body’s review of economic,
environmental and social impacts, risks, and opportunities
Risk management
102-35 The remuneration policies for the highest governance body and
senior executives
Remuneration statement
GRI 102 Stakeholder engagement 2016
102-40 List of stakeholder groups Stakeholder cooperation
102-41 Collective bargaining agreements Personnel
102-42 Identifying and selecting stakeholders Stakeholder cooperation
102-43 Approach to stakeholder engagement Stakeholder cooperation, Sustainability focus areas, Customers, Personnel, Partners
102-44 Key topics and concerns that have been raised through
stakeholder engagement
Sustainability focus areas, Stakeholder cooperation
GRI 102 Reporting practice 2016
102-45 Financial statements
102-46 Sustainability focus areas, Management approach
102-47
List of material topics Sustainability focus areas, Management approach
102-48 Restatements of information Reporting principles
102-49 Changes in reporting Reporting principles, Management approach
102-50 Reporting period 2020
102-51 Date of most recent report 5.3.2020
102-52 Reporting cycle Reporting principles
102-53 Contact point for questions regarding the report Contact information
102-54 Claims of reporting in accordance with the GRI Standards Reporting principles
102-55 GRI content index GRI-index
102-56 External assurance Assurance report
Material topics
GRI 103 Management approach 2016
103-1 Explanation of the material topic and its boundary Sustainability focus areas, Management approach
103-2 The management approach and its components Management approach
103-3 Evaluation of the management approach Management approach
Sustainability Report 2020
35
THE SUSTAINABLE SATO KEY FIGURES
REPORTING PRINCIPLES
GRI 200 Economic performance
GRI 201 Financial results 2016
201-1 Direct economic value generated and distributed , Finances
201-4 Financial assistance received from government Finances
new construction in 2020.
GRI 203 Indirect nancial impacts 2016
203-1 Investments in local infrastructure and services Environment
203-2 Strategy, Personnel, Partners, Environment, Finances
GRI 204 Procurement practices 2016
204-1 Proportion of spending on local suppliers Partners
Local suppliers represent 95.5% of SATO's purchases.
Foreign suppliers represent 4.5% of SATO's purchases.
GRI 205 Anti-corruption 2016
205-3 Sustainable SATO / Sustainable management
No incidents of bribery in 2020.
GRI 300 Environmental standards series
GRI 302 Energy 2016
302-1 Energy consumption within the organisation
302-4 Reduction of energy consumption Environment, , Key concepts
CRE1-sector supplement Building energy intensity , Key concepts
SATO reports the intesities in relation to apartment cubic meters.
CRE8-sector supplement Sustainability focus areas, Environment
GRI 303 Water and euents 2018
303-1 Interactions with water as a shared resource Environment, Management approach
All SATO properties use municipal water supply. Tenants consume a large share of
-
charged into the municipal waste water network, where they undergo wastewater
treatment. SATO does not operate in areas with water stress.
303-2 Management of water discharge-related impacts Environment, Management approach
The municipal water utilities analyse the water quality. Individual water analyses are
performed in properties as needed. SATO does not operate in areas with water
stress.
303-3 Total water withdrawal by source , Key concepts
SATO does not operate in areas with water stress.
CRE2-sector supplement Building water intensity Environment
SATO reports the intesities in relation to apartment cubic meters.
Sustainability Report 2020
36
THE SUSTAINABLE SATO KEY FIGURES
REPORTING PRINCIPLES
GRI 305 Emissions 2016
305-1 Direct greenhouse gas (GHG) emissions (Scope 1)
305-2 Energy indirect greenhouse gas (GHG) emissions (Scope 2) , Key concepts
305-3
Other indirect greenhouse gas (GHG) emissions (Scope 3) , Key concepts
305-5 Reduction of greenhouse gas (GHG) emissions Environment, , Key concepts
CRE3-sector supplement Greenhouse gas emissions intensity from buildings , Key concepts
GRI 306 Euents and waste 2016
306-2 Total weight of waste by type and disposal method , Key concepts
The total amount of waste includes non-hazardous waste generated by residents.
The amount of waste from SATO’s own operations is marginal.
SATO
Enhance the sorting of waste from residents Environment
SATO Communication on the environment and open data Environment
GRI 307 Environmental compliance 2016
307-1
sanctions for non-compliance with environmental laws and regulations
Sustainability management
GRI 308 Supplier environmental assessments 2016
308-1 Percentage of new suppliers that were screened using
environmental criteria
Partners
In line with our auditing process, we require that the environmental responsibility
procedures of our new suppliers are fully adequate. 4% of SATO’s suppliers
have been audited.
Sector aspect: Land degradation, contamination and remediation
CRE5-sector supplement Land remediated or in need of remediation
Soil contamination is the result of the actions of 3rd party.
SATO’s own material topic: Location of investments
SATO Public transportation Environment
SATO’s own material topic: Property maintenance
SATO Maintenance and repair operations Environment, Report of the Board of Directors
GRI 400 Social standards series
GRI 401 Employment 2016
401-1 Total number and rates of new employee hires and employee turnover
by age group, gender and region
Personnel
GRI 402 Employee-employer relations 2016
402-1 Minimum notice periods regarding operational changes The Act on Co-operation within Undertakings (334/2007) applies to corporate re-
structuring in Finland. In all of its countries of operation, SATO complies with the
local statutory periods (1–6 months)
Sustainability Report 2020
37
THE SUSTAINABLE SATO KEY FIGURES
REPORTING PRINCIPLES
GRI 403 Occupational health and safety 2018
403-1 Occupational health and safety management system Personnel, Management approach, Key concepts
SATO complies with occupational health and safety legislation and
the Occupational Health Care Act
403-2 Personnel, Management approach, Partners
403-3 Occupational health services Personnel, Management approach
403-4 Worker participation, consultation and communication on occupational
health and safety
Personnel, Key concepts
403-5 Worker training on occupational health and safety Personnel, Management approach
403-6 Promotion of worker health Personnel, Management approach
SATO’s employees have very comprehensive occupational health care at Aava
Medical Centre. In accident situations, employees must seek the best and nearest
treatment.
403-7 Prevention and mitigation of occupational health and safety impacts
directly linked by business relationships
Personnel
SATO has a Housing Health Manager, who looks after residents’ home health and
safety. House experts, service managers and maintenance partners also oversee
safety in SATO’s buildings.
403-9 Work-related injuries Personnel, Key concepts
CRE6-sector supplement
an internationally recognized health and safety management system
GRI 404 Training and education 2016
404-1 Average hours of training per year per employee by gender, and by
employee category
Personnel
404-3 Percentage of employees receiving regular performance and career
development reviews
Applies to all employees; the personal data on employees in St. Petersburg is not
in the system due to Russian data privacy legislation.
GRI 405 Diversity and equality 2016
405-1 Diversity of governing bodies and personnel groups
405-2 Equal remuneration of women and men Personnel
GRI 416 Customer health and safety 2016
416-1 Assessment of the health and safety impacts of product and service
categories
Customers
416-2 Incidents of non-compliance concerning the health and safety impacts of
products and services
Customers
GRI 418 Customer privacy 2016
418-1 Number of substantiated complaints concerning breaches of customer Sustainability focus areas
GRI 419 Socio-economic compliance 2016
419-1
sanctions for non-compliance with laws and regulations
Corporate governance statement
SATO’s own material topic: Customer service and satisfaction
Multilingual customer service and communication Customers
Promoting a sense of community Customers
Sustainability Report 2020
38
THE SUSTAINABLE SATO KEY FIGURES
REPORTING PRINCIPLES
assertions contained within it. The Management
is also responsible for determining SATO’s
objectives with regard to sustainable development
performance and reporting, including the
and for establishing and maintaining appropriate
performance management and internal control
systems from which the reported performance
information is derived.
Our responsibilities
Our responsibility is to carry out a limited
assurance engagement and to express a
conclusion based on the work performed. We
conducted our assurance engagement on the
Selected Environmental Information in accordance
with International Standard on Assurance
Engagements (ISAE) 3000 (Revised), Assurance
Engagements other than Audits or Reviews of Historical
Financial Information, issued by the International
Auditing and Assurance Standards Board IAASB.
That Standard requires that we plan and perform
the engagement to obtain limited assurance
about whether the Selected Environmental
Information is free from material misstatement.
KPMG Oy Ab applies International Standard on
Quality Control ISQC 1 and accordingly maintains
a comprehensive system of quality control
including documented policies and procedures
regarding compliance with ethical requirements,
professional standards and applicable legal and
regulatory requirements.
We have complied with the independence
and other ethical requirements of the Code
of Ethics for Professional Accountants issued
by the International Ethics Standards Board
for Accountants IESBA, which is founded on
fundamental principles of integrity, objectivity,
professional competence and due care,
Procedures performed
A limited assurance engagement on Selected
Environmental Information consists of making
inquiries, primarily of persons responsible for
the preparation of information presented in
the Selected Environmental Information, and
applying analytical and other evidence gathering
procedures, as appropriate. In the engagement,
we have performed the following procedures,
among others:
•
for providing the Selected Environmental
Information;
• Assessed the application of the GRI
Sustainability Reporting Standards reporting
principles in the presentation of the Selected
Environmental Information;
• Assessed data management processes,
information systems and working methods
used to gather and consolidate the Selected
Environmental Information;
• Reviewed the presented Selected
Environmental Information and assessed its
and;
• Assessed of the Selected Environmental
Information’s data accuracy and completeness
through a review of the original documents
and systems on a sample basis.
INDEPENDENT ASSURANCE REPORT
TO THE MANAGEMENT OF SATO
CORPORATION
This document is an English translation of the
Finnish report
We have been engaged by the Management of
SATO Corporation (hereafter “SATO”) to provide
limited assurance on selected environmental
indicators presented in SATO’s Sustainability
Report 2020 (hereafter “Selected Environmental
Information”) for the year ended 31 Dec 2020.
The Selected Environmental Information consists
of the following indicators:
Indicators presented in the tables of the
section
• Energy (GRI 302-1, 302-4, CRE1)
•
• Emissions (GRI 305-1, 305-2, 305-3, 305-5,
CRE3)
•
• Land remediated and in need of remediation
(CRE5)
Indicators presented in the table of the
“Reporting principles/GRI index” section
• Environmental compliance (GRI 307-1)
• Supplier environmental assessment (GRI 308-1)
Management's responsibilities
The Management of SATO is responsible for the
preparation and presentation of the Selected
Environmental Information in accordance with
the reporting criteria, i.e. GRI Sustainability
Reporting Standards, and the information and
ASSURANCE REPORT
The procedures performed in a limited assurance
engagement vary in nature and timing from, and
are less in extent than for, a reasonable assurance
engagement. Consequently, the level of assurance
obtained in a limited assurance engagement is
substantially lower than the assurance that would
have been obtained had a reasonable assurance
engagement been performed.
Inherent limitations
Inherent limitations exist in all assurance
engagements due to the selective testing of the
information being examined. Therefore fraud,
error or non-compliance may occur and not be
data, given both its nature and the methods used
for determining, calculating and estimating such
data.
Conclusion
Based on the procedures performed and the
evidence obtained, as described above, nothing
has come to our attention that causes us to believe
that the information subject to the assurance
engagement is not prepared, in all material
respects, in accordance with the GRI Sustainability
Reporting Standards.
Helsinki, 10 February 2021
KPMG Oy Ab
Tomas Otterström
Partner, Advisory
Sustainability Report 2020
39
THE SUSTAINABLE SATO KEY FIGURES
REPORTING PRINCIPLES
SUSTAINABILITY CONCEPTS
ENVIRONMENT
Concept or indicator Denition
Initiatives to reduce energy consumption,
and their impact
Objects covered by energy and water
consumption monitoring
Total heat consumption, MWh
The year’s absolute heat consumption in all the owned properties held throughout the year and within the scope of consumption monitoring,
expanded by estimated consumption in properties purchased and sold during the year and properties outside the scope of consumption monitoring
(average rated consumption multiplied by the surface area of apartments owned on average during the year).
Total electricity consumption, MWh
The year's absolute electricity consumption in all the owned properties held throughout the year and within the scope of consumption monitoring,
expanded by estimated consumption in properties purchased and sold during the year and properties outside the scope of consumption monitoring
(average rated consumption multiplied by the surface area of apartments owned on average during the year).
Total energy consumption, MWh
Total consumption of heat and electricity during the year.
Total water consumption, 1,000 m
3
The year’s absolute water consumption in all owned properties held throughout the year and within the scope of consumption monitoring,
expanded by estimated consumption in properties purchased and sold during the year and properties outside the scope of consumption monitoring
(average rated consumption multiplied by the surface area of apartments owned on average during the year).
Standardised Specic heat consumption
kWh/m
3
/year
Specic electricity consumption, kWh/m
3
/year
Electricity consumption per m3 in all objects that have been rented for the entire year.
Specic energy consumption (kWh/m
3
/year)
Specic water consumption, litres/m
3
/year
Water consumption per m3 in all objects that have been rented for the entire year.
Greenhouse gas emissions, tCO
2
e
Emissions from heat, electricity, heated water and waste produced by residents. The emissions of properties within the scope of consumption monitoring have
been expanded to apply to apartments owned on average during the year, similarly to the total consumption of heat, electricity and water. The emission
any emissions because it is green electricity produced 100% by wind power.
Greenhouse gas emission intensity of buildings,
kg CO
2
-e/m
2
/year
Greenhouse gas emissions per square metre. The emissions of properties within the scope of consumption monitoring have been expanded to apply to
apartments owned on average during the year.
Total amount of waste, tonnes
waste volume reported by Statistics Finland.
Sustainability Report 2020
40
THE SUSTAINABLE SATO KEY FIGURES
REPORTING PRINCIPLES
PERSONNEL
Concept or indicator Denition
Total personnel turnover, %
Sum of terminated employment contracts in relation to the number of personnel for the last month of the previous year, summer jobs excluded.
Absentee rate, %
Hours of sick leave in relation to calculated working hours.
Injury rate, %
Number of accidents during the work commute and number of occupational diseases in relation to the number of employees.
Lost day rate, %
The percentage of work-related accidents and occupational diseases in relation to calculated working hours.
Number of new employment c ontracts
Number of terminated employment contracts
Number of training days
One training day comprises six hours of training.
Person-year
SATOs direct and indirect employment impact has been evaluated applying a calculation of the employment footprint of the maintenance services and
other purchased services prepared by VATT for Senate Properties and the estimate of the Confederation of Finnish Construction Industries and VTT of the
employment impact of building investments. The employment multipliers obtained from the aforementioned sources have been combined with SATOs
2016 cost structure.
TARMO
TARMO is a discussion forum for SATOs management and personnel, comprised of 8 employee representatives and 4 representatives of the employer and
OHS representative.
LiiVi
LiiVi is SATOs committee for recreation and sports activities, comprised of 11 employee representatives and 1 representative of the employer.
CUSTOMER RELATIONSHIPS
Concept or indicator Denition
NPS (Net Promoter Score)
Net Promoter Score (NPS) among customers. The strategic NPS is the NPS during living starting from 2017.
SATO GOVERNANCE 2020
SATO GOVERNANCE 2020
2
SUSTAINABILITY MANAGEMENT RISK MANAGEMENT CORPORATE GOVERNANCE STATEMENT REMUNERATION STATEMENT
GOVERNANCE
Sustainability management ................................................ 3
Risk management ...............................................................4
Corporate Governance Statement 2020 .............................8
Remuneration statement 2020 ..........................................14
Board of Directors ............................................................. 15
Corporate Management Group ......................................... 17
SATO GOVERNANCE 2020
3
SUSTAINABILITY MANAGEMENT
RISK MANAGEMENT CORPORATE GOVERNANCE STATEMENT REMUNERATION STATEMENT
SUSTAINABILITY MANAGEMENT
The Group’s Corporate Management Group
processes all key corporate management matters,
such as those related to the Group’s strategy,
budget, investments, operational planning and
nancial reporting. The Corporate Management
Group also carries out the Board’s decisions.
SATO’s organisational units have their own
management teams, which are responsible for
the preparation and execution of matters.
The Group’s Chief Financial Ocer is responsible for
sustainability issues in the Corporate Management
Group. SATO’s sustainability work is planned
and coordinated by the sustainability steering
group, which meets four to six times a year and is
coordinated by the corporate responsibility advisor.
The steering group is responsible for preparing the
main guidelines and determining the target level
for sustainability work, in addition to preparing a
proposal for the action plan. It is also responsible
for sustainability communications within SATO in
cooperation with the communications department,
and for preparing proposals concerning sustainability
matters for the Group’s Corporate Management
Group. Practical measures and development goals
related to sustainability are included in the action
plan of each of SATO’s units. The sustainability
steering group monitors the implementation of these
measures and the achievement of these goals.
During the year under review, we committed to
reporting on climate risks and opportunities in
accordance with the framework of the Task Force on
Climate-related Financial Disclosures (TCFD). SATO’s
Board of Directors addresses climate-related risks
twice a year. Climate risks are also taken into account
in every new investment decision that is made.
Sustainability is evident in our day-to-day work in
many ways. Our operations are based on legislation
and our values and guidelines. We comply with
approved international accounting standards and
the Finnish Corporate Governance Code in general
reporting. In sustainability reporting, we comply
with the GRI framework and SATO’s own guidelines
and principles. In 2020, we made the decision
to report on climate risks and opportunities in
accordance with the framework of the Task Force
on Climate-related Financial Disclosures (TCFD).
SATO’s most important guidelines and principles
include its Code of Conduct, values, sustainability
programme and guidelines for combating
the grey economy, as well as its procurement,
nancing, risk management and disclosure
policies and its HR management principles. SATO’s
operating principles, guidelines and policies are
described in the management approach table.
SUSTAINABILITY SHOWS IN OUR DAILY WORK
Our sustainability
work is guided by
SATOs strategy
and sustainability
program, as well
as themes that we
have evaluated to
be material based
on discussions with
our stakeholders.
SATO GOVERNANCE 2020
4
SUSTAINABILITY MANAGEMENT
RISK MANAGEMENT
CORPORATE GOVERNANCE STATEMENT REMUNERATION STATEMENT
RISK MANAGEMENT SYSTEM
Risk evaluations and risk management
Key guidelines
• Decision-making model and authorisations
• Financial policy
• Control model for procurement (cooperation
with suppliers, selection of suppliers, criteria
for suppliers, selection of partners)
• Insurance management system, evaluation
and responsibilities
• Internal control system
Process management model
• Ownership of key processes, monitoring
and development model, and indicators
• Financial and operational reporting
• Balance between preventive and
monitoring indicators
The purpose of risk management is to advance
the fullment of SATO’s strategic and business
objectives. We assess opportunities and threats
that arise in our operations in relation to our
set objectives. We also ensure the continuity of
our operations, produce information to support
business decisions and maintain the organisation’s
understanding of the opportunities and
uncertainties of our operating environment.
SATO’s risk management is based on the risk
assessment embodied in the strategic and annual
planning process, and the assessment also covers
the risks of the nancial reporting process.
The risk assessment includes measures for
minimising risks. Business risks consist of strategic
and operative risks as well as nancing and
market risks. In order to ensure that strategic and
operational risks are handled comprehensively,
key SATO employees take part in the risk
identication process.
Our approach
We have laid down responsibilities for evaluating
and monitoring the realisation of recognised
risks. When required, we initiate risk management
measures with the goal of preventing risks from
being realised or to enhance the monitoring
of a certain area. Management can also be
strengthened by preparing operating models
for various risk situations.
We continuously monitor changes in situations
and the suciency of management on both
the Group level and by the persons responsible
for each risk area.
WE PREVENT RISKS
The purpose of
risk management
is to advance
the fullment of
SATO’s strategic
and business
objectives.
SATO GOVERNANCE 2020
5
SUSTAINABILITY MANAGEMENT
RISK MANAGEMENT
CORPORATE GOVERNANCE STATEMENT REMUNERATION STATEMENT
MANAGEMENT OF KEY RISKS
Risk Description of risk Control measures
Regulatory risk A risk that the activities of the authorities, political guidelines or legal
amendments disturb the development of towns and cities and SATO’s operating
conditions.
• Continuous contact with authorities
• Impact on housing policies
• Active monitoring of motions to change laws
Continuation of the coronavirus
pandemic or the emergence of a
new pandemic
The risk that society will have to signicantly restrict people’s movement and
companies’ business operations, as a consequence of which the solvency of
companies and private persons will weaken and housing cannot be maintained
or repaired, in turn resulting in lower rental income and a decline in the value of
investment assets.
• Focus on improving the economic occupancy rate
• Maintaining a safe work environment
• Strict cost control and case-by-case decisions on repairs
Finland’s economic situation is
weakening, and this will aect
the housing markets
The risk that a weaker-than-expected market situation in Finland will be reected
in the housing markets as shrinking market demand, weakened solvency among
the customer base, lower market rents and thus a decrease in the value of
SATO’s housing stock.
• Sucient nancial reserves and liquidity buers
• Development of the housing portfolio, investments (procurement and repairs) and
divestments
• Sensitivity analyses
• Allocation of new investments/microlocation strategy
Reputation risk A risk that SATO’s reputation is damaged, for example, due to non-compliance
with personal data protection regulations, due to partners not operating in
the manner required by SATO, or due to neglected repairs causing health
problems among customers. A risk that SATO does not operate responsibly or
that irresponsible activities in the real estate business ruin the reputation of the
industry. A risk that a signicant industrial operator faces nancial diculties
that are also reected in the value of housing assets of other operators.
• Compliance with the data protection policy in transactions carried out by the
company and its partners
• Expansion of the Customer First service model to partner activity
• Regular updating of the long-term repair plan and compliance with the plan
• Operating according to SATO’s sustainability programme and focusing on themes
that are estimated to be material based on the stakeholder dialogue.
• Thorough and close monitoring of the nancial situation of partners
• Regular communication with managers of partners
• Back-up plans in the case of partners facing diculties
Risks related to data systems, or
cyber threats
A risk that SATO’s data systems are incapable of oering the usability,
functionality or services required for business.
A risk that an external party attacks SATO’s data systems and/or data network
with the purpose of causing disruption and endangering SATO’s operations.
A risk that, as a result of an attack, SATO’s customer information ends up in
the wrong hands and/or is misused.
• Actively updating the overall architecture
• Renewal of data systems to meet business needs
• Building strong rewalls
• Continuity and recovery plans for data management
• Information security audits
• Information security training
Signicant diculties in the
availability and price of nancing
A risk that current sources of nancing are unable to meet SATO’s nancing needs
in the medium term. Key risks include diculties in the availability and price of
bank nancing due to developments in the market environment, and a decrease
in demand in the domestic and global bond market.
• Diversied nancing
• Sucient nancial reserves
• Maintaining the IG credit rating
SATO GOVERNANCE 2020
6
SUSTAINABILITY MANAGEMENT
RISK MANAGEMENT
CORPORATE GOVERNANCE STATEMENT REMUNERATION STATEMENT
CLIMATE-RELATED RISKS
AND OPPORTUNITIES
In 2020, we committed to report on climate-related
risks in accordance with the recommendations
of the Task Force on Climate-Related Financial
Disclosures (TCFD). The TCFD is an organisation
established by large companies whose mission is
to encourage companies to report on the climate-
related risks and opportunities that aect them.
TCFD
Disclosure focus area Recommended disclosure Location and additional information
Governance
a. Describe the board’s oversight of climate-related risks and opportunities. Sustainability management/Corporate governance statement
b. Describe management’s role in assessing and managing risks and opportunities. Corporate governance statement, Sustainability management
Strategy
a. Describe the climate-related risks and opportunities the organization
has identied over the short, medium, and long term.
Operating environment’s impacts (Report of the Board of Directors and sustainability section)
Risk management
Comment: Transition and physical climate-related risks were included as part of SATO’s risk analysis in 2020.
Climate-related risks are expected to grow in signicance in the coming years.
Risks and opportunities
• Global warming and an increase in extreme weather events
• Regulatory changes
• Technological development
• Consumers’ and other stakeholders’ expectations of sustainable operations
• Rise in building usage costs
b. Describe the impact of climate-related risks and opportunities on the
organization’s businesses, strategy, and nancial planning.
Strategy
c. Describe the resilience of the organization’s strategy, taking into consideration
dierent climate-related scenarios, including a 2°C or lower scenario.
Sustainability programme
Risk management
Comment: We are initiating a scenario analysis in 2021. Various climate scenarios can help us more
accurately dene the risks and opportunities, as well as the related processes, that are material to SATO.
Risk management
a. Describe the organization’s processes for identifying and assessing climate-related risks. Risk management
During the reporting year, we began charting
the climate-related risks and opportunities that
are material to SATO. The Management Group
conducted its rst risk assessment based on
research and expert data. The physical risks
that emerged are the growing trend of extreme
weather events and the impacts of such events in
the short, medium and long term. The transition
risks that we identied are increasing national
and international regulation related to climate
change, consumers’ and other stakeholders’
demand for more sustainable and climate-friendly
operations, and a possible increase in the cost
of using buildings. Based on the assessment, we
also identied opportunities, such as making use
of renewable energy as technology develops. We
will continue our climate risk work by conducting
a more in-depth analysis of the impacts of
climate-related risks on SATO’s business
operations during 2021.
SATO GOVERNANCE 2020
7
SUSTAINABILITY MANAGEMENT
RISK MANAGEMENT
CORPORATE GOVERNANCE STATEMENT REMUNERATION STATEMENT
Disclosure focus area Recommended disclosure Location and additional information
b. Describe the organization’s processes for managing climate-related risks. Risk management
c. Describe how processes for identifying, assessing, and managing climate-related
risks are integrated into the organization’s overall risk management.
Risk evaluations/risk management
Metrics and Targets
a. Disclose the metrics used by the organization to assess climate-related risks and
opportunities in line with its strategy and risk management process.
Sustainability programme/Objectives table
b. Disclose Scope 1, Scope 2, and, if appropriate, Scope 3 greenhouse
gas (GHG) emissions, and the related risks.
Carbon-neutrality objective (environmental data table) Sustainability programme
c. Describe the targets used by the organization to manage climate-related risks
and opportunities and performance against targets.
Sustainability programme/Objectives table
SATO GOVERNANCE 2020
8
SUSTAINABILITY MANAGEMENT RISK MANAGEMENT
CORPORATE GOVERNANCE STATEMENT
REMUNERATION STATEMENT
SATO draws up its consolidated nancial
statements as well as interim reports and half year
nancial reports in accordance with international,
IFRS reporting standards approved in EU. The
report of the Company’s Board of Directors
and the nancial statements of the parent
company of SATO Group have been drawn up in
accordance with Finnish accounting legislation. An
independent external appraiser gives a statement
about the values of SATO's housing portfolio
and the appropriateness of the methods used to
assess the values.
This statement is being published separately
from the annual report of the Board of Directors.
The board of directors has handled the statement
in its meeting.
DESCRIPTIONS CONCERNING
CORPORATE GOVERNANCE
The authority and governance of the Company
are divided between the annual general meeting,
the Board of Directors, and the President and
CEO. The President and CEO implements
the operative business with the assistance of
the Corporate Management Group. Internal
audit subordinate to the Board of Directors is
responsible for internal auditing and auditors
are responsible for the external auditing.
The general meeting
The general meeting of the shareholders is SATO’s
supreme decision-making body. The annual
general meeting is to be held once a year within
six months of the end of the nancial year. An
extraordinary general meeting is held when it is
necessary according to the consideration of the
The governance of SATO Corporation
(hereinafter “SATO" or “the Company”) is based
on Finnish legislation and SATO’s articles of
association. The Company also complies with
the recommendations of Corporate Governance
Code 2020 issued by the Finnish Securities Market
Association (excluding the procedure for the
remuneration of President and CEO as dened
in recommendation 22) as well as SATO’s internal
instructions. The Corporate Governance Code is
available on the website of the Finnish Securities
Market Association www.cgnland..
Since SATO’s shares are not publicly listed, the
legislation does not require that SATO has either
the remuneration policy or the remuneration
report as further dened in the Corporate
Governance Code. SATO will not compose
the abovementioned documents, but it drafts
a remuneration statement in accordance with
Corporate Governance Code 2015. The ultimate
parent company of SATO, Fastighets AB Balder, is
a listed company in the Stockholm Stock Exchange
and it will draft the instructions, policies and
reports regarding the remuneration required by
the Swedish legislation and Corporate Governance
Code from time to time. Those documents
may include also information regarding the
remuneration of SATO’s governing bodies.
SATO has issued corporate bonds, which are
listed on the Helsinki stock exchange or Irish stock
exchange, and the Company complies with their
rules and regulations for listed bonds as well as
EU’s Market Abuse Regulation, securities markets
legislation and the regulations of supervisory
authorities.
CORPORATE GOVERNANCE STATEMENT 2020
MANAGEMENT
The Group’s management team
Auditing
Internal
control,
risk mana-
gement
Internal
audits
ANNUAL GENERAL MEETING
Nomination and Remuneration Committee
PRESIDENT AND CEO
BOARD OF DIRECTORS
SHAREHOLDERS’ NOMINATION COMMITTEE
INSIDER MANAGEMENT
RELATED-PARTY
TRANSACTIONS
SATO GOVERNANCE 2020
9
SUSTAINABILITY MANAGEMENT RISK MANAGEMENT
CORPORATE GOVERNANCE STATEMENT
REMUNERATION STATEMENT
In order to ensure the dialogue between
shareholders and Company bodies and to full
shareholders' entitlement to ask questions,
the President and CEO, Chair of the Board of
Directors and the Board members must attend
the general meeting. Persons proposed as Board
members must be present at a general meeting
deciding on their election.
The Company’s annual general meeting was held
on 23 June 2020. A total of eight shareholders
attended the meeting, representing 90,1% of
the Company’s shares and votes. The minutes of
the annual general meeting can be found on the
Company’s website.
Shareholders' Nomination Committee
On 3 March 2015, the annual general meeting
decided to establish a shareholders' Nomination
Committee and approved its rules of procedure.
The Committee's task is to prepare proposals
concerning the Board's composition and the
remuneration of its members to the annual
general meeting. The committee’s rules of
procedure can be found on the Company’s
website.
The Committee's term of oce begins in October
each year, when the largest shareholders have
nominated their representatives, and ends at
the closing of the next annual general meeting.
A shareholder shall name as a member of
the Committee a person independent of the
Company.
The shareholders' Nomination Committee consists
of the representatives of SATO's four largest
shareholders, which have been registered in
the book-entry system on 1 October and which
accept the position. If a shareholder does not
use its right of nomination, the right transfers to
the next largest shareholder. The fourth largest
shareholder of the Company on 1 October 2020,
State Pension Fund, has not used its nomination
right so the nomination right has transferred to
the fth largest shareholder, Finnish Construction
Trade Union.
The Chair of the Company's Board of Directors
serves as a specialist member of the Committee.
The Committee elects one of its members to
serve as Chair.
The representatives of the following shareholders
have been nominated as members of the
Committee:
Balder Finska Otas AB (holdings on 1 October
2020: 31,055,003 shares, 54,7%)
Erik Selin, chairman
See further information about the member below
in section “Board of Directors”
Stichting Depositary APG Strategic Real Estate
Pool (holdings on 1 October 2020: 12,811,647
shares, 22.6%)
Hans Spikker
See further information about the member below
in section “Board of Directors”
Elo Mutual Pension Insurance Company (holdings
on 1 October 2020: 7,233,081 shares, 12.8%)
Hanna Hiidenpalo, Master of Economics,
born 1966
Chief Investment Ocer, Elo Mutual Pension
Insurance Company
• No shareholdings in SATO Group companies
Finnish Construction Trade Union (holdings on
1 October 2020: 619,300 shares, 1.1%)
Matti Harjuniemi, Bachelor of Arts, born 1958
Chairman, Finnish Construction Trade Union
• No shareholdings in SATO Group companies
Board of Directors
The general meeting elects between ve and
nine members of the Board of Directors and
one member of the Board of Directors to serve
as Chair of the Board. The Board of Directors
elects one of its members to serve as Deputy
Chair. The term of oce of the members of the
Board of Directors lasts until the closing of the
annual general meeting following the one at
which they were elected. The majority of the
Board of Directors must be independent of the
Company. At least two Board members who
are independent of the Company must also be
independent of signicant shareholders in the
Company. The Board of Directors assesses the
independence of its members and declares
which of the members of the Board of Directors
are considered independent of the Company,
and which independent of the signicant
shareholders.
The annual general meeting on 23 June 2020
elected six members to the Board of Directors.
All the elected members also acted as members
of the Board prior to the annual general meeting.
Marcus Hansson’s, M.Sc. (Econ) task as member
of the Board of Directors expired at the annual
Board of Directors or the Finnish Limited Liability
Companies Act.
The annual general meeting decides on the
matters due to it under the Finnish Limited
Liability Companies Act and the articles of
association. These include the adoption of the
Company’s nancial statements and consolidated
nancial statements, the use of prot indicated
on the balance sheet, discharging the members
of the Board of Directors and the President and
CEO from liability, electing the members and
Chair of the Board of Directors and an auditor,
and determining the remuneration to be payable
to them. The meeting may also handle other
matters to be dealt with at a general meeting
in accordance with the Finnish Limited Liability
Companies Act, such as share issues, acquisition
of the Company’s own shares and amendments
to the articles of association. The meeting also
deals with matters which a shareholder has
requested to be dealt with at a general meeting
in accordance with the Finnish Limited Liability
Companies Act.
SATO has a single series of shares. Each share
confers entitlement to one vote at a general
meeting. Entitlement to attend the general
meeting is held by a shareholder who has been
entered in the register of shareholders maintained
by Euroclear Finland eight working days before
the general meeting. The Finnish Limited
Liability Companies Act also contains regulations
concerning nominee-registered shareholders
when participating in a general meeting.
SATO GOVERNANCE 2020
10
SUSTAINABILITY MANAGEMENT RISK MANAGEMENT
CORPORATE GOVERNANCE STATEMENT
REMUNERATION STATEMENT
Tarja Pääkkönen D.Sc. (Corporate strategies),
M.Sc. (Construction)
b. 1962, professional board member
Finnish citizen
• no shareholdings in SATO Group companies
• in controlled corporations no shareholdings in
SATO Group companies
Johannus (Hans) Spikker Economic Geography,
University of Amsterdam
s. 1959, Senior Portfolio Manager Real Estate
Europe, APG Asset Management, The Netherlands
Dutch citizen
• no shareholdings in SATO Group companies
• in controlled corporations no shareholdings
in SATO Group companies
Timo Stenius M.Sc. (Constr. Eng.),
b. 1956, Director, Unlisted investments (real estate,
infrastructure, private equity and private debt Elo
Mutual Pension Insurance Company
Finnish citizen
• no shareholdings in SATO Group companies
• in controlled corporations no shareholdings
in SATO Group companies
The Board of Directors elected Jukka Hienonen
as its Deputy Chair.
All Board members are independent of the
Company, and Jukka Hienonen, Esa Lager and
Tarja Pääkkönen are also independent of the
signicant shareholders.
The Company’s Board of Directors is responsible
for the proper organisation of the Company’s
governance and its operations. It is the duty of
the Board of Directors to promote the interests of
the Company and all its shareholders.
In 2020, the Board of Directors convened on 14
meetings. An average of 96.4% of the members
of the Board of Directors attended the Board
meetings. Members of the Board of Directors
participated in the meetings as follows: Erik Selin
14/14, Marcus Hansson 7/7, Jukka Hienonen 13/14,
Esa Lager 14/14, Tarja Pääkkönen 14/14, Hans
Spikker 13/14 and Timo Stenius 14/14.
SATO's Board of Directors has conrmed the
rules of procedure applied to the duties, meeting
procedures and decision-making practices of the
Board of Directors. These rules of procedure are
explained on the Company’s website. In addition
to matters for decision, the Board of Directors
receives up-to-date information on the Company's
operations, nancial position and risks at its
meetings.
In addition to the duties specied by the
Companies Act, the Board of Directors decides on
matters which, taking into account the extent and
size of the Group’s operations, have considerable
importance for the Group’s business. The duties of
the Board of Directors include the following:
• conrmation of the Group’s business strategy
and monitoring its implementation
• conrming and monitoring the annual budget
and the business plan
• dealing with the nancial statements and
report of the Company’s Board of Directors
as well as the interim reports and half year
nancial reports
• conrming the Company’s dividend policy
• organization and supervision of risk
management, internal control and internal
audit
• decisions regarding SATO Group’s nancing
• decisions on signicant investments and
divestments.
The Board of Directors also appoints and
dismisses the Company’s President and CEO and,
when necessary, his/her deputy, as well as the
members of the Corporate Management Group,
and determines the terms of their employment
and of their term of oce as well as their
remuneration schemes.
The Board of Directors performs an annual,
internal self-assessment of its activities and its
working methods. The purpose of the self-
assessment is to verify how the Board’s activities
have been performed during the year and to
serve as a basis for assessing the Board’s method
of operating.
Diversity of the Board of Directors
The diversity of the Board of Directors supports
the Company’s business, its development and thus
the success of the Company. Diversity strengthens
the work of the Board of Directors by emphasising
the views of people of dierent ages, dierent
educational backgrounds and dierent experience
concerning the Company’s development and the
steering of its operations. Diversity increases open
discussion and strengthens the decision-making
of the Board members.
While preparing a proposal for the annual
general meeting concerning the number of
general meeting 23 June 2020. The shareholdings
of the members of the Board are presented as on
31 December 2020.
Elected as chairman of the Board of Directors was
Erik Selin degree in business economics
b. 1967, Managing Director, Fastighets Ab Balder
Swedish citizen
• no shareholdings in SATO Group companies
• no shareholdings in SATO Group companies
in by Erik Selin controlled corporations
• Erik Selin holds 10,500 B-shares in Fastighets
AB Balder. Erik Selin Fastigheter AB (100%
controlled by Erik Selin) owns 57,200,400
B-shares and 8,309,328 A-shares in Fastighets
AB Balder which represents 36,4% of the
share capital and 49,9% of votes. Erik Selin
is the member of the Board of Directors and
CEO in Fastighets AB Balder. Fastighets AB
Balder is the ultimate parent company of SATO
Corporation.
Elected as members of the Board of Directors
were
Jukka Hienonen M.Sc. (Econ.)
b. 1961, professional board member
Finnish citizen
• no shareholdings in SATO Group companies
• in controlled corporations no shareholdings
in SATO Group companies
Esa Lager LL.M., M.Sc. (Econ.)
b. 1959, professional board member
Finnish citizen
• no shareholdings in SATO Group companies
• in controlled corporations no shareholdings
in SATO Group companies
SATO GOVERNANCE 2020
11
SUSTAINABILITY MANAGEMENT RISK MANAGEMENT
CORPORATE GOVERNANCE STATEMENT
REMUNERATION STATEMENT
Board members and the persons to be elected as
members and Chair the Nomination Committee
must take into account the requirement for
diversity. The Committee must evaluate the
requirements set for the number of the members
of the Board, their competence in any given
situation and must also evaluate the experience of
the Board members, their knowledge of SATO’s
business, education and distribution of age and
gender. A member of the Board of Directors
must have the possibility to spend sucient time
on Board work. The number of Board members
must be a sucient. Board members must have
dierent skills to support the implementation
of the Company’s current strategic targets. To
support and challenge SATO’s management from
various perspectives is also one of Board’s key
tasks.
The requirements for diversity has been
implemented in the composition of SATO’s Board
of Directors. The education and experience of
the members of SATO’s Board supplement and
support that of other members. Each member
of Sato’s Board has a degree in technology,
in business or economics or a Master of Laws
degree. Board members have experience in
management functions and board memberships
in signicant companies and of companies
operating internationally. A wide experience in
housing investment, nancing and consumer
business is represented in SATO’s Board.
Both genders (one woman and ve men) are
represented on the Board of Directors and the
span of ages ranges from 53 to 64. The term of
oce of the Board members has lasted six years
on average.
The committees of the Board of Directors
At the organisational meeting held after the
annual general meeting, the Board of Directors
has appointed annually an Audit Committee and
a Nomination and Remuneration Committee.
The Audit Committee and the Nomination and
Remuneration Committee have comprised
three to ve members elected by the Board of
Directors, one of whom serves as Chair. The
Board of Directors has decided to abolish the
Audit Committee as of 23 February 2020.
The Board of Directors conrms the rules of
procedure for the current committees. The
committees have no independent decision-
making authority. Their mission is to prepare
matters for decision by the Board of Directors
and the annual general meeting and they report
constantly on their actions to the Board of
Directors. The rules of procedure can be seen
on the SATO’s website.
Serving on the Audit Committee until 23
February 2020 were Marcus Hansson as Chair
and members Esa Lager, Hans Spikker and Timo
Stenius. All members have been independent of
the Company. Esa Lager is also independent of
the signicant shareholders. All the members of
the Audit Committee participated in its meeting
held on 23 February 2020.
Serving on the Nomination and Remuneration
Committee in 2020 were Chair Erik Selin
and members Jukka Hienonen and Tarja
Pääkkönen. All the members are independent
of the Company and Tarja Pääkkönen and Jukka
Hienonen are also independent of the signicant
shareholders. The members of the committee
attended all the committee meetings, four
meetings in the total.
President and CEO
The President and CEO is responsible for
managing the Group’s business operations, their
planning, and the attainment of its goals. He/
she is responsible for preparing matters for the
Board of Director’s attention and for executing the
decisions of the Board. The President and CEO
is responsible for the ongoing management of
the Company in accordance with the rules and
regulations supplied by the Board of Directors.
The President and CEO serves as Chair of the
Corporate Management Group.
The Board of Directors appoints and discharges
the Company’s President and CEO.
Until 18 December 2020 Sharam Rahi served
as SATO’s President and CEO. Mr Rahi is also
the Vice CEO of Fastighets AB Balder. As of 18
December 2020 M.Sc. (Tech.) Antti Aarnio was
appointed as SATO’s President and CEO.
The Corporate Management Group
The Corporate Management Group assists
the President and CEO in the planning and
management of operations and decision-making.
The Corporate Management Group deals with
all key issues for the management of SATO
Group, such as matters related to the strategy,
budgeting, investments, business planning, and
nancial reporting. The Corporate Management
Group’s duties include the implementation of
the decisions of the Board of Directors under
the leadership of the President and CEO. The
Corporate Management Group has no authority
under law or the articles of association; it serves
as a body to assist the President and CEO. The
shareholdings of the members of the Corporate
Management Group are presented as on 31
December 2020.
31 December 2020 the Corporate Management
Group consisted of
Antti Aarnio President and CEO, Chair of the
Management Group (as of 18 December 2020)
also Executive Vice President, Rental Housing
Business
b. 1972, M.Sc. (Tech.)
• no shareholdings in SATO Group companies
• in controlled corporations no shareholdings in
SATO Group companies
Markku Honkasalo CFO
b. 1964, LL.M., eMBA
• no shareholdings in SATO Group companies
• in controlled corporations no shareholdings in
SATO Group companies
In addition, during year 2020 President and
CEO Sharam Rahi (until 18 December 2020);
EVP, Rental Housing Business, M.Sc. (Econ.)
Antti Asteljoki (until 4 February 2020) and Director,
Marketing and Communications, M.Soc.Sc.
Miia Eloranta (until 3 December 2020) served as
members of the Corporate Management Group.
The Corporate Management Group convened
once every two weeks in January–March 2020.
In addition convened the Wide Corporate
SATO GOVERNANCE 2020
12
SUSTAINABILITY MANAGEMENT RISK MANAGEMENT
CORPORATE GOVERNANCE STATEMENT
REMUNERATION STATEMENT
Management Group consisting of VP, General
Counsel; VP, Human Recourses, Chief Digital
Ocer (CDO) and as of 18 December Commercial
Director and VP, Investments. The Wide
Corporate Management Group has convened
once every two weeks and 3–5 times a week
starting in March 2020. The focus areas of the
Corporate Management Groups were in year
2020 the matters related to the coronavirus
pandemic: the cost eciency and occupancy
rate, the improvement of customer satisfaction,
as well as the development of digital operational
environment. In addition, management groups
operate in dierent areas of business and nancing
having focus on the monitoring, development and
supervision of its own eld of business.
DESCRIPTIONS OF INTERNAL
CONTROL PROCEDURES AND
THE MAIN FEATURES OF RISK
MANAGEMENT SYSTEMS
Overview of the risk management systems
SATO’s risk management is based on the risk
assessment embodied in the strategic and annual
planning process which assessment also covers
the risks of the nancial reporting process. Risk
assessment includes actions to mitigate the risks.
As business risks are considered strategic and
operative risks as well as nancing and market risks.
Responsibility for the arrangement of risk
management and supervision is held by the
Company’s Board of Directors and the President
and CEO. The internal audit and internal control
support the Board of Directors in performing its
duty of supervision.
Overview of internal control
The aim of internal control is to help to verify
the eciency, productiveness and reliability
of the Group’s operations, and to conrm the
compliance of operations with the law and other
regulations. In addition, SATO’s activities are
steered by SATO’s internal instructions such as
Code of Conduct. SATO’s priority is that each
person working for SATO Group is acquainted
with rules and regulations regarding his/her own
tasks and follows them. SATO organizes regularly
training about internal instructions and it is an
essential part of introduction for work.
The Group’s internal control systems serve i.a.
to verify that the nancial reports issued by the
Company give essentially correct information
on the nancial standing of the Group. The
Group has determined for the key spheres of its
operations Group-wide principles which form the
basis for internal control. Each of SATO’s business
units has its own controller function to assure that
the nancial reporting meets with regulation and
Group’s instructions.
Responsibility for the arrangement of internal
control is held by the Board of Directors and
by the President and CEO who implement the
resolutions of the Board. Board members are
sent regularly report on the Group’s nancial
position and operating environment. The
Board of Directors oversees the eectiveness of
internal control and the accuracy of the nancial
reporting. Responsibility for the performance
of internal control is held by the operational
organisation of the entire Group, in such a way
that each Group employee is responsible to his
or her supervisor at all times for the supervision of
his or her sphere of responsibility.
The content of the reporting process and
compliance with regulations are the responsibility
of the Group’s nancial administration. The
Group’s nancial reporting process complies with
the Group’s operational guidelines and process
descriptions as well as control measures for
ensuring the quality of reporting. The controls
on the reporting process have been specied
on the basis of a control risk assessment matrix
for the process. The types of controls are, for
example, system controls, specications, or
audits or actions carried out by management or
another party. Responsible parties have been
allocated for controls which are in charge of the
implementation and eectiveness of the controls.
The interpretation and application of accounting
standards has been consolidated in the hands
of the Group’s nancial administration, which
maintains operating guidelines on nancial
reporting, process descriptions, calculation
manuals and control mechanism descriptions,
and which attends to the associated in-
house communications. The Group’s nancial
administration also oversees compliance
with these instructions and procedures. The
monitoring of the budgeting and reporting
processes is based on the Group’s reporting
principles, for which the denition and
centralised maintenance is the responsibility
of the Group’s nancial administration. The
principles are applied uniformly throughout
the Group and a standardised Group reporting
system is in use.
OTHER INFORMATION TO BE
PROVIDED IN THE CG STATEMENT
Internal audit
Internal audit supports the Board of Directors in
performing its duty of supervision. Internal audit
acts in accordance with the annual plan approved
by the Board of Directors. Audit objects are
elected in accordance with the Group’s strategic
targets, estimated risks and focus areas. In year
2020 the internal audit conducted four wide audits.
The internal audit assesses, independently and
systematically, the functionality, eciency and
appropriateness of the Group’s management
and governance systems, as well as the business
processes and risk management. In its reports,
the internal audit makes recommendations for the
improvement of systems and processes.
The aim of the internal audit is to give reasonable
reliability of the correctness of nancial and
business reporting, the appropriate management
of Company’s assets and the legality of
Company’s activities. In addition, the internal
audit aims to promote the development of the risk
management. The person liable for the internal
audit reports to the Chief Financial Ocer (as the
member of the organisation) and the ndings of
internal audit to the President and CEO as well as
to the Board of Directors.
Related party transactions
Persons as dened in detail in the SATO Corporation
Related Party Instructions must report the related
party transactions to the Company in writing.
SATO GOVERNANCE 2020
13
SUSTAINABILITY MANAGEMENT RISK MANAGEMENT
CORPORATE GOVERNANCE STATEMENT
REMUNERATION STATEMENT
The report must be submitted for approval prior
to completing the related party transaction. In the
case of major transactions, the Board of Directors
will decide whether to accept the reported related
party transaction. In the case of transactions that
are part of SATO's regular business, or minor
transactions valued less than EUR 10,000, the
decision can be made by the Chair of the Board,
the President and CEO or the CFO. Regulations
concerning recusal due to the likelihood of bias
are observed in decision making. No approval is
required in case of ordinary contracts concerning
lease of apartments.
In consideration the closeness of the related
party relations and the size of the transaction
are taken into account, as well as any exceptions
from market conditions, whether the transaction
is part of SATO Group's daily business, whether
there are nancial grounds for the transaction and
whether it is acceptable from the viewpoint of
SATO Group.
Insider trading management
SATO’s rules concerning insider trading are based
on the EU’s Market Abuse Regulation (596/2014,
“MAR”), the Finnish Securities Markets Act and
they comply with the standards of the Financial
Supervisory Authority and the guidelines of the
Helsinki and Irish stock exchanges where these
apply to an issuer of listed bonds.
The insider guidelines include, among other
things, guidelines concerning trading in SATO’s
nancial instruments. SATO has no permanent
insiders and it does not maintain a list of permanent
insiders. A project-specic list of insiders is based
on a decision by the President and CEO or, if
he/she is recused, the CFO. Insider information
is in particular information that concerns the
ability of SATO and the SATO Group to full their
commitments in respect of issued bonds.
In SATO managers (as specied in MAR) are
the members of the Board of Directors and the
President and CEO. SATO maintains a list of them
and persons closely associated to them according
to MAR. SATO’s managers are prohibited from
trading in SATO’s nancial instruments during
the closed period starting 30 days prior to the
publication of SATO’s nancial statement or
interim report and ending at the closing of the
publication day. Also persons who participate
in the preparation of the nancial statements or
interim reports or their publication are prohibited
from trading in SATO’s nancial instruments
during the closed period. A separate record is
maintained of these persons. Managers and their
closely associated persons must notify SATO
and Finnish Financial Supervision Authority of
all transactions conducted by SATO’s nancial
instruments within three working days of the
transaction.
Audit
The annual general meeting elects a single
auditor for the Company, which must be an
audit rm approved by the Finnish Patent and
Registration Oce. The auditor's term of oce is
the nancial year and its duties end at the closing
of the annual general meeting following the one
at which it was elected.
The auditor for the nancial year 1 January to
31 December 2020 was Deloitte Oy with Eero
Lumme, M.Sc. (Econ.), APA as the auditor in
charge. The audit examines the accounts, nancial
statements and administration of the Company
and group.
In 2020, the auditor Deloitte Oy was paid auditing
fees of EUR 235,067, fees for other assignments
related to auditing EUR 87,815 and for other
services EUR 8,073 (including all companies
belonging to the same group or chain).
SATO GOVERNANCE 2020
14
SUSTAINABILITY MANAGEMENT RISK MANAGEMENT CORPORATE GOVERNANCE STATEMENT
REMUNERATION STATEMENT
Erik Selin, chairman of
the Board of Directors EUR 45,500
Jukka Hienonen, deputy chairman of
the Board of Directors EUR 31,000
Marcus Hansson EUR 13,500
Esa Lager EUR 25,500
Tarja Pääkkönen EUR 27,500
Johannus (Hans) Spikker EUR 25,000
Timo Stenius EUR 25,500
A total of EUR 193,500 was paid in fees to members
of the Board of Directors in 2020. During the nancial
period, no shares or share-based rights were issued
to members of the Board of Directors as fees.
THE PRESIDENT AND CEO AND
OTHER MANAGERS OF THE GROUP
Decision-making procedure
On the basis of proposals presented by the
Nomination and Remuneration Committee,
SATO's Board of Directors makes resolution on
the terms and conditions of the term of oce of
SATO's President and CEO and employment of
the members of the Group management team.
Board of Directors also makes resolution on their
salaries, the criteria of annual bonus schemes and
long-term incentive schemes, as well as the amount
of bonuses payable based on the schemes, the
payment method and date.
Individuals employed by SATO Group do not
receive any separate compensation for acting as a
member of the Board of Directors or as CEO in the
subsidiaries of the Group.
The President and CEO's service contract
A written service contract has been signed
between SATO and its President and CEO Antti
Aarnio, according to which the President and CEO
receives a monthly salary divided into a monetary
component and customary fringe benets. The
President and CEO is within the scope of the
annual bonus and/or long-term incentive schemes
in the manner decided by the Board of Directors.
The period of notice for the President and CEO
is six months if the service contract is terminated
by the President and CEO. Since the CEO service
contract has been signed only for the period of
recruitment of the permanent President and CEO,
SATO shall not follow any specic notice period
and no severance pay will be paid to the President
and CEO in case SATO terminates the service
contract due to the appointment of the permanent
President and CEO. In such case Antti Aarnio has
the right to return to his position as EVP, Rental
Housing Business. In case SATO terminates the
service contract for any other reason or if Antti
Aarnio cannot return to his position as EVP, Rental
Housing Business for any reason attributable to
SATO, Aarnio has the right to six months’ salary
for the notice period and for the severance pay
corresponding to his six months’ salary.
REMUNERATION SCHEMES
The objective of incentive schemes is to combine
the targets of shareholders and key individuals to
increase the company's value, improve the Group's
competitiveness and ensure the long-term nancial
success.
The following incentive scheme concerning year
2020 is eective in SATO:
Members of the Group management team and
separately appointed key individuals of the Group
are within the scope of an annual bonus scheme.
The coronavirus pandemic has aected also the
annual bonus scheme in SATO in an manner that
the bonus will be paid based on the achievement
MEMBERS OF SATO’S BOARD OF
DIRECTORS
Decision-making procedure
Remuneration payable to the members of
the Board of Directors of SATO Corporation
(hereinafter “SATO”) is resolved by the SATO’s
shareholders at the Annual General Meeting.
The proposal for the remuneration is prepared,
together with a proposal for the election of board
members, by the Shareholders' Nomination
Committee. The Nomination Committee consists of
representatives of SATO's four largest shareholders
registered in the book-entry system on 1 October,
which shareholders have approved the assignment.
SATO's Annual General Meeting (“AGM”) held on 23
June 2020 made the resolution that the following
annual remuneration be paid for the term starting
at the close of the AGM and ending at the close of
the AGM in year 2021:
• Chair of the Board of Directors: EUR 36,000
• Deputy chair of the Board of Directors:
EUR 22,000
• Other members of the Board of Directors:
EUR 18,000 each.
In addition, the AGM resolved that a meeting fee of
EUR 500 per meeting be paid to the chair, deputy
chair and members of the Board of Directors
for meetings of the Board of Directors and its
committees. These fees correspond to the fees paid
to members of the Board of Directors during the
previous term of oce.
Fees paid to members of
the Board of Directors in 2020
The following fees were paid to members of SATO's
Board of Directors during the nancial period of
1 January – 31 December 2020:
REMUNERATION STATEMENT 2020
of the personal targets and the behaviour in
accordance with SATO’s values.
The Board of Directors approves the criteria for
annual bonuses, the individuals within the scope
of bonus scheme and the payment of bonuses. In
the highest payment segments the annual bonuses
are paid in two parts: rst part in the year following
the earnings period and the second part two years
after the earnings period for those individuals
employed by SATO at the moment of payment.
SALARIES AND FEES PAID TO
THE PRESIDENT AND CEO AND
MEMBERS OF THE GROUP
MANAGEMENT TEAM IN 2020
For the period ending on 18 December 2020
President and CEO Sharam Rahi received EUR
281,888 in salary, of which monetary salary
accounted for EUR 281,657 and fringe benets
made up EUR 231. Sharam Rahi did not receive any
payments as annual bonuses or based on other
incentive schemes during year 2020. Since Sharam
Rahi was appointed as President and CEO only for
a temporary period of time, no severance pay was
paid to him.
For the period starting on 18 December 2020
the President and CEO Antti Aarnio received
EUR 10,245 in salary, of which monetary salary
accounted for EUR 9,809 and fringe benets made
up EUR 436.
In 2020, other members of the Group management
team received EUR 589,838 in salaries and fringe
benets, EUR 6,109 in bonuses based on long-term
incentive schemes, and EUR 319,413 in bonuses
based on the annual bonus schemes for years 2018
and 2019. In addition to the President and CEO,
the Group management team consisted of four
individuals during year 2020.
SATO GOVERNANCE 2020
15
SUSTAINABILITY MANAGEMENT RISK MANAGEMENT CORPORATE GOVERNANCE STATEMENT REMUNERATION STATEMENT
BOARD OF DIRECTORS
ERIK SELIN
born 1967, Business school economist, CEO and Board
Member, Fastighets Ab Balder, Board member since 2015,
Chairman of the Board since March 2016, independent of the
company, not independent of the main shareholders
Primary working experience
Fastighets AB Balder: CEO and Board Member since 2005,
Owner of several companies in real estate business
Main positions of trust
Skandrenting AB: Chairman of the Board of Directors,
Collector AB: member of the Board of Directors, Collector
Bank AB: Member of the Board of Directors, Västsvenska
Handelskammaren: member of the Board of Directors,
Hexatronic Scandinavia AB: member of the Board of Directors,
Hedin Bil: member of the Board of Directors, Ernström & Co:
member of the Board of Directors
JUKKA HIENONEN
born 1961, M.Sc.(Econ.), Board member and Deputy Chairman of
the Board since 2015, independent of the company and its main
shareholders
Primary working experience
SRV Plc: President and CEO 2010–2014, Finnair Plc: President
and CEO 2006–2010, Stockmann Plc: Executive Vice President
2001–2005, Director, International Aairs 1995–2000,
Timberjack Oy: Marketing Director 1991–1995
Main positions of trust
Juuri Partners Oy: Chairman of the Board of Directors: Nokian
Renkaat Oyj: Chairman of the Board of Directors
ESA LAGER
born 1959, LL.M., M.Sc.(Econ.), Board member since 2014,
Chairman of the Board 2015–2016, Deputy Chairman of the
Board 2014–2015, independent of the company and its main
shareholders
Primary working experience
Outokumpu Oyj: deputy to the CEO 2011–2013, Executive Vice
President - Chief Financial Ocer 2005–2013, Executive Vice
President of Finance and Administration 2001–2004, Corporate
Treasurer 1995–2000, Assistant Treasurer 1991–1994, Kansallis
Banking Group: Manager at the Head Oce/London Branch
1984–1990
Main positions of trust
Ilkka-Yhtymä Oyj: Deputy Chairman of the Board of Directors,
Alma Media Corporation: member of the Board of Directors,
Terrafame Oy: member of the Board of Directors,
Stockmann Oyj: member of the Board of Directors,
GRK Infra Oy: member of the Board of Directors
TARJA PÄÄKKÖNEN
born 1962, Ph.D (Corp.Strategies), M.Sc. (Const. & Architecture), Executive
Partner of Boardman Ltd, Board member since 2013, independent of the
company and its main shareholders
Primary working experience
Boardman Ltd: Executive Partner, 2010–, Boardman Ltd: Executive Partner and
Chairman of Brand Compass Group 2010–2019, Itella Corporation: Senior Vice
President, Corporate Sales and Marketing and member of Executive Board
2005–2010, Nokia Corporation: Member of the Management Board of Nokia
Mobile Phones and several global Senior Vice President positions in Europe,
the USA and Asia 1994–2004, Mecrastor Oy (PwC): Management Consultant
1992–1994, Kienbaum KmbH, Germany: Management Consultant 1990–1992
Main positions of trust
Panostaja Oyj: member of the Board of Directors, United Bankers Oyj:
member of the Board of Directors and member of Remuneration Committee,
YLVA: member of the Board of Directors and member of Remuneration
Committee, GRK Infra Oy: member of the Board of Directors, Qentinel Oy:
member of the Board of Directors, Andiata Oy: Advisor Board, Chairman of
the Board
SATO GOVERNANCE 2020
16
SUSTAINABILITY MANAGEMENT RISK MANAGEMENT CORPORATE GOVERNANCE STATEMENT REMUNERATION STATEMENT
BOARD OF DIRECTORS
TIMO STENIUS
born 1956, M.Sc. (Constr. Eng.), Board member since 2015,
independent of the company, not independent of the main
shareholders
Primary working experience
Worked as a director responsible for Elo Mutual Pension Insurance
Company's real estate investments as well as all unlisted investments
2014–2020. Since 1990, he has been a member of the Board of
property investment and development in a listed company Polar
Yhtymä Oyj and Polar Kiinteistöt Oyj, and since 2001, as the director
responsible for a pension insurance company Eläke-Fennia's property
investments, corporate nancing and non-listed equity investments. In
addition, in 1982–1988 he was involved in project export tasks targeted
at the Soviet Union in Finn-Stroi Oy.
Main positions of trust
KTI: Chairman of the Board of Directors, Tyvene Oy: Chairman of
the Board of Directors, Avara Oy: Deputy Chairman of the Board of
Directors
JOHANNUS (HANS) SPIKKER
born 1959, Economic Geography, University of
Amsterdam, Senior Portfolio Manager Real Estate
Europe, APG Asset Management, Amsterdam, The
Netherlands, Board member since 2017, independent of
the company, non-independent of the main shareholders
Primary working experience
Senior Portfolio Manager Real Estate, APG Asset
Management, as of 2007, Senior Portfolio Manager Real
Estate, Structured Investments, Pensionfund PGGM,
1997–2007, Asset Manager German real estate, SPP
Investment Management, 1994–1997, Property Manager
commercial real estate Germany, Shell Pensionfund 1991–
1994, Market researcher MAB Groep BV, a Dutch property
development company, 1986–1991
Main positions of trust
–
SATO GOVERNANCE 2020
17
CORPORATE MANAGEMENT GROUP
ANTTI AARNIO
President and CEO, EVP/Rental Housing Business
born 1972, M.Sc.(Eng.)
has worked for SATO since 2000
Primary working experience:
SATO Corporation: Vice President/Rental Housing
Business and Investments 2016–2020, Director,
Investments and divestments, Helsinki Region and St.
Petersburg 2010–2016: Nordic Real Estate Partners Oy:
Housing investments and investment management /
managing director of Minun Koti associations 2007–2009:
SATO Corporation, Housing investments: Director, SATO
Asunnot 2006–2007, Real estate manager 2004–2006,
Building manager 2003–2004, Project engineer 2002–
2003, Administrative building manager 2000–2001
Main positions of trust
Member of the Board for several SATO Group
companies: Helsinki Region Chamber of Commerce:
Regional and housing committee, member: RAKLI:
Investment and nancing committee, member
Shareholding in SATO: –
MARKKU HONKASALO
Chief Financial Ocer
born 1964, LL.M., eMBA
has worked for SATO since 2016
Primary working experience
Componenta Corporation: CFO 2015–2016: Valmet
Corporation: CFO 2013–2015: Rautaruukki Oyj:
CFO 2009–2013: Myllykoski Corporation: Director,
Administration, Legal & HR 2003–2008: Dierent
positions in the banking sectors 1989–2003
Main positions of trust
Member of the Board for several SATO Group companies
Shareholding in SATO: –
