News

SSH Communications Security Corp will apply the International
Financial Reporting Standards (IFRS) in its financial statements as of
the first quarter of 2004. This release provides a description of the
transition to IFRS and the reconciliations, required by IFRS 1 (First-
Time Adoption of IFRS), showing the effect of transition on the
Group’s previously reported shareholders’ equity and profit. SSH
Communications Security’s date of transition is January 1, 2003. It
will prepare its first IFRS  financial statements for the fiscal year
ending December 31, 2004, and its interim report for the first quarter
ending March 31, 2004 will be presented in accordance with IAS 34.
This interim report will be released on April 20, 2004.

The purpose of this release is to provide information on the major
effects of the adoption of IFRS on SSH Communications Security Corp’s
financial information. The company has applied IFRS 1 in the
transition to IFRS, which requires that the same accounting policies
are used in the opening IFRS balance sheet and throughout all periods
presented in the first IFRS financial statement. These accounting
policies must comply with each IFRS standards effective at the
reporting date for the first IFRS financial statements. The financial
information below is based on IAS/IFRS standards in force on the date
of preparing this release.

SSH Communications Security Corp’s previous financial statements were
based on the Finnish Accounting Standards. SSH Communications Security
Corp’s Financial Statements for 2003 were the last financial
statements prepared in accordance with the Finnish Accounting
Standards. The Notes to Reconciliations to IFRS below describe the
differences in the above principles resulting from the adoption of
IFRS. The comparative figures, based on the Finnish Accounting
Standards shown in this release, are consistent with the previously
released information.

RECONCILIATION OF EQUITY AT 1 JANUARY 2003 AND 31 DECEMBER 2003
(MEUR)








                           Finnish        IFRS     Finnish      IFRS
                         Accounting     Dec. 31,  Accounting  Dec. 31,
                          Standards       2002    Standards     2003
                          Dec. 31,               Dec. 31, 2003
                            2002

Note                                                                   
1 INTANGIBLE ASSETS            1.0   -0.5    0.5    1.6    -0.4    1.2
2 Tangible assets              0.6    0.5    1.1    0.2     0.3    0.5
3 Deferred tax assets                 0.2    0.2            0.2    0.2
  Long-term assets total       1.6    0.2    1.8    1.8     0.1    1.9
                                                                      
3 DEFERRED TAX ASSETS          0.2   -0.2           0.2    -0.2       
  Inventories                  0.8           0.8                      
  Accounts receivable and      4.7           4.7    5.2            5.2
  other receivables
  Available-for-sale          20.4          20.4   32.2           32.2
  assets
  Trading investments                               1.6            1.6
  Cash and cash               14.3          14.3    3.0            3.0
  equivalents
  Short-term assets total     40.4   -0.2   40.2   42.2    -0.2   42.0
                                                                      
  Assets total                42.0          42.0   44.0    -0.1   43.9
                                                                      
  SHARE CAPITAL                0.8           0.8    0.8            0.8
4 Share premium               54.6   -1.6   53.0   41.0    -1.6   39.4
5 Retained earnings          -19.5    1.6  -17.9   -0.6     1.5    0.9
6 Subordinated loan            0.2   -0.2           0.2    -0.2       
  Shareholders’ equity        36.1   -0.2   35.9   41.4    -0.3   41.1
  total
                                                                      
6 Borrowings                          0.2    0.2            0.2    0.2
  Long-term liabilities               0.2    0.2            0.2    0.2
                                                                      
  Provisions                   1.5           1.5                      
7 Pensions                                          0.1            0.1
  Accounts payable and         4.4           4.4    2.5            2.5
  other payables
  Short-term liabilities       5.9           5.9    2.6            2.6
  total
                                                                      
  Liabilities total           42.0          42.0   44.0    -0.1   43.9


NOTES TO THE RECONCILIATION OF EQUITY:

1. - 2.
Capitalised expenses resulting from the leasehold improvements on
rented premises in the USA have been transferred from intangible
assets to tangible assets, in accordance with IAS 16 (Property, Plant
and Equipment).

Expenses incurred for external services used to develop a brand have
been capitalized under intangible assets for 2003. IAS 38 (Intangible
Assets) requires this item to be recognized as expenses, since it does
not fulfill the recognition criteria set for intangible assets.

3.
In accordance with the Finnish Accounting Standards, deferred tax
assets, based on confirmed losses for taxation, were recognized only
to the amount of payable taxes, complying with special prudence. Based
on IAS 12 (Income Taxes) criteria, SSH considers that this amount
recognized in the balance sheet, complying with special prudence and
in accordance with the Finnish Accounting Standards, currently
corresponds to the amount, for which there is convincing evidence
required by the standard that the tax receivable can be utilized.
Deferred tax assets have been presented under non-current assets, in
accordance with IAS 12. IFRS adjustments do not give arise to any
other material deferred tax assets or liabilities.

4.
Expenses resulting from the company’s 1999 private placement and the
2000 listing on the Helsinki stock exchange are presented in retained
earnings in the balance sheet prepared using Finnish Accounting
Standards. In the IFRS financial statement these expenses have been
accounted for as a deduction from the issue premium fund, in
accordance with the interpretation of SIC 17.

5.
Retained earnings reported on December 31, 2002 were subject to an
adjustment of EUR 1.6 million, pertaining to the transfer of the above
expenses.

In addition to this EUR 1.6 million, retained earnings reported on
December 31, 2003 included an additional adjustment of EUR -0.1
million, with the most significant items being the derecognition of
the intangible asset in note 1 above and the deferred tax effect of
the IFRS adjustments. Consequently, retained earnings adjustments on
December 31, 2003 totaled EUR 1.5 million.

6.
As prescribed by the Finnish accounting legislation, the subordinated
loan under the Finnish Companies Act has been presented as a separate
item under the shareholders’ equity, whereas IAS 39 (Financial
Instruments) requires it to be presented under liabilities.

7.
The Group has both defined benefit and defined contribution pension
plans, as classified in accordance with IAS 19 (Employee benefits).
Contributions under the defined contribution plan are recognized as a
pension expense in the accounting period for which such contributions
relate to. Disability pension obligation under the Finnish Employees’
Pension Act (TEL) is interpreted as a defined benefit. IAS 19 requires
that pension expenses under defined benefits are recognized as
expenses for the period of employment, based on calculations performed
by authorized actuaries. The application of defined benefit accounting
does not have a material effect to the previously recorded pension
liability or expense under the Finnish Accounting Standards.


RECONCILIATION OF PROFIT FOR 2003 (MEUR)

                             Finnish
                    ACCOUNTING STANDARDS         IFRS
                              2003               2003
Note
  Net sales                    13.8              13.8
  Purchasing and production
  costs                        -2.5              -2.5
  Gross profit                 11.3              11.3
1 Operating expenses          -17.3     -0.1    -17.4
  Other operating income       11.3              11.3
  Operating profit/loss         5.3               5.2
  Financial income and
  expenses total                0.3               0.3
  Profit for the period         5.6               5.5


NOTES TO RECONCILIATION OF PROFIT FOR 2003

1.
The IFRS adjustments affecting the results for 2003 arises mainly from
the derecognition of certain intangible assets as stated in Note 1 to
the reconciliation of equity.

REPORT ON MATERIAL ADJUSTMENTS TO CASH FLOW STATEMENT FOR JANUARY
1-DECEMBER 31, 2003

There are no material differences between the IFRS cash flow statement
and the cash flow statement based on the Finnish Accounting Standards.

The effect of IFRS adoption to each quarter in 2003 will be shown in
connection with the Interim Reports of 2004.

Helsinki, March 18, 2004

SSH COMMUNICATIONS SECURITY CORP


Arto Vainio
CEO

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