Year 2014

Notes to the financial statements

1. Basis of preparation for the financial statements

1.1 Valuation principles

  • Fixed assets are entered in the balance sheet at cost less planned depreciation.
  • 25 per cent reducing balance depreciation is applied to machinery and equipment.
  • Software licenses are amortised on a straight-line basis over five years.
  • Other long-term expenses are amortised on a straight-line basis over five years.

Foreign currency items

Foreign currency denominated assets and liabilities are recognised at the European Central Bank average exchange rate of the closing date of the financial period.

1.2 Comparability of accounts

The accounting principles that were applied in 2013 have also been applied in 2014.

2. Notes to the profit and loss statement

2.1 Personnel expenses and average number of personnel 2014 2013
Salaries –4 855 736,95 –4 542 946,91
Fees and remuneration of the Managing Director and the Board of Directors –280 681,54 –292 023,85
Pension expenses –928 991,48 –885 687,39
Other indirect personnel expenses –246 790,35 –228 117,48
Personnel expenses, total –6 312 200,32 –5 948 775,63
Total monetary value of fringe benefits 78 948,62 74 476,92
Number of employees
At the end of the financial period 77 73
Average during the financial period 75 71
2.2 Depreciation
Planned depreciation during the financial period
Intangible assets
Software licenses –18 832,27 –33 371,43
Tangible assets
Machinery and equipment –29 323,18 –18 326,33
Depreciation during the financial period, total –48 155,45 –51 697,76
2.3 Other operating expenses
Administrative expenses –1 344 207,55 –1 110 467,76
Facility expenses –576 646,48 –634 965,19
Telephone, IT and office expenses –461 393,62 –459 886,81
Marketing expenses –101 515,05 –90 916,31
Travel expenses –87 524,68 –63 246,97
Representation expenses –4 213,82 –4 475,23
Other operating expenses –156 374,64 –143 207,67
Other operating expenses, total –2 731 875,84 –2 507 165,94
2.4 Financial income and expenses
Financial income
Interest income 18 604,05 94 935,55
Exchange rate gains 18,84 38,75
Other income from securities 38 817,69 2 920,38
Financial income, total 57 440,58 97 894,68
Financial expenses
Interest expenses –679,86 –165,99
Exchange rate losses –15,46 –5,64
Guarantee premiums 0,00 –10 652,04
Other expenses from investments –364,78 –189,53
Financial expenses, total –1 060,10 –11 013,20
2.5 Auditors’ fees
Audit fees –26 080,49 –29 831,62
Other fees –26 701,98 –15 738,00
Auditors’ fees, total –52 782,47 –45 569,62
3. Notes to assets of the balance sheet 2014 2013
3.1 Changes in non-current assets
Intangible assets
Acquisition cost 1.1. 387 410,21 366 521,38
Procured during financial period 0,00 20 888,83
Sold during financial period 0,00 0,00
Acquisition cost 31.12. 387 410,21 387 410,21
Accumulated depreciation 1.1. –340 737,24 –307 365,81
Depreciation during the financial period –18 832,27 –33 371,43
Accumulated depreciation 31.12. –359 569,51 –340 737,24
Balance sheet value 31.12. 27 840,70 46 672,97
Tangible assets
Acquisition cost 1.1. 733 909,18 723 699,17
Procured during financial period 62 966,45 10 210,01
Sold during financial period 0,00 0,00
Acquisition cost 31.12. 796 875,63 733 909,18
Accumulated depreciation 1.1. –678 725,53 –660 399,20
Depreciation during the financial period –29 323,18 –18 326,33
Accumulated depreciation 31.12. –708 048,71 –678 725,53
Balance sheet value 31.12. 88 826,92 55 183,65
The company does not have a depreciation difference.
3.2 Long-term receivables
Other receivables
Guarantee deposits 950 370,67 889 887,79
Long-term receivables, total 950 370,67 889 887,79
3.3 Other receivables
Travel advances 7 714,44 17 309,85
Other receivables, total 7 714,44 17 309,85
3.4 Prepayments and accrued income
Accrued interest, Bank account for December 0,00 157,75
Deferred expense 83 330,66 51 954,02
Pension insurance payment receivables 6 041,00 0,00
Prepayments and accrued income, total 89 371,66 52 111,77
3.5 Investments Book-value Book-value
Other shares and similar rights of ownership
Fund units 1 969 090,75 1 977 245,20
Investments, total 1 969 090,75 1 977 245,20
Market value Market value
Fund units 2 145 967,15 2 024 770,42
4. Notes to equity and liabilities of the balance sheet 2014 2013
4.1 Equity
Restricted equity
Share capital 1.1. 12 500 000,00 12 500 000,00
Share capital 31.12. 12 500 000,00 12 500 000,00
Restricted equity, total 12 500 000,00 12 500 000,00
Non-restricted equity
Retained earnings 1.1. 2 548 359,89 2 352 945,42
Retained earnings 31.12. 2 548 359,89 2 352 945,42
Profit/loss for the financial period 235 252,74 195 414,47
Non-restricted equity, total 2 783 612,63 2 548 359,89
Equity, total 31.12. 15 283 612,63 15 048 359,89
4.2 Current liabilities
Accruals and deferred income
Annual leave salaries and related social security payments 714 457,50 682 628,73
Salary liabilities and related social security payments 680 000,00 570 355,94
Accrued pension expense 0,00 9 972,00
Mandatory employer insurance payments 12 017,26 5 718,13
Other accrued expense 70 513,15 78 310,26
Accruals and deferred income, total 1 476 987,91 1 346 985,06
5. Notes on collateral and contingent liabilities
5.1 Commitments
Other own commitments
Rental liabilities, less than one year 662 428,20 661 968,60
Rental liabilities, more than one year 2 108 924,00 2 852 512,59
On-demand bank guarantee to Nasdaq OMX Stockholm Ab 44 390 393,00 53 389 679,00
Guarantee deposits to Nasdaq OMX Stockholm Ab 950 370,67 889 887,79
Leasing liabilities, less than one year 160 379,71 67 220,81
Leasing liabilities, more than one year 246 891,21 64 734,02
Commitments, total 48 519 386,79 57 926 002,81

The structure of the government’s Electricity framework agreement was modified in 2013. The clearing account for energy derivatives trading is in Nasdaq OMX Stockholm Ab under Hansel’s name. To open the account, Hansel was required to make guarantee deposits to Nasdaq (totalling  €950,370.67 on 31 December 2014). The deposits are verified every three months by Nasdaq.

Hansel Oy has a maximum on-demand bank guarantee of €75 million from Pohjola Bank Plc for use in hedging electricity purchase prices. On the balance sheet date, €50 million of this guarantee was still available for hedging purposes. On 31 December Hansel had used €44,390,393.00 of this guarantee, corresponding to the guarantees given to Nasdaq on the balance sheet date. The collateral provided by Hansel against the bank guarantee from Pohjola Bank is a directly enforceable government guarantee of a maximum of €150 million granted by the government to Hansel for use in electricity price hedging (decision VM/1805/02.04.06/2013).

For Hansel, electricity derivatives trading is a pass-through item that does not affect profits. The results of derivatives trading are charged or repaid to customers as such. The government’s electricity procurement strategy is determined by the Ministry of Finance.  The hedging policy, derived from the strategy, is set by the steering group for government electricity procurement appointed by the Ministry of Finance. Decisions regarding the hedging policy are made by the Ministry of Finance at the steering group’s proposal. The term of office of the steering group for government electricity procurement ended on 31 December 2014. A portfolio manager chosen by Hansel through competitive tendering decides on the content and timing of individual hedges made in line with the hedging policy. The hedges made according to the policy reach up to 2019.

At the beginning of 2015, the steering group was renamed Monitoring group for government electricity procurement and its term of office was set for 1 January 2015–31 December 2016. The monitoring group is responsible for monitoring the government’s electricity procurement and for making development proposals to the Ministry of Finance as required. Once a year, the monitoring group reports on the government electricity procurement to the State Procurement Advisory Board and, when necessary, to the  senior management of the Ministry of Finance.

The European Securities and Markets Authority (ESMA), an EU authority, has issued a European Market Infrastructure Regulation (EMIR), which applies to derivatives. According to the regulation, bank guarantees will not be accepted as collateral for derivatives trading after March 2016. Various Nordic organisations, such as Nasdaq, are attempting to negotiate changes to the regulation. Various Nordic organisations, such as Nasdaq, are attempting to negotiate changes to the regulation. For the time being, the situation remains unresolved, but Hansel may have to adjust its collateral arrangements for derivatives in the future.

5.2 Pending legal proceedings

At the end of 2014, Hansel was involved in three tendering-related cases handled in the Market Court, and two in the Supreme Administrative Court. In 2014, Hansel received six Market Court decisions, in which two appeals were rejected, two were left without further action and one expired. One court hearing ended in the procurement decision being revoked. The Supreme Administrative Court dismissed one case in  2014, after Hansel Oy withdrew its appeal.