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 on the closing date of the financial period.
1.2 Comparability of accounts
The accounting principles that were applied in 2016 have also been applied in 2017.
2. Notes to the profit and loss statement
| 2.1 Personnel expenses and average number of personnel | 2017 | 2016 |
| Salaries | –5,558,198.78 | –5,002,121.09 |
| Fees and remuneration of the Managing Director and the Board of Directors | –310,365.70 | –294,259.00 |
| Pension expenses | –1,071,733.06 | –963,027.72 |
| Other indirect personnel expenses | –232,761.71 | –282,866.37 |
| Personnel expenses, total | –7,173,059.25 | –6,542,274.18 |
| Total monetary value of fringe benefits | –84,561.16 | –84,892.03 |
| Number of employees | ||
| At the end of the financial period | 94 | 75 |
| Average during the financial period | 83 | 73 |
| 2.2 Depreciation | ||
| Planned depreciation during the financial period | ||
| Intangible assets | ||
| Software licenses | –17,576.35 | –18,921.70 |
| Tangible assets | ||
| Machinery and equipment | –34,784.88 | –19,834.48 |
| Depreciation during the financial period, total | –52,361.23 | –38,756.18 |
| 2.3 Other operating expenses | ||
| Administrative expenses | –1,651,327.06 | –1,104,813.88 |
| Facility expenses | –619,955.57 | –608,131.24 |
| Telephone, IT, and office expenses | –640,291.55 | –504,985.74 |
| Marketing expenses | –50,942.65 | –54,140.81 |
| Travel expenses | –79,181.91 | –85,843.31 |
| Representation expenses | –3,011.86 | –85,819.50 |
| Other operating expenses | –140,963.30 | –157,520.72 |
| Other operating expenses, total | –3,185,673.90 | –2,601,255.20 |
| 2.4 Financial income and expenses | ||
| Financial income | ||
| Interest income | 129.48 | 1,315.57 |
| Exchange rate gains | 820.17 | 0.10 |
| Other income from securities | 17,063.65 | 74,101.06 |
| Financial income, total | 18,013.30 | 75,416.73 |
| Financial expenses | ||
| Interest expenses | –470.87 | –713.64 |
| Exchange rate losses | –0.09 | –1,590.99 |
| Other expenses from investments | 0.00 | –14,174.11 |
| Financial expenses, total | –470.96 | –16,478.74 |
| 2.5 Auditors’ fees | ||
| Audit fees | –8,657.32 | –7,911.31 |
| Other fees | –36,150.79 | –32,738.06 |
| Auditors’ fees, total | –44,808.11 | –40,649.37 |
| 3. Notes to assets of the balance sheet | 2017 | 2016 |
| 3.1 Changes in non-current assets | ||
| Intangible assets | ||
| Acquisition cost 1 Jan | 449,193.46 | 387,410.21 |
| Procured during financial period | 33,936.76 | 61,783.25 |
| Acquisition cost 31 Dec | 483,130.22 | 449,193.46 |
| Accumulated depreciation 1 Jan | –395,589.11 | –376,667.41 |
| Depreciation during the financial period | –17,576.35 | –18,921.70 |
| Accumulated depreciation 31 Dec | –413,165.46 | –395,589.11 |
| Balance sheet value 31 Dec | 69,964.76 | 53,604.35 |
| Tangible assets | ||
| Acquisition cost 1 Jan | 809,899.92 | 798,100.51 |
| Procured during financial period | 79,636.16 | 11,799.41 |
| Acquisition cost 31 Dec | 889,536.08 | 809,899.92 |
| Accumulated depreciation 1 Jan | –750,396.02 | –730,561.54 |
| Depreciation during the financial period | –34,784.88 | –19,834.48 |
| Accumulated depreciation 31 Dec | –785,180.90 | –750,396.02 |
| Balance sheet value 31 Dec | 104,355.18 | 59,503.90 |
| The company does not have a depreciation difference. | ||
| 3.3 Receivables | ||
| Travel advances | 16,902.08 | 5,546.57 |
| Other receivables, total | 16,902.08 | 5,546.57 |
| 3.4 Prepayments and accrued income | ||
| Deferred expense | 136,646.12 | 125,641.46 |
| Pension insurance payment receivables | 0.00 | 23,540.00 |
| Prepayments and accrued income, total | 136,646.12 | 149,181.46 |
| 3.5 Investments | Book value | Book value |
| Other shares and similar rights of ownership | ||
| Fund units | 2,124,346.76 | 2,074,760.46 |
| Investments, total | 2,124,346.76 | 2,074,760.46 |
| Market value | Market value | |
| Fund units | 2,310,964.70 | 2,307,547.43 |
| 4. Notes to equity and liabilities of the balance sheet | 2017 | 2016 |
| 4.1 Equity | ||
| Restricted equity | ||
| Share capital 1 Jan | 12,500,000.00 | 12,500,000.00 |
| Share capital 31 Dec | 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 Jan | 3,557,033.83 | 3,150,595.73 |
| Retained earnings 31 Dec | 3,557,033.83 | 3,150,595.73 |
| Profit/loss for the financial period | 184,290.53 | 406,438.10 |
| Non-restricted equity, total | 3,741,324.36 | 3,557,033.83 |
| Equity, total 31 Dec | 16,241,324.36 | 16,057,033.83 |
| 4.2 Current liabilities | ||
| Accruals and deferred income | ||
| Annual leave salaries and related social security payments | 889,841.77 | 817,580.00 |
| Salary liabilities and related social security payments | 751,803.00 | 670,000.00 |
| Pension insurance payment liabilities | 9,294.00 | 0.00 |
| Mandatory employer insurance payments | 2,464.73 | 993.00 |
| Other accrued expense | 27,860.40 | 51,255.85 |
| Accruals and deferred income, total | 1,681,263.90 | 1,539,828.85 |
| 5. Notes on collateral and contingent liabilities | ||
| 5.1 Transactions by related parties | ||
| Of the company’s turnover, €1,509,167.18 (14.5%) comes from the sales of expert services to the government or organisations outside the government but tied to it. | ||
| 5.2 Commitments | ||
| Other own commitments | ||
| Rental liabilities, less than one year | 723,852.48 | 702,769.32 |
| Rental liabilities, more than one year | 0.00 | 732,852.40 |
| Leasing liabilities, less than one year | 130,033.74 | 111,823.06 |
| Leasing liabilities, more than one year | 201,556.08 | 41,354.14 |
| Commitments, total | 1,055,442.30 | 1,588,798.92 |
| Electricity derivatives | ||
| Market value | –3,025,636.20 | –13,639,161.74 |
| Value of hedged volume (underlying security) | 59,200,588.86 | 76,255,673.32 |
Government electricity procurement is handled centrally through Hansel’s framework agreement and involves derivatives that hedge against changes in electricity prices, in accordance with the government’s electricity hedging strategy. Hansel is responsible for the management of the portfolio and is the counterparty to the derivative agreements on behalf of its customers. The counterparties used by Hansel are large operators in the field, and to reduce risks, Hansel distributes the portfolio between various counterparties. At present, Hansel has six potential counterparties. For Hansel, electricity derivatives trading is a pass-through item, and the related expenses and income are charged for in full from the Hansel portfolio customers. The market values of derivatives are not recorded in the balance sheet.
The monitoring group for electricity procurement, set up by the Ministry of Finance, supervises government electricity procurement and, if necessary, suggests improvements to the Ministry of Finance. The Chair of the monitoring group is a representative of the Ministry of Finance, and the group reports to the management of the Ministry of Finance, as necessary. The term of office of the current group ends on 31 December 2018.
The Ministry of Finance decides on the government’s hedging strategy for electricity procurement. According to this strategy, a portfolio manager chosen by Hansel through competitive tendering will decide on individual hedges and their scheduling. Hedges have been made accordingly until 2021.
5.3 Pending legal proceedings
At the end of 2017, Hansel was involved in one case in the Supreme Administrative Court and one in the Market Court. The Supreme Administrative Court gave Hansel one ruling in 2017, dismissing the complaint. The company also received three rulings from the Market Court, all dismissing the complaint. In addition, the company received rulings from the Market Court on two framework agreement tendering processes, which remained as was. In early 2018, the company received a ruling from the Market Court, dismissing the complaint. This case has been taken to the Supreme Administrative Court. By the company’s estimate, the likelihood of financial ramifications from the court proceedings is low. However, any financial ramifications that come true will amount to significant sums.
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