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 2015 have also been applied in 2016.
2. Notes to the profit and loss statement
| 2.1 Personnel expenses and average number of personnel | 2016 | 2015 |
| Salaries | -5,002,121.09 | -4,746,296.63 |
| Fees and remuneration of the Managing Director and the Board of Directors | -294,259.00 | -290,352.17 |
| Pension expenses | -963,027.72 | -916,310.85 |
| Other indirect personnel expenses | -282,866.37 | -248,337.11 |
| Personnel expenses, total | -6,542,274.18 | -6,201,296.76 |
| Total monetary value of fringe benefits | -84,892.03 | -79,952.81 |
| Number of employees | ||
| At the end of the financial period | 72 | 74 |
| Average during the financial period | 73 | 73 |
| 2.2 Depreciation | ||
| Planned depreciation during the financial period | ||
| Intangible assets | ||
| Software licenses | -18,921.70 | -17,097.90 |
| Tangible assets | ||
| Machinery and equipment | -19,834.48 | -22,512.83 |
| Depreciation during the financial period, total | -38,756.18 | -39,610.73 |
| 2.3 Other operating expenses | ||
| Administrative expenses | -1,104,813.88 | -1,216,262.49 |
| Facility expenses | -608,131.24 | -591,857.94 |
| Telephone, IT and office expenses | -504,985.74 | -447,870.13 |
| Marketing expenses | -54,140.81 | -53,540.03 |
| Travel expenses | -85,843.31 | -78,047.56 |
| Representation expenses | -85,819.50 | -3,697.65 |
| Other operating expenses | -157,520.72 | -148,978.27 |
| Other operating expenses, total | -2,601,255.20 | -2,540,254.07 |
| 2.4 Financial income and expenses | ||
| Financial income | ||
| Interest income | 1,315.57 | 3,810.80 |
| Exchange rate gains | 0.10 | 0.00 |
| Other income from securities | 74,101.06 | 81,436.58 |
| Financial income, total | 75,416.73 | 85,247.38 |
| Financial expenses | ||
| Interest expenses | -713.64 | -2,152.62 |
| Exchange rate losses | -1,590.99 | -187.54 |
| Other expenses from investments | -14,174.11 | -20,304.98 |
| Financial expenses, total | -16,478.74 | -22,645.14 |
| 2.5 Auditors’ fees | ||
| Audit fees | -7,911.31 | -7,883.57 |
| Other fees | -32,738.06 | -41,716.02 |
| Auditors’ fees, total | -40,649.37 | -49,599.59 |
| 3. Notes to assets of the balance sheet | 2016 | 2015 |
| 3.1 Changes in non-current assets | ||
| Intangible assets | ||
| Acquisition cost 1.1. | 387,410.21 | 387,410.21 |
| Procured during financial period | 61,783.25 | 0.00 |
| Sold during financial period | 0.00 | 0.00 |
| Acquisition cost 31.12. | 449,193.46 | 387,410.21 |
| Accumulated depreciation 1.1. | -376,667.41 | -359,569.51 |
| Depreciation during the financial period | -18,921.7 | -17,097.90 |
| Accumulated depreciation 31.12. | -395,589.11 | -376,667.41 |
| Balance sheet value 31.12. | 53,604.35 | 10,742.80 |
| Tangible assets | ||
| Acquisition cost 1.1. | 798,100.51 | 796,875.63 |
| Procured during financial period | 11,799.41 | 1,224.88 |
| Sold during financial period | 0.00 | 0.00 |
| Acquisition cost 31.12. | 809,899.92 | 798,100.51 |
| Accumulated depreciation 1.1. | -730,561.54 | -708,048.71 |
| Depreciation during the financial period | -19,834.48 | -22,512.83 |
| Accumulated depreciation 31.12. | -750,396.02 | -730,561.54 |
| Balance sheet value 31.12. | 59,503.90 | 67,538.97 |
| The company does not have a depreciation difference. | ||
| 3.2 Long-term receivables | ||
| Other receivables | ||
| Guarantee deposits | 0.00 | 819,835.95 |
| Long-term receivables, total | 0.00 | 819,835.95 |
| 3.3 Receivables | ||
| Travel advances | 5,546.57 | 11,441.57 |
| Other receivables, total | 5,546.57 | 11,441.57 |
| 3.4 Prepayments and accrued income | ||
| Deferred expense | 125,641.46 | 108,131.32 |
| Pension insurance payment receivables | 23,540.00 | 47,690.00 |
| Prepayments and accrued income, total | 149,181.46 | 155,821.32 |
| 3.5 Investments | Book value | Book value |
| Other shares and similar rights of ownership | ||
| Fund units | 2,074,760.46 | 2,067,625.89 |
| Investments, total | 2,074,760.46 | 2,067,625.89 |
| Market value | Market value | |
| Fund units | 2,307,547.43 | 2,202,485.44 |
| 4. Notes to equity and liabilities of the balance sheet | 2016 | 2015 |
| 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. | 3,150,595.73 | 2,783,612.63 |
| Retained earnings 31.12. | 3,150,595.73 | 2,783,612.63 |
| Profit/loss for the financial period | 406,438.10 | 366,983.10 |
| Non-restricted equity, total | 3,557,033.83 | 3,150,595.73 |
| Equity, total 31.12. | 16,057,033.83 | 15,650,595.73 |
| 4.2 Current liabilities | ||
| Accruals and deferred income | ||
| Annual leave salaries and related social security payments | 817,580.00 | 772,888.84 |
| Salary liabilities and related social security payments | 670,000.00 | 600,000.00 |
| Mandatory employer insurance payments | 993.00 | 940.04 |
| Other accrued expense | 51,255.85 | 43,153.26 |
| Accruals and deferred income, total | 1,539,828.85 | 1,416,982.14 |
| 5. Notes on collateral and contingent liabilities | ||
| 5.1 Commitments | ||
| Other own commitments | ||
| Rental liabilities, less than one year | 702,769.32 | 682,299.84 |
| Rental liabilities, more than one year | 732,852.40 | 1,426,620.74 |
| Guarantee deposits to Nasdaq OMX Stockholm Ab | 0.00 | 819,835.95 |
| Leasing liabilities, less than one year | 111,823.06 | 140,392.81 |
| Leasing liabilities, more than one year | 41,354.14 | 93,841.37 |
| Commitments, total | 1,588,798.92 | 3,162,990.71 |
| Electricity derivatives | ||
| Market value | 13,839,819.36 | 45,558,690.00 |
| Value of hedged volume (underlying security) | 76,255,673.61 | 110,963,192.73 |
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. For Hansel, electricity derivatives trading is a pass-through item and the related expenses and income are charged for in full from Hansel portfolio customers. The market values of derivatives are not recorded in the balance sheet.
Due to stricter regulatory requirements, Hansel switched from its direct Nasdaq account to bilateral derivatives agreements in 2015. At the same time, the counterparty risk was spread out by selecting multiple counterparties. At present, Hansel has a total of six potential counterparties. All of these counterparties are large actors in the sector. A Board meeting held on 16 June 2016 decided to discontinue the Nasdaq account, as the new operating model had proven effective, and the Nasdaq account was no longer considered necessary. Actors that did not require collateral from Hansel were selected as bilateral counterparties. The last collateral held by Nasdaq was returned to Hansel in September 2016.
The monitoring group for government electricity procurement’s term of office runs from 1 January 2015–31 December 2016 and its task is to take responsibility for supervising government electricity procurement and, if necessary, suggest improvements to the Ministry of Finance. Once a year, the monitoring group provides an update on the current status of government electricity procurement to the State Procurement Advisory Board and, if necessary, also to the management of the Ministry of Finance. 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 2020. A monitoring group for government electricity procurement will also be appointed for the 1 January 2017–31 December 2018 period by the Ministry of Finance. The round of appointments is currently in progress.
5.3 Pending legal proceedings
At the end of 2016, Hansel had one case pending in the Supreme Administrative Court and four complaints in the Market Court, all of which concerned the same procurement decision. The Supreme Administrative Court gave Hansel one ruling in 2016, dismissing the complaint in question. The Market Court gave Hansel three decisions in 2016. One complaint was rejected and two remained as was. The company expects that the pending legal proceedings will not have significant financial consequences.
