Notes to the financial statements of parent company
1. ACCOUNTING PRINCIPLES
Fingrid Oyj's financial statements have been drawn up in accordance with the Finnish Accounting Standards (FAS). The items in the financial statements are valued at original acquisition cost.
Foreign currency transactions
Commercial transactions and financial items denominated in foreign currencies are recognised at the foreign exchange mid-rate quoted by the European Central Bank (ECB) at the transaction date. Interest-bearing liabilities and receivables and the derivatives hedging these items are valued at the mid-rate quoted by the ECB at the closing date. Foreign exchange gains and losses on interest-bearing liabilities and receivables, and on the instruments hedging these items, are recognised at maturity under finance income and costs. Foreign exchange rate differences arising from the derivatives used to hedge commercial currency flows are recognised to adjust the corresponding item in the income statement.
Interest and currency derivatives
Interest rate and currency swaps, foreign exchange forwards and interest rate options are used, in accordance with the Treasury Policy, to hedge the interest rate and foreign exchange risk, as well as the commercial items, in Fingrid’s balance sheet items. The accounting principles for derivative contracts are the same as for the underlying items. The interest rate items of interest rate and currency swaps and interest rate options are accrued and recognised in the income statement under interest income and costs. The interest portion of forward foreign exchange contracts hedging the interest-bearing liabilities and receivables is accrued over the maturity of the contracts and recognised under finance income and costs. Premiums paid or received on interest rate options are accrued over the hedging period.
Electricity derivatives
Fingrid hedges its loss energy purchases by employing futures instruments quoted on the NASDAQ OMX Oslo ASA. There can also be trading in the OTC market in instruments corresponding to Nasdaq OMX Oslo ASA’s financial instruments. The profits and losses arising from these contracts are used to adjust the loss energy purchases in the income statement in the period in which the hedging impacts profit or loss.
Research and development expenses
Research and development expenses are treated as annual expenses.
Valuation of fixed assets
Fixed assets are capitalised under immediate acquisition cost. Planned straight-line depreciation on the acquisition price is calculated on the basis of the useful life of the fixed asset. Depreciation on fixed assets taken into use during the financial year is calculated on an item-by-item basis from the month of introduction.
The depreciation periods are as follows:
Goodwill = 20 years
Other non-current expenses:
Rights of use to line areas = 30–40 years
Other rights of use according to useful life, maximum = 10 years
Computer software = 3 years
Buildings and structures
Substation buildings and separate buildings = 40 years
Substation structures = 30 years
Buildings and structures at gas turbine power plants = 20–40 years
Separate structures = 15 years
Transmission lines
Transmission lines 400 kV = 40 years
Direct current lines = 40 years
Transmission lines 110–220 kV = 30 years
Creosote-impregnated towers and related disposal costs* = 30 years
Aluminium towers of transmission lines (400 kV) = 10 years
Optical ground wires = 10–20 years
Machinery and equipment
Substation machinery = 10–30 years
Gas turbine power plants = 20 years
Other machinery and equipment = 3–5 years
*Disposal costs are discounted at present value and added to the value of the fixed asset and recognised under provisions for liabilities and charges.
Goodwill is depreciated over a 20-year period, since grid operations are a long-term business in which income is accrued over several decades.
Emission rights
Emission rights are treated in accordance with the net procedure in conformance with statement 1767/2005 of the Finnish Accounting Board.
Valuation of inventories
Inventories are recognised according to the FIFO principle at acquisition cost, or at the lower of replacement cost or probable market price.
Cash in hand, bank receivables and financial securities
Cash in hand and bank receivables include cash assets and bank balances. Financial securities include certificates of deposit, commercial papers and investments in short-term money-market funds. Quoted securities and comparable assets are valued at the lower of original acquisition cost or probable market price.
Interest-bearing liabilities
Fingrid’s non-current interest-bearing liabilities consist of loans from financial institutions and bonds issued under the Euro Medium Term Note (EMTN) programme. The current interest-bearing liabilities consist of commercial papers issued under the domestic and international programmes and of the current portion of noncurrent borrowings and bonds maturing within a year. The outstanding notes under the programmes are denominated in euros and foreign currencies. Fingrid has both fixed and floating rate debt. The interest is accrued over the maturity of the debt. The differential of a bond issued over or under par value is accrued over the life of the bond. The arrangement fees of the revolving credit facilities are, as a rule, immediately recognised as an expense, and the commitment fees are recognised as an expense over the maturity of the facility.
Financial risk management
The principles applied to the management of financial risks are presented in chapters 6.2 and 6.3 of the Notes to the Consolidated Financial Statements.
Income taxes
Taxes include the accrued tax corresponding to the profit for the financial year as well as tax adjustments for previous financial years.
Deferred taxes
The company enters deferred tax assets for the congestion income it uses for investments, and they become taxable income and tax in the year in which they were used. The tax assets entered for congestion income are recognised in accordance with the depreciation used in taxation for investments covered by congestion income. Congestion income allocated to investments is entered as a reduction in acquisition cost. For the rest, deferred tax assets and liabilities are not recorded in the income statement or balance sheet, but are instead presented in the notes.
2. TURNOVER BY BUSINESS AREA | ||
The business of Fingrid Oyj comprises entirely transmission grid business with system responsibility. For that reason, there is no distribution of turnover by business area. | ||
TURNOVER, €1,000 | 2017 | 2016 |
Grid service income | 412,082 | 382,395 |
Imbalance power sales | 213,872 | 153,881 |
Cross-border transmission | 20,711 | 24,015 |
ITC income | 8,647 | 13,199 |
Income from peak load capacity services | 293 | 295 |
Income from guarantee-of-origin services | 234 | 244 |
Other operating income | 9,553 | 7,382 |
Total | 665,393 | 581,410 |
3. OTHER OPERATING INCOME, €1,000 | 2017 | 2016 |
Rental income | 942 | 922 |
Capital gains of fixed assets | 340 | 3,796 |
Contributions received | 170 | 282 |
Congestion income | 0 | 6,325 |
Other income | 1,500 | 1,368 |
Total | 2,952 | 12,693 |
4. MATERIALS AND SERVICES, €1,000 | 2017 | 2016 |
Purchases during the financial year | 234,232 | 170,793 |
Loss energy purchases | 47,397 | 57,555 |
Change in inventories, increase (-) or decrease (+) | -1,260 | 396 |
Materials and consumables | 280,369 | 228,745 |
Services | 13,615 | 13,010 |
Total | 293,984 | 241,755 |
5. PERSONNEL EXPENSES, €1,000 | 2017 | 2016 |
Salaries and bonuses | 24,187 | 22,735 |
Pension expenses | 4,139 | 4,433 |
Other personnel expenses | 1,059 | 1,430 |
Total | 29,385 | 28,598 |
Salaries and bonuses of the members of the Board of Directors and President and CEO, €1,000 | 2017 | 2016 |
Juhani Järvi, Chairman (since 6 June 2014) | 39 | 34 |
Helena Walldén, Chairman (until 6 April 2016) | 11 | |
Juha Majanen, Vice Chairman (since 22 March 2012) | 24 | 23 |
Sanna Syri, Member of the Board (since 14 April 2015) | 19 | 20 |
Esko Torsti, Member of the Board (since 22 March 2012) | 20 | 20 |
Anu Hämäläinen, Member of the Board (since 6 April 2016) | 19 | 14 |
Jukka Ruusunen, Presiden and CEO | 416 | 352 |
Number of salaried employees in the company during the financial year: | ||
Personnel, average | 352 | 336 |
Personnel, 31 Dec | 355 | 334 |
DEPRECATION ACCORDING TO PLAN, €1,000 | 2017 | 2016 |
Goodwill | 4,289 | 6,433 |
Other non-current expenses | 6,390 | 5,856 |
Buildings and structures | 8,535 | 8,100 |
Machinery and equipment | 48,104 | 50,973 |
Transmission lines | 36,427 | 36,904 |
Total* | 103,745 | 108,267 |
* deprecation on the electricity grid (notes 12 and 13) | 89,658 | 88,967 |
7. OTHER OPERATING EXPENSES, €1,000 | 2017 | 2016 |
Contracts, assignments etc. undertaken externally | 56,173 | 53,277 |
Grid rents | 241 | 241 |
Other rental expenses | 3,381 | 2,575 |
Other costs | 10,331 | 9,681 |
Total | 70,126 | 65,774 |
8. AUDITORS’ FEES, €1,000 | 2017 | 2016 |
PricewaterhouseCoopers Oy: | ||
Auditing fee | 63 | 61 |
Tax consulting | 20 | 21 |
Assignments referred to in the Auditing Act, Chapter 1, Section 1, Subsection 2 | 0 | 3 |
Other fees | 41 | 60 |
Total | 124 | 145 |
9. FINANCE INCOME AND COSTS, €1,000 | 2017 | 2016 |
Dividend income from Group companies | 139 | 294 |
Dividend income from others | 1,119 | 565 |
Interest and other finance income from others | 4,768 | 7,332 |
6,025 | 8,192 | |
Interest and other finance costs to Group companies | 0 | 0 |
Interest and other finance costs to others | -23,205 | -28,313 |
-23,205 | -28,313 | |
Total | -17,180 | -20,121 |
10. INCOME TAXES, €1,000 | 2017 | 2016 |
Income taxes for the financial year | 33197 | 25722 |
Income taxes for the previous financial years | 6217 | |
Changes in deferred taxes | -8,846 | 0 |
Total | 30,568 | 25,722 |
The company will pay its income taxes in accordance with the underlying tax rate, with no tax planning | ||
Deferred tax assets in balance sheet, €1,000 | ||
On temporary differences from congestion income | 8,846 | 0 |
Total | 8,846 | 0 |
Deferred tax assets and liabilities of balance sheet, €1,000 | ||
Deferred tax assets | ||
On temporary differences | 295 | 296 |
295 | 296 | |
Deferred tax liabilities | ||
On temporary differences | 220 | 242 |
On appropriations | 89,779 | 89,779 |
90,000 | 90,021 | |
Total | 89,705 | 89,725 |
11. GOODWILL, €1,000 | 2017 | 2016 |
Cost at 1 Jan | 128,664 | 128,664 |
Cost at 31 Dec | 128,664 | 128,664 |
Accumulated depreciation according to plan 1 Jan | -124,375 | -117,942 |
Depreciation according to plan 1 Jan–31 Dec | -4,289 | -6,433 |
Carrying amount 31 Dec | -0 | 4,289 |
Accumulated depreciation difference 1 Jan | -4,289 | -10,722 |
Decrease in depreciation difference reserve 1 Jan–31 Dec | 4,289 | 6,433 |
Accumulated depreciation in excess of plan 31 Dec | 0 | -4,289 |
12. OTHER NON-CURRENT EXPENSES, €1,000 | 2017 | 2016 |
Cost at 1 Jan | 183,719 | 180,861 |
Increases 1 Jan–31 Dec | 5,959 | 3,548 |
Decreases 1 Jan–31 Dec | -126 | -690 |
Cost at 31 Dec | 189,553 | 183,719 |
Accumulated depreciation according to plan 1 Jan | -103,949 | -98,519 |
Decreases, depreciation according to plan 1 Jan–31 Dec | 60 | 427 |
Depreciation according to plan 1 Jan–31 Dec | -6,390 | -5,856 |
Carrying amount 31 Dec* | 79,273 | 79,770 |
Accumulated depreciation difference 1 Jan | -52,620 | -53,378 |
Increase in depreciation difference reserve 1 Jan–31 Dec | -5,908 | -737 |
Decrease in depreciation difference reserve 1 Jan–31 Dec | 6,481 | 1,496 |
Accumulated depreciation in excess of plan 31 Dec | -52,047 | -52,620 |
*Net capital expenditure in electricity grid, €1,000 | 2017 | 2016 |
Carrying amount 31 Dec | 71,258 | 74,378 |
Carrying amount 1 Jan | -74,378 | -77,101 |
Depreciation according to plan 1 Jan–31 Dec | 4,030 | 3,941 |
Decreases 1 Jan–31 Dec | 66 | 263 |
Total | 976 | 1,482 |
13. TANGIBLE ASSETS, €1,000 | 2017 | 2016 |
Land and water areas | ||
Cost at 1 Jan | 15,701 | 15,349 |
Increases 1 Jan–31 Dec | 274 | 393 |
Decreases 1 Jan–31 Dec | 0 | -41 |
Cost at 31 Dec | 15,974 | 15,701 |
Buildings and structures | ||
Cost at 1 Jan | 253,104 | 218,637 |
Increases 1 Jan–31 Dec | 24,614 | 34,634 |
Decreases 1 Jan–31 Dec | -5 | -168 |
Cost at 31 Dec | 277,712 | 253,104 |
Accumulated depreciation according to plan 1 Jan | -59,464 | -51,436 |
Decreases, depreciation according to plan 1 Jan–31 Dec | 5 | 73 |
Depreciation according to plan 1 Jan–31 Dec | -8,535 | -8,100 |
Carrying amount 31 Dec | 209,719 | 193,640 |
Accumulated depreciation difference 1 Jan | -12,694 | -12,649 |
Increase in depreciation difference reserve 1 Jan–31 Dec | -9,383 | -970 |
Decrease in depreciation difference reserve 1 Jan–31 Dec | 8,535 | 925 |
Accumulated depreciation in excess of plan 31 Dec | -13,542 | -12,694 |
Machinery and equipment | ||
Cost at 1 Jan | 1,091,578 | 1,029,839 |
Increases 1 Jan–31 Dec | 31,938 | 61,839 |
Decreases 1 Jan–31 Dec | -718 | -100 |
Cost at 31 Dec | 1,122,798 | 1,091,578 |
Accumulated depreciation according to plan 1 Jan | -515,261 | -464,296 |
Decreases, depreciation according to plan 1 Jan–31 Dec | 718 | 8 |
Depreciation according to plan 1 Jan–31 Dec | -48,104 | -50,973 |
Carrying amount 31 Dec | 560,151 | 576,317 |
Accumulated depreciation difference 1 Jan | -90,425 | -97,309 |
Increase in depreciation difference reserve 1 Jan–31 Dec | -44,144 | -782 |
Decrease in depreciation difference reserve 1 Jan–31 Dec | 48,104 | 7,665 |
Accumulated depreciation in excess of plan 31 Dec | -86,466 | -90,425 |
Transmission lines | ||
Cost at 1 Jan | 1,290,658 | 1,221,808 |
Increases 1 Jan–31 Dec | -1,658 | 74,414 |
Decreases 1 Jan–31 Dec | -433 | -5,565 |
Cost at 31 Dec | 1,288,567 | 1,290,658 |
Accumulated depreciation according to plan 1 Jan | -481,783 | -448,824 |
Decreases, depreciation according to plan 1 Jan–31 Dec | 184 | 3,944 |
Depreciation according to plan 1 Jan–31 Dec | -36,427 | -36,904 |
Carrying amount 31 Dec | 770,541 | 808,875 |
Accumulated depreciation difference 1 Jan | -288,869 | -274,839 |
Increase in depreciation difference reserve 1 Jan–31 Dec | -44,400 | -50,934 |
Decrease in depreciation difference reserve 1 Jan–31 Dec | 36,427 | 36,904 |
Accumulated depreciation in excess of plan 31 Dec | -296,842 | -288,869 |
Other property, plant and equipment | ||
Cost at 1 Jan | 118 | 118 |
Cost at 31 Dec | 118 | 118 |
Prepayments and purchases in progress | ||
Cost at 1 Jan | 59,404 | 120,816 |
Increases 1 Jan–31 Dec | 94,299 | 116,534 |
Transfers to other tangible and intangible assets 1 Jan - 31 Dec | -70,047 | -177,946 |
Cost at 31 Dec | 83,656 | 59,404 |
Tangible assets total* | 1,640,160 | 1,654,054 |
*Net capital expenditure in electricity grid, €1,000 | 2017 | 2016 |
Carrying amount 31 Dec | 1,609,354 | 1,618,586 |
Carrying amount 1 Jan | -1,618,586 | -1,635,324 |
Depreciation according to plan 1 Jan–31 Dec | 85,628 | 85,026 |
Decreases 1 Jan–31 Dec | 249 | 1,742 |
Total | 76,645 | 70,030 |
Fingrid’s reserve power plants are included in the property, plant and equipment of the transmission system. | ||
14. INVESTMENTS, €1,000 | 2017 | 2016 |
Interests in Group companies | ||
Cost at 1 Jan | 507 | 505 |
Increases 1 Jan–31 Dec | 0 | 3 |
Cost at 31 Dec | 507 | 507 |
Interests in associated companies | ||
Cost at 1 Jan | 8,588 | 8,588 |
Decreases 1 Jan–31 Dec | 0 | 0 |
Cost at 31 Dec | 8,588 | 8,588 |
Other shares and interests | ||
Cost at 1 Jan | 1,965 | 1,885 |
Increases 1 Jan–31 Dec | 139 | 227 |
Decreases 1 Jan–31 Dec | -8 | -147 |
Cost at 31 Dec | 2,097 | 1,965 |
Investments total | 11,192 | 11,060 |
15. INVENTORIES, €1,000 | 2017 | 2016 |
Materials and consumables at 31 Dec | 13,248 | 12,139 |
Work in progress | 281 | 131 |
Total | 13,529 | 12,269 |
16. OTHER NON-CURRENT RECEIVABLES, €1,000 | 2017 | 2016 |
Loan receivables from Group companies | 5,000 | 2,808 |
Loan receivables from associated companies | 4,000 | 4,000 |
Total | 9,000 | 6,808 |
17. RECEIVABLES FROM GROUP COMPANIES, €1,000 | 2017 | 2016 |
Current: | ||
Trade receivables | 772 | 799 |
Interest receivables | 62 | 27 |
Total | 833 | 827 |
18. RECEIVABLES FROM ASSOCIATED COMPANIES, €1,000 | 2017 | 2016 |
Current: | ||
Trade receivables | 3,888 | 125 |
Interest receivables | 46 | 18 |
Total | 3,934 | 144 |
19. PREPAYMENTS AND ACCRUED INCOME, €1,000 | 2017 | 2016 |
Interest and other financial items | 6,545 | 7,333 |
Accruals of sales and purchases | 2,201 | 1,666 |
Tax assets | 2,331 | 0 |
Other prepayments and accrued income | 789 | 200 |
Total | 11,866 | 9,199 |
20. UNRECORDED EXPENSES AND PAR VALUE DIFFERENTIALS ON THE ISSUE OF LOANS INCLUDED IN PREPAYMENTS AND ACCRUED INCOME, €1,000 | 2017 | 2016 |
Par value differentials | 1,624 | 1,039 |
21. CASH AND CASH EQUIVALENTS, €1,000 | 2017 | 2016 |
Commercial papers | 6,496 | 12,991 |
Short-term money market funds | 56,472 | 44,402 |
Bank deposits | 10,000 | 10,000 |
Cash in hand and bank receivables | 10,303 | 11,939 |
Total | 83,271 | 79,333 |
22. SHAREHOLDERS' EQUITY, €1,000 | 2017 | 2016 |
Share capital 1 Jan | 55,922 | 55,922 |
Share capital 31 Dec | 55,922 | 55,922 |
Share premium account 1 Jan | 55,922 | 55,922 |
Share premium account 31 Dec | 55,922 | 55,922 |
Profit from previous financial years 1 Jan | 175,954 | 162,088 |
Dividend distribution | -98,000 | -90,000 |
Profit from previous financial years 31 Dec | 77,954 | 72,088 |
Profit for the financial year | 123,358 | 103,866 |
Shareholders’ equity 31 Dec | 313,158 | 287,799 |
Distributable shareholders’ equity | 201,313 | 175,954 |
Number of shares | Series A shares | Series B shares | Total |
1 Jan 2017 | 2,078 | 1,247 | 3,325 |
31 Dec 2017 | 2,078 | 1,247 | 3,325 |
Series A shares confer three votes each at the Annual General Meeting and Series B shares one vote each. When electing members of the Board of Directors, Series A shares confer 10 votes each at the Annual General Meeting and Series B shares one vote each.
Series B shares have the right before Series A shares to obtain the annual dividend specified below from the funds available for profit distribution. If the annual dividend cannot be distributed in some year, the shares confer a right to receive the undistributed amount from the funds available for profit distribution in the subsequent years; however, such that Series B shares have the right over Series A shares to receive the annual dividend and the undistributed amount. Series B shares have no right to receive any other dividend.
Fingrid Oyj's Annual General Meeting decides on the annual dividend. Eighty-two (82) per cent of the dividends to be distributed for each financial year is distributed for all Series A shares and eighteen (18) per cent for all Series B shares, however such that EUR twenty (20) million of the dividends to be distributed for each financial year is first distributed for all Series B shares. If the above-mentioned EUR twenty (20) million minimum amount for the financial period is not distributed (all or in part) for Series B shares in a financial period, Series B shares confer the right to receive the undistributed minimum amount in question (or the accumulated undistributed minimum amount accrued during such financial periods) in the next profit distribution, in any disbursements paid out, or in any other distribution of assets prior to any other dividends, disbursements or asset distribution until the undistributed minimum amount has been distributed in full for Series B shares.
There are no non-controlling interests.
23. ACCUMULATED APPROPRIATIONS, €1,000 | 2017 | 2016 |
Accumulated depreciation from the difference between depreciation according to plan and depreciation carried out in taxation | 448,897 | 448,897 |
24. BONDS, €1,000 | 2017 | 2016 | |||
Currency | Nominal value | Maturity date | Interest | ||
EUR | 20,000 | 11.04.2017 | floating rate | 20,000 | |
EUR | 25,000 | 11.04.2017 | floating rate | 25,000 | |
EUR | 30,000 | 15.06.2017 | 3,07% | 30,000 | |
EUR | 50,000 | 20.09.2020 | floating rate | 50,000 | 50,000.00 |
EUR | 30,000 | 19.09.2022 | floating rate | 30,000 | 30,000.00 |
EUR | 30,000 | 11.09.2023 | 2,71% | 30,000 | 30,000 |
EUR | 300,000 | 03.04.2024 | 3,50% | 300,000 | 300,000 |
EUR | 100,000 | 23.11.2027 | 1,125 % | 100,000 | |
EUR | 25,000 | 27.03.2028 | 2,71% | 25,000 | 25,000 |
EUR | 10,000 | 12.09.2028 | 3,27% | 10,000 | 10,000 |
EUR | 80,000 | 24.04.2029 | 2,95% | 80,000 | 80,000 |
EUR | 30,000 | 30.05.2029 | 2,89% | 30,000 | 30,000 |
655,000 | 630,000 | ||||
JPY | 500,000 | 22.06.2017 | 1,28% | 4,507 | |
0 | 4,507 | ||||
NOK | 200,000 | 11.04.2017 | 5,16% | 24,620 | |
NOK | 200,000 | 10.11.2017 | 5,12% | 23,725 | |
NOK | 200,000 | 12.11.2019 | 5,37% | 23,725 | 23,725 |
NOK | 100,000 | 16.09.2025 | 4,31% | 12,512 | 12,512 |
36,237 | 84,582 | ||||
SEK | 1,000,000 | 19.11.2018 | floating rate | 107,307.65 | 107,308 |
107,308 | 107,308 | ||||
Bonds, non-current, total | 691,237 | 698,544 | |||
Bonds, current, total | 107,308 | 127,852 | |||
Total | 798,544 | 826,396 | |||
25. LOANS FALLING DUE IN FIVE YEARS OR MORE, €1,000 | 2017 | 2016 |
Bonds | 617,512 | 517,512 |
Loans from financial institutions | 72,554 | 90,216 |
Total | 690,066 | 607,728 |
26. LIABILITIES TO GROUP COMPANIES, €1,000 | 2017 | 2016 |
Current: | ||
Other liabilities | 1,158 | 1,103 |
Total | 1,158 | 1,103 |
27. LIABILITIES TO ASSOCIATED COMPANIES, €1,000 | 2017 | 2016 |
Current: | ||
Trade payables | 3,376 | 152 |
Total | 3,376 | 152 |
28. OTHER LIABILITIES, €1,000 | 2017 | 2016 |
Current: | ||
Other loans/Commercial papers (international and domestic) | 145,243 | 120,128 |
Value added tax | 12,378 | 11,860 |
Electricity tax | 3,092 | 3,093 |
advances received | 923 | 923 |
Other liabilities | 588 | 667 |
Total | 162,225 | 136,671 |
29. ACCRUALS, €1,000 | 2017 | 2016 |
Current: | ||
Interest and other financial items | 11,757 | 12,822 |
Salaries and additional personnel expenses | 6,613 | 5,693 |
Accruals of sales and purchases | 8,751 | 5,766 |
Other accruals | 5,150 | 5,277 |
Total | 32,271 | 29,558 |
30. PROVISIONS FOR LIABILITIES AND CHARGES, €1,000 | 2017 | 2016 |
Creosote-impregnated and CCA-impregnated wooden towers, disposal costs | 1,474 | 1,481 |
Total | 1,474 | 1,481 |
31. DERIVATIVE AGREEMENTS, €1,000 | |||||||||
2017 | 2016 | Hierarchy level | |||||||
Interest rate and currency derivatives | Fair value pos. 31.12.17 | Fair value neg. 31.12.17 | Net fair value 31.12.17 | Nominal value 31.12.17 | Fair value pos. 31.12.16 | Fair value neg. 31.12.16 | Net fair value 31.12.16 | Nominal value 31.12.16 | |
3,837 | -12,660 | -8,822 | 143,544 | 6,930 | -12,487 | -5,558 | 196,396 | Level 2 | |
Forward contracts | -123 | -123 | 1,167 | 46 | 46 | 2,271 | Level 2 | ||
Interest rate swaps | 23,209 | -7,487 | 15,722 | 430,000 | 26,667 | -6,725 | 19,943 | 360,000 | Level 2 |
Bought interest rate options | 787 | 787 | 571,587 | 1,350 | 1,350 | 514,685 | Level 2 | ||
Total | 27,833 | -20,270 | 7,563 | 1,146,298 | 34,993 | -19,212 | 15,781 | 1,073,352 | |
Electricity derivatives johdannaiset |
Fair value pos. 31.12.17 | Fair value neg. 31.12.17 | Net fair value 31.12.17 | Nominal value 31.12.17 | Fair value pos. 31.12.16 | Fair value neg. 31.12.16 | Net fair value 31.12.16 | Nominal value 31.12.16 | |
Electricity future contracts. NASDAQ OMX Commodities | 1,009.71 | -134.63 | 875.08 | 1.13 | Level 1 | ||||
Electricity forward contracts. NASDAQ OMX Commodities | 2,904.97 | -1,244.44 | 1,660.52 | 3.75 | 1,639.52 | -8,157.40 | -6,517.87 | 4.07 | Level 1 |
Total | 3915 | -1379 | 2536 | 4.88 | 1640 | -8157 | -6518 | 4.07 | |
32. COMMITMENTS AND CONTINGENT LIABILITIES, €1,000 | 2017 | 2016 |
Rental liabilities | ||
Liabilities for the next year | 4,079 | 3,536 |
Liabilities for subsequent years | 28,192 | 28,653 |
32,270 | 32,189 | |
Right-of-use agreements | ||
Liabilities for the next year | 10,769 | 7,601 |
Liabilities for subsequent years | 62,011 | 72,677 |
72,780 | 80,278 | |
Pledges | ||
Pledge covering property lease agreements | 0 | 9 |
Pledge covering customs credit account | 200 | 280 |
Pledge covering excise duty | 280 | 0 |
480 | 289 | |
Other financial commitments | ||
Rent security deposit, guarantee | 38 | 38 |
Credit facility commitment fee and commitment fee: | ||
Commitment fee for the next year | 400 | 395 |
Liabilities for subsequent years | 1,154 | 1,154 |
1,592 | 1,587 |
33. OPERATING CASH FLOW ADJUSTMENTS, €1,000 | 2017 | 2016 |
Business transactions not involving a payment transaction | ||
Depreciation | 103,745 | 108,267 |
Capital gains/losses (-/+) on tangible and intangible assets | -340 | -3,778 |
Total | 103,404 | 104,489 |
34. LEGAL PROCEEDINGS AND PROCEEDINGS BY AUTHORITIES |
A lawsuit was initiated against Fingrid in December 2016, demanding non-specified liquidated damages due to an alleged breach of contract. The legal proceedings ended with the district court issuing an interlocutory judgement in December 2017, according to which Fingrid had not been proven to have committed a contractual breach.
Fingrid has appealed to the Market Court against the decision issued by the Energy Authority on 2 January 2017 to the extent where the Energy Authority required Fingrid to submit the terms and conditions concerning the balancing power agreements and the grounds for the determination of fees for approval by the Energy Authority. According to Fingrid, under the legislation in force at the time the decision was issued, it was not required to submit the terms and conditions related to the procurement of balancing power beforehand to the authority for approval. The matter is still before the Market Court. The legal proceedings do not have a substantial impact on the company’s financial result or financial position.
35. SEPARATION OF BUSINESSES IN ACCORDANCE WITH THE ELECTRICITY MARKET ACT |
Imbalance power and regulating power
Each electricity market party must ensure its electricity balance by making an agreement with either Fingrid or some other party. Fingrid buys and sells imbalance power in order to stabilise the hourly power balance of an electricity market party (balance responsible party). Imbalance power trade and pricing are based on a balance service agreement with equal and public terms and conditions.
Fingrid is responsible for the continuous power balance in Finland by buying and selling regulating power in Finland. The balance responsible parties can participate in the Nordic balancing power market by submitting bids on their available capacity. The terms and conditions of participation in the regulating power market and the pricing of balancing power are based on the balance service agreement.
Fingrid is responsible for organising national imbalance settlement. As of the beginning of May 2017, Fingrid has transferred the imbalance settlement to eSett Oy, a company jointly owned by the Finnish, Swedish and Norwegian transmission system operators.
The balance settlement takes place after the utilisation hours by determining the actual electricity generation, consumption and electricity trade. The outcome of the balance settlement is power balances for each party to the electricity trade.
Management of balance operation
In accordance with a decision by the Energy Market Authority, Fingrid Oyj shall separate the duties pertaining to national power balance operation by virtue of Chapter 12 of the Electricity Market Act. The management of balance operation is a part of grid operations.
The income statement of the balance service unit is separated by means of cost accounting as follows:
Income | direct |
Separate costs | direct |
Production costs | matching principle |
Administrative costs | matching principle |
Depreciation | matching principle in accordance with Fingrid Oyj's depreciation principle |
Finance income and costs | on the basis of imputed debt |
Income taxes | based on result |
The average number of personnel during 2017 was 11 (12). The operating profit was 0,5 (3,7) per cent of turnover.
MANAGEMENT OF BALANCE OPERATION, SEPARATED INCOME STATEMENT | 1 Jan - 31 Dec, 2017 | 1 Jan - 31 Dec, 2016 |
1 000 € | 1 000 € | |
TURNOVER* | 219,344 | 165,393 |
Other operating income | 1 | 1 |
Materials and services* | -213,014 | -156,520 |
Personnel costs | -1,148 | -1,385 |
Depreciation and amortisation expense | -434 | -181 |
Other operating expenses | -3,718 | -1,129 |
OPERATING PROFIT | 1,028 | 6,178 |
Finance income and costs | 81 | 48 |
PROFIT/LOSS BEFORE APPROPRIATIONS AND TAXES | 1,110 | 6,226 |
Appropriations | -81 | -89 |
Income taxes | -206 | -884 |
PROFIT/LOSS FOR THE FINANCIAL YEAR | 823 | 5,253 |
Turnover includes EUR 56.7 (9.2) million in sales of imbalance power to balance provider Fingrid Oyj, and Materials and services includes EUR 54.7 (6.5) million euros in purchases by Fingrid Oyj. | ||
*The increase in imbalance power sales and purchases resulted from the transfer of imbalance settlement to eSett Oy, following which the imbalance power sold to cross-border imbalance responsible parties is reported as external turnover and the imbalance power purchased from them is reported as external purchases. |
MANAGEMENT OF BALANCE OPERATION, SEPARATED BALANCE SHEET | ||
ASSETS | 31 Dec 2017 | 31 Dec 2016 |
€1,000 | €1,000 | |
NON-CURRENT ASSETS | ||
Intangible assets | ||
Other non-current expenses | 1,311 | 385 |
Tangible assets | ||
Machinery and equipment | 461 | 247 |
Prepayments and purchases in progress | 62 | |
Investments | ||
Interests in associated companies | 2,001 | 2,001 |
TOTAL NON-CURRENT ASSETS | 3,772 | 2,695 |
CURRENT ASSETS | ||
Non-current | ||
Loan receivables from associated companies | 4,000 | 4,000 |
Current receivables | ||
Trade receivables | 2,649 | 27,420 |
Receivables from Group companies | 10,594 | 18,469 |
Receivables from associated companies | 13,214 | 144 |
Other receivables | 2,234 | 1,504 |
28,690 | 47,537 | |
Cash in hand and bank receivables | 1 | 1 |
TOTAL CURRENT ASSETS | 32,691 | 51,538 |
TOTAL ASSETS | 36,463 | 54,233 |
SHAREHOLDERS' EQUITY AND LIABILITIES | 31 Dec 2017 | 31 Dec 2016 |
€1,000 | €1,000 | |
EQUITY | ||
Share capital | 32 | 32 |
Share premium account | 286 | 286 |
Profit from previous financial years | 21,873 | 16,620 |
Profit for the financial year | 823 | 5,253 |
TOTAL SHAREHOLDERS' EQUITY | 23,013 | 22,190 |
ACCUMULATED APPROPRIATIONS | -389 | -470 |
LIABILITIES | ||
Current liabilities | ||
Trade payables | 520 | 30,724 |
Liabilities to Group companies | 906 | |
Liabilities to associated companies | 13,113 | |
Accruals | 206 | 884 |
13,839 | 32,513 | |
TOTAL LIABILITIES | 13,839 | 32,513 |
TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES | 36,463 | 54,233 |
Development of information exchange
It is Fingrid’s task to develop the exchange of information required for electricity trade and imbalance settlement as set out in the Electricity Market Act. Fingrid’s information exchange services are part of the electricity markets’ information exchange environment. In order to develop the effective and accurate exchange of information, Fingrid works in close co-operation with e.g. electricity market parties, interest groups, service providers, supervisory authorities, legislators, organisations that develop national and international communications and other transmission system operators.
In accordance with a decision by the Energy Market Authority, Fingrid Oyj must separate the duties pertaining to the development of information exchange by virtue of Chapter 12 of the Electricity Market Act. The development of information exchange is a part of grid operations.
The separation of the income statement for the development of information exchange is realised by means of cost accounting as follows:
Income | direct |
Separate costs | direct |
Administrative costs | matching principle |
Income taxes | based on result |
DEVELOPMENT OF INFORMATION EXCHANGE, SEPARATED INCOME STATEMENT | 1 Jan - 31 Dec, 2017 | 1 Jan - 31 Dec, 2016 |
€1,000 | €1,000 | |
TURNOVER | 575 | 595 |
Personnel costs | -116 | -144 |
Other operating expenses | -374 | -392 |
OPERATING PROFIT | 86 | 59 |
PROFIT/LOSS BEFORE APPROPRIATIONS AND TAXES | 86 | 59 |
Income taxes | -17 | -12 |
PROFIT/LOSS FOR THE FINANCIAL YEAR | 69 | 48 |
DEVELOPMENT OF INFORMATION EXCHANGE, SEPARATED BALANCE SHEET | ||
ASSETS | 31 Dec 2017 | 31 Dec 2016 |
€1,000 | €1,000 | |
CURRENT ASSETS | ||
Trade receivables | 0.78 | |
Other receivables | 130 | 147 |
TOTAL CURRENT ASSETS | 131 | 147 |
TOTAL ASSETS | 131 | 147 |
SHAREHOLDERS' EQUITY AND LIABILITIES | 31 Dec 2017 | 31 Dec 2016 |
€1,000 | €1,000 | |
EQUITY | ||
Share capital | 3 | 3 |
Profits/losses from previous financial years | -589 | -636 |
Profit for the financial year | 69 | 48 |
TOTAL SHAREHOLDERS' EQUITY | -518 | -586 |
LIABILITIES | ||
Current liabilities | ||
Trade payables | 11 | 12 |
Liabilities to Group companies | 575 | 686 |
Other liabilities | 62 | 36 |
649 | 734 | |
TOTAL LIABILITIES | 649 | 734 |
TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES | 131 | 147 |
Grid operations
Grid operations refers to licensed electricity system operation that takes place on the electricity grid. Electricity system operations are defined in Chapter 1 of the Electricity Market Act (588/2013) and grid operations are defined in Chapter 5. Of Fingrid Oyj’s operations, activities related to the management of the power reserve system and guarantees of origin for electricity, as well as the data hub project that was started in 2015 are not included in grid operations. Operations that are not part of grid operations constitute ‘other operations’ as referred to in Chapter 12 of the Electricity Market Act and must be separated from grid operations in accordance with that Chapter.
The income statement and balance sheet of grid operations and other operations have, in compliance with Chapter 12 of the Electricity Market Act, been separated by means of cost accounting as follows:
Income | direct |
Separate costs | direct |
Production costs | matching principle |
Administrative costs | matching principle |
Depreciation | matching principle in accordance with Fingrid Oyj's depreciation principle |
Finance income and costs | on the basis of imputed debt |
Income taxes | based on result |
Balance sheet items | matching principle |
SEPARATED INCOME STATEMENT | TRANSMISSION SYSTEM OPERATION | OTHER OPERATION |
1 Jan - 31 Dec, 2017 | 1 Jan - 31 Dec, 2017 | |
€1,000 | €1,000 | |
TURNOVER | 663,176 | 2,217 |
Other operating income | 2,952 | |
Materials and services | -293,984 | |
Personnel costs | -28,182 | -1,203 |
Depreciation and amortisation expense | -103,745 | |
Other operating expenses | -69,112 | -1,014 |
OPERATING PROFIT | 171,106 | 0 |
Finance income and costs | -17,424 | 245 |
PROFIT BEFORE EXTRAORDINARY ITEMS | 153,682 | 245 |
PROFIT/LOSS BEFORE APPROPRIATIONS AND TAXES | 153,682 | 245 |
Income taxes | -30,519 | -49 |
PROFIT/LOSS FOR THE FINANCIAL YEAR | 123,163 | 196 |
SEPARATED BALANCE SHEET | TRANSMISSION SYSTEM OPERATION | OTHER OPERATION |
ASSETS | 31 Dec 2017 | 31 Dec 2017 |
€1,000 | €1,000 | |
Intangible assets: | ||
Goodwill | ||
Other intangible assets | 79,273 | |
79,273 | ||
Tangible assets | ||
Land and water areas | 15,974 | |
Buildings and structures | 209,719 | |
Machinery and equipment | 560,151 | |
Transmission lines | 770,541 | |
Other property, plant and equipment | 118 | |
Prepayments and purchases in progress | 83,656 | |
1,640,159 | ||
Investments: | ||
Interests in Group companies | 507 | |
Interests in associated companies | 8,588 | |
Other shares and interests | 2,097 | |
10,685 | 507 | |
TOTAL NON-CURRENT ASSETS | 1,730,117 | 507 |
CURRENT ASSETS | ||
Inventories | 13,528.91 | |
Receivables | ||
Non-current | ||
Loan receivables from Group companies | 5,000 | |
Loan receivables from associated companies | 4,000 | |
Deferred tax assets | 8,846 | |
12,846 | 5,000 | |
Current | ||
Trade receivables | 75,074 | |
Receivables from Group companies | 5,445 | 833 |
Receivables from associated companies | 3,934 | |
Other receivables | 1,448 | |
Prepayments and accured income | 11,866 | |
97,767 | 833 | |
Financial securities | 62,968 | |
Cash in hand and bank receivables | 20,303 | |
TOTAL CURRENT ASSETS | 207,413 | 5,833 |
TOTAL ASSETS | 1,937,530 | 6,340 |
SEPARATED BALANCE SHEET | TRANSMISSION SYSTEM OPERATION | OTHER OPERATION |
SHAREHOLDERS' EQUITY AND LIABILITIES | 31 Dec 2017 | 31 Dec 2017 |
€1,000 | €1,000 | |
EQUITY | ||
Share capital | 55,920 | 3 |
Share premium account | 55,922 | |
Profit from previous financial years | 77,695 | 259 |
Profit for the financial year | 123,163 | 196 |
TOTAL SHAREHOLDERS' EQUITY | 312,700 | 458 |
ACCUMULATED APPROPRIATIONS | 448,897 | |
PROVISIONS FOR LIABILITIES AND CHARGES | 1,474 | |
LIABILITIES | ||
Non-current liabilities | ||
Bonds | 691,237 | |
Loans from financial institutions | 129,541 | |
820,778 | ||
Current liabilities | ||
Bonds | 107,308 | |
Loans from financial institutions | 22,474 | |
Trade payables | 25,308 | |
Liabilities to Group companies | 1,158 | 5,445 |
Liabilities to associated companies | 3,376 | |
Other liabilities | 162,053 | 172 |
Accruals | 32,006 | 266 |
353,682 | 5,883 | |
TOTAL LIABILITIES | 1,174,459 | 5,883 |
TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES | 1,937,530 | 6,340 |
Other non-current assets included in the separated balance sheet for grid operations | |
SEPARATED BALANCE SHEET | TRANSMISSION SYSTEM OPERATION |
ASSETS | 31 Dec 2017 |
€1,000 | |
Intangible assets: | |
Other intangible assets | 8,016 |
8,016 | |
Tangible assets | |
Land and water areas | 15,732 |
Buildings and structures | 4,258 |
Machinery and equipment | 9,557 |
Transmission lines | 1,140 |
Other property, plant and equipment | 118 |
Prepayments and purchases in progress | 83,656 |
114,462 | |
TOTAL NON-CURRENT ASSETS | 122,477 |
Congestion income in grid operations
The congestion income received by a grid owner must be used for the purposes stated in EC Regulation 714/2009, Article 16, Paragraph 6: guaranteeing the actual availability of the allocated capacity, and maintaining or increasing interconnection capacities through network investments. As a consequence of the change in the regulation governing Fingrid’s grid pricing, the company will include the congestion income received after 1 January 2016 as accruals in the item other liabilities in the balance sheet. Of the accruals, congestion income will be recognised in the income statement as other operating income when their corresponding costs, as defined in the regulation, accrue as annual expenses in the income statement. Alternatively, they are entered in the balance sheet against investments, as defined by regulation, to lower the acquisition cost of property, plant and equipment, which lowers the depreciation of the property, plant and equipment in question. The congestion income received before 1 January 2016 was recognised in turnover. The congestion income from 2017 was used entirely for the Hirvisuo–Pyhänselkä grid investment, and the congestion income from 2016 was used for improving and maintaining the cross-border transmission connections, and in part also for the Hirvisuo–Pyhänselkä grid investment. The Hirvisuo–Pyhänselkä grid investment supports the cross-border transmission from northern Sweden to Finland.
Congestion income, €1,000 | 2017 | 2016 |
Congestion income on 1 Jan | ||
Accumulated congestion income | 25,752 | 39,863 |
Expenses matching congestion income | -6,325 | |
Investments matching congestion income | -25,752 | -33,538 |
Congestion income on 31 Dec | ||
Countertrade
In terms of the costs arising from countertrade used to safeguard system security in grid operations, congestion income may be used to offset countertrade costs arising from cross-border transmission connections.
Counter trade, €1,000 | 2017 | 2016 |
Counter-trade between Finland and Sweden | 366 | 2,531 |
Counter-trade between Finland and Estonia | 96 | 87 |
Counter-trade between Finland's internal connections | 1,295 | 1,242 |
Total counter-trade | 1,756 | 3,861 |
36. EMISSION RIGHTS | ||
Fingrid has not been granted free-of-charge emission rights for the emissions trade period 2013–2020. The use of emission rights had no impact on the financial result in 2016. |
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2017 | 2016 | |
Total CO2 emissions tCO2 | 5,817 | 10,335 |