Notes to the financial statements
1 Basis of preparation for the financial statements
1.1 Income recognition principles
Hansel’s net sales consist of service fees for joint procurement and sales of expert services. The service fees are charged in arrears based on the sales reports of contractual suppliers so that the supplier reports their sales from the previous period to Hansel at the start of the new one. The reporting period is usually a month, but it can also be a quarter. Expert services are mainly charged in arrears based on the realised workhours on a monthly basis.
1.2 Valuation principles
Fixed assets are entered on the balance sheet at cost less planned depreciation. Reducing balance depreciation of 25% is applied to machinery and equipment. Software licences 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.
1.3 Comparability of accounts
The accounting principles that were applied in 2019 were also applied in 2020.
2 Notes to the profit and loss statement
| 2.1 Personnel expenses and average number of personnel | 2020 | 2019 |
| Salaries | -8,157,688.55 | -6,846,993.17 |
| Fees and remuneration of the Managing Director and the Board of Directors | -327,655.00 | -315,586.12 |
| Pension expenses | -1,321,911.97 | -1,245,237.35 |
| Other indirect personnel expenses | -289,796.14 | -212,997.25 |
| Personnel expenses total | -10,097,051.66 | -8,620,813.89 |
| Total monetary value of fringe benefits | -65,473.67 | -84,244.60 |
| Number of employees | ||
| At the end of the financial period | 118 | 116 |
| On average during the financial period | 111 | 101 |
| 2.2 Depreciation | ||
| Depreciation according to plan during the financial period | ||
| Intangible assets | ||
| Software licenses | -22,178.47 | -19,396.87 |
| Tangible assets | ||
| Machinery and equipment | -42,749.63 | -56,999.52 |
| Depreciation during the financial period total | -64,928.10 | -76,396.39 |
| 2.3 Other operating expenses | ||
| Subsidies received | 376,062.03 | 202,502.01 |
| Other operating expenses | 1,290,317.22 | 953,990.64 |
| 1,666,379.25 | 1,156,492.65 | |
| 2.4 Financial expenses | ||
| Administration expenses | -3,028,853.27 | -2,407,580.98 |
| Expenses from facilities | -716,491.29 | -723,548.88 |
| Telephone, data communications and office expenses | -784,196.28 | -985,492.82 |
| Marketing expenses | -43,366.73 | -78,929.58 |
| Travel expenses | -55,331.71 | -99,796.30 |
| PR expenses | -1,677.66 | -3,014.89 |
| Other operating expenses | -95,456.82 | -146,808.78 |
| Other operating expenses total | -4,725,373.76 | -4,445,172.23 |
| 2.5 Financial income and expenses | ||
| Financial income | ||
| Interest income | 1,335.49 | 144.65 |
| Exchange rate gains | 0.00 | 0.03 |
| Other income from securities | 32,051.71 | 69,030.79 |
| Financial income total | 33,387.20 | 69,175.47 |
| Financial expenses | ||
| Interest expenses | -547.56 | -540.75 |
| Exchange rate losses | -344.46 | -736.70 |
| Other expenses from securities | 0.00 | 0.00 |
| Financial expenses total | -892.02 | -1,277.45 |
| 2.5 Auditors’ fees | ||
| Audit fees | -19,507.32 | -19,598.05 |
| Other fees | -16,709.34 | -58,501.99 |
| Auditors’ fees total | -36,216.66 | -78,100.04 |
| 3. Notes to assets on the balance sheet | 2020 | 2019 |
| 3.1 Changes in non-current assets | ||
| Intangible assets | ||
| Acquisition cost 1 Jan | 498,302.58 | 483,130.22 |
| Procured during financial period | 0.00 | 15,172.36 |
| Acquisition cost 31 Dec | 498,302.58 | 498,302.58 |
| Accumulated depreciation 1 Jan | -451,706.33 | -432,309.46 |
| Depreciation during the financial period | -22,178.47 | -19,396.87 |
| Accumulated depreciation 31 Dec | -473,884.80 | -451,706.33 |
| Balance sheet value 31 Dec | 24,417.78 | 46,596.25 |
| Tangible assets | ||
| Acquisition cost 1 Jan | 1,082,945.15 | 1,064,243.84 |
| Procured during financial period | 0.00 | 18,701.31 |
| Acquisition cost 31 Dec | 1,082,945.15 | 1,082,945.15 |
| Accumulated depreciation 1 Jan | -911,946.02 | -854,946.50 |
| Depreciation during the financial period | -42,749.64 | -56,999.52 |
| Accumulated depreciation 31 Dec | -954,695.66 | -911,946.02 |
| Balance sheet value 31 Dec | 128,249.49 | 170,999.13 |
| The company does not have any depreciation difference. | ||
| 3.3 Receivables | ||
| Travel advances | 7,418.71 | 9,860.43 |
| Other receivables total | 7,418.71 | 9,860.43 |
| 3.4 Prepayments and accrued income | ||
| Deferred expenses | 655,330.07 | 476,075.18 |
| Deferred expenses total | 655,330.07 | 476,075.18 |
| 3.5 Financial securities | Book value | Book value |
| Other shares and similar rights of ownership | ||
| Fund units | 2,203,374.80 | 2,190,617.86 |
| 2,203,374.80 | 2,190,617.86 | |
| Market value | Market value | |
| 2,513,467.72 | 2,426,694.70 | |
| 2,513,467.72 | 2,426,694.70 | |
| Pension investments | 555,675.33 | 539,259.60 |
| Financial securities total book value | 2,759,050.13 | 2,729,877.46 |
| 4. Notes to equity and liabilities of the balance sheet | 2020 | 2019 |
| 4.1 Equity | ||
| Restricted equity | ||
| Share capital 1 Jan | 5,000,000.00 | 5,000,000.00 |
| Reduction of share capital | 0.00 | 0.00 |
| Share capital 31 Dec | 5,000,000.00 | 5,000,000.00 |
| Restricted equity total | 5,000,000.00 | 5,000,000.00 |
| Unrestricted equity | ||
| Unrestricted equity reserve 1 Jan | 2,968,128.27 | 7,500,000.00 |
| Deduction from unrestricted equity reserve | 0.00 | -4,531,871.73 |
| Unrestricted equity reserve 31 Dec | 2,968,128.27 | 2,968,128.27 |
| Retained profit/loss 1 Jan | 1,861,094.91 | 3,069,571.75 |
| Pension liabilities carried forward | 0.00 | -438,448.00 |
| Retained profit/loss 31 Dec | 1,861,094.91 | 2,631,123.75 |
| Profit/loss for the financial period | -1,723,217.27 | -770,028.84 |
| Unrestricted equity total | 3,106,005.91 | 4,829,223.18 |
| Equity total 31 Dec | 8,106,005.91 | 9,829,223.18 |
| Calculated distributable assets 31 Dec | ||
| Unrestricted equity reserve | 2,968,128.27 | 2,968,128.27 |
| Retained losses | 1,861,094.91 | 2,631,123.75 |
| Profit/loss for the period | -1,723,217.27 | -770,028.84 |
| Distributable assets | 3,106,005.91 | 4,829,223.18 |
| Reserve for contingencies | ||
| Pension liabilities carried forward | 477,452.00 | 438,448.00 |
| 4.3 Current liabilities | ||
| Accruals and deferred income | ||
| Annual holiday pay and related social security contributions | 1,156,710.13 | 1,336,432.54 |
| Salary liabilities and related social security contributions | 209,145.03 | 620,159.17 |
| Mandatory employer’s insurance payments | 0.00 | 2,394.74 |
| Other accrued expenses | 1,098,825.48 | 790,371.40 |
| Accruals and deferred income total | 2,464,680.64 | 2,749,357.85 |
| 5 Notes on collateral and contingent liabilities | ||
| 5.1 Transactions by related parties | ||
| Of the company’s net sales, EUR 2,440,045.29 (21.3%) comes from the sales of expert services to the government and regional government, or organisations outside the government/regional government, but tied to them. | ||
| 5.2 Commitments and liabilities | ||
| Other own commitments | ||
| Rental liabilities, less than one year | 795,137.22 | 767,934.96 |
| Rental liabilities, more than one year | 1,654,476.28 | 2,444,818.47 |
| Leasing liabilities, less than one year | 75,076.75 | 110,654.18 |
| Leasing liabilities, more than one year | 196,076.89 | 20,124.42 |
| Commitments and liabilities total | 2,720,767.14 | 3,343,532.03 |
| Electricity derivatives | ||
| Market value | 3,446,239.94 | 7,339,089.01 |
| Value of hedged volume (underlying security) | 73,141,788.48 | 68,287,366.57 |
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 this 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, there are 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 on the balance sheet.
A monitoring group for electricity procurement, set up by the Ministry of Finance, supervises government electricity procurement and, if necessary, proposes 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 Minister of Finance nominates the members of the monitoring group for a two-year term.
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 tendering decides on individual hedges and their scheduling. Hedges have been made accordingly until 2024.
5.3 Pending legal proceedings
At the end of 2020, Hansel had two pending claims in the Market Court. One of these claims was withdrawn in January 2021. The company received four decisions in the Market Court in 2020. Two cases dismissed the claims whilst two claims concerning the same service procurement entity were successful. Hansel appealed the Market Court’s decisions to the Supreme Administrative Court but withdrew the appeals in January 2021.
5.4 Key events after the financial year
The coronavirus pandemic continues to have a negative impact on Hansel’s business. It has been acknowledged in the company’s financial planning, but the pandemic has increased the number of risk factors.
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