GASUM – CONSOLIDATED (IFRS) FINANCIAL STATEMENTS 2013 · Gasum – Consolidated (IFRS) Financial...
Transcript of GASUM – CONSOLIDATED (IFRS) FINANCIAL STATEMENTS 2013 · Gasum – Consolidated (IFRS) Financial...
GASUM – CONSOLIDATED (IFRS) FINANCIAL STATEMENTS 2013
USE
TRANSMISSION AND DISTRIBUTION
PRODUCTION, SOURCING AND SALES
LNG
Cleanly with natural energy gases
Gasum – Consolidated (IFRS) Financial Statements 2013
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CONTENTS
CONTENTS .................................................................................................................................................. 2 CONSOLIDATED STATEMENT OF INCOME ................................................................................................... 3 CONSOLIDATED BALANCE SHEET ............................................................................................................... 4 CONSOLIDATED BALANCE SHEET ............................................................................................................... 5 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY ............................................................................... 6 CONSOLIDATED STATEMENT OF CASH FLOWS ............................................................................................ 7 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS .......................................................................... 8
1. General information .......................................................................................................................... 8 2. Summary of significant accounting policies ...................................................................................... 8 3. First-time adoption of IFRS -standards ........................................................................................... 18 4. Significant accounting estimates and judgmental items ................................................................. 25 5. Management of financial risks and capital structure ....................................................................... 26 6. Derivative financial instruments ..................................................................................................... 28 7. Net sales by business ..................................................................................................................... 31
8. Other operating income .................................................................................................................. 31 9. Materials and services .................................................................................................................... 32
10. Personnel expenses ........................................................................................................................ 32 11. Depreciation and amortization ....................................................................................................... 33 12. Other operating expenses............................................................................................................... 33 13. Auditor’s fees ................................................................................................................................. 33
14. Finance income and finance expenses ............................................................................................ 34 15. Income tax expense ....................................................................................................................... 34 16. Intangible assets ............................................................................................................................ 35 17. Tangible assets ............................................................................................................................... 36 18. Financial instruments ..................................................................................................................... 38 19. Available-for-sale investments ....................................................................................................... 39 20. Shares in joint ventures ................................................................................................................. 40
21. Other non-current receivables ........................................................................................................ 41 22. Trade and other receivables ........................................................................................................... 41 23. Inventories ..................................................................................................................................... 42 24. Cash and cash equivalents .............................................................................................................. 42 25. Deferred income tax ....................................................................................................................... 43
26. Share capital .................................................................................................................................. 43 27. Borrowings ..................................................................................................................................... 44
28. Other non-current liabilities ........................................................................................................... 44 29. Trade and other current payables ................................................................................................... 45 30. Post-employment benefits .............................................................................................................. 45 31. Defined benefit pension plans ........................................................................................................ 46 32. Dividend per share ......................................................................................................................... 49 33. Contingent liabilities ....................................................................................................................... 50
34. Related parties ............................................................................................................................... 51 35. Group companies ............................................................................................................................ 52 36. Events after the reporting period.................................................................................................... 52
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CONSOLIDATED STATEMENT OF INCOME
(€ thousands) Note
Jan 1–Dec 31, 2013
Jan 1–Dec 31, 2012
Revenue 7. 1,149,702 1,274,648
0 0
Other operating income 8. 967 10,334
0 0
Materials and services 9. -1,040,366 -1,151,153
Personnel expenses 10. -19,776 -19,368
Depreciation, amortization and impairment 11. -27,404 -28,307
Other operating expenses 12. -22,578 -25,409
0 0
Operating profit 40,545 60,745
0 0
Finance income 14. 337 266
Finance expenses 14. -6,309 -5,681
Finance expenses, net -5,972 -5,414
0 0
Share of profit/loss of investments accounted for using the equity method -40 -2
0 0
Profit before income tax 34,533 55,329
0 0
Current income tax expense (income) 15. -5,883 -10,748
Change in deferred taxes 15. 9,419 -2,917
Profit for the period 38,068 41,664
Profit attributable to: 0 0
0 0
Owners of the parent 38,068 41,664
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Profit for the period 38,068 41,664
0 0
Other items in comprehensive income 0 0
Items that will not be reclassified to profit or loss 0 0
Remeasurements of post-employment benefits -470 -1,974
Items that may be subsequently reclassified to profit and loss 0 0
Translation differences - 0
0 0
Total comprehensive income for the period 37,598 39,690
0 0
Total comprehensive income for the period attributable to: 0 0
0 0
Owners of the parent 37,598 39,690
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CONSOLIDATED BALANCE SHEET
(€ thousands) Note Dec 31,
2013 Dec 31,
2012 Jan 1, 2012
ASSET
Non-current assets
Intangible assets 16. 10,467 9,423 8,199
Tangible assets 17. 580,219 586,863 596,383
Available-for-sale investments 19. 76 56 56
Investments accounted for using the equity method 20. 2,289 2,128 1,933
Derivative financial instruments 6. 18. - 90 423
Other non-current assets 21. 2,299 2,356 2,068
Total non-current assets 595,351 600,916 609,063
Currents assets
Inventories 23. 89,258 89,683 108,792
Trade and other receivables 22. 129,347 182,577 171,009
Available-for-sale investments 19. 991 1,459 -
Derivative financial instruments 6. 18. - 161 6,002
Current tax assets 3,340 2,205 -
Cash and cash equivalents 24. 4,485 11,401 4,208
Total current assets 227,422 287,486 290,011
Total assets 822,772 888,402 899,074
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CONSOLIDATED BALANCE SHEET
(€ thousands) Note Dec 31, 2013 Dec 31,
2012 Jan 1, 2012
EQUITY AND LIABILITIES
Equity attributable to owners of the parent
Share capital 26. 178,279 178,279 178,279
Retained earnings 209,738 208,560 173,078
Profit for the period 38,068 41,664 69,255
Translation differences 0 0 -
Total equity 426,085 428,502 420,612
Liabilities
Non-current liabilities
Borrowings 27. 92,953 140,135 138,250
Other non-current liabilities 28. 11,666 14,082 17,501
Post-employment benefits 30. 6,576 7,230 5,277
Deferred tax liabilities 25. 52,168 60,677 58,401
Derivative financial instruments 18. 4,457 1,618 1,406
Total non-current liabilities 166,940 223,743 220,834
Current liabilities
Borrowings 27. 71,448 57,181 43,714
Trade and other payables 29. 156,557 178,962 211,993
Derivative financial instruments 18. 1,742 14 -
Current income tax liabilities - - 1,920
Total current liabilities 229,748 236,157 257,627
Total liabilities 396,687 459,900 478,462
Total equity and liabilities 822,772 888,402 899,074
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CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Attributable to owners of the parent
(€ thousands) Share capital Retained earnings Total
Eqyity at January 1, 2012 (FAS) 178,279 217,498 395,777
Impacts of adoption of IFRS 0 24,836 24,836
Equity at January 1, 2012 (IFRS) 178,279 242,333 420,612
Profit for the period 41,664 41,664
Other comprehensive income:
Remeasurements of post-employment benefits -1,974 -1,974
Translation differences 0 0
Total comprehensive income for the period 39,690 39,690
Dividends paid -31,800 -31,800
Total transactions with owners, recognized directly in equity -31,800 -31,800
Equity at December 31, 2012 178,279 250,223 428,502
Attributable to owners of the parent
(€ thousands) Share capital Share capital Share capital
Equity at January 1, 2013 178,279 250,223 428,502
Profit for the period 38,068 38,068
Other comprehensive income:
Remeasurements of post.employment benefits -470 -470
Translation differences - -
Total comprehensive income for the period 37,598 37,598
Dividends paid -40,015 -40,015
Total transactions with owners, recognized directly in equity -40,015 -40,015
Equity at December 31, 2013 178,279 247,806 426,085
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CONSOLIDATED STATEMENT OF CASH FLOWS
(€ thousands) Note
Jan 1 – Dec 31, 2013
Jan 1 – Dec 31, 2012
Cash flows from operating activities
Cash inflow from sales
1,190,178 1,275,428
Cash inflow from other operating income
786 12,305
Cash outflow from other operating expenses
-1,090,666 - 1,256,703
Cash flow from operating activities before financal items and taxes
100,298 31,030
Interest paid and other payments from finance activities
-4,728 - 5,349
Interest received
213 141
Income taxes paid
-7,021 -14,887
Net cash flows from operating activities 88,762 10,935
Cash flows from investing activities
Investments of tangible assets 17. -19,778 -18,867
Investments of intangible assets 16. -1,785 -2,004
Purchases of joint ventures and available-for-sale investments
-221 - 212
Proceeds from sale of tangible and intangible assets
611 207
Repayments of loan receivables
408
Net cash flows from investing activities -20,765 -20,876
Cash flows from financing activities
Increase in equity
0 60
Proceeds from borrowings
13,629 15,352
Repayments of borrowings
-47,699 -1,361
Dividends paid
-40,015 -31,800
Increase/decrease of non-current assets
-1,298 60
Net cash flows from financing activities -75,383 -17,690
Net decrease (-)/increase (+) in cash and cash equivalents -7,384 -27,631
Cash and cash equivalents at the beginning of period
12,860 40,491
Cash and cash equivalents at the end of period 24. 5,476 12,860
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1. General information
Gasum Oy is a Finnish limited liability company and the parent company of Gasum Group (“Gasum”, the “Group” or the “Company”, unless otherwise stated) domiciled in Espoo at registered address Miestentie 1, PO Box 21, 02151 Espoo.
Established in 1994, Gasum is a Finnish company excelling in natural energy gas solutions. The Company imports natural gas to Finland and transmits and supplies it for energy production, industry, households and transportation.
Gasum is an active developer of the Finnish biogas sector. Natural gas and biogas are natural energy gases that provide the Finnish energy sector with considerable advantages as they are efficient, environmentally friendly and local. The Company is the leading supplier of biogas in Finland. In 2013 a total of 33 TWh of natural gas was imported to Finland. Gasum launched several studies concerning the development of biogas production and the utilization of liquefied natural gas (LNG) as a marine fuel in Baltic Sea shipping. Copies of the consolidated financial statements are available at Gasum’s head office at Miestentie 1, 01250 Espoo and at the Company’s home pages www.gasum.com.
The Board of Directors of Gasum Oy has approved these consolidated financial statements for issue on 25th of June,
2014.
2. Summary of significant accounting policies
Basis of preparation
Gasum´s consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union, conforming with the IAS and IFRS standards as well as SIC- and IFRIC interpretations applicable as at December 31, 2013. The International Financial Reporting Standards refer to the
standards and associated interpretations in the Finnish Accounting Act and in regulations issued under it that are approved by the EU for application in accordance with the procedure laid down in Regulation (EC) No 1606/2002. The notes to the consolidated financial statements are also in accordance with the requirements of the Finnish accounting and corporate legislation supplementing the IFRS rules.
Gasum publishes the first consolidated financial statements prepared under IFRS standards for the financial period ended December 31, 2013 with comparative information for the financial period ended December 31, 2012. Gasum applies in these consolidated financial statements IFRS 1 First-time adoption of International Financial Reporting Standards with the date of transition January 1, 2012. Gasum has previously applied Finnish Accounting Standards (FAS).
The impacts arising from first-time adoption of the IFRS standards are presented in reconciliations included in the note
3 to the consolidated financial statements.
The consolidated financial statements have been prepared primarily under the historical cost convention unless otherwise indicated. Financial assets and liabilities measured at fair value through profit or loss have been revalued at
fair value.
The consolidated financial statements are presented in thousands of euros unless otherwise stated.
New and amended standards and interpretations adopted
Gasum has adopted the following new, revised and amended standards and interpretations and applies them for all financial periods included in its first consolidated IFRS financial statements.
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IFRS 7 Financial Instruments: Disclosures (amended). This amendment includes new disclosures to enhance the presentation of financial assets and financial liabilities and when those can be offset.
IFRS 13 Fair Value Measurement. The standard provides a precise definition of fair value for use across all IFRS
standards and a single source of fair value measurement. The standard extended the notes information required to be
presented in connection with fair value measurement.
IAS 19 Employee Benefits (revised). As a consequence of the revision to the standard the option to apply corridor method for recognizing actuarial gains and losses on defined benefit employee plans was discontinued. According to the revised standard actuarial gains and losses are recognized immediately and in full in the statement of comprehensive income in the period in which they arise and they will not be reclassified to profit and loss in subsequent periods. Interest cost and expected return on plan assets have been replaced with a net interest amount on the net defined benefit liability (asset), which is recognized in profit or loss and presented within the employee
benefit costs.
IAS 1 Presentation of Financial Statements (amended). Gasum has grouped items presented in other comprehensive income in accordance with the amended standard on the basis whether they are potentially reclassifiable to profit or loss subsequently.
Improvements to IFRS standards. Minor and less urgent improvements into standards are effected through the Annual
Improvements – procedure collecting changes together annually. Items included in the Annual Improvements relate to
five standards.
Other changes into IFRS standards enforced during Gasum’s first period of reporting under IFRS have not had material effect on the Group’s consolidated income statement, balance sheet of presentation of the financial statements.
Early adoption of standards not yet effective
Gasum has adopted in these first consolidated financial statements prepared under IFRS the following standards which are not yet effective but for which early adoption is allowed
IFRS 10 Consolidated Financial Statements and IAS 27 Separate Financial Statements (amended). The new IFRS 10 standard replaces sections concerning preparation of consolidated financial statements in the current IAS 27 Consolidated and Separate Financial Statements standard. The amended standard brings changes to the concept of
control and may in certain cases change earlier principle of including or not including an entity in the consolidation for group purposes.
IFRS 11 Joint Arrangements and IAS 28 Investment in Associates and Joint Ventures (amended). New IFRS 11 standard will replace current IAS 31 Interests in Joint Ventures –standard. In connection with setting of the new standard also IAS 28 standard is amended to align the accounting for both associates and joint ventures under the equity method.
IFRS 12 Disclosure of Interests in Other Entities (amended). The new standard combines the disclosure requirements for consolidated financial statements under one standard and sets out new notes requirements for example for entities
containing non-controlling interests.
Consolidation principles
Subsidiaries
Subsidiaries are all such entities over which the Group has control. The Group controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date that control ceases.
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The Group applies the acquisition method to account for business combinations. The consideration transferred for the acquisition of a subsidiary is the fair values of the assets transferred, the liabilities incurred to the former owners of the acquiree and the equity interests issued by the Group. The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration arrangement. Identifiable assets acquired and liabilities and
contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. The Group recognizes any non-controlling interest in the acquiree on an acquisition-by-acquisition basis, either at fair value or at the non-controlling interest’s proportionate share of the recognized amounts of acquiree’s identifiable net assets. Acquisition-related costs are expensed as incurred.
If the business acquisition is achieved in stages, the acquisition date carrying value of the acquirer’s previously held equity interest in the acquiree is re-measured to fair value at the acquisition date and any gains or losses arising from such re-measurement are recognized in profit or loss.
Any contingent consideration to be transferred is recognized at fair value at the acquisition date. Subsequent changes to the fair value of the contingent consideration that is deemed to be an asset or liability is recognized in accordance with IAS 39 either in profit or loss or as a change to other comprehensive income. Contingent consideration that is classified as equity is not re-measured, and its subsequent settlement is accounted within equity.
The excess of the consideration transferred the fair value amount of any non-controlling interest in the acquiree and the acquisition-date fair value of any previous equity interest in the acquiree over the fair value of the identifiable net
assets acquired is recognized as goodwill. If the total of consideration transferred, the fair value of non-controlling interest recognized and previously held interest measured is less than the fair value of the net assets of the subsidiary acquired, the difference is recognized directly in the profit and loss.
Inter-company transactions, receivables and liabilities as well as unrealized gains on transactions between group companies are eliminated. Unrealized losses are also eliminated. When needed, the financial statements by subsidiaries have been adjusted to conform to the Group’s accounting policies.
Transactions with non-controlling interests that do not result in loss of control are accounted for as equity transactions
– that is, as transactions with the owners in the capacity as owners. The difference between fair value of any consideration paid and the relevant share acquired of the carrying value of net assets of the subsidiary is recorded in equity. Gains and losses on disposals to non-controlling interests are also recorded in equity.
When the Group ceases to have control any retained interest in the entity is re-measured to its fair value at the date when control is lost, with the change in carrying amount recognized in profit or loss. The fair value is the initial carrying amount for the purposes of subsequently accounting for the retained interest as an associate, joint venture
or financial asset. In addition, any amounts previously recognized in other comprehensive income in respect of that
entity are accounted for as if the Group had directly disposed of the related assets or liabilities. This may mean that amounts previously recognized in other comprehensive income are reclassified to profit or loss.
Joint arrangements
Under IFRS 11 investments in joint arrangements are classified as either joint operations or joint ventures depending
on the contractual rights and obligations of each investor. Joint ventures are accounted for using the equity method. Under the equity method, interests in joint ventures are initially recognized at cost and adjusted thereafter to recognize the Group’s share of the post-acquisition profits or losses and movements in other comprehensive income. When the Group’s share of losses in a joint venture equals or exceeds its interests in the joint venture (which includes any long-term interest that, in substance, forms part of the Group’s net investment in the joint venture), the Group does not recognize further losses, unless it has incurred legal or constructive obligations or made payments on behalf of the joint ventures.
Unrealized gains on transactions between the Group and its joint ventures are eliminated to the extent of the Group’s
interest in the joint ventures. Unrealized losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Accounting policies of the joint ventures have been changed where necessary to ensure consistency with the policies adopted by the Group.
Foreign currency items
Items included in the financial statements of the each of the Group’s entities are measured using the currency of the primary economic environment in which the entity operates (the functional currency). The consolidated financial statements are presented in euros, which is the Company’s functional and presentation currency.
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Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Monetary items denominated in foreign currencies are translated into the functional currency using the exchange rates prevailing at reporting dates. Non-monetary items are translated at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of transactions in foreign currencies
and translation of monetary items are recognized in the income statement. Foreign exchange gains and losses arising from transactions in the ordinary course of business are included in respective items above operating profit. Translation differences related to financial items are recognized in financial income and expense.
The functional currency in all group companies is euro.
Intangible assets
Intangible assets comprise of intangible rights and other long-term expenditures. Intangible rights comprise primarily of patents and licenses. Other long-term expenditures include mainly compensation allowances for land owners for redeeming a long-term property usage right for the accommodation of the transmission pipelines and measurement stations as well as for other limitations on the property usage arising from the transmission pipelines.
Intangible assets are initially recognized in the balance sheet at historical cost if the cost can be measured reliably and it is probable that future economic benefits associated with the asset will flow to the Group.
Amortizations are calculated along straight-line method over their useful economic lives. The compensation allowances for land owners are not amortized. The applied useful economic lives are:
2013 2012
Patents and licences 3–5 years 3–5 years *
Compensation allowances to the land owners are accounted for as intangible assets with indefinite useful life. They are not subject to amortization and are tested annually for impairment.
The assets’ residual values and useful lives and amortization method are reviewed at minimum at the end of each reporting period and adjusted, if appropriate, to reflect changes in the expected economic benefits. The amortization of intangible assets is commenced when the asset is ready for its intended use.
Tangible assets
Tangible assets comprise primarily of the transmission and distribution networks for natural gas as well as related
installations and buildings as well as other machinery and equipment. Tangible assets are recognized at historical cost less depreciation and impairment charges. The cost includes expenditure that is directly attributable to the acquisition of the tangible asset. The cost for self-constructed assets include material costs, directly attributable employee benefit costs and other directly attributed costs arising from constructing the asset ready for its intended use. The borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying tangible asset are capitalized as part of the asset’s acquisition cost. In addition, the cost includes any estimated costs arising from
obligations to dismantle, remove and restore the items of property, plant and equipment.
In case the tangible asset comprises of multiple assets with different useful lives each asset is accounted and measured as separate component. Any replacement costs are capitalized and remaining value in the balance sheet at the date of replacement is written off.
Subsequent costs arising from additions, replacement or maintenance of the asset, are included in the tangible asset’s carrying amount only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. Maintenance costs, meaning repair and overhaul costs are charged
to the income statement when incurred. Government grants received have been recognized as deductions to the acquisition cost.
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Assets are depreciated straight-line over their estimated useful lives. Land and water areas are not depreciated. The estimated useful lives are:
Buildings and constructions 15–65 years* 15–65 years*
Other tangible assets 20–40 years 20–40 years
Machinery and equipment 3–25 years 3–25 years
* Not applicable to the cushion gas accounted for as a tangible asset which is depreciated only when the expected residual value is lower than the acquisition cost or carrying value at reporting date. Cushion gas implies the lowest quantity of gas required for the flawless function of the gas transmission.
The assets’ residual values, useful lives and depreciation methods are reviewed at least at the end of each reporting period and adjusted, when necessary, to reflect changes in expected economic benefits. Depreciations are commenced when the asset is ready for its intended use.
Impairment of tangible and intangible assets
The Group assesses at each reporting date if there exist any indications that the value of any asset may be impaired. If any such indications exist the recoverable amount of respective asset is assessed.
Tangible and intangible assets with finite useful lives are tested for impairment only when indications exist that their carrying value may be impaired.
Recoverable amount is additionally assessed for the following asset classes regardless whether indications of
impairment exist: intangible assets with indefinite useful lives and intangible assets in process.
The recoverable amount is the higher of an asset’s fair value less costs of disposal and value in use. Value in use refers to the expected future net cash flows derived from the asset or cash generating unit in question that have been discounted to net present value. Discount factor is the pre-tax interest rate reflecting market view of the time value of money and any specific risks related to the asset.
An impairment loss is recognized for the amount by which the asset’s carrying value exceeds its recoverable amount. Impairment is expensed immediately in the profit and loss. The useful life of a asset is reviewed in connection with
recognition of impairment losses. Prior impairments of non-financial assets, other than goodwill, are reversed in case there has been a change in the estimates used for assessing the recoverable amount. Impairments are, however, not
reversed in excess of the carrying value of the asset excluding the impact of the impairment.
Leasing contracts in which the Group is lessee
Leases of tangible assets in which the significant portion of the risks and rewards of ownership are retained by the
Group are classified as financial leases. Finance leases are capitalized at the lease’s commencement at the lower of the fair value of the leased asset and the present value of the minimum lease payments. The assets acquired under finance leases are depreciated over the shorter of the useful life of the asset and the lease term. Periodic lease payments are allocated between the finance expenses and reduction in the leasing liability to produce a constant periodic rate of interest on the remaining balance of the liability for each period. Variable leases are recognized as expenses during the periods they are incurred. Leasing liabilities for finance leases are included within financial
liabilities.
Leases in which the significant portion of the risks and rewards of ownership are retained by the lessor are accounted for as operating leases. Payments made under operating leases are charged to the profit and loss on a straight-line basis over the period of the lease. Incentives received are deducted from operating lease payments over the period of
obtained benefits from the use of leased asset.
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When a lease includes both land and property components, the classification into finance or operating lease is made individually for each of the component.
Leasing contracts in which the Group is lessor
Assets leased by the Group where the significant portion of risks and rewards have been materially transferred to the lessee are accounted for as finance leases and recognized in the balance sheet in receivables. The receivable is initially recognized at the present value of the lease contract. The financial income included in the lease is recognized over the lease period so as to produce a constant rate of return over the lease period on the remaining net investment.
Assets leased under other leases than finance lease are included in the tangible assets. The assets are depreciated
over their useful lives similarly to tangible assets held for own use.
Leasing income is recognized in the profit or loss on a straight-line basis over the period of the lease.
Arrangements which may contain a lease
At the outset of the arrangement the Group assesses on the basis of the substance of the contract whether the arrangement is a lease or whether it contains a lease. The arrangement is a leasing contract if the following criteria
are met:
a) execution of the arrangement is dependent on utilization of a specific asset or asset group, and
b) the arrangement establishes a right to use the asset.
In case the arrangement contains a lease, the basis of preparation described above is applied in respect to the lease component. Relevant IFRS standards are applied to other components of the arrangement.
Inventories
Inventories are stated the lower of cost and net realizable value. Cost is determined using the FIFO (first in, first out) method. The cost excludes borrowing costs. Net realizable value is the estimated selling price in the ordinary course of business, less applicable variable selling expenses.
Inventories include also the prepayments made under a long-term ”Take-or-pay” supply contract that is stated at lower of cost and net realizable value. See also note 4 Significant accounting estimates and judgmental items and
note 23 Inventories.
Trade receivables
Trade receivables are amounts due from customers for goods sold or services performed in the ordinary course of business. If collection is expected in one year or less (or in the normal operating cycle of the business if longer), they are classified as current assets. If not, they are presented as non-current assets. Trade receivables are recognized
initially at fair value and subsequently measured at amortized cost using the effective interest method, less provision for impairment.
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Financial assets and liabilities
Financial assets
The Group classifies its financial assets in the following categories: at fair value through profit or loss, loans and receivables and available-for-sale investments. The classification depends on the purpose for which the financial assets were acquired and classification is determined at acquisition date.
Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss are financial assets held for trading. A financial asset is classified into this category if acquired principally for the purpose of selling in the short term. The Group acquires derivatives for the purposes of trading. Assets in this category are classified as current assets, unless matured over 12 months after the end of the reporting period.
Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are included in current assets, expect for maturities greater than 12 months after the end of
the reporting period in which case they are classified as non-current assets. Group’s loans and receivables also include items ‘trade and other receivables’ and ‘cash and cash equivalents’ within the balance sheet.
Available-for-sale investments
Available-for-sale financial assets are non-derivatives that are either designated in this category or not classified in any of the other categories. They are non-current assets unless the investment matures or management intends to dispose of it within 12 months from the end of the reporting period. Group’s investments are included in this category and they are presented in ‘other receivables’ in the balance sheet.
Recognition and measurement
Transaction costs are included in the original book value for all financial assets not carried at fair value through profit or loss. Financial assets carried at fair value through profit or loss are initially recognized at fair value, and transactions costs are expensed in the income statement. Investments in financial assets which are not carried at fair
value through profit or loss are initially recognized to an amount including transaction costs. All purchases and sales of financial assets are recognized on the trade-date, being the date on which the Group commits to purchase or sell the asset.
Financial assets are derecognized when the rights to receive cash flows from the investments have expired or have been transferred and the Group has transferred substantially all risks and rewards of ownership.
Dividend income from financial assets at fair value through profit or loss is recognized in the profit and loss as part of other finance income when the Group’s right to receive payments is established.
The fair value adjustments of available-for-sale financial assets are recognized in other comprehensive income. When securities classified as available-for-sale are sold or impaired the accumulated fair value adjustments recognized in equity are included in the income statement as ‘other operating income’ or ‘other operating expenses’.
Offsetting financial instruments
Financial assets and liabilities are offset and the net amount reported in the balance sheet when there is a legally enforceable right to offset the recognized amounts and there is an intention to settle on a net basis or realize the asset and settle the liability simultaneously.
Cash and cash equivalents
In the consolidated statement of cash flows, cash and cash equivalents includes cash in hand, deposits held at call with banks, other short-term highly liquid investments with original maturities of three months or less and bank overdrafts. In the consolidated balance sheet, bank overdrafts are shown within borrowings under current liabilities.
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Impairment of financial assets – Assets carried at amortized cost
The Group assesses at the end of each reporting period whether there is objective evidence that a financial asset or
group of financial assets is impaired. A financial asset or group of financial assets is impaired and impairment losses
are incurred only if there is objective evidence of impairment as a result of one or more events that occurred after the initial recognition of the asset (a “loss event”) and that loss event (or events) has an impact on the estimated future cash flows of the financial asset or group of financial assets that can be reliably estimated.
Evidence of impairment may include indications that the debtor or a group of debtors is experiencing significant financial difficulty, default or delinquency in interest or principal payments, the probability that they will enter bankruptcy or other financial reorganization, and where observable data indicate that there is a measurable decrease
in the estimated future cash flows, such as changes in arrears or economic conditions that correlate with defaults.
For loans and receivables category, the amount of the loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows (excluding future credit losses that have not been incurred) discounted at the financial asset’s original effective interest rate. The carrying amount of the asset is reduced and the amount of the loss is recognized in the consolidated income statement. If a loan or held-to-maturity investment has a variable interest rate, the discount rate for measuring any impairment loss is the current effective
interest rate determined under the contract. As a practical expedient, the Group may measure impairment on the basis of an instruments fair value using an observable market price.
If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognized (such as improvement in the debtor’s credit rating), the reversal of the previously recognized impairment loss is recognized in the consolidated income statement.
Impairment of financial assets – Assets classified as available-for-sale
The Group assesses at the end of each reporting period whether there is objective evidence that a financial asset or a group of financial assets is impaired. For debt securities, the Group uses the criteria referred to above. In the case of equity investments classified as available-for-sale, a significant or prolonged decline in the fair value of the security below its cost is also evidence that the assets are impaired. If any such evidence exists for available-for-sale financial assets, the cumulative loss, measured as the difference between the acquisition cost and the current fair value, less any impairment loss on that financial asset previously recognized in profit or loss, is removed from equity and
recognized in profit or loss. Impairment losses recognized in the consolidated income statement on equity instruments are not reversed through the consolidated income statement.
Borrowings
Borrowings are recognized initially at fair value, net of transaction costs incurred. Borrowings are subsequently carried at amortized cost. Any difference between the proceeds (net of transaction costs) and the redemption value is
recognized in the income statement over the period of the borrowings using the effective interest method.
Derivative financial instruments
Derivatives are initially recognized at fair value on the date of a derivative contract is entered into and are subsequently re-measured at their fair value. The method of recognizing the resulting gain or loss from re-measurement at fair value depends on the designation of the derivative contract. The derivatives used by the group
are highly effective in accordance with the approved risk management policy but hedge accounting is not applied. Therefore unrealized gains and losses from changes in the fair value of derivative contracts is recorded in the profit and loss at the end of each reporting period.
All derivate contracts are classified as financial assets or liabilities at fair value through profit or loss and the gains or losses resulting from movement in their fair values is presented under item “other operating expense (-)/income” in the income statement in respect of commodity derivatives and under financial income or expense in respect of interest derivatives in the period incurred.
Gasum – Consolidated (IFRS) Financial Statements 2013
16
Equity
The Group classifies equity instruments on the basis of their nature into either equity or financial liabilities. An equity
instrument is any contract which contains the right to the entity’s assets after deducting all its liabilities. Transaction
costs directly attributable to the issue or redemption of shares are a shown in equity as a deduction from the proceeds.
Dividend distribution proposed by the Board of Directors is not deducted from the distributable equity prior to the approval of the Company’s ordinary shareholder meeting.
Trade payables
Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade payables are recognized initially at fair value and subsequently measured at amortized cost using the effective interest method.
Provisions and contingent liabilities
Provisions for environmental restoration, asset retirement obligations, restructuring costs and legal claims are recognized when the Group has a present legal or constructive obligation as a result of past events; it is probable that an outflow of resources embodying economic benefit will be required to settle the obligation; and ta reliable estimate of the obligation can be made.
Post-employment benefits
The Group operates various post-employment schemes, including both defined benefit and defined contribution schemes. Pension arrangements are managed through external pension and life insurance companies.
A defined contribution plan is a pension plan under which the Group pays fixed contributions into a separate entity (fund) and the Group retains no legal or constructive obligations to pay further contributions if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods. The contributions are recognized as employee benefit expenses when they are due. Prepaid contributions are recognized
as an asset to the extent that a cash refund or a reduction in the future payments is available. Statutory pension
contributions are expensed in the year they are incurred. Pension schemes other than defined contribution plans are defined benefit plans.
Typically defined benefit plans define an amount of pension benefit that an employee will receive on retirement, usually dependent on one or more factors such as age, years of service and compensation. The liability recognized in the balance sheet in respect of defined benefit pension plans is the present value of the defined benefit obligation at
the end of the reporting period less the fair value of plan assets. The defined benefit obligation is calculated annually by independent actuaries using the projected unit credit method. The present value of the defined benefit obligation is determined by discounting the estimated future cash outflows using interest rates of high-quality corporate bonds that are denominated in the currency in which the benefits will be paid, and that have terms to maturity approximating to the terms of the related pension obligation. In countries where there is no deep market in such bonds, the market rates on government bonds are used. Actuarial gains and losses arising from experience adjustment and changes in actuarial assumptions are charged or credited to equity in other comprehensive income in the period in which they
arise. Past service costs are recognized immediately in statement of income.
Revenue recognition
Revenue is measured at the fair value of the consideration received for good supplied and services rendered stated net of indirect taxes and discounts. The Group recognizes revenue when the amount of revenue can be reliably measured and when it is probable that future economic benefits will flow to the entity. Revenue includes the volume
based excise tax payable on natural gas supplied for taxable use.
Gasum – Consolidated (IFRS) Financial Statements 2013
17
Sales of energy
The sales of energy are recognized constantly upon delivery based on quantities as indicated by meters operated by
Gasum and at valid tariffs applicable (“Maakaasun hinnoittelujärjestelmä”).
Participation and connection fees
Gasum’s clients pay participation and connection fees when linked to the transmission and distribution network. Participation fees are recognized to revenue over the expected life of the client contract based on Gasum’s accumulated experience. Connection fees are recognized to revenue when there is reasonable certainty that the
related economic benefits will flow to Gasum.
Transmission services
Gasum is a dedicated owner of the transmission network as defined by the Natural gas market act and liable for the maintenance and development of the transmission network. Transmission services mean the transmission of bulk natural gas by Gasum Oy falling under the definition of rendering the services. Revenue from transmission services
are recognized to revenue on a straight-line basis over a specified period as the transmission services flow to the customers on a continuous basis.
Research and development costs
Research and development costs are expensed in the period they are incurred.
Current and deferred income tax
The tax expense for the period comprises current and deferred tax. Tax is recognized in the income statement, expect to the extent that it relates to items recognized in other comprehensive income or directly to equity. In this case, the tax is also recognized in other comprehensive income or directly in equity, respectively. The current income tax charge is calculated on the basis of the tax laws enacted at the balance sheet date. Tax receivable and liability related to the taxes for the period are netted if and only when the Group has legally enforceable right to offset the tax items
and the Group will either effect the tax payment on net basis or realize the tax receivable and pay the tax liability simultaneously.
Deferred income tax is recognized on temporary differences arising between the tax bases of assets and liabilities and
their carrying amounts. Deferred tax liabilities are not recognized if they arise from the initial recognition of goodwill or if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable income.
Deferred income tax liabilities are recognized for investments made in subsidiaries and joint arrangements, expect
when the timing of the reversal of the temporary difference is controlled by the Group and it is probable that the temporary difference will not reverse in the foreseeable future.
Major taxable temporary differences in the Group arise from the depreciation of tangible assets, from the fair valuation of derivative contracts and defined benefit pension plans.
Deferred taxes are calculated on the basis of the tax laws enacted or substantively enacted at the balance sheet dates.
Deferred income tax assets are recognized only to the extent that it is probable that future taxable profit will be
available against which the temporary differences can be utilized. Deferred income tax asset is not recognized if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable income. The Group assesses the recognition criteria of deferred income tax assets respectively at the end of each reporting period.
Deferred income tax assets and liabilities are offset in the Group if and only when there is a legally enforceable right to offset current tax assets against current tax liabilities and when the deferred income tax asset and liabilities relate
to income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities where there is an intention to set off deferred income tax assets and liabilities or realize the tax receivable and pay
Gasum – Consolidated (IFRS) Financial Statements 2013
18
the tax liability simultaneously on such future period during which a significant amount of deferred income tax liabilities are expected to be paid or a significant amount of deferred income tax assets are expected to be deducted.
Dividends
Dividend income is recognized when the right to receive the payment is established. Dividend distribution proposed by the Board of Directors is not deducted from the distributable equity prior to the approval of company’s ordinary shareholder meeting.
Government grants
Government grants are recognized at their fair value where there is a reasonable assurance that the grant will be received and the Group will comply with all attached conditions. Government grants related to costs are deferred and recognized into other operating income in the income statement over the period necessary to match them with the costs that they are intended to compensate. Government grants relating to the acquisition of tangible assets are deducted from the cost of the asset and recognized in the income statement by deducting depreciation for the respective asset.
3. First-time adoption of IFRS -standards
General
Gasum publishes the first consolidated financial statements prepared under IFRS standards for the financial period ended December 31, 2013 with comparative information for the financial period ended December 31, 2012. Gasum
applies in these consolidated financial statements IFRS 1 First-time Adoption of International Financial Reporting Standards with the date of transition January 1, 2012. Gasum has previously applied Finnish Accounting Standards (FAS).
The impacts arising from first-time adoption of the IFRS standards are presented in the following:
Gasum – Consolidated (IFRS) Financial Statements 2013
19
Consolidated balance sheet as at January 1, 2012
€ thousands
FAS
Jan 1,
2012
Re-
classi-fi-
cations
Tangible
assets and
revenue
recognition
Financial
instru-
ments Lea-sing
Employ-ee
benefits
Other
adjust-
ments
Total IFRS
adjust-
ments
IFRS
Jan 1,
2012
Assets
Non-current assets
Intangible assets 9,442 -1,243 0 0 0 0 0 -1,243 8,199
Tangible assets 544,976 3,943 48,717 0 -1,254 0 0 51,407 596,383
Available-for-sale investments 2,416 -2,360 0 0 0 0 0 -2,360 56
Investments accounted for using the
equity method 0 1,933 0 0 0 0 0 1,933 1,933
Deferred tax assets 0 0 0 344 2 1 647 -1 994 0 0
Derivative financial instruments 0 0 0 423 0 0 0 423 423
Other non-current assets 0 427 0 0 1,641 0 0 2,068 2,068
0 0 0 0 0 0
Total non-current assets 556,835 2,700 48,717 767 390 1,647 -1,994 52,228 609,063
0 0 0 0 0 0 0
Current assets 0 0 0 0 0 0 0
0 0 0 0 0 0 0
Inventories 8,929 99,863 0 0 0 0 0 99,863 108,792
Trade and other receivables 237,249 -66,280 0 0 40 0 0 -66,240 171,009
Available-for-sale investments 36,283 -36,283 0 0 0 0 0 -36,283 0
Derivative financial instruments 0 0 0 6,002 0 0 0 6,002 6,002
Cash and cash equivalents 4,208 0 0 0 0 0 0 0 4,208
0 0 0 0 0 0
Total current assets 286,670 -2,700 0 6,002 40 0 0 3,342 290,011
0 0 0 0 0 0
Total assets 843,504 0 48,717 6,769 430 1,647 -1,994 55,570 899,074
Equity and liabilities
Equity attributable to owners of the
parent
Share capital 178,279 0 0 0 0 0 0 0 178,279
Retained earnings 148,242 0 23,881 6,006 25 -5,076 0 24,836 173,078
Profit for the period 69,255 0 0 0 0 0 0 0 69,255
Translation differences
Total equity 395,777 0 23,881 6,006 25 -5,076 0 24,836 420,612
Liabilities
Non-current liabilities
Borrowings 138,250 0 0 0 0 0 0 0 138,250
Other non-current liabilities 1,553 0 14,368 0 234 1,346 0 15,948 17,501
Post-employment benefits 0 0 0 0 0 5,277 0 5,277 5,277
Deferred tax liabilities 50,342 0 7,749 2,293 10 0 -1,994 8,059 58,401
Derivative financial instruments 0 0 0 1,406 0 0 0 1,406 1,406
Total non-current liabilities 190,144 0 22,117 3,699 244 6,623 -1,994 30,690 220,834
0 0 0 0 0 0 0
Current liabilities 0 0 0 0 0 0 0
0 0 0 0 0 0 0
Borrowings 43,714 0 0 0 0 0 0 0 43,714
Trade and other payables 211,949 0 2,719 -2,935 160 101 0 44 211,993
Derivative financial instruments 0 0 0 0 0 0 0 0 0
Current income tax liabilities 1,920 1,920
0 0 0 0 0 0
Total current liabilities 257,583 0 2,719 -2,935 160 101 0 44 257,627
0 0 0 0 0 0
Total liabilities 447,727 0 24,836 764 404 6 724 -1 994 30,734 478,462
0 0 0 0 0 0
Total equity and liabilities 843,504 0 48,717 6,769 430 1,647 -1,994 55,570 899,074
Gasum – Consolidated (IFRS) Financial Statements 2013
20
Consolidated balance sheet as at December 31, 2012
€ thousands
FAS
Dec 31,
2012
Reclassif
ica-tions
Tangible
assets and
revenue
recognition
Financial
instru-
ments Lea-sing
Employ-ee
benefits
Other
adjustmen
ts
Total IFRS
adjust-
ments
IFRS
Dec 31,
2012
Assets
Non-current assets
Intangible assets 9,805 -925 543 -382 9 423
Tangible assets 533,885 3,625 50,683 -1,589 259 52,978 586,863
Available-for-sale investments 2,530 -2,474 -2,474 56
Investments accounted for using
the equity method 2,032 96 2,128 2,128
Deferred tax assets 13 399 2 1 796 -2 210
Derivative financial instruments 90 90 90
Other non-current assets 442 1,914 2,356 2,356
Total non-current assets 546,220 2,700 50,695 489 328 1,796 -1,312 54,696 600,916
Current assets
Inventories 9,637 80,046 80,046 89,683
Trade and other receivables 265,270 -82,746 53 -82,693 182,577
Available-for-sale investments 1,459 1,459
Derivative financial instruments 161 161 161
Current income tax assets 2,205 2,205
Cash and cash equivalents 11,401 11,401
Total current assets 289,973 -2,700 0 161 53 0 0 -2,487 287,486
Total assets 836,193 0 50,695 649 381 1,796 -1,312 52,209 888,402
Equity and liabilities
Equity attributable to owners of
the parent
Share capital 178,279 178,279
Retained earnings 185,698 23,881 6,006 25 -7,050 22,862 208,560
Profit for the period 42,636 3,100 -6,328 37 1,516 702 -973 41,664
Translation differences
Total equity 406,613 0 26,981 -322 63 -5,534 702 21,889 428,502
Liabilities
Non-current liabilities
Borrowings 140,135 140,135
Other non-current liabilities 1,522 12,190 114 256 12,560 14,082
Post-employment benefits 7,230 7,230 7,230
Deferred tax liabilities 53,605 8,768 294 23 -2,013 7,072 60,677
Derivative financial instruments 1,618 1,618 1,618
Total non-current liabilities 195,262 0 20,958 1,913 137 7,486 -2,013 28,481 223,743
Current liabilities
Borrowings 57,181 57,181
Trade and other payables 177,137 2,756 -955 181 -157 1,826 178,962
Derivative financial instruments 14 14 14
Current income tax liabilities
Total current liabilities 234,318 0 2,756 -941 181 -157 0 1,839 236,157
Total liabilities 429,580 0 23,714 971 318 7,330 -2,013 30,320 459,900
Total equity and liabilities 836,193 0 50,695 649 381 1,796 -1,312 52,209 888,402
Gasum – Consolidated (IFRS) Financial Statements 2013
21
Consolidated balance sheet as at December 31, 2013
€ thousands
FAS
Dec 31,
2013
Reclassif
ications
Tangible
assets and
revenue
recognition
Financial
instru-
ments Lea-sing
Employ-ee
benefits
Other
adjust-
ments
Total IFRS
adjust-
ments
IFRS
Dec 31,
2013
Assets
Non-current assets
Intangible assets 9,959 -656 1,164 508 10,467
Tangible assets 525,055 3,356 52,847 -1,556 517 55,165 580,219
Available-for-sale investments 2,614 -2,538 -2,538 76
Investments accounted for using
the equity method 2,096 192 2,289 2,289
Deferred tax assets 21 925 1 1,320 -2,267
Derivative financial instruments
Other non-current assets 442 1,858 2,299 2,299
Total non-current assets 537,628 2,700 52,868 925 303 1,320 -393 57,723 595,350
Current assets
Inventories 91,958 -2,700 -2,700 89,258
Trade and other receivables 130,169 -878 57 -821 129,347
Available-for-sale investments 991 991
Derivative financial instruments
Current income tax assets 3,340 3,340
Cash and cash equivalents 4,485 4,485
Total current assets 230,943 -2,700 0 -878 57 0 0 -3,521 227,422
Total assets 768,571 0 52,868 47 360 1,320 -393 54,202 822,772
Equity and liabilities
Equity attributable to owners of
the parent
Share capital 178,279 178,279
Retained earnings 189,837 25,463 -322 63 -6,004 702 19,901 209,738
Profit for the period 33,527 5,096 -3,599 48 2,161 836 8,063 38,068
Translation differences 0
Total equity 401,643 0 30,559 -3,921 111 -3,844 1,538 24,443 426,085
Liabilities
Non-current liabilities
Borrowings 92,953 92,953
Other non-current liabilities 34 11,589 43 11,631 11,666
Post-employment benefits 6,576 6,576 6,576
Deferred tax liabilities 45,275 8,002 -440 29 353 -1,930 6,014 51,288
Derivative financial instruments 1,540 2,917 4,457 4,457
Total non-current liabilities 138,262 1,540 19,591 2,477 72 6,929 -1,930 28,678 166,940
Current liabilities
Borrowings 71,448 71 448
Trade and other payables 157,217 -1 540 2,718 -251 178 -1 766 -660 156 557
Derivative financial instruments 1 742 1 742 1 742
Current income tax liabilities
Total current liabilities 228,666 -1,540 2,718 1,491 178 -1,766 0 1,082 229,748
Total liabilities 366,928 0 22,309 3,968 249 5,163 -1,930 29,760 396,688
Total equity and liabilities 768,571 0 52,868 47 360 1,320 -393 54,202 822,772
Gasum – Consolidated (IFRS) Financial Statements 2013
22
Consolidated statement of comprehensive income January 1 – December 31, 2012
€ thousands
FAS
Jan 1–Dec 31, 2012
Reclassifica-tions
Tangible
assets and
revenue
recogni-tion
Financial
instru-ments Lea-sing
Employ-ee benefits
Other
adjust-ments
Total
IFRS
adjustments
IFRS
Jan 1–Dec 31, 2012
Net sales 1,281,816 -9,674 2,719 0 -212 0 0 -7,168 1,274,648
Other operating income 659 9,674 0 0 0 0 0 9,674 10,334
Materials and services -1,149,595 0 0 -1,558 0 0 0 -1,558 -1,151,153
Personnel expenses -21,376 0 0 0 0 2,008 0 2,008 -19,368
Depreciation and amortization -30,400 0 1,387 0 -96 0 802 2,093 -28,307
Other operating expenses -19,003 0 0 -6,611 205 0 0 -6,405 -25,409
0 0 0 0 0
Operating profit 62,100 0 4,106 -8,168 -102 2,008 802 -1,354 60,745
0 0 0 0 0 0
Finance income 99 0 0 0 167 0 0 167 266
Finance expenses -5,453 0 0 -213 -15 0 0 -228 -5,681
Finance expenses, net -5,353 0 0 -213 152 0 0 -61 -5,414
0 0 0 0 0 0
Share of profit/loss of investments
accounted for using the equity
method -98 0 0 0 0 0 96 96 -2
0 0 0 0 0 0
Profit before income tax 56,648 0 4,106 -8,381 49 2,008 898 -1,319 55,329
0 0 0 0 0 0
Income tax expense -10,748 0 0 0 0 0 0 0 -10,748
0 0 0 0 0
Change in deferred taxes -3,264 0 -1,006 2,053 -12 -492 -196 347 -2,917
0 0 0 0 0 0
Profit for the period 42,636 0 3,100 -6,328 37 1,516 702 -973 41,664
0 0 0 0 0 0
Profit attributable to: 0 0 0 0 0 0 0
0 0 0 0 0 0
Owners of the parent 42,636 0 3,100 -6,328 37 1,516 702 -973 41,664
0 0 0 0 0 0
Other comprehensive income 0 0 0 0 0 0 0
Items that will not be reclassified to
profit or loss: 0 0 0 0 0 0 0
Remeasurements of post-
employment benefits 0 0 0 0 0 -1,974 0 -1,974 -1,974
Items that may be subsequently reclassified to profit and loss: 0 0 0 0 0 0 0
Translation differences 0 0 0 0 0 0
0 0 0 0 0 0
Total comprehensive income for
the period 42,636 0 3,100 -6,328 37 -457 702 -2,946 39,690
0 0 0 0 0 0
Total comprehensive income for the
period attributable to: 0 0 0 0 0 0 0
0 0 0 0 0 0
Owners of the parent 42,636 0 3,100 -6,328 37 -457 702 -2,946 39,690
Gasum – Consolidated (IFRS) Financial Statements 2013
23
Consolidated statement of comprehensive income January 1 – December 31, 2013
€ thousands
FAS
Jan 1–Dec 31, 2013
Reclassifica-tions
Tangible
assets and
revenue
recogni-tion
Financial
instru-ments Lea-sing
Employ-ee benefits
Other
adjust-ments
Total IFRS
adjust-ments
IFRS
Jan 1–
Dec 31, 2013
Net sales 1,147 473 -456 2,908 0 -223 0 0 2,229 1,149,702
Other operating income 511 456 0 0 0 0 0 456 967
Materials and services -1,040,366 0 0 0 0 0 0 0 -1 040 366
Personnel expenses -22,736 0 0 0 0 2 960 0 2 960 -19 776
Depreciation and amortization -29,575 0 1 414 0 -123 0 880 2 170 -27 404
Other operating expenses -18,541 0 0 -4 277 240 0 0 -4 037 -22 578
0 0
Operating profit 36,767 0 4 322 -4 277 -106 2 960 880 3 778 40 545
0 0 0 0 0 0
Finance income 87 0 0 79 171 0 0 250 337
Finance expenses -5,638 0 0 -661 -9 0 0 -670 -6,309
Finance expenses, net -5,551 0 0 -582 162 0 0 -421 -5,972
0 0 0 0 0 0
Share of profit/loss of investments
accounted for using the equity
method -136 0 0 0 0 0 96 96 -40
0 0 0 0 0 0
Profit before income tax 31,079 0 4,322 -4,859 55 2,960 976 3,454 34,533
0 0 0 0 0 0
Income tax expense -5,883 0 0 0 0 0 0 0 -5,883
0 0 0 0 0 0
Change in deferred taxes 8,331 0 774 1,260 -7 -800 -140 1,088 9,419
0 0 0 0 0 0
Profit for the period 33,527 0 5,096 -3,599 48 2,161 836 4,542 38,068
0 0 0 0 0 0
Profit attributable to: 0 0 0 0 0 0 0
0 0 0 0 0 0
Owners of the parent 33,527 0 5,096 -3,599 48 2,161 836 4,542 38,068
0 0 0 0 0 0
Other comprehensive income 0 0 0 0 0 0 0
Items that will not be reclassified to
profit or loss: 0 0 0 0 0 0 0
Remeasurements of post-
employment benefits 0 0 0 0 0 -470 0 -470 -470
Items that may be subsequently reclassified to profit and loss: 0 0 0 0 0 0 0
Translation differences 0 0 0 0 0 0 0 0 0
0 0 0 0 0 0
Total comprehensive income for
the period 33,527 0 5,096 -3,599 48 1,690 836 4,071 37,598
0 0 0 0 0 0
Total comprehensive income for the
period attributable to: 0 0 0 0 0 0 0 0 0
0 0 0 0 0 0
Owners of the parent 33,527 0 5,096 -3,599 48 1,690 836 4,071 37,598
Tangible assets
Participation fees
The participation fees paid by clients in connection with their access to the distribution network have been deducted
from the cost of buildings and constructions (gas transmission network) in the financial statements prepared under FAS. As the accounting treatment under FAS is not in line with the definition of cost as set out in IAS 16 Property, Plant and Equipment the carrying value of buildings and constructions in the opening balance sheet is adjusted. The
participation fees are adjusted to Gasum’s revenue. Gasum has also assessed the useful life of the transmission network in connection of the transition to IFRS and extended the useful life from 40 to 65 years (see next paragraph). The combined effect arising from previous adjustments on the carrying value of buildings and constructions in the
opening balance sheet is €42.9 million pre-tax and the increase in the retained earnings is respectively €32.3 million. The participation fees netted in the value of buildings and constructions subsequently have been adjusted accordingly since the date of transition to IFRS.
Gasum – Consolidated (IFRS) Financial Statements 2013
24
The participation fees are recognized to revenue over the expected life of the client contract based on Gasum’s accumulated experience. The pre-tax adjustment for deferred revenue in the opening balance sheet is €17.1 million and related post-tax reduction in the retained earnings is €12.9 million.
Useful life of the transmission network
Gasum has assessed the useful lives of tangible and intangible assets in connection with its transition to IFRS and changes retrospectively the useful life of transmission network built subsequent to year 2000 from 40 years to 65 years. The basis for the extension of the useful life is technical development enabling longer utilization of the transmission pipeline whereas the earlier depreciation period applied in the FAS was driven by tax regulations. The accumulated depreciation of the transmission network has been reduced by €5.9 million in the opening balance sheet
and post-tax adjustment to the retained earnings of Gasum amounts to €4.4 million, respectively. During both financial periods ending December 31, 2012 and December 31, 2013 the annual depreciation of transmission network has been reduced by €2.3 million, respectively.
Financial instruments
Unrealized gains or losses arising from commodity and interest rate derivatives have not been recognized in FAS for
the periods ended December 31, 2011 or December 31, 2012. For the financial period ended December 31, 2013 Gasum has recognized the unrealized losses from interest derivatives based on principle of prudence but has not
recognized unrealized gains. Furthermore, under FAS Gasum has accrued the realized gains and losses from derivative instruments for future periods.
The fair value of all derivative contracts in the opening IFRS balance sheet is recognized in equity, net of deferred taxes. The derivative financial instruments in non-current and current assets amount to €6.4 million and the
derivative financial instruments in non-current liabilities amount to €1.4 million.
The impact of fair value changes of interest derivatives recognized in finance expenses amounted to €0.2 million for the financial period ended December 31, 2012 and respectively €0.6 million in financial income for the financial period ended December 31, 2013. Fair value movements of commodity derivatives recognized in other operating expenses amounted to €6.6 million for the financial period ended December 31, 2012 and respectively €4.3 million for the financial period ended December 31, 2013.
The accruals for realized gains or losses from derivative instruments have been reversed in the opening IFRS balance
sheet as well as for all subsequent periods and at the same time the realized gains and losses from commodity derivatives recognized in revenues have been reclassified into other operating income and expenses.
Leases
Under FAS all leases in which Gasum is a lessee have been classified as operating leases. According to IFRS, such leasing contracts in which the significant portion of the risks and rewards of ownership of the asset transfer to the
lessee are classified as finance leases. Finance leases are capitalized at the lease’s commencement at the lower of the fair value of the leased asset and the present value of the minimum lease payments. The value of assets acquired under finance lease amounted to €0.4 million in the opening IFRS balance sheet and respective finance lease liability amounted to €0.4 million. Furthermore, the value of assets acquired under finance lease and value of finance lease liability amounted to €0.3 million at the end of financial period ended December 31, 2012 and €0.2 million at the end of the financial period ended December 31, 2013.
Gasum acts also as a lessor in certain arrangements which fall under leasing contracts according to the criteria set out
in IFRIC 4 Determining whether an Arrangement contains a lease interpretation. Under FAS the assets related to such arrangements are presented in buildings and constructions and associated constant payments are included in the
revenue. Buildings and constructions related to arrangements classified as finance leases have been re-measured at the present value of minimum lease payments in accordance with IAS 17 Leases and reclassified as finance lease assets. The amount of finance lease assets amounts to €1.7 million in the opening IFRS balance sheet, €1.9 million as at December 31, 2012 and €1.9 million as at December 31, 2013. The payments recognized in the revenue have been
adjusted and reclassified as amortization of the finance lease asset and interest income.
Gasum – Consolidated (IFRS) Financial Statements 2013
25
Employee benefits
Gasum operates a supplementary defined benefit pension scheme which has been recognized under FAS on a cash
basis at the amounts indicated in the advance invoicing from pension company. In the IFRS financial statements the
pension plan has been recognized according to IAS 19 Employee Benefits standard applying the projected unit credit method in determining the benefit and the net liability arising from the defined benefit. The net defined benefit liability amounts to €5.3 million in the opening balance sheet. The respective net defined benefit liability amounted to €7.2 million for the financial period ended December 31, 2012 and €6.6 million for the financial period ended December 31, 2013.
Gasum has a long-term incentive scheme for key employees of the Group that has been recognized to income
statement only at the end of the vesting period under FAS. Under IFRS these schemes are accounted for as other long-term defined benefit schemes according to IAS 19 Employee Benefits and the impact has been accrued over the vesting period. For the IFRS opening balance sheet the liabilities relating to the long-term incentive scheme have been increased by €1.4 million compared to FAS financial statements and the respective total liability together with related social security costs was €3.2 million. Accordingly, the liability for the financial year ended December 31, 2012 was €1.9 million and for the financial year ended December 31, 2013 €0.
Other adjustments and reclassifications
The compensation allowances paid by Gasum for land owners for redeeming a long-term property usage right for the accommodation of natural gas pipelines and natural gas measuring post as well as for other limitations on the property usage arising from the natural gas pipelines have been accounted for as intangible assets in FAS and amortized on a straight-line basis over ten years in line with tax regulations. Under IFRS the compensation allowances
are accounted for as intangible assets with indefinite life prospectively since the date of transition. Respectively, the amortization recognized on compensation allowances amounting to €0.5 million during 2012 and €0.6 million during 2013 are reversed to the carrying value.
In connection with the first-time adoption, Gasum uses the optional exemption allowed by IFRS 1 regarding business combinations and does not apply IFRS 3 Business Combinations to business combinations executed prior to the transition date. Gasum has, nevertheless, assessed business acquisitions executed prior to the transition date and allocates related goodwill of €1.0 million in the opening balance sheet to tangible assets as part of the transmission
network according to the substance of the acquisition. The re-classified item is depreciated according to plan over the remaining useful life at the transition date. The annual goodwill amortization of €0.3 million recognized in the financial statements for the periods ending December 31, 2012 and December 31, 2013 is reversed.
Gasum reclassifies the value of the cushion gas from inventories to tangible assets. In the opening balance sheet as well as in other balance sheets included in the first financial statements the reclassification amounts to €2.7 million.
Furthermore, Gasum has presented in FAS as at December 31, 2011 and December 31, 2012 the prepayments relating to a long-term ”Take-or-pay” supply contract within the non-current and current assets. In the opening
balance sheet the prepayment is classified based on its substance to inventories and the respective reclassification into the opening balance sheet inventories amounts to €102.6 million. In the balance sheet as at December 31, 2012 the reclassification into inventory amounts to €82.7 million. During the financial period ending December 31, 2013 the applied FAS accounting principle is in line with IFRS and does not require reclassification.
4. Significant accounting estimates and judgmental items
The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates as well as management judgment in applying the accounting principles when preparing financial statements. The estimates and judgments are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.
The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The most significant estimates and assumptions and judgmental
items are discussed in more detail in the following.
Gasum – Consolidated (IFRS) Financial Statements 2013
26
”Take-or-Pay” prepayment related to the purchase contract of natural gas
Gasum has engaged to a long-term purchase contract of natural gas which includes a”Take-or-Pay” mechanism.
Gasum has made prepayments in accordance with the purchase contract which entitle the Company to receive
physical gas deliveries over future years. Take-or-pay prepayment is presented in the inventories and valued at lower of cost and net realizable value.
The net realizable value is highly dependent on management views on the future utiliability of the prepaid amount. Other factors impacting the valuation of the prepayment include potential changes in the market situation, development of sales prices or possible amendments to the contract terms.
Pension benefits
The present value of the pension obligations depends on a number of factors that are determined on an actuarial basis using a number of assumptions. The discount rate is one of the significant assumptions in determining the net cost (or net income) arising from pensions. Any changes in these assumptions will impact the carrying amount of pension obligations.
Assumptions used for impairment testing of tangible assets and intangible assets
Significant assets in tangible assets and intangible assets with indefinite lives are tested for impairment. Impairment testing is carried out utilizing value-in-use calculations which are based on forecast cash-flows and the preparation of which requires management estimates on future cash-flows. The nature of the estimates depends on which business the tested assets belong to. The gas transmission business is regulated and monitored by domestic authorities and the cash-flows include estimates on the future development of the regulation. Most significant judgments regarding the
supply of energy relate to future cash-flows and the discount factor.
5. Management of financial risks and capital structure
Financial risk management
Gasum’s financial risks related to business are market risk (including interest rate risk and price risk), credit risk and liquidity risk. Risk management is carried out by the Group’s finance department together with business planning and operations.
Market risk – Commodity risk
The contract price of Gasum’s procurement contract of natural gas has tied to the price indexes. These indexes are
the price of heavy fuel oil HFO1S, index E40 published by Statistics Finland which represents Finnish energy markets, and the price describing the price of coal. For invoicing, from above mentioned indexes, have been included a six-month average price. Same indexes included in the procurement contract are also applied to the selling contracts of natural gas that entail a natural hedge of the price risk. Clients are able to hedge the variable oil or coal component through a price hedge product whereupon Gasum enters into a mirror contract with an external counterparty. For oil, the hedge is always the same in both contracts. For coal, a coal derivative available from market is used. This derivative is not completely the same as the h-value in the customer contract. In these instances the price of hedging
includes a risk premium by which the basis risk is covered.
The Group does not apply hedge accounting to these derivative contracts.
Gasum – Consolidated (IFRS) Financial Statements 2013
27
Interest rate risk
The business of Gasum is capital intensive, and group has regular need to obtain financing. The current loan portfolio
consists mainly of long-term euro-denominated financing. Long-term financing consists mainly of loans to financial
institutions. Seasonal fluctuations in working capital have been trying to finance with own liquidity and using the euro-denominated commercial paper programme.
Gasum Oy’s interest rate risk arises primarily from variable rate long-term loans. The average duration of Gasum’s debt portfolio is 24 to 48 months and the aim is to minimize interest rate risk by using derivatives. Strategies for interest rate management are continuously developed in order to find an optimal ratio between risks and finance expenses.
The funding is raised mainly by the parent entity and further allocated to subsidiaries through different internal finance arrangements.
As at December 31, 2013 interest-bearing debt of Gasum totalled to €164.4 million (2012: €197.3 million).
The average duration of Gasum's debt portfolio in the end of 2013 was 2.9 years (2012: 3.9).
Credit risk
All customers of Gasum’s energy trade are with high credit rating. Customer base of Group’s energy services is quite large, consisting of more than 30.000 customers when credit risk will be decreased due to this. The credit risk related to the trade receivables of the Company is very low.
Liquidity risk
Gasum manages liquidity and refinancing risks by cash and cash equivalents and overdrafts entered with key partner
banks. The Group must always have available cash and cash equivalents or comparable marketable securities and undrawn overdrafts enough to cover all the loans which will overdue during the next 12 months. As at 31 December 2013 the Company had enough unused overdraft limit to achieve this target.
The next table analyses the Group´s non-derivative financial liabilities and net-settled derivative financial liabilities into relevant maturity groupings based on the remaining period at the balance sheet date to the contractual maturity date. Derivative financial liabilities are included in the analysis if their contractual maturities are essential for an
understanding of the timing of the cash flows. The amounts disclosed in the table are the contractual undiscounted cash flows.
Gasum – Consolidated (IFRS) Financial Statements 2013
28
At December 31, 2013
Less than 1
year 1–2 years 2–5 years More than 5
years Total
Loans from financial institutions 71,448 82,363 10,591 0 164,402
Trade payables 102,320 102,320
Derivative financial instruments 1,742 4,457 3,998
Finance lease liabilities 180 43 223
Total 175,690 86,863 10,591 0 273,144 At December 31, 2012
Less than 1
year 1–2 years 2–5 years More than 5
years Total
Loans from financial institutions 57,181 104,363 35,772 197,316
Trade payables 109,735 109,735
Derivative financial instruments 14 1,618 1 632
Finance lease liabilities 189 115 - 304
Total 167,119 106,096 35,772 0 308,987 At January 1, 2012
Less than 1
year 1–2 years 2–5 years More than 5
years Total
Loans from financial institutions 43,714 65,429 59,428 13,393 181,964
Trade payables 108,467 108,467
Derivative financial instruments 1 405 1,405
Finance lease liabilities 173 241 414
Total 152,354 67,075 59,428 13,393 292,250
6. Derivative financial instruments
At December 31, 2013 At December 31, 2012 At January 1, 2012
assets liabilities assets liabilities assets liabilities
Interest rate swap (hierarchy level 2)
3,741 1,618 1,405
Oil derivatives (hierarchy level 2)
2,432 247 6,424
Coal derivatives (hierarchy level 1)
26 4 14
Total 6,199 251 1,632 6,424 1,405
Less non-current portion:
Interest rate derivatives 3,741 1,618 1,405
Oil derivatives 716 86 423
Coal derivatives 4
Non-current portion 4,457 90 1,618 423 1,405
Current portion 0 1,742 161 14 6,001 0
At the reporting date instruments with positive fair value have been recognized in the balance sheet as assets and instruments with negative fair value has been recognized as liabilities. Changes in fair values are recorded in the income statement.
Gasum – Consolidated (IFRS) Financial Statements 2013
29
The nature of the derivative contracts
Interest rate derivatives
As at December 31, 2013 the nominal values of the outstanding interest rate derivatives were €183.0 million (December 31, 2012: €187.3 million; January 1, 2012: €170.5 million). Gains and losses on interest rate swaps are recognized in the consolidated income statement within finance expenses until the repayment of the bank borrowings. The fair value of interest rate swaps is calculated as the present value of the estimated future cash flows based on observable yield curves.
Oil derivatives
The nominal values of the outstanding oil derivatives were €63.8 million at the year-end (2012: €68.0 million; 2011: €60.6 million). The fair values of derivative contracts are based on the forward curve of heavy fuel oil at the reporting date.
Coal derivatives
The nominal values of the outstanding coal derivatives at the reporting date were € 203 thousand (2012: €417
thousand; 2011: €0 thousand). The fair values of derivative contracts are based on quoted market prices at the reporting date.
Fair value estimation
Financial instruments valued at fair value classified according to the valuation method. Hierarchy levels used have been determined as follows:
a) Level 1: quoted prices (unadjusted) in active markets for identical assets and liabilities
b) Level 2: inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices)
c) Level 3: inputs for the asset or liability that are not based on observable market data / that is, unobservable
inputs)
Offsetting of derivative financial instruments
At December 31, 2013 Gross amounts of recognized
financial instruments
Related financial instruments not set
off in the balance sheet
Net amount
Financial assets
Derivative financial instruments
Commodity derivatives 21 -2 19
Total 21 -2 19
Financial liabilities
Derivative financial instruments
Commodity derivatives 2,252 -2 2,250
Total 2,252 -2 2,250
Gasum – Consolidated (IFRS) Financial Statements 2013
30
At December 31, 2012 Gross amounts of recognized
financial instruments
Related financial instruments not set
off in the balance sheet
Net amount
Financial assets
Derivative financial instruments
Commodity derivatives 708 -62 646
Total 708 -62 646
Financial liabilities
Derivative financial instruments
Commodity derivatives 376 -62 314
Total 376 -62 314
At January 1, 2012 Gross amounts of recognized
financial instruments
Related financial instruments not set
off in the balance sheet
Net amount
Financial assets
Derivative financial instruments
Commodity derivatives 6,433 -8 6,425
Interest rate derivatives
Total 6,433 -8 6,425
Financial liabilities
Derivative financial instruments
Commodity derivatives 8 -8
Interest rate derivatives
Total 8 -8
For the commodity derivatives subject to enforceable master netting arrangement or similar arrangement above, each agreement between the Group and the counterparty allows for the net settlement of the relevant financial assets and liabilities only in event of bankruptcy.
Sensitivity analyses for market risk
Sensitivity analyses for significant commodity risks have been presented in the following. In the calculation of price
risk of oil, the position includes outstanding oil derivatives with an external counterparty. The impact of the increase or decrease of oil price to the Group’s income statement has been presented in the table below. The figures are based on the assumption that oil price had increased/decreased by 10 percent with all other variables held constant. The figures do not present the real impact on the Group’s income statement because they don’t include the mirror fair value change of oil price in sales agreements.
At December 31, 2013 At December 31, 2012
10 percent increase in oil price would affect to the income statement €8,1 million €2,3 million 10 percent decrease in oil price would affect to the income statement
€-5,7 million €-1,5 million
Gasum – Consolidated (IFRS) Financial Statements 2013
31
Capital management
Capital management in the Group is based on different business scenarios and sensitivity analyses in those as well as
the evaluation of essential risks concerning the Group. In addition to business risks, Gasum reserves adequate capital
to cover the balance sheet interest rate risk and possible impairments. The following table presents Gasum’s net debt and gearing, which the Company monitors as a part of its capital management.
2013 2012 2011
Total borrowings 164,402 197,316 181,964
Cash and cash equivalents* - 5,476 -12,860 -40,491
Net debt 158,926 184,456 141,473
Total equity 426,085 428,502 420,612
Total capital 585,011 612,958 562,085
Gearing ratio 27% 30% 25%
* Cash and current bank deposits (liquid deposits with maturities under three months)
7. Net sales by business
2013 2012
Energy trade 899,220 1,019,767
Transmission business 229,714 242,619
Other business 20,769 12,262
Total 1,149,702 1,274,648
The excise tax included in the selling price of the tax delivered taxable use, €55.4 million (2012: €55.1 million), has been recorded in the net sales.
8. Other operating income
2013 2012
Gain on sale of tangible assets 125 125
Rental income 201 155
Other income 641 10 054
Total 967 10,334
The rental income includes the income from goods rented other than those under finance lease. €9.7 million of the other income for the financial year 2012 was a result of the reclassification of derivatives.
Gasum – Consolidated (IFRS) Financial Statements 2013
32
9. Materials and services
2013 2012
Materials and supplies Purchases during the period 1,039,708 1,151,861
Change in inventory 658 -708
Total materials and supplies 1,040,366 1,151,153
External services - -
Total 1,040,366 1,151,153
The excise tax included in the purchase price of the tax delivered for taxable use, €56.6 million (2012: €56.5 million), has been recorded in the materials and services.
10. Personnel expenses
2013 2012
Salaries and benefits 16,679 14,918
Social security costs 861 919
Pension expenses
Defined contribution plans 2,927 3,150
Defined benefit plans (note 30) 749 692
Other expenses -1,440 -311
Total 19,776 19,368
Key management compensation*
CEOs 904 1,118
Defined benefit supplementary pension of CEO** 779 483
Members of the Board of Directors and Supervisory Board 1,062 1,144
Total 2,745 2,745
* Key management compensation is presented on cash basis ** Premium paid to the defined benefit plan
Personnel on average
2013 2012
Office workers 193 179
Workers 80 80
Total 273 259
Gasum – Consolidated (IFRS) Financial Statements 2013
33
11. Depreciation and amortization
2013 2012
Depreciation on tangible assets
Buildings and structures 19,627 19,785
Machinery and equipment 6,770 7,427
Other tangible assets 256 255
Amortization on intangible assets 751 840
Total depreciation and amortization 27,404 28,307
12. Other operating expenses
2013 2012
Rents 1,742 1,552
Maintenance costs 1,472 2,689
External services 7,885 7,498
Other 11,479 13,669
Total other operating expenses 22,578 25,408
13. Auditor’s fees
2013 2012
Statutory fees 51 50
Other services 414 245
Total auditor´s fees 465 295
Gasum – Consolidated (IFRS) Financial Statements 2013
34
14. Finance income and finance expenses
2013 2012
Finance income:
Interest income on other non-current receivables 171 167
Fair value gains on derivative financial instruments 79
Other finance income 87 99
Total finance income 337 266
Finance expenses
Interest expenses on borrowings 5,638 5,453
Fair value losses on derivative financial instruments 661 213
Other finance expenses* 9 15
Total finance expenses 6,308 5,681
Finance expenses - net -5,972 -5,414
* Finance lease costs included.
15. Income tax expense
2013 2012
Current tax 5,880 10,745
Taxes for previous years 3 3
Change in deferred taxes -9,419 2,917
Income tax expense -3,535 13,665
Income taxes recognized in consolidated income statements differ from the income taxes calculated using the Finnish tax rate as follows:
2013 2012
Profit before income tax 34,533 55,329
Tax calculated at Finnish tax rate 8,461 13,555 Permanent differences (income not subject to tax or expenses not deductible for tax purposes)
36 53
Net profit of joint ventures 33 24
Tax for previous years 3 3
Remeasurement of deferred tax – change in Finnish tax rate -12,068 0
Other - 53
Total tax charge -3,535 13,689
The effective tax rate of Gasum was -10.2% (2012: 24.7%).
In the beginning of 2014 the corporate tax rate of Finland changed from the 24.5 percent to 20 percent. Therefore the deferred taxes have been remeasured with the tax rate of 20%.
Gasum – Consolidated (IFRS) Financial Statements 2013
35
The tax charge / credit relating to components of other comprehensive income is as follows:
2013
Before tax Tax charge (-) / credit
After tax
Remeasurements of post-employment benefit liabilities -441 88 -353
Impact of change in Finnish tax rate on deferred tax - -117 -117
Translation differences 0 0 0
Other comprehensive income -441 -29 -470
2012
Before tax Tax charge (-) / credit
After tax
Remeasurements of post-employment benefit liabilities -2,614 640 -1,974
Translation differences - - -
Other comprehensive income -2,614 640 -1,974
16. Intangible assets
2013 Intangible rights Other long-term expenditure
Total
Cost at January 1, 2013 1,294
20,858
22,152
Additions 409 1,376 1,785
Disposals - - -
Reclassifications
11 11
Cost at December 31, 2013 1,703 22,245 23,948
Accumulated amortization and impairment at January 1, 2013 1,059 11,671 12,730
Disposals -
Reclassifications - - -
Amortization for the period 132 619 751
Accumulated amortization and impairment at December 31, 2013
1,191 12,290 13,481
Net book value at January 1, 2013 235 9,187 9,423
Net book value at December 31, 2013 512 9,955 10,467
Gasum – Consolidated (IFRS) Financial Statements 2013
36
2012
Intangible rights Other long-term expenditure
Total
Cost at January 1, 2012 1,176 18,912 20,088
Additions 118 1,886 2,004
Disposals -
Reclassifications - 60 60
Cost at December 31, 2012 1,294 20,858 22,152
Accumulated amortization and impairment at January 1, 2012 900 10,990 11,890
Disposals - - -
Reclassifications - - -
Amortization for the period 159 681 840
Accumulated amortization and impairment at December 31, 2012
1,059 11,671 12,730
Net book value at January 1, 2012 276 7,922 8,198
Net book value at December 31, 2012 235 9,187 9,423
17. Tangible assets
2013 Land and water areas
Buildings and structures
Machinery and equipment
Other tangib-le assets
Construction in progress
Total
Cost at January 1, 2013 6,814 773,890 128,958 9,454 20,214 939 330
Additions 14 7,309 3,576 26 21,930 32 855
Disposals -5 -7 -2,690 - -12,273 -14 975
Reclassifications - -10 - - - -10
Cost at December 31, 2013 6,823 781,182 129,844 9,480 29,871 957,200
Accumulated depreciation and impairment at January 1, 2013
- 270,034 79,803 2,632 - 352,469
Disposals - -9 -2,131 - - -2,140
Reclassifications - - - - - -
Depreciation for the period - 19,627 6,770 256 - 26,653
Accumulated depreciation and impairment at December 31, 2013
- 289,652 84,442 2,888 - 376,982
Net book value at January 1, 2013 6,814 503,856 49,155 6,822 20,214 586,862
Net book value at December 31, 2013 6,823 491,530 45 402 6,592 29,871 580,219
Gasum – Consolidated (IFRS) Financial Statements 2013
37
2012 Land and water areas
Buildings and structures
Machinery and equipment
Other tangi-ble assets
Construction in progress
Total
Cost at January 1, 2012 6,815 765,427 121,715 9,368 18,890 922,215
Additions 1 8,857 8,161 86 17,609 34,714
Disposals -2 -335 -918 - -16,285 -17,540
Reclassifications - -59 - - - -59
Cost at December 31, 2012 6,814 773,890 128,958 9,454 20,214 939,330
Accumulated depreciation and impairment at January 1, 2012
- 250,250 73,206 2,377 - 325,833
Disposals - -2 -830 - - -832
Reclassifications - -
- - -
Depreciation for the period - 19,785 7,427 255 - 27,467
Accumulated depreciation and impairment at December 31, 2012
- 270,034 79,803 2,632 - 352,469
Net book value at January 1, 2012 6,814 515,176 48,509 6,991 18,890 596,382
Net book value at December 31, 2012 6,814 503,856 49,155 6,822 20,214 586,862
The non-current portion of finance lease liabilities, €43.2 thousand, has been recorded in other non-current liabilities (see Note 28).
Machinery and equipment include the following amount where the Group is a lessee under a finance lease:
2013 2012 2011
Cost of capitalized finance lease at December 31 634 478
-
Accumulated depreciation and impairment at December 31 420 193
-
Net book value 214 285 -
Finance leases of the Group consist of office equipment, computers and phones. Lease periods are between 3 and 5 years.
Gasum – Consolidated (IFRS) Financial Statements 2013
38
18. Financial instruments
Financial instruments by category
December 31, 2013 Loans and
receivables
Assets at fair value through profit and
loss Available-for-
sale Total
Assets as per balance sheet:
Available-for-sale financial assets - - 76 76
Derivative financial instruments - - - -
Trade and other receivables 129,347 - - 129,347
Cash and cash equivalents 4,485 - - 4,485
Total 133,832 - 76 133,908
Liabilities at fair value through profit and loss
Liabili-ties at amortised cost Total
Liabilities as per balance sheet:
Borrowings 164,402 164,402
Finance lease liabilities - 223 223
Derivative financial instruments 6,199 - 6 199
Trade and other payables excluding non-financial liabilities - 102,320 102,320
Total 6,199 266,945 273,144
December 31, 2012 Loans and
receivables
Assets at fair value through profit and
loss Available-for-
sale Total
Assets as per balance sheet:
Available-for-sale financial assets - - 56 56
Derivative financial instruments - 251 - 251
Trade and other receivables excluding pre-payments 182,577 - - 182,577
Cash and cash equivalents 11,401 - - 11,401
Total 193,978 251 56 194,285
Liabilities at fair value through profit and loss
Liabili-ties at amortised cost Total
Liabilities as per balance sheet:
Borrowings
- 197,316 197,316
Finance lease liabilities
- 304 304
Derivative financial instruments
1,632 - 1,632
Trade and other payables excluding non-financial liabilities
- 109,735 109,735
Total 1,632 307,355 308,987
Gasum – Consolidated (IFRS) Financial Statements 2013
39
January 1, 2011 Loans and
receivables
Assets at fair value through profit and
loss Available-for-
sale Total
Assets as per balance sheet:
Available-for-sale financial assets - - 56 56
Derivative financial instruments - 6,424 - 6,424
Trade and other receivables 171,009 - - 171,009
Cash and cash equivalents 4,208 4,208
Total 175,217 6,424 56 181,697
Liabilities at fair value through profit and loss
Liabili-ties at amortised cost Total
Liabilities as per balance sheet:
Borrowings 181,964 181,964
Finance lease liabilities 414 414
Derivative financial instruments 1,405 - 1,405
Trade and other payables excluding non-financial liabilities 108,467 108,672
Total 1,405 292,455
19. Available-for-sale investments
2013 2012 2011
Unquoted investments in shares 76 56 56
Total 76 56 56
Available-for-sale investments are unquoted equity investments. The Group has valued these investments at cost as it
is not able to obtain prices with reliable ranges of variation.
Gasum – Consolidated (IFRS) Financial Statements 2013
40
20. Shares in joint ventures
Joint ventures of the Group at December 31, 2013
Place of business / country of incorporation
% of ownership interest
Measurement method
Biovakka Suomi Oy Finland 20 Equity method
UAB GET Baltic Ltd. Manga LNG Oy
Lithuania Finland
34 20
Equity method Equity method
Summarized financial information for joint ventures
Non-current Current
Assets Liabilities Assets Liabilities Net sales
Profit/Loss
Ownership interest
2013
Biovakka Suomi Oy 13,860 6,735 1,714 6,267 8,072 46 20%
UAB GET Baltic Ltd 214 17 263 17 065 100 -145 34%
Manga LNG Oy * - - - - - - 20%
Total 14,074 6,735 18,977 23,332 8,172 -99
2012
Biovakka Suomi Oy 14,782 8,181 1,379 5,454 7,805 26 20%
UAB GET Baltic Ltd 229 - 465 137 - -22 34%
Total 15,011 8,181 1,844 5,591 7,827 4
2011
Biovakka Suomi Oy 15,526 8,741 1,475 5,761 7,714 -148 20%
Total 15,526 8,741 1,475 5,761 7,714 -148
*As of the date of the consolidated financial statements of Gasum Oy the financial information of Manga LNG Oy was not available. The effect of Manga LNG Oy to the consolidated financial statements of Gasum Oy is not material.
Biovakka Suomi Oy owns and operates two large biogas facilities which are situated in Turku and Vehmaa. The gas produced in these facilities is consumed locally for the production of electricity and heat. In addition, the company has sought permissions for and plans other biogas facility projects in Finland.
UAB GET Baltic is a Lithuanian company founded in 7 September 2012 which maintains a marketplace in the gas market of Lithuania. The owners of the company are Gasum (34%), Lietuvos Dujos (34%) and Amber Grid (32%). The trading began on 21 January 2013.
Manga LNG Oy was founded in 20 December 2013. The purpose of the company is to form the corporate structures and agreements for the separate companies, around which the LNG terminal to be built in Tornio and the related shipping operations as well as gas sourcing are incorporated.
Gasum – Consolidated (IFRS) Financial Statements 2013
41
21. Other non-current receivables
2013 2012 2011
Finance lease receivables – non-current portion 1,858 1,914 1,641 Other non-current receivables 441 442 427
Total 2,299 2,356 2,068
The current portion of finance lease receivables, €57 thousand (2012: €53 thousand, 2011: €40 thousand), has been recorded under trade and other receivables (see Note 22).
2013 2012 2011
Finance lease receivables – non-current portion 1,858 1,914 1,641
Finance lease receivables – current portion 57 53 40
Total 1,914 1,967 1,681
The minimum lease payments of finance lease receivables mature as follows:
2013 2012 2011
Minimum lease payments
No later than 1 year 202 192 170 Later than 1 year and no later than 5 years 3,238 3,440 3,056 Later than 5 years 2,226 2,428 2,207
Gross investment in finance leases 3,440 3,632 3,226
Net present value of minimum lease payments
No later than 1 year 57 53 40
Later than 1 year and no later than 5 years 276 255 142
Later than 5 years 1,581 1,659 1,500
Total net present value of minimum lease payments 1,914 1,967 1,681
Unearned finance income 1,323 1,474 1,375
Gross investment in finance leases 3,440 3,632 3,226
22. Trade and other receivables
2013 2012 2011
Trade receivables 126,966 180,563 131,658
Other receivables 1,787 1,762 38,952
Accrued income 537 199 359
Finance lease receivables – current portion 57 53 40
Total 129,347 182,577 171,009
Impairment of trade receivables - - -
Net carrying value 129,347 182,577 171,009
Gasum – Consolidated (IFRS) Financial Statements 2013
42
The fair values of trade and other receivables equal their carrying amount. The maximum exposure to credit risk is the carrying value of each receivable. The non-current portion of finance lease receivables, €1,858 thousand (2012:
€1,914 thousand, 2011: €1,641 thousand), has been recorded in other non-current receivables (see Note 21)
The ageing analysis of trade receivables is as follows:
2013 2012 2011
Not due 125,976 178,965 130,550
Overdue by
Less than 3 months 990 1,598 1,108
Total 126,966 180,563 131,658
23. Inventories
2013 2012 2011
Product inventories 4,932 5,358 4,650
Other inventories 1,580 1,580 1,580
Prepayments 82,746 82,746 102,562
Total inventories 89,258 89,684 108,792
A “Take-or-pay” pre-payment of €82.7 million (2012: €82.7 million, 2011: €102.6 million) related to the long-term
natural gas purchase agreement is included in the inventories.
The expensed cost of inventories which is included in the financial line item ‘materials and services’ was €1,040.4 million (2012: €1,151.2 million, 2011: €1,102.1 million).
”Take-or-pay” prepayment
2013 2012 2011
Non-current portion 82,746 52,907 102,562
Current portion - 29,839 -
Total “take-or-pay” prepayment 82,746 82,746 102,562
24. Cash and cash equivalents
2013 2012 2011
Cash at bank and in hand 4,485 11,401 4,208
Cash and cash equivalents (excluding bank overdrafts) 4,485 11,401 4,208
The current bank deposits are recorded in current assets in the row ‘Trade and other receivables’.
Gasum – Consolidated (IFRS) Financial Statements 2013
43
Cash and cash equivalents include the following for the purposes of the statement of cash flows:
2013 2012 2011
Cash and cash equivalents 4,485 11,401 4,208
Short-term cash deposits 991 1,459 36,283
Cash and cash equivalents 5,476 12,860 40,491
The short-term cash deposits include liquid deposits with maturities less than three months.
25. Deferred income tax
2013 2012
Deferred tax assets: Fixed assets 21 13
Financial instruments 1,365 399
Pensions and employee benefits 1
1,320 1
1,796
Other temporary differences 1 2
Total 2,707 2,210
At January 1 2,210 1,994
Recognized in income statement 526 -424
Recognized in equity -29 640
Book value at December 31 2,707 2,210
Deferred tax liabilities:
Fixed assets and depreciation difference 53,233 62,339
Financial instruments - 295
Other temporary differences 762 253
Total 53,995 62,887
At January 1 62,887 60,394
Recognized in income statement -8,892 2,493 Recognized in equity - -
Book value at December 31 53,995 62,887
Deferred tax assets and liabilities, net 51,288 60,677
26. Share capital
Number of A
shares Number of K
shares Total number
of shares Share capital
January 1, 2012 53,000,000 1 53,000,001 178,279
December 31, 2012 53,000,000 1 53,000,001 178,279
December 31, 2013 53,000,000 1 53,000,001 178,279
Gasum – Consolidated (IFRS) Financial Statements 2013
44
The share capital of Gasum Oy is divided into A-series shares and one K-series share. The Finnish State owns the K-share. Each share incorporates one vote when voting in the annual general meeting. Each share has an equal right to the dividend and to Gasum’s assets. A permission of Gasum Oy’s board of directors must be granted to acquire the K-series share. If this permission is not granted the K-share shareholder has a right to claim that the share is converted
into an A-share.
The share capital of Gasum Oy is €178,279,205.41. The share capital is fully paid. The shares do not have a nominal value. According to the articles of association, the minimum share capital of Gasum Oy is €100 000 000 and the maximum share capital is €400,000,000, within the limits of which the share capital can be raised or lowered without changing the articles of association.
27. Borrowings
2013 2012 2011
Non-current:
Loans from financial institutions 92,953 140,134 138,250
Current:
Loans from financial institutions 71,448 57,181 43,714
Borrowings 164,402 197,316 181,964
All borrowings are denominated in euros from financial institutions that mature by June 2017 and their average interest is 0.8% (2012: 0.7%, 2011: 1.7%). The Group also has a finance facility that matures in March 2016 and which the Group has withdrawn in all three years 10 million euros. The average interest rate of finance facility has been 0.8% (2012: 0.7%, 2011: 1.9%).
The fair value of the current borrowings equals their carrying amount, as the impact of discounting is not significant.
The non-current borrowings are based on variable interest rate and their fair values do not significantly deviate from their fair value.
28. Other non-current liabilities
2013 2012 2011
Finance lease liabilities – non-current portion 43 114 234
Revenue recognition 11,623 13,968 17,267
Other non-current liabilities 11,666 14,082 17,501
The current part of finance lease liabilities, €180.5 thousand, is recorded in trade and other current payables (see Note 29). More information about the grouping of finance lease liabilities is presented in note 5 Management of financial risks and capital structure.
The gross minimum lease payments of finance lease liabilities mature as follows:
2013 2012 2011
Maturity of minimum lease payments
No later than 1 year 181 189 173
Later than 1 year and no later than 5 years 43 115 241
Later than 5 years 0 0 0
Gasum – Consolidated (IFRS) Financial Statements 2013
45
Gross investment in finance leases 224 304 415
Maturity of net present value of minimum lease payments
No later than 1 year 178 181 160
Later than 1 year and no later than 5 years 43 114 234
Later than 5 years 0 0 0
Total net present value of minimum lease payments 221 295 394
Unearned finance expenses 3 9 21
Gross investment in finance leases 224 304 415
29. Trade and other current payables
2013 2012 2011
Trade payables 102,320 109,735 108,467
Other liabilities * 49,971 63,925 97,784
Accrued expenses 4,086 5,113 5,569
Finance lease liabilities – current portion 180 189 173
Trade and other current payables 156,557 178,962 211,993
* Other liabilities mostly consist of VAT liability.
The non-current part of finance lease liabilities, €43.2 thousand, is recorded in other non-current liabilities (see Note 28). Accrued expenses mostly consist of different personnel-related provisions.
30. Post-employment benefits
Finnish statutory pensions are insured with a pension insurance company and accounted for as a defined contribution plan in the consolidated financial statements. The supplementary pension scheme provided by Gasum is accounted for as a defined benefit plan.
2013
2012
2011
Balance sheet obligations for: Defined pension benefits 6,5
76 7,230
5,277
Liability in the balance sheet 6,576
7,230
5,277
Income statement charge included in operating profit for*:
Defined pension benefits 749
692
Total 749
692
*The income statement charge included within operating profit includes current service cost, net interest income
and expense, past service costs and gains and losses on settlement and curtailment.
Remeasurements for: Defined pension benefits
Gasum – Consolidated (IFRS) Financial Statements 2013
46
31. Defined benefit pension plans
Gasum operates a supplementary pension scheme which is classified as a defined benefit pension plan and arranged
with Mandatum Life Insurance Company. In the arrangement the targeted level of pension benefit is set in percent
terms whereby the benefit payable is not linked to the contribution payments Gasum makes into the scheme. The Scheme was closed in 1994.
The amounts recognized in the balance sheet are determined as follows:
2013 2012 2011
Present value of funded obligations 22,030 21,580 15,509
Fair value of plan assets -15,454 -14,350 -10,232
Deficit of funded plans 6,576 7,230 5,277
Liability in the balance sheet 6,576 7,230 5,277
The movement in the defined benefit obligation over the year is as follows:
Present value of defined benefit obligation
Fair value of plan assets
Net defined benefit obligation
1.1.2012 15,509 10,232 5,277
Current service cost 484 - 484
Interest expense or income (-) 689 481 208
16,682 10,713 5,969
Remeasurements:
Gain (-)/loss from change in demographic assumptions
Gain (-)/loss from change in financial assumptions 3,685 - 3,685
Experience gains (-) /losses 1,628 -1,071
Return on plan assets, excluding amounts included in interest expense or income
2,699
Contributions:
Employers 1,353 -1,353
Plan participants
Payments from plans:
Benefit payments -415 -415 -
31.12.2012 21,580 14,350 7,230
Gasum – Consolidated (IFRS) Financial Statements 2013
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Present value of defined
benefit obligation
Fair value of plan assets
Net defined benefit obligation
1.1.2013 21 580 14 350 7 230
Current service cost 560 560
Interest expense or income (-) 641 452 189
22,781 14,802 7,979
Remeasurements
Experience gains (-) /losses -325 441
Return on plan assets, excluding amounts included in interest expense or income
-766
Contributions:
Employers 1,844 -1,844
Plan participants
Payments from plans:
Benefit payments -426 -426 -
31.12.2013 22,030 15,454 6,576
The significant actuarial assumptions were as follows:
2013 2012 2011
Discount rate 3% 3% 4.5%
Inflation 2% 2% 2%
Salary growth rate 4% 4% 4%
Pension growth rate 2.1% 2.1% 2.1%
Client bonus by the life insurance company 0.3% 0.5% 0.5%
Assumptions regarding future mortality are set based on actuarial advice in accordance with published statistics by TyEL (K2008) mortality schedules and experience. These assumptions translate into an average life expectancy in
years for a pensioner retiring at age 65. Life expectancy is defined as the life span prediction of a person of a
particular age and its calculation is based on the Gomperz mortality model:
Life expectancy at age 65 Male Woman
Aged 45 at balance sheet date 20.6 26.4
Aged 65 at balance sheet date 19.0 24.7
Gasum – Consolidated (IFRS) Financial Statements 2013
48
Sensitivity analysis of the defined benefit obligation:
Financial period ending 31.12.2013
€(1000)
Present value of defined
benefit obligation
Fair value of
plan assets
Net defined benefitt
obligation
Current service cost
Net interest
Discount rate 3.00% 22,030 15,454 6,576 373 176
Discount rate +0.50% 20,569 14,671 5,898 348 181
Discount rate –0.50% 23,662 16,319 7,344 400 165
Impact in percentages
Discount rate 3.00% 0.0% 0.0% 0.0% 0.0% 0.0%
Discount rate +0.50% -6.6% -5.1% -10.3% -6.6% -3.2%
Discount rate –0.50% 7.4% 5.6% 11.7% 7.3% 5.7%
Financial period ending 31.12.2013 Subsequent financial period
Present value of defined
benefit obligation
Fair value of
plan assets
Net defined benefit
obligation
Current service cost
Net interest
Salary growth rate 4.00% 22,030 15,454 6,576 373 176
Salary growth rate +0.50% 22,381 15,459 6,922 387 186
Salary growth rate –0.50% 21,692 15,449 6,243 360 165
Impact in percentages
Salary growth rate 4.00% 0.0% 0.0% 0.0% 0.0% 0.0%
Salary growth rate +0.50% 1.6% 0.0% 5.3% 3.8% 5.9%
Salary growth rate –0.50% -1.5% 0.0% -5.1% -3.5% -5.9%
Financial period ending 31.12.2013 Subsequent financial period
Present value of defined
benefit obligation
Fair value of
plan assets
Net defined benefit
obligation
Current service cost
Net interest
Pension growth rate 2.10% 22 030 15 454 6 576 373 176
Pension growth rate +0.50% 23 323 15 454 7 869 389 214
Pension growth rate –0.50% 20 852 15 454 5 398 358 140
Impact in percentages
Pension growth rate 2.10% 0.0% 0.0% 0.0% 0.0% 0.0%
Pension growth rate +0.50% 5.9% 0.0% 19.7% 4.3% 22.1%
Pension growth rate –0.50% -5.3% 0.0% -17.9% -4.0% -20.2%
When the life expectancy increases by one year the net defined benefit obligation increases by €296 thousand (4.5%).
Gasum – Consolidated (IFRS) Financial Statements 2013
49
The above sensitivity analyses are based on a change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions the same method has been applied as when calculating the defined benefit obligation (present value of the defined benefit obligation calculated with the
projected unit credit method at the end of the reporting period).
The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the previous period.
All pension arrangement related assets are included within the approved insurance contracts.
Through its defined benefit pension plans the group is exposed to a number of risks, the most significant of which are detailed below:
Changes in bond yields
A decrease in corporate bond yields will increase the plan liabilities. In case the bond yields used as bases for discount rates change, the group may need to change respectively the discount rates. This will impact both the net defined benefit obligation as well as the amount of remeasurements recognized in the other comprehensive income.
Inflation risk
Some of the group’s defined benefit obligations are linked to inflation and growth in the inflation rate will increase the defined benefit obligation. In case the development of employer productivity lags behind the inflation, the acceleration of inflation may increase the deficit of defined benefit plans.
Life expectancy
The majority of the plans’ obligations are to provide benefits for the life of the member, so increases in life expectancy will result in an increase in the plans’ liabilities. This is particularly significant in the UK plan, where inflationary increases result in higher sensitivity to changes in life expectancy.
Expected contributions to post-employment benefit plans for the year ending 31 December 2014 are €1.5 million.
The weighted average duration of the defined benefit obligation is 18 years, calculated on the basis of undiscounted
cash-flows. Expected maturity analysis of undiscounted pension benefits:
31.12.2013 Less than a year Between 1–5 years Between 5–10 years Over 10 years Total
Pension benefits 757 5,100 5,950 23,507 35 314
Total 757 5,100 5,950 23,507 35 314
32. Dividend per share
In 2013 dividends of €40.0 million (€0.755 per share) were paid and in 2012 dividends of €31.8 million (€0.60 per share) were paid. Dividends of €17.9 million (€0.338 per share) are proposed to the annual general meeting. This proposed amount of dividends is not recorded as a liability to the financial statements.
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50
33. Contingent liabilities
Purchase agreement of natural gas
Gasum has engaged to a long-term purchase agreement of natural gas, in which a minimum annual delivered quantity of natural gas is agreed along with the agreed quantity of delivery. In case the Company will not use the minimum annual delivered quantity of the gas, the Company will pay a pre-payment for the difference which gives the Company a right to receive the unused amount of the agreed quantity of the gas in later years. The right is unlimited in terms of time.
Guarantees given and contingent liabilities
2013 2012 2011
Guarantees given on own behalf:
Property mortgages
Pledges * 233 223 1,456
Contingent liabilities and other commitments ** 4,354 2,445 3,207
Guarantees given on behalf of joint ventures:
Property mortgages
Pledges
Contingent liabilities and other commitments
Total 4,587 2,668 4,663
* The pledges include e.g. the pledge given to customs ** Contingent liabilities and other commitments consist mostly of rent securities and project collaterals
Operating lease commitments
2013 2012 2011
No later than 1 year 514 - -
Later than 1 year and no later than 5 years 718 - -
Later than 5 years
Total 1,232 - -
Gasum – Consolidated (IFRS) Financial Statements 2013
51
34. Related parties
Related parties of the Group are (a) joint ventures; (b) management of the Company including members and a
secretary of the Board of Directors of Gasum Oy, members of the Supervisory Board of Gasum, CEO and Executive
Board (key persons in the management team) and their close family members and the companies in which they or their close family members have control and (c) owners of Gasum Oy and their Group companies.
Gasum Oy is the parent company of the Gasum. Transactions between the Group and subsidiaries have been eliminated in consolidation and they are not included in the amounts of this note. Transactions between other companies belonging to related party have been specified in the table below. Transactions with the related parties are carried out on market terms.
Transactions with related parties
2013 Sales of goods and services
Purchases of goods and
services
Receivables Finance income and
expenses
Liabilities
Joint ventures 0 0 0 17 0
Owners of Gasum 71,141 982,034 8,030 0 91,328
Management of the Company 0 0 0 0 0
Total 71,141 982,034 8,030 17 91,328
2012 Sales of goods
and services Purchases of
goods and services
Receivables Finance income and
expenses
Liabilities
Joint ventures 0 0 0 0 0
Owners of Gasum 95,730 1,117,143 8,761 0 95,866
Management of the Company 0 0 0 0 0
Total 95,730 1,117,143 8,761 0 95,866
Management´s employee benefits
2013 2012
Salaries and other short-term employee benefits 1,966 2,262
Termination benefits - -
Post-employment benefits 779 483
Other long-term benefits - -
Total 2,745 2,745
Gasum – Consolidated (IFRS) Financial Statements 2013
52
35. Group companies
The following summarizes the subsidiaries and joint ventures belonging to the Group as at December 31, 2013. All
group companies are related parties of the Group.
Parent company
Country of incorporation
Gasum Oy Finland
Subsidiaries
Country of incorporation
Group´s ownership interest (%)
% of the voting rights
Gasum Energiapalvelut Oy Finland 100 100
Gasum Paikallisjakelu Oy Finland 100 100
Gasum Tekniikka Oy Finland 100 100
Kaasupörssi Oy Finland 100 100
Helsingin Kaupunkikaasu Oy Finland 100 100
Gasum Eesti A.S. Estonia 100 100
Gasum LNG Oy Finland 100 100
Finngulf LNG Oy Finland 100 100
Joint ventures
Group´s ownership interest (%)
% of the voting rights
Biovakka Suomi Oy Finland 20 20
UAB GET Baltic Ltd. Manga LNG Oy
Lithuania Finland
34 20
34 20
36. Events after the reporting period
Gasum acquired the majority (51 percent) of the LNG distribution business of the Norwegian Skangass from Lyse group. The production facility of Skangass in Risavika will remain under Lyse but Skangass A/S, the new joint venture, has engaged to a long-term agreement about the use of this facility. Skangass’ Öra terminal in Norway and Lysekil terminal under construction as well as Gävle terminal under planning in Sweden will be transferred to the new company. Skangass has charter agreements to two LNG tankers and with the transaction the companies have 20 LNG tank trucks in total.
The transaction is a part of Gasum’s strategy the aim of which is to improve the availability of the competitive liquefied natural gas (LNG) in Finland. Skangass will add to reliability of Gasum’s LNG selections delivery with the new terminals and tankers as well as enables the fast development of the gas infrastructure in the northern Baltic Sea region. The larger combined imports will lead to more efficient sourcing and make the establishment of new gas terminals more economical. The transaction unites geographically Finnish, Norwegian and Swedish markets after which a competitive product can be offered to the whole market area.
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53
INDEPENDENT AUDITOR’S REPORT (Translation from the Finnish original)
To the Board of Directors of Gasum Oy
We have audited the accompanying consolidated financial statements of Gasum Oy, which comprise of the balance sheet for 1.1.2012, 31, 12.2012 and 31.12.2013 as well as the consolidated statements of income, consolidated statements of comprehensive income, consolidated statements of changes in shareholders' equity and consolidated statements of cash flows for the periods ended December 31, 2012 and December 31, 2013 and notes to the consolidated financial statements. The consolidated financial statements have been prepared in connection with Gasum Oy’s transition to
report the consolidated financial statements in accordance with the International Financial Reporting Standards as adopted by the EU.
Management's Responsibility for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with International Financial Reporting Standards as adopted by the EU, and for such internal control as they determine is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material
misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the consolidated financial
statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates, if any, made by management, as well as evaluating the overall presentation of the consolidated financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the consolidated financial statements give a true and fair view of the financial position
of the consolidated company as at 1.1.2012, 31.12.2012 and 31.12.2013 and of their financial performance and cash flows for the years ended December 31, 2012 and December 31, 2013 in accordance with International Financial Reporting Standards as adopted by the EU.
Gasum – Consolidated (IFRS) Financial Statements 2013
54
Other aspects
Gasum Oy has also prepared the financial statements (FAS) and the report of the Board of Directors in accordance with the laws and regulations governing the preparation of the financial statements and the report of the Board of Directors in Finland for the period ended 31 December 2013. An Auditor’s Report has been given for these financial statements on March 10, 2014.
Helsinki, 28 July 2014
PricewaterhouseCoopers Oy Authorized Public Accountants
Pasi Karppinen Authorized Public Accountant