Financial statements Swiss GAAP FER
Notes
1. Accounting principles
General
The 2021 financial statements of Swissgrid Ltd (hereinafter: Swissgrid) have been prepared in accordance with Swiss GAAP FER. The financial statements provide a true and fair view of the company’s assets, financial position and results of operations.
Conversion of foreign currency items
The accounting records are maintained in the local currency (Swiss francs, CHF). All monetary assets and liabilities recognised in foreign currencies are converted at the exchange rate as of the balance sheet date. Transactions in foreign currencies are converted at the exchange rate on the day the transaction took place. Foreign exchange gains and losses resulting from transactions in foreign currencies are recognised in the income statement and are presented in the same item as the underlying transaction.
Cash flow statement
Cash and cash equivalents form the basis for the presentation of the cash flow statement. The cash flow from operating activities is calculated using the indirect method.
Revenue recognition
Revenue is recognised in the income statement upon performance of Swissgrid’s obligations. For activities regulated under the Federal Electricity Supply Act (StromVG), the measurement of performance is based mainly on energy volumes directly metered on the transmission grid orreported from downstream grid levels. For certain revenue and procurement items, initial billing values are available six weeks after delivery at the earliest, thereby rendering accruals based on historical and statistical data, as well as on estimates necessary for the revenue recognition of these items.
Activities according to StromVG
Volume- and tariff-related timing differences (surpluses and deficits)
According to Art.14 of the Electricity Supply Act (StromVG), grid utilisation costs must be allocated to users on a user-pays basis. The tariffs for a financial year are determined based on planned costs. Due to price and volume deviations, actual expenses and income vary from the tariff calculation on both the revenue and procurement side. This results in surpluses or deficits, i.e. the tariff revenues from a financial year are higher or lower than the actual expenses incurred during the same period. These volume- and tariff-related timing differences are transferred to the balance sheet and taken into account in cost and revenue calculations for future tariff periods. The expected reduction in volume- and tariff-related timing differences within twelve months of the balance sheet date is recognised as short-term surpluses or deficits in the balance sheet.
EBIT regulated under StromVG
Earnings before interest and taxes (EBIT) from activities related to the Federal Electricity Supply Act (StromVG) are defined in Article 13 of the Electricity Supply Ordinance (StromVV) and are equivalent to the interest applied to the assets required to operate the transmission system with the weighted average cost of capital rate (WACC) for the current year under review (= WACCt+0) and the interest applied to the volume and tariff-related timing differences with the weighted average cost of capital rate of WACCt+2 plus income taxes.
Invested operating assets consist of net current assets calculated on a monthly basis as well as the property, plant and equipment and intangible assets as at the end of the financial year. The weighted average cost of capital rate (WACC) is based on the current international practice of the WACC capital cost concept with reference to the Capital Asset Pricing Model (CAPM). Besides considering the findings of financial market theory, the regulatory framework conditions in Switzerland and the current situation in the money and capital market are also taken into account. The official weighted average cost of capital rates for 2021 (WACCt+0) and 2023 (WACCt+2) based on this method of calculation are unchanged from the 3.83% used in the previous year.
ElCom has the right to verify ex post the chargeability of Swissgrid’s operating and capital costs for tariff-setting purposes. In case of an ex post cost adjustment, an appeal can be lodged with the Federal Administrative Court with the possibility of appeal to the Federal Supreme Court. A cost adjustment impacting Swissgrid’s operating result is applied whenever no appeal is lodged, or whenever an appeal’s prospects for success are judged to be less than 50% on the basis of a reappraisal, or whenever a legally binding ruling is issued.
Property, plant and equipment
Property, plant and equipment are recognised at the cost of acquisition or production less accumulated amortisation and any impairment losses. Significant spare parts which are likely to be used for a longer period and whose use only takes place in connection with a non-current asset item are recognised in non-current assets and depreciated over the remaining useful life of the relevant asset.
Depreciation/amortisation is calculated using the straight-line method on the basis of the estimated useful technical and economic service life. The service life is determined as follows:
– Lines: 15 to 60 years
– Substations: 10 to 35 years
– Buildings and expansions: 5 to 50 years
– Other property, plant and equipment: 3 to 8 years
– Construction in progress and properties: only applicable in the case of an impairment loss
Intangible assets
Intangible assets are recognised at the cost of acquisition or production less accumulated amortisation and any impairment losses. Depreciation/amortisation is calculated using the straight-line method on the basis of the estimated useful technical and economic service life.
The service life is determined as follows:
– Rights of use: contract term
– Software and technical regulations: 3 to 5 years
– Intangible assets under development: only applicable in the case of an impairment loss
Impairment losses
The value of property, plant and equipment and intangible assets is reviewed annually. If there is an indication of an impairment loss, the book value is reduced to the realisable value and an impairment loss is charged to the results of the period.
Construction in progress/intangible assets under development
Construction in progress and intangible assets under development are non-current assets that are not yet completed or not yet operational. All items of property, plant and equipment and intangible assets, including self-constructed assets, are classified as non-current assets. As of each balance sheet date, a review is performed to determine whether any construction in progress or intangible assets under development have to be impaired. These are recognised as impairment losses in the year of completion. Ordinary depreciation or amortisation of these assets begins once they are completed or are ready for operation.
Financial assets
Financial assets are measured at acquisition costs less any impairment losses. These include shareholdings with a capital share of over 20%, but which do not have a significant impact on the financial statements, as well as shareholdings with a capital share of less than 20%. Employer contribution reserves without conditional renounced use are also recognised in financial assets.
Inventory
Inventory includes waste material for maintaining the grid systems. Inventory is measured at the lower of acquisition cost or market price.
Accounts receivable
Accounts receivable are reported at their nominal value less any impairment losses required for business reasons.
Cash and cash equivalents
Cash and cash equivalents include cash in hand, cash at banks and deposits at banks maturing in 90 days or less. They are recognised at their nominal value.
Bonds
Bonds issued on the capital market are recognised at their nominal value. Deviations from the nominal value in the case of below- or above-par issues are recognised as accruals and deferrals and are reversed on a straight-line basis over the term of the bond.
Liabilities
Liabilities are recognised at their nominal value.
Provisions
Provisions are recognised if there is an obligation based on an event that took place prior to the balance sheet date, the amount and/or due date of which is uncertain but capable of being estimated.
Contingent liabilities
Contingent liabilities are measured as of the balance sheet date. A provision is reported if a cash outflow without a usable countervalue is probable and assessable. Otherwise, contingent liabilities are disclosed in the notes to the financial statements.
Interest on borrowed capital
Interest on borrowed capital is recognised as an expense in the period in which it arises.
Employee pension plan
Swissgrid is a member of an industry-wide retirement benefit plan (PKE Pensionskasse Energie). This is a legally independent pension fund. All permanent employees of the company are included in this pension fund from 1 January of the year in which they turn 18. They are insured for disability and death. From 1 January of the year in which they turn 25, employees are also covered by retirement insurance.
Economic benefits arising from a pension fund surplus (e.g. in the form of a positive impact on future cash flows) are not capitalised, since the prerequisites for this are not met and the company does not intend to use such benefits to reduce employer contributions. Any benefits arising from freely available employer contribution reserves are recognised as an asset.
An economic obligation (e.g. in the form of negative effects on future cash flows due to a pension fund deficit) is recognised if the prerequisites for the creation of a provision are met. Accrued contributions for the period, the difference between the annually calculated economic benefit from pension fund surpluses and obligations, as well as the change in the employer contribution reserves are recognised in the income statement as personnel expenses.
Transactions with related parties
Related parties are organisations and persons that can have a significant influence, either directly or indirectly, on Swissgrid’s financial or operational decisions. Shareholders holding at least 20% of the voting rights in Swissgrid, either alone or together with others, are considered to be related parties. As regards shareholders, other criteria in addition to the proportion of voting rights held are also taken into account (including representation in committees and the possibility of exerting influence due to the shareholder structure). Subsidiaries of related shareholders as well as partner plant companies whose shares are 100% owned by related shareholders or which are controlled by a related shareholder, are also considered to be related parties. Related parties also include companies over which Swissgrid exercises a significant influence. Members of the Board of Directors and the Executive Board are also considered to be related parties. Provided they exist and are significant, relations with related parties are disclosed in the notes to the financial statements. All transactions are conducted at arm’s length.
Segment information
Segmentation is based on tariff groups as defined in the Electricity Supply Act and is aligned with Swissgrid’s internal reporting structure.
Income taxes
Current income taxes are calculated based on the taxable results on an accrual basis. The annual accrual of deferred taxes is based on a balance sheet perspective (balance sheet method) and considers all future income tax effects (comprehensive method).
Derivative financial instruments
Swissgrid may use derivative financial instruments to hedge against currency and market price risks. If the conditions are met, Swissgrid will apply hedge accounting to hedge expected future cash flows. The instruments used for this purpose will be disclosed in the notes to the financial statements until the underlying transaction is realised.
2. Estimation uncertainty
Financial-statement reporting requires estimates and assumptions to be made that may have a significant impact on Swissgrid’s financial statements. With respect to assets and liabilities recognised in the balance sheet, accruals and deferrals (prepaid expenses and accrued income/ accrued expenses and deferred income) and volume- and tariff-related timing differences in particular are based on various assumptions and estimates that may necessitate significant adjustments. This is due to specific volumes not being available for certain revenue and procurement items when the financial statements are prepared, as well as regulatory uncertainties. The volume- and tariff-related timing differences are also influenced by estimates in the allocation of operating expenses to the segments.
For more information on this, the reader is referred to the comments in the sections on «Revenue recognition» and «Activities according to StromVG» in Note 1, as well as the comments in the following section.
3. Legal proceedings
Swissgrid’s legal mandate and business activities expose the company to costs that can be passed on to the lower grid levels and end consumers in the form of tariff revenues if EICom deems the costs to be chargeable. ElCom has the right to verify ex post the chargeability of Swissgrid’s costs for tariff-setting purposes.
At present, ElCom has not initiated any proceedings to examine Swissgrid’s chargeable costs. Swissgrid’s Board of Directors and Executive Board believe that all costs were incurred within the framework of Swissgrid’s legal mandate and should therefore qualify as chargeable. Based on this assessment, Swissgrid has treated all operating and capital costs as chargeable and consequently recognised them in full in the volume- and tariff-related timing differences. If, contrary to Swissgrid’s assessment, the costs claimed are ruled to be non-chargeable, this would be reflected in future financial statements.
Third-party proceedings
The financial impact of third-party proceedings in which Swissgrid is involved are included in Swissgrid’s financial statements if the Swiss GAAP FER criteria for recognition have been met. However, they have no direct impact on Swissgrid’s results as they are included in the volume- and tariff-related timing differences.
4. Segment reporting
For segment reporting, the costs of capitalised self-constructed assets are deducted from operating expenses and are therefore not included in total operating income.
Eliminations: active power losses are a separate internal balance group. As a result, internal transactions occur between the general ancillary services/balance energy and active power losses segments.
Congestion management is included in the other activities.
Segment report 2021
| In millions of CHF | Grid utilisation | General ancillary services/balance energy | Active power losses (individual ancillary services) |
|---|---|---|---|
| Net turnover | 479.4 | 165.0 | 58.0 |
| Other operating income | 1.1 | 0.2 | – |
| Change in volume- and tariff-related timing differences | 122.6 | 150.6 | 8.5 |
| Total operating income | 603.1 | 315.8 | 66.5 |
| Procurement costs | –54.0 | –292.0 | –62.6 |
| Gross profit | 549.1 | 23.8 | 3.9 |
| Operating expenses | –176.4 | –19.5 | –2.4 |
| Depreciation/amortisation and impairment losses | –171.7 | –3.4 | –0.4 |
| Earnings before interest and income tax (EBIT) | 201.0 | 0.9 | 1.1 |
Volume- and tariff-related timing differences: negative figures represent
surpluses, and positive figures deficits.
Movement in volume- and tariff-related timing differences per segment
| In millions of CHF | Total | Grid utilisation | General ancillary services/balance energy | Active power losses (individual ancillary services) | Reactive energy (individual ancillary services) | Eliminations | Total activities according to StromVG | Further activities |
|---|---|---|---|---|---|---|---|---|
| Net turnover | 715.1 | 479.4 | 165.0 | 58.0 | 19.4 | –6.7 | 715.1 | – |
| Other operating income | 17.1 | 1.1 | 0.2 | – | – | – | 1.3 | 15.8 |
| Procurement costs | –417.5 | –54.0 | –292.0 | –62.6 | –15.6 | 6.7 | –417.5 | – |
| Operating expenses | –211.1 | –176.4 | –19.5 | –2.4 | –0.7 | – | –199.0 | –12.1 |
| Depreciation/amortisation and impairment losses | –179.0 | –171.7 | –3.4 | –0.4 | –0.2 | – | –175.7 | –3.3 |
| Imputed interest and income taxes (EBIT) | –204.3 | –201.0 | –0.9 | –1.1 | –0.9 | – | –203.9 | –0.4 |
| Change in volume- and tariff-related timing differences | –279.7 | –122.6 | –150.6 | –8.5 | 2.0 | – | –279.7 | – |
Volume- and tariff-related timing differences: negative figures represent
surpluses, and positive figures deficits.
Segment report 2020
| In millions of CHF | Total | Grid utilisation | General ancillary services/balance energy | Active power losses (individual ancillary services) | Reactive energy (individual ancillary services) | Eliminations | Total activities according to StromVG | Further activities |
|---|---|---|---|---|---|---|---|---|
| Net turnover | 588.2 | 354.7 | 125.4 | 94.1 | 17.7 | –3.7 | 588.2 | – |
| Other operating income | 14.5 | 1.6 | 0.3 | – | – | – | 1.9 | 12.6 |
| Change in volume- and tariff-related timing differences | 107.9 | 128.6 | 29.0 | –51.4 | 1.7 | – | 107.9 | – |
| Total operating income | 710.6 | 484.9 | 154.7 | 42.7 | 19.4 | –3.7 | 698.0 | 12.6 |
| Procurement costs | –228.5 | –42.8 | –132.7 | –39.3 | –17.4 | 3.7 | –228.5 | – |
| Gross profit | 482.1 | 442.1 | 22.0 | 3.4 | 2.0 | – | 469.5 | 12.6 |
| Operating expenses | –210.6 | –179.0 | –18.9 | –2.3 | –0.7 | – | –200.9 | –9.7 |
| Depreciation/amortisation and impairment losses | –154.8 | –148.2 | –3.2 | –0.4 | –0.1 | – | –151.9 | –2.9 |
| Earnings before interest and income tax (EBIT) | 116.7 | 114.9 | –0.1 | 0.7 | 1.2 | – | 116.7 | – |
Volume- and tariff-related timing differences: negative figures represent
surpluses, and positive figures deficits.
Movement in volume- and tariff-related timing differences per segment
| In millions of CHF | Total | Grid utilisation | General ancillary services/balance energy | Active power losses (individual ancillary services) | Reactive energy (individual ancillary services) | Eliminations | Total activities according to StromVG | Further activities |
|---|---|---|---|---|---|---|---|---|
| Net turnover | 588.2 | 354.7 | 125.4 | 94.1 | 17.7 | –3.7 | 588.2 | – |
| Other operating income | 14.5 | 1.6 | 0.3 | – | – | – | 1.9 | 12.6 |
| Procurement costs | –228.5 | –42.8 | –132.7 | –39.3 | –17.4 | 3.7 | –228.5 | – |
| Operating expenses | –210.6 | –179 | –18.9 | –2.3 | –0.7 | – | –200.9 | –9.7 |
| Depreciation/amortisation and impairment losses | –154.8 | –148.2 | –3.2 | –0.4 | –0.1 | – | –151.9 | –2.9 |
| Imputed interest and income taxes (EBIT) | –116.7 | –114.9 | 0.1 | –0.7 | –1.2 | – | –116.7 | – |
| Change in volume- and tariff-related timing differences | –107.9 | –128.6 | –29 | 51.4 | –1.7 | – | –107.9 | – |
Volume- and tariff-related timing differences: negative figures represent
surpluses, and positive figures deficits.
Earnings before interest and taxes (EBIT) per segment within the StromVG-regulated activities correspond to the capital costs on the invested operating assets plus taxes (cf.Note 1). The individual expense and income positions assigned to the four segments within the StromVG-regulated activities are listed in Note 5.
Grid utilisation
The grid utilisation segment is predominantly financed by various charges for use of the grid. This segment is also assigned the income from auctioning bottleneck capacities at the national borders to reduce the chargeable grid costs, provided that this purpose is approved by ElCom. This segment also includes part of the compensation for international transit flows (ITC); the other part is recognised in the active power losses segment.
Net turnover in this segment amounts to CHF 479.4 million in the 2021 financial year, CHF 124.7 million above the previous year. Higher tariff revenues of CHF 65.3 million and higher income from auctions for the reduction of chargeable grid costs of CHF 61.1 million are the reasons for this increase in relation to the previous year. The procurement costs in the 2021 financial year amount to CHF 54.0 million, CHF 11.2 million above the previous year’s value of CHF 42.8 million. This is due to a CHF 24.6 million increase in additional remuneration to former transmission system owners and a CHF 13.4 million decrease in national redispatch costs.
Despite the higher net turnover, the costs exceed the income generated in the 2021 financial year, resulting in a deficit of CHF 122.6 million.
General ancillary services/balance energy
In 2021, net income in this segment rose from CHF 125.4 million to CHF 165.0 million, primarily due to the increase in revenue from balance group balance energy.
The largest expense item for this segment is control power provision, i.e. the reservation of power plant capacity in the interests of balancing energy consumption and energy feed-in as well as the proportional voltage stability costs payable by this segment. The procurement costs of CHF 292.0 million in this segment are CHF 159.3 million above the 2020 figure (CHF 132.7 million). This increase is primarily due to higher costs of CHF 161.4 million for control power provision and AS energy.
In 2021, costs exceeded net turnover, resulting in a deficit of CHF 150.6 million.
Active power losses (individual ancillary services)
This segment reports expenses and income for active power losses in the transmission grid. In addition to tariff revenues, part of the income from ITC is recognised in this segment.
The procurement of energy to offset active power losses takes place on the spot market and via tenders. Net turnover of CHF 58.0 million in this segment is CHF 36.1 million lower than in the previous year (CHF 94.1 million), primarily due to the CHF 29.0 million decrease in tariff revenue.
In the financial year, this segment recorded procurement costs for active power loss of CHF 62.6 million, an increase of CHF 23.3 million from the previous year.
In 2021, costs exceeded revenue, resulting in a deficit of CHF 8.5 million.
Reactive energy (individual ancillary services)
The supply of reactive energy to maintain the required operating voltage is ensured by means of contractual agreements with several power plants.
Net turnover in this segment increased by CHF 1.7 million year on year to CHF 19.4 million due to the higher tariff revenue. By contrast, the procurement costs amount to CHF 15.6 million, CHF 1.8 million below the previous year’s level of CHF 17.4 million. This decrease is due to the lower pro rata voltage stability costs payable by this segment.
In the 2021 financial year, higher revenue as well as reduced costs led to a surplus of CHF 2.0 million.
5. Net turnover and procurement costs according to StromVG
| In millions of CHF | Segment | 2021 | 2020 |
|---|---|---|---|
| Tariff income for grid utilisation | A | 376.7 | 311.4 |
| Net income from ITC | A/C | 6.3 | 15.1 |
| Income from auctions for the reduction of chargeable grid costs | A | 100.8 | 39.7 |
| Tariff income for general ancillary services (AS) and income from unintentional deviation | B | 99.6 | 88.9 |
| Income from balance group/balance energy | B | 65.4 | 36.5 |
| Tariff income for active power losses | C | 53.6 | 82.6 |
| Tariff income for reactive energy | D | 19.4 | 17.7 |
| Eliminations | –6.7 | –3.7 | |
| Net turnover | 715.1 | 588.2 | |
| Expenses for national redispatch | A | 4.1 | 17.5 |
| Remuneration to former transmission system owners | A | 49.9 | 25.3 |
| Expenses for AS control power provision and unintentional deviation | B | 188.0 | 50.1 |
| Expenses for automatic start-up/island operation capability | B | 1.1 | 1.1 |
| Expenses for grid enhancement | B | 3.6 | 9.0 |
| Expenses for AS energy | B | 49.6 | 26.1 |
| Expenses for compensation of active power losses | C | 62.6 | 39.3 |
| Expenses for reactive energy/voltage maintenance | B/D | 65.3 | 63.8 |
| Eliminations | –6.7 | –3.7 | |
| Procurement costs | 417.5 | 228.5 |
Letters used for segment allocation:
A = Grid utilisation
B = General ancillary services/balance energy
C = Active power losses (individual ancillary services)
D = Reactive energy (individual ancillary services)
Segment reporting is provided in Note 4.
Income from ITC consists of the following:
– Compensation for grid utilisation (A) CHF 1.9 million (previous year: CHF 3.6 million)
– Compensation for active power losses (C) CHF 4.4 million (previous year: CHF 11.5 million)
The ITC compensation for grid utilisation and active power losses corresponds to net income. Supervision charges paid to ElCom and to the Swiss Federal Office of Energy (SFOE) amounting to CHF 4.6 million (previous year: CHF 4.8 million) are deducted from the gross income of CHF 3.3 million for grid utilisation (previous year: CHF 4.8 million) and CHF 7.6 million for active power losses (previous year: CHF 15.1 million).
Expenses for reactive energy/voltage maintenance is comprised as follows:
– General AS (B): CHF 49.7 million (previous year: CHF 46.4 million)
– Reactive energy (D): CHF 15.6 million (previous year: CHF 17.4 million).
Eliminations: active power losses are a separate internal balance group. As a result, internal transactions occur between the general ancillary services/balance energy and active power losses segments.
6. Other operating income
| In millions of CHF | 2021 | 2020 |
|---|---|---|
| Congestion management clearing | 15.6 | 12.4 |
| Other | 1.5 | 2.1 |
| 17.1 | 14.5 |
7. Materials and third-party supplies
| In millions of CHF | 2021 | 2020 |
|---|---|---|
| Grid maintenance | 19.1 | 19.1 |
| Grid system control | 0.4 | 0.4 |
| Other services in the grid area | 23.7 | 31.5 |
| Expenses for projects, advisory and non-cash benefits | 38.7 | 32.4 |
| Hardware/software maintenance | 12.6 | 11.1 |
| 94.5 | 94.5 |
Other grid-related services include remuneration for easements, including easement management services performed by third parties and operating expenses for mixed-use plants. The number of easements for which Swissgrid pays remuneration to the property owners and therefore also the other services in the grid area item decreased compared to the previous year. Due to the implementation of Strategy 2022 measures, the expenses for projects, advisory services and non-cash benefits were higher year on year.
8. Personnel expenses
Personnel
| In millions of CHF | 2021 | 2020 |
|---|---|---|
| Salaries, bonuses, allowances | 84.9 | 81.5 |
| Employee insurance | 17.2 | 16.3 |
| Other personnel expenses | 3.8 | 3.7 |
| 105.9 | 101.5 | |
| Headcount at 31.12. | ||
| Permanent employment: | ||
| Number of employees | 625.0 | 591.0 |
| expressed as full-time equivalents | 587.7 | 558.0 |
| Fixed-term employment: | ||
| Number of employees | 12.0 | 7.0 |
| expressed as full-time equivalents | 10.2 | 5.5 |
Other personnel expenses include, in particular, the costs of training and further education, recruitment, lump-sum expenses as well as allowances for external catering for employees.
Executive Board remuneration
| In millions of CHF | 2021 | 2020 |
|---|---|---|
| Fixed remuneration (incl. lump-sum expenses) | 1.78 | 1.78 |
| Variable remuneration | 0.62 | 1.06 |
| Non-cash benefits 1 | 0.02 | 0.03 |
| Pension benefits 2 | 0.50 | 0.53 |
| Total remuneration to the Executive Board | 2.92 | 3.40 |
| Of which to the highest-earning member of the Executive Board | ||
| Fixed remuneration (incl. lump-sum expenses) | 0.49 | 0.49 |
| Variable remuneration | 0.22 | 0.28 |
| Pension benefits 2 | 0.13 | 0.14 |
| Total remuneration to the highest-earning member of the Executive Board | 0.84 | 0.91 |
1 Non-cash benefits include the private use of business vehicles.
2 Pension benefits include employer contributions to social security and the employee pension plan.
Further information on the members of the Executive Board can be found in the Corporate Governance Report.
9. Other operating expenses
| In millions of CHF | 2021 | 2020 |
|---|---|---|
| Rental and occupancy costs | 9.4 | 8.7 |
| Ground rents | 4.8 | 6.5 |
| Rental costs for communication equipment/telecommunication expense | 3.2 | 3.1 |
| Board of Directors' fees and expenses, incl. social costs | 0.8 | 0.8 |
| Actual expenses for travel and subsistence for employees and third parties | 0.8 | 0.9 |
| Fees, dues and licences | 4.1 | 4.4 |
| Insurance | 1.8 | 1.4 |
| Other administrative costs | 3.1 | 3.0 |
| 28.0 | 28.8 |
Board of Directors’ fees and expenses represent fixed gross remuneration. The remuneration paid to the Chairman of the Board of Directors amounted to CHF 250,000, including lump-sum expenses (previous year: CHF 250,000). The remaining members of the Board of Directors received remuneration of between CHF 57,500 and CHF 70,000 pro rata temporis for 2021, including lump-sum expenses (previous year: CHF 57,500 to CHF 70,000).
Further information on the members of the Board of Directors can be found in the Corporate Governance Report.
10. Financial income
| In millions of CHF | 2021 | 2020 |
|---|---|---|
| Other financial income | 0.9 | 1.0 |
| 0.9 | 1.0 |
Other financial income includes a dividend of CHF 0.5 million (previous year: CHF 0.7 million) received from Holding des Gestionnaires de Réseau de Transport d’Électricité SAS (HGRT).
11. Financial expenses
| In millions of CHF | 2021 | 2020 |
|---|---|---|
| Bond interest | 10.0 | 9.7 |
| Loans and convertible loans interest | 42.7 | 15.7 |
| Commitment fees | 0.1 | 0.2 |
| Other financial expenses | 0.7 | 0.4 |
| 53.5 | 26.0 |
The convertible loans increased due to the final remuneration paid in 2021 for the grid takeovers undertaken since 2013. The increase was retroactive to the respective date of the grid takeover. The resulting interest of CHF 30.3 million to be paid for previous years is included in the item «Loans and convertible loans interest».
12. Income taxes
| In millions of CHF | 2021 | 2020 |
|---|---|---|
| Current income taxes | 25.8 | 17.3 |
| Change in deferred taxes | 19.7 | -1.3 |
| 45.5 | 16.0 |
The higher current income taxes compared to the previous year are a consequence of the higher net income in 2021 in relation to 2020. An average rate of 17.4% (previous year: 17.9%) was used to calculate the current income taxes and, in 2021, deferred taxes were calculated based on an expected rate of 17.2% (previous year: 17.65%).
The effective average tax rate based on earnings before tax amounts to 30.0% (previous year: 17.4%). Adjusted to take into account the increase in deferred taxes due to the final remuneration of CHF 20.5 million for the grid takeovers, the average tax rate is 16.5%.
13. Non-current assets
Summary of property, plant and equipment – 2021
| In millions of CHF | Advances and construction in progress | Substations | Lines | Properties and buildings | Other property, plant and equipment | Total |
|---|---|---|---|---|---|---|
| Acquisition cost at 1.1.2021 | 325.4 | 2,019.2 | 2,666.3 | 253.1 | 56.1 | 5,320.1 |
| Final remuneration for the grid takeovers | – | 227.2 | 111.3 | –4.1 | – | 334.4 |
| Additions | 164.2 | 4.5 | 11.7 | 2.5 | 4.3 | 187.2 |
| Disposals | – | –31.1 | –1.1 | –0.5 | –0.1 | –32.8 |
| Reclassification | -27.4 | 22.2 | 2.4 | 1.3 | 2.6 | 1.1 |
| Acquisition cost at 31.12.2021 | 462.2 | 2,242.0 | 2,790.6 | 252.3 | 62.9 | 5,810.0 |
| Accumulated depreciation and amortisation at 1.1.2021 | 5.2 | 1,246.8 | 1,599.9 | 79.3 | 45.9 | 2,977.1 |
| Final remuneration for the grid takeovers | – | 163.5 | 77.8 | –6.9 | – | –234.4 |
| Depreciation and amortisation | – | 78.6 | 51.6 | 7.3 | 8.5 | 146.0 |
| Impairment losses | – | – | – | – | – | – |
| Disposals | – | –30.0 | –1.1 | –0.5 | –0.1 | –31.7 |
| Reclassification | – | – | – | – | – | – |
| Accumulated depreciation and amortisation at 31.12.2021 | 5.2 | 1,458.9 | 1,728.2 | 79.2 | 54.3 | 3,325.8 |
| Net book value at 1.1.2021 | 320.2 | 772.4 | 1,066.4 | 173.8 | 10.2 | 2,343.0 |
| Net book value at 31.12.2021 | 457.0 | 783.1 | 1,062.4 | 173.1 | 8.6 | 2,484.2 |
Summary of property, plant and equipment – 2020
| In millions of CHF | Advances and construction in progress | Substations | Lines | Properties and buildings | Other property, plant and equipment | Total |
|---|---|---|---|---|---|---|
| Acquisition cost at 1.1.2020 | 371.8 | 1,995.8 | 2,550.5 | 233.1 | 65.8 | 5,217.0 |
| Additions | 106.4 | 8.8 | 15.0 | 1.7 | 1.3 | 133.2 |
| Disposals | –0.2 | –13.4 | –0.2 | – | –13.6 | –27.4 |
| Reclassification | –152.6 | 28.0 | 101.0 | 18.3 | 2.6 | –2.7 |
| Acquisition cost at 31.12.2020 | 325.4 | 2,019.2 | 2,666.3 | 253.1 | 56.1 | 5,320.1 |
| Accumulated depreciation and amortisation at 1.1.2020 | 5.4 | 1,194.3 | 1,557.6 | 72.0 | 49.6 | 2,878.9 |
| Depreciation and amortisation | – | 65.9 | 42.3 | 7.3 | 9.9 | 125.4 |
| Impairment losses | – | – | – | – | – | – |
| Disposals | –0.2 | –13.4 | – | – | –13.6 | –27.2 |
| Reclassification | – | – | – | – | – | – |
| Accumulated depreciation and amortisation at 31.12.2020 | 5.2 | 1,246.8 | 1,599.9 | 79.3 | 45.9 | 2,977.1 |
| Net book value at 1.1.2020 | 366.4 | 801.5 | 992.9 | 161.1 | 16.2 | 2,338.1 |
| Net book value at 31.12.2020 | 320.2 | 772.4 | 1,066.4 | 173.8 | 10.2 | 2,343.0 |
Gross investments in property, plant and equipment amounted to CHF 190.3 million (previous year: CHF 165.5 million). Thereof, CHF 3.1 million (previous year: CHF 32.3 million) was financed by proceeds from the auctioning of bottleneck capacities for cross-border supplies. Project costs of CHF 1.1 million were reclassified from intangible assets under development to construction in progress in the year under review (previous year: CHF 2.7 million from construction in progress to intangible assets under development).
Related parties received CHF 74.1 million in final remuneration in 2021 for the grid takeovers undertaken since 2013. Property, plant and equipment of CHF 14.2 million (previous year: CHF 9.6 million) were purchased from related parties in 2021.
Summary of intangible assets – 2021
| In millions of CHF | Intangible assets under development | Usage rights | Software | Total intangible assets | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Purchased | Self-constructed | Total | Purchased | Self-constructed | Total | Purchased | Self-constructed | Total | Purchased | Self-constructed | Total | |
| Acquisition cost at 1.1.2021 | 8.10 | 1.60 | 9.70 | 160.70 | – | 160.70 | 141.70 | 60.40 | 202.10 | 310.50 | 62.00 | 372.50 |
| Final remuneration for the grid takeovers | – | – | – | 31.00 | – | 31.00 | – | – | – | 31.00 | – | 31.00 |
| Additions | 8.50 | 3.60 | 12.10 | – | – | – | 5.00 | 1.20 | 6.20 | 13.50 | 4.80 | 18.30 |
| Disposals | – | – | – | –0.1 | – | –0.1 | –2.7 | – | –2.7 | –2.8 | – | –2.8 |
| Reclassification | –5.6 | –1.2 | –6.8 | –0.2 | – | –0.2 | 4.70 | 1.20 | 5.90 | –1.1 | – | –1.1 |
| Acquisition cost at 31.12.2021 | 11.00 | 4.00 | 14.90 | 191.40 | – | 191.40 | 148.70 | 62.80 | 211.50 | 351.10 | 66.80 | 417.90 |
| Accumulated depreciation and amortisation at 1.1.2021 | – | – | – | 74.70 | – | 74.70 | 115.80 | 45.20 | 161.00 | 190.50 | 45.20 | 235.70 |
| Final remuneration for the grid takeovers | – | – | – | 5.10 | – | 5.10 | – | – | – | 5.10 | – | 5.10 |
| Depreciation and amortisation | – | – | – | 9.70 | – | 9.70 | 15.70 | 7.60 | 23.30 | 25.40 | 7.60 | 33.00 |
| Impairment losses | – | – | – | – | – | – | – | – | 0.00 | – | – | – |
| Disposals | – | – | – | –0.1 | – | –0.1 | –2.7 | – | –2.7 | –2.8 | – | –2.8 |
| Reclassification | – | – | – | – | – | – | – | – | – | – | – | – |
| Accumulated depreciation and amortisation at 31.12.2021 | – | – | – | 89.40 | – | 89.40 | 128.80 | 52.80 | 181.60 | 218.20 | 52.80 | 271.00 |
| Net book value at 1.1.2021 | 8.10 | 1.60 | 9.70 | 86.00 | – | 86.00 | 25.90 | 15.20 | 41.10 | 120.00 | 16.80 | 136.80 |
| Net book value at 31.12.2021 | 11.00 | 4.00 | 15.00 | 102.00 | – | 102.00 | 19.90 | 10.00 | 29.90 | 132.90 | 14.00 | 146.90 |
Summary of intangible assets – 2020
| In millions of CHF | Intangible assets under development | Usage rights | Software | Total intangible assets | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Purchased | Self-constructed | Total | Purchased | Self-constructed | Total | Purchased | Self-constructed | Total | Purchased | Self-constructed | Total | |
| Acquisition cost at 1.1.2020 | 10.3 | 2.9 | 13.2 | 158.4 | – | 158.4 | 134.5 | 56.9 | 191.4 | 303.2 | 59.8 | 363.0 |
| Additions | 5.1 | 0.7 | 5.8 | 0.0 | – | 0.0 | 4.9 | 1.9 | 6.8 | 10.0 | 2.6 | 12.6 |
| Disposals | –0.3 | – | –0.3 | –0.2 | – | –0.2 | –4.6 | –0.7 | –5.3 | –5.1 | –0.7 | –5.8 |
| Reclassification | –7.0 | –2.0 | –9.0 | 2.5 | – | 2.5 | 6.9 | 2.3 | 9.2 | 2.4 | 0.3 | 2.7 |
| Acquisition cost at 31.12.2020 | 8.1 | 1.6 | 9.7 | 160.7 | – | 160.7 | 141.7 | 60.4 | 202.1 | 310.5 | 62.0 | 372.5 |
| Accumulated depreciation and amortisation at 1.1.2020 | 0.3 | – | 0.3 | 69.7 | – | 69.7 | 104.2 | 37.9 | 142.1 | 174.2 | 37.9 | 212.1 |
| Depreciation and amortisation | – | – | – | 5.2 | – | 5.2 | 16.3 | 7.9 | 24.2 | 21.5 | 7.9 | 29.4 |
| Impairment losses | – | – | – | 0.0 | – | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 |
| Disposals | –0.3 | – | –0.3 | –0.2 | – | –0.2 | –4.7 | –0.6 | –5.3 | –5.2 | –0.6 | –5.8 |
| Reclassification | – | – | – | 0.0 | – | – | – | – | – | – | – | – |
| Accumulated depreciation and amortisation at 31.12.2020 | – | – | – | 74.7 | – | 74.7 | 115.8 | 45.2 | 161.0 | 190.5 | 45.2 | 235.7 |
| Net book value at 1.1.2020 | 10.0 | 2.9 | 12.9 | 88.7 | – | 88.7 | 30.3 | 19.0 | 49.3 | 129.0 | 21.9 | 150.9 |
| Net book value at 31.12.2020 | 8.1 | 1.6 | 9.7 | 86.0 | – | 86.0 | 25.9 | 15.2 | 41.1 | 120.0 | 16.8 | 136.8 |
Related parties received CHF 14.3 million in final remuneration in 2021 for the grid takeovers undertaken since 2013. In 2021, intangible assets amounting to CHF 12,300 (previous year: CHF 3,000) were purchased from related parties.
14. Financial assets
| In millions of CHF | 31.12.2021 | 31.12.2020 |
|---|---|---|
| Shareholdings | 8.5 | 8.7 |
| Employer contribution reserves | 0.5 | – |
| 9.0 | 8.7 |
Swissgrid has the following shareholdings, which are recognised in the balance sheet as financial assets:
| Share capital in m. | Share in % | ||
|---|---|---|---|
| Joint Allocation Office (JAO) | B | 0.100 | 5.0 |
| TSCNET Services GmbH | C | 0.038 | 6.7 |
| Holding des Gestionnaires de Réseau de Transport d’Electricité SAS (HGRT) | D | 52.119 | 5.0 |
| Pronovo AG | E | 0.100 | 100.0 |
| ecmt AG | F | 0.100 | 20.0 |
| Equigy B.V. | G | 0.050 | 20.0 |
| AET NE1 SA | A | 0.100 | 100.0 |
| ALENA Aletsch Energie Netz AG | A | 0.100 | 100.0 |
| Alpiq Netz AG Gösgen/Aarau | A | 0.100 | 100.0 |
| Alpiq Réseau SA Lausanne/Aarau | A | 0.100 | 100.0 |
| BKW Übertragungsnetz AG | A | 0.100 | 100.0 |
| CKW Grid AG | A | 0.100 | 100.0 |
| EGL Grid AG | A | 0.100 | 100.0 |
| ewb Übertragungsnetz AG | A | 0.100 | 100.0 |
| ewz Übertragungsnetz AG | A | 0.100 | 100.0 |
| FMV Réseau SA | A | 0.100 | 100.0 |
| Kraftwerke Hinterrhein Netz AG | A | 0.100 | 100.0 |
| LENA Lonza Energie Netz AG | A | 0.100 | 100.0 |
| Nordostschweizerische Kraftwerke Grid AG | A | 0.100 | 100.0 |
| Ofible Rete SA | A | 0.100 | 100.0 |
| Ofima Rete SA | A | 0.100 | 100.0 |
| Repower Transportnetz AG | A | 0.100 | 100.0 |
| SN Übertragungsnetz AG | A | 0.100 | 100.0 |
| Übertragungsnetz Basel/Aarau AG | A | 0.100 | 100.0 |
Letters used for locations and currencies:
A = Aarau (formerly Laufenburg, CH) | Currency CHF
B = Luxembourg (Lux) | Currency EUR
C = Munich (D) | Currency EUR
D = Paris (F) | Currency EUR
E = Frick (CH) | Currency CHF
F = Embrach (CH) | Currency CHF
G = Arnhem (NL) | Currency EUR
Due to changes in ownership, Swissgrid’s share in TSCNET Services GmbH and Equigy B.V. has decreased to 6.7% and 20.0% respectively. Swissgrid is not legally obliged to prepare consolidated financial statements. Either the control principle necessary to prepare a consolidated financial statement (Art.963 of the Swiss Code of Obligations (CO)) is not met, or the subsidiaries do not have a material influence on Swissgrid’s financial statements. In particular, Pronovo AG is regulated by the Swiss Federal Office of Energy (SFOE) and is explicitly excluded from any consolidation with Swissgrid based on Art.64(5) of the Energy Act (EnG).
Otherwise, the information is unchanged from the previous year.
| In millions of CHF | Grid utilisation | General ancillary services/balance energy | Active power losses (individual ancillary services) | Reactive energy (individual ancillary services) | Total volume- and tariff-related timing differences | Thereof surpluses | Thereof deficits |
|---|---|---|---|---|---|---|---|
| Balance at 31.12.2019 | 15.5 | –149.8 | 58.7 | 22.8 | –52.8 | –149.8 | 97.0 |
| Change in 2020 | 128.6 | 29.0 | –51.4 | 1.7 | 107.9 | – | – |
| Balance at 31.12.2020 | 144.1 | –120.8 | 7.3 | 24.5 | 55.1 | –120.8 | 175.9 |
| Change in 2021 | 122.6 | 150.6 | 8.5 | –2.0 | 279.7 | – | – |
| Final remuneration for the grid takeovers | –8.5 | – | – | – | –8.5 | – | – |
| Balance at 31.12.2021 | 258.2 | 29.8 | 15.8 | 22.5 | 326.3 | – | 326.3 |
| Current portion | – | – | – | 4.2 | 4.2 | – | 4.2 |
Negative figures represent surpluses, and positive figures deficits. Further information on volume- and tariff-related timing differences (function, estimation uncertainties and current legal proceedings) can be found in Notes 1, 2 and 3.
More detailed comments on the reclassifications item are contained in Note 4 on the reactive energy segment (individual ancillary services).
16. Balance sheet items held on a fiduciary basis
On the basis of a statutory mandate, Swissgrid coordinates the auctioning of bottleneck capacities for cross-border supplies and maintains accounting records and bank accounts on a fiduciary basis for this purpose.
Assets held on a fiduciary basis
| In millions of CHF | 31.12.2021 | 31.12.2020 |
|---|---|---|
| Trade accounts receivable | 110.6 | 11.5 |
| Other receivables | 5.8 | – |
| Prepaid expenses and accrued income | 3.0 | 3.3 |
| Cash and cash equivalents | 18.4 | 9.1 |
| 137.8 | 23.9 |
Liabilities held on a fiduciary basis
| In millions of CHF | 31.12.2021 | 31.12.2020 |
|---|---|---|
| Trade accounts payable | 93.6 | 16.6 |
| Other liabilities | – | 0.4 |
| Accrued expenses and deferred income | 44.2 | 6.9 |
| 137.8 | 23.9 |
The revenues and the manner in which they are used are as follows:
Auctions
| In millions of CHF | 2021 | 2020 |
|---|---|---|
| Share of revenue Switzerland | 154.7 | 91.4 |
| Congestion management clearing | –17.3 | –13.5 |
| Net proceeds | 137.4 | 77.9 |
| Used for reduction of the chargeable grid costs | –97.1 | –39.1 |
| Used for grid investments | – | –32.0 |
| Undistributed income from auctions | 40.3 | 6.8 |
Pursuant to the ElCom ruling issued on 6 April 2020, income from auctions in 2021 amounting to CHF 97.1 million (previous year: CHF 71.1 million) was paid to Swissgrid. At CHF 137.8 million, the balance sheet item is CHF 113.9 million above the previous year’s value of CHF 23.9 million. This is primarily due to the CHF 33.5 million increase in unused income from auctions as well as the higher level of outstanding trade accounts receivable and trade accounts payable as at 31 December 2021.
As of the balance sheet date, derivative financial instruments (futures) in the nominal amount of EUR 43.0 million exist to partially hedge against the EUR/CHF currency risk from expected future income in euros. The positive replacement values as at 31 December 2021 amount to CHF 2.2 million (previous year: negative replacement values of CHF 1.0 million).
17. Trade receivables
| In millions of CHF | 31.12.2021 | 31.12.2020 |
|---|---|---|
| Trade receivables | 180.8 | 125.5 |
| Specific valuation allowances | – | – |
| 180.8 | 125.5 |
18. Other receivables
| In millions of CHF | 31.12.2021 | 31.12.2020 |
|---|---|---|
| Security deposits on blocked bank accounts | 1.1 | 1.1 |
| Other | 18.6 | 13.1 |
| 19.7 | 14.2 |
In particular, other receivables include the receivable for the 2021 enforcement costs for handling congestion management amounting to CHF 15.6 million (previous year: CHF 12.4 million) and VAT credit of CHF 2.0 million (previous year: VAT liability of CHF 0.4 million).
19. Prepaid expenses and accrued income
| In millions of CHF | 31.12.2021 | 31.12.2020 |
|---|---|---|
| Accrued revenue for supplies made | 57.7 | 41.4 |
| Other | 23.4 | 25.5 |
| 81.1 | 66.9 |
In particular, other prepaid expenses and accrued income include the discount on bond issues and financing and issue costs, which are amortised over the term of the financing instrument.
20. Financial liabilities
| In millions of CHF | 31.12.2021 | 31.12.2020 |
|---|---|---|
| Bonds | 1,540.0 | 1,180.0 |
| Convertible loans | 326.70 | 415.40 |
| Loans | 0.10 | 0.10 |
| Total financial liabilities | 1,866.8 | 1,595.5 |
| Current portion | 254.6 | 172.4 |
Bonds
| Nominal amount in CHF | Interest rate | Term | Expiration at nominal value |
|---|---|---|---|
| 350 million | 1,625% | 2013 - 2025 | 30.01.2025 |
| 150 million | 0,000% | 2021 - 2026 | 30.06.2026 |
| 150 million | 0,000% | 2020 - 2028 | 30.06.2028 |
| 150 million | 0,625% | 2015 - 2030 | 25.02.2030 |
| 150 million | 0,200% | 2020 - 2032 | 30.06.2032 |
| 110 million | 0,050% | 2021 - 2033 | 30.06.2033 |
| 125 million | 0,150% | 2020 - 2034 | 30.06.2034 |
| 130 million | 0,125% | 2020 - 2036 | 30.06.2036 |
| 100 million | 0,200% | 2021 - 2040 | 29.06.2040 |
| 125 million | 0,050% | 2019 - 2050 | 30.06.2050 |
Convertible loans and loans
Convertible loans have a term of nine years and one-fifth of the loans become payable annually from year five. Partial repayments of convertible loans amounting to CHF 170.9 million were made in the 2021 financial year. Moreover, loans are also assigned a conversion right by Swissgrid in the event of occurrence of contractually defined events and an associated conversion obligation by the creditors. Creditors are compensated by a premium on the interest rate for the conversion right assigned to Swissgrid. Convertible loans are recognised in full in liabilities.
The interest conditions and maturities of convertible loans and loans are as follows:
| Position | Interest rate (bandwidth) | Year 1 | Year 2–5 | More than 5 years |
|---|---|---|---|---|
| Convertible loans | 3.36 - 3.93% | 254.6 | 68.3 | 3.8 |
| Loans | 0.00% | – | – | 0.1 |
Convertible loans and loans are assessed at their nominal value.
Lines of credit
The committed lines of credit total CHF 200 million and remain unclaimed as at 31 December 2021.
21.Provisions
| In millions of CHF | Dismantling | Employee incentive plan | Procedural costs | Deferred taxes | Total provisions |
|---|---|---|---|---|---|
| Balance at 31 December 2019 | 6.1 | 0.3 | 3.8 | 19.9 | 30.1 |
| Provisions raised | – | – | 1.5 | – | 1.5 |
| Provisions used | – | 0.3 | 1.5 | 1.3 | 3.1 |
| Reversals | – | – | 0.9 | – | 0.9 |
| Balance at 31 December 2020 | 6.1 | – | 2.9 | 18.6 | 27.6 |
| Provisions raised | – | – | 0.2 | 20.5 | 20.7 |
| Provisions used | – | – | 2.1 | 0.8 | 2.9 |
| Reversals | – | – | 0.5 | – | 0.5 |
| Balance at 31 December 2021 | 6.1 | – | 0.5 | 38.3 | 44.9 |
| Current portion | – | – | 0.2 | – | 0.2 |
Procedural costs
With the grid takeovers on 3 January 2013 and 5 January 2015 and the associated spin-offs of the procedural companies from the grid companies, contractual regulations mean that Swissgrid is responsible for the costs of proceedings attributable to the procedural companies. The provision as at 31 December 2021 includes the remaining expected expenses for party, court and legal costs due to the final remuneration for the grid takeovers paid in 2021.
The provision amount also includes the estimated compensation payable to parties and the court costs imposed on Swissgrid due to the administrative procedures in conducting proceedings.
Deferred income taxes
Due to the final remuneration for the grid takeovers, deferred income taxes of CHF 20.5 million were recognised in 2021.
22. Other liabilities
| In millions of CHF | 31.12.2021 | 31.12.2020 |
|---|---|---|
| Value-added tax | – | 0.4 |
| Security deposits on blocked bank accounts | 0.7 | 0.8 |
| Other | 1.7 | 1.7 |
| 2.4 | 2.9 |
In particular, the «Other» item contains outstanding obligations towards PKE Vorsorgestiftung Energie of CHF 1.4 million (previous year: CHF 1.3 million) as of the cut-off date.
23. Accrued expenses and deferred income
| In millions of CHF | 31.12.2021 | 31.12.2020 |
|---|---|---|
| Accrued expenses for supplies made | 101.5 | 49.8 |
| Personnel expenses and employee insurance scheme | 10.0 | 9.0 |
| Accrued interest and premium from issued bonds | 15.4 | 9.0 |
| Taxes | 16.7 | 9.2 |
| 143.6 | 77.0 |
24. Contingent receivables
Billing method for the ancillary services (AS) surcharge
ElCom defined the billing method for the AS surcharge in its 4/2018 directive. Under this method, Swissgrid and the distribution system operators wait until the subsequent year to finally settle payments of AS tariffs for the previous financial year.
The settlement will result in receivables owed to Swissgrid by the distribution system operators. However, since the amount of these receivables could not be reliably determined when the financial statements were prepared, they were recognised as contingent receivables.
25. Other off-balance sheet commitments
Joint Allocation Office (O)
As a shareholder of the Joint Allocation Office (JAO), Swissgrid is contractually obliged to assume its share of the annual costs.
TSCNET Services Gmbh
As a shareholder of TSCNET Services GmbH, Swissgrid is contractually obliged to assume its share of the annual costs.
Equigy B.V.
As a shareholder of Equigy B.V., Swissgrid is contractually obliged to assume its share of the annual costs.
Long-term rental contracts
Long-term rental contracts with fixed terms exist with several parties. These result in the following obligations:
| In millions of CHF | Year 1 | Year 2–10 | More than 10 years | Total |
|---|---|---|---|---|
| 31.12.2021 | 5.8 | 36.5 | 64.3 | 106.6 |
| 31.12.2020 | 6.0 | 38.3 | 68.3 | 112.6 |
The long-term rental obligations primarily include the rental commitments for Swissgrid’s head office in Aarau.
Off-balance-sheet lease commitments
Swissgrid has the following off-balance-sheet lease commitments for vehicles and office equipment:
| In millions of CHF | Year 1 | Year 2–5 | Total |
|---|---|---|---|
| 31.12.2021 | 0.8 | 1.6 | 2.4 |
| 31.12.2020 | 0.8 | 1.2 | 2.0 |
26. Derivative financial instruments
Swissgrid made use of derivative financial instruments to partially hedge against market price risk from future procurement costs for active power losses. The nominal amount of these instruments is EUR 36.1 million (previous year: EUR 18.3 million), with positive replacement values of EUR 13.4 million as at 31 December 2021 (previous year: negative replacement values of EUR 1.5 million).
27. Employee pension plan
Economic benefit/economic obligation and pension expenses
| In millions of CHF | Shortfall/surplus funding | Economic share of the organisation | Change compared with previous year/ affecting income in FY | Accrued amounts | Pension benefit expenses within personnel expenses | ||
|---|---|---|---|---|---|---|---|
| 31.12.2021 | 31.12.2021 | 31.12.2020 | 2021 | 2020 | |||
| Pension fund with surplus funding (PKE) | 1.0 | – | – | – | 10.1 | 10.1 | 9.6 |
| Total | 1.0 | – | – | – | 10.1 | 10.1 | 9.6 |
Swissgrid is affiliated to a collective plan by the pension fund PKE Vorsorgestiftung Energie. Therefore, an economic benefit or economic obligation cannot be determined on the basis of the individual affiliation contract. The coverage ratio of the collective plan is 125.2% as at 31 December 2021 (previous year: 112.5%).
| Transactions with related parties in millions of CHF | 2021 | 2020 |
|---|---|---|
| Total operating activities | ||
| Net turnover | 332.8 | 320.9 |
| thereof grid utilisation | 243.6 | 216.2 |
| thereof general ancillary services /balance energy | 36.6 | 35.4 |
| thereof active power losses | 36.2 | 55.3 |
| thereof reactive energy | 16.3 | 14.0 |
| Other operating income | 0.1 | 0.1 |
| Procurement costs and operating expenses | ||
| Procurement costs | 242.9 | 125.3 |
| thereof grid utilisation | 33.1 | 28.8 |
| thereof general ancillary services /balance energy | 178.9 | 80.5 |
| thereof active power losses | 23.9 | 7.8 |
| thereof reactive energy | 7.0 | 8.2 |
| Cost of materials and third-party supplies | 12.7 | 13.0 |
| Other operating expenses | 4.4 | 1.7 |
| Financial result | ||
| Financial expenses | 24.6 | 6.9 |
| Unsettled balances at balance sheet date with related parties in millions of CHF | 2021 | 2020 |
|---|---|---|
| Assets | ||
| Trade receivables | 80.6 | 63.3 |
| Prepaid expenses and accrued income | 19.5 | 15.3 |
| Liabilities | ||
| Convertible loans and loans | 165.7 | 186.7 |
| Trade accounts payable | 84.8 | 27.3 |
| Accrued expenses and deferred income | 43.7 | 15.2 |
The conditions relating to related parties are described in Note 1.
29. Events after the balance sheet date
There are no events after the balance sheet date that would require disclosure or recognition in the 2021 financial statements.
On 26 April 2022, the Board of Directors of Swissgrid Ltd approved the 2021 financial statements for submission to the General Assembly and for publication.