Fingrid Annual Report 2019
Total Page:16
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Annual Report 2019 Table of Contents Operating environment and strategy 79 Personnel 85 Risk management at Fingrid 5 Contents of the annual report and reporting principles Sustainability 6 Fingrid in brief 8 Vocabulary 91 Corporate responsibility 11 Review by the President & CEO 96 Environment 13 Operating environment 102 Corporate responsibility GRI disclosures 16 Mission and business model 133 Independent assurance statement Materiality assessment 19 Value creation 20 Strategy and management system Governance Strategic targets and indicators 137 Board of Directors Management system 139 Executive management group 28 Stakeholder engagement 142 Corporate Governance Statement 1. General Business operations 2. Description of Fingrid's administrative bodies 33 Customers 3. General meeting Customer committees and Advisory 4. Board of Directors Committee 5. Board committees 40 Finance and treasury 6. President & CEO Financial result 2019 7. Company management 50 Grid development and maintenance 8. Advisory committee Completed and ongoing projects 9. Internal control and risk management Investment decisions and planned 10. Financial audit and internal audit investments 11. Related party transactions Reserve power provides security in disturbances 12. Main procedures relating to insider administration Occupational safety Remuneration principles and remuneration 62 Power system statement Transmission grid 167 Stock exchange releases 2019 71 Electricity market 75 Research and development This PDF has been generated from Online Annual Report and only contains the parts specified and downloaded by the user. 2 Please visit annualreport2019.fingrid.fi/EN for the full online report. Annual Report 2019 Annual review and financial 4.3 Formation of turnover and financial er sult statements 4.4 Revenue-related receivables and credit risk management 4.5 Operating expenses, liabilities and credit 169 1 Report of the board of directors risk management for purchases 1.1 Financial result 4.6 Inventories 1.2 Financing 4.7 Management of commodity risks 1.3 Share capital 4.8 Personnel - the cornerstone of our 1.4 Customers operations 1.5 Capital expenditure 4.9 Taxes 1.6 Power system 231 5 Long-term Investor (IFRS) 1.7 Electricity market 5.1 Grid assets 1.8 Personnel 5.2 Tangible and intangible assets 1.9 Board of Directors and corporate 5.3 Lease agreements management 246 6 Strong Financial Position (IFRS) 1.10 Fingrid's business model 6.1 Capital management 1.11 Internal control and risk management 6.2 The aims and organisation of financing 1.12 Foremost risks activities and the principles for financial risk 1.13 Corporate responsibility management 1.14 Environmental matters 6.3 Financial liabilities, financial osc ts and managing the financial risks of liabilities 1.15 Legal proceedings and proceedings by authorities 6.4 Cash and cash equivalents and other financial assets 1.16 Events after the review period and estimate of future outlook 6.5 Equity and dividend distribution 1.17 Board of Directors’ proposal for the 6.6 Summary of financial assets, financial distribution of profit liabilities and derivatives 1.18 Annual General Meeting 2020 276 7 Other Information (IFRS) 196 2 Consolidated Key Figures 7.1 Group companies and related parties 199 3 Consolidated Financial Statements (IFRS) 7.2 Other notes 3.1 Income statement 284 8 Parent company financial ts atements (FAS) 3.2 Consolidated balance sheet 8.1 Parent company income statement 3.3 Consolidated statement of changes in 8.2 Parent company balance sheet equity 8.3 Parent company cash flow statement 3.4 Consolidated cash flow statement 8.4 Notes to the financial ts atements of parent 210 4 Benchmark for TSO Operations (IFRS) company 4.1 General information about the Group and 317 9 Signatures for the Annual Review and for the general accounting principles Financial Statements 4.2 The company's general risk management processes and policies This PDF has been generated from Online Annual Report and only contains the parts specified and downloaded by the user. 3 Please visit annualreport2019.fingrid.fi/EN for the full online report. Annual Report 2019 Operating environment and strategy This PDF has been generated from Online Annual Report and only contains the parts specified and downloaded by the user. 4 Please visit annualreport2019.fingrid.fi/EN for the full online report. Annual Report 2019 Contents of the annual report and reporting principles Fingrid’s annual report for 2019 will be published in electronic format on the company’s website. The annual report also includes Fingrid’s corporate responsibility reporting and the corporate governance statement. Fingrid draws up the consolidated financial ts atements and the half-year report in accordance with IFRS reporting standards accepted by the European Union and in accordance with the Finnish Securities Market Act. The consolidated financial ts atements include the parent company Fingrid Oyj and its wholly owned subsidiaries Finextra Oy and Fingrid Datahub Oy. The consolidated associated companies are Nord Pool Holding AS (ownership 18.8%) and eSett Oy (ownership 25.0%). The annual review and the financial ts atements of the Group’s parent company and its subsidiaries are prepared in accordance with the Finnish Accounting Act and the guidelines and statements of the Finnish Accounting Standards Board. The information on personnel is based on the calculation systems used by human resources management, and the calculation of the relevant information is in compliance with the general guidelines of the Finnish Accounting Standards Board concerning the preparation of annual reviews. The environmental data is collected from the information reported to the authorities and from Fingrid’s own data collection systems. An external emissions trading verifier has erifiev d the company’s carbon dioxide emission report. Corporate responsibility reporting focusses on the main economic, social and environmental impacts of Fingrid Group’s operations. The reporting applies integrated reporting principles, is in compliance with the Global Reporting Initiative (GRI) 2016, Core requirements, and has been verified by an independent third party. The boundaries of the social and environmental data do not include the associated companies. Requirements for corporate responsibility reporting by state-owned companies and environmental, social and governance (ESG) reporting guidance for stock exchanges are also taken into account. The annual report stands for a Communication on Progress (COP) report in compliance with the UN’s Global Compact initiative. This PDF has been generated from Online Annual Report and only contains the parts specified and downloaded by the user. 5 Please visit annualreport2019.fingrid.fi/EN for the full online report. Annual Report 2019 Fingrid in brief Fingrid Oyj is Finland’s transmission system operator. Our owners are the State of Finland and Finnish pension companies. Our mission is to secure a reliable supply of electricity in our society in all situations and to promote a clean, market-based power system. A reliable supply of electricity is secured by transmitting electricity in the main grid, i.e. the high-voltage network, from production plants to industry and power companies that then transmit the electricity to homes. The nationwide main grid is the trunk network to which major electricity producers, industrial plants that use large amounts of electricity and electricity distribution networks are connected. Fingrid guarantees a disturbance-free electricity supply in Finland. Electricity cannot be stored, which is why electricity production and consumption must be in balance at all times. Our company’s statutory task is to take care of that round the clock. Finland is part of the Nordic power system, which means that changes in production and consumption in our neighbouring countries also affect us. Electricity is continuously transmitted from one country to another, and Finland is also connected to the Central European power system with transmission connections. Finland also has transmission connections with Russia and Estonia. With cross-border connections, we can ensure system security even on the coldest winter days. Sufficient transmission connections are also the best way to secure the functioning of the market. Key figures: The company was established on 29 November 1996 and its operations began on 1 September 1997. The main grid encompasses approx. 14,100 kilometres of 400-, 220- and 110-kilovolt transmission lines, 115 substations, three HVDC connections and 10 of the company’s own reserve power plants. Fingrid is owned by the State of Finland (direct holding), the National Emergency Supply Agency, Aino Holding Ky, Ilmarinen Mutual Pension Insurance Company and other institutional investors. Turnover amounts to EUR 789.4 (852.8) million. The balance sheet total is EUR 2.1 (2.1) billion. High credit ratings: ’AA-’ S&P and ’A’ Fitch Ratings At the end of the year, Fingrid had 380 (380) employees, 338 (327) of whom were permanent. This PDF has been generated from Online Annual Report and only contains the parts specified and downloaded by the user. 6 Please visit annualreport2019.fingrid.fi/EN for the full online report. Annual Report 2019 Image: Fingrid’s role in the electricity system This PDF has been generated from Online Annual Report and only contains the parts specified and downloaded by the user. 7 Please visit annualreport2019.fingrid.fi/EN for the full online report. Annual Report 2019 Vocabulary Aggregation: Aggregation