14 Additional notes to the company financial statements

Movements in tangible fixed assets in 2021 are as follows:

At year-end 2021, tangible fixed assets included an amount of € 83.9 million (year-end 2020: € 79.3 million) of leases. The company has economic but not legal ownership of these right-of-use assets. Right-of-use assets relate mainly to land and buildings and the company vehicles.

Movements in tangible fixed assets in 2020 are as follows:

The cost and accumulated depreciation (including impairments) are as follows:

Movements in tangible fixed assets were as follows:

The issued and repaid share premiums recognised in 2021 relate mainly to the split of the wholly-owned group company GTS B.V. on 30 December 2021, which saw part of GTS B.V.’s tangible fixed assets transferred to Gasunie Assets B.V. and Maasvlakte Storage B.V. The split arose from and relates to the assets held by GTS B.V., but which are also - and increasingly so - used for other entities that come under N.V. Nederlandse Gasunie. These are mainly certain buildings and installations and part of the other operating assets, such as tools and IT equipment. Shares in Gasunie Assets B.V. and Maasvlakte Storage B.V. are also held by N.V. Nederlandse Gasunie for the full 100%.

Direct movements in the group companies’ equity refer to the revaluation of the interest in Nord Stream (as included in note 9 ‘Other participating interests’ and note 42 ‘Legal reserve’), the effect of the changes to corporate income tax rates (as included in note 10 ‘Deferred tax assets’, note 41 ‘Revaluation reserve’ and note 43 ‘Other reserves’), the actuarial result for the Gasunie Deutschland pension plan (as included in note 20 ‘Employee benefits’ and note 43 ‘Other reserves’) and to the revaluation of the interest in Gate terminal as a result of the change in value of a cash flow hedge (as included in note 43 ‘Other reserves’).

The dividend received and result of group companies and participating interests were lower than in 2020. This relates mainly to the one-off effect of reversal, in 2020, of a € 300.0 million impairment that had been recognised in the past.

The list of participating interests, their registered offices and Gasunie’s participation percentage are included in note 55 ‘List of group companies and participating interests’.

The interest rate on the non-current loans was, unless specified otherwise, the weighted average interest rate of N.V. Nederlandse Gasunie’s non-current loan portfolio plus 12.5 basis points (2020: the same).

The fair value of the non-current loans to group companies and participating interests was € 4,627.9 million at year-end 2021 (year-end 2020: € 5,064.9 million).

No other special conditions have been agreed between Gasunie and the group companies concerning the non-current loans granted. No provision has been made for expected credit losses, because there is no reason to do so on the basis of historical data and current outlook.

The non-current loan granted to GTS totalled € 3,451.3 million at year-end 2021 (year-end 2020: € 3,583.1 million). This concerns the de facto balance of borrowings drawn under a loan facility capped at € 6.0 billion, made available as of 1 January 2014. The loan terminates on 31 December 2029 and has an extension option. It has been agreed with GTS that the facility can be drawn or redeemed without restrictions during the term of the loan. No repayment schedule has been agreed. As a result of the split of GTS B.V., part of the non-current loan was transferred to Gasunie Assets B.V. (€ 116.0 million) and Maasvlakte Storage B.V (€ 6.0 million). The loan conditions were not affected by this transfer.

GTS is the transmission system operator of the national gas grid as defined in the Dutch Gas Act. The Dutch Minister of Economic Affairs and Climate Policy has set rules with regard to proper financial management by a transmission system operator (Besluit Financieel Beheer Netbeheerders (‘BFBN)). Each quarter, taking account of the provisions of the BFBN, GTS must assess whether the credit facility should be redeemed or drawn in order to meet the BFBN requirements. In this periodic assessment, the company not only takes into account the current financial position, but also the expectations for the coming years regarding the expected volume and timing of the investment expenditure, the expected dividend payments and the expected operating expenses for the gas transport network. Due to the size and volatility of these variables, it is not currently possible to make a reliable estimate regarding potential future repayments. For this reason, the loan issued is fully presented under non-current receivables as at the balance sheet date.

At year-end 2021 the non-current loans granted to Gastransport Noord-West Europa Holding totalled € 420.7 million (year-end 2020: € 495.6 million). The various tranches of these loans terminate on 31 December 2022 and 31 December 2023. It has been agreed with Gastransport Noord-West Europa Holding that full or partial repayments of all loans may be made during the term of the loan. The current part of the non-current loans to group companies was € 43.0 million at year-end € 2021 (year-end 2020: zero). This amount is not recognised separately under current receivables.

The non-current loans granted to Gasunie BBL totalled € 80.1 million at year-end 2021 (year-end 2020: € 92.8 million). This is the balance drawn on a loan facility capped at € 200.0 million, made available as of 12 December 2014. The loan expires on 1 December 2024 and has an extension option. It has been agreed with Gasunie BBL that the facility can be drawn or redeemed during the term of the loan.

The loans granted to other participating interests amounted to € 21.3 million at year-end 2021 (year-end 2020: € 23.9 million). The interest rate on these loans varies depending on the participating interest’s risk profile.

Intra-group positions arise from services provided by N.V. Nederlandse Gasunie to group companies and vice versa, from dividend payments within the group and from cash pool transactions carried out by the head of the group on behalf of the group companies as part of normal continuing operations.

No repayment schedule has been agreed for the receivables from group companies; the receivables have the characteristics of a current account facility.

In certain cases, the group company pays arm’s length interest on the balance of the intra-group receivables, based on a variable interest rate plus a surcharge appropriate to both Gasunie’s risk profile and that of the group company in question.

No provision has been made for expected credit losses because, on the basis of historical data and the current outlook for the group companies in question, there is no reason to do so.

The authorised share capital amounts to € 756,000 and is divided into 7,560 ordinary shares, each having a nominal value of € 100. At year-end 2021, 1,513 of these shares were in issue and had been paid up in full. No movements took place in the issued and paid-up shares during the financial year (2020: the same).

At year-end 2021, all shares in issue were held by the State of the Netherlands (year-end 2020: the same).

The revaluation reserve relates to the revaluation of the tangible fixed assets. This revaluation was connected to the division of Gasunie and the subsequent introduction of IFRS in 2005 and was calculated in line with the situation as at 1 January 2004. Deferred taxation relating to the revaluation is recognised in the liability for deferred taxation, which is part of the deferred tax assets for the Dutch fiscal unity. The revaluation reserve is realised in proportion to the depreciation of the tangible fixed assets to which the revaluation reserve relates.

Movements in the revaluation reserve are as follows:

For further details of the change to the corporate income tax rate, see note 10 ‘Deferred tax assets’.

The legal reserve relates to the legal reserve for participating interests which concerns the 9.0% interest in Nord Stream. This interest is measured at fair value. Since Gasunie has no control over this interest and therefore cannot enforce profit distributions, a legal reserve has been recognised for that part of the fair value measurement that exceeds the original acquisition price.

Movements in the legal reserve are as follows:

More detailed information about the valuation of the interest in Nord Stream can be found in note 9 ‘Other participating interests’.

Movements in the other reserve are as follows:

For a description of the movements, please refer to note 7 ‘Investments in joint ventures’, note 10 ‘Deferred tax assets’, note 20 ‘Employee benefits’, note 41 ‘Revaluation reserve’ and note 44 ‘Unappropriated result’.

The group company GTS is the network operator of the national gas grid as defined in the Netherlands in the Dutch Gas Act. The Dutch Minister of Economic Affairs and Climate Policy has issued rules with regard to proper financial management by a network operator by way of the BFBN. These rules consist of a number of financial ratios, including a minimum for equity, which can lead to restrictions with regard to the level of GTS’ distributable reserves. When the occasion arises, such circumstances could also affect the level of N.V. Nederlandse Gasunie’s distributable reserves. At year-end 2021, no such restriction applied and no reserve provided for by the articles of association or legal reserve was recognised (year-end 2020: the same).

Movements in the unappropriated result are as follows:

The 2020 financial statements were adopted by the General Meeting of Shareholders on 29 March 2021. The General Meeting of Shareholders has appropriated the result in accordance with the Executive Board’s proposal.

The result for 2020 amounted to a profit of € 599.7 million, of which € 262.3 million was distributed as dividend in 2021. The remainder of € 337.4 million was added to the other reserves.

The Executive Board proposes that, of the profit for 2021, an amount of € 217.5 million be paid as dividend to the shareholder and that € 93.2 million be added to the other reserves. The dividend per share is € 143.8 thousand.

This proposal for appropriation of the result has not been recognised in the balance sheet as at 31 December 2021 or in the notes.

Provisions can be broken down as follows:

The restructuring provision relates to the planned closure of two regional offices in early 2022 and the associated staffing and material consequences. The restructuring provision is expected to have a term of less than one year.

For more detailed information about the other provisions, please refer to note 19 ‘Deferred tax liabilities’, note 20 ‘Employee benefits’ and note 21 ‘Other provisions’ in the notes to the consolidated financial statements.

Trade and other payables can be broken down as follows:

Tax liabilities relate to the wage tax payable and social security contributions.

The other liabilities and accruals consist mainly of interest payable, receivable invoices and security deposits received with a value of € 36.9 million (2020: € 31.6 million). Security deposits received are securities that customers of N.V. Nederlandse Gasunie have given to the company or its group companies to cover the risk of bad debt. A market interest charge is calculated for the security deposits.

Due to the current nature of the trade and other payables, the fair value approximates the carrying amount of these liabilities.

Intra-group positions arise from services provided by N.V. Nederlandse Gasunie to group companies and vice versa, from dividend payments within the group and from cash pool transactions carried out by the head of the group on behalf of the group companies as part of normal continuing operations.

No repayment schedule has been agreed for the liabilities to group companies; the liabilities have the characteristics of a current account facility.

In certain cases, Gasunie pays arm’s length interest on the balance of the intra-group payables, based on a variable interest rate plus a surcharge appropriate to both Gasunie’s risk profile and that of the group company in question.

N.V. Nederlandse Gasunie procures goods and services externally for its group companies and/or other participating interests. Furthermore, N.V. Nederlandse Gasunie is the legal employer of employees who work for Gasunie and its group companies. N.V. Nederlandse Gasunie’s net revenue largely comprises sums charged to its group companies and/or other participating interests for the activities of its own personnel and/or the supply of externally procured goods and services. N.V. Nederlandse Gasunie acts as a principal with respect to its group companies.

Costs of subcontracted work and other external costs can be broken down as follows:

The costs of subcontracted work and other external costs mainly comprise goods and services which N.V. Nederlandse Gasunie procures for providing services to its group companies, including GTS as the national transmission system operator for gas transport in the Netherlands. The cost of network operations mainly comprises the procurement of nitrogen production capacity, electricity and gas for the company’s own use for gas transport. The increase in costs compared to 2020 is due mainly to higher energy prices and a slight increase in the use of resources for gas transport operations.

Personnel expenses are as follows:

The average number of employees in full-time equivalents totalled 1,337 in 2021 (2020: average of 1,277 full-time equivalents), 2 of whom (2020: 2) are stationed outside the Netherlands.

The specification of the remuneration for members of the Executive Board and Supervisory Board has been included in note 27 ‘Personnel expenses’ to the consolidated financial statements.

Other costs can be broken down as follows:

Other costs mainly comprise goods and services which N.V. Nederlandse Gasunie procures for providing services to its group companies, including GTS as the national transmission system operator for gas transport in the Netherlands. Other costs consist mainly of insurance costs and other material and personnel expenses.

Financial income and expenses can be broken down as follows:

Interest expenses and similar expenses primarily relate to the interest charged on non-current loans. The drop in interest expenses can mainly be explained by the effects of the refinancing arrangements in 2021. Two bond loans were refinanced based on the maturity schedule at a substantially lower rate of interest.

Interest income and similar income mainly covers interest charged on loans to group companies and, in certain cases, interest on tax assessments. As a result of the lower interest expenses of N.V. Nederlandse Gasunie, interest expenses charged to group companies were also down. Interest income is based on the weighted average interest rate of N.V. Nederlandse Gasunie’s non-current loan portfolio plus 12.5 basis points (2020: the same).

N.V. Gasunie heads the fiscal unity in the Netherlands for the purposes of corporate income tax and VAT. The tax expense in the statement of profit and loss can be broken down as follows:

The movements in deferred taxation in 2020 and 2021 are partly attributable to the changes in the Dutch corporate income tax rate. For a more detailed explanation of the change to the corporate income tax rate, see note 10 ‘Deferred tax assets’. Furthermore, the reversal of an impairment previously recognised had significant consequences for both deferred taxation and the allocation of part of the tax expense to Gasunie Transport Services in 2020.

For information on other items in the company statement of financial position and statement of profit and loss, please see the notes to the consolidated financial statements.

The list of group companies and other participating interests is as follows: