11 Additional notes to the consolidated financial statements

As a European energy infrastructure company, Gasunie has continuously monitored the consequences of the COVID-19 pandemic on its operations and its financial position. In so doing, the company considered a range of scenarios which were repeatedly updated throughout 2021 on the basis of the most recent information and developments. Additional measures were taken to be able to continue to perform our operations – including the continuity of the gas transport and gas storage – safely and reliably.

The financial results for 2021 and financial position as at year-end 2021 were not significantly adversely affected by the pandemic. No important operations were halted and major investment projects were continued, with adjustments due to stricter safety guidelines where necessary. Several important projects, however, did suffer delays due to the impact of the pandemic.

The revenue and costs of regulated activities and those which are non-regulated or are exempt from regulation did not deviate substantially from the business plan as a result of the pandemic. There were no changes to the measurement of sales, purchase and lease contracts in 2021. The existing contracts do not give rise to the recognition of additional liabilities or provisions in the balance sheet. .

The refinancing calendar was unaffected by the pandemic. The liquidity position is good, including access to money markets and capital markets. The company did not make use of the emergency financial measures brought in by the Dutch and German governments. The COVID-19 pandemic had no significant consequences for the valuation of trade and other receivables. The dividend policy has also remained unchanged.

In particular, the company investigated whether the COVID-19 pandemic affected the transactions recognised in accordance with the following reporting standards:

• Revenue recognition
• Measurement of fixed assets
• Financial instruments
• Leases
• Provisions
• Income taxes

The company concluded that in 2021, like in the 2020 financial year, the COVID-19 pandemic had no major consequences for the application of the aforementioned accounting policies. For the 2022 financial year, the company again expects no major consequences for the application of the aforementioned accounting policies.

In 2021, the company faced rapidly rising prices for the gas and electricity it buys for its gas transport operations, balancing actions in the gas transport network, and the internal and external production of nitrogen for quality conversion. Gas and electricity prices were very volatile, especially in the second half of the financial year. Of the total increase in energy costs in 2021, approximately € 80 million to € 85 million is the result of higher energy prices. Under current regulations in the Netherlands and Germany, costs relating to trends in energy prices are partly offset in future tariffs.

On 1 February 2021, ACM published the 2022-2026 method decision for the group company GTS. When it comes to GTS’s energy costs, the 2022-2026 method decision does not allow GTS to offset additional costs due to energy prices in its tariffs. In GTS’s view, ACM’s approach, which puts the price risk entirely on GTS, is based on an inaccurate picture of GTS’s energy costs and GTS’s influence over these costs and leads to disproportionate financial risks for the company. On 10 December 2021, GTS lodged an appeal against the 2022-2026 method decision with the Dutch Trade and Industry Appeals Tribunal (College van Beroep voor het bedrijfsleven (CBb)), objecting to the energy costs aspect among other things. On the date that the 2021 financial statements were prepared, it was not known when the CBb will deal with the appeals lodged.

More information about the consequences of energy price developments on the measurement of the gas transport network can be found in note 4 ‘Impairment tests’.

In 2021, the company paid out € 262.3 million (2020 financial year: € 288.4 million) in dividend to its sole shareholder, the Dutch State. This was the appropriation of the result for the 2020 financial year following a decision by the general meeting of 29 March 2021. For further details, see note 44 ‘Unappropriated result’. 

While there were no business combinations in 2021 (2020: acquisition of ZEBRA gas pipeline and EHD networks), a number of new entities were set up in 2021 with the aim of further shaping the energy transition. These new entities will focus on developing CCS, heat, and hydrogen activities.

The establishment of these entities had no significant effect on the consolidated result and the consolidated cash flows for 2021 nor on the consolidated equity at year-end 2021 and has therefore not been explained in any more detail in these financial statements. The newly established entities have been included in note 55 ‘List of group companies and participating interests’.

The financial information is segmented in line with the company’s activities. The operating segments reflect the management structure. The company differentiates between the following segments:

• Gasunie Transport Services
  This segment covers network operations in the Netherlands and is responsible for managing gas transport, developing the network and related plants, and promoting market forces.
   
• Gasunie Deutschland
  This segment covers network operations in Germany and is responsible for managing gas transport, developing the network and related plants, and promoting market forces.
   
• Participations
  This segment focuses on developing energy transition projects, utilising existing participating interests to the full and facilitating new gas flows to north-western Europe using an LNG connection and long-distance pipelines. This segment also includes a number of joint arrangements for pipelines that connect the Gasunie transport network with markets outside the Netherlands.

The accounting policies for measurement of assets and liabilities and the determination of the results used for the operating segments are the same as the accounting policies used when drawing up these consolidated financial statements. The assets, revenues and results of a segment comprise items directly related to the segments and items that can reasonably be attributed to them. Because the financing of the company mainly takes place at group level, liabilities are not segmented and are therefore not reported on separately. Transactions between companies which belong to the segments are carried out at arm’s length. Transactions between segments are eliminated in the financial information by operating segment.

The information about revenues and the result for each operating segment is as follows:

During 2021, the Gasunie Transport Services operating segment provided inter-segment services worth € 16.9 million (2020: € 8.9 million), the Gasunie Deutschland operating segment provided such services to the value of € 0.4 million (2020: € 0.1 million) and the Participations operating segment provided such services to the value of € 28.7 million (2020: € 27.3 million).

The information about assets by operating segment is as follows:

As a result of the split of GTS B.V., an amount of € 243.9 million in assets was transferred from the Gasunie Transport Services segment to the Participations segment at year-end 2021. More detailed information about the split of GTS B.V. can be found in note 38 ‘Tangible fixed assets’. For a more detailed explanation of the investments in tangible fixed assets, see note 5 ‘Tangible fixed assets’.

Allocated assets include tangible fixed assets, investments in joint ventures and associates, and investments in other participating interests. Unallocated assets comprise deferred tax assets and current assets.

Investments in and depreciation of tangible fixed assets and other non-monetary items are as follows:

Other material non-cash items consist of, among other things, movements in personnel-related and other provisions, results of disposals and certain costs of the defined benefit pension plan. In 2020, the other important non-monetary items of the Gasunie Transport Services segment were significantly affected, in a positive sense, by the reversal of a previously recognised impairment of € 300.0 million.

Fixed assets by geographical area are determined primarily on the basis of the area where the activities take place. The company differentiates between two geographical areas: the Netherlands and outside the Netherlands.

The geographical distribution of the assets is as follows:

Fixed assets included in the table cover tangible fixed assets and the share in the joint ventures, associates and other participating interests.

Operating segment information about joint ventures and associates is as follows:

Investments in joint ventures mainly refer to the Gate terminal and SKW participating interests in 2021.

More details about the movements in joint ventures and associates can be found in note 7 ‘Investments in joint ventures’ and note 8 ‘Investments in associates’.

At the end of each reporting period, the company determines whether there are any events or indications for impairment of fixed assets. As mentioned in note 1 ‘Significant matters and events in 2021’, the COVID-19 pandemic had – like in 2020 – no consequences for the valuation of fixed assets as at 31 December 2021. The outcomes of this analysis for each significant cash-generating unit are shown below.

The valuation of the gas transport network in the Netherlands partly depends on the company’s regulated income. In early 2021, the company analysed the valuation of the gas transport network following the 2022-2026 method decision for GTS. The outcome of this investigation prompted reversal of an impairment of € 300.0 million that had been recognised in the 2020 financial statements and that was mainly due to a lower IFRS discount rate after taxation. The other main assumptions used in the impairment test regarded the determination of static efficiency (GTS’s efficiency compared to that of other European network operators) after the 2022-2026 regulatory period, and the capital cost allowance for the 2022-2026 regulatory period. When it comes to the aforementioned assumptions, no new insights were gained in 2021 that are relevant in preparing the 2021 financial statements.

In early 2021, both Gasunie’s group company GTS B.V. and market parties filed a pro forma appeal against the method decision with the Dutch Trade and Industry Appeals Tribunal (College van Beroep voor het bedrijfsleven (CBb)). The grounds for this appeal were further detailed in December 2021 in a notice of appeal filed with the Trade and Industry Appeals Tribunal. GTS’s objections relate to the robustness of the benchmark analysis, including how static efficiency is determined, how the regulated return is determined, and the regime of offsetting energy procurement costs in future tariffs. On the date that the 2021 financial statements were prepared, it was not known when the CBb will deal with the appeals lodged.

For the 2021 financial year, costs incurred due to trends in energy costs in the Netherlands are partly offset in future tariffs. Although the outcome of the appeal lodged with the Trade and Industry Appeals Tribunal for the 2022-2026 period has not yet been finalised, the company concluded that the increase in energy prices over the second half of 2021 is not an indication for an impairment of the gas transport network as at 31 December 2021. This conclusion also took into account the fact that energy prices are hard to predict and, at year-end 2021, subject to various national and European factors, such as how quickly the economy picks up, the filling levels of gas storage facilities, and various geopolitical developments. 

The company’s assessment has not revealed any other evidence or indication of an impairment of the gas transport network in the Netherlands as at 31 December 2021.

The valuation of the gas transport network in Germany partly depends on the company’s regulated income. In 2019, the German Ministry for Economic Affairs and Energy explored legislative options for, among other things, an amendment to the investment allowance scheme. Since then, they have looked into whether the current regulatory framework needs to be amended in this area to accelerate the investments that are partly needed for the energy transition. The changes are intended to get planned and approved investments implemented faster.

On 25 June 2021, the German Federal Council approved the new legislation (the ‘AregV Novelle’). One key change is that the existing investment allowance scheme will be abolished as of the start of the new regulatory period on 1 January 2023. At the same time, however, the obligation to repay historically accumulated investment allowances will also cease to apply. Aside from that, the way the capital cost allowance is calculated for other investments will also change. There will be a transitional regime through to 2028.

The company has looked into whether Germany’s AregV Novelle legislation could be an indication for an impairment of the gas transport network. The company’s analysis shows that - in part due to the transitional measures - the impact of scrapping the investment allowances and introducing a capital cost allowance model will largely be compensated by the cancellation of the repayment obligation with respect to historically accumulated investment allowances.

Based on these considerations, the company concludes that implementation of the AregV Novelle is not an indication for an impairment of the gas transport network in Germany as at 31 December 2021.

For the 2021 financial year, costs incurred due to trends in energy costs in Germany are, to the extent that they relate to gas transport and associated activities, offset fully in future tariffs. This conclusion also took into account the fact that energy prices are hard to predict and, at year-end 2021, subject to various national and European factors, such as how quickly the economy picks up, the filling levels of gas storage facilities, and various geopolitical developments. The company has concluded that increased energy costs are not an indication for an impairment of the gas transport network in Germany as at 31 December 2021.

The company’s assessment has not revealed any other evidence or indication of an impairment of the gas transport network in Germany as at 31 December 2021.

The company’s assessment has not revealed any evidence or indication of an impairment of the BBL Company gas transport network as at 31 December 2021.

The company’s assessment has not revealed any evidence or indication of an impairment of the EnergyStock gas storage facility as at 31 December 2021.

The company’s assessment has not revealed any evidence or indication of impairment of other tangible and financial fixed assets as at 31 December 2021.

Movements in tangible fixed assets in 2021 were as follows:

In the Netherlands, investments related mainly to the construction of the new nitrogen plant and the switching of certain customers from high-calorific to low-calorific gas. In Germany, investments related to the construction of the natural gas pipeline to the Volkswagen plant in Wolfsburg and the development of phase 2 of the EUGAL pipeline, which was taken into use on 1 April 2021. The investments column also contains transfers from fixed operating assets under construction to the other asset categories for assets that were taken into use in 2021.

Tangible fixed assets includes an amount of € 101.7 million (year-end 2020: € 98.0 million) for right-of-use assets at year-end 2021. The company has economic but not legal ownership of these right-of-use assets. More detailed information about the associated lease liabilities can be found in note 17 ‘Lease liabilities’.

Movements in right-of-use assets associated with leases in 2021 are as follows:

Movements in tangible fixed assets in 2020 were as follows:

The sums mentioned under acquisitions in 2020 relate to the acquisition of the ZEBRA gas pipeline and the EHD networks.

Movements in right-of-use assets associated with leases in 2020 are as follows:

The cost and accumulated depreciation of tangible fixed assets were as follows:

The company uses assumptions to determine the relevant depreciation periods. The company concluded that, at year-end 2021, there was no reason to review the depreciation periods.

The company’s assets are largely made up of regulated assets. The regulatory systems in the Netherlands and Germany respectively allow the company to recoup investments in tangible fixed assets. The depreciation periods for such investments are set by the regulatory authorities for the regulated networks in the Netherlands (ACM) and Germany (BNetzA). In both the method decision for GTS that applied to the 2021 financial year and the method decision for GTS for the 2022-2026 period, ACM still assumes - based partly on their energy transition studies -  a long depreciation horizon (up to as long as 55 years for transport pipelines) for the gas transport network. At year-end 2021, the German gas transport network was in a similar situation in terms of the useful life assumed by the regulatory authority for the gas transport network. The company took the view of the regulatory authorities into account in determining the depreciation periods under IFRS.

Should the regulatory authorities in the Netherlands and Germany decide to amend the regulated depreciation periods in the future, possibly in response to more concrete developments around the phasing out of natural gas transmission, the company will again take that development into account in the determination of the depreciation periods under IFRS. This may in certain cases lead to a shortening or extension of the depreciation periods, which would change the depreciation charges under IFRS. However, this will in practice primarily affect the depreciation of mainline and regional transport pipelines, as the other assets generally have a relatively shorter technical life.

Another key consideration in determining depreciation periods under IFRS is the company’s own view on the energy transition and tightened environmental and climate targets. This goes both for the regulated and for the non-regulated (transport-related) assets.

The company shares ACM’s and BNetzA’s view that the existing gas transport network will continue to be needed for natural gas transmission for the medium to long term.

However, the company also considers the possibility that the existing gas transport infrastructure could in the long term gradually be used to transport alternative energy carriers, such as hydrogen. Given the recent political decisions in the Netherlands with respect to hydrogen, heat, and CO₂, and the new government’s strong commitment to the climate, this long-term vision is becoming increasingly concrete and is expected to be further worked out over the coming years. The new German government that was recently sworn in is also working on plans in the climate domain, in which hydrogen (transport) is also expected to feature heavily. The company also conducts regular assessments of the impact of these developments on the depreciation periods under IFRS.

Finally, the company checks in its regular assessments of depreciation periods whether they relate to assets that will in the medium term no longer be used for gas transport. In such specific cases, the company may amend the depreciation periods for certain assets. The anticipated closure of the Groningen field and increased imports from sources outside the Netherlands are changing gas flows and consequently the use of certain parts of our gas infrastructure, including compressor stations and related components and other assets, in specific locations. These installations have been or are due to be decommissioned in the near future and will be depreciated more quickly until the time of decommissioning. When determining the technical decommissioning method, the possibility of recommissioning the installations in the future if an alternative use is foreseen for hydrogen, heat, and CO₂ is also taken into consideration. The installations will therefore not be redeveloped, but sustainably preserved.

With respect to the other regulated and non-regulated assets, mainly underground gas storage facilities, the company does not have any indications that the expected useful life is shorter than the current depreciation period. In fact, these assets are subject to a considerably shorter depreciation period, which is generally based on their shorter technical life.

The depreciation periods for the most important asset categories are as follows:

Right-of-use assets are depreciated in accordance with the above categories; leased land is depreciated in accordance with the useful life of the asset with which the land lease is connected. Depreciation is not calculated on land, gas and nitrogen stocks and assets under construction.

The company has interests in the following joint operations, either directly or indirectly:

The Ambigo V.O.F. joint arrangement was terminated in January 2021. This entity had already ceased operating. In June 2021, following the winding up of Ambigo V.O.F., Gasunie Ambigo B.V. was also wound up. Both transactions had no significant financial consequences for the company.

BBL Company was founded in 2004 and it has been operating a gas pipeline between Balgzand in the Netherlands and Bacton in the United Kingdom since 2006. Gasunie has a 60% financial interest in the BBL Company joint arrangement. The other partners, Fluxys and Uniper, each hold a 20% interest in the joint arrangement. Based on the agreements between the partners of BBL Company, significant decisions require a majority of 80%. Gasunie therefore has no control. Moreover, a V.O.F. structure is considered to be a transparent structure in the Netherlands, with the partners having a direct interest in the assets and liabilities of the V.O.F. The legal and economic reality of BBL Company is therefore comparable with that of a joint operation.

In 2017, Gasunie Deutschland acquired a 16.5% interest in the joint arrangement that is developing the EUGAL pipeline project. EUGAL stands for European Gas Pipeline Link (Europäische Gas-Anbindungsleitung - EUGAL). The other interests are held by the German gas transport network operators Gascade, ONTRAS and Fluxys. Based on the contractual arrangement, Gasunie has joint control. The EUGAL pipeline will run from the town of Greifswald on the Baltic Sea to the southern part of Saxony and from there on to the Czech border, covering a distance of approx. 485 kilometres. Gascade retains a 50.5% financial interest in the project and is responsible for construction and management of the pipeline. Phase 1 of the EUGAL pipeline became operational on 1 January 2020. The second pipeline has been operational since April 2021.

The company has interests in the following joint ventures, either directly or indirectly:

Biogas Netwerk Twente is a joint arrangement with Cogas for the construction and management of pipelines and associated facilities, and the construction, maintenance and provision of installations for biogas feed-in into the gas transport network. Gasunie’s share in the voting rights is 50%. Based on the contractual arrangement, Gasunie has joint control.

SCW Systems and Gasunie founded the SKW Alkmaar demonstration facility (Demonstratiefaciliteit SKW) in 2017. It is a joint arrangement for developing installations for biogas feed-in into the gas transport network by means of supercritical water gasification (SKW).

The aim of the joint arrangement is to build a demonstration facility to demonstrate that this new technology can work robustly on an industrial scale over the coming years. At year-end 2021, Gasunie’s financial interest was reduced to 35%. Based on the contractual arrangements, there is joint control.

DEUDAN stands for German/Danish Natural Gas Transport (Deutsch/Dänische Erdgastransport - DEUDAN) and operates a gas pipeline in Germany between the Itzehoe region and the German/Danish border in the Flensburg region. The other shareholder is Open Grid Europe. Gasunie Deutschland’s financial interest in this participating interest differs from its voting right. Gasunie Deutschland has a 75% interest in DEUDAN. However, based on the agreements between the shareholders, the two companies have joint control.

Gate terminal is a joint arrangement with Royal Vopak for the operation of a terminal for liquefied natural gas (LNG) on the Maasvlakte in the Netherlands. Gasunie and Royal Vopak each have a 50% financial interest in both Gate terminal Management B.V. and Gate terminal C.V. Gate terminal B.V. is the actual operator of the LNG terminal and is wholly-owned by Gate terminal C.V. However, based on the agreements between the shareholders, the two companies have joint control.

German LNG Terminal is a joint arrangement between Gasunie, Royal Vopak and Oiltanking with the aim of developing an LNG terminal in northern Germany. Gasunie’s economic interest and share in the voting rights of this joint arrangement is 33.3%. Based on the contractual arrangement, Gasunie has joint control. An investment decision could not be made yet in 2021 because of the lack of certainty about the customer contracts. German LNG Terminal is working with the potential customers and the German government to get this investment decision made.

NETRA stands for North German Natural Gas Pipeline (‘Norddeutsche Erdgas Transversale’) and manages a network of approx. 350km of pipeline and two compressor stations. The other shareholder in NETRA is Open Grid Europe. Gasunie Deutschland has a 44.1% financial interest in NETRA. Open Grid Europe has the remaining financial interest of 55.9%. Gasunie Deutschland’s financial interest in this participating interest differs from its voting right. However, based on the agreements between the shareholders, the two companies have joint control.

Porthos is a joint arrangement between Gasunie, Energie Beheer Nederland (EBN) and Port of Rotterdam Authority. Porthos focuses on storing CO₂ in empty gas fields on the North Sea bed. The project extends to the development of a carbon capture, storage and transport system, which various industries and businesses can connect to. Gasunie is contributing its expertise particularly in terms of transport and storage. Based on the agreements between the shareholders, the partners have joint control. Gasunie has a 33.3%- 50% financial interest.

The movements in joint ventures have been aggregated as follows:

An amount of € 9.8 million of investments made in 2021 relates to Gate terminal. The remainder of the investments relates mainly to joint ventures which focus on building infrastructure for the further development and integration of alternative energy carriers. The direct movements in equity refer to the revaluation of the interest in Gate terminal as a consequence of the change in fair value of one of Gate terminal’s cash flow hedges. Gasunie has recognised this change in equity in other comprehensive income.

Of the joint ventures, Gate terminal has a material effect on the company’s equity and result.
Information about the carrying amount, the share in other comprehensive income, the result for the financial year and the dividend received on investments broken down into Gate terminal and other joint ventures is as follows:

Due to the material effect on Gasunie’s equity and result, more detailed information is included below with regard to Gate terminal.

Gate terminal’s consolidated financial information is as follows:

At year-end 2021, investments in associates related solely to the interest in Trading Hub Europe.

In 2021, GASPOOL Balancing Services GmbH (GASPOOL) merged with NetConnect Germany GmbH & Co. KG (NCG) to form Trading Hub Europe GmbH (THE). Gasunie used to have a 20% stake in GASPOOL and the merger led to Gasunie acquiring a financial interest in THE. The merger came on the back of a change to regulations in Germany that is intended to create one single German market area. As a result of the merger, the separate northern and southern German market areas ceased to exist on 1 October 2021, creating a jointly managed market area with a single entry and exit zone.

The merger did not have any significant financial consequences for Gasunie. Gasunie’s financial interest in THE is € 0.5 million, which equals the value of Gasunie’s stake in GASPOOL. Under the joint arrangement, the eleven shareholders each hold a 9.09% stake and Gasunie is able to exert significant influence over the relevant operations of THE. Therefore, the interest in THE is recognised as an associate applying the equity method.

THE has no material effect on the company’s equity and result. At year-end 2021, the balance of the outstanding current loan to THE stood at € 10.0 million (2020: € zero). This amount is recognised under current receivables. The loan facility to THE totals € 25.0 million. See note 12 ‘Trade and other receivables’ for more information about this.

Gasunie’s total share in the other comprehensive income of associates in 2021 is € zero (2020: € zero).

The other participating interests are as follows:

EDSN works in conjunction with the regional transmission system operators, TenneT and GTS on central market facilitation for the energy sector. EDSN develops and manages IT infrastructure for the energy market. ESDN has its registered office in Arnhem, the Netherlands. Based on agreements with shareholders, Gasunie has no significant influence in EDSN.

Nord Stream operates the two gas pipelines that form the Nord Stream 1 connection through the Baltic Sea from Russia to Germany. Nord Stream was acquired in 2008. Based on agreements with shareholders, Gasunie has no significant influence in Nord Stream.

PRISMA is a European platform for trading transport capacity. Gasunie offers its transport capacity on this and other platforms. PRISMA has its registered office in Leipzig, Germany. Based on agreements with shareholders, Gasunie has no significant influence in PRISMA.

SCW Systems and Gasunie are the joint shareholder in Demonstratiefaciliteit SKW Alkmaar B.V. It is a joint arrangement for developing installations for biogas feed-in into the gas transport network by means of supercritical water gasification (SKW). At year-end 2021, Gasunie acquired a 5.5% stake in SCW Systems. Based on agreements with shareholders, Gasunie has no significant influence in SCW Systems.

The fair value of the other participating interests was € 515.2 million at year-end 2021 (€ 509.3 million at year-end 2020). Of the total movement, an amount of € 1.1 million (2020: € 5.7 million) was recognised in other comprehensive income. This concerns the direct movements in equity. Income from dividend payments by Nord Stream amounted to € 32.5 million (2020: € 31.3 million). Like in 2020, PRISMA, EDSN and SCW Systems paid no dividends in 2021.

The measurement of the fair value of other participating interests is based on the present value of projected future cash flows. The determination of the fair value took place according to level 3 (year-end 2020: level 3). When determining the fair value of the aforementioned other participating interests, Gasunie applies a discount rate based on the risk-free market interest rate, plus credit and liquidity surcharges. The discount rate varies between 3% and 6% after tax, depending on the participating interest’s risk profile.

The valuation of the participation in Nord Stream is based on the present value of projected future cash flows. Use was made of a Nord Stream calculation model, which is annually updated in line with the most recent business plan. This model is presented for assessment and approval to the shareholders of Nord Stream, including Gasunie. The model is additionally assessed by Gasunie at regular intervals on the basis of Nord Stream’s periodic financial reports. The projected cash flows are partly based on contractual agreements. All things being equal, if the discount rate changes by 0.5% points, this will indicatively result in a change in the fair value amount of € 17.0 million at year-end (2020: € 20.0 million).

The assumption for the interests in PRISMA, EDSN and SCW Systems is that, partly on account of their relatively small size, the carrying amount is an estimate of the fair value. A fair value calculation and sensitivity analysis have not been included in the financial statements for these interests.

Deferred tax assets arise from temporary differences between the measurement of assets and liabilities for financial reporting purposes and their measurement for tax purposes. There are no capitalised losses carried forward.

The temporary differences concern the tax treatment of the purchase price paid by the Dutch State, the differences in respect of the measurement of tangible fixed assets and other temporary differences. The first difference arose when Gasunie was split into a transport and a trading company in 2005. At the time, the Dutch State made a deemed capital contribution to the company for tax purposes. Gasunie did not capitalise this purchase price for tax purposes under IFRS. This recognition of the purchase price has given Gasunie an additional tax depreciation potential, for which a deferred tax asset has been recognised.

The temporary difference resulting from the measurement of tangible fixed assets is mainly due to the one-time revaluation of tangible fixed assets when Gasunie was split in 2005 and the subsequent transition to IFRS. In addition, the depreciation method for tax purposes deviates from time to time from the depreciation principles under IFRS (including the recognition of impairments and their reversals). Such temporary differences are recognised in the balance sheet. On balance, temporary differences in tangible fixed assets result in a deferred tax liability.

The other differences relate mainly to temporary differences resulting from employee benefits.

The aforementioned deferred tax assets and liabilities relate to the fiscal unity for Dutch corporate income tax and satisfy the conditions for setting off tax debts. Deferred taxation is therefore presented as a net amount.

The movements in deferred tax assets in 2021 are as follows:

The deferred tax assets at year-end 2021 to be settled within one year after the balance sheet date amount to € 29.8 million (year-end 2020: € 29.6 million). This amount is not shown separately under current assets.

At the end of 2021, the Dutch House of Representatives and Senate both approved the tax plan for 2022. As part of this tax plan, the corporate income tax will be raised to 25.8% as of 2022. This decision has a significant impact on the valuation of the company’s deferred tax assets.

Since the deferred tax impact of the tax treatment of the purchase price paid by the Dutch State was taken directly to equity, the effect of the changes to future rates for corporate income tax will also be taken directly to equity. This has led to an upward adjustment of € 38.9 million in 2021, (2020: € 167.5 million).

The tax impact of the revaluation of certain tangible fixed assets was also taken directly to the company’s equity, which is why the effect of the changes to the future rates of corporate income tax have been taken directly to equity here as well. This led to an adjustment of minus € 17.1 million in 2021 (2020: minus € 68.0 million).

The movements in deferred tax assets in 2020 are as follows:

Movements in deferred tax assets in 2020 related to regular movements as well as movements due to the change in corporate income tax rates. The reversal of an impairment recognised in the past had consequences for the measurement of deferred tax assets in 2020.

Inventories refer to items kept for regular daily maintenance, for the company’s own (future) investments and for projects for third parties.

The carrying amount of inventories at year-end 2021 amounted to € 49.7 million (2020: € 47.2 million). The valuation at year-end 2021 takes into account a write-down for obsolescent inventories of € 13.3 million (year-end 2020: € 13.7 million).

The movements in the provision for obsolescence are as follows:

Trade and other receivables are as follows:

Receivables from joint ventures and associates relate mainly to costs incurred and investments made by the joint ventures in which Gasunie is a partner, which are yet to be settled, and to a loan provided to Trading Hub Europe in 2021. At year-end 2021, an amount of € 10.0 million (year-end 2020: € zero) was recognised under this facility. The loan facility involves a maximum amount of € 25.0 million and was provided to cover a temporary need for additional liquidity for balancing actions as a result of rising energy prices. This loan facility has a term of under one year.

Other taxes consist of receivable VAT and receivable non-Dutch withholding tax on foreign dividends received.

Trade and other receivables are measured less a provision for doubtful debts. Movements in the provision for doubtful debts are as follows:

Trade and other receivables have a nominal term of less than one year. Please refer to note 24 ‘Financial instruments’ for the securities provided.

Trade receivables, receivables from joint ventures and other receivables totalled € 197.5 million at year-end 2021 (year-end 2020: € 150.4 million). The ageing of these receivables as at the balance sheet date is as follows:

The due and not impaired items are, as necessary, covered by bank guarantees or other securities obtained.

N.V. Nederlandse Gasunie and its wholly-owned Dutch group companies constitute a fiscal unity for corporate income tax. Gasunie Deutschland GmbH & Co. KG and its wholly-owned German group companies also constitute a fiscal unity for German corporate income tax purposes. Receivables and liabilities relating to corporate income tax on different fiscal unities are not set off.

The corporate income tax refund receivable is as follows:

Current receivables and liabilities relating to corporate income tax constitute the corporate income tax due for the current and previous financial years less any sums paid on receipt of provisional or final tax returns for the fiscal unities in question.

Movements in the corporate income tax refund receivable are as follows:

Cash and cash equivalents are as follows:

Bank balances carry an interest rate based on daily interest and are payable immediately.

The company’s policy regarding the capital and financial position is geared towards:

• guaranteeing the company’s continuity;
• financing investments in the network as well as enabling the energy transition, while actively taking sustainability goals into account;
• maintaining a capital and financing structure with a view to optimising borrowing costs and keeping good access to financial markets.

The company aims to have a financial profile which will enable it to implement its strategy and, at the same time, will lead to a satisfactory credit rating which matches the company’s profile and the shareholder’s policy.

Note 16 ‘Interest-bearing loans’ and note 24 ‘Financial instruments’ contain further information about the company’s financial position, the instruments used, and the size of these instruments.

Please also refer to the notes to equity in the company financial statements (note 40 ‘Issued share capital’, note 41 ‘Revaluation reserve’, note 42 ‘Legal reserve’, note 43 ‘Other reserves’ and note 44 ‘Unappropriated result’).

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

All shares issued are held by the Dutch State.

Given that at year-end 2021 the cash flow hedge reserve amounted to under € 0.1 million (year-end 2020: € zero), it has not been recognised separately in the equity.

Please refer to the notes to equity in the company financial statements (note 42 ‘Legal reserve’) for a description of the fair value reserve.

Items included under ‘other reserves’ are classified as accumulated profits.

At year-end 2021, the nominal amount of € 3,009.2 million (year-end 2020: € 3,102.4 million) in non-current loans comprised € 2,119.1 million (year-end 2020: € 2,552.4 million) in bond loans and € 890.0 million (year-end 2020: € 550.0 million) in private loans. The transaction costs and discount still to be amortised amounted to € 9.0 million at year-end 2020 (year-end 2020: € 9.1 million). These are loans drawn at group level, but which also serve as financing for group companies.

Movements in interest-bearing loans are as follows:

In 2021, two long-term bond loans were repaid in full on the maturity date.

In October 2021, the company issued a ‘sustainability-linked bond’ with a value of € 300.0 million. With an agreed term of 15 years, this bond will be repaid in one lump-sum payment at the end of the term. The fixed effective rate of interest is 0.76%. The loan was issued in compliance with the sustainability-linked bond framework. This framework is in line with the 2020 version of the sustainability-linked bond principles (SLBPs) of the International Capital Markets Association (ICMA). The company has set two targets that have to be achieved by 31 December 2030. The first target is for the company to reduce its methane emission levels by approximately 50% compared to the 2020 level. The second target relates to the CO₂-equivalent emissions that the company can influence, which are to be reduced by 30% by 2030, compared to the 2020 level. The sustainability targets could result in a coupon increase of 0.10% from 2030 onwards if the company has not achieved one target by 31 December 2030 and of 0.20% if it has failed to achieve either target. These coupon increases were not recognised in the effective interest at year-end 2021 because there is currently no reason to assume that the company will not hit the targets. 

In May 2021, an amount of € 90.0 million was drawn on a loan facility with the European Investment Bank (EIB) for the construction of GTS’s nitrogen installation. The fixed effective rate of interest agreed on for this loan is 0.258%. Repayment will be in a single lump-sum payment by May 2030. The remaining part of the loan facility, i.e. an amount of € 150.0 million, was drawn in June 2021. The fixed effective rate of interest agreed on for this part of the loan is 0.127%. Repayment will be in a single lump-sum payment by June 2029. Early repayment is permitted for both loan parts. Finally, a private loan of € 100.0 million was taken out in late 2021, with a term of (a maximum of) two years and a variable rate of interest. At year-end 2021, the effective interest rate for this loan stood at minus 0.78%.

The maturity schedule for interest-bearing loans (nominal value) is as follows:

Non-current loans, including current repayment obligations are as follows:

The weighted average effective interest rate on the non-current loans at year-end 2021 was 1.6% (year-end 2020: 2.4%).

No securities have been provided by the company to credit providers with regard to the interest-bearing loans. Neither were there any significant financial covenants or ratios with which the company had to comply.

The company’s loans with the European Investment Bank (EIB) with a remaining value of € 790.0 million at year-end 2021 are subject to a number of change-of-control conditions regarding the Dutch State holding shares in N.V. Nederlandse Gasunie and regarding N.V. Nederlandse Gasunie holding shares in GTS B.V. The company deems it highly unlikely that these change-of-control events will take place within the foreseeable future.

For more information on the financial risks associated with the interest-bearing loans and how the company manages the financial risk with the aim of limiting these risks, please refer to note 24 ‘Financial instruments’.

The company has entered into lease contracts covering such matters as land and buildings, regional transmission lines and the company vehicles. These right-of-use assets are for the company’s own use; there are no sub-leases involved. More detailed information about the associated right-of-use assets can be found in note 5 ‘Tangible fixed assets’.

Movements in lease liabilities are as follows:

In certain cases, lease terms are based on estimates. This is specifically the case for leases payable on leased land. While these properties are generally leased for an indefinite period, the company has the option to terminate the lease at short notice. The most likely lease period was measured by looking at the useful life of the asset, such as a pipeline or an installation, for which the land is leased.

The weighted average incremental borrowing rate in 2021 was 1.48% (2020: 1.55%). Lease contracts with a term of less than one year or with a contract value of less than € 5,000 are not included in the balance sheet. They represented less than € 0.1 million per year at year-end 2021 (2020: the same).

Modifications are interim adjustments of variables in the existing lease contracts that result in a change in the measurement of the agreements, such as expected or agreed lease terms and the amount of lease payments.

The remaining term of the lease liabilities is as follows:

The current part of the lease liabilities is presented separately under current liabilities.

Contract liabilities relate to the company’s revenue from contracts with customers. The payment schedule for certain contracts is not synchronous with the way in which the company is required to allocate revenues to the financial years. This happens in the case of contracts in which customers have made a financial contribution to an investment in specific transport capacity. In principle, these contributions are attributed to the contract with the customer and not to the asset to which the contribution relates. A contract liability is included for such customer contributions, taking account of the financing element in these contracts.

At year-end 2021, the contract liabilities totalled € 49.8 million (year-end 2020: € 50.6 million). The following table shows the movements in these contract liabilities.

The remaining term of the contract liabilities is as follows:

The current part of the contract liabilities is presented separately under current liabilities.

Deferred tax liabilities arise from temporary differences between the measurement of assets and liabilities for financial reporting purposes and the measurement for tax purposes. In particular, deferred tax liabilities mainly refer to temporary differences in the measurement of tangible fixed assets in Germany. In addition, there are a few other differences that lead to deferred tax liabilities and assets.

The deferred tax liabilities and assets relate to the fiscal unity for German corporate income tax and satisfy the conditions for setting off tax debts. Deferred taxation is therefore presented as a net amount.

The movements in deferred tax liabilities in 2021 were as follows:

The amount of deferred tax liabilities to be settled more than one year after the balance sheet date was € 193.9 million at year-end 2021 (year-end 2020: € 179.1 million).

The movements in deferred tax liabilities in 2020 were as follows:

The liabilities recognised in the balance sheet relating to deferred employee benefits can be broken down as follows:

The pension plan for employees of Gasunie Deutschland who joined the company before 2012 is a defined benefit pension plan, based on a final salary pension system. The entitlements of these employees have not been funded. This pension plan is treated as a defined benefit pension plan. 

For the most part, this is a non-current provision. The drop in the pension obligation in 2021 can be mainly explained by the increase in the discount rate at year-end 2021.

The pension obligation as at the end of the financial year is set out in the historical summary below:

The weighted average duration of the pension obligations was approximately 20 years at year-end 2021 (year-end 2020: approximately 21 years). The assumptions underlying the calculation of the pension obligations are as follows:

Movements in the present value of pension obligations are as follows:

The actuarial results are as follows:

The actuarial results for 2021 are affected mainly by an increase in the discount rate at year-end 2021 (2020: drop in the discount rate).

Actuarial results taken directly to other comprehensive income totalled € 10.9 million in 2021 (2020: a loss of € 6.2 million). At year-end 2021, the accumulated actuarial result, net of deferred taxation, showed a loss of € 36.3 million (2020: a loss of € 47.2 million). The actuarial results are accounted for in other comprehensive income.

The sensitivity of the calculation of the provision for pension obligations is as follows:

• If the discount rate changes by 0.1% point in otherwise unchanged circumstances, this is expected to lead to a change in the present value of pension entitlements and a change in other comprehensive income of € 2.1 million (2020: € 2.4 million).
   
• If the expected future salary increase changes by 0.1% point in otherwise unchanged circumstances, this is expected to lead to a change in the present value of pension entitlements and a change in other comprehensive income of € 0.4 million (2020: € 0.5 million).
   
• If the expected future pension increase changes by 0.1% point in otherwise unchanged circumstances, this is expected to lead to a change in the present value of pension entitlements and a change in other comprehensive income of € 1.6 million (2020: € 1.8 million).

The total pension expenses for the defined benefit pension plan as presented in the statement of profit and loss comprise:

This provision relates to long-service awards paid by the company to its employees. The movements in this provision are as follows:

For the most part, this is a non-current provision.

This provision relates to certain allowances that the company pays to its post-active and retired employees. The movements in this provision are as follows:

For the most part, this is a non-current provision.

Other provisions completely comprise the provision for certain abandonment costs and redevelopment.

The provision for abandonment costs and redevelopment was formed in 2010 following the company’s decisions to decommission or redevelop specific assets in the Netherlands. Legislation, regulations and permits, including those governing the environment and spatial planning, require redevelopment to take place in certain cases.

This provision relates to the redevelopment of decommissioned pipelines. The redevelopment programme also includes pipelines that have already been disconnected and former third-party pipelines for which the company is currently responsible. At year-end 2021, there will still be a term of several years left to run on the redevelopment programme.

The company deems it unlikely that transport pipelines and appurtenances will have to be completely removed. In its judgement, the company has taken into consideration that natural gas transmission will continue to be important over the coming years. Aside from that, the company sees sufficient opportunities for various alternative uses, including the transport of alternative energy carriers, such as hydrogen. The expectation is that the existing natural gas transmission network will gradually be repurposed for the transport of alternative energy carriers in the near and more distant future. Aside from that, the revenues from alternative use (in the longer term) less the costs of conservation are anticipated to offset the costs of removal, including societal costs. Based on the above considerations, a provision for abandonment costs for the gas transport network as a whole in the longer term has not been recognised.

In measuring the provision for abandonment costs and redevelopment, the company takes into account that its judgements and estimates may be affected by developments in the area of the energy transition and tightened environmental and climate targets. Given the recent political decisions with respect to hydrogen, heat, and CO₂, and a new government with a strong commitment to the climate, the long-term vision is becoming increasingly concrete and is expected to be further worked out over the coming years. On the balance sheet date, the company brings the provision for abandonment costs and redevelopment into line with the most recent developments. The aforementioned developments may in future years lead to an adjustment to the scope of the provision for redevelopment, such as if certain network components turn out not to be fit for an alternative use that was previously thought feasible. Aside from that, the provision can be adjusted if experience figures prompt a change to the redevelopment method or if the costs of historic redevelopments are reason to assume higher or lower costs for future redevelopments.

Movements in the provision are as follows:

The current part of the provision for abandonment costs and redevelopment is expected to total € 5.7 million at year-end 2021 (year-end 2020: € 6.6 million). This amount is not shown separately under the current liabilities. The discount rate in 2021 is 0.0% (2020: 1.0%). The drop in the discount rate came mainly as a result of lower market rates of interest (negative on the balance sheet date) compared to 2020. The addition to the provision relates mainly to a revision of the scope of pipelines to be removed for which the company is currently responsible.

Current financing liabilities are as follows:

More detailed information about non-current interest-bearing loans can be found in note 16 ‘Interest-bearing loans’. 

At year-end 2021, the company had drawn € 250.0 million (year-end 2020: € 225.0 million) in current interest-bearing loans at prevailing market rates. This concerns deposits taken and commercial paper issued with terms of less than one year (in practice ranging between one and ninety days).

Trade and other payables can be broken down as follows:

Other taxes and social security contributions primarily consist of VAT payable, social security contributions and wage tax payable.

The other liabilities and accruals consist mainly of accrued interest on loans, receivable invoices, security deposits received, and debts to joint ventures. Security deposits received relate to securities customers have given to the company to cover the risk of bad debt. A market interest charge is calculated for the security deposits. At year-end 2021, deposits received amounted to € 44.7 million (year-end 2020: € 34.9 million). Debts to joint ventures amounted to € 26.3 million at year-end 2021 (2020: € zero) and relate entirely to the company cash pool management with respect to several joint ventures.

Trade and other payables, apart from the security deposits received, bear no interest and have a term of less than one year.

The main financial risks to which the company is exposed are market risk (consisting of interest rate risk, currency risk, and price risk), credit risk and liquidity risk. The company uses financial risk management to limit these risks through operational and financial measures. Specific hedging instruments can be used for this purpose, depending on the nature and size of the risks.

The company may use derivative financial instruments to manage interest rate, currency, and price risks arising from ordinary operational activities. Derivative financial instruments are only used to hedge risks and not for trading or any other purpose.

The interest rate risk to which the company is exposed relates to the risk that future outgoing interest cash flows will increase due to changes to the market interest rate for interest-bearing loans with floating interest rates and for deposits taken and commercial paper issued with terms of less than one year. The interest rate risk of these instruments, to the extent they are held by the company itself or its wholly-owned group companies, was not hedged at year-end 2021 (year-end 2020: the same). The company is also exposed to an interest rate risk in the period between the decision to issue or refinance non-current loans with a fixed rate and the uptake of these loans.

On average, between 5% and 10% of the company’s non-current debts (including the current repayment obligation on non-current loans) are current financing arrangements with a variable rate of interest. Aside from that, an amount of € 100.0 million in non-current loans with a variable rate of interest was outstanding at year-end 2021 (ultimo 2020: € zero). A 1% point change in the interest rate will alter the interest expenses by approximately € 2.5 to € 4.0 million. Given the limited size and term of these loans, the interest rate risk on these loans has not been hedged.

Currency risks arise if contracts or transactions are entered into in a currency that is not the functional currency. The currency risk the company is exposed to consists of the risk that future cash flows, including those from payables and receivables, will fluctuate over time due to changes in exchange rates.

The currency risk is limited in the context of normal operations because most transactions take place in euros. Only a limited number of transactions take place in currencies other than the euro. The company aims to limit or neutralise the currency risk for a number of these transactions by making use of specific risk hedging instruments, such as forward foreign exchange contracts. Currency risks are hedged if there is sufficient certainty about the amount and timing of the foreign currency cash flows. Hedging the currency risk on transactions in Swiss francs and pounds sterling is an example of this.

At year-end 2021, a total of € 2.9 million (translated) in transactions denominated in Swiss francs was hedged (year-end 2020: € 5.7 million) by means of forward exchange contracts. This hedging refers entirely to the periodic refund of withholding tax deducted from dividend payments from the Nord Stream participating interest (which has its registered office in Switzerland) to Gasunie. The outstanding tax refunds were hedged for 100%. At year-end 2021, the hedging instruments had a term of under one year (year-end 2020: the same).

Furthermore, the currency risk on a number of future liabilities denominated in pound sterling have been hedged by keeping this foreign currency in a pound sterling bank account. At year-end 2021, the pound sterling balance in this account represented a euro value of € 5.2 million (year-end 2020: € 5.5 million).

At year-end 2021, there were no other significant foreign currency positions (year-end 2020: the same).

The company uses gas and electricity for its day-to-day operations, including for gas transport, balancing actions in the gas transport network, and internal and external production of nitrogen for quality conversion, for which the company has entered into gas and power supply contracts with energy providers. The contracts the company has entered into are supply contracts that are common in the market today, with variable energy prices based on current spot market prices at the moment of contracting/supply. These contracts are not subject to a minimum purchase obligation. The energy supply contracts generally have a relatively short term (3-5 years). The company is exposed to a price risk if the variable charges for gas and electricity increase and regulations do not allow Gasunie to offset these price increases in its future tariffs. For the 2021 financial year, the price risk can partially be offset in future tariffs in the Netherlands and Germany. For further details on the price risk, see note 1 ‘Significant matters and events in 2021’. Aside from that, the company is exposed to an energy price risk in the performance of certain investment projects.

In order to mitigate the price risk in the company’s day-to-day operations, and thus pursue stability in the regulatory tariffs, the company uses a risk hedging policy and associated energy procurement strategy. The basic principle of this policy is that the company does not trade in energy supply contracts and does not take speculative positions. The company has committed to purchasing the contracted volumes itself and using them for its day-to-day operations.

The energy supply contracts come with the contractual option to partly fix prices for a certain future supply period. Under the current contracts, this can be done a maximum of three years in advance. In these ‘forward purchases’, the company takes into account the anticipated periodic energy requirements to meet the own-use exemption. The required level of price risk hedging differs from one group company to the next, determined partly by the predictability of the volume and timing of the energy usage. GTS aims to hedge at least 65% of the anticipated energy usage, whereby the degree of hedging is partly based on current and forward prices. For Gasunie Deutschland, prices are fixed only to a very limited degree or not at all under its current procurement contracts and within the current regulatory framework. For other important group companies, such as EnergyStock and BBL, the degree to which prices are fixed varies because their energy usage and timing is harder to predict in practice. Energy usage that has not been contracted under forward supply contracts is purchased on the sport market as and when the need for energy arises.

At year-end 2021, the nominal value of the forward supply contracts for the company’s energy usage totalled approximately € 76.1 million (year-end 2020: € 30.3 million). The forward supply of energy under these contracts consists entirely of electricity and gas to be supplied in the 2022 financial year. Under IFRS 9.2.4, liabilities from forward supply contracts are not recognised in the balance sheet.

Credit risk relates to the loss that would arise if counterparties were to entirely or partially default and fail to meet their contractual obligations. At the balance sheet date, the company was not exposed to any material credit risk with regard to any individual customer or counterparty (year-end 2020: the same).

In making use of derivative and other financial instruments the company applies strict limits on counterparties to limit the credit risk. This limits the level of risk the company is exposed to from its counterparties. The company has drawn up criteria for selecting counterparties in financial transactions. These criteria limit the risk associated with possible credit concentrations and market risks.

To limit the credit risk on trade and other receivables, if appropriate, the company asks for guarantees from its customers and other parties with whom transactions take place.

The company has received the following guarantees from third parties:

Securities received are primarily guarantees issued as part of gas transport arrangements, as well as guarantees provided by contractors and suppliers involved in major investment projects. The security deposits are held in cash and are interest-bearing. A market interest charge is calculated for the security deposits. The letters of awareness mainly relate to legally unlimited guarantees received from the parent company of the customers to which they relate. An internal creditworthiness analysis and the maximum allowed exposure of the customers in question subsequently determined by the company form the basis for quantifying the value of these guarantees.

The individual terms of the guarantees received are generally short (one to three years), with the terms of a few guarantees exceeding five years. The guarantees are not freely assignable.

The liquidity risk is the risk that the company has insufficient cash to meet its immediately payable current liabilities. The company quantifies its liquidity risk by using a long-range forecast of capital expenses and investments and a liquidity forecast with a horizon of at least one year for operational expenses. With respect to the hedging instruments held as at the balance sheet date, there are no obligations to provide collateral if the fair value of these instruments is negative.

The company’s financing policy is partly to reduce its liquidity risk at as low a cost as possible. The options for reducing this risk depend on the solvency of the company. Gasunie is a solvent company and can therefore attract credit facilities relatively easily. According to Standard & Poor’s, Gasunie’s long-term creditworthiness is AA- with a stable outlook, while the short-term rating is A-1+. According to Moody’s Investors Service, the long-term credit rating is A1 with a stable outlook, and the short-term rating is P-1.

At year-end 2021, the company had an uncommitted current account facility of € 45 million (year-end 2020: € 45 million), a committed credit facility of € 600 million (year-end 2020: € 600 million), a Euro Commercial Paper (ECP) programme of € 750 million (year-end 2020: € 750 million) and a European Medium Term Note (EMTN) programme of € 7.5 billion (year-end 2020: € 7.5 billion) to hedge its liquidity risk. The committed credit facility was extended by one year in March 2021. The agreement now runs through to April 2026, with an option to extend it to April 2027. No funds were drawn on the committed credit facility over the past year. As part of its normal operational activities, the company has regularly raised short-term loans on the money market in the form of deposit loans and debt securities under the ECP. Under the EMTN programme, € 2.9 billion was issued in loans as at year-end 2021 (year-end 2020: € 2.6 billion). The EMTN programme is regularly updated and runs through to September 2022. 

Summary of future cash flows
The maturity profile of future cash flows relating to non-current and current financial liabilities outstanding as at the balance sheet date is as follows:

The maturity profile of future cash flows relating to non-current and current financial liabilities outstanding in 2020 is as follows:

Various financial instruments measured at fair value or for which the fair value can deviate from the carrying amount on the basis of amortised cost are included in these financial statements. This relates to:

• Other participating interests
• Interest-bearing loans
• Other primary financial instruments.

The way in which fair value is determined is described under ’Determining fair value’ in the accounting policies for the measurement of assets and liabilities and the determination of the results.

Other participating interests

At year-end 2021, the value of other participating interests measured at fair value in the balance sheet was € 515.2 million (year-end 2020: € 509.3 million). The determination of this fair value took place according to level 3 (year-end-2020: level 3). For more information, please refer to note 9 ‘Other participating interests’ to the consolidated financial statements.

Interest-bearing loans
The interest-bearing loans are bond loans with a listing on the Amsterdam stock exchange, and private loans.

The fair value of listed bonds is the same as the year-end exit price. The determination of the fair value took place according to level 1 (year-end 2020: level 1). The fair value of the private loans has been determined by calculating the present value of the expected future cash flows at a discount rate equal to the applicable risk-free market interest for the remaining term, plus credit and liquidity surcharges. Account has been taken of the company’s risk profile. The determination of the fair value took place according to level 2 (year-end 2020: level 2).

The carrying amount and the fair value of the interest-bearing loans as at year-end 2021 were:

Other primary financial instruments
Other primary financial instruments comprise trade and other receivables, cash and cash equivalents, current financing liabilities (excluding current repayment obligations on non-current loans), trade and other payables.

Given the short term of these instruments, their carrying amount approximates their fair value.

At year-end 2021, the company had entered into conditional investment commitments to the amount of € 168.0 million (year-end 2020: € 205.2 million). These obligations mainly relate to the development of a new nitrogen plant, several expansion investments in Germany, and the regular replacement investments in the Netherlands.

The company has issued – either directly or indirectly – the following guarantees to third parties:

The securities provided predominantly comprise securities and guarantees provided to customers of the company and the joint ventures and to a few creditors and other stakeholders. The guarantees are not freely assignable. The term of the securities provided is generally between 5 and 10 years; a limited number of securities do not have an agreed end date.

Non-current obligations are as follows:

Non-current obligations mainly refer to the procurement of nitrogen production capacity and IT and other services. The non-current obligations do not include amounts relating to the future supply of energy under forward supply contracts entered into by the company. For further details of these contracts, see the ‘price risk’ section of note 24 ‘Financial instruments’.

N.V. Nederlandse Gasunie and its Dutch wholly-owned group companies form a fiscal unity for the collection of corporate income tax and VAT. Pursuant to the Dutch Collection of State Taxes Act, the company is jointly and severally liable for the corporate income tax and VAT liabilities of all the companies in the fiscal unity. There is a similar liability regime in Germany for the German fiscal unity.

The company has a number of indirect joint arrangements in the form of private companies (without legal personalities). In addition, the company is an indirect managing partner in a number of limited partnerships. The group company above the relevant company without legal personality and its managing partners are jointly and severally liable for the obligations these private companies enter into.

Net revenue rose by 1.0% compared to the previous financial year (2020: increase of 7.4%). This net revenue growth comes partly on the back of higher revenue from non-regulated services and/or services exempt from regulation. Revenue from regulated services was roughly the same as in 2020. While regulated revenue increased mainly on the back of higher tariffs for 2021 in the Netherlands, regulated revenue fell in Germany as a result of changing international gas flows, which resulted in falling demand for transport capacity at Gasunie Deutschland.

As a result of the regulatory systems in the Netherlands and Germany respectively, the regulated part of revenue contains various ‘settlements’ every year. If the actual revenue deviates from the revenue permitted by the regulatory authority, the difference is settled in the tariffs for subsequent years. This also means that revenue for the 2021 financial year includes such settlements from prior financial years. Under IFRS, these settlements are not recognised in the balance sheet, but instead recognised in the year when the difference between actual revenue and permitted revenue is settled. 

The company categorises its revenues according to the way in which economic factors influence the nature, amount, timing and uncertainty of the cash flows. A distinction can be made between two categories in the case of Gasunie. The first revenue stream is revenue from regulated transport and related services, as generated by the Gasunie Transport Services and Gasunie Deutschland business units. The Dutch and German regulatory authorities set the permitted income for this revenue stream for the long term.

The second revenue stream relates to non-regulated services and/or those exempt from regulation. The income for these services is determined by the market on the basis of supply and demand and it is generally subject to greater volatility in revenue compared to the regulated services. Revenue from the non-regulated services and/or those exempt from regulation is almost completely generated by the Participations business unit.

Revenue for each operating activity is as follows:

Revenue can be divided into revenue from gas transport and related services and from other activities. Gas transport and associated services covers revenue from regulated gas transport and from non-regulated or exempt gas transport. Other activities include revenue from gas storage and other services to third parties.

The breakdown is as follows:

Revenue per geographical area is determined on the basis of the area where the activities take place (in or outside the Netherlands). The geographical distribution of the revenue is as follows: 

The company generated more than 10% of its external revenues from gas transport and associated services from a single customer in 2021 (2020: the same). This customer had no payment arrears at year-end 2021 (2020: the same). For a more detailed explanation of the credit risk, see note 24 ‘Financial instruments’.

The personnel expenses are as follows:

The increase in personnel expenses came primarily as a result of an increase in the number of employees. New employees were hired mainly for energy transition-related activities.  

The cost of the defined contribution plans recognised in profit and loss is € 26.5 million (2020: € 24.9 million). Please refer to note 20 ‘Employee benefits’ for the cost of the defined benefit pension plan and the part of the costs taken directly to other comprehensive income.

Remuneration for members of the company’s Executive Board in 2021 was as follows:

The variable remuneration is based on the meeting of agreed targets during the financial year, as explained under ‘Remuneration policy for the Executive Board’ in the annual report.

The pension plan for members of the Executive Board is the same as that for other Gasunie employees in the Netherlands.

The reimbursements under the ‘Other benefits’ item are payments from the flexible allowance.

Remuneration for members of the company’s Executive Board in 2020 was as follows:

Remuneration for members of the company’s Supervisory Board in 2021 was as follows:

Remuneration for members of the company’s Supervisory Board in 2020 was as follows:

Remuneration for members of the Supervisory Board comprises a basic payment and an additional payment for those who participate in the Audit Committee (AC) and/or the Remuneration, Selection and Appointment Committee (RAC). Remuneration also includes premiums to be paid under the Dutch Health Insurance Act.

The depreciation costs are as follows:

Depreciation costs were up in 2021, partly due to a partial reversal of a previously recognised impairment in 2020.

The result from disposals is the balance of the net realisable value of the assets sold or transferred minus the carrying amount of these assets when they were delivered.

The other costs are as follows:

The cost of network operations mainly comprises the procurement of nitrogen production capacity and electricity for the production of nitrogen, and the cost of electricity and gas for the company’s gas transport and gas storage operations. The increase in costs compared to 2020 is due mainly to higher energy prices and a slight increase in consumption levels due to increased use of resources for gas transport operations. For further details, see note 1 ‘Significant matters and events in 2021’.

Other costs comprise mainly insurance costs, other material and personnel costs, and incidental costs, including the addition to the provision for abandonment costs and redevelopment and the balance of the other incidental costs and income.

Financial income can be broken down as follows:

Interest income and similar income include the interest on tax assessments, interest (including negative interest) on deposits taken and commercial paper issued with a term of less than one year, as well as interest income on security deposits received (security provided by customers, to which a negative interest rate applies).

Financial expenses can be broken down as follows:

Of the interest expenses, a total amount of € 9.7 million was capitalised in 2021 (2020: € 9.9 million). This capitalisation was based on the weighted average interest rate of N.V. Nederlandse Gasunie’s non-current loan portfolio.

The other finance expenses mainly comprise amortised transaction costs and discount on non-current loans as well as other financing costs.

The tax expense is as follows:

The total tax expense was substantially affected by the adjustments to corporate income tax rates in the Netherlands in both 2020 and 2021. For a more detailed explanation of the change to the corporate income tax rate, see note 10 ‘Deferred tax assets’. Furthermore, the reversal of the impairment recognised in the past had consequences for the deferred tax expense in 2020.

The effective tax rate is as follows:

Other differences principally relate to non-taxable results as a consequence of the application of the participation exemption in the Netherlands and Germany.

The average number of employees in full-time equivalents was 1,581 in 2021, of whom 246 worked outside the Netherlands (2020: 1,518 full-time equivalents, with 243 stationed outside the Netherlands). At year-end 2021, the number of employees in full-time equivalents was 1,616, of whom 246 worked outside the Netherlands (year-end 2020: 1,558, with 244 stationed outside the Netherlands).

The number of employees grew throughout the year due to an increase in energy transition activities.

Services between Gasunie and its group companies and between group companies are provided at arm’s length. This also applies to transactions with joint ventures, joint operations, and associates and other participating interests. For a full list of related entities, see note 55 ‘List of group companies and participating interests’. For more information about intercompany services, see note 3 ‘Financial information by operating segment’, note 7 ‘Investments in joint ventures’ and note 8 ‘Investments in associates’. 

The members of the Executive Board qualify as a related party, because they can exercise control or significant influence over the company’s financial or operational policy. No other transactions took place with the Executive Board other than the transactions by virtue of their remuneration and possible expense claims. The same applies to members of the Supervisory Board. For a description of the remuneration of the members of the Executive Board and Supervisory Board, see note 27 ‘Personnel expenses’ to the consolidated financial statements.

GTS provides gas transport services to its customers, including GasTerra B.V. The sole shareholder of the company, the Dutch State, also owns 50% of GasTerra. This allows the Dutch State, in its capacity as shareholder, to exercise significant influence on the policy of the two companies.

The services provided by GTS to GasTerra are performed in line with the provisions of the Dutch Gas Act. Under this legislation, GTS must not discriminate in its treatment of all market parties and must conduct business as requested. The tariffs charged to GasTerra are determined by the Dutch regulatory authority, ACM. ACM works independently of GTS, GasTerra and the Dutch State.

The following fees charged by PricewaterhouseCoopers Accountants N.V. (PwC Accountants N.V.) for auditing the consolidated and company financial statements are charged to the company, its subsidiaries and other companies it consolidates, in accordance with Article 2:382a, paragraph 1 and 2 of the Dutch Civil Code.

Following Russia's invasion of Ukraine in February 2022, various sanction measures have been announced against Russia and Belarus and against Russian and Belarusian companies. Gasunie does business with Russian, Belarusian and Ukrainian companies in accordance with European and national provisions on gas transport, with the scope of these services covering a substantial part of regulated net turnover and a more limited part of unregulated or exempted net turnover. Furthermore, Gasunie participates in foreign companies where, where appropriate, Russian companies are also co-shareholders.

Gasunie complies with the sanctions imposed. Gasunie has also frozen all non-operational relationships and contacts with Russian and Belarusian companies. Operational contacts with Russian and Belarusian companies have been reduced to the minimum level necessary to facilitate security of supply for the Netherlands and Europe via our infrastructure. Because of the major social and economic consequences for society in Europe, Gasunie is following the government's policy on gas imports from Russia.

Gasunie has established that the sanctions imposed and the other measures taken do not provide any new information about the actual situation on the balance sheet date. Depending on the further development of the conflict and the duration and scope of the sanction measures, as well as Gasunie's policy in this respect, the company could be faced with adverse financial consequences in due course. This could happen if, for example, shippers from the aforementioned countries or other shippers indirectly affected by the crisis default on payments for booked transport capacity or if the relevant market interest rates rise substantially, as a result of which the fixed assets could be subject to impairment.

There are no other significant events after the balance sheet date that require recognition or disclosure in the financial statements.