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Notes to the parent company financial statements

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1. Other operating income
MEUR 2019 2018
Rental income 3 1
Services to Group companies 85 78
Other 1 1
Total 89 80
2. Personnel expenses
MEUR 2019 2018
Wages and salaries -30 -19
Pension costs -5 -5
Other compulsory personnel costs -1 -1
Total -37 26
Salaries and remunerations paid to senior management
The President and CEO and his deputy and members of the Board of Directors. In 2019 there was not nominated deputy to the President and CEO. -2 -5
The President and CEO has the right to retire at the age of 63 years. The members of the Board of Management are entitled to retire on reaching the statutory retirement age. One member of the Board of Management is entitled to retire earlier, on reaching 60 years of age.
The company's Board of Directors decides the remunerations of the President and CEO and his immediate subordinates.
Additional information about Management remuneration can be found in Consolidated Financial Statements Note 32.
Personnel on average during the year 392 371
3. Depreciation and amortisation
MEUR 2019 2018
Depreciation and amortisation according to plan
Other long-term expenditure -3 -3
Machinery and equipment -1
Total depreciation according to plan -4 -3
Impairment losses on non-current assets -1
Tax depreciations -4 -4
Depreciation difference 1
Depreciation difference
Depreciation difference on 1 January 1 2
Change in the depreciation difference -1
Depreciation difference on 31 December 1 1
4. Financial income and expenses
MEUR 2019 2018
Dividend income
From Group companies 304 300
Total 304 300
Other interest income
From Group companies 34 28
From other companies 1 1
Total 35 29
Other financial income
From Group companies 32 24
From other companies 22 20
Total 55 45
Exchange gains and losses 1 -1
Interest expenses
To Group companies -6 -6
To other companies -8 -9
Total -14 -14
Other financial expenses
To Group companies -32 -21
To other companies -45 -42
Total -77 -62
Financial income and expenses, total 304 296
5. Income taxes
MEUR 2019 2018
Income taxes
For the financial period -3 -4
For prior financial periods -6
Total -3 -10
6. Fixed assets
Intangible assets
MEUR Other
long-term
expenditures
Intangable assets and construction in progress Total 2019 Total 2018
Acquisition cost at January 1 117 8 125 123
Additions 1 2 7
Disposals -3 -3
Reclassifications 8 -8 -5
Acquisition cost at December 31 123 1 124 125
Accumulated amortisation at January 1 -113 -113 -115
Accumulated amortisation on disposals and other changes 3 3 5
Amortisation during the financial period -3 -3 3
Accumulated amortisation at December 31 -113 -113 -113
Carrying amount at 31 December 2019 10 1 11
Carrying amount at 31 December 2018 3 8 12
Tangible assets
MEUR Land
and
water
Buildings
and
structures
Machinery, equipment and other tangible assets Construction
in progress
Total 2019 Total 2018
Acquisition cost at January 1 7 2 2 6 17 13
Additions 6
Reclassifications 6 -6 -3
Acquisition cost at
December 31
7 2 8 17 17
Accumulated depreciation at
January 1
-2 -1 -3 -5
Accumulated amortisation on disposals and other changes 3
Impairment losses on non-current assets -1
Amortisation during the financial period -1 -1
Accumulated depreciation at December 31 -2 -3 -4 -3
Carrying amount at 31 December 2019 7 6 13
Carrying amount at 31 December 2018 7 1 6 14
Shares and securities
MEUR Shares in
Group
companies
Shares in
other
companies
Total 2019 Total 2018
Acquisition cost at January 1 950 1 951 951
Acquisition cost at December 31 950 1 951 951
Carrying amount at 31 December 2019 950 1 951
Carrying amount at 31 December 2018 950 1 951
7. Non-current receivables
MEUR 2019 2018
Receivables from Group companies
Loan receivables 100 100
Total 100 100
8. Current receivables from Group companies
MEUR 2019 2018
Trade receivables 24 16
Loan receivables 2 135 2 153
Derivatives 27 54
Other receivables 76
Prepaid expenses and accrued income 7 10
Total 2 193 2 308
9. Prepaid expenses and accrued income
MEUR 2019 2018
Derivatives 24 12
Insurance receivables 1
Other 5 4
Total 29 16
10. Shareholders' equity
MEUR 2019 2018
Share capital
Share capital on January 1 336 336
Share capital on December 31 336 336
Share premium reserve
Share premium reserve on January 1 61 61
Share premium reserve on December 31 61 61
Retained earnings
Retained earnings on January 1 1 038 1 002
Dividends paid -284 -272
Result for the financial period 240 308
Retained earnings on December 31 994 1 038
Total shareholders' equity 1 391 1 435
Distributable equity 994 1 038
Free share issue approved by Wärtsilä Corporation’s Annual General Meeting on 8 March 2018 increased the total number of Wärtsilä shares
to 591 723 390.
11. Liabilities
MEUR 2019 2018
Non-current
Interest-bearing 847 741
Total 847 741
Current
Non-interest-bearing 96 155
Interest-bearing 1 060 1 349
Total 1 155 1 504
Debt with maturity profile
2019 Current Long-term
MEUR <1 year 1-5 years >5 years Total
Loans from financial institutions 51 519 328 899
Total
2018 Current Long-term
MEUR <1 year 1-5 years >5 years Total
Loans from financial institutions 56 491 250 797
Total 56 491 250 797
12. Accrued expenses and deferred income
MEUR 2019 2018
Income and other taxes 5
Derivatives 23 79
Personnel costs 6 11
Interest and other financial items 3 3
Other 4 5
Total 36 102
13. Liabilities to Group companies
MEUR 2019 2018
Trade payables 15 9
Other current liabilities 1 008 1 293
Derivatives 25 24
Accrued expenses and deferred income 4 2
Total 1 052 1 327
14. Financial assets and liabilities by measurement category
2019
MEUR Measured
at
amortised
cost
At fair
value
through
the
statement
of income
Carrying
amounts
of the
statement
of financial
position
items
Fair
value
Non-current financial assets
Interest-bearing receivables from Group companies 100 100 100
Other receivables 1 1 1
Current financial assets
Interest-bearing receivables from Group companies 2 135 2 135 2 135
Trade receivables from Group companies 24 24 24
Derivatives 24 24 24
Derivatives from Group companies 27 27 27
Other receivables from Group companies 6 6 6
Cash and bank 113 113 113
Carrying amount by category
Non-current financial liabilities
Interest-bearing debt 847 847 856
Current financial liabilities
Interest-bearing debt 52 52 52
Interest-bearing debt to Group companies 1 008 1 008 1 008
Trade payables 14 14 14
Trade payables to Group companies 15 15 15
Derivatives 23 23 23
Derivatives to Group companies 25 25 25
Other liabilities 3 3 3
Carrying amount by category
Information about the fair value hierarchy and valuation principle can be found in Consolidated Financial Statements Note 18.
2018
MEUR Measured
at
amortised
cost
At fair
value
through
the
statement
of income
Carrying
amounts
of the
statement
of financial
position
items
Fair
value
Non-current financial assets
Interest-bearing receivables from Group companies 100 100 100
Other receivables 1 1 1
Current financial assets
Interest-bearing receivables from Group companies 2 153 2 153 2 153
Trade receivables from Group companies 16 16 16
Derivatives 12 12 12
Derivatives from Group companies 54 54 54
Other receivables from Group companies 8 8 8
Cash equivalents 5 5 5
Cash and bank 286 286 286
Carrying amount by category 2 569 65 2 635 2 635
Non-current financial liabilities
Interest-bearing debt 741 741 747
Current financial liabilities
Interest-bearing debt 56 56 56
Interest-bearing debt to Group companies 1 293 1 293 1 293
Trade payables 18 18 18
Trade payables to Group companies 9 9 9
Derivatives 79 79 79
Derivatives to Group companies 24 24 24
Other liabilities 3 3 3
Carrying amount by category 2 120 103 2 223 2 229
Information about the fair value hierarchy and valuation principle can be found in Consolidated Financial Statements Note 18.
15. Derivative financial instruments
MEUR With external financial institutions With Group companies Total 2019
Nominal values of derivative financial instruments
Currency forwards, transaction risk 2 358 2 448 4 806
Interest rate swaps 400 130 530
Cross currency swaps 246 246
5 582
Fair values of derivative financial instruments (level 2)
Currency forwards, transaction risk 11 11
Interest rate swaps -7 2 -6
Cross currency swaps -4 -4
Total 2
MEUR With external financial institutions With Group companies Total 2018
Nominal values of derivative financial instruments
Currency forwards, transaction risk 2 821 2 799 5 620
Interest rate swaps 270 270
Cross currency swaps 238 238
6 128
Fair values of derivative financial instruments (level 2)
Currency forwards, transaction risk -55 30 -25
Interest rate swaps -4 -4
Cross currency swaps -8 -8
Total -37
Foreign currency forward contracts are against transactional risks and are matched against the hedged cashflows. Interest rate swaps are denominated in euros and the average interest-bearing period for external contracts is 69 (48) months and 137 months for intragroup contracts. The average maturity for cross currency swaps is 41 (29) months.
16. Financial risks
General
Wärtsilä has a centralised Group Treasury with two main objectives: 1) to arrange adequate funding for the Group’s underlying operations on competitive terms and 2) to identify and evaluate the financial risks within the Group and implement the hedges for the Group companies. The Group Treasury is organisationally within the Parent Company.
The details about the management of the Group's financial risks are in Note 33 of the Consolidated Financial statements. As the Group's liquidity and interest rate risks are managed at the parent company level the group reporting applies fully to the Parent Company.
Foreign exchange risk
Operative foreign currency risks are followed and hedged at the subsidiary level. The Group Treasury acts as a counterparty to these hedges, if that is allowed by local regulations. To enable netting of intragroup currency flows and to reduce the amount of external transactions the Group Treasury is allowed to have minor unhedged exposures in different currencies. Any gains/losses from the Group Treasury's operations are booked directly into the financial items and we do not expect any material foreign exchange gains/losses from the Group Treasury's operations.
17. Collateral, contingent liabilities and other commitments
MEUR 2019 2018
Guarantees and contingent liabilities
On behalf of Group companies 2 773 3 215
Total 2 773 3 215
Future nominal lease payments
Payable within one year 4 4
Payable after one year 29 32
Total 33 36
18. Related party loans and other commitments
There are no loans receivables from senior management and the members of the Board of Directors. No pledges or other commitments were given on behalf of senior management or shareholders. In Note 32 in Consolidated Financial Statements, related party disclosures are specified. Related parties comprise the Board of Directors, the President and CEO, the Board of Management as well as the associated companies and joint ventures. In Notes 8 and 13 in Parent Company financial statement, receivables and liabilities from Group companies are specified.
19. Auditors' fees and services
The following fees were paid to auditors and accounting firms for audits and other services.
In 2019, the AGM appointed the audit firm PricewaterhouseCoopers Oy as Wärtsilä Corporation's auditor.
Auditors' fees
TEUR 2019 2018
Audit 583 524
Tax advisory 10
Other services 111 6
Total 705 528

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