ANNUAL REPORT 2018

GENERAL DATA OF TALLINN UNIVERSITY OF TECHNOLOGY

Name: Tallinn University of Technology

Registry code: 74000323

Address: Ehitajate tee 5, 19086, Tallinn, Estonia

Telephone: +372 620 2002

E-mail: info@taltech.ee

Website: www.taltech.ee

Form of ownership: public legal entity

Financial year: 01.01.2018-31.12.2018

Auditor: BDO Eesti AS

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TABLE OF CONTENTS

1. MANAGEMENT REPORT UNIVERSITY

Mission and vision 4

The rector’s foreword 5

Most important actions in 2018 7

The best at TalTech 9

Structure and management 10

People 12

Reserch and development 15

Educational activities 19

Partnership with society 22

SCHOOLS

School of Engineering 26

School of Information Technologies 28

School of Science 30

School of Business and Governance 32

Estonian Maritime Academy 34

Financial activities 36

2. CONSOLIDATED FINANCIAL STATEMENTS 40

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MISSION AND VISIONThe mission of Tallinn University of Technology (TalTech) is to be a promoter

of science, technology and innovation and a leading provider of engineering

and economic education in Estonia. The university’s vision is innovative

Estonia in a developing world.

The core values of Tallinn University of Technology are professionalism and

reliability, entrepreneurship and innovation, openness and cooperativeness.

The university pursues these values in all of its fields of activity.

14.8% international students

from 94 countries

32 international study programmes

7 joint study programmes

from 50 countries

128 professors

48,2% proportion of female employees

61.2% in international co-authorship

77 defended PhD degrees

28% foreign PhD candidates

2.5% foreign alumni

10852students

70417alumni

86study programmes

1847employees

1209scientific publications

TALTECH 2018

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Last year, Tallinn University of Technology celebrated its

100th anniversary: on 17 September 1918, the first few

dozen students started their engineering studies on the

premises of the Luther furniture factory. Today, more than

10 000 students from nearly 100 countries are studying at

the university.

Major reorganisations – the structural and statutory

reform, the reform of study programmes, the reform of the

financing model, introduction of the new academic career

model – were carried out in the period from 2016 to

2017. Last year was marked by accelerating development

supported by emerging opportunities: we launched the

tenure track academic career model and improved the

quality indicators of academic activity, raised the univer-

sity’s admission threshold and improved graduation ef-

fectiveness. For the first time, we introduced a year-round

admission of students.

The volumes of business agreements with enterprises

and other non-state funding increased faster than expect-

ed – the strength of Tallinn University of Technology lies

in close links between the academic competencies and

the economic and social needs of Estonia. Long-term

cooperation agreements with several partners will ensure

development of the cooperation also in the future.

The highlight in research was receipt of the European

Research Council (ERC) grant; in the development sector

the self-driving vehicle Iseauto designed and constructed

in cooperation with Silberauto attracted attention in Es-

tonia and abroad; in 2018 a record number of doctoral

degrees (77) was awarded.

The highlight of the university’s anniversary celebra-

tions was the concert performance in the Alexela Concert

Hall, where the university’s cultural collectives performed

together with Estonian top artists and the members of

the academic staff provided a glimpse of the the road

travelled. Looking ahead, Tallinn University of Technology

introduced its new international short name TalTech to the

public, which ties our historical roots with a global vision

with an aim to lead Estonia to a sustainable digital future.

JAAK AAVIKSOORector

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Alexander Stubb took a ride in the self-driving car Iseauto completed in September. In the photo together with Iseauto project manager Senior Research Scientist Raivo Sell.

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MOST IMPORTANT ACTIONS IN 2018The reform of study programmes

was fully implemented; the bache-

lor’s, master’s and doctoral study

programmes have been substantial-

ly updated.

We started the year-round admission process. The university started accept-

ing applications for the next academic

year already on 1 November and ad-

mission is fully threshold-based.

The Good Lecturer Development Program was launched to consist-

ently improve the effectiveness of

teaching and development of studies

and develop the competencies of the

academic staff required for teaching.

In collaboration with Silberauto, the

self-driving vehicle Iseauto, designed

and constructed by a few dozen stu-

dents under the supervision of scien-

tists from several fields of engineering

and information technology, was com-

pleted. Iseauto is one of the key pillars

in the planned smart campus and a de-

velopment platform for IoT solutions.

In collaboration with Telia, we

opened Estonia’s first 5G network

at the campus, which allows big

data transfer in an IoT network at the

planned smart campus.

Senior Researcher at Ragnar Nurk-

se Department of Innovation and

Governance Vasilis Kostakis was awarded the prestigious European Research Council (ERC) Starting Grant. V.Kostakis will use the €1.1

million ERC Starting Grant for a four-

year research project titled “Cos-

molocalism” that will advance under-

standing of the future of work in the

age of automation and beyond.

The first year of implementation of the tenure track career model has

brought nearly fifty tenured profes-

sors to the university and the estab-

lished system and underlying princi-

ples make it an integral part of Tallinn

University of Technology.

In this year, 77 doctoral dissertations were defended, which is a record

number in the history of Tallinn Uni-

versity of Technology.

Two TalTech objects were entered in the list of research infrastructures of national importance - the Estonian

Research Infrastructures Roadmap:

the Naval Architecture and Hydrody-

namics Infrastructure (SCC) and the

Smart Industry Centre (SmartIC).

Compared to 2017, the volume of the

business agreements signed be-tween the university and enterpris-es increased by 32%.

During the financial year, in the

framework of the TalTechDigital in-itiative, we updated the business

software, introduced the data ware-

housing and business analysis plat-

form, transferred the first services to

the information management system,

created the TalTech app for students,

developed e-support for hundreds of

courses, we analysed the user views

of the extranet and intranet and took

the first steps towards migrating data

to new platforms, at the end of the

year we migrated e-courses to the

TalTech Moodle environment that will

be integrated and, characteristically

of a digital university, we created an

interactive virtual tour for introducing

the university campus.

We established the Olympiads School, which supports and encour-

ages the development of talented

schoolchildren through olympiads

and preparatory courses for the ol-

ympiads and introduces them early

the road to Tallinn University of Tech-

nology.

Celebrations of the 10th anniversary

received a lot of publicity, academic

and official events were organised

and a grand party took place at the

university campus, which brought

together thousands of people – the

employees, students and alumni.

Along with the anniversary events,

the university introduced its new short name TalTech, the new brand

brought about the new visual identi-

ty. Tallinn University of Technology

continuously develops its positive

image and renown.

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THE BEST AT TALTECH RESEARCHERS OF THE YEAR

Professor of the Department of Mechanical and Industrial

Engineering of the TalTech School of Engineering Irina Hussainova received from the Government of the Repub-

lic the annual research award for her cycle of works “Na-

nofibre Network as a Basis for the Industrial Applications

of Multifunctional Hybrid Materials”.

The President of the Republic of Estonia bestowed na-

tional decorations to two TalTech researchers: the Order

of Merit of the Estonian Red Cross, III class, to Associate

Professor of the Department of Health Technologies Ka-trin Gross-Paju and the Order of Merit of the White Star,

III class, to Lead Research Scientist of the Department

of Software Sciences Tarmo Uustalu to recognise their

contribution to research and development.

Professor of the Division of Gene Technology of the

Department of Chemistry and Biotechnology Tõnis Timmusk received the TalTech Researcher of the Year

2018 award. Professor of Ragnar Nurkse Department of

Innovation and Governance Vasileios Kostakis received

the TalTech Junior Researcher of the Year 2018 award.

2018. RESEARCH ARTICLES OF THE YEAR 2018

ENGINEERING AND TECHNOLOGY• Martin Thalfeldt, Jarek Kurnitski, Eduard Latõšov.

“Exhaust air heat pump connection schemes and bal-

anced heat recovery ventilation effect on district heat

energy use and return temperature”. Applied Thermal

Engineering 128, 402–414.

• Akinrinade George Ayankojo, Jekaterina Reut, An-dres Öpik, Andreas Furchner, Vitali Sõritski. “Hybrid

molecularly imprinted polymer for amoxicillin detec-

tion”. Biosensors and Bioelectronics 118, 102-107.

• Olga Kovaleva, Maris Eelsalu, Tarmo Soomere

(2017). “Spots of large wave energy resources in rela-

tively sheltered sections of the Baltic Sea coast”. Re-

newable & Sustainable Energy Reviews, 74, 424–437.

NATURAL, EXACT AND HEALTH SCIENCES• Arvo Kaldmäe, Ülle Kotta “Realization of time-delay

systems”. Automatica, 90, 317−320.

SOCIAL SCIENCES AND HUMANITIES• Kadri Männasoo, Heili Hein, Raul Ruubel (2018).

“The contributions of human capital, R&D spending

and convergence to total factor productivity growth”.

Regional Studies, 52:12, 1598-1611

TALTECH COMPETITION FOR THE DEVELOPMENT OF THE YEAR AWARD 2018• I place – the self-driving car Iseauto, members of the

research group: Raivo Sell, Johannes Mossov, Mairo

Leier, Juhan-Peep Ernits, Anton Rassõlkin

• II place – the development “Development of Ceramics

and Cermets for Applications in the Clock and Jewel-

ry Industry”, members of the research group: Jakob

Kübarsepp, Kristjan Juhani, Lauri Kollo, Jüri Pirso, Mart

Viljus, Märt Kolnes, Marek Tarraste

• III - IV – the development “Estonian Language Speech

Recognition System”, members of the research group:

Tanel Alumäe, Asad Ullah, Ottokar Tilk and the devel-

opment “Impedance Spectro Tomograph QT1”, mem-

bers of the research group: Paul Annus, Mart Min, Raul

Land, Marek Rist, Olev Märtens

OTHER ACADEMIC ACKNOWLEDGEMENTS

In 2018, the Estonian Academy of Sciences elected two

TalTech researchers to academician positions: Professor

Jarek Kurnitski in the field of engineering and Professor

Tiina Randma-Liiv in the field of public administration

and governance.

A TalTech student Katre Juganson won the 1st prize

of the Estonian National Contest for University Students

for her doctoral thesis “Ecotoxicological Impacts of

Industrially Relevant Engineered Nanomaterials: Effects

on Tetrahymena thermophila”.

LECTURERS AND SUPPORT STAFF OF THE YEAR AWARDS

In 2018, the university rewarded the best lecturers, who

have received the best feedback from students:

• the Lecturer of the Year 2018 of the Estonian Maritime

Academy of Tallinn University of Technology is Paavo Kuuseok

• the Lecturer of the Year 2018 of the School of Science

is Professor Tõnis Timmusk• the Lecturers of the Year 2018 of the School of Infor-

mation Technologies are Nadežda Furs-Nižnikova

and Kalju Meigas

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Professor Tõnis Timmusk: Researcher of the Year and Lecturer of the Year of the School of Science.

• the Lecturers of the Year 2018 of the School of Busi-

ness and Governance are Kaido Künnapas and Paavo Siimann

• the Lecturers of the Year 2018 of the School of Engineer-

ing are Merik Meriste, Sergei Pavlov, Anton Rassõlkin

and Tiia Rüütmann

In addition, the specialists and experts from among the

support staff were recognized for their mission to support

the students, teaching staff and researchers. The best

support staff of the year are:

• student counsellor of the School of Information

Technologies Katri Kadakas• incoming exchange students manager

Kerti Sönmez• the university’s graphic designer Anu Teder• chief settlement officer Tiina Väljas• head of the library Tõnis Liibek

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STRUCTURE AND MANAGEMENT

UNIVERSITY COUNCIL

Audit Committee

RECTOR Academician Jaak Aaviksoo

SCHOOL OF INFORMATION TECHNOLOGIESDean Gert Jervan

• Department of Computer Systems

• Department of Software Science

• Department of Health Technologies

• Thomas Johann Seebeck Department of Electronicst

• IT College

SCHOOL OF SCIENCE

Dean Tõnis Kanger

• Department of Geology

• Department of Chemistry and Biotechnology

• Department of Cybernetics

• Department of Marine Systems

SCHOOL OF BUSINESS AND GOVERNANCEDean Enn Listra

• Department of Economics and Finance

• Ragnar Nurkse Department of Innovation and Governance

• Department of Law

• Department of Business Administration

ESTONIAN MARITIME ACADEMYDirector Roomet Leiger

BOARD OF GOVERNORS

SCHOOL OF ENGINEERING

Dean Arvo Oorn

• Department of Civil Engineering and Architecture

• Department of Electrical Power Engineering and Mechatronics

• Department of Energy Technology

• Department of Materials and Environmental Technology

• Department of Mechanical and Industrial Engineering

• Tartu College• Virumaa College

VICE-RECTOR FOR ACADEMIC AFFAIRSHendrik Voll

• Office of Academic Affairs

VICE-RECTOR Mati Lukas

• Open University• Innovarion and Business Relations

VICE-RECTOR FOR RESEARCHRenno Veinthal

• Research Administration Office• Library• Certification Centre

DIRECTOR FOR FINANCETauno Tuisk

• Finance Office

DIRECTOR FOR ADMINISTRATIONJoosep Kaasik

• Information Technology Services• Personnel Office• General Office

DIRECTOR FOR FACILITIESMargus Leivo

• Real estate Office

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The university’s Strategic Plan was adopted in February

2016 and it sets out the key development goals up to 2020.

More detailed goals and policies for the period are laid

down in the Management’s Action Plan.

The Board of Governors is the highest decision-making

body of the university which is responsible for the devel-

opment of the university and shall ensure the achievement

of its objectives. The Board of Governors elects the uni-

versity’s rector who directs the activities of the university

and is responsible for the general state of the university.

The rector and the area directors form the Rector’s Office.

The academic decision-making body of the university is the

Council which is responsible for the education, research

and development activities of the university and shall en-

sure the high quality thereof.

In 2018, no changes were made in the structure of the

university, but some of the heads of the units were replaced:

• on 12 February Tauno Tuisk assumed

office as Director for Finance

• Kalle Tammemäe assumed office as

Director of IT College on 2 April

• Marti Lung commenced work in the position of Head

of Information Technology Services on 31 May

• the Rector appointed Mati Lukas acting Director for

Innovation and Business Relations for the period

from 1 September until the end of the year.

• Laur Lemendik commenced work in the position of Head

of Thomas Johann Seebeck Department of Electronics

MEMBERS OF THE BOARD OF GOVERNORS OF TALLINN UNIVERSITY OF TECHNOLOGY

• Gunnar Okk – Chairman, Vice-President

at Nordic Investment Bank

• Ardo Kamratov – Vice-Chairman

• Arvi Hamburg – Visiting Professor

of Energy Policy at TalTech

• Anneli Heinsoo – CEO of Tieto Estonia AS

• Ülo Jaaksoo – Chairman of the Supervisory

Board of Cybernetica AS, academician

• Väino Kaldoja – CEO of AS Silberauto, Chairman

of the Board of Alumni Association of Tallinn

University of Technology and Chairman of

the Supervisory Board of the Development

Fund of Tallinn University of Technology;

• Rainer Kattel – Professor of Innovation Policy

at University College London and TalTech

• Robert Kitt – CEO of Swedbank AS

• Margus Lopp – Professor of Organic

Chemistry at TalTech, academician

• Mart Saarma – Professor of Biotechnology at

the University of Helsinki, academician

• Andres Öpik – Professor of Physical

Chemistry at TalTech, academician.

MEMBERS OF THE COUNCIL OF TALLINN UNIVERSITY OF TECHNOLOGY

• Jaak Aaviksoo – Rector, Chairman of the Council

• Renno Veinthal – Vice-Rector for Research

• Hendrik Voll – Vice-Rector for Academic Affairs

• Gert Jervan – Dean of the School

of Information Technologies

• Tõnis Kanger – Dean of the School of Science

• Roomet Leiger – Director of

Estonian Maritime Academy

• Enn Listra – Dean of the School of

Business and Governance

• Arvo Oorn – Dean of the School of Engineering

• Andres Keevallik – former Rector (2010–2015)

• Martin Eerme – representative of the academic

staff of the School of Engineering

• Erkki Karo – representative of the academic staff

of the School of Business and Governance

• Malle Krunks – representative of the academic

staff of the School of Engineering

• Margus Kruus – representative of the academic

staff of the School of Information Technologies

• Merike Kukk – representative of the academic

staff of the School of Business and Governance

• Eha Merirand – representative of the academic

staff of Estonian Maritime Academy

• Lembit Nei – representative of the academic

staff of the School of Engineering

• Toomas Rang – representative of the academic

staff of the School of Information Technologies

• Andrus Salupere – representative of the

academic staff of the School of Science

• Erkki Truve – representative of the academic

staff of the School of Science

• Tõnu Pihelgas – representative of the

administrative and support staff

• Gerlin Gil – representative of students

• Mari Kasemets – representative of students

• Triin Kask – representative of students

• Madis Leinakse – representative of students

• Marii Metsmaa –representative of students

• Nikon Vidjajev – representative of students

Nõukogu koosseisus on 2018. aasta jooksul olnud kolm

muutust, kõik seotud üliõpilaste esindajate vahetumisega.

MOST IMPORTANT ACTIONS RELATED TO MANAGEMENT AND STRUCTURE IN THE YEAR 2019

• The mandate of the Council will expire on 31 August

2019 and a new Council will be established.

• During 2019, the Council shall appoint five

members of the Board of Governors.

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PEOPLEThe priorities of the HR policies in 2018 were develop-

ment of the tenure-based academic career model, de-

velopment of the managers and work related to the

Inter national Staff Mobility Centre.

In 2018, the total of 13 professors employed at the

university who had passed the evaluation received a

recommendation for tenure and 16 competitions for

tenure-track academic positions were announced. As

of 31.12.2018, the total of 92 tenured positions were

established at TalTech, 47 of them are filled. Interest

in the tenured positions remains high – on average 17

applications were submitted per one tenured position.

One of the goals of the university is international-

ization and the proportion of international staff has

increased year by year: from 7% in 2015 to 11% in 2018.

Since employees from outside Estonia are employed

mainly in academic positions, the proportion of interna-

tional staff forms already 17.06% in the academic staff.

The survey conducted in 2018 among international staff

indicated that there is a need for a service for supporting

the mobility of international staff. Therefore the concept

of the International Staff Mobility Centre was developed,

which was strongly supported by the Rector’s Office and

the centre started its work at the beginning of 2019.

The staff development and training activities focused

on the development of the managers (incl. development of

the competency models of managers and implementation

of the junior managers training programme), improving

the pedagogical competencies of the academic staff and

preparatory work related to the establishment of the In-

ternational Staff Mobility Centre. In view of the goal of the

university’s Strategic Plan to foster teaching and learning

at the university and improve the quality of teaching, var-

ious continuing education courses were provided to the

academic staff and the PhD students.

An employee job satisfaction survey was conducted

in spring 2018, which indicated that the employees are

satisfied with the content of their work and are of the

opinion that their unit has a good working environment

and the direct superiors and heads of the structural units

are highly rated by the employees. On the other hand,

new ways for improving communication of information

and explaining the actions and decisions of the Rector’s

Office should be considered. A start has been made by

meetings and information days and the development of

an in-house TV channel.

TalTech Professor of Mining Engineering Michael Hitch shows on the map, where he comes from and says: “I’m so fortunate to have come to TalTech, which has a long history of research excellence in the field of natural resources and serving the needs of the society.”

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2017 2018

Number of international employees (headcount) 187 207

Proportion of international employees in academic staff 15% 17%

Number of professors (headcount) 111 128

Number of tenured posts 63 92

Number of filled tenured posts 26 47

Average number of applicants per professor post 12.6 17.1

Proportion of academic staff in the university staff 55.5% 53.3%

Proportion of female employees in university staff 48.8% 48.2%

Average age of employees 46 46

Proportion of academic staff with a doctoral degree 56.5% 60.8%

Proportion of new academic staff in the total number of academic staff 8.7% 8.3%

Average wages (eur) 1,850 1,978

Average wages of academic staff (eur) 2,205 2,273

1847Number of employees

(headcount)

1837

20

18

20

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STAFF

TalTech Professor of Big Data in Social Sciences Anu Masso: “A pleasant surprise at the new workplace is the university’s interdisciplinarity – a synergy between engineering and social sciences, which creates an excellent environment for research in the developing field of (big) data analysis.

Professor of Microfluidics Ott Scheler: “There is a very powerful science park vibe in the TalTech campus. Various departments as well as a large number of technology companies are close at hand.”

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The Smart Industry Centre (SmartIC) is an infrastructure project supporting the field

of smart manufacturing and R&D activities related to digitalization of industry.14

RESERCH AND DEVELOPMENTTENURE

One of the goals laid down in the TalTech’s Strategic Plan

is introduction of an integrated tenure-team academic

career model. Tenured professors shall be responsible for

developing excellence in their field, both in research and

knowledge transfer to students, being a leading spokes-

man in their field in Estonia as well as a coordinator of

cross-sector cooperation at the university.

In two years, the process of filling tenured posts

has been become consistent and stable. The work of

the professors recruitment and attestation committees

has become more stable and effective. The biggest

challenge in filling the tenured posts by an international

competition is still the wage level at the university and

the matters related to resettlement of the professors and

since the process is time-consuming, sometimes the can-

didates for the professor position find new challenges in

the period between applying and being elected.

DOCTORAL STUDIES

In the academic year 2017/18, the Estonian Quality Agency

for Higher and Vocational Education (EKKA) assessed the

doctoral study programmes and the quality of doctoral

studies at Tallinn University of Technology. The university

conducted also self-evaluation covering all the sectors of

evaluation of the study programmes included the study

programme group. Tallinn University of Technology re-

ceived an accreditation decision on eight doctoral study

programmes.

A number of strengths and areas of improvement

were pointed out for all the study programmes. The

strengths included e.g. providing an income complying

with the average wages in Estonia, competition for su-

pervisors upon creating PhD student places, substantive

attestation, involving junior lecturers in supervision, good

opportunities for international mobility of PhD students

and the model of industrial doctorate, which provides

good preconditions and opportunities for cooperation

with enterprises. The areas of improvement included

international marketing of student admission and PhD

student places, the feedback system, career counselling

of PhD students and training on writing project applica-

tions, integration of international PhD students in the

community and the need to develop cooperation and

carry out cooperation projects with enterprises, which

will also help to reduce the dependency on EU project

funding.

At the same time the study programmes were

updated at the university and several areas of improve-

ment pointed out by the assessment committee have

already been taken into account in the versions in force

from the academic year 2018/19.

The number of PhD degrees defended at TalTech was

77 in 2018, that is a nearly 25% increase compared to last

year and a record number over the years. The expected

number of graduates in 2018 was 76 in the performance

agreement signed with the Ministry of Education and

Research and 80 in the Management’s Action Plan.

9 of the 90 PhD students admitted in 2018 were

industrial PhD students. The target set for 2019 – 15%

of admitted students – is ambitious and to achieve it

the principles of industrial doctoral studies need wider

promotion among enterprises. The university has estab-

lished a working group for the development of industrial

doctoral studies and is continuously actively engaged in

maintaining the business relations.

INFRASTRUCTURE

The university has substantially upgraded its research

infrastructure in recent years, and TalTech’s infrastructure

is in excellent state. The unanimous assessment of the

scientific equipment provided by the experts who visited

the university in the course of international evaluation

was positive in all the research fields and keeping the

equipment up to date as well as providing resources for

that is extremely important for the university’s research

performance.

The research infrastructure can be further applied

in the research and development of enterprises and

the public sector and in designing innovative solutions.

A total of 70 laboratories are located in the TalTech

departments, 7 of which are accredited. In 2018, the

university’s labs provided external services for a total of

nearly 1.6 million euros.

In 2018, Estonian research institutions and universities

wanted to add 15 new objects to the Estonian Research

Infrastructures Roadmap (a long-term planning instru-

ment, which contains a list of new nationally important

research infrastructure units, or of those in need of mod-

ernisation): proposals were submitted to the Estonian Re-

search Council to add seven new objects to the Estonian

research infrastructure and to join eight international

research infrastructure organisations. Tallinn University

of Technology proposed four objects, two of which were

added to the Roadmap:

• The naval architecture and hydrodynamics infrast-ructure (SCC) is a research and development infra-

15

structure network, which is focused on the devel-

opment of Estonian naval architecture and offshore

construction, the core of which is the only model

testing tank in the Baltic States. Partners: Baltic Work-

boats AS, Association of Estonian Marine Industries.

• The Smart Industry Centre (SmartIC) is a distribut-

ed research infrastructure consolidating research and

development in the field of smart production and digi-

talization of industry in Tallinn University of Technolo-

gy, Estonian University of Life Sciences and the Uni-

versity of Tartu. Partners: Estonian University of Life

Sciences, University of Tartu

PUBLICATION

In publication the emphasis is on high-level internation-

ally recognized scientific journals. The quality of articles

is assessed in terms of the impact factor of the journal

as well as the number of citations. Great importance is

attached to publications that have been issued in interna-

tional co-authorship with universities and research and

development institutions.

COOPERATION WITH ENTERPRISES

An important goal of TalTech is to make use of our aca-

demic potential in particular through long-term strategic

partnership with major technology-intensive companies

all over the world and in Estonia.

Cooperation between the university and enterprises

is enhanced by the TalTech Development Programme

2016–2022 launched in the framework of ASTRA pro-

gramme, where in 2018 the main focus was on creating

the university’s network of entrepreneurship specialists

and streamline the knowledge base on signing of busi-

ness agreements.

The volume of business agreements and contracted

services has increased to 7.1 million (an increase of 32%

compared to 2017), whereas the proportion of contracts

with foreign companies and institutions formed 15% in the

total volume in 2018. 36% of the total revenue from con-

tracts was received from ten major contracting partners.

In 2019, the focus will remain on improvement of the

competencies of business cooperation coordinators and

specialists. We are seeking opportunities for cooperation

with business cooperation units of other research and

development organisations (Aalto, MIT, etc.) with an aim

to learn from their best practices.

INVENTIONS

In recent years, the research groups of the university have

submitted on an average ten notices on the creation of

new inventions per year. The largest number of inventions

were created in the fields of mechanical engineering

(24%), electronics (20%) and materials technology (11%).

Prototron has provided funding to help to put research

findings into practice. In the years 2013–2017, research

groups submitted 26 applications for the Prototron fund-

ing. However, in 2018 Prototron application requirements

changed: it is not required any more that the application

shall be based on the university’s invention and funding

can now be applied by the members of the university

for any innovative and research-based project. In 2018,

TalTech members submitted about a hundred applica-

tions and the board of experts eventually chose five

teams that received funding.

FINANCING

In 2018, the total amount of funding of research and de-

velopment of Tallinn University of Technology was 38.3

million euros (in 2017, 34.1 million euros). The increase

is mainly related to increase of funding from the state

budget (TalTech’s share increased by 2.2 million euros),

opening of new Horizon 2020 projects and increase in the

1209 Number of scientific

publications

1221

PUBLICATION

2017 2018

Number of high-level (ETIS category 1.1; 3.1; 1.2; 2.1) peer-reviewed scientific publications

919 915

Number of high-level (ETIS category 1.1; 3.1; 1.2; 2.1) peer-reviewed scientific publications per a filled academic position

1.12 1.16

Number of scientific publications per an academic position 1.20 1.23

Proportion of scientific publications issued in international co-authorship 48.3% 61.2%

TOP 10 countries of cooperation for publication

Finland, Germany, Russia, USA,

Sweden, Latvia, France, England,

Italy, Norway

Finland, Germany, Russia, USA,

Sweden, England, Norway, Spain,

France, China

volume of business contracts.

20

18

20

17

16

The university in collaboration with OÜ Thinnect has installed nearly 900 sensors in Tallinn that measure and record information on noise, temperature, air humidity, air pressure, air pollution and traffic flow, which helps smarter urban planning.

38.3 Total revenue from research

and development (mln €)

34.2

20

18

20

17

REVENUE FROM RESEARCH AND DEVELOPMENT

2017 2018

Baseline funding 3.8 6.0

Estonian Research Council funding (institutional research funding, personal research funding) 7.5 7.7

incl. allocations intended for a specific purpose (Ministry of Education and Research) 0.8 0.8

Contracts and services 5.4 7.1

incl. contracts and services in Estonia 4.5 6.0

incl. international agreements and services 0.9 1.1

Project grants 16.7 16.7

incl. projects in Estonia 8.1 6.6

incl. external projects 8.6 10.1

(mln €)

17

The university has excellent research infrastructure; there are 70 laboratories in the departments.

18

EDUCATIONAL ACTIVITIES As of 10.11.2018, the total of 10 852 were studying at TalTech

in the academic year 2018/19. The number of students

has decreased steadily over the last five academic years

mainly due to the demographic situation, the total number

of students in Estonia also shows a downward trend.

At the first level of study there were 1 086 graduates,

87 of them cum laude graduates. At the second level of

study there were 966 graduates, 172 of them cum laude

graduates. The proportion of cum laude graduates has

remained stable at 12 % over the past years.

Graduates’ satisfaction with their studies was 3.99

points in 2018 (3.96 points in 2017), the graduates are

more content with their study programme and speciality,

less with teaching. Therefore the Good Lecturer Develop-

ment Program has been launched.

(YEAR-ROUND) ADMISSION

The university started accepting applications for the aca-

demic year 2019/20 already on 1 November 2018. Admission

is fully threshold-based and in case of successful completion

of state examinations and/or speciality tests you can secure

a student place at the university for yourself early on.

As a result of the reform of the first and second level

study programmes, admission took place to one third fewer

but more broad-based study programmes than previously.

Although the number of study programmes, in particular at

bachelor’s level, has decreased and the threshold is higher,

the number of students admitted has increased.

The number of prospective students who have gradu-

ated from the upper secondary school with a medal has

increased and in 2018, there was also an increase in the

number of applicants who received a particularly high

score at the mathematics state examination.

As regards the admission of international students, the

university continues to improve the admission criteria,

requirements and processes, so that the university can

attract best-qualified international prospective students

who have a very good knowledge base.

UPDATED STUDY PROGRAMMES

The reform of the study programmes in the first level was

completed in the academic year 2017/18 and in the sec-

ond level at the beginning of the academic year 2018/19.

The reform was carried out bearing in mind the needs of

ÜLIÕPILASTE ARV TEADUSKONDADE KAUPA

Inseneriteaduskond 3498

Majandusteaduskond 3086

Infotehnoloogia teaduskond 2974

Eesti Mereakadeemia 761

Loodusteaduskond 533

28%

27%

7%5%

32%

3502 Total number

of students admitted

3455

20

18

20

17

STUDENTS

2017 2018

Total number of international students admitted 558 578

Proportion of international students admitted 16.2% 16.5%

Total number of students at TalTech 11,208 10,852

Number of international students 1506 1608

Proportion of international students in the total number of students at TalTech 13.4% 14.8%

Total number of students in Estonia 46,155 45,815

Proportion of TalTech students in the total number of students in Estonia 24.3% 23.7%

Number of countries, where international postgraduate students are studying 94 94

19

the Estonian society and the labour market, TalTech and

state strategies, developments in the European Higher

Education Area and quality assurance principles, as

well as international openness; an essential goal was to

reduce the duplication and overlapping of learning out-

comes, both within the university and across universities.

We encourage opening of internationally attractive

study programmes taught in English, in particular at

master’s level, and study programmes, the graduates of

which will receive the graduation certificates of several

partner universities (double degrees).

In the academic year 2018/19, the total of 18 master’s

programmes taught in English were opened for admis-

sion, five of which were joint study programmes with

other Estonian universities (the University of Tartu, Tallinn

University and the Estonian Academy of Arts) and one

was an international study programme with parter uni-

versities: the Catholic University of Leuven (Katholieke

Universiteit Leuven) from Belgium and the University of

Münster(Universität Münster) from Germany. A total of

4 bachelor’s study programmes and 9 doctoral study

programmes are taught in English.

In 2019, one of the important goals is to participate in the

EuroTech Alliance, where a new pan-European concept is

being created, which will enable students from universities

in the consortium to acquire a EuroTech engineering de-

gree in the future. The members of the planned EuroTech

Universities Alliance are, in addition to TalTech, the Techni-

cal University of Munich (TUM), the Technical University of

Denmark (DTU), the Czech Technical University in Prague

(CTU), École polytechnique fédérale de Lausanne (EPFL),

École polytechnique (EX), the Israel Institute of Technology

(Technion), the Eindhoven University of Technology (TU/e).

GOOD LECTURER DEVELOPMENT PROGRAM

The Good Lecturer Development Program was launched,

the aim of which is to consistently develop the compe-

tencies of TalTech’s academic staff required for teaching

and thereby to improve the quality of teaching and the

effectiveness of the development of studies, as well as

to recognise the good lecturers by providing financial

support for their ad hoc professional development with an

aim to improve the quality of studies.

E-LEARNING

In order to develop the education infrastructure, an e-sup-

port project was launched for compulsory courses, the

goal of which was to supply all the first and second level

study programmes with at least basic level e-support by

the beginning of the academic year 2020/21. In 2018, two

e-support evaluation rounds were carried out and the

e-support for 428 courses was declared to comply with

the baseline requirements.

The main e-learning environment used at TalTech

until 1 January 2019 was HITSA Moodle administered

by the Information Technology Foundation for Education

(HITSA). At the turn of the academic year 2018/19 all the

courses of Tallinn University of Technology were migrated

to the TalTech Moodle e-learning environment, which is

user-friendly and allows interfacing with other TalTech

environments, including the study information system ÕIS.

In 2018, the total of 3 989 lectures were recorded,

which have 156 916 views. A number of the educational

videos and lecture recordings are publicly available in

video environments and can be used by other lecturers

in courses for different target audiences.

MOBILITY

The interest of the students of Tallinn University of Tech-

nology to study abroad has been relatively sable over the

years, but the number of students, who have submitted an

application but still waive, has increased. A survey was

carried out among TalTech students to find out the main

reasons why students do not want to go to study abroad

and what is their opinion of possible mandatory mobility.

The most common obstacles pointed out were the desire

to graduate from the university within the nominal dura-

tion of studies (37% of the respondents), family-related

reasons (27%) and professional commitments (25%).

TalTech students, who cannot or do not want to study

abroad for some reason, can gain international learning

MOBILITY2017 2018

Number of international visiting students in an academic year 425 386

Number of short-term mobility students in an academic year 227 225

incl. number of in foreign universities as exchange students 160 155

incl. number of students in foreign countries as interns 67 70

20

experience through international post-graduate students

and international visiting students, who have come to

study at TalTech for a semester or a year. The number

of incoming international visiting students indicates a

downward trend in recent years. One of the reasons is

the stricter requirements established for international

students, such as the requirement of English language

proficiency at B2 level and the requirement to pass

prerequisite courses in some study programmes.

CONTINUING EDUCATION

Continuing education includes three sectors:

• continuing education provided based on the

continuing education study programmes;

• studying subjects of degree level

studies in Open University

• preparatory courses and courses

of the School of Technology

In 2018, the total revenue from continuing education was

3.544 million euros, an increase of 12% compared to the

previous year. Revenue from Open University tuition fees

decreased 15.6%, but revenue from continuing educa-

tion provided based on the continuing education study

programmes increased 33.4%. The strengths of TalTech

continuing education lie in flexibility in preparing training

programmes in compliance with the needs of enterpris-

es, focusing on training in the fields of engineering and

technology, the high quality of the trainings provided and

high level of professionalism in organising trainings.

In September 2018, the TalTech Olympiads School

began its activities in order to organise olympiads and

competitions for schoolchildren at Tallinn University of

Technology, thereby offering activities and challenges

to talented schoolchildren. In addition, the university

offers elective courses for schools and an exam school

and preparatory courses and learning support for state

exams for schoolchildren. The number of students in

TalTech’s preparatory courses has increased every year:

this is due to the fact that, on the one hand, the level

of teaching in mathematics at schools is inconsistent,

but, on the other hand, the preparatory courses are of

good repute. In the academic year 2017/18, one fifth of

the schoolchildren who attended preparatory courses

for upper secondary schoolchildren commenced their

studies at Tallinn University of Technology.

In 2019, the focus will be on increasing the volume of

continuing education, creating new forms and opportuni-

ties for learning, increasing the volume of international

summer schools and establishing a conference centre.

The School of Technology plans to extend the selection

of courses and opportunities for recreational activities,

involving more students and lecturers and broadening

the scope of the activities outside Tallinn.

TalTechDigital Vision Conference ended with a

discussion on the future of higher education.

3,54 Total revenue from continuing

education (million €)

3,17

20

18

20

17

CONTINUING EDUCATION2017 2018

incl. Open University tuition fees(million €) 1,39 1,17

incl. continuing education courses (million €) 1,78 2,37Number of students studying in continuing education study programmes 10183 11552

Number of students in preparatory courses 1545 1609

Number of students in the School of Technology 601 901

Number of students in Open University 3584 2710

21

PARTNERSHIP WITH SOCIETYPOPULARIZATION OF SCIENCE

Researchers from Tallinn University of Technology present-

ed their expert assessments in summer at Paide Opinion

Festival and in autumn in the scientific films programme of

Tallinn Black Nights Film Festival PÖFF. In 2018, we joined

the international science news release portal EurekAlert

and the “How do you know?” initiative led by the Estonian

Research Council. The goal of popularizing science is pur-

sued also by organising 3-minute science communication

competitions for doctoral students and junior researchers

at TalTech, from where three participants advanced to the

final round at the Estonian Academy of Sciences.

The aim of TalTech School of Technology is to arouse

the schoolchildren’s interest in the field of natural and

exact sciences and engineering by organising courses,

workshops and technology camps in the fields for chil-

dren from upper secondary schools and basic schools.

In spring 2018, the Young Engineer Programme was

launched, involving the total of 300 schoolchildren. The

Young Engineer Programme is based on the physics

and mathematics syllabi of the 3rd level of basic school

and upper secondary school that are related to study

programmes provided at TalTech School of Engineering.

In autumn, a number of new hobby groups were opened

to ensure posterity in the field of IT.

The Innovation and Business Centre Mektory in cooper-

ation with the School of Information Technologies, organ-

ised the Cyber Conference 2018 which, together with the

CyberSpike and CyberCracker competitions, helps bring

new persons interested in cyber security to the university

and raise cyber awareness. Mektory in cooperation with

the School of Business and Governance established the

Entrepreneurship Academy for companies, where 9 cours-

es for 660 participants took place in 2018. A new form of

cooperation was launched with the company MWB, where

the company contributes to the Mektory’s spatial planning

and equipment, involves students in the development of

new business solutions, adds value to teaching and learn-

ing and offers topics for master’s thesies. An agreement

was signed for sending a TalTech satellite to the orbit.

More than 50 000 people visited Mektory during the year,

and in 2019 we are expecting even more visitors, because

Mektory will become TalTech’s landmark, where a business

cooperation area and demo centre will be established.

22

TALLINN UNIVERSITY OF TECHNOLOGY 100

On 17 September 2018, Tallinn University of Technology

became a hundred years old, and we celebrated the

anniversary throughout the year. Through the events and

activities of the anniversary programme, we introduced

the university’s achievements to the public and assured

that Tallinn University of Technology is committed to be

a leading innovative and international university of engi-

neering and technology.

The message borne by the concept of the whole an-

niversary programme was “Heading towards the future”.

The activities and events were divided into three stages:

• THE PAST: we provided insight into 100 years of his-

tory (history book, postage stamp, permanent exhibi-

tion, alumni day)

• THE PRESENT: we recognised our staff, acknowl-

edged present-day actions (academic ceremony,

promotion of honorary doctors and doctors, awarding

of outstanding persons, university’s pop-up-events in

Estonia and abroad)

• THE FUTURE: we took a glimpse into the future, dis-

cussed the vision of the university (gala concert and

reception, Vision Conference)

The jubilee year provided a good opportunity to in-

volve alumni in the university life and almost all traditional

alumni events had more participants in his year. The most

popular event among the students, alumni and staff was

the campus party on 14 September, when the university’s

doors were open to everyone and various activities took

place from 11 a.m. up to early hours next morning. All

the stakeholders were involved in the organisation of

the party (e.g. more than 40 alumni played the guitar in

the rock opera, alumni and staff music bands performed

on the stage, etc.). Alumni gatherings took place in the

framework of the campus party.

As traditional, an academic ceremony was held on

17 September to celebrate the anniversary, which was

followed by a concert performance and Rector’s recep-

tion that same evening in the Alexela Concert Hall. The

concert was broadcast live by Estonian Television and

received the Event Marketing Award at the advertising

awards competition Golden Egg.

The TalTechDigital Vision Conference brought

Vice-President of the European Investment Bank Alex

Stubb and other high-level speakers to the campus. The

conference, which started with a ride on Iseauto, won

Tallinn’s most innovative conference award.

The anniversary celebrations entailed large-scale

communication activities in various formats and chan-

nels, with thousands of media reports and thousands

participants from Estonia and abroad. The communi-

cation activities included also launching of the new

TalTechi säravad üliõpilased

peale õppeaasta avaaktust

TalTech’s brilliant students after the opening ceremony of the academic year

23

short name of Tallinn University of Technology: TalTech

logo was officially approved both as a wordmark and

visual image. The new logo was positively welcomed

by students who are actively involved in university life

and it has received positive feedback in the context of

international communication.

BRAND AWARENESS AND VISIBILITY OF THE UNIVERSITY IN MEDIA

The visibility of Tallinn University of Technology in media

increased in 2018 and the awareness and pleasantness

of the brand has grown in the last five years. Spontaneous

awareness of Tallinn University of Technology has been

on an upward trend from 2014 (65%), being already 76%

in 2018 (source: survey of the reputation of universities

conducted by Kantar Emor in spring 2018).

Visibility in media in 2018 was primarily affected by

major events and achievements at the university: the

anniversary and the accompanying events, launching

of the TalTech short name and brand, completion of

the self-driving vehicle Iseauto, opening of the nearly

zero-energy building, etc.

The importance of print media has decreased signifi-

cantly in Estonia and all over the world, online publications

and social media are becoming increasingly important. In

2018, TalTech was covered 10 660 times by traditional

news media sources (print media, television and radio),

representing 25% of the total media coverage compared

to the University of Tartu and Tallinn University. As regards

social media channels, Tallinn University of Technology is

the market leader among the three largest universities in

Estonia with 51.4%. In 2019, a press centre will be estab-

lished at TalTech, which enables the university to produce

and distribute video, audio and printed news by taking

advantage of new solutions and providing the journalists

an opportunity to receive news more quickly.

The bridge designing competition Brico for engineering students organised at TalTech encourages to study engineering.

24

When planning the communication activities of 2019,

it should be borne in mind that the short name TalTech

needs to be consistently communicated and introduced,

so that an increasing number of people would associate

TalTech exclusively with Tallinn University of Technology.

It must be taken into account that a temporary setback

in brand strength indicators may occur, but this is normal

after a major change and before a new rise and a strong-

er position in the future, which has been one of the main

goals in launching the new brand.

DIGITAL DEVELOPMENTS OF THE UNIVERSITY

The goal of the digital infrastructure initiative TalTechDigi-

tal is to provide the students, staff and alumni convenient

and mobile solutions for using all major TalTech applica-

tions. To improve the level of e-services, we increased our

IT capabilities: in 2018, a new head of IT services, an IT

architect, software developers, project managers started

their work at TalTech.

During the year the business software was updated,

the data warehousing and business analysis platform

was introduced, the first services were transferred to the

information management system, a TalTech app was

created for students, at the end of the year e-courses

were migrated to the TalTech Moodle environment, the

user views of the extranet and intranet were analysed

and the first steps were taken toward transfer to new

platforms and, characteristically of a digital university,

an interactive virtual tour for introducing the university

campus was created.

In order to manage the risks and threats related to

digital developments, a three-level IT baseline security

system based on the university’s needs is under devel-

opment. A decision has been made to create a CERT

(Computer Emergency Response Team) at the university

to enhance cyber security and support academic devel-

opment in this field.

An e-course DigiTarkus providing digital competences

to all university staff was completed. Nearly 400 em-

ployees have registered for the course, rounds II and III

will be opened in 2019. The goal is for every university

employee to acquire the basic digital competencies.

SPORTS AND CULTURE

The title Cultural Event of the Year was awarded to two

collectives:

• TalTech Academic Female Choir for the 2nd place at

Gaudeamus singing competition, for participation in the

performance of Carl Orff’s cantata “Carmina Burana”

in the Student Song Festival Gaudeamus and for partic-

ipation in TalTech’s rock opera “Four Drops of Digital”;

• TalTech Brass Band for winning the 1st place in the

higher category of the national brass band competi-

tion and for organising the concert performance “My

Estonia” in Tallinn, Tartu and Viljandi.

The Sports Event of the Year was TalTech’s basketball

team’s 3rd place at the European Universities Basketball

Championship – this is the first ball games medal in the

history of Estonian student sports won from a European

Championship.

TalTech basketball team

25

Departments and heads of departments

• Department of Civil Engineering and Architecture

Head of Department Jarek Kurnitski

• Department of Electrical Power Engineering and Mechatronics

Head of Department Ivo Palu

• Department of Energy Technology

Head of Department Andres Siirde

• Department of Materials and Environmental Technology

Head of Department Malle Krunks

Department of Mechanical and Industrial EngineeringHead of Department Kristo Karjust

Tartu CollegeHead of College Lembit Nei

Virumaa CollegeHead of College Viktor Andrejev

Dean Arvo Oorn

SCHOOL OF ENGINEERING

New tenured professors 2018

Kimmo Sakari LylykangasProfessor of Architechture

Department of Civil Engineering and Architecture

Alar JustProfessor of Structural Engineering

Department of Civil Engineering and Architecture

Raido PuustProfessor of BIM

Department of Civil Engineering and Architecture

Argo RosinProfessor of Power Engineering

and Electricity Supply Department of Electrical Power Engineering and Mechatronics

Alar KonistProfessor of Oil Shale Technologies Department of Energy Technology

Maarja GrossbergProfessor of Semiconductor Material Physics Department of Materials and Environmental Technology

Sergei PreisProfessor of Water and Environment Technology Department of Materials and Environmental Technology

Prashanth Konda GokuldossProfessor of Additive Layer Manufacturing Department of Mechanical and Industrial Engineering

26

MOST IMPORTANT ACHIEVEMENTS IN 2018

A self-driving car Iseauto,

completed in cooperation between

TalTech engineering and IT students,

researchers and Silberauto, is a

development and learning platform

for creating and testing the IoT and

smart campus solutions.

The development “Development of Ceramics and Cermets for Applications in the Clock and Jewelry Industry” was recognized

as one of the university’s best

developments of the year.

The Smart Industry Centre (SmartIC)

was added to the Estonian Research

Infrastructures Roadmap.

Opening of the Relay Protection and Automation Laboratory.

Opening of the Building Information Modelling (BIM) classroom.

Starting the wind tunnel in the

aerodynamics lab.

Water emissions and their reduction in village communities –

villages in Baltic Sea Region as pilots

(VillageWaters)

Successful implementation of the

development project “Digital sensor platform for medical diagnostics and environmental monitoring”.

A high resolution scanning electron microscope and an atomic layer deposition reactor were

purchased for the Estonian Research

Infrastructures Roadmap object

NAMUR+ (center of nanomaterials

technologies and research).

A fully electrospun durable electrode

and an electrochemical double-

layer capacitor for high frequency

applications were developed for the European Space Agency.

Surface coating for indoor air cleaning in smart buildings.

Applied research in thermal engineering, as a result of which:

• transition of the existing large sca-

le networks to the 4th generation

district heating took place;

• large-scale heat pumps were integ-

rated with district heating systems.

Opening of Auvere power plant, where both the representative of the

energy company Eesti Energia and

the prime minister pointed out the

contribution of TalTech Department

of Energy Technology in R&D.

Construction of industrial robots and

automation systems integration and

visualization lab at Virumaa College.

Opening ceremony of Auvere power

plant, where both the representative

of the energy company Eesti Energia

and the prime minister pointed out the

contribution of TalTech Department of

Energy Technology in R&D.

27

Dean Gert Jervan

SCHOOL OF INFORMATION TECHNOLOGIES

New tenured professors 2018

Eduard PetlenkovProfessor of Intelligent Systems

Department of Computer Systems

Maksim JenihhinProfessor of Computer Systems

Department of Computer Systems

Peeter EllerveeProfessor of Digital System Design Department of Computer Systems

Muhammad Mahtab AlamProfessor of Communication Technologies T. J. Seebeck Department of Electronics

Juri BelikovProfessor of Control Systems Modelling Department of Software Science

Maie BachmannProfessor of Biomedical Signal Processing Department of Health Technologies

Departments and heads of departments

Department of Computer Systems

Head of Department Margus Kruus

Department of Software Science

Head of Department Jaan Penjam

Department of Health Technologies

Head of Department Kalju Meigas

Thomas Johann Seebeck Department of ElectronicsHead of Department Laur Lemendik

IT College Head of Department Kalle Tammemäe

28

MOST IMPORTANT ACHIEVEMENTS IN 2018

National research awards: A. Buldas

received an award for research and

development “Base technologies

of e-society” based on a scientific

discovery that led to the creation of

an innovative product which has a

significant socio-economic impact

and Ü.Kotta received an award in

the field of exact sciences for her

cycle of works “Algebraic methods in

mathematical control theory”.

A self-driving car Iseauto, completed

in cooperation between TalTech engi-

neering and IT students, researchers

and Silberauto, is a development

and learning platform for creating

and testing the IoT and smart campus

solutions.

Launching of the one-year study programme Digital Transformation in Business

An important increase in the practical

orientation of the study programmes

and updating the model of higher

education.

Collaboration between Telia and TalTech, where Telia supports

research and development and the

university conducts scientific research

in the field of NB-IoT and 5G.

Expansion of TalTech Centre for Di-gital Forensics and Cyber Security,

which now covers the area of cyber

security from strategic management

to technical operations and solutions.

High-level Estonian language speech recognition system developed as

a result of long-term research on

linguistics and machine learning.

Positive funding decisions for the

H2020 projects ECOBOTICS.SEA

(“Bio-inspired Technologies for a

Sustainable Marine Ecosystem”,

Maarja Kruusmaa) and ROBOMINERS

(“Resilient Bio-inspired Modular

Robotic Miners”).

The project Lab-on-Chip completed

in collaboration with the company

SelfDiagnostics Deutchland GmbH

has reached the small batch produc-tion stage.

The Centre for Biorobotics has

developed underwater sensors for

measurements in extreme conditions.

Applied research on the system of

sensors and software algorithms

for safety and driver assistance on

remotely operated ground vehicles

carried out in collaboration with Milrem LCM.

Developing methodology for auto-matic pavement defects detection in

collaboration with Reach-U AS.

Maturing the BLT signature scheme concept in collaboration with Guard-

time AS.

Alexela Energia AS applied research for finding the best clients’ electricity

consumption forecasting model.

The clinical flagship project of the personalised medicine programme

with the North Estonia Medical Centre

– applicability of personalised

medicine in the prevention of cardio-

vascular diseases.

The team of the project “Ragnarok

Workwear 2.0 smart work clothes”

was winner of Tallinn Entrepreneurs-hip Awards 2018 in applied research

and received the 1st place at the

TalTech applied research competition

in 2018; the best applied research

team in 2017.

Business agreements for underwater

camera systems signed with IAMHY-

DRO GmbH.

Installing in the Port of Sillamäe the

current meters, which were devel-

oped at the Centre for Biorobotics in

the framework of a Prototron project.

Applying speech recognition technology at a hospital, in the

Parliament of Estonia and in the Police

and Border Guard Board.

TalTech Centre for

Biorobotics explores

fish passibility using

underwater sensors.

29

Departments and heads of departments

Department of Geology

direktor Atko Heinsalu

Department of Chemistry and Biotechnologydirektor Ivar Järving

Department of Cyberneticsdirektor Andrus Salupere

Department of Marine Systemsdirektor Jüri Elken

Dean Tõnis Kanger

SCHOOL OF SCIENCE

New tenured professors 2018

Michael HitchProfessor of Mining Engineering

Department of Geology

Toomas TammProfessor of Inorganic Chemistry

Department of Chemistry and Biotechnology

Ott SchelerProfessor of Microfluidics Department of Chemistry and Biotechnology

Olli-Pekka SmolanderProfessor of Bioinformatics Department of Chemistry and Biotechnology

30

MOST IMPORTANT ACHIEVEMENTS IN 2018

H2020 FetTOpen grant “INnovative

chemIcal sensors for enanTioselective

detectIon of chiral pOllutants”.

Researcher of the Year 2018

– Professor Tõnis Timmusk

Team grants from the Estonian Research Council – Riina

Aav (Department of Chemistry

and Biotechnology), Siim Veski

(Department of Geology).

Nearly 40% increase in the volume of the School’s research

and development contracts and research projects: 2017 – 1.134 million

euros; 2018 – 1.605 million euros.

Successful work of the Laboratory of Industrial Chemistry in providing

added value to oil shale.

EU Interreg project Coast4us

and the new marine environment

monitoring stage of EU Copernicus programme.

Organisation of the conference Balticum Organicum Syntheticum

(BOS 2018) in Tallinn (President of the

Republic of Estonia Kersti Kaljulaid

delivered an opening speech, Jean

Marie Lehn who has been awarded

Nobel Prize in Chemistry participated

at the conference).

Professor Tarmo Soomere was

elected honorary doctor of Klaipeda University.

Professor Tarmo Soomere was

awarded the Badge of the Coat of

Arms (honorary citizenship) of Tallinn.

Professor Tarmo Soomere was elected honorary

doctor of Klaipeda University in 2018.

31

DeanEnn Listra

SCHOOL OF BUSINESS AND GOVERNANCE

New tenured professors 2018

Kadri MännasooProfessor of Microeconometrics

Department of Economics and Finance

Anu MassoProfessor of Big Data in Social Sciences

Ragnar Nurkse Department of Innovation and Governance

Erkki KaroProfessor of Science and Technology Policy Ragnar Nurkse Department of Innovation and Governance

Departments and heads of departments

Department of Economics and Finance

Head of Department Kadri Männasoo

• Ragnar Nurkse Department of Innovation and GovernanceHead of Department Erkki Karo

Department of LawHead of Department Tanel Kerikmäe

Department of Business AdministrationHead of Department Mari Avarmaa

32

MOST IMPORTANT ACHIEVEMENTS IN 2018

Tiina Randma-Liiv was elected

member of the Estonian

Academy of Sciences

The first ERC grant in TalTech

was awarded to Vasilis Kostakis:

www.cosmolocalism.eu.

The Foresight Centre of the Parliament of Estonia published the findings of the School’s research groups on investment patterns and

their implications to productivity and

entrepreneurial ecosystems in Estonia.

Organisation of the conference

“Digitalization of experiences. 25 years of marketing studies at Tallinn University of Technology”.

Study of the economists from

TalTech and the University of Tartu

on gender asset gap in Estonia.

Developing legal artificial intelligence strategy for the

Estonian government.

In December, an annual business idea presentation event “Ideas for Business” took place, where

over a thousand TalTech students

participated with the total of more than

a hundred different business projects.

A record number of students,

the total of 12, defended their

doctoral degree at the School.

The subject Public Administration was

placed 151–200 in the Academic Ranking of World Universities

(ARWU) or Shanghai Ranking.

We became a leader in the field in terms of the number

of scientific publications.

Students from 60 countries

are studying at the School.

Junior Researcher of the Year Vasilis Kostakis

33

Director Roomet Leiger

ESTONIAN MARITIME ACADEMY

New tenured professors 2018

Mihkel Kõrgesaar

Professor of Naval Architecture

MOST IMPORTANT ACHIEVEMENTS IN 2018

Increase of own revenue, incl.

the volume of research and

development, 46% compared to 2017.

Developing the concept of a smart cardeck for AS Tallink Grupp

in cooperation with the School

of Information Technologies.

Cooperation agreement signed with Saaremaa rural municipality

for opening the master’s programme

of Marine Engineering.

Development and testing of the

autonomous watercraft.

The naval architecture and hydrodynamics infrastructure

(SCC) was added to the Estonian

Research Infrastructures Roadmap.

Launching the professorship

and establishing a research

team on shipbuilding and

hydrodynamics.

Transfer to the new ISO 9001:2015 management system standard.

Estonia’s maritime education,

training and certification system audit conducted by the European

Maritime Safety Agency (EMSA)

was successfully passed.

Organising the Maritime Cyber Security summer school in

cooperation with the School of

Information Technologies.

The highest level of students’ satisfaction with their studies.

Winning the 1st place at the international sailing regatta The Tall

Ships Races in class C and D ships.

Joining the European Maritime Simulator Network (EMSN) in the

framework of the CoMET project.

Bringing expertise in the maritime sector to South African market in the

framework of the SME Aisle project.

Commencement of cooperation with the European Border and Coast Guard Agency Frontex with an aim to

train border and coast guard experts.

34

The core of the naval architecture and hydrodynamics infrastructure (SCC) is the only model testing tank in the Baltic States.

35

FINANCIAL ACTIVITIESIn 2018, the consolidated financial activities of Tallinn Uni-

versity of Technology resulted in over 11% year-on-year

growth in operating revenue and larger than expected op-

erating surplus. During the year, several important steps

were taken to streamline TalTech’s financial activities in

years ahead. An overview of work done is provided in this

chapter.

REVENUE

The budgeted consolidated revenue of Tallinn University

of Technology for 2018 amounted to 106.2 million euros,

the figure consisting of core operating revenue of 101.2

million euros and revenue from grants related to assets of

5 million euros. Actual revenue amounted to 103.6 million

euros (97.6% budget execution), the figure consisting of

core operating revenue of 100.6 million euros (99.4%) and

revenue from grants related to assets of 3 million euros

(60%).

Budgeted grants related to assets included grants

for the completion of a new academic building for the

Department of Civil Engineering and Architecture at Mäe-

pealse 3 (Tallinn). Due to delays in construction work, the

completion of the new building and the transfer of related

grants were postponed to the 2019/2020 fiscal year.

EXPENSES

Budgeted core operating expenses amounted to 93.1

million euros. Actual core operating expenses amounted

to 89.7 million euros, a 96.3% budget execution rate.

Staff costs amounted to 53.4 million euros, grants,

scholarships and membership fees totalled 14.5 million

euros and other operating expenses amounted to 21.8

million euros (23.0 million euros together with value

added tax on investments).

In the budget strategy of Tallinn University of Technol-

ogy, one of the key targets is that the ratio of staff costs

to core operating expenses should not exceed 60%. In

2018, the figure was 59.5%.

SURPLUS

Surplus for the year amounted to 1.77 million euros, ex-

ceeding the budgeted figure by a half. The better than

expected result was achieved by continuous monitoring

of operating expenses and the application of various

cost-saving measures (including, for example, the rejection

of bids received in several public procurements and the

arrangement of repeat procurements because the bids

received exceeded the target ceilings). In addition, the

depreciation and amortisation rates of different asset

classes were reviewed and adjusted to better reflect

the assets’ actual useful lives (for example, the analysis

indicated that while the average depreciation period of

assets in the class of plant and equipment was 5.5 years,

their average actual useful life was 8.4 years).

KEY FINANCIAL PERFORMANCE INDICATORS

In 2018, the Board of Governors approved the following

key financial performance indicators for Tallinn University

of Technology:

1. Total operating revenue should exceed total operat-

ing expenses every year by at least 1%.

2. Total operating revenue should increase every year

at a rate that equals or exceeds the growth rate of

Estonia’s nominal gross domestic product (GDP).

3. Current ratio (current assets dividend by current liabil-

ities) should equal or exceed 1.2.

4. Available cash funds should not be less than 1/12 of

total annual expenses.

5. Long-term loan burden should be smaller than 25% of

total annual revenue.

6. Cash flows from operating activities should be posi-

tive every year and cover depreciation and amortisa-

tion expense for the same year.

7. In 2018, the financial activities of Tallinn University of

Technology complied with the first five performance

indicators. However, cash flow management requires

further effort because in 2018 cash flows from operat-

ing activities did not fully cover depreciation and am-

ortisation expense.

HIGHLIGHTS OF FINANCIAL ACTIVITIES IN 2018

1. We made preparations for the upgrade of our central

enterprise resource planning (ERP) software and im-

plemented a new version, MS Dynamics NAV 2018, at

the end of 2018 and the beginning of 2019. Develop-

ing and updating the old version was not reasonable

as it no longer met the university’s needs.

2. We analysed the option of outsourcing TalTech’s ac-

counting and payroll functions but the analysis re-

flected that maintaining the functions in-house would

36

be more cost-efficient and enable us to respond more

quickly and flexibly in our daily operations.

3. We prepared descriptions of the internal services and

main work processes of TalTech’s financial activities,

which is a pre-requisite for gradual transition to activi-

ty-based budgeting.

4. We developed and implemented an electronic envi-

ronment and app for processing economic expenses

that are interfaced with our ERP software. The system

is comprehensive and mobile, and the solution saves

time, eliminates duplication of data and allows storing

expense documents digitally.

5. We designed a full costing model for the study pro-

grammes of TalTech’s education activities that can be

used to price the study programmes.

6. We changed the budgeting process and timeline. Pre-

viously the budget of a new fiscal year was prepared

in the last months of the previous fiscal year but in the

future we are planning to prepare budget projections

for the next year already before the summer holidays.

Also, we integrated the preparation of the budget for

a new fiscal year and the budget strategy for the next

four years into a single work flow.

7. TalTech refinanced its outstanding loan liability to

Luminor Bank AS at OP Corporate Bank plc Estonian

branch and, besides making scheduled loan repay-

ments, reduced its total outstanding loan liabilities by

an additional five million euros.

8. We carried out around 140 public procurements, two

times more than in recent years. The rise is attributa-

ble to purchasing activities related to the realisation

of support measures under the ASTRA programme.

9. To streamline its management and financial activities,

TalTech decided to reduce the number of its subsidiar-

ies. First, OÜ TTÜ Sport and OÜ Eitsa Kinnisvara were

merged and then OÜ Eitsa Kinnisvara was liquidated.

Eitsa Kinnisvara OÜ was deleted from the Commercial

Register on 7 March 2019.

CONSOLIDATED OPERATING REVENUE AND EXPENSES IN 2016 – 2018

OPERATING REVENUE

Amount 2016 (EUR’000)

Share 2016 (%)

Amount 2017 (EUR’000)

Share 2017 (%)

Amount 2018 (EUR’000)

Share 2018 (%) 

Operational funding received

47,928 60% 49,690 54% 54,609 53%

Revenue from economic activities and other revenue

16,673 21% 16,975 18% 19,449 19%

Grants received 15,672 19% 26,259 28% 29,508 28%

TOTAL 80,273 100% 92,924 100% 103,566 100%

OPERATING EXPENSES

Amount 2016 (EUR’000)

Share 2016 (%)

Amount 2017 (EUR’000)

Share 2017 (%)

Amount 2018 (EUR’000)

Share 2018 (%) 

Staff costs 46,514 54% 48,197 53% 53,384 52%

Other operating expenses

17,579 20% 19,228 21% 22,999 23%

Depreciation, amortisation and impairment losses

13,215 15% 11,229 12% 10,856 11%

Grants and scholarships provided

7,219 8% 7,507 8% 8,527 8%

Pass-through grants and membership fees

2,100 3% 5,055 6% 6,010 6%

TOTAL 86,627 100% 91,216 100% 101,776 100%

Operational funding comprises both transfers for funding

higher education activities and transfers for baseline

funding of research and development activities.

Other operating expenses comprise expenses on

maintaining and managing buildings and infrastructure

assets, entertainment expenses, expenses on office

supplies, training expenses, travel expenses, adver-

tising expenses, transport expenses, expenses on

assets of immaterial value and miscellaneous operating

expenses.

37

TALLINN UNIVERSITY OF TECHNOLOGY GROUP IN 2018 (In thousands of euros)

Legal person Area of activityOperating revenue

Surplus or deficit

Total assets Net assets

Tallinn University of Technology

Higher education, research 100,602 1,693 142,118 105,368

Subsidiaries

OÜ TTÜ Sport Real estate management 0 -2 0 0

MTÜ TTÜ Üliõpilasküla Accommodation of students 3,742 130 3,031 778

MTÜ TTÜ Spordiklubi Sports activities for students 563 -19 22 -36

MTÜ TTÜ Kultuurikeskus Cultural activities for students 180 -2 2 2

OÜ Eitsa Kinnisvara Real estate management 259 -91 0 0

Associates

OÜ IMECCInnovative manufacturing engineering systems competence centre

725 1 660 145

E-Kyla Arendus OÜ Software development 18 -2 60 57

AS Toidu- ja Fermentatsiooni-tehnoloogia Arenduskeskus

Research and development in the field of biotechnology

3,261 455 1,563 776

Tallinn University of Technology group (intra-group transactions have been eliminated)

103,566 1,770 145,309 106,301

KEY FINANCIAL INDICATORS (consolidated)

FINANCIAL INDICATOR (In millions of euros)

2013 2014 2015 2016 2017 2018 2019*

Operating revenue 91.4 95.5 91.3 80.3 92.9 103.6 111.5

Operating expenses 85.1 86.9 91.2 86.6 91.2 101.8 110.9

Finance income and costs 0 -0.3 -0.4 -0.2 -0.1 0 -0.1

Surplus/deficit for the year 6.3 8.3 -0.3 -6.5 1.6 1.8 0.4

Assets 142.7 166.7 155.2 137.4 151.8 145.3 145.8

Current assets 33.7 35.5 26.2 19.6 32.8 30.4 32.1

Non-current assets 109 131.2 128.9 117.8 119 114.9 113.7

Current liabilities 20.8 24.5 17.2 14 23.4 20 21.8

Non-current liabilities 24.8 36.8 32.9 24.9 23.9 19 17.5

Net assets 97.1 105.4 105 98.5 104.5 106.3 106.6

Borrowings 26.2 40.8 35 27.5 26.1 20.2 18.3

SUHTARVUD 2013 2014 2015 2016 2017 2018 2019*

Operating expenses / Operating revenue

93.1% 91.0% 99.9% 107.8% 98.2% 98.3% 99.5%

Borrowings / Operating revenue 28.7% 42.7% 38.3% 34.2% 28.1% 19.5% 17.0%

Current assets / Current liabilities 162.0% 144.9% 152.3% 140.0% 140.2% 152% 147.2%

Non-current assets / Total assets 76.4% 78.7% 83.1% 85.7% 78.4% 79.1% 78.0%

Borrowings / Total assets 18.4% 24.5% 22.6% 20.0% 17.2% 13.9% 12.6%

Net assets / Total assets 68.0% 63.2% 67.7% 71.7% 68.8% 73.2% 73.1%

*Forecast

38

MAIN FINANCIAL TARGETS FOR 2019

1. To generate consolidated operating revenue of 111.5

million euros (7.6% growth compared to 2018) and earn

a positive operating surplus of at least 0.4 million euros.

2. To find and plan solutions in the new budget strate-

gy that also ensure growth in TalTech’s revenue after

2020 when various structural support programmes

end or their monetary volume decreases.

3. To continue the development of the new ERP software

and implement new asset management, project ma-

nagement and budgeting modules that would allow

more mobile data processing and administration as

well as automating asset counts.

4. To calculate the costs of study programmes open for

admission to TalTech using the full costing model de-

signed in 2018.

5. To continue compiling service and process descrip-

tions and preparing for the implementation of activity

based budgeting.

6. To implement a new financial instrument: a starting

grant for tenured professors.

7. To continue the application of cost-saving measures

(including more efficient use of premises, modernising

the lighting solutions of buildings, etc.).

8. To speed up reporting and develop significantly better

data visualisation solutions.

9. To find and implement optimal solutions for carrying

out public procurements (including the implementation

of an e-catalogue, the identification and adoption of

a time-saving solution for carrying out small procure-

ments, etc.).

39

CONSOLIDATED FINANCIAL STATEMENTS

CONSOLIDATED BALANCE SHEET (in euros)

As at 31 December 2018 2017 Note

ASSETS 145,308,713 151,844,141

CURRENT ASSETS 30,399,280 32,769,385

Cash and cash equivalents 15,391,361 17,615,326 2

Receivables and prepayments 14,895,526 15,023,855 3

Inventories 112,393 130,204

NON-CURRENT ASSETS 114,909,433 119,074,756

Investments in associates 213,862 127,266 6

Other investments 8,705 9,206

Receivables and prepayments 45,364 22,384

Property, plant and equipment 114,022,326 118,636,280 8

Intangible assets 619,176 279,620 9

LIABILITIES AND NET ASSETS 145,308,713 151,844,141

LIABILITIES 39,007,350 47,312,962

Current liabilities 20,030,987 23,387,809

Payables and deferred income 18,715,722 20,729,186 11

Short-term provisions 0 377,172 13

Borrowings 1,315,265 2,281,451 14

Non-current liabilities 18,976,363 23,925,153

Borrowings 18,855,943 23,804,733 14

Provisions 120,420 120,420 13

NET ASSETS 106,301,363 104,531,179

Accumulated surpluses 104,531,179 102,903,379

Surplus for the financial year 1,770,184 1,627,800 The notes on pages 44 to 65 are an integral part of these consolidated financial statements.

40

CONSOLIDATED STATEMENT OF FINANCIAL PERFORMANCE (in euros)

2018 2017 Note

OPERATING REVENUE 103,566,468 92,924,298

Revenue from economic activities 18,966,751 16,692,150 15

Operational funding received 54,609,480 49,690,298 16

Grants received 29,507,874 26,259,332 17

Other revenue 482,363 282,518 18

OPERATING EXPENSES 101,776,360 91,215,695

Grants and scholarships provided 8,526,637 7,507,174

Pass-through grants and membership fees 6,010,209 5,055,389 19

Staff costs 53,384,486 48,196,635 20

Other operating expenses 19,196,118 16,199,402 21

Other expenses 3,802,943 3,028,405 22

Depreciation, amortisation and impairment losses 10,855,967 11,228,690 8, 9

OPERATING SURPLUS 1,790,108 1,708,603

Finance income and costs -106,520 -117,300 23

Share of surplus of investees 86,596 36,497 6, 23

SURPLUS FOR THE FINANCIAL YEAR 1,770,184 1,627,800

The notes on pages 44 to 65 are an integral part of these consolidated financial statements.

41

CONSOLIDATED STATEMENT OF CASH FLOWS (in euros)

2018 2017 Note

Cash flows from operating activities

Operating surplus for the financial year 1,790,108 1,708,603

Adjustments for:

Depreciation, amortisation and impairment losses and write-off at carrying amount

10,855,967 11,228,690 8, 9

Gain on sale of non-current assets -424,027 -99,358 8

Change in provisions -377,172 -32,915 13

Change in operating receivables and prepayments 106,304 -8,316,800

Change in inventories 17,930 -16,842

Change in operating payables and deferred income -2,014,375 9,864,009

Net cash from operating activities 9,954,735 14,335,387

Cash flows from investing activities

Paid on acquisition of property, plant and equipment and in-tangible assets

-6,608,992 -8,336,133 8, 9

Interest and other finance income received 12,086 3,367

Consideration received for building rights 0 1,278

Proceeds from sale of investment properties 0 155,320 8

Received on merger with IT College 0 117,344 7

Proceeds from sale of property, plant and equipment 451,925 0 8

Net cash used in investing activities -6,144,981 -8,058,824

Cash flows from financing activities

Other finance costs paid -3,128 -1,140

Proceeds from loans received 4,870,000 0 14

Repayment of loans received -10,785,265 -1,402,683 14

Interest paid -115,326 -120,079

Effect of movements in foreign exchange rates 0 -5,999

Net cash used in financing activities -6,033,719 -1,529,901

Net cash flow -2,223,965 4,746,662

Cash and cash equivalents at beginning of year 17,615,326 12,868,664 2

Change in cash and cash equivalents -2,223,965 4,746,662

Cash and cash equivalents at end of year 15,391,361 17,615,326 2

The notes on pages 44 to 65 are an integral part of these consolidated financial statements.

42

CONSOLIDATED STATEMENT OF CHANGES IN NET ASSETS (in euros)

Accumulated surpluses

Deficit/surplus for the financial year

Total

As at 31 December 2016 105,023,390 -6,518,822 98,504,568

Transfer of deficit for 2016 -6,518,822 6,518,822 0

Other changes 4,398,811 0 4,398,811

Surplus for the financial year 0 1,627,800 1,627,800

As at 31 December 2017 102,903,379 1,627,800 104,531,179

Transfer of surplus for 2017 1,627,800 -1,627,800 0

Surplus for the financial year 0 1,770,184 1,770,184

As at 31 December 2018 104,531,179 1,770,184 106,301,363

The notes on pages 44 to 65 are an integral part of these consolidated financial statements.

43

KONSOLIDEERITUD RAAMATUPIDAMISE AASTAARUANDE LISAD

NOTE 1. SIGNIFICANT ACCOUNTING POLICIES

The consolidated financial statements of Tallinn University

of Technology group for the year ended 31 December 2018

comprise the financial information of Tallinn University

of Technology (the parent) and its subsidiaries (together

referred to as ’the group’) and the group’s investments in

associates. The consolidated financial statements of Tallinn

University of Technology group for 2018 have been pre-

pared in accordance with the Estonian Financial Reporting

Standard. The main requirements of the Estonian Financial

Reporting Standard are set out in the Estonian Accounting

Act and more specific guidance is provided in the Public

Sector Financial Accounting and Reporting Guidelines.

The consolidated financial statements have been

prepared on the historical cost basis unless stated other-

wise in these accounting policies.

The consolidated financial statements are presented

in euros.

The consolidated financial statements for 2018 com-

prise the financial information of Tallinn University of

Technology (the parent) and its subsidiaries OÜ TTÜ Sport

(deleted from the Commercial Register on 18 May 2018),

MTÜ TTÜ Üliõpilasküla, MTÜ TTÜ Spordiklubi, MTÜ TTÜ

Kultuurikeskus and OÜ Eitsa Kinnisvara (deleted from the

Commercial Register on 7 March 2019). Tallinn University

of Technology is (was) the sole owner of all the subsidiar-

ies. All the subsidiaries of Tallinn University of Technology

operate (operated) in Estonia. Further information about

subsidiaries is provided in note 7.

Investments in IMECC OÜ, E-Kyla Arendus OÜ and

Toidu- ja Fermentatsioonitehnoloogia Arenduskeskus AS

are accounted for as investments in associates. Further

information about associates is provided in note 6.

PREPARATION OF CONSOLIDATED FINANCIAL STATEMENTS

BASIS OF CONSOLIDATIONIn preparing consolidated financial statements, the fi-

nancial statements of Tallinn University of Technology and

all subsidiaries under its control are combined line by line.

All intra-group receivables and liabilities, transac-

tions, and any resulting unrealised profits and losses are

eliminated.

SUBSIDIARIESA subsidiary is an entity controlled by the group. Con-

trol is presumed to exist when the group holds, directly

or indirectly, over 50% of the voting power of an entity

or has the power to govern an entity’s operating and

financial policies by some other means.

The term ‘subsidiary’ also covers non-corporate en-

tities (non-profit associations). The existence of control

of and significant influence over non-corporate entities

is determined considering, among other factors, whether

the assets of the entity will transfer to the parent when

the entity is liquidated. When the parent has control of

a non-corporate entity (generally assumes holding over

50% of voting power), the investment is accounted for as

a wholly-held investment.

A subsidiary is included in the consolidated financial

statements from the date the group gains control to the

date the group loses control of it.

Acquisitions of subsidiaries are accounted for using

the purchase method (except for business combinations

involving entities under common control which are ac-

counted for using the modified purchase method). Under

the purchase method, the acquired subsidiary’s assets,

liabilities and contingent liabilities (i.e. the net assets

acquired) are recognised at their fair values and the

difference between the cost of the interest acquired and

the fair value of the net assets acquired is recognised as

positive or negative goodwill.

From the date of acquisition, the group’s interest in the

acquired subsidiary’s assets, liabilities and contingent

liabilities and any positive goodwill acquired are recog-

nised in the consolidated balance sheet and the acquired

subsidiary’s revenue and expenses are recognised in

the consolidated statement of financial performance.

Positive goodwill is classified as an intangible asset.

44

When a subsidiary is sold during the reporting period,

its revenue and expenses are included in the consolidat-

ed statement of financial performance until the date of

disposal. The difference between the sales price and the

carrying amount of the subsidiary’s net assets (including

goodwill) in the group’s balance sheet as at the date

of sale is recognised as a gain/loss on the sale of the

subsidiary. If part of a subsidiary is sold and the parent

loses control (voting power decreases below 50%) but

retains some ownership interest, consolidation of the

entity is discontinued as of the date of sale and the par-

ent’s remaining interest in the entity’s assets, liabilities

and goodwill is accounted for as an investment in an

associate or a financial asset.

The carrying amount of the investment retained in a

former subsidiary is regarded as its deemed new cost.

ASSOCIATESAn associate is an entity over which the group has

significant influence but not control. Significant influence

is generally presumed to exist when the group holds 20

to 50% of the voting power of an entity. In the consolidat-

ed financial statements, investments in associates are

accounted for using the equity method. Under the equity

method, an investment is initially recognised at cost and

its carrying amount is subsequently adjusted to recog-

nise the investor’s share of changes in the investee’s net

assets (both changes in the investee’s profit or loss and

other items of net assets), depreciation, and amortisation

of the difference identified in the purchase price alloca-

tion between the fair value and carrying amount of the

investee’s assets, liabilities and contingent liabilities.

If the group’s share of losses of an associate account-

ed for under the equity method exceeds the carrying

amount of the investment in the associate, the carrying

amount of the investment is reduced to zero and such

non-current receivables that in essence form part of

the investment are written down. Further losses are

accounted for off the balance sheet. If the group has

incurred legal or constructive obligations on behalf of

the associate, both the liability and loss under the equi-

ty method are recognised in the consolidated financial

statements.

INVESTMENTS IN FOUNDATIONS AND NON-PROFIT ASSOCIATIONS

Investments in foundations and non-profit associa-

tions are accounted for as follows:

• when the group has control of a foundation or a

non-profit association (generally assumes holding

over 50% of voting power), the investment is accoun-

ted for as a wholly-held investment;

• when the group has significant influence over a foun-

dation or a non-profit association (generally assumes

holding 20 to 50% of voting power), no investment

or financial asset is recognised in the consolidated

balance sheet (contributions to the investee’s capital

are accounted for as expenses on support provided).

The existence of control of non-corporate entities is

determined considering, among other factors, whether

the assets of the entity will transfer to the group when

the entity is liquidated.

OTHER INVESTMENTSInvestments in shares and other equity instruments

(except for investments in subsidiaries and associates)

whose fair value cannot be measured reliably are meas-

ured at cost less any impairment losses. Tallinn University

of Technology has investments in the following entities:

Eliko Tehnoloogia Arenduskeskus OÜ (10% interest),

Tarkvara Tehnoloogia Arenduskeskus OÜ (2% interest),

LandResources OÜ (5% interest), Crystalsol GmbH AS

(5% interest) and Haridusmeedia OÜ (7.5% interest).

PARENT’S PRIMARY FINANCIAL STATEMENTS IN THE NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

In accordance with the Estonian Accounting Act, the

notes to the consolidated financial statements have to

include the separate primary financial statements of the

group’s parent (the consolidating entity): the balance

sheet and the statements of financial performance, cash

flows and changes in net assets. The parent’s sepa-

rate primary financial statements are prepared using

the same accounting policies as those applied on the

preparation of the consolidated financial statements. In

the parent’s separate financial statements presented in

the notes to these consolidated financial statements, in-

vestments in subsidiaries and associates are measured

at cost less any impairment losses.

FOREIGN CURRENCY TRANSACTIONS AND FINANCIAL ASSETS AND LIABILITIES DENOMINATED IN A FOREIGN CURRENCY

Any currency other than the functional currency, the

euro (i.e. the group’s functional currency), is regarded as

a foreign currency. A transaction in a foreign currency

is recorded by applying the official exchange rate of

the European Central Bank quoted at the date of the

transaction. At the reporting date, monetary assets and

liabilities denominated in a foreign currency (receivables

and loans to be settled in cash) are translated into euros

using the exchange rates of the European Central Bank

ruling at that date. Exchange gains and losses arising on

translation are recognised in the statement of financial

performance in the period in which they arise.

45

FINANCIAL ASSETS

The group has the following financial assets: cash and

cash equivalents, trade and other receivables and other

investments (investments in shares and other securities).

Trade and other receivables (accrued income, loans

provided and other current and non-current receivables),

except for items acquired for resale, are measured at

their amortised cost.

The amortised cost of current receivables is generally

equal to their nominal value (less any repayments and

any impairment losses). Therefore, current receivables

are measured at the amount that is expected to be col-

lectible. Non-current receivables are recognised initially

at the fair value of the consideration receivable. After

initial recognition, they are measured at amortised cost

using the effective interest rate method. Non-current re-

ceivables that do not bear interest are measured at their

present value by applying a discount rate of 4% per year.

Financial assets measured at fair value through

surplus or deficit (derivative financial instruments) are

initially recognised at fair value and any transaction

costs attributable to their acquisition are recognised as

an expense in the consolidated statement of financial

performance.

At each reporting date the group assesses whether

there is any indication that a financial asset may be

impaired. If such indication exists, the financial asset is

written down.

Trade receivables comprise current receivables arising

from the provision of education services and other ordi-

nary economic activities. Trade receivables are measured

at their amortised cost (i.e. at their nominal value less any

write-down for impairment). Receivables are measured

on an individual basis: the collectability of each invoice

is assessed separately. The collectability of a receivable

is estimated by taking into account both information that

is available at the reporting date and information that be-

comes available between the reporting date and the date

on which the financial statements are authorised for issue

and may affect the collectability of the receivable. A re-

ceivable is written down if there is objective evidence that

the receivable or part of it will not be settled in accordance

with the originally agreed settlement terms.

CASH AND CASH EQUIVALENTS

Cash and cash equivalents in the consolidated balance

sheet and consolidated statement of cash flows comprise

cash on hand, balances on current accounts and term

deposits with a maturity of up to three months.

In the consolidated statement of cash flows, cash

flows from operating activities are reported using the

indirect method. Cash flows from investing and financing

activities are reported using the direct method.

INVENTORIES

Inventories are assets, which are: held for sale in the

ordinary course of economic activity; in the process of

production for such sale; or in the form of materials or

supplies to be consumed in the production process or the

rendering of services. Inventories are initially measured

at cost, which comprises all costs of purchase, costs

of conversion and other costs incurred in bringing the

inventories to their present location and condition. Ex-

penditure on fuel excise duty incurred on the acquisition

of inventories is capitalised and included in the cost of the

inventories. Borrowing costs are not included in the cost

of inventories and, in line with the Public Sector Financial

Accounting and Reporting Guidelines, non-recoverable

levies and taxes paid on the acquisition of inventories are

recognised as an expense. The cost of goods is assigned

using the FIFO formula. In the consolidated balance

sheet, inventories are measured at the lower of cost and

net realisable value. Net realisable value is the estimated

selling price in the ordinary course of business less the

estimated costs of completion and the estimated costs

necessary to make the sale.

Inventories recognised in the consolidated balance

sheet comprise souvenirs and similar items purchased

and held for resale and publications awaiting sale.

INVESTMENT PROPERTY

Investment property comprises property (land or a

building or part of a building) that the group leases out

to a non-public sector entity to earn rentals or holds for

capital appreciation and which is not used in the group’s

own operating activity. Buildings and premises that are

used by a public sector entity are recognised as items of

property, plant and equipment.

An investment property is measured initially at its

cost that includes any expenditure directly attributable

to its acquisition (e.g. notary’s fees, stamp duties, legal

and advisory fees, and other expenditures without which

the transaction would probably not have occurred). Bor-

rowing costs are not included in the cost of investment

property and, in line with the Public Sector Financial

Accounting and Reporting Guidelines, non-recoverable

levies and taxes incurred on the acquisition of invest-

ment property are recognised as an expense. In line with

the Public Sector Financial Accounting and Reporting

Guidelines, after initial recognition, investment property

is measured at cost less any accumulated depreciation

and any impairment losses. Depreciation is charged

using the straight-line method. Exceptions include

properties without buildings (plots of land) which are not

depreciated. Each investment property is assigned a de-

preciation rate that corresponds to its useful life. Where

an investment property consists of significant parts that

46

have different useful lives, the parts are accounted

for separately and assigned depreciation rates that

correspond to their useful lives. The group’s investment

properties are depreciated at the rate of 5% per year.

The costs of subsequent day-to-day maintenance and

repair of investment properties are recognised as an ex-

pense as incurred. When a component of an investment

property is replaced, the cost of the new component is

added to the carrying amount of the property if it meets

the definition of investment property and the recognition

criteria and the carrying amount of the replaced compo-

nent is written off the consolidated balance sheet.

An investment property is derecognised on disposal

or when it is permanently withdrawn from use. When the

purpose of use of an investment property changes, the

property is reclassified to another asset class in the con-

solidated balance sheet. From the date of reclassification,

the asset is accounted for using the accounting policies

applied to the class of assets it was transferred to.

PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment are assets which are used

in the group’s own operating activities, have an estimated

useful life exceeding one year, and cost at least 5,000

euros. Assets whose useful lives exceed a year but cost

is less than 5,000 euros are accounted for as assets of

immaterial value until they are implemented at which

point they are recognised as an expense. Items of imma-

terial value that have been recognised as an expense are

accounted for off the balance sheet.

As an exception, the following items may be recognised as

items of property, plant and equipment regardless of cost:

• works of artistic value (works of art and antiques, mu-

seum objects, archive materials, rare books) whose

value does not decrease over time;

• books in public libraries whose core activity is storage

and lending of books.

An item of property, plant and equipment is initially rec-

ognised at cost, which comprises the purchase price and

any costs directly attributable to bringing the item to the

location and condition necessary. In line with the Public

Sector Financial Accounting and Reporting Guidelines,

non-recoverable levies and taxes are not capitalised

as part of the cost of an item of property, plant and

equipment. In the consolidated balance sheet, items of

property, plant and equipment are carried at cost less any

accumulated depreciation and any impairment losses.

Subsequent costs on an item of property, plant and

equipment are capitalised and added to the carrying

amount of the item if they meet the definition of property,

plant and equipment and the recognition criteria. Other

repair and maintenance costs are recognised as an

expense as incurred.

Depreciation is charged using the straight-line method.

Each item of property, plant and equipment is assigned

a depreciation rate that corresponds to its useful life. In

the case of assets with significant residual value only the

depreciable amount (cost less residual value) is charged

to expenses over the useful life of the asset.

Assets with an unlimited useful life (land, assets en-

tered in the national registry of cultural property, assets

belonging to museum collections and items belonging to

library collections) are not depreciated. Assets acquired

for decor and design that do not have permanent value

and assets transferred to auxiliary museum collections

which are replaced after certain periods are depreciated

over their estimated useful lives

Asset classes are assigned the following depreciation

rates:

Buildings, infrastructure assets and their structural compo-nents

2–10%

Plant and equipment 10–30%

Vehicles 20–35%

Other items of property, plant and equipment 20–50%

Land, books and works of artistic value are not depreciated.

Depreciation of an asset begins when it is available

for use (i.e. in the location and condition necessary for it

to be operating in the intended manner). Depreciation of

an asset ceases when the asset’s residual value exceeds

its carrying amount or the asset is permanently retired

from use. Depreciation rates and methods and residual

values are reviewed at each reporting date. When there

is indication that the useful life or residual value of an as-

set has changed significantly, depreciation accounting is

changed prospectively.

LIBRARY COLLECTIONS

Section 41 subsection 2 clause 2 of the Public Sector

Financial Accounting and Reporting Guidelines provides

that public libraries whose core activity is storage and

lending of library items may, by way of an exception,

recognise library items as items of property, plant and

equipment regardless of cost.

In line with the above recognition exception, the

group’s balance sheet includes items acquired for the

library collections of Tallinn University of Technology

since 2004. Items acquired for library collections are

recognised as items of property, plant and equipment in

an aggregated set (total amount). Accounts in unit and

title terms are kept in the library’s information system. In

the consolidated balance sheet, library collections are

measured at cost. Items belonging to library collections

are not depreciated.

47

The following library collection items are not recognised

in the consolidated balance sheet (are accounted for off

the balance sheet):

• library items acquired before 2004;

• library items received through donations;

• legal deposit copies.

The library of Tallinn University of Technology writes

library collection items off in accordance with the Pro-

cedure for Derecognising Library Items, which sets out

the bases for writing off different library collection items.

Library items are written off at cost.

INTANGIBLE ASSETS

An intangible asset is an identifiable non-monetary asset

without physical substance that is expected to be used

for more than a year and has a cost that exceeds the

threshold for recognition as a non-current asset. An intan-

gible asset (software, a right of use or another intangible

asset) is recognised when the group controls the asset, it

is probable that future economic benefits attributable to

the asset will flow to the group, the cost of the asset can

be measured reliably and the asset did not result from

internal research and development expenditures. Re-

search and development expenditures are recognised as

an expense as incurred. An intangible asset is measured

initially at cost, which comprises its purchase price and

other directly attributable costs of acquisition. After initial

recognition, an intangible asset is carried at cost less any

accumulated amortisation and any impairment losses.

All of the group’s intangible assets are assumed to

have finite useful lives. Intangible assets are amortised

on a straight-line basis over their estimated useful lives.

Each intangible asset is assigned an amortisation rate

that corresponds to its useful life. Amortisation rates

and methods are reviewed at each reporting date. The

classes of the group’s intangible assets are assigned

amortisation rates that range from 20 to 40%.

IMPAIRMENT OF ASSETS

In conformity with section 42 subsection 9 of the Public

Sector Financial Accounting and Reporting Guidelines,

public sector entities do not conduct impairment tests or

recognise impairment losses for non-current assets re-

quired for rendering public service unless the value of an

asset has declined due to damage or the asset has been

partly or fully retired from use due to some other reason.

In the case of other assets, items of property, plant and

equipment with unlimited useful lives (land, assets en-

tered in the national registry of cultural property, assets

belonging to museum collections and items belonging

to library collections) and depreciable and amortisable

assets are assessed at each reporting date to determine

whether there is any indication of impairment. When

there is indication of impairment, the group estimates the

asset’s recoverable amount and compares it to the asset’s

carrying amount.

An impairment loss is recognised in an amount by

which an asset’s carrying amount exceeds its recoverable

amount. The recoverable amount of an asset is the higher

of its fair value less costs to sell and its value in use.

Recoverable amount is determined for an individual asset

or the smallest group of assets that generates largely

independent cash flows. An impairment loss is recognised

as an expense in the period in which it is incurred.

At the end of each reporting period the group assesses

whether there is any indication that the recoverable amount

of an asset written down in an earlier period may have

increased (except for goodwill whose impairment losses

are not reversed). If an impairment test indicates that the

recoverable amount of an asset or a group of assets (a

cash-generating unit) has risen above its carrying amount,

the previously recognised impairment loss is reversed and

the asset’s carrying amount is increased to an amount

that would have been determined (net of amortisation or

depreciation) had no impairment loss been recognised in

prior years. A reversal of an impairment loss is recognised

in the consolidated statement of financial performance by

reducing expenses from impairment of non-current assets.

FINANCE AND OPERATING LEASES

A finance lease is a lease that transfers all significant risks

and rewards of ownership of an asset to the lessee. All

other leases are classified as operating leases.

THE GROUP AS A LESSEEOperating lease payments are recognised as an

expense on a straight-line basis over the lease term.

THE GROUP AS A LESSORAssets leased out under operating leases are pre-

sented in the group’s balance sheet according to their

nature, i.e. similarly to other assets recognised in the

consolidated balance sheet. Assets leased out under

operating leases are depreciated using a depreciation

policy consistent with the group’s normal depreciation

policy for similar assets. Operating lease payments re-

ceived are recognised as income on a straight-line basis

over the lease term

DERIVATIVE FINANCIAL INSTRUMENTS

When a derivative financial instrument is recognised initial-

ly, it is measured at its fair value at the date of signature of

48

the underlying contract. After initial recognition, derivatives

are re-measured to fair value at each reporting date. The

method of recognising gains and losses on changes in the

fair value of derivative financial instruments depends on

whether the instrument has been designated as a hedging

instrument and if so, the nature of the hedged item.

The group uses interest rate swaps to hedge its expo-

sure to the risks arising from movements in interest and

foreign exchange rates. Such derivatives are measured

initially at their fair value at the date of signature of the

contract and are subsequently re-measured to fair value

when their fair value changes. Derivatives with a positive

fair value are classified as assets and derivatives with a

negative fair value are classified as liabilities.

Gains and losses on changes in the fair values of

derivative financial instruments are recognised in the

consolidated statement of financial performance in the

period in which they arise.

FINANCIAL LIABILITIES

Upon initial recognition all financial liabilities (trade pay-

ables, borrowings, accrued expenses, and other current

and non-current payables) are measured at their cost

which includes any directly attributable transaction costs.

After initial recognition, financial liabilities are measured

at their amortised cost.

The amortised cost of current financial liabilities

is generally equal to their nominal value. Therefore,

current financial liabilities are measured in the amount

payable.

Non-current financial liabilities are recognised initially

at the fair value of the consideration received (less any

transaction costs). Thereafter they are measured at their

amortised cost using the effective interest rate method.

A financial liability is classified as current when it is due

to be settled within twelve months after the reporting date

or the group does not have an unconditional right to defer

settlement for at least twelve months after the reporting

date. A loan liability that is due to be settled within twelve

months after the reporting date but which is refinanced

into a non-current liability after the reporting date and

before the financial statements are authorised for issue is

classified as current. Liabilities which become payable on

demand at the reporting date due to breach of the provi-

sions of the loan contract are also classified as current.

PROVISIONS AND CONTINGENT LIABILITIES

A provision is recognised for a probable present obligation

of uncertain timing or amount that has arisen as a result

of a past event. A provision is recognised in the consoli-

dated balance sheet based on management’s estimates

of the expenditure required to settle the obligation and

the time the obligation should be settled. A provision is

measured in an amount that is management’s best esti-

mate of the expenditure required to settle the obligation

at the reporting date or to transfer it to a third party at

that time. When it is probable that a provision will be used

within more than twelve months after the reporting date,

it is measured at its discounted value unless the effect of

discounting is immaterial.

Other possible or present obligations whose real-

isation is less probable than their non-realisation or

whose amount cannot be measured sufficiently reliably

are disclosed in the notes to the consolidated financial

statements as contingent liabilities.

GRANTS

Grants comprise resources received (grants received)

through non-exchange transactions, i.e. without directly

giving goods or services in exchange, and resources

transferred (grants provided or passed on) through

non-exchange transactions, i.e. without directly receiving

goods or services in exchange. Grants are accounted for

in accordance with the principles outlined in the Public

Sector Financial Accounting and Reporting Guidelines.

Grants are classified into:

• government grants (hereafter ‘grants’) – grants recei-

ved and provided on a project basis for particular

purposes that have a specified goal along with mi-

lestones for monitoring the achievement of the goal,

a timeframe, and a monetary budget and where the

provider of the grant (the donor) requires from the reci-

pient (the beneficiary) detailed reporting on the use

of funds received and any surplus funds have to be

returned to the provider of the grant;

• operational funding grants (hereafter ‘operational fun-

ding’) – funding received and provided based on the

functions and tasks outlined in the statutes and the

goals outlined in the development documents of the

recipient.

Grants comprise:

• domestic grants;

• international grants.

Domestic grants comprise grants received from Estonian

residents including other public sector entities (except

international grants passed on by them). International

grants comprise grants received from non-residents

including international organisations.

A grant is recognised in the consolidated balance

sheet initially when the cash has been transferred or

received or on the date when the receivables, liabilities,

revenue and expenses associated with the grant are

49

recognised. A grant is recognised as revenue in the

period in which the operating costs are incurred or the

non-current asset is acquired unless the conditions of the

grant involve the risk that the grant may be reclaimed or

may not be received. Operational funding is recognised

as revenue when the cash has been received. When a

grant provider or intermediary provides a grant using sim-

plified reimbursement of expenditures (standardised unit

costs, payments of specific amounts, reimbursements

of indirect expenditures compensated at a uniform rate)

without requiring expense documents, grant revenue is

recognised in the period in which the grant is provided.

When a grant has been received but significant

conditions attaching to it have not been met, the grant

is recognised as deferred income. When expenditures

have been incurred and the application for the disburse-

ment of a grant has been accepted but the grant has not

been received, the grant is recognised as revenue and

a receivable.

Grants are also classified into grants related to in-

come and grants related to assets.

GRANTS RELATED TO INCOME

Grants related to income (grants for covering operating

expenses) are recognised using the principle of matching

revenue with expenses. Grants related to income are

recognised as revenue in proportion to related expens-

es. Grants related to income are recognised using the

gross method, i.e. grants received and the expenses for

which they are intended to compensate are recognised

separately in the consolidated statement of financial

performance.

GRANTS RELATED TO ASSETS

The main condition for grants related to assets is that

the group as the grant recipient has to purchase, build

or otherwise acquire a certain non-current asset. In line

with the Public Sector Financial Accounting and Reporting

Guidelines, public sector entities whose main goal is not

earning income for the owner recognise grants related to

assets as income in the period in which the non-current

asset is acquired. For accounting purposes, the date of

receipt of a grant is the date on which the non-current

asset is actually acquired (in the case of work that is

capitalised, the date on which the work that is capitalised

is completed).

The cost of an asset acquired with a grant is recog-

nised as an item of property, plant and equipment or an

intangible asset based on the nature of the asset.

On recognising grants in the consolidated statement

of financial performance, the group differentiates be-

tween grants received and pass-through grants (where

the group acts an intermediary). Pass-through grants are

grants received for passing on to another party, not for

covering the group’s own operating expenses or acquir-

ing assets. When the group acts as a grant intermediary,

income from grants received for passing on equals

expenses from grants passed on.

Non-monetary grants are classified into:

• grants received through three-party transactions whe-

re the grant provider or intermediary transfers cash di-

rectly to the supplier of goods or services from whom

the group as the grant recipient receives the goods or

services;

• grants received through transactions where the grant

provider transfers goods or services to the group wit-

hout a direct sale from the supplier of the goods or

services.

When a non-monetary grant is provided through a trans-

action where the grant provider or intermediary transfers

cash directly to the supplier, the grant is recognised based

on a notice issued by the grant provider or intermediary in

the same way as if the cash moved via the grant recipient

to the supplier (except for movements in the bank account;

instead, on the due date the grant recipient closes the

payable to the supplier and the receivable or prepayment

received from the grant provider or intermediary).

Non-monetary grants are measured at the fair value

of the goods and services received. Assets received

from other public sector entities by way of non-monetary

grants are measured at their fair value or, if this cannot

be determined, at their carrying amount in the transfer-

or’s financial statements.

When it appears that some conditions attaching to the

grant have not been met and the group as the grant in-

termediary or recipient is liable to the grant provider for

the recipient’s compliance with the conditions attaching

to the grant and the use of the funds for their designated

purpose, the group recognises at the date the breach of

contract is identified a receivable from the grant recipi-

ent and/or a liability to the grant provider, and reduces

revenue from grants received and/or expenses from

grants provided.

REVENUE

Revenue from the sale of goods and rendering of services

is measured at the fair value of consideration received or

receivable, taking into account any discounts and rebates

allowed. Revenue from the sale of goods is recognised

when all significant risks of ownership of the goods have

been transferred to the buyer, the amount of revenue and

the costs incurred or to be incurred in respect of the trans-

action can be measured reliably and it is probable that

the economic benefits associated with the transaction will

50

flow to the group. Revenue from the rendering of services

is recognised when the service has been rendered or, if

the service is rendered over an extended period, using the

stage of completion method.

Revenue from the rendering of education services

comprises tuition fees charged from students, partici-

pants in continuing education programmes, etc. Relevant

revenue is recognised in the same period in which the

service is rendered. When part of an education service

is rendered in the next financial year, relevant portion of

tuition fees received is recognised in the consolidated

balance sheet as deferred income. Out of tuition fees

received for the autumn term of the 2018/2019 academic

year, 80% have been included in revenue for the report-

ing period. The remaining 20% have been recognised as

deferred income and will be taken to revenue in 2019.

Interest income is recognised when it is probable

that it will be received and its amount can be measured

reliably. Interest income is recognised using the effective

interest method.

TRANSACTIONS WITH RELATED PARTIES

For the purposes of these consolidated financial state-

ments, related parties include:

• the group’s associates;

• foundations in which Tallinn University of Technology

is a founding member;

• members of the executive and higher management

of Tallinn University of Technology (members of the

board of governors, the rector, vice-rectors, area di-

rectors) and foundations, non-profit associations and

companies under their control or significant influence;

• close family members of the members of the execu-

tive and higher management of Tallinn University of

Technology including spouses, domestic partners and

children, and foundations, non-profit associations and

companies under their control or significant influence.

The remuneration and significant benefits provided to

members of the executive and higher management are

disclosed in the consolidated financial statements. In line

with the Public Sector Financial Accounting and Reporting

Guidelines, information on other related party transac-

tions is disclosed only where the transactions do not meet

general legal or the group’s internal requirements or have

not been conducted on market terms.

EVENTS AFTER THE REPORTING PERIOD

The consolidated financial statements reflect all signifi-

cant events affecting the valuation of assets and liabilities

that became evident between the reporting date and the

date on which the financial statements were authorised

for issue but are related to the reporting or prior periods.

Recognition of events that occur between the end

of the reporting period and the date when the financial

statements are authorised for issue depends on whether

the event is adjusting or non-adjusting. An adjusting event

is an event that provides evidence of conditions that

existed at the reporting date. The effects of an adjusting

event are recognised in the consolidated balance sheet

and the consolidated statement of financial performance

as at and for the reporting period. A non-adjusting event

is an event that is indicative of conditions that arose after

the reporting period. The consolidated balance sheet

andthe consolidated statement of financial performance

as at and for the reporting period are not adjusted to

reflect a non-adjusting event after the reporting period.

If the effect of a non-adjusting event is material, it is

disclosed in the notes to the consolidated financial

statements.

NOTE 2. CASH AND CASH EQUIVALENTS

As at 31 December 2018 2017

Cash on hand 5,124 8,617

Current account balances 15,386,237 17,586,248

Term deposits 0 20,461

Total 15,391,361 17,615,326

The average interest rate of term deposits recognised as at 31 December 2017 was 0.65%.

51

NOTE 3. RECEIVABLES AND PREPAYMENTS

As at 31 December 2018 2017

Trade receivables 1,866,863 1,500,022

Accounts receivable 1,918,297 1,596,848

Allowance for doubtful receivables -51,434 -96,826

Doubtful receivables at the beginning of the period -96,826 -211,763

Collection of doubtful receivables 14,159 128,595

Items recognised as doubtful during the period -48,580 -38,258

Items written off as uncollectable during the period 79,813 24,600

Grants receivable (note 4) 9,990,544 9,767,156

Prepaid taxes (note 5) 172,574 169,492

Prepayments for services 726,069 366,417

Other current receivables 2,139,476 3,220,768

Prepaid grants and co-financing 1,644,529 2,690,938

Grant repayments receivable (recoveries) 148,419 47,304

Other receivables 346,528 482,526

Total 14,895,526 15,023,855

NOTE 4. GRANTS RECEIVABLE

As at 31 December 2018 2017

Ministry of Education and Research 3,037,125 85,765

European Union and its institutions 2,891,393 457,408

Foreign donors 1,417,001 793,405

Archimedes Foundation 781,109 6,105,745

Information Technology Foundation for Education 638,918 491,432

University of Tartu 404,568 776,285

Estonian Research Council 225,526 365,801

IMECC OÜ 161,831 68,100

Environmental Investment Centre 125,852 297,404

Other domestic donors 307,221 325,811

Total 9,990,544 9,767,156

See also note 3.

Grants receivable by programme 2018 2017

Institutional development programme for R&D institutions and higher education establishments (ASTRA programme)

2,415,488 1,875,656

EU research and innovation programme Horizon 2020 2,286,322 340,443

INTERREG Baltic Sea Region 861,025 328,117

Other 4,427,709 7,222,940

Total 9,990,544 9,767,156

52

NOTE 5. TAXES

Tax As at 31 December 2018 As at 31 December 2017Prepayment Payable Prepayment Payable

Value added tax 0 285,157 0 372,992

Personal income tax 0 674,697 0 631,631

Social security tax 0 1,242,538 0 1,174,642

Income tax on fringe benefits and corporate income tax 0 22,613 0 16,308

Unemployment insurance premiums 0 78,489 0 73,629

Funded pension contributions 0 49,912 0 53,059

Other taxes 0 200 0 242

Balance on the prepayment account (note 3) 172,574 0 169,492 0

Total 172,574 2,353,606 169,492 2,322,503

NOTE 6. INVESTMENTS IN ASSOCIATES

Toidu- ja Fermentatsiooni- tehnoloogia Arenduskeskus AS

OÜ IMECCE-Kyla

Arendus OÜTOTAL

Domicile Estonia Estonia Estonia

2017

Ownership interest (%) at the end of the year

20 21.05 33.33

Share of investee’s equity at the end of the year

78,106 29,723 19,437 127,266

Carrying amount of investment at end of year

78,106 29,723 19,437 127,266

2018

Ownership interest (%) at end of year

20 21.05 33.33

Share of investee’s equity at the end of the year

165,152 29,867 18,843 213,862

Carrying amount of investment at the end of the year

165,152 29,867 18,843 213,862

Toidu- ja Fermentatsiooni- tehnoloogia Arenduskeskus AS

OÜ IMECCE-Kyla

Arendus OÜ

Share capital 39,375 12,141 4,500

Legal reserve 3,938 1,214 450

Share premium 4,108 0 40,500

Retained earnings 728,643 132,086 11,081

Total equity 776,064 145,441 56,531

Group’s share of investee’s equity 155,213 30,615 18,842

All associates operate in Estonia.Toidu- ja Fermentatsioonitehnoloogia Arenduskeskuse

AS ended 2018 with an adjusted profit of 435,229 euros, which increased the value of the group’s investment in the entity by 87,046 euros (2017: a profit of 168,551 euros, investment growth 33,710 euros).

OÜ IMECC ended 2018 with a profit of 685 euros, which

increased the value of the group’s investment in the entity by 144 euros (2017: adjusted profit of 12,347 euros, investment growth 2,599 euros).

E-Kyla Arendus OÜ ended 2018 with a loss of 1,782 euros, which reduced the value of the group’s investment in the entity by 594 euros (2017: a profit of 565 euros, investment growth 188 euros).

53

NOTE 7. SUBSIDIARIES

Name of subsidiary Domicile

Ownership interest (%)As at 31 December

2018 2017

TTÜ Sport OÜ (Was deleted from Commercial Regis-ter on 18 May 2018)

Estonia 0 100

TTÜ Üliõpilasküla MTÜ Estonia 100 100

TTÜ Spordiklubi MTÜ Estonia 100 100

TTÜ Kultuurikeskus MTÜ Estonia 100 100

Eitsa Kinnisvara OÜ (Was deleted from Commercial Register on 7 March 2019)

Estonia 100 0

In the reporting period, the subsidiary TTÜ Sport OÜ was merged with the subsidiary Eitsa Kinnisvara OÜ. TTÜ Sport OÜ was deleted from the Commercial Register on 18 May 2018. All rights, obligations, assets and liabilities of TTÜ Sport OÜ were transferred to Eitsa Kinnisvara OÜ. As a result of the merger, the acquirer was transferred cash at bank of 341,004 euros and a liability classified as a provision of 223,946 euros (was recognised in 2016 for covering the expenses of repairing the floor of a sports hall).

The liquidation of Eitsa Kinnisvara OÜ began in June 2018 and was completed on 7 March 2019 when the entity was deleted from the Commercial Register.

The activities of Eitsa Kinnisvara OÜ were discontinued in No-vember 2018. All its assets (cash of 397,773 euros and non-cur-rent assets of 3,826,664 euros) were transferred to Tallinn Uni-versity of Technology (sole shareholder). Liquidation gain on the write-off of the cost of investment from the balance sheet of Tal-linn University of Technology amounted to 23,891 euros.

NOTE 8. PROPERTY, PLANT AND EQUIPMENT

Land Build-ingsPlant and equipment

Other items of property, plant and equipment

Library collections

Assets under construction

Total

BALANCE AT 31 DECEMBER 2016

Cost 5,416,436 141,643,215 42,641,999 11,463,898 6,318,477 386,956 207,870,981

Accumulated depreciation 0 -46,168,779 -34,960,825 -9,475,932 0 0 -90,605,536

Carrying amount 5,416,436 95,474,436 7,681,174 1,987,966 6,318,477 386,956 117,265,445

MOVEMENTS IN 2017

Purchases and improvements 0 184,583 3,200,255 307,623 95,864 4,400,857 8,189,182

Addition through merger with IT College (at cost)

0 5,659,527 208,761 433,942 0 0 6,302,230

Reclassification 0 4,097,483 0 96,419 0 -4,193,902 0

Write-off at cost 0 -1,543,994 -1,342,202 -132,288 -18,228 0 -3,036,712

Depreciation and impairment losses

0 -6,763,399 -3,541,336 -611,569 0 0 -10,916,304

Writeoff of depreciation 0 1,543,994 1,342,202 132,288 0 0 3,018,484

Addition through merger with IT College (deprecia-tion)

0 -1,571,305 -198,539 -309,181 0 0 -2,079,025

Write-off at carrying amount 0 -68,229 -18,362 -20,429 -18,228 0 -125,248

BALANCE AT 31 DECEMBER 2017

Cost 5,416,436 150,040,814 44,708,813 12,169,594 6,396,113 593,911 219,325,681

Accumulated depreciation 0 -53,027,718 -37,376,860 -10,284,823 0 0 -100,689,401

Carrying amount 5,416,436 97,013,096 7,331,953 1,884,771 6,396,113 593,911 118,636,280

54

MOVEMENTS IN 2018

Purchases and improve-ments 158,640 77,250 2,886,400 239,348 90,218 2,645,435 6,097,291

Reclassification 0 2,830,093 0 0 0 -2,830,093 0

Write-off at cost -27,423 -1,617,344 -397,590 -504,136 -50,980 0 -2,597,473

Depreciation and impairment losses

0 -6,791,240 -2,667,984 -523,458 0 0 -9,982,682

Write-off of depreciation 0 1,617,344 397,590 504,136 0 0 2,519,070

Write-off at carrying amount 0 -631,528 -4,327 -5,140 -50,980 -9,165 -701,140

BALANCE AT 31 DECEMBER 2018

Cost 5,547,653 151,330,813 47,197,623 11,904,806 6,435,351 400,088 222,816,334

Accumulated depreciation 0 -58,833,142 -39,651,581 -10,309,285 0 0 -108,794,008

Carrying amount 5,547,653 92,497,671 7,546,042 1,595,521 6,435,351 400,088 114,022,326

At 31 December 2018, the largest item in assets under const-ruction was the reconstruction of an academic building at Mäepealse 3 of 323,399 euros.

The largest construction projects that were completed in 2018 included the reconstruction of the gallery of academic building No 3 at Ehitajate tee 5 of 1,282,404 euros and the TalTech amphitheatre of 453,900 euros.

In the reporting period, the group sold a five-room apart-ment and a non-residential space (part of a basement) at Rä-vala pst. 11/13/15 in Tallinn for 240,000 euros and for 53,350 euros respectively. Total proceeds from the transaction amounted to 293,350 euros.

Information about assets pledged as collateral for bor-rowings is provided in note 14.

NOTE 9. INTANGIBLE ASSETS

Software Rights and licencesAssets under

construction and prepayments

Total

Balance at 31 December 2016

Cost 2,326,788 73,205 0 2,399,993

Accumulated amortisation -2,026,632 -54,148 0 -2,080,780

Carrying amount 300,156 19,057 0 319,213

MOVEMENTS IN 2017

Additions 146,951 0 0 146,951

Write-off at cost -75,093 -3,040 0 -78,133

Amortisation and impairment -169,826 -16,718 0 -186,544

Write-off of amortisation 75,093 3,040 0 78,133

Balance at 31 December 2017

Cost 2,398,646 70,165 0 2,468,811

Accumulated amortisation -2,121,365 -67,826 0 -2,189,191

Carrying amount 277,281 2,339 0 279,620

MOVEMENTS IN 2018

Additions 144,572 69,126 298,003 511,701

Write-off at cost -69,781 0 0 -69,781

Amortisation and impairment -157,365 -7,480 0 -164,845

Write-off of amortisation 69,781 0 0 69,781

Reclassification 0 28,500 -28,500 0

Write-off at carrying amount -7,300 0 0 -7,300

Balance at 31 December 2018

Cost 2,466,137 167,791 269,503 2,903,431

Accumulated amortisation -2,208,949 -75,306 0 -2,284,255

Carrying amount 257,188 92,485 269,503 619,176

Intangible assets under construction include projects for the renewal of the digital infrastructure of TalTechDigital. At 31 December 2018, the largest of these (in terms of work

delivered and accepted) was the Information Management System that amounted to 203,773 euros.

55

NOTE 10. OPERATING LEASES

Premises Cars Office equipment

2018 2017 2018 2017 2018 2017

Operating lease expenses of the period 128,598 97,710 39,887 44,561 235,118 117,092

NOTE 11. PAYABLES AND DEFERRED INCOME

As at 31 December 2018 2017

Trade payables 1,505,892 2,123,245

Payables to employees 2,444,829 2,217,525

Taxes payable (note 5) 2,353,606 2,322,503

Payables related to grants and co-financing 2,460,662 1,477,094

Other payables 359,813 301,162

Advances received 314,332 245,259

Deferred income (note 12) 9,276,588 12,042,398

Total 18,715,722 20,729,186

NOTE 12. DEFERRED INCOME

As at 31 December 2018 2017

Deferred income from research and development contracts 477,625 30,965

Deferred grants and co-financing 8,304,125 11,509,073

Deferred tuition fees 489,282 496,804

Other deferred income 5,556 5,556

Total 9,276,588 12,042,398

DEFERRED GRANTS AND CO-FINANCING As at 31 December 2018 2017

European Union and its institutions 4,354,112 8,087,931

Foreign donors 1,526,830 1,530,506

Archimedes Foundation 1,508,792 1,048,205

Estonian Research Council 420,762 431,138

Other domestic donors 197,851 212,023

Ministry of Foreign Affairs 184,906 165,879

Information Technology Foundation for Education 110,872 33,391

Total 8,304,125 11,509,073

See also note 11.

DEFERRED GRANTS AND CO-FINANCING BY PROGRAMME 2018 2017

EU research and innovation frame programme Horizon 2020 5,049,843 9,110,044

ERASMUS+ 1,766,834 1,168,170

Personal research grants and personal post-doctoral grants 342,205 380,519

Other 1,145,243 850,340

Total 8,304,125 11,509,073

56

NOTE 13. PROVISIONS

CURRENT PROVISIONS As at 31 December 2018 2017

Provision for grants to be repaid 0 153,226

Other provisions 0 223,946

Total 0 377,172

CURRENT PROVISIONS As at 31 December 2018 2017

Provision for termination benefits 120,420 120,420

Total 120,420 120,420

In the reporting period, the group reversed a provision of 153,226 euros recognised for recovery claims that could have been submitted based on the European Commission’s audit of the projects of the EU 7th Framework Programme because no claims were received. The reversed provision was recognised in the statement of financial performance within Grants received.

In 2018, the floor of a sports hall was repaired. In 2016, the group had recognised a provision of 223,946 euros for

relevant costs. Actual repair costs amounted to 147,957 eu-ros. The unused portion of the provision of 75,989 euros was reversed and recognised in the statement of financial perfor-mance as a reduction of Other operating expenses.

The provision for termination benefits has been recogni-sed for covering the costs of the post-employment benefits to be provided to the rector and the vice-rectors when their contracts expire.

NOTE 14. BORROWINGS

As at 31 December 2018Loan

balanceOf which

non-currentOf which

currentMaturity

dateInterest rate

Long-term loan 1 (OP Corporate Bank plc Estonian branch)

4,870,000 4,470,000 400,000 2023 Euribor + 0.66%

Long-term loan 2 (Danske Bank AS Estonian branch)

13,600,000 13,000,000 600,000 2024 Euribor + 0.93%

Long-term loan 3 (AS SEB Pank) 779,553 662,619 116,934 2020 Euribor + 1.15%

Long-term loan 4 (AS SEB Pank) 315,000 210,000 105,000 2021 Euribor + 1.18%

Long-term loan 5 (AS SEB Pank) 606,655 513,324 93,331 2022 Euribor + 1.35%

20,171,208 18,855,943 1,315,265

As at 31 December 2017Loan

balanceOf which

non-currentOf which

currentMaturity

dateInterest rate

Long-term loan 1 (Luminor Bank AS) 8,928,701 8,503,525 425,176 2038 Euribor + 0.3%

Long-term loan 2 (Danske Bank AS Estonian branch)

14,200,000 13,600,000 600,000 2024 Euribor + 0.93%

Long-term loan 3 (AS SEB Pank) 896,487 779,553 116,934 2020 Euribor + 1.15%

Long-term loan 4 (AS SEB Pank) 420,000 315,000 105,000 2021 Euribor + 1.18%

Long-term loan 5 (AS SEB Pank) 699,986 606,655 93,331 2022 Euribor + 1.35%

25,145,174 23,804,733 1,340,441

In general, loans are denominated in euros. The base cur-rency of the loan received from Luminor Bank AS in 2011 was the Swedish krona. With a swap contract, the exchange rate of the Swedish krona was set at 8.905 until 20 June 2018. At 31 December 2017, the fair value of the derivative financial instru-ment was 941,010 euros and it was presented in the balance sheet within short-term borrowings.

On 20 June 2018, the outstanding balance of the loan was converted to euros. The conversion did not give rise to additio-nal costs for Tallinn University of Technology.

At the end of the reporting period, the university repaid Lu-minor Bank AS the entire loan balance of which 4,870,000 eu-ros was refinanced at OP Corporate Bank plc Estonian branch and the remaining repayment of 5,000,000 euros was cove-red with the own funds of Tallinn University of Technology.

Tallinn University of Technology has an overdraft agree-ment with AS SEB Pank that has a limit of 3,200,000 euros. The interest rate of the overdraft is 1 month Euribor plus 0.65%

per year. At 31 December 2018 and 31 December 2017, Tallinn University of Technology had no overdraft liabilities.

The group’s loan agreements are not secured except for the loans taken by MTÜ TTÜ Üliõpilasküla that are secured with mortgages of building rights at Raja 4D of 2,556,466 eu-ros and at Akadeemia tee 11 of 2,100,000 euros.

The loan agreements contain certain covenants that impo-se requirements to the group’s financial indicators. If the group does not meet the covenants, the bank may call in the loan immediately. At 31 December 2018, Tallinn University of Tech-nology was in compliance with all loan terms and covenants.

Total carrying amount of assets pledged as loan collaterals

As at 31 December 2018 2017

Buildings 1,500,037 1,684,960

57

NOTE 15. REVENUE FROM ECONOMIC ACTIVITIES2018 2017

Formal education tuition fees 3,501,889 3,157,166

Continuing education tuition fees 3,284,707 3,119,656

Research and development contracts and services provided 7,074,766 5,364,363

Other economic activities 5,105,389 5,050,965

Total 18,966,751 16,692,150

Revenue from economic activities by geographical area 2018 2017

Estonia 15,687,127 13,954,173

Other countries of the European Union 1,977,048 1,941,415

Other countries 1,302,576 796,562

Total 18,966,751 16,692,150

NOTE 16. OPERATIONAL FUNDING RECEIVED2018 2017

Operational funding from state budget for formal education activities 41,505,252 38,865,038

Funding from state budget for institutional research activities 5,430,211 5,430,211

Baseline funding from state budget for research activities 5,965,920 3,767,530

Funding from state budget for national programmes and research pro-jects

778,464 772,105

Other funding from state budget 686,955 648,375

Other funding and support 242,678 207,039

Total 54,609,480 49,690,298

NOTE 17. GRANTS RECEIVEDGrants related to income 2018 2017

European Union and its institutions 7,777,860 6,479,305

Archimedes Foundation 8,027,731 5,902,251

Foreign donors 3,227,476 2,846,189

Estonian Research Council 2,970,539 2,838,914

Information Technology Foundation for Education 1,902,353 1,807,207

University of Tartu 956,755 1,017,405

Other domestic donors 370,326 414,450

Ministry of Economic Affairs and Communications 261,000 0

Environmental Investment Centre 252,641 437,747

Ministry of Education and Research 235,779 308,929

Ministry of Finance 230,841 0

Ministry of Foreign Affairs 226,741 214,669

Enterprise Estonia 201,700 405,663

Ministry of Defence 177,657 103,485

IMECC OÜ 146,191 150,825

Total 26,965,590 22,927,039

58

Grants related to assets 2018 2017

Archimedes Foundation 2,068,776 3,035,117

University of Tartu 302,378 42,508

Other domestic donors 171,130 254,668

Total 2,542,284 3,332,293

Total grants received 29,507,874 26,259,332

Grants related to income by programme 2018 2017

EU research and innovation frame programme Horizon 2020 7,994,200 6,288,560

Institutional development programme for R&D institutions and higher edu-cation establishments (ASTRA programme)

2,698,674 1,303,859

Programme for scholarships in smart specialisation growth areas 2,411,000 2,217,568

Other 13,861,716 13,117,052

Total 26,965,590 22,927,039

Grants related to assets by programme 2018 2017

Institutional development programme for R&D institutions and higher edu-cation establishments (ASTRA programme)

2,004,177 1,563,593

Support for research infrastructure of national importance provided on the basis of a roadmap

312,395 1,510,232

IT Academy programme 82,127 54,668

Other 143,585 203,799

Total 2,542,284 3,332,293

As a rule, projects are funded with grants on the principle of reimbursement. Under the latter, Tallinn University of Techno-logy group as a grant recipient first incurs expenditures using own funds and then the intermediary of the grant reimburses the expenditures on the basis of a relevant application and supporting documentation. The execution of projects and the receipt of grants are influenced by the intermediary’s

assessment of the eligibility of project costs incurred. Grants received for covering costs that are deemed to be ineligible have to be repaid to the intermediary.

In 2017, Tallinn University of Technology group as a reci-pient and intermediary of grants reduced grants received by 11,142 euros (2016: 166,177 euros) due to recovery claims recei-ved.

NOTE 18. OTHER REVENUE

2018 2017

Gain on sale of investment properties 0 94,103

Gain on sale of property, plant and equipment 424,027 5,255

Other income on assets 8,781 8,685

Miscellaneous income 49,555 174,475

Total 482,363 282,518

59

NOTE 19. PASS-THROUGH GRANTS AND MEMBERSHIP FEES

2018 2017

Provision of grants related to income 5,494,321 4,213,366

Of which foreign grants related to income passed on 5,452,026 4,173,803

Of which co-financing for foreign grants related to income passed on 42,295 39,563

Provision of grants related to assets 0 452,675

Of which foreign grants related to assets passed on 0 405,025

Of which co-financing for foreign grants related to assets passed on 0 47,650

Membership fees 515,888 389,348

Total 6,010,209 5,055,389

NOTE 20. STAFF COSTS

2018 2017

Salary expenses 39,699,914 35,973,887

Taxes on staff costs 13,375,757 12,025,457

Other 308,815 197,291

Total staff costs 53,384,486 48,196,635

Average number of staff converted to full-time equiva-lent 1,635 1,638

NOTE 21. OTHER OPERATING EXPENSES

2018 2017

Expenses on properties 6,465,642 5,879,396

Travel expenses 2,572,259 2,051,148

Acquisition of assets of immaterial value 3,893,270 2,899,412

Sub-contracting services 2,068,168 1,922,034

Office expenses 1,726,567 1,484,282

Transport expenses 473,164 406,768

Entertainment expenses 717,608 604,939

Advertising expenses 791,954 567,855

Personnel-related expenses 411,856 337,284

Miscellaneous other operating expenses 75,630 46,284

Total 19,196,118 16,199,402

60

NOTE 22. OTHER EXPENSES

2018 2017

Taxes 3,709,828 3,063,565

Penalty payments and levies 16,392 22,011

Doubtful receivables 44,660 -74,217

Miscellaneous expenses 32,063 17,046

Total 3,802,943 3,028,405

NOTE 23. FINANCE INCOME AND COSTS

2018 2017

Finance income and costs on investments in subsidiaries and associates (note 6)

86,596 36,497

Interest expense -115,160 -119,927

Interest income 11,148 2,419

Loss on sale of other investments -26 -1,788

Foreign exchange gain 0 2,049

Of which adjustment of loan balance for year-end EUR exchange rate 0 272,277

Of which exchange loss on derivative financial instrument 0 -241,729

Of which foreign exchange gain 0 -28,499

Other finance income and costs -2,482 -53

Total -19,924 -80,803

NOTE 24. OFF-BALANCE SHEET ASSETSAssets with a cost of 500 to 5,000 euros are accounted for off the balance sheet. At 31 December 2018, the total cost of

off-balance sheet assets was 14,148,567 euros (31 December 2017: 13,184,536 euros).

NOTE 25. TRANSACTIONS WITH RELATED PARTIESIn 2018, the remuneration of the executive and higher mana-gement amounted to 642,665 euros, including bonuses of 46,900 euros, compensation of 28,323 euros and car bene-fits of 18,789 euros (2017: 507,467 euros, including bonuses of

3,500 euros, compensation of 14,100 euros and car benefits of 19,993 euros). In 2018 and 2017, there were no transactions that did not meet general legal or the group’s internal requi-rements or were not conducted on market terms.

NOTE 26. CONTINGENT LIABILITIESThe tax administrator may audit the group’s tax accounting within five years after the deadline for the submission of a tax return. On the detection of a misstatement or omission, the tax authorities may charge additional tax, late payment

interest and penalty payments. The group’s management is not aware of any circumstances that might cause the tax administrator to assess a significant amount of additional tax to be paid by the group.

61

NOTE 27. FINANCIAL INFORMATION ON THE GROUP’S PARENTIn accordance with the Estonian Accounting Act, the notes to the consolidated financial statements include the separate primary financial statements of the consolidating entity (the parent’s balance sheet, statement of financial performance, statement of cash flows and statement of changes in net as-sets). The parent’s primary financial statements are prepared

using the same accounting policies and measurement ba-ses as those applied in the preparation of the consolidated financial statements. As an exception, investments in subsi-diaries and associates are measured in the parent’s financial statements at cost less any impairment losses.

BALANCE SHEET

As at 31 December 2018 2017

ASSETS 142,116,747 148,170,175

CURRENT ASSETS 29,978,936 31,903,307

Cash and cash equivalents 15,061,919 16,853,706

Receivables and prepayments 14,804,743 14,919,397

Inventories 112,274 130,204

NON-CURRENT ASSETS 112,137,811 116,266,868

Investments in subsidiaries and associates 10,431 4,210,978

Other investments 8,705 9,206

Receivables and prepayments 45,364 22,384

Property, plant and equipment 111,454,135 111,744,680

Intangible assets 619,176 279,620

LIABILITIES AND NET ASSETS 142,116,747 148,170,175

LIABILITIES 36,748,464 44,494,426

Current liabilities 19,158,044 22,270,481

Payables and deferred income 18,158,044 20,151,069

Short-term provisions 0 153,226

Borrowings 1,000,000 1,966,186

Non-current liabilities 17,590,420 22,223,945

Borrowings 17,470,000 22,103,525

Provisions 120,420 120,420

NET ASSETS 105,368,283 103,675,749

Accumulated surpluses 103,675,749 102,162,403

Surplus for the financial year 1,692,534 1,513,346

62

STATEMENT OF FINANCIAL PERFORMANCE

2018 2017

OPERATING REVENUE 100,602,080 90,108,843

Revenue from economic activities 16,056,558 14,022,867

Operational funding received 54,582,443 49,664,280

Grants received 29,491,124 26,259,332

Other revenue 471,955 162,364

OPERATING EXPENSES 98,849,996 88,433,752

Grants and scholarships provided 8,495,737 7,474,374

Pass-through grants and membership fees 6,358,117 5,336,091

Staff costs 52,091,426 47,003,516

Other operating expenses 18,248,503 15,254,689

Other expenses 3,409,552 2,681,730

Depreciation, amortisation and impairment losses 10,246,661 10,683,352

OPERATING SURPLUS 1,752,084 1,675,091

Finance income and costs -83,441 -90,203

Share of surplus of investees 23,891 -71,542

SURPLUS FOR THE FINANCIAL YEAR 1,692,534 1,513,346

63

STATEMENT OF CASH FLOWS

2018 2017

CASH FLOWS FROM OPERATING ACTIVITIES

Operating surplus for the financial year 1,752,084 1,675,091

Adjustments for:

Depreciation, amortisation and impairment losses and write-off at carrying amount

10,246,661 10,683,352

Gain on sale of non-current assets -424,027 -5,255

Change in provisions -153,226 -32,915

Change in operating receivables and prepayments 91,674 -8,397,280

Change in inventories 17,930 -17,164

Change in operating payables and deferred income -1,993,025 9,820,602

Net cash from operating activities 9,538,071 13,726,431

CASH FLOWS FROM INVESTING ACTIVITIES

Paid on acquisition of property, plant and equipment and intangible as-sets

-6,496,430 -8,109,962

Consideration received for building rights 0 1,278

Interest and other finance income received 12,021 3,312

Proceeds from sale of non-current assets 451,925 5,255

Received on merger with IT College 0 117,344

Proceeds from liquidation of Eitsa Kinnisvara 397,773 0

Net cash used in investing activities -5,634,711 -7,982,773

CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds from loans received 4,870,000 0

Repayment of loans received -10,470,000 -1,060,643

Effect of movements in foreign exchange rates 0 -5,999

Other finance costs paid -3,128 0

Interest paid -92,019 -93,918

Net cash used in financing activities -5,695,147 -1,160,560

Net cash flow -1,791,787 4,583,098

Cash and cash equivalents at beginning of year 16,853,706 12,270,608

Change in cash and cash equivalents -1,791,787 4,583,098

Cash and cash equivalents at end of year 15,061,919 16,853,706

64

STATEMENT OF CHANGES IN NET ASSETS

Accumulated Aruandeaasta

tulemKokku

Balance at 31 December 2016 surpluses -6,405,109 97,763,591

Carrying amount of interests under control and significant influence

Deficit/surplus for the finan-cial year

-12,987

Value of interests under control and significant in-fluence under the equity method

Total 753,964

Adjusted unconsolidated net assets at 31 De-cember 2016 98,504,568

Transfer of deficit for 2016 -6,405,109 6,405,109 0

Changes in net assets 4,398,812 0 4,398,812

Surplus for 2017 0 1,513,346 1,513,346

Balance at 31 December 2017 102,162,403 1,513,346 103,675,749

Carrying amount of interests under control and significant influence

0 0 -4,210,978

Value of interests under control and significant in-fluence under the equity method

0 0 5,066,408

Adjusted unconsolidated net assets at 31 De-cember 2017 104,531,179

Transfer of surplus for 2017 1,513,346 -1,513,346 0

Surplus for 2018 0 1,692,532 1,692,532

Balance at 31 December 2018 103,675,749 1,692,532 105,368,281

Carrying amount of interests under control and significant influence

0 0 -10,431

Value of interests under control and significant in-fluence under the equity method

0 0 943,513

Adjusted unconsolidated net assets at 31 De-cember 2018 106,301,363

65

Tel: +372 627 5500 A. H. Tammsaare tee 47 Fax: +372 627 5501 11316 Tallinn adm@bdo.ee ESTONIA www.bdo.ee

INDEPENDENT AUDITOR’S REPORT

(Translation of the Estonian original)

To the Board of Governors of Tallinn University of Technology

Opinion

We have audited the consolidated financial statements of Tallinn University of Technology and its subsidiaries (‘the group’), which comprise the consolidated balance sheet as at 31 December 2018, and the consolidated statement of financial performance, the consolidated statement of cash flows and the consolidated statement of changes in net assets for the year then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies and other explanatory information. In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of Tallinn University of Technology and its subsidiaries as at 31 December 2018, and their consolidated financial performance and their consolidated cash flows for the year then ended in accordance with the Estonian Financial Reporting Standard.

Basis for Opinion

We conducted our audit in accordance with International Standards on Auditing (Estonia). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the group in accordance with the Code of Ethics for Professional Accountants (Estonia) (Code of Ethics (EE)) and we have fulfilled our other ethical responsibilities in accordance with the requirements of the Code of Ethics (EE).

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Other Information

Rector is responsible for the other information included in the annual report in addition to the consolidated financial statements and our auditors’ report thereon.

Our opinion on the consolidated financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the consolidated financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the consolidated financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Responsibilities of Rector and Those Charged with Governance for the Consolidated Financial Statements

Rector is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with the Estonian Financial Reporting Standard and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error. In preparing the consolidated financial statements, management is responsible for assessing the group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the group or to cease operations, or has no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the group’s financial reporting process.

BDO Eesti AS Registry no. 10309827 VAT no. EE100081343 Activity licence 1

BDO Eesti AS, Estonian limited liability company, is a member of BDO International Limited, a UK company limited by guarantee, and forms part of the international BDO network of independent member firms.

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Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with International Standards on Auditing (Estonia) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements. As part of an audit in accordance with International Standards on Auditing (Estonia), we exercise professional judgment and maintain professional skepticism throughout the audit. We also: • Identify and assess the risks of material misstatement of the consolidated financial statements,

whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures

that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the group’s internal control.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting

estimates and related disclosures made by management. • Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based

on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the group to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the consolidated financial statements,

including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or

business activities within the group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. /signed digitally/ Betty Blös Certified Public Accountant, licence no. 664

/signed digitally/ Laile Kaasik Certified Public Accountant, licence no. 511

BDO Eesti AS Activity licence no. 1 A. H. Tammsaare tee 47, 11316 Tallinn

LK Konsultatsioonid OÜ Activity licence no. 290 Pärnu mnt 12, 10146 Tallinn

15 April 2019 BDO Eesti AS, Estonian limited liability company, is a member of BDO International Limited, a UK company limited by guarantee, and forms part of the international BDO network of independent member firms.

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SIGNATURES TO ANNUAL REPORT 2018

The management of Tallinn University of Technology has prepared the

annual report of Tallinn University of Technology group for the year ended

31 December 2018, which comprises the management report, the consoli-

dated financial statements and independent auditor’s report.

The rector of Tallinn University of Technology has reviewed the annual

report of Tallinn University of Technology and approved its presentation to

the university’s Board of Governors on 15 April 2019.

Rector

JAAK AAVIKSOO/signed digitally/

Chief Financial Officer

TAUNO TUISK/signed digitally/

Chief Accountant

AVE TAMM/signed digitally/

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