Contingent assets and liabilities

Contingent assets and liabilities other than guarantees are presented at present value. Present value is calculated using a discount rate that reflects current market assessments of the time value of money. The used discount rate is the Euro zero coupon yield curve.

Energy purchase commitments

Stedin Group has energy purchase commitments to offset administrative and technical grid losses. Based on the rates applicable in 2019, the obligation amounts to € 361 million (2018: € 294 million) and relates to the period from 2020 to the end of 2031.

Investment obligations

At 31 December 2019, Stedin Group had entered into investment obligations for a total amount of € 5 million (2018: € 38 million). These investment obligations relate mainly to investments in smart meters. The investment obligations have been entered until 2020.

Other obligations

In addition, Stedin Group entered into contractual obligations for an amount of € 8 million (2018: € 8 million). These are mainly contractual obligations for maintenance.

Guarantees

Stedin Group has issued group and bank guarantees to third parties of € 33 million (2018: € 34 million). Of that total, Stedin Holding N.V. issued € 27 million (2018: € 28 million) of guarantees. The full amount of € 27 million (2018: € 27 million) concerns ‘parent company guarantees’. The remaining guarantee has been issued by a subsidiary.

Stedin Group has taken out directors' and officers' liability insurance for the members of the Supervisory Board, the members of the Board of Management, the directors and other executives within Stedin Group. To the extent possible, the directors are indemnified by Stedin Group, subject to specific conditions, against costs in connection with civil law, criminal law or administrative law proceedings in which they could be involved because of their position.

Results 'Meetdomein'

The rates that Stedin charges as a grid manager for low-use meter rental are regulated and based on the Ministerial Metering Tariff Regulation (Ministeriële Regeling Meettarieven, MR), which lays down how the ACM sets such rates. The maximum rates that grid managers may charge are currently based on the 2005 rate levels, plus an annual inflation adjustment in accordance with the consumer price index. The ACM has monitored the costs associated with performing the metering task since 2011. It should be possible with this regard to fund the Large-Scale Roll-Out of Smart Meters project from the returns that are achieved. The Ministerial Metering Tariff Regulation ensures that consumers ultimately do not pay more than the break-even rates and that the grid managers do not make surplus profits. To this end, the ACM may include the returns achieved in future decisions on rates. We currently estimate that Stedin has achieved sufficient returns at this moment in order to fund smart meter introduction without the need to increase rates. In 2018, a rate reduction amounting to € 20 million was applied in the metering domain in keeping with this estimate.

Legal proceedings

Stedin Group is involved either as plaintiff or defendant in various legal and regulatory claims and proceedings related to its operations. The amounts claimed in some of these proceedings may be significant to the consolidated financial statements. Liabilities and contingencies in connection with these claims and proceedings are assessed periodically based on the latest information available. A liability is only recognised if an adverse outcome is considered to be probable and the amount of the loss can be reasonably estimated; see note 25 Other provisions.

Stedin is involved with several municipalities in claims for municipal sufferance taxes. The potential impact for Stedin is a receivable ranging up to approximately € 26 million. Due to uncertainties, this potential receivable is not recognised in the balance sheet as at 31 December 2019.

Fiscal unity

Stedin Holding N.V. forms a fiscal unity for corporate income tax purposes with all its consolidated participating interests as included in note 37 List of subsidiaries. The companies, including Stedin Holding N.V., that are part of a fiscal unity are jointly and severally liable for the tax obligations of that fiscal unity.

There is also a fiscal unity for VAT purposes that includes Stedin Holding N.V. and all its consolidated participating interests as included in note 37 List of subsidiaries. Only companies, including Stedin Holding N.V., that are part of a fiscal unity are jointly and severally liable for the tax obligations of that fiscal unity.

Cash pool

Under its participation in the Stedin Group cash pool, Stedin Holding N.V., like the other participants, is jointly and severally liable for deficits in Stedin Group's cash pool.