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 discount rate applied is the euro zero coupon yield curve.

Energy purchase commitments

Stedin Group has energy purchase commitments to offset administrative and technical network losses. Based on the rates applicable in 2020, the obligation amounts to €292 million (2019: €361 million) and relates to the period from 2021 to the end of 2031.

Investment obligations

At 31 December 2020, Stedin Group had entered into investment obligations for a total amount of €46 million (2019: €5 million). These investment obligations relate to investments in smart meters. The investment obligations have been entered until 2024.

Other obligations

In addition, Stedin Group entered into contractual obligations for an amount of €8 million (2019: €8 million). These are mainly contractual obligations for maintenance.

Guarantees

Stedin Group has issued group and bank guarantees to third parties of €6 million (2019: €33 million). Of that total, Stedin Holding N.V. issued €0 million (2019: €27 million) in guarantees. This guarantee was provided 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. Since 2011, the ACM has monitored the costs incurred in executing the metering task. It should be possible in 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. 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 to achieve the agreed completion rate of smart meter installations, including a discount to be granted on the metering tariffs of €21 million after 2021.

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 24 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 €38 million. Due to uncertainties, this potential receivable is not recognised in the balance sheet as at 31 December 2020.

Rendant

Stedin has been designated by the Minister of Economic Affairs and Climate Policy as grid manager for a third-party electricity grid and gas grid. The proceedings are currently ongoing at a district court and are expected to be completed during 2021. Accordingly, Stedin will acquire the electricity grid and gas grid for an amount to be determined in due course.

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 36 Overview 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 36 Overview 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.