7.2 Other notes
Fingrid’s reserve power plants are subject to an environmental permit and covered by the EU’s emissions trading scheme. Fingrid has not been granted free-of-charge emission rights for the emissions trade period 2013–2020. Emission rights purchased in 2019 amounted to 7,000 units (tCO2). Emissions trading had minor financial significance for Fingrid. CO2 emissions included in emissions trading totalled 5,142 tonnes in 2019 (8,223).
Emission rights acquired free of charge are recognised in intangible assets at their nominal value, and purchased emission rights at their acquisition cost. A liability is recognised for emission rights to be returned. If the Group has sufficient emission rights to cover the return obligations, the liability is recognised at the carrying amount corresponding to the emission rights in question. If there are not sufficient emission rights to cover the return obligations, the liability is recognised at the market value of the emission rights in question. No depreciation is recognised on emission rights. They are derecognised in the balance sheet at the time of transfer when the actual emissions have been ascertained. The expense resulting from the liability is recognised in the income statement under the expense item ‘Materials and services’. Capital gains from emissions rights are recognised under other operating income.
|25. PROVISIONS, € 1,000||2019||2018|
|Provisions for creosote-impregnated towers 1 Jan||1,424||1,474|
|Provisions 31 Dec||1,393||1,424|
A provision is recorded when the Group has a legal or factual obligation based on an earlier event and it is likely that fulfilling the obligation will require a payment, and the amount of the obligation can be estimated reliably.
The provisions are valued at the present value of the costs required to cover the obligation. The discounting factor used in calculating the present value is chosen so that it reflects the market view of the time value of money at the assessment date and the risks pertaining to the obligation.
|26. COMMITMENTS AND CONTINGENT LIABILITIES, €1,000||2019||2018|
|Other financial commitments|
|Rent security deposit, guarantee||38||38|
|Credit facility commitment fee and commitment fee:|
|Commitment fee for the next year||414||345|
|Commitment fee for subsequent years||568||862|
|Unrecognised investment commitments||181,973||103,946|
|The investment commitments consist of agreements signed by the company to carry out grid construction projects and to procure the datahub system.|
|Payment obligations from right-of-use agreements for reserve power plants:|
|In one year||8,663||8,663|
|In more than one year and less than five years||29,638||34,064|
|In more than five years||15,596||19,610|
Under its system responsibility, Fingrid is also obligated to maintain a rapid response disturbance reserve to prepare for disruptions to the power system. In order to ensure the availability of this disturbance reserve, Fingrid has, in addition to its reserve power plant capacity, acquired power plant capacity suited to this purpose by long-term Right-of-use agreements.
LEGAL PROCEEDINGS AND PROCEEDIGNS BY AUTHORITIES
An accident took place on a work site in Laukaa, Finland, on 25 August 2017, where an employee of Revilla y Garcia S.L. died after having fallen from a power line tower. A civil court case has been raised in Spain for damages against Fingrid (the client linked with the accident), the main contractor, Technolines S.R.L. filial i Finland, and its sub-contractor, Revilla y Garcia S.L. Fingrid does not believe the claim against it is likely to succeed and, in Fingrid’s view, the legal proceedings or their outcome are not likely to have a substantial impact on the company’s earnings or financial position. The action raised in the case concerning social security based compensation has lapsed.
EVENTS AFTER THE CLOSING DATE
On 5 December 2019, Fingrid Oyj announced that it had, together with the other owners of Nord Pool Holding AS, entered into a binding agreement to sell 66% of the company's shares to Euronext. On 15 January 2020, Fingrid Oyj announced that the transaction has received the necessary authority approvals and that the other preconditions for its completion have been fulfilled. The sale will have a small positive impact on Fingrid’s result and cash flow in the first quarter. Fingrid’s indirect ownership in Nord Pool is 6.4%, which is managed through a holding company jointly owned by the Nordic Transmission System Operators.
Fingrid Group’s profit for the 2020 financial period, excluding changes in the fair value of derivatives and before taxes, is expected to slightly decline compared to the previous year. Fingrid announced on 2 October 2019 that it will maintain the electricity transmission prices in the main grid at their 2019 level in 2020.
Results forecasts for the financial year are complicated especially by the uncertainty related to grid income, ITC income and cross-border transmission income, and to reserve and loss power costs. These are dependent on the variations in outside temperature and precipitation and changes in the hydrological situation in the Nordic countries, which affect electricity consumption and electricity prices in Finland and neighbouring areas and thus also grid transmission volumes. The company’s debt service capacity is expected to remain stable.
GROUP’S CONTACT INFORMATION AND APPROVAL OF THE FINANCIAL STATEMENTS
Fingrid Oyj is a Finnish public limited liability company incorporated under the Finnish Companies Act. Fingrid’s consolidated financial statements have been drawn up in accordance with the International Financial Reporting Standards (IFRS) as adopted by the EU. Fingrid’s registered office is in Helsinki at the address P.O. Box 530 (Läkkisepäntie 21, 00620, Helsinki), 00101 Helsinki.
A copy of the consolidated financial statements is available on the website fingrid.fi or at Fingrid Oyj's head office.
The amounts in the financial statements are expressed in thousands of euros and are based on the original acquisition costs, unless otherwise stated in the accounting principles or notes.
Fingrid Oyj’s Board of Directors has accepted the publication of these financial statements in its meeting on 27 February 2020. In accordance with the Finnish Companies Act, the shareholders have the opportunity to adopt or reject the financial statements in the shareholders’ meeting held after their publication. The shareholders’ meeting can also amend the financial statements.