Other notes

6.2 Other notes

Emission rights

Fingrid’s reserve power plants are subject to an environmental permit and covered by the EU’s emissions trading scheme. A total of 6,634 (11,141) units (tCO2) of emission allowances were returned, all of which consisted of acquired emission rights units. Fingrid has not been granted free-of-charge emission rights for the emissions trade period 2013–2020. No emissions rights were purchased in 2016.Emissions trading had minor financial significance for Fingrid. The use of emission rights had no impact on the financial result in 2016. CO2 emissions included in emissions trading totalled 10,326 tonnes in 2016 (6,697). As of 31 December 2016, the balance sheet included EUR 0.4 million (0.5) in emission rights.


Accounting principles

Emission rights

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
  2016 2015
Provisions for creosote-impregnated towers 1 Jan 1,668 1,735
Provisions used -187 -67
Provisions 31 Dec 1,481 1,668

Accounting principles

Provisions

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
  2016 2015
Pledges    
Pledge covering property lease agreements 9 9
Pledge covering customs credit account 280 280
Pledge covering electricity exchange purchases   863
  289 1,151
Other financial commitments    
Counterguarantee in favour of an associated company    
Rent security deposit, guarantee 38 38
Credit facility commitment fee and commitment fee:    
Commitment fee for the next year 395 326
Commitment fee for subsequent years 1,154 1,154
  1,587 1,518
     
Unrecognised investment commitments 84,572 124,314
 
The investment commitments consist of agreements signed by the company to carry out grid construction projects.

LEGAL PROCEEDINGS AND PROCEEDIGNS BY AUTHORITIES

A lawsuit was initiated against Fingrid in December 2016, demanding non-specified damages due to an alleged breach of contract. The alleged injury is continuous and the claim amounted to EUR 135,000 by the time the lawsuit was initiated. Fingrid has contested the claims presented in the lawsuit. The case is currently before the court. In Fingrid’s view, the legal proceedings are not likely to have a substantial impact on the company’s financial result or financial position. Thus no provisions were recognised in the financial statements in relation to these proceedings.

There are no other ongoing legal proceedings or proceedings by authorities that would have a material impact on Fingrid's business.

EVENTS AFTER THE CLOSING DATE

The Group management is not aware of such significant events after the closing date that would affect the financial statements.

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 17 February 2017. 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.