22. Pledged assets, commitments and other liabilities
Pledges given for Group companies
Pledges given for others
Lease contracts unpaid amounts
Payable within one year
Payable in later years
Currency forward contracts
Interest rate swaps
Derivative instruments are used for hedging the foreign exchange rate risk and interest rate risk and they are valued at the market rates available on the balance sheet date. Currency forward contracts are used to hedge against currency-denominated receivables and payables. Generally, transaction positions arising from subsidiary financing are hedged fully. A company’s long-term variable-interest loan has been converted to fixed-interest loan with an interest-rate swap.
In 2011 and 2012, seven financial institutions submitted a claim primarily against Posti and secondarily against Posti and the State of Finland in order to receive compensation for the value-added tax charged by Posti on its postal services in 1999-2014. The claim is based on an allegation that the Finnish Value Added Tax Act had and would still be contrary to the EU’s Value Added Tax Directive.
Posti has submitted a recourse claim against the State of Finland, demanding it to refund Posti for any sums that Posti may be ordered to pay in the legal proceedings initiated by the financial institutions. The recourse claim is pending until the claims by the financial institutions have been processed and a final ruling issued.
The claims were rejected in their entirety by a decision of the Helsinki District Court on September 18, 2015, and by a decision of the Helsinki Court of Appeal on September 14, 2017. Of the six plaintiffs that appealed the District Court’s decision to the Court of Appeal, one decided to take no further legal action. Five of the plaintiffs have requested the Supreme Court for leave to appeal. The total amount of the compensations claimed by the five plaintiffs is approximately EUR 99 million, and the interest claimed amounted to approximately EUR 61 million on December 31, 2017.
It is expected to take several years until all of the final court orders are rendered in the matter. According to Posti, the allegations made by the plaintiffs are without merit and it has not recorded any receivables or provisions in its financials based on the claims made.