F.31. Off balance sheet items
F.31.1. Commitments
The Company had no other significant contractual commitments as at 31 December 2015.
F.31.2. Other contingencies
F.31.2.1. Legal
As at the release date of the financial statements, there was a legal case which consolidated cases concerning the decision of the general meeting of the Company in 2005 approving a squeeze-out of minority shareholders and consideration paid on the squeeze-out pending. Based on legal analyses carried out by external legal counsel, management of the Company believes that none of these cases gives rise to any contingent future liabilities for the Company.
F.31.2.2. Collateral pledged on behalf of third party
Pařížská 26, s.r.o., a subsidiary of the Company has obtained a bank loan and the Company has established a pledge in favour of the bank over its business share in the subsidiary. The outstanding balance of the loan as at 31 December 2015 is CZK 236 million. In the event of the subsidiary being unable to meet its liabilities arising from the loan, the Company may be required to transfer its share to the bank. Management does not believe the risk of this occurring to be material.
F.31.2.3. Participation in nuclear pool
As a member of the Czech Nuclear Pool, the Company is jointly and severally liable for the obligations of the pool. This means that, in the event that one or more of the other members are unable to meet their obligations to the pool, the Company would take over the uncovered part of this liability, pro-rata to its own net retention used for the contracts in question. The management does not consider the risk of another member being unable to meet its obligations to the pool to be material to the financial position of the Company. In addition, the potential liability of the Company for any given insured risk is contractually capped at twice the Company’s net retention for that risk.
The subscribed net retention is as follows:
| In CZK million, for the year ended 31 December | 2015 | 2014 |
|---|---|---|
| Liability (w/o D&O liability) | 148 | 148 |
| D&O liability only | 18 | 18 |
| FLEXA extended coverage of nuclear Risks plus BI | 576 | 576 |
| Transportation risk | 115 | 115 |
| Engineering and “all risk” cover | 288 | 288 |
| Total | 1,145 | 1,145 |
F.31.2.4. Membership in the Czech Insurers’ Bureau
As a member of the Czech Insurers’ Bureau (“the Bureau”) related to MTPL insurance, the Company is committed to guarantee the MTPL liabilities of the Bureau. For this purpose, the Company makes contributions to the guarantee fund of the Bureau based on the calculations of the Bureau (see F.11).
In the event of a fellow member of the Bureau being unable to meet its liabilities arising from MTPL due to insolvency, the Company may be required to make additional contributions to the guarantee fund. Management does not believe the risk of this occurring to be material to the financial position of the Company.