Page 32 - KELAG Annual Report 2017
P. 32

Bosnia and Herzegovina                            10               10
            Bulgaria                                          10               10
            Kosovo                                            10               10
            Croatia                                         12/18              20
            Macedonia                                         10               10
            Montenegro                                         9                9
            Austria                                           25               25
            Romania                                           16               16
            Serbia                                            15               15
            Slovenia                                          19             17-19
            Czech Republic                                    19               19



           The  financial  instruments  in  the  KELAG  Group  can  be  broken  down  into  non-derivative  and
           derivative financial instruments. In the case of KELAG, commodity forwards relating to energy
           (electricity and gas) as defined in IAS 39 constitute derivative financial instruments. The derivative
           financial instruments are recognised at fair value. The measurement basis in the field of electricity
           is provided by the market prices on the European Energy Exchange (EEX) on the last active trading
           day for annual products for the years 2017 to 2020. For gas products, fair value is measured in line
           with the procedure for electricity products, using the listings of the corresponding virtual trading
           points. The following overview shows the derivative financial instruments measured at fair value
           broken  down  according  to  their  main  measurement  parameters. The  resulting  measurement
           levels are defined as follows in accordance with IFRS 7 (with reference to IFRS 13):

           Level  1:  Quoted  prices  for  similar  instruments.  This  means  that  measurement  is  based  on
           unadjusted prices of products traded on active markets.

           Level 2: Inputs other than those included within level 1 that are directly observable. This means
           that measurement is based on models which in turn have observable parameters (quotations) as
           inputs. In the KELAG Group the fair values are measured on the basis of over-the-counter energy
           futures. Their values are determined from forward price curves that are based on exchange prices.

           Level 3: Inputs that are not based on observable market data.

           Derivative financial instruments in connection with the trade and sale of energy are measured at
           fair  value.  Unrealised  measurement  gains  and  losses  are  generally  recognised  in  the  income
           statement unless the prerequisites for hedge accounting pursuant to IAS 39 are met. The KELAG
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