Page 90 - KELAG Annual Report 2017
P. 90

customer  and  the  risk  characteristics  of  the  financed  project.  Based  on  this  measurement,
                valuation allowances are recognised to account for the expected losses of these receivables. As
                of the reporting date, the carrying amounts of such receivables, net of allowances, were not
                materially different from their calculated fair values.
               Fair value of quoted notes and bonds is based on price quotations at the reporting date. The fair
                value of unquoted instruments, loans from banks and other financial liabilities as well as other
                non-current financial liabilities is estimated by discounting future cash flows using interest rates
                currently available for debt on similar terms, default risks and remaining terms to maturity.
               For more information on the measurement of derivative financial instruments relating to energy
                field and individual instruments used to hedge cash flows, please refer to the explanations on
                accounting policies.


           The KELAG Group uses the following hierarchy for determining and disclosing the fair value of
           financial instruments by valuation technique:

               Level 1: quoted (unadjusted) prices in active markets for identical assets or liabilities;
               Level 2: other techniques for which all inputs which have a significant effect on the recorded fair
                value are observable, either directly or indirectly; and
               Level 3: techniques which use inputs that have a significant effect on the recorded fair value that
                are not based on observable market data.





           The KELAG Group is well positioned in terms of liquidity and met all its payment obligations on
           time  and in  full in  the  financial  year  2017.  A  possible liquidity  risk  is countered  by  proactive
           planning  of  liquidity  and  cash  flows,  medium  and  long-term  capital requirement  planning, a
           conscious policy to maintain sufficient liquidity reserves as well as open credit lines from different
           banks. The objectives of maintaining liquidity at all times and increasing financial flexibility are
           guaranteed for the medium term on the one hand by large cash volumes (EUR 160.8m as of
           31 December 2017; EUR 167.5m as of 31 December 2016) and on the other by a contracted cash
           advance  credit  line  amounting  to  EUR 250.0m  (prior  year:  EUR 250.0m).  Reflecting  the
           overarching  corporate  strategy,  ensuring  adequate  liquidity  reserves  and  maintaining  an
           excellent  credit  rating  remain  primary  objectives  of  the  KELAG  Group. The  liquidity  risk  can
           therefore be classified as moderate, as has also been confirmed by the rating agency.


           The presentation of the contractually agreed (undiscounted) cash outflows associated with the
           financial liabilities in the KELAG Group within the scope of IFRS 7 breaks down as follows:
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