Page 89 - Annual Report KELAG Group 2018
P. 89

Market value of derivatives (assets)   0.0   26.7      0.0        26.7
                                       Market value of derivatives      0.0       28.3        0.0        28.3
                                       (liabilities)
                                       Cash flow hedge (liabilities)    0.0        1.2        0.0         1.2



                                      The aforementioned cash flow hedge is an interest rate swap entered into to hedge against the
                                      risk of interest rate increases from variable interest payments. Currently, this relates to a variable-
                                      interest rate financial liability of EUR 10.8m (prior year: EUR 14.4m). The future interest payments
                                      hedged by the interest rate swap will become due and affect profit or loss between 2019 and
                                      2021. There was no ineffective portion of the hedge that could theoretically arise from the credit
                                      risk of the counterparties involved, in either the current financial year or the prior year. As the
                                      overall risk of an increase in market interest rates in relation to the variable-interest rate financial
                                      liability is hedged, the hedge ratio stands at 100%. The nominal amount and interest rate of the
                                      hedging instrument and hedged item correspond to each other. The underlying variable market
                                      interest rate is the three-month EURIBOR. The hedged interest rate is 3.9%. The interest rate swap
                                      is disclosed under the financial liabilities. In the current financial year, EUR 0.5m was reclassified
                                      in the income statement to interest expenses.

                                      The risks from the area of derivative financial instruments are essentially market and credit risks
                                      that arise from the company’s own trading activities with, and the sale of, energy. In terms of
                                      market  risks,  adverse  price  developments  represent  the  main  risk  for  KELAG.  This  risk  is
                                      counteracted by a commodity risk management system with limit mechanisms derived from the
                                      central risk management system. The same applies to the area of credit risk, where bad debts and
                                      the  replacement  and  resale  risks  are  limited  and  controlled  by  strict  selection  and  intense
                                      monitoring of the trading and distribution partners.

                                      The tables below present a comparison by category of the carrying amounts and fair values of the
                                      Group’s financial instruments that are carried in the financial statements:
   84   85   86   87   88   89   90   91   92   93   94