The Group KD Group and KD Group dd

The Group KD Group Annual Report 2009
Notes to Consolidated Financial Statements as at and for the year ended 31 December 2009
(in EUR) Carrying value Fair value
31. 12. 2009 31. 12. 2008 31. 12. 2009 31. 12. 2008
Financial assets
Investment securities (held to maturity) 18,295,285 7,844,709 18,295,285 7,844,709
Loans and bank deposits 92,017,877 97,785,680 92,048,655 97,748,361
110,313,162 105,630,389 110,343,340 105,593,070
Financial liabilities
Borrowings 101,642,448 106,107,912 101,491,404 106,977,118
Bonds issued 75,521,481 75,449,991 72,623,944 74,573,007
177,163,929 181,557,903 174,115,348 181,550,125
Fair value hierarchy
In 2009, the disclosures of financial assets and liabilities measured at fair value were amended by disclosures serving to
disclose the financial assets and financial liabilities measured at fair value also by the source of valuation by applying a threelevel
hierarchy for each and every type of financial instruments. The hierarchy is divided into three levels and the fair value of
financial assets is shown below:
- Level 1 includes the assets where fair value is determined entirely on the basis of prices quoted on an active market
for similar instruments.
- Level 2 includes the assets where fair value is determined on the basis of the valuation models where the inputs are
obtained from publicly accessible market data (e.g.: market interest rates).
- Level 3 includes the assets where fair value is determined on the basis of the valuation models where inputs that
cannot be based on observable market are taken into account.
Financial assets and liabilities by fair value hierarchy in 2009
(in EUR)
Total fair
value Level 1 Level 2 Level 3
Assets measured at fair value
Financial assets at fair value through profit or loss
Equity securities 14,363,886 13,274,974 1,088,912 -
Debt securities 23,709,486 23,709,486 - -
Financial assets, available for sale
Equity securities 50,395,798 42,670,344 4,470,831 3,254,623
Debt securities 135,722,854 134,916,334 806,520 -
Derivative financial instruments
Derivative financial instruments for trading 1,146,675 - 1,146,675 -
Liabilities measured at fair value
Derivative financial instruments
Derivative financial instruments for hedge accounting 1,426,656 - 1,426,656 -
The valuation of the investments made in equity securities classified at Level 3 was carried out on the basis of the
assessment made for all equity capital and by using the discounted future net cash flows method . The method was based on
the key assumptions set forth below:
− The estimated free cash flows until 2018,
− The leverage rate of the insurance company, and
− The discount for the lack of marketability.
The effect of the modified assumptions would not have any material effect on the financial statements.
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