The value of financial assets and liabilities measured at amortized cost is a rational approximation of their fair value, except for bonds issued by PGE Sweden AB (publ).

Bonds issued by PGE Sweden AB (publ) are based on a fixed interest rate. Their amortized cost presented in these financial statements as at December 31, 2016 amounted to EUR 642 million and their estimated fair value amounted to EUR 679 million. The indicators used in the valuation belong to Level 2 of fair value hierarchy.

Instruments not quoted on active markets, for which the fair value cannot be estimated reliably

Basic assets of the Group classified as available-for-sale financial assets are shares in entities not quoted on active markets. For shares in entities that are not quoted on the stock exchange, there is no active market nor possibility to use measurement techniques that will give reliable values. Due to the above, the Group is not able to establish reasonable fair value estimates. Such assets are measured at cost less impairment losses.