Annual Report 2010 - Scana Industrier ASA

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76Annual Report 2010 Scana Industrier ASABelow is a summary of all open currency contracts at 31.12.10:UnrealisedCurrency Net Net Maturity gain/loss (-)EUR Sale 17 919 2011 1 066GBP Sale 950 2011 77PLN Purchase 400 2011 2SEK Sale 51 000 2011 -71USD Sale 24 495 2011 1 545EUR Sale 1 700 2012 -92USD Sale 6 450 2012 170Total 2 697Below is a summary of all open currency contracts at 31 December 2009:UnrealisedCurrency* Net Nominal value Maturity gain/loss (-)EUR Sale 21 325 2010 3 066GBP Sale 675 2010 109PLN n/a - 2010 -9SEK n/a - 2010 -52USD Sale 8 228 2010 551EUR Sale 1 644 2011 -101USD Sale 220 2011 -113Total 3 451** PLN and SEK have a net nominal value of 0 as a result of counteractive sales and purchase contracts. The individual sales and purchasecontracts are assessed in the balance sheet and the net value of these is presented in the table above as unrealised gains/losses.Hedging interest rate riskFloating interest-bearing liabilities are hedged against changes in the interest rate level by entering into interest rate swaps. As at 31 December2010, 46% of the syndicate loan is secured with a fixed interest rate. In 2010, the group entered into an interest rate swap with Nordea, whereScana receives floating rates of interest and pays fixed rates. Changes in the fair value of the agreement are recognised against the overall resultin line with the rules in IAS 39 on hedge accounting. The maturity profile on the interest rate swap is five years, while the interest-bearing liabilitymatures after two years. Any inefficiencies are recognised in the profit and loss account. For 2010, the hedge ratio is considered to be effective,and the entire change in value linked to the interest rate swaps is consequently recognised against the total comprehensive income. As at 31December 2010, the group has an interest rate swap totalling SEK 200 million, where the group pays a fixed interest rate and receives a floating rate.Currency Amount Fixed interest rate Maturity Fair valueSEK 200 000 3.21 % 25-04-14 -2 904The floating interest rate is set each quarter based on the 3-month STIBOR interest rate. Interest rate swaps that were hedging instruments includedin the cash flow hedging as at 31 December 2010, are NOK -2.9 million before tax and recognised directly against the total comprehensiveincome as at 2010.Hedging fluctuations in electricity pricesThe group has major electricity costs in relation to the production of its goods. Scana protects itself from fluctuations in electricity prices bybuying electricity derivatives for Swedish subsidiaries and Scana Steel Stavanger AS. The group has an agreement with Vattenfall PowerManagement AB to administer Scana’s electricity derivatives with the aim of hedging future electricity prices. The estimated electricityconsumption is hedged by up to 100 per cent for the coming months, while the hedged share of estimated consumption gradually becomeslower for periods further into the future. As at 31 December 2010, electricity hedging is carried out for up to three years in the future. The valueof electricity derivatives is calculated based on the difference between the agreed future electricity price and the market’s forward prices on thevaluation date multiplied by the hedged volume. The change in the fair value of electricity derivatives is carried against the total comprehensiveincome to the degree it satisfies the performance requirements for hedge accounting in accordance with IAS 39. The ineffective share of thechanges in value is recognised in the profit and loss account.For the settlement of electricity derivatives, Scana receives a statement from Vattenfall based on the difference between the agreed price inaccordance with the electricity contracts and the price Scana has paid for its ongoing electricity consumption. This amount is recognised asother operating costs in such a way that the expensed electricity consumption is based on the hedged electricity prices at all times.
77The table below shows the effects in the profit and loss account and balance sheet. The figures are pre-tax.2010 2009Fair value 22 665 -3 380Recognised against total comprehensive income 20 205 -767Hedging instruments removed from total comprehensive income -824 -1 690The table below shows an overview of the book value linked to financial instruments distributed by maturity period:Annual Report 2010 Scana Industrier ASA2011 2012 2013 2014 2015 2016As at 31 December 2010 Remaining years < 1 1 - 2 2 - 3 3 - 4 4 - 5 > 5 TotalFixed interest rateInterest rate swaps -2 904 -2 904FloatingBank deposits 101 249 101 249Bank overdraft -1 753 -1 753Financial leasing -6 790 -4 794 -3 796 -3 078 -1 977 -2 629 -23 064Factoring -47 491 -47 491Syndicate loan -46 800 -337 340 -384 140Interest-bearing loans Leshan Scana -12 755 -38 264 -51 019Handelsbanken -667 -667 -667 -667 -667 -3 332 -6 667Forward currency contracts 2 619 78 2 697Interest -2 760 -2 7602011 2012 2013 2014 2015 2016As at 31 December 2009 Remaining years < 1 1 - 2 2 - 3 3 - 4 4 - 5 > 5 TotalFixed interest rateInterest rate swaps -4 853 -4 853FloatingBank deposits 139 523 139 523Bank overdraft -1 800 -1 800Financial leasing -8 068 -7 085 -4 690 -3 720 -3 171 -4 464 -31 198Factoring -43 169 -43 169Syndicate loan -46 800 -46 800 -243 344 -336 944Interest-bearing loans Leshan Scana -25 033 -25 033 -24 828 -74 894Handelsbanken -667 -667 -667 -667 -667 -3 999 -7 334Forward currency contracts 3 665 -214 3 451Interest -915 -915Setting of fair valueThe fair value of forward currency contracts is calculated according to the closing rate on the balance sheet date adjusted for an interest additionor deduction based on the interest rate difference between the respective currencies. For interest rate swap contracts and electric derivatives, thebasis is the present value of the cash flow. The fair value of cash, bank overdrafts and other interest-bearing debt is regarded to be almost equalto the recognised value, since these have a short maturity period and thereby give floating interest rates that are adjusted in line with changes inthe general interest rate level. Likewise, the fair value of accounts receivable and creditors is considered to be equal to the book value, since bothitems have a short maturity period and were entered into under normal conditions.The fair value of interest rate swaps is calculated using the estimated discounted cash flow based on the market’s forward interest rates on thevaluation date, with an addition to reflect the bank’s profit margins.
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3 THE SCANA GROUP4 Objectives and m
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4Annual Report 2010 Scana Industrie
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Historical highlights1652Scana’s
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11Annual Report 2010 Scana Industri
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Managing director: Sten IsraelssonS
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Page 25 and 26: 25The product area Scana Propulsion
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Page 49 and 50: 49Scana GROUP Cash flow STATEMENT(N
Page 51 and 52: 51notes group 2010Note 1. Group acc
Page 53 and 54: 53Acquisition cost for tangible fix
Page 55 and 56: 55Where the group expects some or a
Page 61 and 62: 61Tax included in the total result:
Page 63 and 64: 63Scana Offshore Vestby Scana Offsh
Page 65 and 66: 65Remuneration to key personnel (gr
Page 67 and 68: 67Share option programmedecided in
Page 73 and 74: 73Note 20. Leasing obligationsOpera
Page 75: 75In 2010, Scana was affected by ca
Page 79: 79The table below shows the valuati
Page 88: 88Annual Report 2010 Scana Industri
Page 100: Scana Industrier ASAStrandkaien 2,
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Annual Report 2010 - Scana Industrier ASA

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