Cloudberry Clean Energy Annual report 2020

Cloudberry Annual report 2020 Financial statements 94 Note 11 Hedge accounting Financial instruments that are designated as hedging instruments or hedged items in hedge accounting are identified based on the intention with entering into a financial instrument. The ineffectiveness from the hedges is recognised in profit and loss. Cloudberry has in June 2020 entered into an interest swap agreement for the long-term loans related to Røyrmyra and Finnestebekken power plants. See note 23 long term debt. Cloudberry has in July 2020 entered into an inter- est swap agreement for expected long term debt which will be drawn at the closing of acquisition of Nessakraft AS. See note 24 debt financing of con- tractual obligations. The objective for the interest rate management is to reduce risk (reduce volatility of future interest pay- ments) and to lock future interest costs at attractive levels. The secured debt and the interest rate swap agreement has equal terms, and the hedge effec- tiveness is fully covered. All interest rate swaps are designated as hedging instruments. All interest rate swaps are recognised at fair value. The table below shows how the interest rate swap has been accounted for in the statement of compre- hensive income. The amounts recognised in OCI is presented net of tax effect. NOK 1 000 Total hedging gain/loss recognised in OCI Amount reclassified fro OCI to profit and loss Line item in the statement of profit and loss Interest swap for long term debt Røyrmyra and Finnesetbekken -124 142 Financial expense Interest swap for long term debt drawn when acquring Nessakraft 1 032 - - The following table demonstrates the sensitivity to a reasonably possible change in interest rates on that portion of financial assets and liabilities affected, after the impact of hedge accounting. With all other variables held constant, the Group’s profit and equity before tax is affected through the impact on floating rate borrowings, as follows NOK 1 000 Increase in %-points Effect on profit before tax Effect on OCI Interest swap for long term debt Røyrmyra and Finnesetbekken 1 % - 712 Interest swap for long term debt drawn when acquring Nessakraft 1 % - 3 337 Please note that the sensitivity applied for the effect on the figures is presented for 2020, the Group did not have interest bearing debt or hedging instruments in 2019. The following table shows the maturity for nominal cash outflow for the hedged bank loans and the interest rate swap NOK 1 000 Less than a year 1-2 years 2-3 years 3-4 years More than 5 years Total Bank loan Røyrmyra and Finnesetbekken -2 139 -2 158 -2 152 -2 137 -25 369 -33 956 Interest swap for long term debt Røyrmyra and Finnesetbekken -217 -120 -45 - 210 -172 Interest swap for long term debt drawn when acquring Nessakraft -98 -411 -263 -140 2 264 1 352 Total -2 454 -2 278 -2 197 -2 137 -25 159 -34 226

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