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Notes to the consolidated financial
statements, REC Group
REC Annual Report 2011
2011, RECWafer made purchases of NOK 17million fromMeløy
Bedriftsservice AS. In 2010, RECWafer made purchases of
NOK 14million fromMeløy Bedriftsservice AS. RECWafer had
no accounts payable at December 31, 2011 or 2010.
JOINTLY CONTROLLED ENTITIES
REC Group contributed equity to jointly controlled entities with
NOK 31million in 2011 (NOK 18million in 2010 excluding Sovello).
Sovello AG became a jointly controlled entity at December 19,
2006. In the first quarter 2010, the owners of Sovello entered into
an agreement to sell all the Sovello shares and shareholders loans.
The acquirer is a fund under the management of Ventizz Capital
Partners. The transaction was closed on April 22, 2010. No
consideration was received for the shares and shareholders loans.
For practical purposes, Sovello has been deconsolidated as from
April 1, 2010. During the first half of 2010, REC ASA paid the total
provisions of EUR 10.8million recognized at December 31, 2009
to the Sovello banks under the guarantees and undertakings.
Sovello accrued interest of NOK 7million (EUR 1million) on the
loans to REC ASA during the first quarter 2010. From January 1
to April 22, 2010 REC Silicon invoiced USD 10million for sales of
polysilicon to Sovello.
DERIVATIVE FINANCIAL INSTRUMENTS
Fair values and carrying amounts at December 31
2011
2010
(NOK INMILLION)
ASSETS
LIABILITIES
ASSETS
LIABILITIES
Foreign exchange forward contracts
310
108
759
23
Interest rate swaps
74
57
16
38
Embedded foreign exchange forward contracts
5
62
4
284
Total
389
228
779
346
- of which designated as hedging instruments*
61
0
16
0
* Hedging instruments are ’pay floating-receive fixed’ interest rate swaps of the two NOK bonds REC01 (swap of NOK 650 million) and REC03 (swap of NOK 700
million) designated as fair value hedges.
Distribution of derivatives at December 31
2011
2010
(NOK INMILLION)
ASSETS
LIABILITIES
ASSETS
LIABILITIES
Embedded derivatives, non-current
5
7
4
144
Other derivatives, non-current
74
86
192
41
Total non-current derivatives
79
94
197
186
Embedded derivatives, current
0
55
0
140
Other derivatives, current
310
79
582
20
Total current derivatives
310
134
582
160
Total derivatives
389
228
779
346
The REC Group uses financial derivatives primarily to reduce currency risk and interest rate exposure. The REC Group manages the hedging
of net cash flows exposed to foreign exchange rate risk as a portfolio on the basis of anticipated future cash flows.
See also note 3 for information on the REC Group’s general policy for covering of currency risk and interest rate risk.
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