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Note 16 – Derivatives

The Group continuously hedges its assets denominated in foreign currencies in order to reduce its exchange rate exposure. As per 31 December 2020, the Group had exposures in EUR, GBP, PLN and RON, where of EUR, GBP and PLN are hedged using currency forward contracts. All outstanding derivatives are measured at fair value. Gains/losses on derivative instruments are recognised in the income statement for each annual statement. Gains/losses for hedge accounting in the Group are recognised in other comprehensive income for each annual statement.

The Group ceased its hedge accounting in EUR during 2018, as critical conditions for hedging net investments in foreign operations are no longer met.

The Parent Company Hoist Finance AB (publ) apply hedge accounting for the fair value of shares in subsidiaries and for shares and participations in joint ventures. Gains/losses on derivative instruments for hedge accounting in the Parent Company are recognised in shares in subsidiaries and in shares and participations in joint ventures.

Additional information on the Group’s and the Parent Company’s management of hedge accounting is presented in Accounting Policies sections 10 and 22.8 “Hedge accounting”.

Derivatives held for trading

 Group 31 dec 2020
 Nominal amount/maturity   
SEK mUp to 1 year1-5 yearsOver 5 yearsNominal amountPositive market valuesNegative market values
Interest rate-related contracts      
Swaps776 2,057 2,833  -40 
Currency-related contracts      
Currency forwards1,648 1,648 27 -3 
Total2,424 2,057 4,481 27 -43 
SEK m    Positive market valuesNegative market values
Currency breakdown of market values      
SEK    -3 
EUR    10 -13 
GBP    12 -17 
PLN    -10 
Total    27 -43 

Derivatives for hedge accounting

 Group 31 dec 2020
 Nominal amount/maturity   
SEK mUp to 1 year1-5 yearsOver 5 yearsNominal amountPositive market valuesNegative market values
Currency-related contracts      
Currency forwards9,141 9,141 214 
Total9,141 9,141 214 
       
 Group 31 dec 2020
 Average exchange rate   
SEK mUp to 1 year1-5 yearsOver 5 yearsPositive market valuesNegative market values
Currency breakdown of market values      
SEK/GBP11.38  135 
SEK/PLN2.26  79 
Total    214  

Derivatives held for trading

 Group 31 dec 2019
 Nominal amount/maturity   
SEK mUp to 1 year1-5 yearsOver 5 yearsNominal amountPositive market valuesNegative market values
Interest rate-related contracts      
Swaps1,0431,5271,0433,6133-1
Currency-related contracts      
Currency forwards7,111--7,11138-28
Total8,1541,5271,04310,72441-29
SEK m    Positive market valuesNegative market values
Currency breakdown of market values      
SEK    --27
EUR    39-1
GBP    20
PLN    --1
Total    41-29

Derivatives for hedge accounting

 Group 31 dec 2019
 Nominal amount/maturity   
SEK mUp to 1 year1-5 yearsOver 5 yearsNominal amountPositive market valuesNegative market values
Currency-related contracts      
Currency forwards10,633--10,63366-6
Total10,633--10,63366-6
       
       
 Group 31 dec 2019
 Average exchange rate   
SEK mUp to 1 year1-5 yearsOver 5 yearsPositive market valuesNegative market values
Currency breakdown of market values      
SEK/GBP12.33-- 66-
SEK/PLN2.44-- --6
Total    66-6

Hedging instruments and effectiveness in the hedge accounting 2020

 Group
  Carrying amount     
SEK mNominal amountAssetsLiabilitiesBalance sheet item in which the hedging instrument is includedChange in fair value used to calculate ineffectiveness for the periodChange in value of the hedging instrument recognised in other comprehensive incomeIneffectiveness recognised in the income statementIncome statement item which include the ineffectiveness
Currency-related contracts        
GBP - Derivatives, positive values5,221 135 Other assets66 66-Net result from
financial transactions
PLN - Derivatives, positive values3,920 79 Other assets-72 -72  -Net result from
financial transactions
Total9,141 214  -6 -6 - 

Hedging instruments and effectiveness in the hedge accounting 2019

 Group
  Carrying amount     
SEK mNominal amountAssetsLiabilitiesBalance sheet item in which the hedging instrument is includedChange in fair value used to calculate ineffectiveness for the periodChange in value of the hedging instrument recognised in other comprehensive incomeIneffectiveness recognised in the income statementIncome statement item which include the ineffectiveness
Currency-related contracts        
GBP - Derivatives, positive values6,48466-Other assets-66-66-Net result from
financial transactions
PLN - Derivatives, positive values200-Other assets---Net result from
financial transactions
Total6,50466- -66-66- 
PLN - Derivatives, negative values4,129--6Other liabilities-49-49-Net result from
financial transactions
Total4,129--6 -49-49- 

Hedged items

2020

GROUP
SEK mChange in fair value used to calculate ineffectiveness for the periodHedge reserveAmounts remaining in the hedging relationships for which hedge accounting is no longer applied
Hedging of foreign exchange risk in net investments in foreign operations   
EUR-149 -149 
GBP568 -143 
PLN257 -264 
Total825 -556 -149 

Hedged items

2019

GROUP
SEK mChange in fair value used to calculate ineffectiveness for the periodHedge reserveAmounts remaining in the hedging relationships for which hedge accounting is no longer applied
Hedging of foreign exchange risk in net investments in foreign operations   
EUR--149-149
GBP-491-209-
PLN-120-200-
Total-611-558-149

Hedged items

2020

PARENT COMPANY
 Carrying amount hedged itemAccumulated fair value adjustment included in the carrying amount of the hedged item  
SEK mAssetsLiabilitiesBalance sheet item in which the hedged item is includedChange in value of hedged items used to determine ineffeciency for the period
Fair value hedges    
EUR394  Shares and participations in subsidiaries and joint ventures 
GBP335 -21 Shares and participations in subsidiaries and joint ventures 19 
PLN147 -47 Shares and participations in subsidiaries and joint ventures 10 
Total876 -68  29 

Hedged items

2019

PARENT COMPANY
 Carrying amount hedged itemAccumulated fair value adjustment included in the carrying amount of the hedged item  
SEK mAssetsAssetsBalance sheet item in which the hedged item is includedChange in value of hedged items used to determine ineffeciency for the period
Fair value hedges    
EUR295-Shares and participations in subsidiaries and joint ventures-
GBP33519Shares and participations in subsidiaries and joint ventures22
PLN14710Shares and participations in subsidiaries and joint ventures17
Total77729 39

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