a) Derivatives

Amounts in MNOK	31 Dec 07	31 Dec 06
Other non-current assets
Interest rat swap attached to loan	1	1
Total derivatives, other non-current assets	1	1
Current assets
Gross excess value currency, forward cash flow hedges	196	80
Gross excess value currency, option cash flow hedges	14	-
Gross excess value currency, forward fair value hedges	274	54
Excess value loan hedges	2	1
Currency options	-	2
Total derivatives current assets	486	137
Other long-term liabilities
Interest swap agreements related to sale and leaseback and loans	6	23
Total derivatives, non-current liabilities	6	23
Current liabilities
Gross negative value currency forward, cash flow hedges	8	23
Gross negative value currency forward, fair value hedges	26	29
Total derivatives current liabilities	34	52

b) Foreign currency risk and hedging foreign currency

For information about KONGSBERG's currency risk and how it is handled, see Note 5 "Financial risk management".

Exposure to currency risk
KONGSBERG's exposure to currency risk was as follows, based on nominal amounts:

	31 Dec 07		31 Dec 06
Amounts in MNOK	USD	EUR	USD	EUR
Trade receivables	106	25	111	22
Trade payables	(4)	(4)	(2)	(4)
Gross balance sheet exposure	102	21	109	18
Forward currency contracts (fair value hedges)	615	207	248	12

The specified forward currency contracts mentioned above are to hedge all contractual currency flows. This means that in addition to hedging capitalised trade receivables in foreign currency, currency forwards are also to be used to hedge remaining orders.

Significant foreign exchange rates applied in the consolidated accounts during the year:

	Average exchange rate		Spot price at 31 Dec.
Amounts in MNOK	2007	2006	2007	2006
USD	5.90	6.41	5.41	6.26
EUR	8.03	8.05	7.96	8.24

Currency hedging
At 31 Dec. 2007, the Group had the following foreign currency hedges, divided by hedge category:

2007
Amounts in MNOK	Value in NOK at 31 Dec 07 based on agreed exchange rate	Net excess (+)/ negative (-) in NOK at 31 Dec 07	Total hedged amount in USD 2007	Average hedged exchange rate in USD 31 Dec 07	Total hedged in EUR at 31 Dec 07	Average hedged rate in EUR 31 Dec 07
Hedge category
Prognosis hedge (cash flow hedges)1)	3 292	188	208	6,30	243	8,14
Currency options2) (cash flow hedges)1)	261	14	45	-	-	-
Total cash flow hedges	3 553	202	253	-	243	-
Project hedges (fair value hedges)	5 263	248	615	5,81	207	8,19
Loan hedges (fair value hedges)3)	123	2	-	-	-	-
Total	8 939	452	868	-	450	-

2006
Amounts in MNOK	Value in NOK at 31 Dec 06 based on agreed exchange rate	Net excess (+)/ negative (-) in NOK at 31 Dec 06	Total hedged amount in USD 2006	Average hedged exchange rate in USD 31 Dec 06	Total hedged in EUR at 31 Dec 06	Average hedged rate in EUR 31 Dec 06
Hedge category
Currency options2) (cash flow hedges)1)	3 694	57	354	6,40	202	8,24
Currency options2) (cash flow hedges)1)	-	-	-	-	-	-
Total cash flow hedges	3 694	57	354	-	202
Project hedges (fair value hedges)	3 679	24	248	6,30	120	8,19
Loan hedges (fair value hedges)3)	128	-	-	-	-
Total	7 501	81	602	-	322

1)	Excess/negative values related to cash flow hedges (prognosis hedges and options) recognised directly in equity.
2)	Currency options are tunnel options ('risk reversal'), involving KONGSBERG purchasing a put option in USD at an exchange rate of NOK 5.80 = USD 1, at the same time as it issues a call options in the interval between NOK 6.10 and NOK 6.30. The total value of the options will be positive when the USD exchange rate declines and negative when it rises.
3)	Loan hedges are currency hedges related to foreign currency loans.

In addition to the exchange rate on 31 Dec., the fair value of currency futures is affected by future interest points. The future interest percentage points within the various time intervals are received from Reuters which, in turn, retrieves data from different market players. Otherwise, please see Note 4 "Fair value".

Sensitivity analysis
A 10 per cent strengthening of NOK against the following currencies at 3. December would have increased equity by the amounts mentioned below. The analysis assumes that other variables remain constant. Since KONGSBERG has a hedging strategy that hedges all contractual currency flows, a change in an exchange rate will not fully affect the result even if the currency changes. Any changes in the value of the currency options have not been taken into account in the table below.

Estimated equity effect (before tax):

Amounts in MNOK	31 Dec 07	31 Dec 06
USD	112	223
EUR	194	167
Total	306	390

A 10 per cent weakening of NOK against the above-mentioned currencies would have the same effect in terms of amount, but with a minus sign instead of a plus, provided all variables remain constant.

c) Cash flow hedges

The periods in which cash flows related to derivatives that are cash flow hedges are expected to arise:

	31 Dec 07			31 Dec 06
	Capitalised amount	2008	2009 and later	Capitalised amount	2007	2008 and later
Interest swap agreements
Assets	1	-	1	(13)	(7)	(6)
Forward currency contracts
Assets	196	129	67	80	56	24
Liabilities	(8)	(8)	-	(23)	(15)	(8)
Currency options
Assets	14	-	14	-	-	-
Total	203	121	82	44	34	10

The periods in which cash flows related to derivatives that are cash flow hedges are expected to affect the result:

	31 Dec 07			31 Dec 06
	Capitalised amount	2008	2009 and later	Capitalised amount	2007	2008 and later
Interest swap agreements
Assets	1	-	1	(13)	(7)	(6)
Forward currency contracts
Assets	196	63	133	80	27	53
Liabilities	(8)	(4)	(4)	(23)	(8)	(15)
Currency options
Assets	14	-	14	-	-	-
Total	203	59	144	44	12	32

d) Interest rate risk on loans

Balance sheet values

Amounts in MNOK	31 Dec 07	31 Dec 06
Financial instruments with fixed interest
Certificate loans	-	300
Instruments with variable interest rates
Bond loans and other loans	705	705
Total	705	705

At 31 Dec., KONGSBERG had the following fixed-interest loans and interest swap agreements (from floating to fixed interest):

	Due date	Time to maturity 31 Dec 07	Interest rate	Amount 2007	Excess (+)/ negative (-) at 31 Dec 07	Amount 2006	Excess (+)/ negative (-) at 31 Dec 06
Fixed interest agreements
Bond loan ISIN 00101 9701.5	26 Sept 07	0.0	5.20%	-	-	300	(3)
Interest swap agreements
Agreement 1	19 Dec 07	0.0	6.80%	-	-	300	(7)
Agreement 2	17 June 09	1.5	5.40%	300	1	300	(4)
Agreement 3	17 Dec 08	1.0	5.60%	100	-	100	(2)
Total interest swap agreements				400	1	700	(13)
Total				400	1	1 000	(16)

Interest swap agreements cover the interest rate risk on the floating parts of the Group's debt portfolio, cf. the specification below on loans.
Interest swap agreement 1 covers certificate loans (MNOK 300 at 31 Dec. 2006) and was redeemed in 2007. Interest rate swaps 2 and 3 cover bond issue with floating interest.
The interest hedges are defined as cash flow hedges, and excess/negative values are recognised in consolidated equity. The fixed interest loan is valued at its amortised cost.

Other interest swap agreements
KONGSBERG has signed interest rate swaps from floating to fixed interest for a nominal amount of MNOK 150. The agreements are related to leases for sale and leaseback agreements as mentioned in Note 31 "Sale and leaseback". The value change is expensed on an ongoing basis.

At 31 Dec. 2007, the interest rate swap agreement had the following valuei:

	Due date	MNOK	Years remaining	Interest rate	Excess (+)/ negative (-) at 31 Dec 07	Excess (+)/ negative (-) at 31 Dec 06
Interest rate swaps	2 Nov 11	150	3.8	6.3%	(6)	(10)

Lån og kredittfasilitet

Amounts in MNOK	31 Dec 07	31 Dec 06
Long-term liabilities
Unsecured bond issue	700	700
Certificate loans		300
Others loans	5	5
	705	1 005

Loans and credit facilities

	At 31 Dec. 2007, the Group had the following loans and credit facilities					At 31 Dec. 2006, the Group had the following loans and credit facilities
	Due date	Nominal interest rate 2007	Term to maturity 2007	Face value	Carrying amount	Due date	Nominal interest rate 2007	Term to maturity 2007	Face value	Carrying amount
Certificate loan 1						21 Feb 07	3.70%	0.1	100	100
Certificate loan 2						21 March 07	3.90%	0.2	100	100
Certificate loan 3						21 April 07	4.00%	0.3	100	100
Bond loan ISIN 00101 9701.4 (fixed interest)						26 Sept 07	5.20%	0.7	300	300
Bond loan ISIN 00103 6178.5 (floating interest)	30 March 12	6.40%	4.3	300	300
Bond loan ISIN 00101 2638.4 (floating interest)	10 June 09	6 80%	1.4	400	400	10 June 09	4.60%	2.4	400	400
Others loans				5	5				5	5
Total loans			2.7	705	705				1 005	1 005
Overdraft facilities (undrawn borrowing limit)	1 July 13		5.5	1 000	0	1 March 09		2.2	800	-

Certificate loans due in 2007 were classified as long-term, since it was assumed they were to be refinanced within the overdraft facility.
The overdraft facility at 31 Dec. 2007 was a syndicated credit facility for a total of MNOK 1 000. The agreement was signed with four banks: DnB NOR, Nordea, SEB and Fokus Bank. The agreement was made through Norsk Tillitsmann (Norwegian Trustee) and will run until 2013.
The certificate loans were issued in NOK and are listed on the Oslo Stock Exchange. The loans are capitalised at amortised cost using the effective interest method.
Other loans comprise minor debts incurred directly by individual subsidiaries. The overdraft facility entails the following covenants related to key financial figures:
a) Earnings before interest and tax (EBIT) plus interest income are to be twice as high as payable interest.
b) Net interest-bearing debt shall not exceed three times the EBITDA, but can be up to 3.5 times the EBITDA for three consecutive quarters at the most.
The covenants in the loan agreements are satisfied.

Sensitivity analysis, fixed interest loan
KONGSBERG recognises financial liabilities with fixed interest at amortised cost. Changes in the interest level on fixed interest loan on the date of balance sheet recognition will therefore not affect the result.

Sensitivity analysis of cash flow for instruments with variable interest rates
A change in interest of 50 basis points (bp) on the date of balance sheet recognition would have increased (reduced) equity and the result by the following amounts. The analysis assumes the other variables in the table remain constant. The analysis was performed on the same basis as for 2006.

Effect of an interest rate increase of 50 bp

	31 Dec 07		31 Dec 06
Amounts in MNOK	Result	Equity	Result	Equity
Investments with floating interest	5	-	4	-
Loans with variable interest	(4)	-	(3)	-
Interest swap agreements	2	2	3	5
Cash flow sensitivity (net)	3	2	4	5

e) Liquidity risk

Due dates under the terms of contract for financial liabilities, including interest payments.

	31 Dec 07				31 Dec 06
Amounts in MNOK	Carrying amount	Contractual cash flows	2008	2009 and later	Carrying amount	Contractual cash flows	2007	2008 and later
Non-derivative financial liabilities
Certificate loan					300	(303)	(303)
Unsecured bond issue	700	(822)	(46)	(776)	700	(761)	(334)	(427)
Derivative financial liabilities
Forward currency contracts identified as hedges (gross negative value)	35	(35)	(30)	(5)	54	(54)	(42)	(12)
Total	735	(857)	(76)	(781)	1 054	(1 118)	(679)	(439)

f) Oppsummering finansielle eiendeler og forpliktelser

	Carrying amount/ fair value
Amounts in MNOK	31 Dec 07	31 Dec 06
Financial assets
Cash and short-term deposits	947	711
Available-for-sale shares	356	263
Forward currency contracts, fair value hedges	274	54
Forward currency contracts, cash flow hedges	196	80
Currency option, cash flow hedges	14	-
Forward currency contracts, loan hedges	2	1
Currency option	-	2
Interest swap agreements to hedge debt	1	-
Financial liabilities
Interest-bearing debt	(705)	(1 005)1)
Interest swap agreements to hedge debt	-	(13)
Interest swap agreements attached to sale and leaseback	(6)	(10)
Forward foreign exchange contracts, fair value hedges	(26)	(29)
Forward foreign exchange contracts, cash flow hedges	(8)	(23)

1) The fair value for 2006 was MNOK 1 008.

For more details about how fair value is calculated, see Note 4 "Fair value".

Summary of changes in the fair value of financial instruments during the year, where the changes have been taken to equity

Figures before tax in MNOK	Prognosis hedges and deferred gains1)	Interest swap agreements	Available for-sale shares	Total
Excess/(negative) value at 1 Jan.	124	(13)	115	226
Change in excess/(negative) value during the period	298	8	(25)	281
Recognised gain during the period	(28)	6	-	(22)
Excess/(negative) value at 31 Dec.	394	1	90	485

1)	The deferred gain on cash flow hedges was MNOK 192 (MNOK 67 at 31 Dec. 2006) attributable to projects. The gains arise when the prognosis hedges mature and new hedges are secured for the projects. Any gains/losses that arise are deferred and realised proportional to the progress of the project.