REG-Nordic Land PLC Final Results - Part 2
Released: 15/07/2009
Part 2 : For preceding part double-click [nRn1O6568V]
Cost of issue of shares at a premium - (1,922) - - (1,922)
Balance at 3 April 2007 - - - - -
Balance at 31 March 2008 192 17,059 2,037 1,258 20,546
The notes form part of these consolidated financial statements.
Notes to the accounts
Note 1 General Information
Nordic Land plc (the 'Company') is a Jersey incorporated company which invests
principally in retail property in the Nordic region. The Company was
incorporated on 3 April 2007. The consolidated financial statements have been
prepared for the year ended 31 March 2009.
The audited consolidated financial statements were authorised for issuance on 7
July 2009.
These statements are not statutory accounts and have been extracted from the
full statutory accounts for the year ended 31 March 2009, on which the auditors'
report is unqualified.
Note 2 Basis of preparation
The financial information has been prepared in accordance with International
Financial Reporting Standards ("IFRS") as adopted by the European Union and is
presented in sterling.
The preparation of financial statements in conformity with IFRSs requires
management to make judgements, estimates and assumptions that affect the
application of policies and the reported amounts of assets and liabilities,
income and expense. The estimates and associated assumptions are based on
historical experience and various other factors that are believed to be
reasonable under the circumstances, the results of which form the basis of
making the judgements about carrying values of assets and liabilities that are
not readily apparent from other sources. Actual results may differ from these
estimates.
Information about significant areas of estimation, uncertainty and critical
judgements in applying accounting policies that have the most significant effect
on the amounts recognised in the financial statements is included in the
following notes:
Note 10 - Investment properties
Note 15 - Borrowings
Note 22 - Share-based payments
The consolidated financial statements have been prepared on the historical cost
basis except for investment properties and derivative financial instruments
which are both measured at fair value.
New standards and interpretations not yet adopted
A number of new standards, amendments to standards and interpretations are not
yet effective for the year ended 31 March 2009, and have not been applied in
preparing these consolidated financial statements.
* IFRIC 13, Customer loyalty programmes (effective date: financial year
beginning 1 July 2008)
* IFRIC 16, Hedges of a net investment in a foreign operation (effective date:
financial year beginning 1 October 2008)
* IFRS 8, Operating segments (effective date: financial year beginning 1
January 2009)
* Revised IAS 1, Presentation of financial statements (effective date:
financial year beginning 1 January 2009)
* Revised IAS 23, Borrowing costs (effective date: financial year beginning 1
January 2009)
* Amendment to IFRS 2, Share-based payment - Vesting conditions and
cancellations (effective date: financial year beginning 1 January 2009)
* Amendment to IAS 32, Financial instruments: Presentation and IAS 1,
Presentation of financial statements - Puttable financial instruments and
obligations arising on liquidation (effective date: financial year beginning 1
January 2009)
* Amendment to IFRS 1, First-time adoption of IFRS, and IAS 27, Consolidation
and separate financial statements - Cost of an investment in a subsidiary,
jointly-controlled entity or associate (effective date: financial year beginning
1 January 2009)
* Improvements to IFRSs (effective date: financial year beginning 1 January
2009 or 1 July 2009)
* IFRIC 15, Agreements for the construction of real estate (effective date:
financial year beginning 1 January 2009)
* Revised IFRS 1, First-time adoption of IFRS (effective date: financial year
beginning 1 July 2009)
* Basis for conclusion on revised IFRS 1, First-time adoption of IFRS
* Implementation guidance on revised IFRS 1, First-time adoption of IFRS
* Revised IFRS 3, Business combinations (applies to business combinations for
which the acquisition date is on or after the beginning of the first annual
reporting period beginning on or after 1 July 2009)
* Amendment to IAS 27, Consolidated and separate financial statements
(effective date: financial year beginning 1 July 2009)
* Amendment to IAS 39, Financial instruments; Recognition and measurement -
Eligible hedged items (effective date: financial year beginning 1 July 2009)
* IFRS 17, Distribution of non-cash assets to owners (effective date: financial
year beginning 1 July 2009)
* IFRIC 18, Transfer of assets from customers (effective date: applies to
transfers of assets from customers received on or after 1 July 2009)
The standards and interpretations addressed above will be applied for the
purposes of the Group consolidated financial statements with effect from the
dates listed.
Revised IAS 1, which becomes mandatory for the 2010 financial statements, is
expected to have significant impact on the presentation of the financial
statements.
Upon adoption of IFRS 8 "Operating Segments", the Group will disclose additional
segmental reporting information. The adoption of the revised IAS 23 is not
expected to have any impact as the Group currently capitalises the interest on
all qualifying assets.
Upon the adoption of the above new standards it is not expected that there will
be an effect on reported income or net assets.
The consolidated financial statements have been prepared on a going concern
basis which assumes the Group will be able to meet its liabilities as they fall
due. The Group's working capital forecasts show that the Group has sufficient
cash resources to meet its funding requirements over the next 12 months and to
continue in operational existence for the foreseeable future.
Note 3 Significant Accounting Policies
The principal accounting policies adopted in the preparation of the financial
statements are set out below. The accounting policies have been consistently
applied by the Company and its subsidiaries (together the 'Group').
Basis of consolidation
The financial statements incorporate the net assets and liabilities of the Group
at the balance sheet date and its results for the year then ended. Results of
subsidiaries acquired or disposed during a period are included from the
effective date of acquisition or up to the effective date of disposal as
appropriate. The financial statements of subsidiaries are included in the
consolidated financial statements from the date that control commences up to the
date that control ceases. Control exists when the Company has the power,
directly or indirectly, to govern the financial and operating policies of an
entity so as to obtain benefits from its activities.
All intra-group transactions, balances, income and expenses are eliminated on
consolidation.
Functional and presentational currency
Items included in the financial statements of each of the Group's entities are
measured using the currency of the primary economic environment in which the
entity operates (the 'functional currency'). The consolidated financial
statements are presented in sterling, which is the Company's and Group's
functional and presentational currency.
Share capital
Shares are classified as equity to the extent that they meet the following two
conditions:
* they include no contractual obligations upon the Company to deliver cash or
other financial assets or to exchange financial assets or financial liabilities
with another party under conditions that are potentially unfavourable to the
Company; and
* where the instrument will or may be settled in the Company's own equity
instruments, it is either a non-derivative that includes no obligation to
deliver a variable number of the Company's own equity instruments or is a
derivative that will be settled by the Company exchanging a fixed amount of cash
or other financial assets for a fixed number of its own equity instruments.
Share issue expenses
The costs incurred by the Company in connection with the issue of shares are
written off against the share premium account.
Share-based payments
Options
The grant-date fair value of options granted to employees of the Manager and
Directors of the Company are recognised as an expense, with a corresponding
increase in equity, over the period that the employees and Directors become
unconditionally entitled to the options. The amount recognised as an expense is
adjusted to reflect the actual number of share options that vest.
Performance carry
The Manager is entitled to receive a performance carry equal to 20 per cent. of
the Total Shareholder Return (defined as the sum of the increase in adjusted net
asset value per share and dividends per share, divided by the adjusted net asset
value per share at the beginning of the relevant financial period) in excess of
8 per cent. per annum for the relevant period, subject to a high watermark, to
which a performance carry relates. This cost will be recorded on an accruals
basis. To the extent it is payable by the issue of shares in the Company, the
cost of such share-based payments is recognised in the Consolidated Income
Statement by reference to the fair value at the date of payment, together with a
corresponding increase in equity.
Revenue
Revenue represents amounts receivable calculated on an accruals basis in respect
of property rental income earned in the normal course of business, net of
sales-related taxes.
Investment property
Investment properties are properties owned or leased by the Group which are held
for long-term rental income and for capital appreciation. Investment property is
initially recognised at cost and re-valued at the balance sheet date to fair
value, as determined by professionally qualified external valuers.
Any gain or loss arising from the change in fair value is reported in the Income
Statement. No depreciation is provided in respect of investment property.
Borrowing costs associated with direct expenditure on investment properties
under development or undergoing refurbishment are capitalised using the average
rate of interest paid on the relevant debt outstanding until the date of
practical completion.
Sales of investment property are recognised when contracts have been
unconditionally exchanged during the period and the significant risks and
rewards of ownership have been transferred.
Acquisitions of corporate interests in investment property are accounted for on
consolidation as if the Group had acquired the underlying property asset
directly. Accordingly, no goodwill arises on such acquisitions as any difference
between the fair values of the assets acquired and the acquisition consideration
are allocated to the investment property asset, which is subject to subsequent
revaluation under IAS 40.
Impairment of assets
The Group assesses at each reporting date whether there is objective evidence
that an asset may be impaired. If any such indication exists the Group makes an
estimate of the asset's recoverable amount. An asset's recoverable amount is
the higher of the asset's fair value less costs to sell and its value in use and
is determined on an asset by asset basis. When the carrying amount of an asset
exceeds its recoverable amount, the asset is considered impaired and is written
down to its recoverable amount.
An assessment is made at each reporting date as to whether there is any
indication that previously recognised impairment losses may no longer exist or
may have decreased. If such an indication exists, the recoverable amount is
estimated and the corresponding impairment loss that was previously booked is
reversed.
Financial instruments
Classification
Management determines the classification of financial instruments at initial
recognition. The Group classifies its financial assets into the following
categories:
* Financial assets at fair value through profit and loss
* Loans and receivables
The Group classifies its financial liabilities into the following categories:
* Financial liabilities at fair value through profit and loss
* Financial liabilities measured at amortised cost
Derecognition
The Group derecognises a financial asset when the contractual rights to the cash
flows from the financial asset expire or it transfers the financial asset and
the transfer qualifies for derecognition in accordance with IAS 39.
A financial liability is derecognised when the obligation specified in the
contract is discharged, cancelled or expired.
Trade and other receivables
Trade and other receivables are reported at their fair value. As trade and other
receivables have a short expected term, they are valued at face value without
discounting. Trade and other receivables are reported at the amount they are
expected to realise after a deduction for doubtful debts, which is made on a
case by case basis.
A provision for impairment is made when there is objective evidence (such as the
probability of insolvency or significant financial difficulties of the debtor)
that the Group will not be able to collect all the amounts due under the
original terms of the invoice. Impaired debts are derecognised when they are
assessed as uncollectable.
Cash and cash equivalents
Cash and cash equivalents comprise cash in hand and on demand deposits that are
readily convertible to a known amount of cash and are subject to an
insignificant risk of changes in value. In order to be classified as cash and
cash equivalents, the maturity of the cash and cash equivalents instruments is
three months or less at the time of acquisition.
Interest-bearing loans and borrowings
All loans and borrowings are initially recognised at their issue proceeds, net
of issue costs associated with the borrowing.
After initial recognition, interest-bearing loans and borrowings are
subsequently measured at amortised cost using the effective interest method.
Amortised cost is calculated by taking into account any issue costs, and any
discount or premium on settlement. Borrowing costs are recognised on an
accruals basis in the Income Statement using the effective interest rate
method.
Gains and losses are recognised in the Income Statement when the liabilities are
derecognised, as well as through the amortisation process.
Derivative financial instruments
The Group may use derivative financial instruments such as interest rate swaps
to hedge its risks associated with interest rate fluctuations. Such derivative
financial instruments are stated at fair value, based on market prices,
estimated future cash flows and forward rates as appropriate. Any gains or
losses arising from changes in fair value are taken directly to the Income
Statement.
In accordance with its treasury policy, the Group does not hold or issue
derivative financial instruments for trading purposes.
Trade and other payables
Trade and other payables are non-interest bearing and are reported at their
amortised cost. As trade payables have a short expected term, they are valued at
their face value without discounting.
Taxation
With effect from the 2009 year of assessment, Jersey abolished the exempt
company regime for existing companies. Profit arising in the Company for the
2009 year of assessment and future periods will be subject to tax at the rate of
0%. In the prior year the Company was exempt from taxation under the provisions
of Article 123A of the Income Tax (Jersey) Law 1961 as amended. Certain
subsidiary undertakings are subject to foreign taxes in respect of foreign
source income; provision for such taxes is made on the basis of taxable
profits.
Deferred taxation
Deferred income tax is recognised on all temporary differences arising between
the tax bases of assets and liabilities and their carrying amounts in the
financial statements, with the following exceptions:
* where the temporary difference arises from the initial recognition of
goodwill or of an asset or liability in a transaction that is not a business
combination that at the time of the transaction affects neither accounting nor
taxable profit or loss;
* in respect of temporary differences associated with investments in
subsidiaries, where the timing of the reversal of the temporary difference can
be controlled by the Group and it is probable that the temporary difference will
not reverse in the foreseeable future; and
* deferred income tax assets are recognised only to the extent that it is
probable that taxable profit will be available against which the deductible
temporary differences, carry-forward of unused tax assets and unused tax losses
can be utilised.
Deferred income tax assets and liabilities are measured on an undiscounted basis
at the tax rates that are expected to apply when the related asset is realised
or liability is settled, based on tax rates and laws enacted or substantially
enacted at the balance sheet date and are expected to apply when the related
deferred tax asset is realised or the deferred tax liability is settled.
Deferred income tax is recognised in the Income Statement except when it relates
to items that are credited or charged directly to equity, in which case the
deferred tax is also dealt with in equity.
Segmental analysis
The Group has a single geographical and business segment, being investment in
property in the Nordic region.
Management fees
Under the terms of the Management Agreement, the Manager, Lathe Investments
(Nordic) LLP, is entitled to receive an annual management fee dependent on the
consolidated gross assets of the Group. Fees are recorded on an accruals
basis.
Foreign currencies
The assets and liabilities of foreign entities are translated into sterling at
the rate of exchange ruling at the balance sheet date and their income
statements and cash flows are translated at the average rate for the year.
Exchange differences arising from the retranslation of the net investment in
foreign entities are dealt with in reserves. Transactions in currencies other
than the Group's functional currency are recorded at the exchange rate
prevailing at the transaction dates. Foreign exchange gains and losses resulting
from settlement of these transactions and from retranslation of monetary assets
and liabilities denominated in foreign currencies are recognised in the Income
Statement except when qualifying as hedges, in which case they are dealt with in
reserves.
Note 4 Net rental income
The Group engages in only one class of business activity, being investment in
retail property. All operations are continuing and are based in the Nordic
region.
Note 5 Operating (loss)/profit
Operating (loss)/profit is stated after charging:
31 March 3 April 2007 to
2009 31 March2008
£000 £000
Auditors' remuneration for audit and non-audit services 54 67
Asset management fees payable to the Manager (note 20) 458 382
Performance fee payable to the Manager (note 20) - 468
Share-based payments (note 22) 77 526
The analysis of auditors' remuneration is as follows:
31 March 3 April 2007 to
2009 31 March 2008
£000 £000
Audit fees payable to the Company's auditors and their 33 30
associates for the audit of the Company's and Group
financial statements
Non-audit fees payable to the Company's auditors and
their associatesfor:
- Tax services 17 14
- Other services 4 23
Total auditors' remuneration 54 67
In addition to the fees disclosed above, fees amounting to £nil (2008: £104,000)
were paid to associates of KPMG Channel Islands Limited for due diligence
services relating to property acquisitions, and £nil (2008: £312,000) for
financial reporting and taxation advice relating to the admission to AIM.
Note 6 Financial income
31 March 3 April 2007 to
2009 31 March2008
£000 £000
Interest receivable 191 291
Note 7 Financial expenses
31 March 3 April 2007 to
2009 31 March2008
£000 £000
Interest on bank loans 2,749 2,102
Other finance costs 113 81
Interest payable and other finance costs 2,862 2,183
Note 8 Income tax
31 March 3 April 2007 to
2009 31 March 2008
£000 £000
Current income tax charge/(credit) 10 (38)
Deferred taxation (710) 1,192
Tax (credit)/charge (700) 1,154
With effect from 1 January 2009, the income tax rate for companies in Jersey was
reduced from 20% to 0% and exempt company status for all companies was
abolished. The existing exempt company status of the Company and its Jersey
subsidiary remained in place until 31 December 2008 at which time they moved to
a 0% rate of income tax. The current tax (credit)/charge and deferred tax
calculations represent corporate income tax on income arising in Sweden, that is
subject to income tax at 26.3%, and Luxembourg, at 29.63%.
The tax on the Group's (loss)/profit before tax differs from the theoretical
amount that would arise using the tax rates applicable to the consolidated
entities as follows:
31 March 3 April 2007 to
2009 31 March 2008
£000 £000
(Loss)/profit before tax (4,503) 1,886
Income tax calculated at the Jersey income tax rate of - -
0%
Effects of:
Taxation of income in other countries 10 (38)
Deferred taxation arising from temporary differences
in the period (710) 1,192
Tax (credit)/charge (700) 1,154
Note 9 Earnings per share
Earnings per share and EPRA earnings per share have been calculated, using the
weighted average number of shares in issue during the year of 19,645,000 (2008:
17,433,213), as follows:
31 March 31 March 3 April 3 April
2009 2009 2007 to 2007 to
Loss Earnings 31 March 31 March
After tax per share 2008 2008
Profit Earnings
After tax per share
£000 pence £000 pence
(Loss)/profit for the year/period (3,803) (19.4)p 732 4.2p
Loss/(gain) on revaluation of investment properties 3,721 18.9p (2,947) (16.9)p
Change in fair value of derivative instruments 272 1.5p (272) (1.5)p
Deferred tax on revaluation of investment properties (710) (3.6)p 1,192 6.8p
Loss on abortive transaction - - 104 0.6p
EPRA loss (520) (2.6)p (1,191) (6.8)p
Basic and diluted earnings per share are the same, as the issued share options
are currently anti-dilutive.
EPRA earnings per share, excluding the (loss)/gain on revaluation of investment
properties, the change in fair value of derivative financial instruments and
exceptional items, all net of attributable taxation, is an accepted property
industry measure for reporting recurring profits.
Note 10 Investment properties
As at As at
31 March 31 March
2009 2008
£000 £000
Opening balance 67,878 -
Investment properties acquired - 64,511
Capital expenditure on properties 486 89
Foreign exchange (losses)/gains (440) 331
(Loss)/gain on revaluation (3,721) 2,947
64,203 67,878
The fair value of investment properties is based on a valuation at 31 March 2009
by DTZ Sweden AB performed in accordance with the Appraisal and Valuation
Standards of RICS, on the basis of market value.
Note 11 Derivative financial instruments
At 31 March 2008, the fair value of derivative financial instruments had been
calculated by discounting the expected future cash flows at prevailing interest
rates. As explained in note 15, all loans are on a fixed interest rate basis
and the Group does not currently have any direct derivative financial
instruments with the lender or any other third parties. Therefore, the value
previously attributable to derivative financial instruments has been
derecognised.
As at As at
31 March 31 March
2009 2008
£000 £000
Derivative financial instruments - 272
Note 12 Trade and other receivables
As at As at
31 March 31 March
2009 2008
£000 £000
Rental debtors 281 189
Prepayments and accrued income 97 130
Other debtors - 44
378 363
The carrying amount of trade and other receivables approximate their fair
value.
The Group's credit risk is primarily the risk that a rental debtor will be
unable to pay amounts in full when due, with a maximum exposure equal to the
carrying amount of the debtor. As at 31 March 2009 (31 March 2008: £nil) no
provision had been made for any doubtful debts.
Note 13 Cash and cash equivalents
As at As at
31 March 31 March
2009 2008
£000 £000
Cash and cash equivalents 5,336 6,838
Cash and cash equivalents comprise cash held by the Group and short-term
deposits with an original maturity of three months or less. The carrying value
of these assets equals their fair value.
The credit risk on liquid funds is limited because the counterparties are banks
with high credit ratings.
Note 14 Trade and other payables
As at As at
31 March 31 March
2009 2008
£000 £000
Accounts payable - trade 329 244
Deferred income 879 987
Accruals 926 931
Other creditors 20 168
Performance fee payable to the Manager - 468
2,154 2,798
The Directors consider that the carrying amount of trade and other payables
approximate to their fair value.
Note 15 Borrowings
As at As at
31 March 31 March
2009 2008
£000 £000
Amounts falling due after more than one year:
Bank loans 50,013 50,285
Unamortised borrowing costs (317) (425)
49,696 49,860
The bank loans represent borrowings of SEK 592.7 million. The weighted-average
interest rate is 5.45% per annum. The interest rates on all loans are fixed
until maturity of the borrowings in April 2012, with an option to extend for a
further year.
The bank loans are secured on the shares of the borrowing subsidiaries and their
investment properties.
The loans to acquire the properties were originally provided by Lehman Brothers
Bankhaus AG ('Lehman'). On 23 May 2008 the loans were transferred to a
commercial-mortgage-backed-securities ('CMBS') vehicle, Excalibur Funding No 1
PLC ('Excalibur'), set up by Lehman to be the lender of a portfolio of loans.
Excalibur took over all the rights and obligations under the Lehman loan
agreement, including the capital expenditure commitment facility of SEK 110
million (£9.3 million).
The loan agreement states that Nordic Land pays interest to Excalibur on a
fixed-interest basis. The Group does not have any floating-rate obligations
under the terms of the loan. Lehman previously advised that Nordic Land
benefitted from movements in interest rates in relation to the underlying
derivative financial instruments put in place within the Lehman group of
companies (and thus subsequently Excalibur) to achieve the fixed interest rates
on our loans. The value of these derivative financial instruments was accounted
for in the Balance Sheet on the advice of Lehman. However, since the loans were
transferred to Excalibur, the service agent has advised that there are no
underlying derivative financial instruments within Excalibur to which Nordic
Land is a party to the derivative contract. Hence the value of the derivative
financial instruments has been derecognised.
The loans have been accounted for at amortised cost at the Balance Sheet date,
in accordance with IFRS, and the fair value is disclosed below. Nordic Land's
only obligation is to pay interest at fixed rates and repay loans at par value
at maturity.
As stated above, Excalibur took over the commitment to provide a capital
expenditure loan facility of some £9.3 million (2008: £9.3 million). This
facility had been intended to be used to fund part of the costs for the
development project at Borlssnge and a drawdown notice has been submitted to
Excalibur to receive the funds. Neither the funds nor confirmation that the
facility exists have yet been received.
The Directors estimate that the book value and fair value of the Group's bank
loans are:
Book value Fair value Book value Fair value
31 March 2009 31 March 2009 31 March 2008 31 March 2008
£000 £000 £000 £000
Bank loans 50,013 54,013 50,285 50,013
Note 16 Financial instruments
Financial risk management objectives and policies
The Group's activities expose it to a variety of market, capital and financial
risks, including:
* market risk (including currency risk, price risk and interest rate risk)
* credit risk
* liquidity risk
The main risks arising from the Group's financial instruments are detailed below
together with the policies adopted by the Board to manage these risks.
These risks are managed by the Group under policies approved by the Board of
Directors. The Group's risk management policies are established to identify and
analyse the risks faced by the Group, to set appropriate risk limits and
controls, and to monitor risks and adherence to limits. Risk management policies
are reviewed regularly to reflect changes in market conditions and the Group's
operational activities.
Financial risks relate to trade and other receivables, trade and other payables,
cash and cash equivalents and borrowings. The Group may also enter into
derivative transactions, primarily fixed interest rate swaps, for the purpose of
managing the interest rate risk arising from funding the acquisition of the
Group's properties.
In accordance with its treasury policy, the Group does not hold or issue
derivative financial instruments for trading purposes.
Capital risk management
The Group's objectives when managing capital are to safeguard the Group's
ability to continue as a going concern in order to provide returns for
shareholders and benefits for other stakeholders and to maintain satisfactory
levels of financial resources to mitigate against financial risk.
The capital structure of the Group consists of a mixture of bank loans, cash and
cash equivalents and retained earnings, all as disclosed in the Balance Sheet.
In order to maintain or adjust the capital structure, the Group may adjust the
amount of dividends paid to shareholders, return capital to shareholders, issue
new shares or sell assets to reduce debt.
Consistent with others in the industry, the Group monitors capital on the basis
of the gearing ratio. This ratio is calculated as net debt divided by the value
of the Group's properties. Net debt is calculated as bank loans less cash and
cash equivalents.
The gearing ratio at the year end is as follows:
As at As at
31 March 31 March
2009 2008
£000 £000
Bank loans 49,696 49,860
Cash and cash equivalents (5,336) (6,838)
Net debt 44,360 43,022
Value of investment properties 64,203 67,878
Net gearing ratio 69.1% 63.4%
Gross gearing ratio 77.4% 73.5%
Categories of financial instruments
The Group's financial instruments relate to trade and other receivables,
derivative financial instruments, cash and cash equivalents, trade and other
payables and borrowings.
In all cases, the Directors consider that the carrying amount of the Group's
financial instruments approximate to their fair value, except for Borrowings
(see note 15).
Currency risk
The Group operates in the Nordic region and is exposed to foreign exchange risk
arising primarily with respect to the Swedish krona and Euros. Foreign exchange
risk arises from future commercial transactions, recognised monetary assets and
liabilities and net investment in foreign operations.
The Group's approach to managing its foreign currency exposure is to match, as
far as possible, local currency assets with local currency liabilities. The
Group's policy is not to undertake any speculative currency hedging
arrangements.
At the reporting date the Group had the following exposure, measured as a
proportion of net non-monetary and monetary assets:
As at 31 March 2009 As at 31 March 2008
Currency
Swedish krona 81.9% 82.9%
Euro (0.1%) 0.1%
The following table sets out the Group's total exposure to foreign currency risk
and the net exposure to foreign currencies of monetary assets and liabilities:
Monetary assets Monetary liabilities Net exposure Monetary assets Monetary liabilities Net exposure
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