Financial statements - Mondi

Notes to the combined and
consolidated financial statements
continued
for the year ended 31 December 2010
6 Net finance costs
Net finance costs and related foreign exchange gains/(losses) are presented below:
E million 2010 2009
Investment income
Interest income
Bank deposits, loan receivables and other 10 8
Available-for-sale investments – 1
Total interest income 10 9
Dividend income 1 –
Expected return on defined benefit arrangements (see note 24) 24 17
Impairment of financial assets (excluding trade receivables) – (1)
Other financial income – 2
Total investment income 35 27
Foreign currency gains/(losses)
Foreign currency gains/(losses) 9 (3)
Less: foreign currency (gains)/losses capitalised (see note 12) (1) 2
Total foreign currency gains/(losses) (see note 7) 8 (1)
Financing costs
Interest expense
Interest on bank overdrafts and loans (134) (158)
Interest on obligations under finance leases (1) (1)
Interest on defined benefit arrangements (see note 24) (33) (26)
Total interest expense (168) (185)
Less: interest capitalised (see note 12) 8 45
Total financing costs (160) (140)
Net finance costs (117) (114)
The weighted average interest rate applicable to interest on general borrowings capitalised for the year ended 31 December 2010
is 3.9% (2009: 10.2%), mainly related to loans in Poland and Russia.
7 Foreign exchange
The amounts of net foreign currency gains/(losses) credited/(charged) to the combined and consolidated income statement is
presented as follows:
E million 2010 2009
Net operating foreign currency gains/(losses) (see note 3) 5 (13)
Net financing foreign currency gains/(losses) 1 (see note 6) 8 (1)
Net foreign currency gains/(losses) 13 (14)
Note:
1 Net of fair value movements attributable to foreign exchange contracts.
102 Annual report and accounts 2010