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INDEX INDEXNotesNotes29. financial risks and instrumentsThe Dantherm group's risk management policyIt is group policy to identify and hedge all significant financial risks in an expedient way and not to engage in active speculation in financial risks. Thegroup's financial management is thus only aimed at managing financial risks that are a direct consequence of the group's operations and financing.A description of accounting policies and methods applied, including the criteria for recognition and the basis of measurement, is given under Accountingpolicies.Currency risksIt is group policy to hedge significant commercial currency risks arising from foreign currency contracts where the cash flow can be predicted withsufficient accuracy. The Danish group enterprises' EUR exposure is not hedged. Translation risks relating to the valuation of foreign net investments aregenerally not hedged. Capitalisation of the foreign subsidiaries is targeted in order to reduce the translation risk. At regular intervals, the group's managementconsiders whether loans need to be arranged for balancing large net investments where the interest on the currency in question is lower thanthe interest on DKK.As a result of the group's international activities, developments in exchange rates between DKK and the various reporting currencies of the consolidatedcompanies are important for the operating profit/loss as measured in DKK. The total net position in currencies other than DKK and EUR amounted toDKK 27m at the end of 2011 relative to a net liability of DKK 2m at the end of 2010. Net receivables in EUR amounted to DKK 14m as at 31 December2011 against DKK 32m at the end of 2010.The group's currency risks are primarily hedged due to income and expenses being settled in the same currency. The group's foreign enterprises arenot materially influenced by exchange rate fluctuations as both income and expenses are settled in the local currencies. No forward exchange contractswere concluded at the end of 2011.The group's currency risks in the balance sheet31 December 2011DKK '000Securitiesand cashand cashequivalents Receivables Payables Net positionUSD 10,506 15,367 -16,348 9,525GBP 0 11,494 -7,954 3,540SEK 7 1,424 -2,676 -1,245NOK 284 11,767 -12,448 -397EUR 13 28,532 -14,216 14,329PLN 378 1,225 -1,052 551CNY 13,026 15,716 -13,287 15,455Total 24,214 85,525 -67,981 41,75829. Financial risks and instruments – continuedThe consolidated income statement is affected by exchange rate fluctuations as the net profit/loss of foreign group enterprises is translated into Danishkroner on the basis of average exchange rates in connection with the continuous recognition during the year.As regards investments in foreign units, the group's equity as at 31 December 2011 would be reduced by DKK 6.7m (2010: DKK 5.4m) if all exchangerates were 10% lower than the actual rate.30. Related partiesDantherm A/S does not have any related parties with a controlling influence. Related parties with a significant influence comprise members of the company'sBoard of Directors and Executive Board and their related family members.Furthermore, related parties comprise the group enterprises and associates included in the group chart on page 7.Transactions between related parties comprise intercompany loans and interest thereon, purchase and sale of goods and services, management feesand remuneration of the Executive Board and the Board of Directors.The remuneration of the Executive Board and the Board of Directors appears from note 5. Transactions with group enterprises have been eliminated inthe consolidated financial statements. Transactions with associates comprise:Trading with associates comprises:DKK '000 2011 2010Sale of goods and services 1,882 5,031Purchased supplies 1 1,045Receivable from associates appears from note 17.31. Events occurring after the balance sheet dateNo important events have occurred after the balance sheet date.31 December 2010DKK '000Securitiesand cashand cashequivalents Receivables Payables Net positionUSD 4,967 18,182 -14,471 8,678GBP 0 1,804 -3,893 -2,089SEK 8 1,432 -10,308 -8,868NOK 1,571 8,262 -14,981 -5,148EUR 119 42,237 -9,992 32,364PLN 517 1,264 -1,079 702CNY 7,092 12,711 -14,946 4,857Other 2 0 0 2Total 14,276 85,892 -69,670 30,49876 Dantherm Annual Report 2011 Annual Report 2011 Dantherm 77