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Notes to the Consolidated Financial Statements

6. Net finance costs

All figures in millions Notes 2007 2006
Interest payable (114) (117)
Net foreign exchange losses (25) (2)
Other losses on financial instruments in a hedging relationship:
– fair value hedges (1)
– net investment hedges (1) (2)
Other losses on financial instruments not in a hedging relationship:
– derivatives (9) (12)
Finance costs (150) (133)
Interest receivable 19 23
Finance income in respect of employee benefits 24 10 4
Net foreign exchange gains 8 21
Other gains on financial instruments in a hedging relationship:
– fair value hedges
– net investment hedges
Other gains on financial instruments not in a hedging relationship:
– amortisation of transitional adjustment on bonds 1 8
– derivatives 6 3
Finance income 44 59
Net finance costs (106) (74)
Analysed as:
Net interest payable (95) (94)
Finance income in respect of employee benefits 24 10 4
Net finance costs reflected in adjusted earnings (85) (90)
Other net finance (costs)/income (21) 16
Total net finance costs (106) (74)

The 1m net loss on fair value hedges comprises a 20m loss on the underlying bonds offset by a 19m gain on the related derivative financial instruments.

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