Notes to the consolidated financial statements

20. Financial instruments continued

(p) Hedges

Cash flow hedges – currency forward contracts

At 31 March 2009, the Group held no forward exchange contracts.

At 31 March 2008, the Group held the following forward exchange contracts, designated as hedges of expected future purchases for which the Group had firm commitments. The forward currency contracts were used to hedge the foreign currency risk of the firm commitments. The terms of these contracts were as follows:

	Maturity	Exchange rate
EUR 473,100	30.4.2008	1.2669
USD 150,000	19.5.2008	2.0216
EUR 150,000	18.6.2008	2.0216

These hedges were designated as highly effective. At 31 March 2008, no change occurred in the fair value and, therefore, no gain or loss was included in equity.

Cash flow hedges – interest rate swap

At 31 March 2009, the Group held three interest rate swaps, designated as a hedge of future interest cash flows, for which the Group has firm commitments. The swap is used to convert variable rate interest payments to a fixed rate basis. The terms of these swaps are as follows:

Notional amount	Start date	Termination date	Fixed rate %
GBP 100 million	15.9.2008	15.3.2022	4.79
GBP 62.5 million	29.1.2009	31.5.2011	2.345
GBP 62.5 million	29.1.2009	31.5.2011	2.435

These hedges were designated as highly effective.

At 31 March 2008, the Group held one interest rate swap, designated as a hedge of future interest cash flows, for which the Group had firm commitments. The swap was used to convert cash deposit interest receipts to a fixed rate basis. The terms of this swap were as follows:

Notional amount	Start date	Termination date	Fixed rate %
GBP 50 million	16.3.2007	16.3.2009	5.665

This hedge was designated as highly effective.

21. Authorised and issued share capital

	31.3.2009 £m	31.3.2008 £m
Authorised:
700 million ordinary shares of 10 pence each	70.0	70.0
Allotted, called up and fully paid:
518.6 million ordinary shares of 10 pence each	51.9	51.9

The Northumbrian Water Group plc Employee Trust, through Northumbrian Water Share Scheme Trustees Limited, currently holds 1,038,252 (2008: 443,507) ordinary 10 pence shares in the Company for use under the Company’s Long Term Incentive Plan (LTIP). All of these shares have been conditionally awarded under the LTIP. Details of the main features of the LTIP and the conditions for vesting can be found in the directors’ remuneration report. As at 31 March 2009, the share price of the ordinary 10 pence shares in the Company was 218.25 pence (2008: 349.25 pence).