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Nordic Land plc

Interim Report

for the period from 1 April to 30 September 2009

CORPORATE STATEMENT

Nordic Land plc ('Nordic Land' or the 'Company', or together with its subsidiaries, the 'Group') is a Jersey registered, property investment company established in April 2007 to invest principally in retail real estate in the Nordic region including Sweden, Norway and Finland. The Manager is Lathe Investments (Nordic) LLP.

The Company's investment objective is to provide shareholders with attractive total returns over the medium to long term through dividends and increases in net asset value. 

The Company's shares are traded on the AIM market of the London Stock Exchange.

HIGHLIGHTS

• Property portfolio valued as at 30 September 2009 at £64.6 million (SEK 722 million) compared to £64.2 million (SEK 761 million) as at 31 March 2009
• EPRA NAV per share* of £0.72 as at 30 September 2009 (31 March 2009: £0.91)
• Net rental income for the six month period to 30 September 2009 was £1.9 million (30 September 2008: £1.6 million)
• Completion of new 1,130 m2 retail warehouse unit at Borlänge, pre-let to Expert
  

(* EPRA NAV per share is the Net Asset Value per share of the Group adjusted to exclude the effect of deferred tax relating to the revaluation of investment properties and the fair value of derivative financial instruments net of attributable taxation). 

"The Board is encouraged by the performance of the portfolio which has proven resilient when compared to similar portfolios in other European countries."

                        Ray Horney, Chairman

For further information please contact:

Nordic Land plc

Ian Knight                                   +44 (0) 1892 752005

SP Angel Corporate Finance LLP

John Mackay                               +44 (0) 20 7647 9642

Matrix Corporate Capital LLP

Stephen Mischler                         +44 (0) 20 3206 7203

Bankside Consultants

Simon Rothschild/Oliver Winters   +44 (0) 20 7367 8888

CHAIRMAN AND MANAGING DIRECTOR'S STATEMENT

OPERATING REVIEW

We are pleased to present the interim results for Nordic Land plc for the six months ended 30 September 2009.

RESULTS

Net rental income for the period was £1.9 million (30 September 2008: £1.6 million) and administrative expenses were £0.7 million (30 September 2008: £0.5 million).  

After a loss of £4.3 million (30 September 2008: loss of £1.2 million) relating to the revaluation of the investment properties, the operating loss for the period was £3.1 million (30 September 2008: operating loss of £0.1 million).

At the period end, the Group had cash and short-term deposits of £5.6 million (30 September 2008: £5.7 million) which are available for working capital and development activity.

 

REVALUATION AND NET ASSET VALUE

The Property Portfolio was revalued by DTZ Sweden at £64.6 million as at 30 September 2009 (31 March 2009: £64.2 million). After allowing for foreign exchange gains on retranslation of £3.5 million, and capital expenditure of £1.1 million incurred during the period, the valuation deficit was £4.3 million, largely as a result of adverse yield movements. 

Despite the valuation deficit, we are encouraged by the performance of the portfolio, which has proven resilient when compared to similar portfolios in other European countries. The Swedish and other Nordic markets remain amongst the best in Europe in terms of economic stability as well as generally low retail rents and high consumer-spend forecasts relative to other European countries.

The EPRA net asset value per share of the Group as at 30 September 2009 was £0.72, a decrease of £0.19 per share from the 31 March 2009 EPRA net asset value per share of £0.91.

EPRA net asset value per share is an accepted property industry measure which excludes deferred tax relating to the revaluation of investment properties and the fair value of derivative financial instruments net of attributable taxation.

DIVIDEND

No dividend is being proposed for the period to 30 September 2009.

REAL ESTATE OPERATIONS

Portfolio analysis

Property	Category	Area (m2)	30 September  2009 Valuation		Net Valuation yield  %	31 March  2009 Valuation		Net Valuation yield  %
Terminalen 1, Helsingborg	Mixed-use	19,500	£46.1 m SEK 515 m		6.18%	£46.4 m SEK 550 m		5.87%
Lackeraren 3, Borlänge	Retail park	11,000	£13.9 m SEK 155 m		6.81%	£13.0 m SEK 154 m		6.56%
Sicklaön 117, Stockholm	Retail	3,500	£4.6 m SEK 52 m		7.51%	£4.8 m SEK 57 m		6.88%
Total		34,000		£64.6 m SEK 722m			£64.2 m SEK 761m

The SEK/GBP exchange rate as at 30 September 2009 was 11.182 (31 March 2009: 11.85).

All the properties are located in Sweden. 

The reduction in values this September is largely attributable to an outward movement in valuation yields. 

PROPERTY REVIEW

Swedish Property Market

For many years Sweden has been one of the most liquid property markets in Europe, with on average some SEK 130-150 billion p.a. in transaction volume. 

However, throughout the period under review, the investment market has been extremely quiet. There are three main factors which have contributed to this.

The most obvious factor is the very strained debt market that is either unable or unwilling to lend money on property assets. The situation has started to improve recently, but we are still a long way from a normal debt market. 

The second factor is the large decline in property prices throughout Europe, especially in the UK and in the Baltic countries. Sweden has not seen such dramatic falls in values, as a result of which international investors, who in normal times represent between 30-50% of transactions in Sweden, are tending to look to Europe for bargains with a perceived greater upside. This has had a significant effect on the liquidity of the Swedish property market. When compared to a year ago, foreign investment volume has decreased by almost 90%.

 

The third reason has been the deteriorating demand for property generally, which makes potential buyers very conservative in their value assessments. At the same time, property owners are reluctant to sell at low prices at this stage of the cycle, since cash flows are still strong due to low interest rates and relatively stable rents.

The first three quarters of 2009 show a transaction volume of SEK 22.5 billion, which is an 85% decrease compared to the same period in 2008. There are some signs of improvement, but investors are still very selective and there is a long way to go before activity is back to normal. 

Nordic Land's Portfolio

Nordic Land's assets comprise Terminalen 1 in Helsingborg, known as 'Knutpunkten', which is a regionally-important, mixed-use, retail and transport hub serving the west coast of Sweden and Denmark, a prime-located retail and office park in Borlänge and a multi-let retail property in an affluent part of Greater Stockholm.

The portfolio is currently well secured on 106 tenants, of which 73% are municipalities and national multiples, including market leaders such as Willy:s, Rusta, Scandlines, Sportex, Espresso House, Expert, McDonald's, the City of Helsingborg and Banverket (the state-owned railway company). 

Retail leases in Sweden are typically fairly short, at between three and five years, although terms may be longer (up to 10 years), particularly on new lettings of larger retail boxes. It is commonplace for retailers to have the right to renew their leases. Rents are annually indexed to the Consumer Price Index every new year.

The quality and size of the tenant base is important to us in terms of providing a diversified cashflow as well as opening up multiple prospects for adding value on lease renewals.  

Each of the Group's properties provides a range of profitable asset management and development opportunities, which we expect to convert into increases in cashflow and, ultimately, net asset value per share. 

Terminalen 1, Helsingborg, (known as 'Knutpunkten')

Helsingborg is a major port city in south-west Sweden, opposite Denmark. The property itself is in central Helsingborg, unique for the area's transportation systems, serving rail, road, ferry and bus routes, and in a prime office location.

The building was constructed in 1991 and is the region's central transport terminal. 

Knutpunkten comprises the terminal area (which provides ticket sales, waiting halls and a passenger link to the main Sweden to Denmark ferry terminal), a shopping centre with a number of restaurants above, and offices in the 5-6 levels above. The total area is some 19,500 m².  

Within the building are the main, west-coast-line, railway station and the town's main bus terminal, both of which the Group owns.

The property also has a multi-storey, roof-top car park (303 spaces) and a surface roof-top car park (399 spaces), which benefit from being directly adjacent to the ferry and train terminals and which together provide a strong income stream.

In total there are currently some 91 tenants.

The South Harbour area, directly to the south of the property, is expected to be redeveloped into a major 'docklands-style' development (called 'H+'), comprising 1,000,000 m2 of land to cater for living, working, studying and leisure facilities.  

Knutpunkten is the 'gateway' property by virtue of its location and hosting of the major transport links. In itself, it will be an essential part of the H+ scheme. 

In addition to the H+ project, the railway will in the future be underground and connect to new high-speed rail links. The construction of the railway tunnel is estimated to start in early 2012, for completion in 2017.  

This gives Nordic Land the opportunity to become significantly involved in the development of this area, and to take advantage of the valuable opportunities that should arise. We are particularly encouraged by our ongoing meetings with officials of the Municipality, and are now fully involved in the Municipality's H+ project team alongside other key landholders. 

With regard to our asset management work, we have installed energy-efficient equipment and are implementing an energy-saving programme, with the intention of saving costs, thereby increasing net operating income and, as a result, the valuation.

We have upgraded the lifts, which were in need of repair and renewal, and are now replacing and repositioning the escalators so as to improve people circulation and to create more valuable space within the building. 

We have completed plans with our architects for a new, vibrant, restaurant area at first floor level, and, potentially, new offices above. 

Lackeraren 3, Borlänge 

Borlänge is a major regional town 120 km to the north-west of Stockholm, with large corporate employers and a strong local economy. The property itself is located next to the regionally-dominant Kupolen Shopping Centre. 

The property comprises a prime retail and office park with four large retail units and servicing areas, two free-standing office buildings, all of some 11,000 m², plus a 327-space surface car park. 

The income is well secured by major national retailers including Willy:s, Rusta and Expert.

Over the last six months we have built a new 1,130 m² retail unit, which we pre-let to Expert, a major Swedish electrical retailer, and acquired additional land so as to meet the required car parking standards. This project was completed on time and below budget.

The development profit of approximately £915,000 is reflected in the current valuation.

We are very pleased to have achieved this result, and to have further improved the tenant mix at the property. We are now exploring the possibility of extending the retail and office areas and acquiring adjacent land to enlarge the car park area.

Potentially adding to the quality of the scheme and its location, the Municipality recently announced that IKEA will establish a new 35,000 m2 store next to the Kupolen Shopping Centre. We expect this new store to open in 2012, and to be a major draw to the immediate vicinity. 

Sicklaön 117, Nacka, Stockholm

The property is well-located in the Sickla shopping quarter which, as the main retail location for the Nacka community, generates some of the highest sales per square metre in Sweden. This area is amongst the most affluent regions in Sweden, featuring high per capita income and strong population growth. New retail developments and car parking facilities have recently been completed adjacent to the building, and a new road connection is being planned.

The property comprises 3,500 m² of retail, storage and office accommodation in one building, predominantly let to national multiple retailers, plus a villa and land for re-development.  

In the shorter term, we have a number of asset management initiatives in hand, including improvement to the retail elements and a property cost reduction programme so as to increase net operating income.

In the medium term, the site itself has high development value as and when the market improves.

REAL ESTATE FINANCING

As at 30 September 2009 the Group's borrowings totalled £53.6 million (31 March 2009: £49.7 million) all secured on the Group's properties. Total borrowings are now SEK 602.7 million (31 March 2009: SEK 592.7 million) after a SEK 10 million drawdown (£0.9 million) to fund the construction of the Expert unit development. Otherwise, the increase in the sterling equivalent of the borrowings is due to exchange losses on revaluation.

Previously we had reported that there was some doubt as to whether the capital expenditure facility with the lender existed. Since then, the availability of the capital expenditure facility has been confirmed and we have been able to drawdown SEK 10 million, as mentioned above. However, the capital expenditure facility expires at the end of this year. Future capital expenditure will therefore be funded out of existing cash resources.

OUTLOOK

We are pleased with the progress we have made during the period under review, in particular with completing the development at Borlänge for a profit, and joining the important working group to enhance value at Helsingborg. 

RAY HORNEY            IAN KNIGHT

CHAIRMAN                MANAGING DIRECTOR

15 December 2009

   Condensed Consolidated Statement of Comprehensive Income for the six months ended 30 September 2009

		Six months to 30 September  2009 (unaudited)		Six months to 30 September  2008 (unaudited)		Year ended   31 March  2009 (audited)
	Note	£000		£000		£000
Gross rental income		2,632		2,519		5,122
Property operating expenses		(752)		(908)		(1,723)
Net rental income		1,880		1,611		3,399
Administrative expenses		(670)		(528)		(1,238)
Loss on revaluation of investment properties		(4,308)		(1,187)		(3,721)
Operating loss		(3,098)		(104)		(1,560)
Financial income	5	5		125		191
Financial expenses	6	(1,446)		(1,446)		(2,862)
Change in fair value of derivative financial
Instruments		-		(203)		(272)
Loss before income tax		(4,539)		(1,628)		(4,503)
Income tax	7	962		151		700
Loss for the period attributable to equity shareholders			(3,577		(1,477)		(3,803)
Other comprehensive income/(loss)
Foreign currency translation differences		738		(973)		(178)
Total other comprehensive income/(loss) for the period			738		(973)		(178)
Total comprehensive income/(loss) for the period			(2,839)		(2,450)		(3,981)
Earnings per share - basic and diluted	8	(18.0)p		(7.6)p		(19.4)p
EPRA earnings per share - basic and diluted	8	(1.2)p		(1.3)p		(2.6)p

All results are derived from continuing operations.

The notes form part of these condensed consolidated interim financial statements.

Condensed Consolidated Statement of Financial Position as at 30 September 2009

		30 September 2009 (unaudited)		30 September 2008 (unaudited)		31 March  2009 (audited)
	Note	£000		£000		£000
ASSETS
Non-current assets
Investment properties	9	64,568		63,281		64,203
Derivative financial instruments	10	-		69		-
		64,568		63,350		64,203
Current assets
Trade and other receivables	11	225		360		378
Cash and cash equivalents	12	5,638		5,702		5,336
		5,863		6,062		5,714
Total assets		70,431		69,412		69,917
LIABILITIES
Current liabilities
Trade and other payables	13	2,498		2,101		2,154
Income tax provision		22		14		19
		2,520		2,115		2,173
Non-current liabilities
Borrowings	14	53,616		47,332		49,696
Deferred tax liability	15	452		1,865		1,403
		54,068		49,197		51,099
Total liabilities		56,588		51,312		53,272
Net assets		13,843		18,100		16,645
EQUITY
Ordinary share capital		199		199		199
Share premium		17,523		17,523		17,523
Foreign currency translation reserve		2,597		1,064		1,859
Retained earnings		(6,476)		(686)		(2,936)
Total shareholders' equity		13,843		18,100		16,645
Net asset value per share - basic and diluted	16	£0.70		£0.91		£0.84
EPRA net asset value per share - basic and diluted	16	£0.72		£1.00		£0.91

The notes form part of these condensed consolidated interim financial statements.

  Condensed Consolidated Statement of Changes in Equity for the six months ended

30 September 2009 (unaudited)

	Ordinary  Share Capital			Share  Premium				Translation Reserve			Retained  Earnings					Total  Equity
	£000			£000				£000			£000					£000
Balance at 1 April 2008			192			17,059				2,037			1,258					20,546
Total comprehensive income/(loss) for the period
Loss for the period	-			-				-			(1,477)					(1,477)
Other comprehensive income/(loss) for the period
Foreign exchange differences	-			-				(973)			-					(973)
Total comprehensive income/(loss) for the period		-			-				(973)					(1,477)			(2,450)
Transactions with owners, recorded directly in equity
Share-based payments	-			-				-			(467)					(467)
Ordinary shares issued at a premium	7			464				-			-					471
Total transactions with owners		7					464		-						(467)			4
Balance at 30 September 2008		199			17,523				1,064					(686)			18,100
Total comprehensive income/(loss) for the period
Loss for the period	-			-				-			(2,326)					(2,326)
Other comprehensive income/(loss) for the period
Foreign exchange differences	-			-				795			-					795
Total comprehensive income/(loss) for the period		-			-				795					(2,326)			(1,531)
Transactions with owners, recorded directly in equity
Share-based payments	-			-				-			76					76
Total transactions with owners		-			-				-					76		76
Balance at 31 March 2009		199			17,523				1,859					(2,936)			16,645
Total comprehensive income/(loss) for the period
Loss for the period	-			-				-			(3,577)					(3,577)
Other comprehensive income/(loss) for the period
Foreign exchange differences	-			-				738			-					738
Total comprehensive income/(loss) for the period		-					-		738						(3,577)		(2,839)
Transactions with owners, recorded directly in equity
Share-based payments	-			-				-			37					37
Total transactions with owners		-					-		-					37			37
Balance at 30 September 2009		199					17,523		2,597					(6,476)			13,843

The notes form part of these condensed consolidated interim financial statements.

  Condensed Consolidated Statement of Cash Flows for the six months ended 30 September 2009

		Six months to 30 September 2009 (unaudited)		Six months to 30 September 2008 (unaudited)		Year ended 31 March 2009 (audited)
	Note	£000		£000		£000
Cash flows from operating activities
Loss for the period		(3,577)		(1,477)		(3,803)
Interest receivable		(5)		(125)		(191)
Interest payable and other finance costs		1,446		1,446		2,862
Income tax		(962)		(151)		(700)
Adjustments for non-cash items:
Loss on revaluation of investment properties			4,308		1,187		3,721
Change in fair value of derivative financial  instruments			-		203		272
Share-based payments			37		-		77
Operating profit before changes in working capital			1,247		1,083		2,238
Other movements arising from operations:
Decrease/(increase) in trade and other receivables		152		(8)		(15)
Increase/(decrease) in trade and other payables		296		(697)		(634)
Tax paid		(3)		-		-
Net cash generated from operations			1,692		378		1,589
Interest received		5		135		203
Interest paid		(1,424)		(1,329)		(2,760)
Net cash flows from/(used in) operating activities			273		(816)		(968)
Cash flows used in investing activities
Acquisition and development of investment properties		(1,137)		(101)		(486)
Cash flows used in investing activities			(1,137)		(101)		(486)
Cash flows from financing activities
Net drawdown of borrowings		894		-		-
Cash flows from financing activities			894		-		-
Net increase/(decrease) in cash and cash equivalents		30		(917)		(1,454)
Opening cash and cash equivalents		5,336		6,838		6,838
Exchange gains/(losses) on cash balances		272		(219)		(48)
Closing cash and cash equivalents	12		5,638		5,702		5,336

The notes form part of these condensed consolidated interim financial statements.

Notes to the condensed consolidated interim financial statements

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 condensed consolidated interim financial statements for the Company and its subsidiaries (together referred to as the 'Group') have been prepared as at 30 September 2009 and for the six month period then ended. The condensed consolidated interim financial statements, which do not represent statutory accounts, have not been audited.

The unaudited condensed consolidated interim financial statements were authorised for issuance on 15 December 2009.

Note 2 Basis of preparation

These condensed consolidated interim financial statements have been prepared in accordance with IAS 34 Interim Financial Reporting. They do not include all of the information required for full annual financial statements, and should be read in conjunction with the consolidated financial statements of the Group as at and for the year ended 31 March 2009.

The preparation of condensed consolidated interim financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expenses. 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.

In preparing these condensed consolidated interim financial statements, the significant judgements made by management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those applied to the consolidated financial statements as at and for the year ended 31 March 2009. 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 condensed consolidated interim financial statements is included in the following notes:

Note 9 - Investment properties

Note 14 - Borrowings

The condensed consolidated interim financial statements have been prepared on the historical cost basis modified for the revaluation of investment properties and derivative financial instruments which are both measured at fair value. 

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 interim financial statements have been prepared following the same accounting policies as adopted in the most recent set of annual financial statements for the year ended 31 March 2009. Where accounting policies differ from policies previously adopted, they are stated and explained below. 

During the period two new accounting standards, IAS 1 "Presentation of financial statements (revised)" and IFRS 8 "Operating Segments" have been adopted. The adoption of these standards has had no impact on the financial statements, other than on presentation and disclosure.

Basis of consolidation

The condensed consolidated interim financial statements incorporate the net assets and liabilities of the Group at the statement of financial position date and its results for the period 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 results of subsidiaries are included in the condensed consolidated interim 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.

A change in the ownership interest of a subsidiary, without a change in control, is accounted for as an equity transaction.

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 Group's condensed consolidated interim financial statements are presented in sterling, which is also the parent company's functional and presentational currency.

Note 4 Operating segments

During the period the Group operated in one business segment, being property investment and development in the Nordic region and as such no further segmental information is required.

Note 5 Financial income

	Six months to 30 September 2009		Six months to 30 September 2008		Year ended 31 March 2009
	£000		£000		£000
Interest receivable		5		125		191

Note 6 Financial expenses

	Six months to 30 September 2009		Six months to 30 September 2008		Year ended 31 March 2009
	£000		£000		£000
Interest on bank loans	1,391		1,390		2,749
Other finance costs	55		56		113
Interest payable and other finance costs		1,446		1,446		2,862

Note 7 Income tax

	Six months to  30 September 2009		Six months to  30 September 2008		Year ended 31 March 2009
	£000		£000		£000
Current income tax charge	5		5		10
Deferred taxation	(967)		(156)		(710)
Tax credit		(962)		(151)		(700)

Note 8 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 period of 19,859,561 (30 September 2008: 19,405,333; 31 March 2009: 19,645,000) as follows:

	Six months to 30 September 2009 Loss after tax		Six months to 30 September 2009 Earnings per share		Six months to 30 September 2008 Loss after tax		Six months to 30 September 2008 Earnings per share		Year ended 31 March 2009 Loss after tax		Year ended 31 March 2009 Earnings per share
	£000		pence		£000		pence		£000		pence
Loss for the period	(3,577)		(18.0)p		(1,477)		(7.6)p		(3,803)		(19.4)p
Loss on revaluation of investment properties	4,308		21.7p		1,187		6.1p		3,721		18.9p
Change in fair value of derivative instruments	-		-		203		1.0p		272		1.5p
Deferred tax on revaluation of investment properties	(967)		(4.9)p		(156)		(0.8)p		(710)		(3.6)p
EPRA loss	(236)		(1.2)p		(243)		(1.3)p		(520)		(2.6)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 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 9 Investment properties

	As at 30 September 2009		As at 30 September  2008		As at 31 March  2009
	£000		£000		£000
Opening balance	64,203		67,878		67,878
Capital expenditure on properties	1,137		101		486
Foreign exchange gains/(losses)	3,536		(3,511)		(440)
Loss on revaluation	(4,308)		(1,187)		(3,721)
Closing balance		64,568		63,281		64,203

        

The fair value of investment properties is based on a valuation at 30 September 2009 by DTZ Sweden AB performed in accordance with the Appraisal and Valuation Standards of RICS, on the basis of market value.

Note 10 Derivative financial instruments

	As at 30 September 2009		As at 30 September  2008		As at 31 March 2009
	£000		£000		£000
Derivative financial instruments		-		69		-

Note 11 Trade and other receivables

	As at 30 September 2009		As at 30 September  2008		As at 31 March  2009
	£000		£000		£000
Rental debtors	25		208		281
Prepayments and accrued income	93		134		97
Other debtors	107		18		-
		225		360		378

        

The carrying amount of trade and other receivables approximate their fair value.

Note 12 Cash and cash equivalents

	As at 30 September 2009		As at 30 September  2008		As at 31 March 2009
	£000		£000		£000
Cash and cash equivalents		5,638		5,702		5,336

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.

Note 13 Trade and other payables

	As at 30 September 2009		As at 30 September  2008		As at 31 March 2009
	£000		£000		£000
Accounts payable – trade	342		145		329
Deferred income	1,128		1,003		879
Accruals	922		832		926
Other creditors	106		121		20
		2,498		2,101		2,154

The Directors consider that the carrying amount of trade and other payables approximate to their fair value.

    

Note 14 Borrowings

	As at 30 September 2009		As at 30 September  2008		As at 31 March  2009
	£000		£000		£000
Amounts falling due after more than one year:
Bank loans	53,895		47,685		50,013
Unamortised borrowing costs	(279)		(353)		(317)
		53,616		47,332		49,696

The bank loans represent borrowings of SEK 602.7 million (30 September 2008: SEK 592.7 million; 31 March 2009: SEK 592.7 million).  The weighted-average interest rate on loans of SEK 592.7 million is 5.45% per annum. The interest rates on these loans are fixed until maturity of the borrowings in April 2012, with an option to extend for a further year. The interest rate on the loan of SEK 10 million is variable.

The bank loans are secured on the shares of the borrowing subsidiaries and their investment properties. There are no loan to value covenants.

The loans have been accounted for at amortised cost at the Statement of Financial Position date, in accordance with IFRS, and the fair value is disclosed below.  Nordic Land's only obligation is to repay the loans at par value at maturity.

The Group has now drawndown SEK 10 million (£0.9 million) from the capital expenditure facility with the lender, leaving a further SEK 100 million (£8.9 million) available for future drawdown. However, the facility expires on 30 December 2009.

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	Book  value	Fair  value
	30 September 2009	30 September 2009	30 September 2008	30  September  2008	31 March  2009	31 March 2009
	£000	£000	£000	£000	£000	£000
Bank loans	53,895	57,208	47,685	47,616	50,013	54,013

The gearing ratio at the period end is as follows:

	As at 30 September 2009		As at 30 September  2008		As at 31 March 2009
	£000		£000		£000
Bank loans	53,616		47,332		49,696
Cash and cash equivalents	(5,638)		(5,702)		(5,336)
Net debt		47,978		41,630		44,360
Value of investment properties		64,568		63,281		64,203
Net gearing ratio		74.3%		65.8%		69.1%
Gross gearing ratio		83.0%		74.8%		77.4%

        

Note 15 Deferred tax liability

	As at 30 September 2009		As at 30 September  2008		As at 31 March 2009
	£000		£000		£000
Opening balance	1,403		2,138		2,138
Net credit for period	(967)		(156)		(710)
Foreign exchange differences	16		(117)		(25)
Closing balance		452		1,865		1,403

Note 16 Net asset value per share

	As at 30 September 2009			As at 30 September  2008			As at 31 March 2009
	£000			£000			£000
Net assets	13,843			18,100			16,645
Adjust for:
Fair value of derivative financial instruments	-			(69)			-
Deferred tax on revaluation of investment properties	452			1,865			1,403
EPRA net assets			14,295			19,896			18,048
Net asset value per share – basic and diluted			£0.70			£0.91			£0.84
EPRA net asset value per share – basic and diluted			£0.72			£1.00			£0.91
Number of ordinary shares in issue at period end	19,859,561			19,859,561			19,859,561

Net asset value per share has been calculated by dividing the net assets attributable to the equity shareholders of the Company by the number of ordinary shares in issue at the period end.

EPRA net asset value per share is the net asset value per share of the Company adjusted to exclude the effect of deferred tax relating to the revaluation of investment properties and the fair value of derivative financial instruments net of attributable taxation.

Basic and diluted net asset value per share are the same, as the issued share options are currently anti-dilutive.

Note 17 Financial risk management

During the six months to 30 September 2009, the Group's financial risk management policies were consistent with those disclosed in the consolidated financial statements for the year ended 31 March 2009.

Note 18 Interim report

The report is available on the Company's website: www.nordicland.com

The interim report for the period from 1 April to 30 September 2009 will be sent to shareholders in due course.

ENDIR FFUEEISUSEIE