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The most significant net risk relates to foreign exchange adjustment of net assets in RUB. This risk was hedged only partially for most of the year and not hedged at all at year-end. 

Fair value adjustments of net investment hedges and loans classified as additions to net investments in the financial year are rec- ognised in other comprehensive income and amounted to DKK -118m (2012: DKK -216m). 

The fair value of derivatives used as net invest- ment hedges recognised at 31 December 2013 amounted to DKK 35m (2012: DKK -10m). 

## 4.5.3 Financing of local entities 

The Group is exposed to foreign exchange risk on borrowings denominated in a cur- rency other than the functional currency of the individual Group entity. 

The main principle for funding of subsidiar- ies is that loans and borrowings should be in local currency or hedged to local currency to avoid foreign exchange risk. However, in some Group entities debt is denominated in a currency other than the local entity’s func- tional currency without the foreign exchange risk being hedged. This applies primarily 

to a few entities in Eastern Europe and is based on an assessment of the alterna- tive cost of financing the entity in the local currency. For the countries concerned, the interest rate level in the local currency, and thus the additional cost of financing in local currency, is so high that it justifies a foreign exchange risk. In some countries financing in local currency is not available at all. 

The tables in the sensitivity analysis in sec- tion 4.5.4 show the impact of a 10% adverse development in exchange rates for the relevant currencies at 31 December. 

## 4.5.4 Impact on financial statements and sensitivity analysis 

## IMPACT ON OPERATING PROFIT 

The impact on operating profit is primarily currency impact as described in section 1.4. 

## IMPACT ON FINANCIAL ITEMS, NET 

In 2013, the Group had net gains on foreign exchange and fair value adjustments of finan- cial instruments of DKK 161m (2012: DKK 17m), cf. section 4.1. 

## IMPACT ON STATEMENT OF FINANCIAL POSITION 

Fluctuations in foreign exchange rates will also affect the level of debt as funding is obtained in a number of currencies. In 2013, net interest-bearing debt decreased by DKK 134m (2012: an increase of DKK 327m) due to changes in foreign exchange rates. The main reason for the decrease was a reduction of the net debt in GBP; the GBP/DKK rate depreci- ated from the end of 2012 to February 2013, at which time a GBP 200m bond was repaid. 

## IMPACT ON OTHER COMPREHENSIVE INCOME 

For 2013, the total losses on net investments (Carlsberg’s share), loans granted to subsidiar- ies as an addition to the net investment and 

