- Financial Statements
Notes to the Consolidated Financial Statements
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for the year to 31 December 2007
32. Translation reserve
| £m | |
| Balance at 1 January 2006 | 29.9 |
| Exchange differences on translation of overseas operations | (61.2) |
| Increase in fair value of hedging derivatives | 12.2 |
| Balance at 31 December 2006 | (19.1) |
| Exchange differences on translation of overseas operations, net of tax | 22.0 |
| Increase in fair value of hedging derivatives | 0.8 |
| Balance at 31 December 2007 | 3.7 |
Translation reserve consists of exchange differences arising on the translation of overseas operations. It also includes changes in fair values of hedging derivatives where such instruments are designated and effective as hedges of investment in overseas operations.