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Cathay Pacific Airways Limited
86 Notes to the Financial Statements Supplementary Information
31. Financial risk management (continued)
2014
Within
one year
HK$M
After one
year but
within two
years
HK$M
After two
years but
within five
years
HK$M
After five
years
HK$M
Total
HK$M
Company
Bank and other loans (4,112) (6,782) (5,159) (596) (16,649)
Obligations under finance leases (5,828) (6,152) (18,106) (22,211) (52,297)
Other long-term payables – (153) (678) (21) (852)
Trade and other payables (12,888) – – – (12,888)
Derivative financial liabilities, net (7,101) (3,769) (3,979) 13 (14,836)
Total (29,929) (16,856) (27,922) (22,815) (97,522)
2013
Within
one year
HK$M
After one
year but
within two
years
HK$M
After two
years but
within five
years
HK$M
After five
years
HK$M
Total
HK$M
Company
Bank and other loans (4,539) (4,894) (9,726) (859) (20,018)
Obligations under finance leases (9,034) (5,151) (16,304) (24,494) (54,983)
Other long-term payables – – (509) (317) (826)
Trade and other payables (13,850) – – – (13,850)
Derivative financial liabilities, net (549) (268) (69) 57 (829)
Total (27,972) (10,313) (26,608) (25,613) (90,506)
(c) Market risk
(i) Foreign currency risk
The Group’s revenue streams are denominated in a number of foreign currencies resulting in exposure to
foreign exchange rate fluctuations. In this respect, it is assumed that the pegged rate between Hong Kong
dollars and United States dollars would be materially unaffected by any changes in movement in value of United
States dollars against other currencies. The currencies giving rise to this risk in 2014 and 2013 are primarily
United States dollars, Euros, New Taiwan dollars, Singapore dollars, Renminbi and Japanese yen. Foreign
currency risk is measured by employing sensitivity analysis, taking into account current and anticipated
exposures. To manage this exposure, assets are, where possible, financed in those foreign currencies in which
net operating surpluses are anticipated, thus establishing a natural hedge. In addition, the Group uses currency
derivatives to reduce anticipated foreign currency surpluses. The use of foreign currency borrowings and
currency derivatives to hedge future operating revenues is a key component of the financial risk management
process, as exchange differences realised on the repayment of financial commitments are effectively matched
by the change in value of the foreign currency earnings used to make those repayments.