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Cathay Pacific Airways Limited
90
29. Financial risk management (continued)
Sensitivity analysis for foreign currency exposure
A five percent appreciation of the Hong Kong dollars against the following currencies at 31st December 2015
would have resulted in a change in profit or loss and other equity components by the amounts shown below.
This represents the translation of financial assets and liabilities and the change in fair value of currency
derivatives at the reporting date. It assumes that all other variables, in particular interest rates, remain constant.
The analysis has been performed on the same basis as for 2014.
2015
Net increase/(decrease)
in profit or loss
HK$M
Net increase in
other equity components
HK$M
United States dollars 1,287 6
Euros (22) 70
Australian dollars (7) 114
Singapore dollars (21) 81
Renminbi (111) 360
Japanese yen (3) 281
Net increase 1,123 912
2014
Netincrease/(decrease)
in profit or loss
HK$M
Netincrease/(decrease)in
other equity components
HK$M
United States dollars 1,247 (544)
Euros 2 345
New Taiwan dollars (5) 105
Singapore dollars (3) 103
Renminbi (173) 276
Japanese yen 25 274
Net increase 1,093 559
(ii) Interest rate risk
The Group’s cash flow exposure to interest rate risk arises primarily from long-term borrowings at floating rates.
Interest rate swaps are used to manage the interest rate profile of interest-bearing financial liabilities on a
currency by currency basis to maintain an appropriate fixed rate and floating rate ratio. Interest rate risk is
measured by using sensitivity analysis on variable rate instruments.
At the reporting date the interest rate profile of the interest-bearing financial instruments was as below:
2015
HK$M
2014
HK$M
Fixed rate instruments
Loans receivable 536 601
Long-term loans (2,972) (3,411)
Obligations under finance leases (7,427) (8,592)
Interest rate and currency swaps (21,005) (24,057)
Net exposure (30,868) (35,459)
Notes to the Financial Statements Supplementary Information