Cathay Pacific 1998 Annual Report Download - page 44

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42 CATHAY PACIFIC AIRWAYS LIMITED ANNUAL REPORT 1998
Notes to the Accounts – Profit and Loss Account
3. Exceptional items
(continued)
The provision for severance payments arising from staff retrenchments in 1998 is in connection with staff
redundancies undertaken or to be undertaken as a result of the decisions to remove the B747-200 and B747-300
aircraft from service.
The provision for the impairment in value of the B747-200 and B747-300 aircraft and related equipment arises
from decisions to remove these aircraft from service. The carrying value of these aircraft and related equipment
has been written down to estimated net recoverable amount. Provision has also been made to write down the
related aircraft spare parts to net realisable value. The net realisable value of the spare parts has been determined
based on market resale price.
4. Net finance charges
1998 1997
HK$M HK$M
Net interest charged on:
Obligations under finance leases 2,047 2,058
Interest income on related security deposits, notes and bonds (933) (942)
1,114 1,116
Bank loans and overdrafts 518 519
Interest income on related security deposits (290) (303)
228 216
Other loans and bonds
– wholly repayable within five years 40 36
– not wholly repayable within five years –1
40 37
Interest income on bank short-term deposits and loans (256) (309)
Other finance income (245) (153)
(501) (462)
881 907
Income from funds with investment managers (570) (572)
311 335
Finance income and expenses relating to defeasance arrangements have been netted off in the above figures.