Cathay Pacific 2000 Annual Report Download - page 65

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CATHAY PACIFIC AIRWAYS LIMITED ANNUAL REPORT 2000 63
22. Reserves
(continued)
Included in retained profit is an amount of HK$957 million (1999: HK$769 million) relating to
retained profit attributable to associated companies.
Investment revaluation reserve relates to changes in the fair value of long-term investments.
Other reserves include the attributable post-acquisition reserves of associated companies
capitalised by bonus issues and exchange differences arising from revaluation of foreign
investments.
Cash flow hedge reserve relates to exchange differences on borrowings, lease obligations,
currency derivatives and related security deposits which are arranged in foreign currencies such
that repayments can be met by anticipated operating cash flows.
Exchange differences recorded in the cash flow hedge reserve are expected to be credited/
(charged) to operating profit as noted below, based on exchange rates ruling at 31st December
2000.
1st half 2nd half Total
HK$M HK$M HK$M
2001 170 193 363
2002 279 235 514
2003 94 86 180
2004 (6) 33 27
2005 273 83 356
Beyond 2005 475
1,915
The actual exchange differences ultimately recognised in operating profit will depend upon
exchange rates ruling on the repayment dates of the relevant long-term liabilities and lease
obligations.
Had HK SSAP 11 been adopted, there would have been no financial impact on the Group’s
assets, liabilities and cash flows. HK$1,915 million (1999: HK$185 million) would have been
included in retained profit rather than the cash flow hedge reserve and the effect on profit
attributable to shareholders and earnings per share would be:
2000 1999
HK$M HK$M
Profit attributable to shareholders 5,005 2,180
HK SSAP 11 adjustment 1,730 119
Adjusted profit with adoption of HK SSAP 11 6,735 2,299
Adjusted earnings per share with adoption of HK SSAP 11 199.7¢ 67.9¢
Earnings per share 148.4¢ 64.4¢
Notes to the Accounts – Balance Sheets