Cathay Pacific 2004 Annual Report Download - page 22
Download and view the complete annual report
Please find page 22 of the 2004 Cathay Pacific annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.-
1 -
2
-
3
-
4
-
5
-
6
-
7
-
8
-
9
-
10
-
11
-
12 -
13 -
14 -
15 -
16 -
17 -
18 -
19 -
20 -
21 -
22 -
23 -
24 -
25 -
26 -
27 -
28 -
29 -
30 -
31 -
32 -
33
-
34
-
35
-
36
-
37
-
38
-
39
-
40
-
41
-
42
-
43
-
44
-
45
-
46
-
47
-
48
-
49
-
50
-
51
-
52
-
53
-
54
-
55
-
56
-
57
-
58
-
59
-
60
-
61
-
62
-
63
-
64
-
65
-
66
-
67
-
68
-
69
-
70
-
71
-
72
-
73
-
74
-
75
-
76
-
77
 |
 |
FINANCIAL RISK MANAGEMENT POLICY
– In the normal course of business the Company
is exposed to movements in foreign exchange
rates, interest rates and jet fuel prices.
– These exposures are managed, sometimes
with the use of derivative financial instruments,
in accordance with policies approved by the
Finance Committee.
– Derivative financial instruments are used solely
for financial risk management purposes and
the Company does not hold or issue derivative
financial instruments for trading purposes.
– Derivative financial instruments which constitute
a hedge do not expose the Company to market
risk since any change in their market value will
be offset by a compensating change in the
market value of the asset, liability or transaction
being hedged.
– Exposures to movements in foreign exchange
rates, interest rates and jet fuel prices are
regularly reviewed and positions are amended
in compliance with policy guidelines.
– To manage credit risk, transactions are only
carried out with financial institutions of high
repute and all counterparties are subject
to prescribed trading limits which are regularly
reviewed. Risk exposures are monitored regularly
by reference to market values.
MANAGEMENT OF CURRENCY EXPOSURES
– As an international airline, the Company’s
revenue streams are denominated in a number
of foreign currencies resulting in exposure to
fluctuations in foreign exchange rates.
– To manage this exposure, assets are, where
possible, financed in those foreign currencies
in which net operating surpluses are anticipated,
thereby establishing a natural hedge. In addition,
the Company 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. 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.
GROUP MATURITY PROFILE
BY CURRENCY: BORROWINGS
GROUP NET DEBT AND EQUITY
Financial Review
18 Cathay Pacific Airways Limited 2004 Annual Report