Cathay Pacific 2006 Annual Report Download - page 80

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Cathay Pacific Airways Limited Annual Report 2006
78
20. Reserves
Group Company
2006
HK$M
2005
HK$M
2006
HK$M
2005
HK$M
Retained profit 28,200 26,492 13,228 13,192
Share premium 16,241 7,531 16,241 7,531
Investment revaluation reserve 906 228 800 202
Cash flow hedge reserve (642) 30 (595) 65
Capital redemption reserve and others 62 11 21 21
44,767 34,292 29,695 21,011
Investment revaluation reserve relates to changes in the fair value of long-term investments.
Capital redemption reserve and others include the capital redemption reserve of HK$21 million (2005: HK$21
million), asset revaluation reserve and exchange differences arising from revaluation of foreign investments.
The cash flow hedge reserve relates to the effective portion of the cumulative net change in fair values of
hedging instruments and exchange differences on borrowings and lease obligations which are arranged in foreign
currencies such that repayments can be met by anticipated operating cash flows.
The cash flow hedge reserve is expected to be charged to operating profit as noted below when the hedged
transactions affect the profit and loss account.
Total
HK$M
2007 169
2008 122
2009 157
2010 69
2011 22
Beyond 2011 103
642
The actual amount ultimately recognised in operating profit will depend upon the fair values of the hedging
instruments at the time that the hedged transactions affect the profit and loss account.
21. Reconciliation of operating profit to cash generated from operations
2006
HK$M
2005
HK$M
Operating profit 5,218 4,143
Depreciation 4,255 3,963
Amortisation of intangible assets 40 44
Loss on disposal of fixed assets and intangible assets 57 230
Profit on disposal of an investment –(66)
Currency adjustments and other items not involving cash flows 241 373
Increase in stock (67) (133)
Increase in trade debtors, other receivables and prepayments (429) (1,190)
Decrease in net amounts due to related companies and associates (70) (77)
Increase in trade creditors and other payables 1,730 514
Increase in unearned transportation revenue 441 242
Non-operating movements in debtors and creditors (294) 663
Cash generated from operations 11,122 8,706
Notes to the Accounts Balance Sheet / Cash Flow