Cathay Pacific 2007 Annual Report Download - page 59

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Notes to the Accounts
Profit and Loss Account
4. Net finance charges
2007
HK$M
2006
HK$M
Net interest charges comprise:
– Obligations under finance leases stated at amortised cost 1,428 1,434
– Obligations under finance leases designated as at fair value
through profit and loss 257 –
– Interest income on related security deposits, notes and bonds (531) (609)
1,154 825
– Bank loans and overdrafts 624 326
– Other loans wholly repayable within five years 120 58
1,898 1,209
Income from liquid funds:
– Funds with investment managers and other liquid investments (611) (462)
– Bank deposits and other receivables (322) (267)
(933) (729)
Financial derivatives:
– Interest income (200) (15)
– Interest expenses 22 –
(178) (15)
787 465
Finance income and charges relating to defeasance arrangements have been netted off in the above figures.
5. Taxation
2007
HK$M
2006
HK$M
Current tax expenses
– Hong Kong profits tax 61 61
– Overseas tax 502 362
– Under provisions for prior years 37 162
Deferred tax
– Origination and reversal of temporary differences 199 197
799 782
Hong Kong profits tax is calculated at 17.5% (2006: 17.5%) on the estimated assessable profits for the year.
Overseas tax is calculated at rates of tax applicable in countries to which the Group is assessable for tax. Tax
provisions are reviewed regularly to take into account changes in legislation, practice and status of negotiations
(see note 27(d) to the accounts).
Cathay Pacific Airways Limited Annual Report 2007 57