Cathay Pacific 2008 Annual Report Download - page 80

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Notes to the Accounts STATEMENT OF FINANCIAL POSITION
23. Reserves
Group Company
2008
HK$M
2007
HK$M
2008
HK$M
2007
HK$M
Retained profit 21,626 32,771 9,361 17,538
Share premium 16,287 16,272 16,287 16,272
Investment revaluation reserve 638 1,068 593 876
Cash flow hedge reserve (1,712) (677) (1,666) (544)
Capital redemption reserve and others 699 327 23 21
37,538 49,761 24,598 34,163
Investment revaluation reserve relates to changes in the fair value of long-term investments.
Capital redemption reserve and others of the Group mainly include the capital redemption reserve of HK$24 million
(2007: HK$21 million), exchange differences arising from revaluation of foreign investments amounted to
HK$1,137 million (2007: HK$613 million) and share of associate’s other negative reserve of HK$485 million
(2007: HK$331 million).
The cash flow hedge reserve relates to the effective portion of the cumulative net change in fair values of hedging
instruments and exchange differences on borrowings and lease obligations which are arranged in foreign
currencies such that repayments can be met by anticipated operating cash flows.
The amount transferred from the cash flow hedge reserve to the following profit and loss items was as follows:
2008
HK$M
2007
HK$M
Turnover (468) (208)
Fuel 382 34
Others (47) (24)
Finance income 122
Net loss transferred to the profit and loss (132) (176)
The cash flow hedge reserve is expected to be charged to operating loss/profit as noted below when the
hedged transactions affect the profit and loss.
Total
HK$M
2009 321
2010 831
2011 153
2012 87
2013 71
Beyond 2013 249
1,712
The actual amount ultimately recognised in operating loss/profit will depend upon the fair values of the hedging
instruments at the time that the hedged transactions affect the profit and loss.
78 Cathay Pacific Airways Limited Annual Report 2008