Cathay Pacific 2010 Annual Report Download - page 92

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90
32. Financial risk management (continued)
2010
Profit
and loss
HK$M
Other equity
components
HK$M
US dollars 178 (1,452)
Euros (15) 216
New Taiwan dollars (16) 282
Australian dollars (3) 179
Renminbi (115) 482
Japanese yen (24) 541
Increase 5 248
2009
Profit
and loss
HK$M
Other equity
components
HK$M
US dollars 686 (438)
Euros 4 164
New Taiwan dollars (12) 73
Singapore dollars (30) 76
Renminbi (94) 160
Japanese yen (18) 316
Increase 536 351
(ii) Interest rate risk
The Group’s cash flow exposure to interest rate risk arises primarily from long-term borrowings at floating
rates. Interest rate swaps are used to manage the interest rate profile of interest-bearing financial liabilities
on a currency by currency basis to maintain an appropriate fixed rate and floating rate ratio. Interest rate risk
is measured by using sensitivity analysis on variable rate instruments.
At the reporting date the interest rate profile of the interest-bearing financial instruments was as below:
Group Company
2010
HK$M
2009
HK$M
2010
HK$M
2009
HK$M
Fixed rate instruments
Liquid funds –1,164 –1,164
Long-term loans (908) (2,075) (908) (2,075)
Obligations under finance leases (11,443) (13,198) (14,784) (17,421)
Interest rate and currency swaps (10,625) (8,099) (10,016) (7,407)
Net exposure (22,976) (22,208) (25,708) (25,739)
Notes to the Accounts SUPPLEMENTARY INFORMATION