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26. Reserves
Group Company
2011
HK$M
2010
HK$M
2011
HK$M
2010
HK$M
Retained profit 38,785 37,061 27,779 26,869
Share premium 16,295 16,295 16,295 16,295
Investment revaluation reserve 885 1,102 759 928
Cash flow hedge reserve (2,417) (1,871) (2,291) (1,720)
Capital redemption reserve and others 1,474 900 23 23
55,022 53,487 42,565 42,395
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
(2010: HK$24 million), capital reserve of HK$23 million (2010: HK$23 million), exchange differences arising from
revaluation of foreign investments amounted to HK$2,190 million (2010: HK$1,458 million) and share of associate’s
other negative reserve of HK$763 million (2010: HK$605 million).
The cash flow hedge reserve relates to the effective portion of the cumulative net change in fair values of hedging
instruments and exchange differences on borrowings and lease obligations which are arranged in foreign currencies
such that repayments can be met by anticipated operating cash flows.
The amount transferred from the cash flow hedge reserve to the following profit and loss items was as follows:
2011
HK$M
2010
HK$M
Turnover (1,274) (243)
Fuel 2,122 (477)
Others 449 (14)
Finance income (216) (140)
Net gain/(loss) transferred to the profit and loss 1,081 (874)
The cash flow hedge reserve is expected to be charged to operating profit/loss as noted below when the hedged
transactions affect profit and loss.
Total
HK$M
2012 341
2013 348
2014 391
2015 354
2016 265
Beyond 2016 718
2,417
The actual amount ultimately recognised in operating profit/loss will depend upon the fair values of the hedging
instruments at the time that the hedged transactions affect profit and loss.
Notes to the Accounts STATEMENT OF FINANCIAL POSITION
78