Cathay Pacific 2011 Annual Report Download - page 92

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Notes to the Accounts SUPPLEMENTARY INFORMATION
33. Financial risk management (continued)
2011
Profit
and loss
HK$M
Other
equity
components
HK$M
US dollars 448 (903)
Euros 1 135
New Taiwan dollars (10) 197
Australian dollars (3) 90
Renminbi (107) 226
Japanese yen (45) 584
Net increase 284 329
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
Net increase 5 248
(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
2011
HK$M
2010
HK$M
2011
HK$M
2010
HK$M
Fixed rate instruments
Long-term loans (658) (908) (658) (908)
Obligations under finance leases (10,510) (11,443) (13,087) (14,784)
Interest rate and currency swaps (18,855) (10,625) (18,119) (10,016)
Net exposure (30,023) (22,976) (31,864) (25,708)
90