Singapore Airlines 2006 Annual Report Download - page 135

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133
Singapore Airlines Annual Report 05/06
35 Financial Instruments (in $ million) (continued)
(c) Derivative fi nancial instruments and hedging activities
Derivative fi nancial instruments included in the balance sheets are as follows:
The Group The Company
31 March 31 March
2006 2005 2006 2005
Assets*
Forward currency contracts 27.7 – 21.4 –
Jet fuel swap and option contracts 56.7 – 44.5 –
Interest rate swap contracts 15.4 – 11.5 –
99.8 – 77.4 –
Liabilities #
Forward currency contracts 5.3 – 3.6 –
Jet fuel swap contracts 5.4 – 4.3 –
Cross currency contracts 18.5 – – –
Interest rate swap contracts 2.9 – – –
32.1 – 7.9 –
* Included under trade debtors.
# Included under trade creditors.
Cash fl ow hedges
The Group entered into jet fuel swaps and options in order to hedge the fi nancial risk related to the price of the fuel. The
Group has applied cash fl ow hedge accounting to these derivatives as they are considered to be highly effective hedging
instruments. A net fair value gain of $82.2 million, with a related deferred tax charge of $34.5 million, was included in the
fair value reserve [Note 14(b)] in respect of these contracts.
The cash fl ows arising from these derivatives are expected to occur and enter into the determination of profi t or loss during
the next three fi nancial years as follows: $55.0 million, $24.5 million and $2.7 million.
NOTES TO THE FINANCIAL STATEMENTS
31 March 2006