How does Infratil treat the currency risk implied in the investment?
Infratil’s investment in Glasgow Prestwick Airport was made on 19 January 2001 and cost GB£14,800,000 or NZ$48,569,178. Since then Infratil has invested to acquire 100% of Glasgow Prestwick Airport. The total invesment amount at 31 March 2004 was GB£28,035,545 (NZ$85,311,177). At present Infratil has no hedges against fluctuation in the NZ$/GB£. The actual risk from currency movements will depend on the local currency value of the investment (which may be quite different to what Infratil has paid). In respect of the impact on Infratil’s results and value, fluctuations in the value of the NZ$ against GB£ will: o impact on P&L when annual earnings from GPIA are converted into NZ$. The earnings from GPIA are consolidated by Infratil and are taken into Infratil’s accounts at the average NZ$/GB£ rate for the relevant accounting period. o impact on Infratil’s value as the NZ$ value of the offshore investments changes due to currency movements. This has no P&L consequence as such changes in v
