2007 Interim Results
Air China Ld
29 August 2007
The Stock Exchange of Hong Kong Limited takes no responsibility for the
contents of this announcement, makes no representation as to its accuracy
or completeness and expressly disclaims any liability whatsoever for any
loss whatsoever arising from or in reliance upon the whole or any part
of the contents of this announcement.
AIR CHINA LIMITED
(a joint stock limited company incorporated in the People's Republic of
China with limited liability)
(Stock Code: 753)
(1) ANNOUNCEMENT OF INTERIM RESULTS
FOR THE SIX MONTHS ENDED 30 JUNE 2007
(2) APPOINTMENT OF DIRECTORS AND SUPERVISORS OF
THE SECOND SESSION OF BOARD AND SUPERVISORY COMMITTEE
The board of directors (the 'Board') of Air China Limited
(the 'Company') announced the unaudited interim results of the Company,
its subsidiaries and joint ventures (collectively, the 'Group') for
the six months ended 30 June 2007, with comparative figures for the
corresponding period of last year, as follows:
FINANCIAL INFORMATION
A. Prepared in accordance with International Financial Reporting
Standards ('IFRSs')
Unaudited Condensed Consolidated Income Statement
For the six months ended
30 June 2007 30 June 2006
Notes RMB'000 RMB'000
(Unaudited) (Unaudited)
TURNOVER
Air traffic revenue 3 21,684,442 18,394,962
Other operating revenue 4 1,668,378 1,535,945
23,352,820 19,930,907
OPERATING EXPENSES
Jet fuel costs (8,042,121) (7,063,679)
Take-off, landing and depot charges (2,714,364) (2,415,696)
Depreciation (2,696,361) (2,664,606)
Aircraft maintenance, repairs
and overhaul costs (946,615) (633,412)
Employee compensation costs (1,989,282) (1,670,027)
Air catering charges (711,389) (653,836)
Aircraft and engine operating
lease expenses (1,172,875) (950,835)
Other operating lease expenses (151,976) (129,461)
Other flight operation expenses (1,996,063) (1,664,662)
Selling and marketing expenses (1,163,530) (861,264)
General and administrative expenses (401,592) (330,164)
(21,986,168) (19,037,642)
PROFIT FROM OPERATIONS 5 1,366,652 893,265
Finance revenue 6 1,226,399 568,853
Finance costs 6 (999,572) (909,473)
Share of profits less losses of
associates 478,928 107,837
PROFIT BEFORE TAX 2,072,407 660,482
Tax 7 (596,372) (182,829)
PROFIT FOR THE PERIOD 1,476,035 477,653
Attributable to:
Equity holders of the Company 1,568,579 457,974
Minority interests (92,544) 19,679
1,476,035 477,653
Dividend:
Interim 8 - -
Earnings per share attributable
to equity holders
of the Company:
Basic 9 13.2 cents 4.9 cents
Diluted 9 N/A N/A
Unaudited Condensed Consolidated Balance Sheet
30 June 31 December
2007 2006
RMB'000 RMB'000
(Unaudited) (Audited)
NON-CURRENT ASSETS
Property, plant and equipment 56,009,300 54,767,664
Lease prepayments 1,003,017 1,013,529
Interests in associates 9,246,117 9,255,474
Advance payments for aircraft and
related equipment 8,032,021 6,976,054
Deposits for aircraft under
operating leases 272,316 259,681
Long term receivable from
ultimate holding company 381,813 431,813
Available-for-sale investments 6,104 6,704
Deferred tax assets 375,770 550,222
75,326,458 73,261,141
CURRENT ASSETS
Inventories 1,085,225 1,015,266
Accounts receivables 3,323,415 2,835,227
Prepayments, deposits and other
receivables 1,282,405 1,077,036
Financial assets 212,572 99,935
Pledged deposits 115,722 211,504
Non-pledged deposits with maturity
of more than three months
when acquired 1,473,080 1,570,777
Cash and cash equivalents 2,610,344 3,588,404
Due from ultimate holding company 313,050 289,933
Due from related companies 21,013 14,378
10,436,826 10,702,460
TOTAL ASSETS 85,763,284 83,963,601
CURRENT LIABILITIES
Air traffic liabilities (2,141,768) (1,530,484)
Accounts payables (5,736,018) (5,221,061)
Bills payable (1,173,618) (651,345)
Other payables and accruals (3,705,185) (4,192,887)
Financial liabilities (100,887) (242,108)
Tax payable (415,148) (534,273)
Obligations under finance leases (1,708,006) (2,354,905)
Bank and other loans (12,910,431) (11,139,021)
Provision for major overhauls (16,670) (47,318)
Due to related companies (47,610) (39,989)
(27,955,341) (25,953,391)
NET CURRENT LIABILITIES (17,518,515) (15,250,931)
TOTAL ASSETS LESS CURRENT LIABILITIES 57,807,943 58,010,210
30 June 31 December
2007 2006
RMB'000 RMB'000
(Unaudited) (Audited)
NON-CURRENT LIABILITIES
Obligations under finance leases (10,045,021) (11,247,855)
Bank loans, other loans and corporate
bonds (16,057,653) (12,701,977)
Provision for major overhauls (1,088,050) (921,929)
Provision for early retirement
benefits obligations (193,395) (201,199)
Long term payables (218,491) (252,591)
Deferred income (910,495) (948,966)
(28,513,105) (26,274,517)
NET ASSETS 29,294,838 31,735,693
EQUITY ATTRIBUTABLE TO EQUITY HOLDERS
OF THE COMPANY
Issued share capital 12,251,362 12,251,362
Treasury shares (1,246,955) (1,246,955)
Reserves 18,115,724 18,117,084
Proposed final dividend - 602,767
29,120,131 29,724,258
MINORITY INTERESTS 174,707 2,011,435
TOTAL EQUITY 29,294,838 31,735,693
Notes:
1. BASIS OF PREPARATION AND ACCOUNTING POLICIES
Air China Limited (the 'Company') was incorporated as a joint stock limited
company in Beijing, the People's Republic of China (the 'PRC'), on 30 September
2004. The Company's H shares are listed on Hong Kong Stock Exchange and London
Stock Exchange while the Company's A share are listed on the Shanghai Stock
Exchange. In the opinion of the Directors, the Company's parent and ultimate
holding company is China National Aviation Holding Company, a PRC state-owned
enterprise under the supervision of the State Council.
The interim condensed consolidated financial statements of the Company, its
subsidiaries and joint ventures (collectively, the 'Group') for the six months
ended 30 June 2007 have been prepared in accordance with International
Accounting Standard 34 'Interim Financial Reporting' and the disclosure
requirements of the Rules Governing the Listing of Securities on the Hong Kong
Stock Exchange (the 'Listing Rules').
These interim condensed consolidated financial statements do not include all
the information and disclosures required in the annual financial statements,
and therefore should be read in conjunction with the Group's annual financial
statements for the year ended 31 December 2006. The interim condensed
consolidated financial statements are presented in Renminbi ('RMB') and all
values are rounded to the nearest thousand except when otherwise indicated.
The principal accounting policies adopted in the preparation of the interim
condensed consolidated financial statements of the Group are materially
consistent with those followed in the preparation of the audited annual
financial statements of the Group for the year ended 31 December 2006, except
for the adoption of the following new International Financial Reporting
Standards ('IFRSs', which comprise standards and interpretations approved by
the International Accounting Standards Board, and International Accounting
Standards and Standing Interpretations Committee interpretations approved by
the International Accounting Standards Committee that remain in effect) which
have become effective for accounting periods beginning on or after 1 January
2007.
IFRIC - Int 7 Applying the Restatement Approach under IAS 29 'Financial
Reporting in Hyperinflationary Economies'
IFRIC - Int 8 Scope of IFRS 2
IFRIC - Int 9 Reassessment of Embedded Derivatives
IFRIC - Int 10 Interim Financial Reporting and Impairment
The adoption of the above IFRSs has had no material impact on the Group's
interim condensed consolidated financial statements for the six months ended 30
June 2007.
2. SEGMENT INFORMATION
Segment information of the Group is presented by way of two segment formats:
(i) on a primary segment reporting basis, by business segment; and (ii) on a
secondary segment reporting basis, by geographical segment.
The Group's operating businesses are structured and managed separately,
according to the nature of their operations and the services they provide. Each
of the Group's business segments represents a strategic business unit that
offers services which are subject to risks and returns that are different from
those of the other business segments. Summary details of the business segments
are as follows:
(a) the airline operations segment comprises the provision of air passenger
and air cargo services;
(b) the engineering services segment comprises the provision of aircraft
engineering services which include aircraft maintenance, repair and
overhaul services;
(c) the airport terminal services segment comprises the provision of ground
services, which include check-in service, boarding service, premium
class lounge service, ramp service, luggage handling service, loading
and unloading services, cabin cleaning and transit services; and
(d) the 'others' segment comprises the provision of air catering services
and other airline-related services.
In determining the Group's geographical segments, revenue is attributed to the
segments based on the origin and destination of each flight segment.
Intersegment sales and transfers are transacted with reference to the selling
prices used for sales made to third parties at the then prevailing market
prices.
Business segments
The following tables present the Group's revenue and profit from operations by
business segment for the six months ended 30 June 2007 and 2006:
For the six months ended 30 June 2007
Airport
Airline Engineering terminal
operations services services Others Eliminations Total
RMB'000 RMB'000 RMB'000 RMB'000 RMB'000 RMB'000
(Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)
REVENUE
Sales to external customers 22,734,273 229,641 256,808 132,098 - 23,352,820
Intersegment sales - 309,462 - 81,826 (391,288) -
Total revenue 22,734,273 539,103 256,808 213,924 (391,288) 23,352,820
PROFIT FROM OPERATIONS 1,279,193 10,974 59,863 16,622 - 1,366,652
For the six months ended 30 June 2006
Airport
Airline Engineering terminal
operations services services Others Eliminations Total
RMB'000 RMB'000 RMB'000 RMB'000 RMB'000 RMB'000
(Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)
REVENUE
Sales to external customers 19,385,010 203,968 218,827 123,102 - 19,930,907
Intersegment sales - 343,730 - 38,224 (381,954) -
Total revenue 19,385,010 547,698 218,827 161,326 (381,954) 19,930,907
PROFIT FROM OPERATIONS 728,568 68,191 77,539 18,967 - 893,265
Geographical segments
The following tables present the Group's consolidated revenue by geographical
segment for the six months ended 30 June 2007 and 2006:
For the six months ended 30 June 2007
Hong Kong/ North Japan/Asia Pacific
Domestic Macau Europe America Korea and others Total
RMB'000 RMB'000 RMB'000 RMB'000 RMB'000 RMB'000 RMB'000
(Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)
REVENUE
Sales to external customers and
total revenue 12,497,397 1,317,013 3,224,386 2,153,863 2,198,633 1,961,528 23,352,820
For the six months ended 30 June 2006
Hong Kong/ North Japan/Asia Pacific
Domestic Macau Europe America Korea and others Total
RMB'000 RMB'000 RMB'000 RMB'000 RMB'000 RMB'000 RMB'000
(Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)
REVENUE
Sales to external customers and
total revenue 10,759,364 1,285,141 2,476,880 1,594,705 2,116,483 1,698,334 19,930,907
3. AIR TRAFFIC REVENUE
Air traffic revenue comprises revenue from the airline operations business and
is stated net of business tax. An analysis of the Group's air traffic revenue
is as follows:
For the six months ended
30 June 2007 30 June 2006
RMB'000 RMB'000
(Unaudited) (Unaudited)
Passenger 19,768,612 16,502,697
Cargo and mail 1,915,830 1,892,265
21,684,442 18,394,962
Pursuant to the relevant PRC business tax rules and regulations, air traffic
revenue for all domestic and outbound international flights is subject to
business tax at a rate of 3%. All inbound international, Hong Kong and Macau
regional flights are exempted from business tax. Business tax incurred and set
off against air traffic revenue for the six months ended 30 June 2007 and 30
June 2006 amounted to approximately RMB551 million and RMB428 million,
respectively.
4. OTHER OPERATING REVENUE
For the six months ended
30 June 2007 30 June 2006
RMB'000 RMB'000
(Unaudited) (Unaudited)
Bellyhold income from a joint venture 780,966 699,904
Ground service income 256,808 218,827
Aircraft engineering income 229,641 203,968
Air catering income 72,276 62,335
Government grants:
Recognition of deferred income 38,472 38,472
Others 72,264 57,551
Service charges on return of unused flight tickets 68,142 48,086
Cargo handling service income 19,764 29,444
Training service income 6,958 9,437
Import and export service income 6,846 10,880
Sale of materials 4,115 5,595
Others 112,126 151,446
1,668,378 1,535,945
5. PROFIT FROM OPERATIONS
The Group's profit from operations is arrived at after charging:
For the six months ended
30 June 2007 30 June 2006
RMB'000 RMB'000
(Unaudited) (Unaudited)
Loss on disposal of property, plant and equipment, net 12,425 9,021
Loss on derecognition of property, plant and equipment 13,883 71,427
Amortisation of lease prepayments 10,512 10,155
6. FINANCE REVENUE AND FINANCE COSTS
For the six months ended
30 June 2007 30 June 2006
RMB'000 RMB'000
(Unaudited) (Unaudited)
Finance revenue
Exchange gains, net 867,541 200,422
Interest income 54,248 30,338
Gains on fuel derivatives, net 304,610 338,093
1,226,399 568,853
Finance costs
Interest on bank loans, other loans and corporate bonds 747,277 336,128
Interest on finance leases 362,816 616,588
Total interest 1,110,093 952,716
Less: Interest capitalised (110,521) (43,243)
999,572 909,473
The interest capitalisation rate represents the cost of capital from raising
the related borrowings and is approximately 4.5% to 6% (2006: 4.5%) per annum.
7. TAX
According to the PRC Enterprise Income Tax Law, the Company, its subsidiaries,
joint ventures and associates established in Mainland China are subject to
enterprise income tax at rates ranging from 12% to 33% (2006: 12% to 33%) on
their taxable income.
Hong Kong profits tax has been provided at the rate of 17.5% (2006: 17.5%) on
the estimated assessable profits arising in Hong Kong during the period.
On 16 March 2007, the National People's Congress approved the Corporate Income
Tax Law of the People's Republic of China (the 'New CIT Law'), which will be
effective from 1 January 2008. Under the New CIT Law, the corporate income tax
rate applicable to domestic companies from 1 January 2008 onwards will decrease
from 33% to 25%. This reduction in corporate income tax rate will directly
reduce the Group's effective tax rate prospectively from 2008. According to IAS
12, 'Income Taxes', deferred tax assets and deferred tax liabilities are
measured at the tax rates that are expected to apply to the period when the
assets are realised or the liabilities are settled. As a result, the change in
corporate income tax rate has resulted in a decrease in net deferred tax assets
of approximately RMB49 million, which has been debited to the income tax
expense during the six months ended 30 June 2007.
At the date of approval of these interim condensed consolidated financial
statements, detailed implementation and administrative requirements relating to
the New CIT Law have yet to be announced. These detailed requirements include
regulations concerning the computation of taxable income, as well as specific
preferential tax treatments and their related transitional provisions. The
Group will further evaluate the impact on its operating results and financial
positions of future periods as more detailed requirements become available.
The determination of current and deferred income tax was based on enacted tax
rates. Major components of income tax charge are as follows:
For the six months ended
30 June 2007 30 June 2006
RMB'000 RMB'000
(Unaudited) (Unaudited)
Current income tax - Mainland China 421,920 31,788
Deferred income tax - origination and reversal of temporary differences 174,452 151,041
Income tax charge for the period 596,372 182,829
The share of tax attributable to joint ventures, which are accounted for in the
Group's interim condensed consolidated financial statements through
proportionate consolidation, amounting to RMB11,117,000 (unaudited) (2006:
RMB21,307,000 (unaudited)) is included in the income tax charge for the period.
The share of tax attributable to associates amounting to RMB99,331,000
(unaudited) (2006: RMB5,343,000 (unaudited)) is included in the 'Share of
profit and losses of associates' on the face of the condensed consolidated
income statement for the six months ended 30 June 2007.
8. DIVIDEND
In accordance with the Company's articles of association, the profit after tax
of the Company for the purpose of dividends payment is based on the lesser of
(i) the profit determined in accordance with the China Accounting Standards;
and (ii) the profit determined in accordance with IFRSs.
The proposed final dividend for the year ended 31 December 2006 was approved by
the Company's shareholders on 30 May 2007.
The Board of Directors of the Company does not recommend the payment of any
interim dividend for the six months ended 30 June 2007 (six months ended 30
June 2006: Nil).
9. EARNINGS PER SHARE ATTRIBUTABLE TO EQUITY HOLDERS OF THE COMPANY
The calculation of basic earnings per share for the six months ended 30 June
2007 was based on the net profit attributable to equity holders of the Company
for the six months ended 30 June 2007 of approximately RMB1,568,579,000
(unaudited), and the weighted average of approximately 11,879,594,685 ordinary
shares in issue during the period, as adjusted to account for the effect of
cross holding with Cathay Pacific Airways Limited ('Cathay Pacific').
The calculation of basic earnings per share for the six months ended 30 June
2006 was based on the net profit attributable to equity holders of the Company
for the six months ended 30 June 2006 of approximately RMB457,974,000
(unaudited) and 9,433,210,909 ordinary shares in issue during the period.
Diluted earnings per share for the six months ended 30 June 2007 and 30 June
2006 have not been disclosed because no diluting events existed during those
periods.
B. Prepared in accordance with China Accounting Standards ('CAS')
Unaudited Consolidated Income Statement
For the six months ended
30 June 30 June
2007 2006
RMB'000 RMB'000
(Unaudited) (Unaudited)
Revenue from operations 22,744,019 19,287,805
Less: Cost of operations 19,111,618 16,592,254
Tax and surcharges 546,090 473,363
Selling expenses 1,370,680 1,035,486
Administrative expenses 501,452 528,042
Finance costs 126,794 716,634
Add: Gains from changes in fair value 253,858 110,842
Investment income 354,274 187,756
Including: Investment income from
associates and joint ventures 352,024 210,169
Profit from operations 1,695,517 240,624
Add: Non-operating income 76,328 73,125
Less: Non-operating expenses 71,842 33,989
Including: Loss on disposal of
non-current assets 44,248 5,146
Total profit 1,700,003 279,760
Less: Income tax 476,942 23,514
Net profit 1,223,061 256,246
Net profit attributable to equity holders
of the Company 1,300,297 236,794
Minority interests (77,236) 19,452
Unaudited Consolidated Balance Sheet
30 June 31 December
2007 2006
RMB'000 RMB'000
(Unaudited) (Audited)
ASSETS
Current assets:
Cash and bank balances 3,935,981 4,982,844
Financial assets 212,572 99,935
Account receivables 3,374,680 2,664,323
Other receivables 990,057 904,639
Prepayments 404,915 298,704
Inventories 746,054 704,367
Total current assets 9,664,259 9,654,812
Non-current assets:
Long term receivables 304,369 293,160
Long-term equity investments 11,338,873 11,547,275
Fixed assets 50,101,728 50,007,863
Construction-in-progress 11,079,221 9,309,266
Intangible assets 525,322 527,211
Goodwill 131,945 131,945
Deferred tax assets 447,770 513,211
Long-term deferred assets 11,983 10,563
Total non-current assets 73,941,211 72,340,494
Total assets 83,605,470 81,995,306
30 June 31 December
2007 2006
RMB'000 RMB'000
(Unaudited) (Audited)
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Short-term loans 9,600,422 8,016,656
Financial liabilities 100,887 242,108
Bills payable 1,173,618 610,545
Accounts payables 6,272,776 5,908,949
Domestic air traffic liabilities 448,043 383,851
International traffic liabilities 1,688,366 1,147,200
Receipts in advance 106,583 14,770
Accrued employee compensations 304,280 412,135
Taxes payable 1,332,203 1,700,858
Interest payable 279,443 138,226
Other payables 1,274,910 1,547,640
Current portion of long-term liabilities 4,763,773 5,205,258
Total current liabilities 27,345,304 25,328,196
Non-current liablities:
Long-term loans 12,493,946 9,130,330
Corporate bonds 3,000,000 3,000,000
Long-term payables 1,243,087 1,140,234
Obligations under finance lease 10,045,021 11,247,855
Provisions 75,648 47,822
Total non-current liabilities 26,857,702 24,566,241
Total liabilities 54,203,006 49,894,437
Shareholders' equity:
Share capital 12,251,362 12,251,362
Capital reserve 13,061,705 14,291,942
Less: Treasury shares (1,246,955) (1,246,955)
Reserve funds 1,037,467 719,565
Retained profits 4,662,805 4,283,177
Exchange differences arising on translation of
foreign currency denominated financial statements (538,627) (203,150)
Shareholder's equity attributable to the Company 29,227,757 30,095,941
Minority interests 174,707 2,004,928
Total shareholders' equity 29,402,464 32,100,869
Total liabilities and shareholders' equity 83,605,470 81,995,306
Effects of Significant Differences Between IFRS and CAS
Effects of significant differences between net profit under CAS and profit
attributable to equity holders of the Company under IFRS are analysed as
follows:
For the six months ended
30 June 30 June
2007 2006
RMB'000 RMB'000
(Unaudited) (Unaudited)
Net profit under CAS 1,300,297 236,794
Additional depreciation from restatement of costs
of property, plant and equipment (82,030) (82,171)
Reversal of depreciation and amortisation arising
on asset revaluation 223,468 249,836
Effect of component accounting 245,648 190,339
Government grant (8,722) (307)
Deferred taxes (108,313) (130,151)
Others (1,769) (6,366)
Profit attributable to equity holders of
the Company under IFRS 1,568,579 457,974
Effects of significant differences between equity attributable to the equity
holders of the Company under CAS and IFRS are analysed as follows:
30 June 31 December
2007 2006
RMB'000 RMB'000
(Unaudited) (Unaudited)
Equity attributable to equity holders of
the Company under CAS 29,227,757 30,095,941
Restatement of costs of property, plant and equipment 810,798 892,828
Reversal of revaluation surplus (1,196,316) (1,419,784)
Effect of component accounting 791,051 545,403
Government grant (435,864) (427,142)
Deferred taxes (71,302) 37,012
Others (5,993) -
Equity attributable to equity holders of
the Company under IFRS 29,120,131 29,724,258
MANAGEMENT DISCUSSION AND ANALYSIS OF OPERATING RESULTS AND FINANCIAL CONDITIONS
Overview
During the first half of 2007, with the macro economy of China continuing to grow
rapidly and steadily while the total demand in the aviation market expanding at a
greater pace, the Company has proactively taken good advantage of the opportunities
arising in the market and successfully offset the adverse impact of high oil price and
achieved remarkable economic growth. Meanwhile, we have been developing our strategic
cooperation and making significant progress in organization transformation, hub
integration, service network improvement as well as brand building, laying a solid
foundation for achieving the strategic missioin of 'becoming the recognised airline of
mainstream passengers, the most valuable and profitable airline in China, and an
airline with international competitive edge'.
With respect to passenger traffic, during the first half of 2007, the number of
passengers carried by the Company increased by 14.6% to 16.687 million compared to the
same period last year; the available seat kilometres of the Company increased by 11.8%
from the same period last year to 41,940 million, while the average passenger load
factor increased by 2.0 percentage points from the first half of the preceding year to
75.8%. The Company's passenger traffic reached 31,810 million revenue passenger
kilometres, representing an increase of 14.9% from the first half of 2006.
With respect to cargo traffic, during the first half of 2007, cargo and mail carried
increased by 18.4% from the same period last year to 454,000 tonnes. The available
freight tonne-kilometres of the Company increased by 24.2% from the same period last
year to 3,390 million, while freight and mail load factor decreased by 1.5 percentage
points from the same period last year to 52.5%. The cargo and mail traffic of the
Company increased by 20.8% from the same period last year to 1,780 million RFTKs.
Profit Attributable to Equity Holders of the Company and Profit from Operations
For the six months ended 30 June 2007, profit attributable to equity holders of the
Company amounted to RMB1.569 billion, representing an increase of 242.5% compared to
the same period in 2006; profit from operations was RMB1.367 billion, representing an
increase of 53.0% compared to the same period in 2006. One of the key reasons of the
increase in profit attributable to equity holders of the Company and profit from
operations of the Group was the rapid growth in revenue from air traffic revenue.
The interim condensed consolidated financial statements include the operating results
of the Company's subsidiaries and joint ventures, which are accounted for under
proportionate consolidation. During the reporting period, the share of profits less
losses of associates was RMB479 million, representing an increase of 344.1% compared
to the same period in 2006, primarily due to the contribution of profit from Cathay
Pacific.
Profit Contribution by Business Segment
For the six months ended
30 June
2007 2006 Change
RMB'000 RMB'000 (%)
Airline operations 1,279,193 728,568 75.58
Maintenance services 10,974 68,191 (83.91)
Airport terminal services 59,863 77,539 (22.80)
Others 16,622 18,967 (12.36)
Profit from operations 1,366,652 893,265 53.00
Earnings Per Share
For the six months ended 30 June 2007, the Company's earnings per share was RMB0.132,
representing an increase of 169.4% compared to RMB0.049 for the same period in 2006.
This was mainly the result of the rapid growth in profit for the reporting period.
Operating Revenue
For the six months ended 30 June 2007, the Group's operating revenue (including air
traffic revenue and other operating revenue) was RMB23.353 billion, representing an
increase of 17.17% compared to the same period in 2006. The increasing demand in the
domestic aviation market and the continuous expansion of our capacity made substantial
contribution to the increase in revenue from our airline operations. Passenger revenue
of the Group was subject to the seasonality of the aviation industry in China. The
peak season of the aviation industry in China falls between July and October each year
with the highest demand for passenger traffic during that period. As such, the Group's
passenger revenue in the second half of the year is generally higher than that in the
first half.
Revenue Contribution by Business Segment
For the six months ended
30 June
2007 2006 Change
RMB'000 RMB'000 (%)
Airline operations 22,734,273 19,385,010 17.28
Maintenance services 229,641 203,968 12.59
Airport terminal services 256,808 218,827 17.36
Others 132,098 123,102 7.31
Operating revenue 23,352,820 19,930,907 17.17
For the six months ended 30 June 2007, revenue from maintenance services increased by
12.59%, primarily due to the increase in maintenance work provided to external
parties; and revenue from airport terminal services increased by 17.36% primarily due
to the increase in passengers and aircraft to which the airport terminal services were
provided.
Revenue Contribution by Geographical Segment
For the six months ended
30 June
2007 2006 Change
RMB'000 RMB'000 (%)
Mainland China 12,497,397 10,759,364 16.15
Hong Kong and Macau 1,317,013 1,285,141 2.48
Europe 3,224,386 2,476,880 30.18
North America 2,153,863 1,594,705 35.06
Japan and Korea 2,198,633 2,116,483 3.88
Asia Pacific and others 1,961,528 1,698,334 15.50
Operating revenue 23,352,820 19,930,907 17.17
The Group's operating revenue is mainly generated from airline operations; the
increase of 17.17% of operating revenue in the first half of 2007 was mainly due to
the significant increase of revenue from airline operations in the domestic, European
and North American markets.
Operating Expenses
The operating expenses of the Group primarily comprise jet fuel costs, take-off,
landing and depot charges, depreciation, aircraft maintenance, repair and overhaul
expenses, employee compensation costs and air catering charges. For the six months
ended 30 June 2007, the Group's operating expenses amounted to RMB21.986 billion,
representing an increase of RMB2.949 billion or 15.5% compared to the same period in
2006. Rising jet fuel costs were the main reason for the increase in operating
expenses. The rise in jet fuel costs was attributable to the increased fuel
consumption and the substantial increase in jet fuel prices. A higher increase in
aircraft maintenance, repair and overhaul expenses was attributable to the expansion
of fleet and increase in maintenance work.
Principal Operating Expenses
For the six months ended
30 June
2007 2006 Change
RMB'000 RMB'000 (%)
Jet fuel costs 8,042,121 7,063,679 13.85
Take-off, landing and depot charges 2,714,364 2,415,696 12.36
Depreciation 2,696,361 2,664,606 1.19
Aircraft maintenance, repair and
overhaul expenses 946,615 633,412 49.45
Employee compensation costs 1,989,282 1,670,027 19.12
Air catering expenses 711,389 653,836 8.8
Analysis of Assets
As at 30 June 2007, the Group had total assets of RMB85.763 billion, representing an
increase of 2.1% from 31 December 2006, in which current assets accounted for 12.2%,
or RMB10.437 billion, while non-current assets accounted for 87.8%, or RMB75.326
billion. Among the current assets, cash and cash equivalents and the non-pledged
deposits with a maturity of more than three months when acquired decreased by 20.9% to
RMB4.083 billion from 31 December 2006, while accounts receivable increased by 17.2%
to RMB3.323 billion. Among the non-current assets, properties, plant and equipment
amounted to RMB56.009 billion, representing an increase of 2.3% from 31 December 2006.
Pledged Assets
As at 30 June 2007, the Group pledged certain aircraft and properties with an
aggregate carrying amount of approximately RMB28.078 billion (compared with RMB34.214
billion as at 31 December 2006) pursuant to certain loan and lease agreements. Details
of the pledged assets are set out in note 11 to the interim condensed consolidated
financial statements prepared under IFRS.
Debt Structure of the Group
(Unit: RMB 100 million)
Bank loans,
other loans and Obligations under
corporate bonds financial leases
30 June 31 December 30 June 31 December
2007 2006 2007 2006
Repayable within 1 year 129.10 111.39 17.08 23.55
Repayable over 1 year 160.58 127.02 100.45 112.48
A significant portion of the Group's debts will fall due within one year. The Group
expects to meet its obligations through bank loans, internally generated funds and
other resources as they fall due and therefore is not exposed to any credit risk.
Gearing Ratio
As at 30 June 2007, the Group's gearing ratio, which represents total liabilities
divided by total assets, was 65.8%, representing an increase of 3.6 percentage points
from 62.2% as at 31 December 2006. During the reporting period, comparatively more
aircraft were purchased and most of the funds were obtained through loans.
Interest Expenses
For the six months ended 30 June 2007, interest expense of the Group charged to the
unaudited condensed consolidated income statement increased from RMB0.909 billion in
the same period last year to RMB1 billion, which was in line with the change of
capital structure.
Interest Cover
For the six months ended 30 June 2007, earnings before finance revenue, finance costs,
enterprise income taxes, share of profits less losses of associates and depreciation
('EBITDA') as computed under IFRS, divided by interest expenses, was 4.06 times,
compared to 3.91 times for the same period in 2006. The significant increase in
interest cover was attributable to the significantly higher profitability for the
reporting period than that for the same period in 2006.
Commitments and Contingent Liabilities
As at 30 June 2007, capital commitments of the Group decreased by 14% from RMB42.944
billion as at 31 December 2006 to approximately RMB36.931 billion. The Group's capital
commitments mainly relate to the purchase of aircraft and the decrease in capital
commitment was mainly due to the advance payments for the purchases of aircraft during
the reporting period.
Details of the contingent liabilities and commitments of the Group, both arising in
the ordinary course of business, as at 30 June 2007 are set out respectively in notes
20 and 21 of the interim condensed consolidated financial statements prepared under
IFRS.
Liquidity and Capital Resources
The Group finances its working capital needs through cash inflows from operating
activities and bank loans. Like many other airline groups in China, the Group has been
operating with a net current liabilities position. As at 30 June 2007 and 31 December
2006, the net current liabilities of the Group were RMB17.519 billion and RMB15.251
billion, respectively.
Capital Expenditure
For the six months ended 30 June 2007, the capital expenditure of the Company amounted
to RMB7.318 billion. The Company's total investment in aircraft out of the capital
expenditure was RMB3.479 billion, including prepayments of RMB1.983 billion for
purchasing aircraft from 2008 onwards.
The capital expenditure incurred for other investments was RMB3.839 billion, which
mainly involved certain long-term external investments, the acquisition of spare
aircraft engines and aircraft parts of high prices, Air China base project,
infrastructure construction of ancillary projects of the No. 3 Terminal of Beijing
International Airport and the acquisition of ancillary equipment of the No. 3 Terminal
of Beijing International Airport.
Objective and Policy of Financial Risk Management
The Group is exposed to the fluctuations in jet fuel price during its ordinary
operations. International jet fuel prices have been historically, and will in the
future continue to be, subject to price volatility and fluctuations in supply and
demand. The Group's strategy for managing its jet fuel price risk aims to provide
itself with protection against sudden and significant price increases. Subject to the
applicable laws in China, the Group started to engage in fuel hedging transactions in
March 2001. The underlying subjects of hedging instruments were mainly Singapore jet
fuel and Brent crude oil derivatives that are closely linked to jet fuel. In the first
half of 2007, the Group applied hedging to 46.7% of the spot jet fuel procured during
the period, and the net gain on jet fuel derivatives was RMB305 million.
The Group adopted 'natural immunity' method to achieve a matching structure of income
and expenses by adjusting the proportion of its liabilities in foreign currencies. The
Group will continue to avoid exposure to the risk of exchange rate fluctuation by
adopting a strategy that matches the income and payment in certain principal
currencies. In the first half of 2007, the Group's net exchange gains amounted to
RMB868 million.
Outlook for 2007
With further opening up of China's aviation market, and benefiting from the
sustainable growth in passenger and cargo capacity, the Company will secure its
leading role in China's civil aviation industry and devote to build and reinforce the
brand of Air China's services, aiming at achieving better operating results and
fulfilling our commitment to the shareholders.
REPURCHASE, SALE OR REDEMPTION OF THE COMPANY'S SECURITIES
Neither the Company nor any of its subsidiaries had purchased, sold or redeemed any of
the listed securities of the Company in the first half of 2007.
INTERIM DIVIDEND
No interim dividend will be paid for the six months ended 30 June 2007. The
undistributed profit will be accumulated for a one-off payment by year end. It is
currently expected that the distribution ratio will range from 15% to 30% of the
distributable profit based on the lesser of distributable profits determined in
accordance with IFRS and CAS.
MATERIAL EVENTS
1. Share Appreciation Rights ('SAR')
Upon the listing of the Company's H shares, the Company's shareholders approved
a long-term equity incentive plan, i.e. the stock appreciation rights scheme
('SAR Scheme'), based on its H shares at a general meeting held on 18 October
2004, for which the Company had obtained approval from relevant government
authorities. According to the 'Directors and Senior Management Share
Appreciation Rights Administration Handbook' which was approved by the
shareholders at the 3rd extraordinary general meeting of the Company convened
on 28 December 2006 and the 'Detailed Implementing Rules of the Share
Appreciation Rights Management Measures of Air China Limited (Provisional)'
which was passed at the 31st meeting of the first session Board convened on 14
June 2007, and with ratification from The Company's management nomination and
remuneration committee, the Company granted the first batch of SARs on 15 June
2007. The grantees of SARs were non-independent directors, senior management,
senior operation managers and heads of each unit of the Company who were
appointed on or before 31 December 2004 and were recorded on the register and
in employment with the Company as at 31 December 2004 (inclusive), making a
total number of 109 grantees. The exercise price on the date of grant was
HK$2.98, and the settlement price would be the average closing price of that
batch of SARs for 5 consecutive trading days in relevant exercisable window
period. SARs are exercisable for the first time after the expiry of the second
anniversary of the date of grant and shall be exercised in full within five
years. Detailed arrangement for exercising the SARs is as follows: 30% of the
total number of SARs granted can be exercised in the third year after the date
of grant, and not more than 70% can be accumulatively exercised in the fourth
year while 100% can be accumulatively exercised in the fifth year. The total
number of shares underlying the first batch of SARs granted were 14.94 million,
representing 0.12% of the total issued share capital of the Company. The
granting of this batch of SARs did not involve any offering of new share and
had no dilutive effect on shareholders of the Company. Individual performance
contracts were signed between the Company and relevant personnel to whom the
SARs was granted. The Company reserves the right to cancel part or all of these
SARs for those who fail the assessment.
2. Antitrust Investigation
On 26 February 2007, the Eastern District Court of New York of the US Federal
Courts issued summons to the Company and Air China Cargo Co., Ltd. ('Air China
Cargo') in connection with the antitrust civil case relating to the air cargo
services. Pursuant to such summons, various airlines, including the Company and
Air China Cargo, were sued for their breach of the US Antitrust Law on the
ground that these airlines were acting in concert in imposing excessive
surcharges so as to impede the offering of discount that would be made
available for the prices charged for air cargo services and that these airlines
had reached an agreement on the allocation of revenues and consumers so as to
achieve such purposes as designated for improving, maintaining or stabilizing
the air cargo prices. Insofar as the case is in the course of initial
examination, our directors believe that at the present stage, they are unable
to make a reasonable and reliable estimation on the ultimate results of the
case and therefore no provisions has been made for such allegation for the time
being.
POST BALANCE SHEET EVENTS
On 7 July 2007, the 32rd meeting of the first board of directors of the Company passed
the resolutions which resolved that Mr. Sun Yude ceased to act as the Vice President
of the Company due to job transfer while Mr. Li Huxiao was appointed to act as the
Vice President of the Company.
On 10 July 2007, the Company and Air China Import and Export Co. Ltd. entered into the
Airbus Aircraft Purchase Agreement with Airbus S.A.S., pursuant to which the Company
has agreed to purchase 23 Airbus 320-series aircraft from Airbus S.A.S..
CORPORATE GOVERNANCE
1. Compliance with the Code on Corporate Governance Practices
The Company has complied with the code provisions set out in the Code on
Corporate Governance Practices (the 'Code') contained in Appendix 14 to the
Listing Rules throughout the first half of 2007.
2. Compliance with the Model Code
The Company adopted its own code of conduct regarding directors' securities
transactions on terms no less exacting than the required standards set out in
the Model Code. After having made specific enquiry, the Company confirms that
all of its directors and supervisors have complied with the required standard
set out in the Model Code contained in Appendix 10 to the Listing Rules
throughout the first half of 2007.
The Company's own code also applies to its supervisors and relevant employees.
DISCLOSURE REQUIRED BY HONG KONG STOCK EXCHANGE LISTING RULES
In compliance with paragraph 46 of Appendix 16 to the Listing Rules, the Company
confirms that, save as disclosed herein, there has been no material change in the
existing information regarding the Company in relation to those matters set out in
paragraph 46(3) of Appendix 16 to the Listing Rules from the information in relation
to the matters disclosed in the 2006 Annual Report of the Company.
REVIEW BY AUDIT COMMITTEE
The audit committee of the Company has reviewed the interim report for the six months
ended 30 June 2007 and the Company's interim condensed consolidated financial
statements and the accounting policies and practices adopted by the Group.
APPOINTMENT OF DIRECTORS AND SUPERVISORS
Pursuant to the articles of association of the Company, the term of the current
session of the Board and the Supervisory Committee is three years and will expire when
the second session of the Board and the Supervisory Committee is elected. At the Board
Meeting held on 28 August 2007, the Board resolved to propose that the current
directors of the Company, i.e. Mr. Li Jiaxiang, Mr. Kong Dong, Mr. Wang Shixiang,
Mr.Yao Weiting, Mr. Christopher Dale Pratt, Mr. Chen Nan Lok Philip, Mr. Ma Xulun, Mr.
Cai Jianjiang, Mr. Fan Cheng, Mr. Hu Hung Lick, Henry, Mr. Wu Zhipan, Mr. Zhang Ke;
Mr. Jia Kang be re-elected as directors ('Directors') of the second session of the
Board; Mr. Sun Yude, Mr. Liao Wei and Mr. Zhou Guoyou be appointed as supervisors
('Supervisors') representing shareholders of the Company on the second session of the
Supervisory Committee. Another two supervisors as the representives of the employees
of the Company will be elected in accordance with the Company's articles of
assocication. Among the Directors, Mr. Li Jiaxiang, Mr. Kong Dong, Mr. Wang Shixiang,
Mr.Yao Weiting, Mr. Christopher Dale Pratt, Mr. Chen Nan Lok Philip and Mr. Ma Xulun
will be appointed as non-executive directors; Mr. Cai Jianjiang and Mr. Fan Cheng will
be appointed as executive directors; and Mr. Hu Hung Lick, Henry, Mr. Wu Zhipan, Mr.
Zhang Ke and Mr. Jia Kang will be appointed as independent non-executive directors. An
ordinary resolution to consider and approve the appointment of the Directors and
Supervisors will be proposed at the Company's extraordinary general meeting.
Directors
Mr. Li Jiaxiang, aged 57. Mr. Li graduated from Shandong Coal Technology Institute in
1969 and studied in Northwest University from 1999 to 2001 majoring in international
economic law. Mr. Li had previously served in the China Air Force, People's Liberation
Army of China since 1969 and served in various positions including as a Major General
in the Air Force. After the restructuring of China's civil aviation industry in
October 2002, he served as the President of Air China International Corporation and
Deputy General Manager of China National Aviation Holding Company ('CNAHC'). He was
then promoted to the position of General Manager of CNAHC in August 2004, a post he
continues to hold.
Mr. Kong Dong, aged 59. Mr. Kong graduated from Jiangxi Technology University in 1977
majoring in mechanical engineering and is a senior economist. Mr. Kong was Deputy
General Manager of China Ocean Helicopter Company, General Manager of Shenzhen Airport
Group, Director-General in charge of the expansion project of the Beijing Capital
International Airport, General Manager of China National Aviation Corporation and
President of China National Aviation Company Limited ('CNAC'), and Vice Chairman and
President of China National Aviation Corporation (Group) Limited ('CNACG'). After the
restructuring of China's civil aviation industry in October 2002, he joined CNAHC as
Deputy General Manager, a post he continues to hold since August 2004.
Mr. Wang Shixiang, aged 58. Mr. Wang graduated from the China Civil Aviation Advanced
School in 1968 majoring in aviation and is a qualified First-Class Pilot. Mr. Wang was
appointed as the President of the Civil Aviation Flight Academy of China in 1995, and
General Manager of China Southwest Airlines in 1999. After the restructuring of
China's civil aviation industry in October 2002, he joined CNAHC as Deputy General
Manager, a post he continues to hold.
Mr. Yao Weiting, aged 59. Mr. Yao graduated from Zhejiang Institute of Economics and
Management and the China Central Party University in 1967 majoring in industrial
accounting and economic management, respectively. He is also a senior accountant and
senior economist. Mr. Yao was appointed as the Deputy Director of Economic Adjustment
Bureau of China Metallurgical Ministry in 1997 and Assistant to the State Council
Investigation Special Commissioner in 1998, and was the Chief Accountant of Air China
International Corporation from 2000 to 2002. After the restructuring of China's civil
aviation industry in October 2002, he joined CNAHC as Deputy General Manager, and
assumed the position of Chief Accountant of CNAHC in December 2004, a post he
continues to hold.
Mr. Christopher Dale Pratt, CBE, aged 51, has been Chairman and a Director of Cathay
Pacific Airways Limited since February 2006. He is also Chairman of Swire Pacific
Limited and John Swire & Sons (H.K.) Limited, and a Director of Swire Properties
Limited. He joined John Swire & Sons Limited in 1978 and has worked with the group in
Hong Kong, Australia and Papua New Guinea. He served as Executive Director of Swire
Pacific Limited's Trading and Industrial Division from 2000 to 2005. He has an honours
degree in modern history from Oxford University.
Mr. CHEN Nan Lok Philip, aged 51, has been a director of Cathay Pacific Airways
Limited since July 1998 and was appointed Chief Executive of that company in January
2005. He is also a director of John Swire & Sons (H.K.) Limited and Swire Pacific
Limited and Chairman of Hong Kong Dragon Airlines Limited. He joined the John Swire &
Sons Limited group in 1977 and in addition to Hong Kong has worked with the group in
Mainland China and the Asia Pacific region. He has an honours degree in Political
Science and History.
Mr. Ma Xulun, aged 43. Mr. Ma graduated from Shanxi Finance University in 1984 with a
Bachelor's Degree of Economics and is a certified public accountant. Mr. Ma was
appointed as Deputy General Manager of China Commodities Storing and Transportation
Corporation in 1995, Deputy Director General of Finance Department of the General
Administration of Civil Aviation of China ('CAAC') in 1997, Vice President of Air
China International Corporation in December 1998, and Deputy Director General of Air
China International Corporation after the restructuring of China's civil aviation
industry in 2002. From September 2004 to January 2007, he was promoted to the
President of the Company.
Mr. Cai Jianjiang, aged 43. Mr. Cai graduated from China Civil Aviation Institute in
1983. Mr. Cai was appointed as General Manager of Shenzhen Airlines Company Limited in
1999. He joined Air China International Corporation in 2001 as a General Manager of
its Shanghai Branch, and subsequently as Assistant to the President and Manager of the
Marketing Department of Air China International Corporation. After the restructuring
of China's civil aviation industry in October 2002, he was appointed as the Vice
President of Air China International Corporation, and has served as Vice President of
the Company since September 2004. In February 2007, he was promoted to the President
of the Company, a post he continues to hold.
Mr. Fan Cheng, aged 52. Mr. Fan graduated from Nanjing Institute of Chemistry and
Chemical Engineering in 1982 with a major in organic synthesis and graduated from
Guanghua School of Management, Peking University in 2000 with an MBA degree. Mr. Fan
is a senior accountant, senior engineer and certified public accountant. Mr. Fan was
appointed as Deputy General Manager of China New Technology Venture Capital Company in
1996. He started his career in China's civil aviation industry in 2001, and served as
General Manager of Corporate Management Department and Capital Operation Department of
CNAHC from October 2002 to October 2004. He has been the Chief Financial Officer of
the Company since September 2004 and the Vice Chairman of the Board of Shenzhen
Airlines Company Limited since January 2005. Since October 2006, he has been serving
as the Vice President of the Company.
Mr. Hu Hung Lick, Henry, aged 87. Mr. Hu is currently the president of Shue Yan
University in Hong Kong. He graduated from the University of Paris with a
Docteur-en-Droit degree. Mr. Hu was a member of Preparatory Committee and Selection
Committee for the First Government of the Hong Kong Special Administrative Region,
China, and was a member of the Standing Committee of the 8th and 9th Chinese People's
Political Consultative Conference. He has been serving as an independent non-executive
director of CNAC from April 1997 to January 2007.
Mr. Wu Zhipan, aged 50. Mr. Wu holds a Doctor in Laws Degree from School of Law,
Peking University, in 1988, and was a visiting scholar at Harvard Law School from 1991
to 1992. Mr. Wu is currently the Vice Chancellor of Peking University. He is also an
expert consultant of the Supreme People's Court of China and Consultant of the
Drafting Group of the Banking Law in China. Mr. Wu is also an independent
non-executive director of China Minsheng Banking, Corp., Ltd., Henan Zhongfu Industry,
Co., Ltd. and Fortune SGAM Fund Management Co., Ltd., and an independent supervisor of
PetroChina Company Limited.
Mr. Zhang Ke, aged 54. Mr. Zhang graduated from Renmin University of China in 1982
with a Bachelor's degree of economics. He is a certified public accountant and senior
accountant. Mr. Zhang is experienced in the fields of investment, managerial
consultancy, finance and auditing, and is currently Chairman and chief partner of
Shine Wing Certified Public Accountants. Mr. Zhang is also a member of the Standing
Council of CICPA, a member of CPA Examination Committee of the Ministry of Finance,
and a part-time professor in the Renmin University of China and the Chinese Academy of
Sciences.
Mr. Jia Kang, aged 53. Mr. Jia holds a Doctor's Degree of Economics and is a famous
economist. He is a researcher, a tutor of doctor and the head of Financial Science
Research Institute of Ministry of Finance, and also the vice chairman and
general-secretary of China Financial Association. Mr. Jia is also the visiting
professor of China Renmin University, State Administration Institute, Xiamen
University, Southwest University of Finance and Economics, Guangdong University of
Business Studies. Mr. Jia is also the winner of Sun Zhifang Economics Prize.
Supervisors
Mr. Sun Yude, aged 53, graduated from China Civil Aviation Institute in 1986 majoring
in economic management. He started his career in China's civil aviation industry in
1972 and served as the Deputy Head of CAAC Taiyuan Terminal and Head of Ningbo
Terminal, as well as General Manager of CNAC Zhejiang Airlines. After the
consolidation and restructuring of China's civil aviation industry in October 2002,
Mr. Sun joined Air China International Corporation as Vice President and General
Manager of Zhejiang branch, and has been serving as Vice President of the Company
since September 2004. Mr. Sun has been serving as Chairman and President of Shandong
Aviation Group since December 2005, and as the President of CNAHC since March 2007.
Mr. Liao Wei, aged 43, graduated from Southwest University of Finance and Economics in
1986 majoring in accounting and is a senior accountant. Mr. Liao served as the Deputy
Director of State-owned Assets Office of Finance Department of CAAC, the Director of
Human Resources and Administration Department of Air Macau, Deputy General Manager and
General Manager of the Investment Department of CNACG. Mr. Liao joined CNAHC in
December 2002 as the Deputy General Manager of its Finance Department in which he was
responsible for overseeing the works of the department. He has been serving as the
General Manager of Finance Department of CNAHC since September 2003 to date.
Mr. Zhou Guoyou, aged 56, graduated from the Party School of the Central Committee of
the Communist Party of China majoring in economic management and is a senior
economist. Mr. Zhou started his career in China's civil aviation industry in 1970 and
served in various positions in the Company such as the Deputy Director of Beijing
Ticketing Department, the Manager of the Shanghai Business Division, the General
Manager of the Marketing and Sale Department of Beijing Business Division, Deputy
Director of Quality Standard Department and the Deputy Director of the Economic
Efficiency Office. Since February 2004 to date, Mr. Zhou has become the Deputy General
Manager of the Corporate Supervision Division of CNAHC.
Mr. Christopher Dale Pratt is a non-executive director of the Company and is
concurrently the chairman and executive director of Cathay Pacific Airways Limited,
which is a substantial shareholder of the Company and wholly owns Hong Kong Dragon
Airlines Limited. Mr. Li Jiaxiang is the chairman and a non-executive director of the
Company and is concurrently the vice-chairman and a non-executive director of Cathay
Pacific Airways Limited.
Save as disclosed above, none of the Directors and Supervisors has held any
directorship in any other listed companies or taken up a post in any affiliated
companies of the Company in the past three years, and none of the Directors and
Supervisors has any relationship with any other director, senior management,
substantial shareholder or controlling shareholder of the Company.
None of the Directors and Supervisors has any equity interest in the Company within
the meaning of Part XV of the Securities and Futures Ordinance (Cap. 571 of the Laws
of Hong Kong). There is no information to be disclosed on items from (h) to (v) in
Rule 13.51(2) of the Listing Rules. No other matter needs to be brought to the
attention of the Shareholders in respect of the Company and its directors and
supervisors of the Company.
The emolument of Directors and Supervisors will be determined in accordance with the
Company's articles of association. The term of office of each Director and Supervisor
is three years, which shall commence upon the shareholders' approval to the
appointment and shall end upon the third session of the Board and the Supervisory
Committee being elected three years later.
By order of the
Board
Air China Limited
Huang Bin Li Man Kit
Joint Company
Secretaries
Beijing, 28 August 2007
As at the date of this announcement, the Directors of the Company are Messrs Li
Jiaxiang, Kong Dong, Wang Shixiang, Yao Weiting, Christopher Dale Pratt, Chen Nan Lok
Philip, Ma Xulun, Cai Jianjiang, Fan Cheng, Hu Hung Lick, Henry*, Wu Zhipan*, Zhang
Ke* and Jia Kang*.
* Independent non-executive Director of the Company
This information is provided by RNS
The company news service from the London Stock Exchange
Monday, 20th May 2024
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