3rd Quarter Results

RNS Number : 8696G

Air China Ld

28 October 2008

 



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.

(a joint stock limited company incorporated in the People's Republic of China with limited liability)

(Stock Code: 753)

THIRD QUARTERLY REPORT 2008

CHANGE OF SUPERVISOR

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1.    Third Quarterly Report 2008 

This announcement is made pursuant to Rule 13.09 of the Rules Governing the Listing of Securities on the Stock Exchange of Hong Kong Limited (the 'Hong Kong Listing Rules'). 

§1    IMPORTANT NOTICE 

1.1    The board of directors (the 'Board'), the Supervisory Committee, as well as the directors, supervisors and senior management of Air China Limited (the 'Company') hereby warrant that there are no false representations, misleading statements or material omissions in this report, and jointly and severally accept full responsibility for the truthfulness, accuracy and completeness of the contents of this quarterly report.

1.2    Director Ms. Wang Yinxiang was unable to attend the Board meeting due to a business engagement and appointed Chairman Mr. Kong Dong to attend and vote on her behalf.

Director Mr. Wang Shixiang was unable to attend the Board meeting due to a business engagement and appointed Director Mr. Cai Jianjiang to attend and vote on his behalf.

Director Mr. Ma Xulun was unable to attend the Board meeting due to a business engagement and appointed Director Mr. Fan Cheng to attend and vote on his behalf.

Director Christopher Dale Pratt was unable to attend the Board meeting due to a business engagement and appointed Director Mr. Chen Nan Lok, Philip to attend and vote on his behalf.

Independent Director Mr. Wu Zhipan was unable to attend the Board meeting due to a business engagement and appointed Independent Director Mr. Hu Hung Lick, Henry to attend and vote on his behalf. 

Independent Director Mr. Jia Kang was unable to attend the Board meeting due to a business engagement and appointed Independent Director Mr. Zhang Ke to attend and vote on his behalf.

1.3    The Third Quarterly Financial Report of the Company is unaudited.

1.4    The Third Quarterly Report has been approved by the Board.

1.5    The Chairman of the Company Mr. Kong Dong, Chief Financial Officer Mr. Fan Cheng (person in charge of accounting function), and the General Manager of the Finance Department Mr. Li Youqiang hereby jointly declare that the financial statements set out in this quarterly report is true and complete.

§2    BASIC INFORMATION OF THE COMPANY

2.1    Major accounting data and financial ratios

In RMB

	At the end of  the reporting  period	At the end of  pervious year	Increase/ (decrease) at  the end of the  reporting  period as  compared to  the end of the  pervious year
			(%)
Total assets (RMB'000)	97,554,239	88,295,239	10.49
Owner's equity (or shareholders' equity  (RMB'000)	29,157,896	31,288,095	-6.81
Net asset per share attributable to   shareholders of the listed company   (RMB)	2.46	2.64	-6.82

	From the  beginning of  the year to  the end of the  reporting period	Increase/ (decrease) over  the corresponding  period of  previous year
		(%)
Net cash flows from operating activities   (RMB'000)	4,322,428	-31.59
Net cash flows from operating activities   per share (RMB)	0.36	-31.55

	Reporting  period	From the  beginning of  the year to  the end of  the reporting  period	Increase/ (decrease) of  this reporting  period as  compared  to the  corresponding  period of  previous year
	(July to September)	(January to September)	(%)
Net profit attributable to shareholders   of the listed company (RMB'000)	-1,939,570	-657,253	-188.67
Basic earnings per share (RMB)	-0.163	-0.055	-188.59
Basic earnings per share after   exceptional gains and losses (RMB)	-0.167	-0.092	-192.52
Diluted earnings per share (RMB)	n/a	n/a	n/a
Fully diluted return on net assets (%)	-6.65	-2.25	Decrease  by 13.65  percentage  points
Fully diluted return on net assets after   exceptional gains and losses (%)	-6.81	-3.75	Decrease  by 13.69  percentage  points

Exceptional gain and loss items	From the beginning of the year to  the end of the reporting period  (January to September) (RMB'000)
	Excluding method: Consolidated exclusion
Gains and losses from disposal of   non-current assets	517,403
Government grants (except for the grants   which are closely related to the Company's   business and have the standard amount and   quantities in accordance with the national   standard) attributable to gains and losses   for the period	165,760
Other non-operating net income and expenses   apart from those stated above	-126,062
Effect of deduction of minority interest and   income tax	-120,694
Total	436,407

2.2    Total number of shareholders and top 10 holders of listed shares not subject to trading moratorium as at the end of the reporting period

	Unit: Share
Total number of shareholders at the end of the   reporting period	583,957

  Particulars of the top 10 holders of listed shares not subject to trading moratorium

Name of shareholder  (full name)	Number of listed  shares not subject to  trading moratorium  held as at period end	Class of Shares
CATHAY PACIFIC AIRWAYS   LIMITED	2,217,617,455	Overseas listed   foreign shares
HKSCC NOMINEES LIMITED	2,157,644,752	Overseas listed   foreign shares
China National Aviation   Holding Company	122,870,578	RMB ordinary shares
Sinotrans Air Transportation   Development Co., Ltd.	80,000,000	RMB ordinary shares
China General Technology  (Group) Holding Limited	30,000,000	RMB ordinary shares
China Yangtze Power Co., Ltd.	24,300,000	RMB ordinary shares
Industrial and Commercial Bank of  China Limited - SSE 50ETF  (上證50交易型開放式指數證券  投資基金)	22,872,770	RMB ordinary shares
Three Gorges Finance Co., Ltd.  (三峽財務有限責任公司)	17,500,000	RMB ordinary shares
China Power Finance Co., Ltd.  (中國電力財務有限公司)	14,120,000	RMB ordinary shares
Tongde Securities Investment Fund	12,320,667	RMB ordinary shares
Bank of China - Jiashi Shanghai  Shenzhen 300 Index Securities  Investment Fund	11,414,113	RMB ordinary shares

  §3    SIGNIFICANT EVENTS

3.1    Significant changes of the principal accounting statements and financial indicators and reasons thereof

        √ applicable     □ not applicable

The Company recorded a loss of RMB 1,940 million (excluding minority interest) for the reporting period (July to September) as compared to the profit of RMB 2,187 million for the corresponding period in the previous year. This is primarily due to the decrease in demand in the aviation market and the fluctuations in crude oil prices. The rise in crude oil prices resulted in an increase of RMB 2,663 million, or 64%, in the jet fuel costs of the Company compared to the corresponding period in the previous year. The investment income of associate companies dropped by RMB 852 million compared to the corresponding period of previous year. Concurrently, due to the recent dramatic decline of international crude oil prices, the fair value of the fuel derivatives held by the Company was RMB -961 million as on 30 September 2008.

The aforementioned fair value of the fuel derivatives is subject to further changes in crude oil prices, the development of the financial market and the adjustment of positions in the financial market. In the event that crude oil prices remain at a relatively low level, the spot purchasing cost of aircraft fuel of the Company will drop correspondingly. In the event the oil prices rise, the negative valuation of the fair value of the fuel derivatives will turn around correspondingly. For the period of January to September 2008, the settled portion of the fuel derivatives of the Company generated accumulated realised revenue of RMB 378 million.

3.2    Analysis and explanation on the progress of significant events and their impact and resolutions

        √ applicable     □ not applicable

On 26 February 2007, the Eastern District Court of New York of the Federal Judiciary of the United States filed a civil summon against the Company and Air China Cargo, claiming that they, together with a number of other airlines, have violated certain antitrust regulations in respect of their air cargo operations in the United States by acting in concert in imposing excessive surcharges to impede the offering of discounts and allocating revenue and customers so as to achieve increasing, maintaining or stabilizing air cargo prices. As the status of the proceedings is still in its preliminary stage, the Directors of the Company are of the view that it is not possible to reasonably estimate the eventual outcome of the claim at this point and therefore no provision for this claim has been made at this stage.

On 9 October 2008, the 2008 first extraordinary general meeting of the Company approved the purchase of 20 Airbus 330 aircraft, 15 Boeing 777 aircraft and 30 Boeing 737 aircraft. 

3.3    Performance of undertakings given by the Company, the shareholders and the effective controlling person

        √ applicable     □ not applicable

China National Aviation Holding Company and China National Aviation Corporation (Group) Limited gave an undertaking that it would not transfer, or nominate other persons to manage, the shares of the Company held by it, and none of these shares would be acquired by the Company, during the period of 36 months from the listing date of the A shares of the Company.

3.4    Warning in respect of forecast of possible net loss from the beginning of the year to the end of the next Reporting Period or warning in respect of any significant changes in net profit as compared with that of the corresponding period of previous year and the reasons therefore

        □ applicable     √ not applicable

3.5    Particulars of the Securities Investment

        □ applicable     √ not applicable

Air China Limited

Legal representative: Kong Dong

28 October 2008

  §4    APPENDIX

4.1    Consolidated Balance Sheet

    30 September 2008

    Prepared by Air China Limited

Unit: RMB'000 (Unaudited)

Items	Balance at  the end  of the period	Balance at  the beginning  of the year
Items	Balance at  the end  of the period	Balance at  the beginning  of the year
CURRENT ASSETS:
Cash and bank balances	4,049,800	3,787,152
rovisions on payables
Contributions received
Trading financial assets	0	6,493
Bills receivable	2,658	1,599
Accounts receivable	3,083,810	2,812,327
Prepayments	366,946	311,784
Premium receivable
Receivables on reinsurance
Provisions for reinsurance contracts
Interests receivable
Dividend receivable
Other receivables	994,757	997,205
Purchase of financial assets resold
Inventories	962,454	755,340
Non-current assets due within a year
Other current assets
Total current assets	9,460,425	8,671,900
NON-CURRENT ASSETS:
Loans and advances
Available-for-sale financial assets
Held-to-maturity investment	100,000
Long-term receivables	268,145	255,340
Long-term equity investment	8,738,358	11,404,643
Investment property
Fixed assets	63,675,510	55,000,376
Construction in progress	11,860,668	10,967,888
Construction materials
Disposal of fixed assets
Biological assets for production
Oil and gas assets
Intangible assets	1,745,472	1,396,620
Development expenses
Goodwill	511,309	131,945
Long-term deferred expenses	133,267	80,684
Deferred income tax assets	1,061,085	385,843
Other non-current assets
Total non-current assets	88,093,814	79,623,339
Total assets	97,554,239	88,295,239
CURRENT LIABILITIES:
Short-term borrowings	7,947,930	6,546,088
Borrowings from central bank
Deposits from clients and placements from   other banks
Contributions made
Trading financial liabilities	1,003,772	14,826
Bills payable
Accounts payable	8,283,000	6,338,341
Domestic air traffic liabilities	797,556	666,208
International air traffic liabilities	1,642,151	1,888,548
Receipts in advance	69,963	53,778
Financial assets sold under agreements to   repurchase
Fees and commission payable
Salaries and wages payable	368,048	254,073
Taxes payable	456,215	1,677,332
Interests payable	301,760	273,824
Dividend payable
Other payables	2,008,598	2,035,038
Amounts payable on reinsurance
Provisions on insurance contracts
Brokerage payable
Underwriting fees payable
Non-current liabilities due within a year	7,822,435	6,344,212
Other current liabilities
Total current liabilities	30,702,228	26,092,268
NON-CURRENT LIABILITIES:
Long-term borrowings	15,932,450	12,938,092
Debentures payable	3,000,000	3,000,000
Long-term payables	1,342,848	1,301,844
Finance leases payables	15,599,558	13,328,193
Estimated liabilities	217,197	191,533
Deferred income tax liabilities	1,119,510	5,000
Other non-current liabilities
Total non-current liabilities	37,211,563	30,764,662
Total liabilities	67,913,791	56,856,930
OWNER'S EQUITY (OR SHAREHOLDERS'   EQUITY):
Paid-up capital (or equity)	12,251,362	12,251,362
Capital surplus	13,273,626	13,135,900
Less: Treasury shares	1,353,714	1,283,492
Surplus reserves	1,563,915	1,299,214
General risk provisions
Profit available for appropriation	5,128,903	6,888,843
Currency translation differences	-1,706,196	-1,003,732
Total equities attributable to owners of Company	29,157,896	31,288,095
Minority interests	482,552	150,214
Total owners' equity	29,640,448	31,438,309
Total liabilities and owners' equity	97,554,239	88,295,239

Legal representative of the Company: Kong Dong

Person in charge of accounting function: Fan Cheng

Person in charge of accounting department: Li Youqiang

Balance Sheet of the Company

30 September 2008

Prepared by Air China Limited

Unit: RMB'000 (Unaudited)

Items	Balance at the  end of the period	Balance at the  beginning of  the year
Items	Balance at the  end of the period	Balance at the  beginning of  the year
CURRENT ASSETS:
Cash and bank balances	1,162,104	1,351,373
Trading financial assets	0	6,493
Bills receivable	965	1,599
Accounts receivable	2,641,618	2,446,047
Prepayments	309,368	264,840
Interests receivable
Dividend receivable
Other receivables	1,174,657	984,279
Inventories	889,408	689,871
Non-current liabilities due within a year
Other current assets
Total current assets	6,178,120	5,744,502
NON-CURRENT ASSETS:
Available-for-sale financial assets
Held-to-maturity investment	100,000
Long-term receivables	194,088	192,848
Long-term equity investment	14,030,646	13,804,257
Investment property
Fixed assets	60,506,589	54,672,583
Construction in progress	11,316,229	10,967,675
Construction materials
Disposal of fixed assets
Biological assets for production
Oil and gas assets
Intangible assets	1,549,851	1,396,527
Development expenses
Goodwill
Long-term deferred expenses	125,651	79,307
Deferred income tax assets	1,037,117	372,000
Other non-current assets
Total non-current assets	88,860,171	81,485,197
Total assets	95,038,291	87,229,699
CURRENT LIABILITIES:
Short-term borrowings	7,772,862	6,533,088
Trading financial liabilities	1,003,772	6,819
Bills payable
Accounts payable	7,038,540	5,750,093
Domestic air traffic liabilities	796,534	666,208
International air traffic liabilities	1,549,132	1,761,626
Receipts in advance	60,620	27,235
Salaries and wages payable	314,026	248,977
Taxes payable	435,360	1,667,134
Interests payable	289,284	273,824
Dividend payable
Other payables	1,741,267	1,881,640
Non-current liabilities due within a year	7,726,297	6,344,212
Other current liabilities
Total current liabilities	28,727,694	25,160,856
NON-CURRENT LIABILITIES:
Long-term borrowings	15,017,639	12,938,092
Debentures payable	3,000,000	3,000,000
Long-term payables	1,174,275	1,098,856
Finance leases payables	15,599,561	13,328,193
Estimated liabilities	214,802	191,533
Deferred income tax liabilities	1,119,510	5,000
Other non-current liabilities
Total non-current liabilities	36,125,787	30,561,674
Total liabilities	64,853,481	55,722,530
OWNER'S EQUITY (OR SHAREHOLDERS'   EQUITY):
Paid-up capital (or equity)	12,251,362	12,251,362
Capital surplus	14,309,947	14,280,532
Less: Treasury shares
Surplus reserves	1,554,324	1,289,624
Profit available for appropriation	2,069,177	3,685,651
Total owner's equity (or shareholders' equity)	30,184,810	31,507,169
Total liabilities and owner's equity   (or shareholders' equity)	95,038,291	87,229,699

Legal representative: Kong Dong

Person in charge of accounting function: Fan Cheng

Person in charge of accounting department: Li Youqiang

  4.2    Consolidated Income Statement

Unit: RMB'000 (Unaudited)

Prepared by Air China Limited

Items		Amounts for  the period	Amounts for the  corresponding  period of  previous year	Amounts for the period from the  beginning of the year to the end of the  reporting period	Amounts for the period from the  beginning of the  previous year to the end of the previous reporting  period
		(July to September)	(July to September)	(January to September)	(January to September)
Items		Amounts for  the period	Amounts for the  corresponding  period of  previous year	Amounts for the period from the  beginning of the year to the end of the  reporting period	Amounts for the period from the  beginning of the  previous year to the end of the previous reporting  period
		(July to September)	(July to September)	(January to September)	(January to September)
I.	Total revenue from operations	13,915,589	14,471,739	39,675,827	37,215,758
	Including: Operating income	13,915,589	14,471,739	39,675,827	37,215,758
	Interest income
	Premium earned
	Fees and commission income
II.	Total operating cost	15,093,752	12,134,144	40,138,231	33,790,778
	Including: Operating costs	13,323,677	10,349,626	36,457,808	29,461,244
	Interest expenses
	Fees and commission expenses
	Returned premium
	Net reimbursement paid
	Net amounts of provisions on insurance   contracts drawn
	Bonus paid on insurance policy
	Reinsurance premium
	Business taxes and other surcharges	338,713	359,483	962,509	905,573
	Selling expenses	762,151	920,313	2,372,612	2,290,993
	Administrative expenses	356,632	259,323	1,029,935	760,775
	Finance expenses	302,789	245,399	-693,543	372,193
	Impairment loss of assets	9,790		8,910
	Add: Gains from changes in fair value   (loss is represented by '-' sign)	-1,063,964	-58,468	-979,078	195,390
	Investment income (loss is represented   by '-' sign)	-96,704	552,592	517,066	906,866
	Including: Gains arising from investments in   associated companies and joint ventures	-261,390	552,368	-327,848	904,392
	Exchange gains (loss is represented   by '-' sign)
III.	Profit from operations (loss is represented   by '-' sign)	-2,338,831	2,831,719	-924,416	4,527,236
	Add: Non-operating income	75,803	87,447	222,202	163,775
	Less: Non-operating expenses	7,016	31,610	142,124	103,452
	Including: Net loss arising from disposal   of non-current assets	1,683	324	20,643	44,572
IV.	Total profit (loss is represented by   '-' sign)	-2,270,044	2,887,556	-844,338	4,587,559
	Less: Income tax expenses	-282,047	700,677	-65,098	1,177,619
V.	Net profit (loss is represented by '-' sign)	-1,987,997	2,186,879	-779,240	3,409,940
	Net profits attributable to owners of   Company	-1,939,570	2,187,417	-657,253	3,487,714
	Gains or losses from minority interests	-48,427	-538	-121,987	-77,774
VI.	Earnings per share:
	(I)    Basic	-0.163	0.184	-0.055	0.287
	(II)    Diluted	n/a	n/a	n/a	n/a

Legal representative of the Company: Kong Dong

Person in charge of accounting function: Fan Cheng

Person in charge of accounting department: Li Youqiang

  Income Statement of the Company

Unit: RMB'000 (Unaudited)

Prepared by Air China Limited

Items		Amounts for  the period	Amounts for the  corresponding  period of  previous year	Amounts for the period from the  beginning of the year to the end of the  reporting period	Amounts for the period from the  beginning of the  previous year to the end of the previous reporting  period
		(July to September)	(July to September)	(January to September)	(January to September)
I.	Revenue from operations	12,223,040	13,710,267	34,747,989	35,134,830
	Less: Operating cost	11,715,439	9,598,349	31,760,140	27,369,864
	Business taxes and other surcharges	313,917	357,987	885,730	901,070
	Selling expenses	728,606	926,598	2,247,632	2,303,958
	Administrative expenses	263,116	285,190	742,813	707,745
	Finance expenses	305,309	259,070	-606,507	428,059
	Impairment loss of assets
	Add: Gains from changes in fair value   (loss is represented by '-'sign)	-1,076,775	-52,325	-979,078	187,721
	Investment income (loss is represented   by '-' sign)	156,255	135,833	395,388	-10,201
	Including: Gains arising from investments in   associated companies and joint ventures	-16,486	135,610	18,246	-13,695
II.	Profit from operations (loss is represented   by '-' sign)	-2,023,867	2,366,581	-865,509	3,601,654
	Add: Non-operating income	62,254	89,833	205,493	163,558
	Less: Non-operating expenses	6,851	31,610	141,522	103,448
	Including: Net loss arising from disposal   of non-current assets	1,559	331	20,510	44,572
III.	Total profit (loss is represented by '-'   sign)	-1,968,464	2,424,804	-801,538	3,661,764
	Less: Income tax expenses	-299,608	686,940	-92,473	1,163,907
IV.	Net profit (loss is represented by '-' sign)	-1,668,856	1,737,864	-709,065	2,497,857

Legal representative of the Company: Kong Dong

Person in charge of accounting function: Fan Cheng

Person in charge of accounting department: Li Youqiang

4.3    Consolidated Cash Flow Statement

January to September 2008

Unit: RMB'000 (Unaudited)

Prepared by Air China Limited

Items		Amounts for the period from the beginning of the year to the end of the reporting period	Amounts for the period from the beginning of the previous year to the end of the previous reporting period
		(January to  September)	(January to  September)
Items		Amounts for the period from the beginning of the year to the end of the reporting period	Amounts for the period from the beginning of the previous year to the end of the previous reporting period
		(January to  September)	(January to  September)
I.	Cash flows from operating activities:
	Cash received from sales of goods,   provision of services	39,023,445	36,917,540
	Net increase in deposits from clients and   placements from other banks
	Net increase in borrowings from central bank
	Net increase in contributions made to other   financial institutions
	Cash received from premiums of original   insurance contracts
	Net cash receipt from reinsurance operations
	Net increase in reserve of the insured and   investment
	Net increase in trading financial assets
	Cash received from interests, fees and   commission
	Net increase in contributions
	Net increase in cash from repurchase   operations
	Refund of tax and levy	36,747	51,108
	Other cash received relating to operating activities	1,005,724	687,986
	Subtotal of cash inflows of operating activities	40,065,916	37,656,634
	Cash paid for goods purchased, services rendered	26,439,750	22,905,509
	Net increase in loans and advances to clients
	Net increase in deposits to central bank and   to other banks
	Cash payment of claims under original   insurance contracts
	Cash payment of interests, fees and commission
	Cash payment of bonus paid to insurance policy
	Cash paid to or on behalf of employees	3,365,686	3,108,960
	Tax paid	2,678,664	2,311,634
	Other cash paid in relation to operating activities	3,259,388	3,011,894
	Subtotal of cash outflows of operating activities	35,743,488	31,337,997
	Net cash flows from operating activities	4,322,428	6,318,637
II.	Cash flows from investing activities:
	Cash received from investments
	Cash from investment income	418,832	414,773
	Net cash from disposal of fixed assets,   intangible assets and other long-term assets	928,165	97,145
	Net cash from disposal of subsidiaries and   other business units		21,939
	Other cash received from investing activities	722,983	2,750,874
	Subtotal of cash inflows of investment   activities	2,069,980	3,284,731
	Cash paid to purchase of fixed assets,   intangible assets and other long-term assets	5,753,416	6,454,489
	Cash paid to investments	978,502	3,032,955
	Net increase in pledged loans
	Net cash from subsidiaries and other   business units
	Cash payments relating to other investments		2,515,457
	Subtotal of cash outflows of investment activities	6,731,918	12,002,901
	Net cash flows from investing activities	-4,661,938	-8,718,170
III.	Cash flows from financing activities:
	Cash received from investments
	Including: Cash received from investments of   minority shareholders through subsidiaries
	Cash received from borrowings	14,375,233	15,898,309
	Cash received from issue of debentures
	Other cash relating to financing activities
	Subtotal of cash inflows of financing activities	14,375,233	15,898,309
	Cash repaid to amounts borrowed	9,303,104	10,608,798
	Cash payments for distribution of dividends,   profits or interest expenses	2,147,033	2,023,325
	Including: Dividends and profit paid to   minority shareholders by subsidiaries
	Other cash payments relating to financing   activities	2,232,407	2,699,711
	Subtotal of cash outflows of financing activities	13,682,544	15,331,834
	Net cash flows from financing activities	692,689	566,475
IV.	Effect of exchange rate changes on cash   and cash equivalents	-81,241	-23,976
V.	Net increase in cash and cash equivalents	271,938	-1,857,034
	Add: Balance of cash and cash equivalents at   the beginning of the period	3,668,528	3,200,563
VI.	Balance of cash and cash equivalents at   the end of the period	3,940,466	1,343,529

Legal representative of the Company: Kong Dong

Person in charge of accounting function: Fan Cheng

Person in charge of accounting department: Li Youqiang

  Cash Flow Statement of the Company

January to September 2008

Unit: RMB'000 (Unaudited)

Prepared by Air China Limited

Items		Amounts for the period from the beginning of the year to the end of the reporting period	Amounts for the period from the beginning of the previous year to the end of the previous reporting period
		(January to  September)	(January to  September)
Items		Amounts for the period from the beginning of the year to the end of the reporting period	Amounts for the period from the beginning of the previous year to the end of the previous reporting period
		(January to  September)	(January to  September)
I.	Cash flows from operating activities:
	Cash received from sales of goods, provision   of services	34,326,429	34,408,263
	Refund of tax and levy	36,747	51,108
	Other cash received relating to operating   activities	739,139	520,643
	Subtotal of cash inflows of operating activities	35,102,315	34,980,014
	Cash paid for goods purchased, services rendered	22,927,025	20,830,843
	Cash paid to or on behalf of employees	2,934,260	2,780,008
	Tax paid	2,552,144	2,201,988
	Other cash paid in relation to operating activities	2,569,851	2,734,361
	Subtotal of cash outflows of operating activities	30,983,280	28,547,200
	Net cash flows from operating activities	4,119,035	6,432,814
II.	Cash flows from investing activities:
	Cash received from investments
	Cash from investment income	1,053	21,572
	Net cash from disposal of fixed assets,   intangible assets and other long-term assets	51,388	97,108
	Net cash from disposal of subsidiaries and   other business units		21,939
	Other cash received from investing activities	395,759	2,612,845
	Subtotal of cash inflows of investment activities	448,200	2,753,464
	Cash paid to purchase of fixed assets,   intangible assets and other long-term assets	5,156,863	6,446,911
	Cash paid to investments	121,498	3,032,955
	Net cash from subsidiaries and other   business units
	Cash payments relating to other investments		2,127,687
	Subtotal of cash outflows of investment   activities	5,278,361	11,607,553
	Net cash flows from investing activities	-4,830,161	-8,854,089
III.	Cash flows from financing activities:
	Cash received from investments
	Cash received from borrowings	14,200,165	15,773,310
	Other cash relating to financing activities
	Subtotal of cash inflows of financing   activities	14,200,165	15,773,310
	Cash repaid to amounts borrowed	9,268,735	10,558,798
	Cash payments for distribution of dividends,   profits or interest expenses	2,121,079	2,021,817
	Other cash payments relating to financing   activities	2,232,406	2,621,444
	Subtotal of cash outflows of financing   activities	13,622,220	15,202,059
	Net cash flows from financing activities	577,945	571,251
IV.	Effect of exchange rate changes on cash   and cash equivalents	-56,086	27,034
V.	Net increase in cash and cash equivalents	-189,267	-1,822,990
	Add: Balance of cash and cash equivalents at      the beginning of the period	1,348,887	2,500,402
VI.	Balance of cash and cash equivalents   at the end of the period	1,159,620	677,412

Legal representative of the Company: Kong Dong

Person in charge of accounting function: Fan Cheng

Person in charge of accounting department: Li Youqiang

  2.    CHANGE OF SUPERVISOR

The Board of the Company annuonces that Mr. He Chaofan has been nominated by China National Aviation Holding Company as a shareholder representative supervisor for the second session of the Supervisory Committee of the Company subject to the approval of the shareholders of the Company. Accordingly, Mr. Liao Wei shall cease to be the shareholder representative supervisor with effect from the date of approval by the shareholders of the Company of Mr. He's appointment.

Mr. He Chaofan, aged 46, a senior accountant, graduated from the Civil Aviation University of China majoring in civil aviation planning and finance. Mr. He served as an accountant at the Beijing Administrative Bureau of Civil Aviation Administration of China, and served in various positions in Air China Limited including that of an accountant, section chief, deputy head and head of the Finance Department and director and general manager of the Revenue Accounting Department of Air China Limited. From March 2003 to October 2008, he served as the general manager and deputy party secretary of China National Aviation Finance Co., Ltd.. He was appointed the general manager of the Finance Department of China National Aviation Holding Company in October 2008. 

Save as disclosed above, Mr. He Chaofan has not 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 does not have any relationship with any other director, senior management, substantial shareholder or controlling shareholder of the Company.

Mr. He Chaofan does not have 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.

Mr. He Chaofan will not receive any emolument for serving as a supervisor of the Company. The term of his office is no more than three years, which shall commence upon the shareholders' approval to the appointment and shall end upon the third session of the Supervisory Committee being elected.

By order of the Board

Air China Limited

Huang Bin Tam Shuit Mui

Joint Company Secretaries

Beijing, 28 October 2008

As at the date of this announcement, the Directors of the Company are Messrs Kong Dong, Wang Yinxiang, Wang Shixiang, Ma Xulun, Christopher Dale Pratt, Chen Nan Lok, Philip, Cai Jianjiang, Fan Cheng, Hu Hung Lick, Henry*, Wu Zhipan*, Zhang Ke* and Jia Kang*.

* Independent non-executive Director of the Company

 

END

 

 

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