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27
CATHAY PACIFIC AIRWAYS LIMITED ANNUAL REPORT 1998
Directors’ Report
We submit our report and the audited accounts for the year ended 31st December 1998, which are
on pages 33 to 61.
Activities
The Cathay Pacific Group (“the Group”) is managed and controlled in Hong Kong. As well as
operating scheduled airline services, the Group is engaged in other related areas, including aircraft
engineering and airline catering. The airline operations are principally to and from Hong Kong, which
is where most of the Group’s other activities are also carried out.
Details of principal subsidiary companies, their main areas of operation and particulars of their
issued capital, and details of principal associated companies are listed on pages 60 and 61.
Accounts
The loss of the Group for the year ended 31st December 1998 and the state of affairs of the
Company and the Group at that date are set out in the accounts on pages 37 to 61.
Dividends
We recommend the payment of a final dividend of HK7¢ per share for the year ended 31st
December 1998. Together with the interim dividend of HK3¢ per share paid on 5th September 1998,
this makes a total dividend for the year of HK10¢ per share. This represents a total distribution for
the year of HK$339 million. Subject to shareholders’ approval of the final dividend at the annual
general meeting on 12th May 1999, payment of the dividend will be on 28th May 1999 to
shareholders registered on 12th May 1999. The shareholders’ register will be closed from 4th May
1999 to 12th May 1999, both dates inclusive.
Reserves
Movements in the reserves of the Company and the Group during the year are set out in note 18
to the accounts.
Accounting policies
The principal accounting policies of the Group are set out on pages 33 to 36. A statement of the
reasons for a departure from the standard accounting practices laid down by the Hong Kong Society
of Accountants is set out in principal accounting policy note 4.
Donations
During the year, the Company and its subsidiary companies made charitable donations amounting
to HK$5.1 million in direct payments and a further HK$6.6 million in the form of discounts on airline
travel. In addition, the Swire Educational Trust, of which the Company is a founding contributor,
funded scholarships of HK$7.7 million.
Fixed assets
Significant movements of fixed assets include aircraft acquisitions, properties in the new airport
and a provision for the impairment of aircraft value. Details are set out on page 10.
Bank and other borrowings
The net bank loans, overdrafts and other borrowings, including obligations under finance leases,
of the Company and its subsidiary companies are shown in notes 14, 19 and 20 to the accounts.