Cathay Pacific 2007 Annual Report Download - page 33

Download and view the complete annual report

Please find page 33 of the 2007 Cathay Pacific annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 100

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100

Directors’ Report
The Company adopted a share option scheme on 10th
March 1999. During the year, 4,327,500 shares were
issued under the scheme. Details of the scheme can
be found in note 20 to the accounts.
At 31st December 2007, 3,940,025,072 shares were in
issue (31st December 2006: 3,935,697,572 shares).
Details of the movement of share capital can be found
in note 20 to the accounts.
Commitments and contingencies
The details of capital commitments and contingent
liabilities of the Group and the Company as at 31st
December 2007 are set out in note 27 to the accounts.
Agreement for services
The Company has an agreement for services with
John Swire & Sons (H.K.) Limited (“JSSHK”), the
particulars of which are set out in the section on
continuing connected transactions.
As directors and/or employees of the John Swire &
Sons Limited (“Swire”) group, Christopher Pratt,
Robert Atkinson, Philip Chen, Martin Cubbon, James
Hughes-Hallett, John Slosar, Tony Tyler and Robert
Woods are interested in the JSSHK Services
Agreement (as defined below).
Particulars of the fees paid and the expenses
reimbursed for the year ended 31st December 2007
are set out below and also given in note 26 to the
accounts.
Significant contracts
Contracts between the Company and HAECO and its
subsidiary TAECO for the maintenance and overhaul of
aircraft and related equipment accounted for
approximately 3% of the airline’s net operating
expenses in 2007. Like the Company, HAECO is an
associate of Swire Pacific; all contracts have been
concluded on normal commercial terms in the ordinary
course of the business of both parties.
Major transaction
Cathay Pacific Aircraft Services Limited (“CPAS”),
a wholly owned subsidiary of the Company, entered
into agreements with The Boeing Company on 8th
November 2007 for the acquisition of seven Boeing
777-300ER aircraft and 10 Boeing 747-8F freighters.
This transaction constituted a major transaction under
the Rules Governing the Listing of Securities on The
Stock Exchange of Hong Kong Limited (the “Listing
Rules”) in respect of which an announcement dated
8th November 2007 was published and a circular dated
21st November 2007 was sent to shareholders.
Discloseable transactions
CPAS entered into an agreement with The Boeing
Company on 7th August 2007 for the acquisition of five
Boeing 777-300ER aircraft. This transaction constituted
a discloseable transaction under the Listing Rules in
respect of which an announcement dated 7th August
2007 was published and a circular dated 22nd August
2007 was sent to shareholders.
CPAS entered into an agreement with Airbus S.A.S.
on 6th December 2007 for the acquisition of eight
Airbus A330-300 aircraft. This transaction constituted a
discloseable transaction under the Listing Rules in
respect of which an announcement dated 6th
December 2007 was published and a circular dated
21st December 2007 was sent to shareholders.
Continuing connected transactions
During the year ended 31st December 2007, the Group
had the following continuing connected transactions,
details of which are set out below:
(a) Pursuant to an agreement dated 17th October 2002
(the “DHL Services Agreement”) with DHL
International GmbH (formerly DHL International
Limited) (“DHL”), AHK provides to DHL services in
respect of the sale of space on certain cargo
services operated by AHK in the Asian region for
the carriage of DHL’s door to door air express
Cathay Pacific Airways Limited Annual Report 2007 31