Cathay Pacific 2007 Annual Report Download - page 80

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Notes to the Accounts
Related Party Transactions
26. Related party transactions
(a) Material transactions between the Group and associates and other related parties which were carried out in the
normal course of business on commercial terms are summarised below:
2007 2006
Associates
HK$M
Other related
parties
HK$M
Associates
HK$M
Other related
parties
HK$M
Turnover 290 – 207 –
Aircraft maintenance costs 1,445 – 1,057 –
Route operating costs 432 – 226 –
Dividends received (274) – (241) –
Fixed assets purchase 1 – 1 –
(b) Other transactions with related parties
(i) The Company had an agreement for services with JSSHK (“JSSHK Services Agreement”). Under the JSSHK
Services Agreement, the Company paid fees and reimbursed costs to JSSHK in exchange for services
provided. Service fees calculated at 2.5% of the Group’s profit before tax, results of associates, minority
interests, and any profits and losses on disposal of fixed assets were paid annually. Service fees paid for the
year ended 31st December 2007 were HK$182 million (2006: HK$125 million) and expenses of HK$108
million (2006: HK$124 million) were reimbursed at cost; in addition, HK$53 million (2006: HK$50 million) in
respect of shared administrative services were reimbursed.
Transactions under the JSSHK Services Agreement are continuing connected transactions, in respect of
which the Company has complied with the disclosure requirements in accordance with Chapter 14A of the
Listing Rules. For definition of terms, please refer to Directors’ Report on page 32.
(ii) Under the Framework Agreement with HAECO, the Group paid fees to HAECO group in exchange for
maintenance services provided to the Group’s aircraft fleets. Service fees paid to HAECO group for the year
ended 31st December 2007 were HK$1,043 million (2006: HK$941 million).
Transactions under the Framework Agreement are continuing connected transactions, in respect of which the
Company has complied with the disclosure and shareholders’ approval requirements in accordance with
Chapter 14A of the Listing Rules. For definition of terms, please refer to Directors’ Report on page 34.
(c) Amounts due from and due to associates and other related companies at 31st December 2007 are disclosed in
notes 17 and 19 to the accounts. These balances arising in the normal course of business are non-interest
bearing and have no fixed repayment terms.
(d) Guarantees given by the Company in respect of bank loan facilities held by an associate at 31st December 2007
are disclosed in note 27 to the accounts.
(e) There were no material transactions with Directors and Executive Officers except for those relating to
shareholdings (Directors’ Report and Corporate Governance). Remuneration of Directors and Executive Officers
is disclosed in note 24 to the accounts.
Cathay Pacific Airways Limited Annual Report 2007
78