Cathay Pacific 2015 Annual Report Download - page 86

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Cathay Pacific Airways Limited
84
27. 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:
2015 2014
Associates
HK$M
Other related
parties
HK$M
Associates
HK$M
Other related
parties
HK$M
Revenue 240 19 226 11
Aircraft maintenance costs 1,102 2,140 948 2,207
Operating costs 761 – 514 –
Dividend income 280 11 221 8
Finance income 19 – – –
Property, plant and equipment purchase – 6 – 13
Other related parties are companies under control of a company which has a significant influence on the Group.
(i) UndertheHAECOFrameworkAgreementwithHAECOandHXITM,theGrouppaidfeesto,andreceivedfees
from,theHAECOgroupinrespectofaircraftmaintenanceandrelatedservices.Theamountspayabletothe
HAECOgroupfortheyearended31stDecember2015totalledHK$3,246million(2014:HK$3,167million).The
amountsreceivablefromtheHAECOgroupfortheyearended31stDecember2015totalledHK$27million
(2014: HK$13 million).
TransactionsundertheHAECO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 a definition of terms, please refer to the Directors’ Report on
page 32.
(ii) Under the Air China Framework Agreement with Air China dated 26th June 2008, the Group paid fees to, and
received fees from, the Air China group in respect of transactions between the Group on the one hand and the
Air China group on the other hand arising from joint venture arrangements for the operation of passenger air
transportation, code sharing arrangements, interline arrangements, aircraft leasing, frequent flyer
programmes, the provision of airline catering, ground support and engineering services and other services
agreed to be provided and other transactions agreed to be undertaken under the Air China Framework
Agreement. The amounts payable to the Air China group for the year ended 31st December 2015 totalled
HK$415 million (2014: HK$430 million). The amounts receivable from the Air China group for the year ended
31st December 2015 totalled HK$232 million (2014: HK$224 million).
Transactions under the Air China Framework 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 a definition of terms, please refer to the Directors’ Report on pages 32 and 33.
(b) The Company has 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 taxation, results of associates, non-controlling
interests, and any profits or losses on disposal of property, plant and equipment are paid annually. For the year
ended 31st December 2015, service fees of HK$143 million (2014: HK$81 million) were paid and expenses of
HK$209million(2014:HK$214million)werereimbursedatcost;inaddition,HK$68million(2014: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 a
definition of terms, please refer to the Directors’ Report on page 32.
(c) Amounts due from and due to associates and other related companies at 31st December 2015 are disclosed in
notes 16 and 19 to the financial statements. 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 of an associate at 31st December 2015 are
disclosed in note 28(b) to the financial statements.
(e) There were no material transactions with Directors and executive officers except for those relating to shareholdings
(as disclosed in the Directors’ Report and the Corporate Governance Report). Remuneration of Directors and
executive officers is disclosed in note 25 to the financial statements.
Notes to the Financial Statements Related Party Transactions