Cathay Pacific 2000 Annual Report Download - page 71

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CATHAY PACIFIC AIRWAYS LIMITED ANNUAL REPORT 2000 69
31. Related party transactions
Material transactions between the Group and associated companies and other related parties
which were carried out in the normal course of business on commercial terms are summarised
below:
2000 1999
Other Other
Associated related Associated related
companies parties companies parties
HK$M HK$M HK$M HK$M
Turnover 67 – 62 –
Aircraft maintenance costs 748 1,650 758 914
Route operating costs 195 673 194 632
Dividends received (65) (28) (48) –
Fixed assets purchase –61 –47
(a) Other transactions with related parties
(i) Under an agreement between the two parties, the Company pays fees and reimburses
costs to John Swire & Sons Limited in exchange for services provided. Management
services fees, calculated at 2.5% of the Group’s profit before tax, results of associated
companies, minority interests, and any profits and losses on disposal of fixed assets will
be paid annually. Management fee paid for the year ended 31st December 2000 was
HK$126 million (1999: HK$62 million) and expenses of HK$150 million (1999: HK$155
million) were reimbursed at cost.
(ii) The Company received agency commission and services fees from Hong Kong Dragon
Airlines Limited (“Dragonair”). The services fees were received in respect of computer
support, engineering, station and ground services provided to Dragonair. All these
transactions were conducted in the ordinary course of business and on normal commercial
terms. A total of HK$178 million was received from Dragonair for these transactions in
2000 (1999 : HK$142 million). Dragonair is also a partner of the Asia Miles frequent-flyer
programme.
(b)Amounts due to and due from associated companies and other related companies at
31st December 2000 are disclosed in note 18 and note 20. These balances arise in the normal
course of business, are non-interest bearing and have no fixed repayment terms.
(c) At 31st December 2000, the Company has given guarantees relating to long-term loan
facilities of HK$680 million (1999: HK$684 million) held by associated and other related
companies.
(d)There were no material transactions with Directors, except for those relating to remuneration
(note 27) and shareholdings (Directors’ Report).
Notes to the Accounts – Related Party Transactions