Cathay Pacific 2006 Annual Report Download - page 31

Share capital
During the year under review, the Group did not
purchase or redeem any shares in the Company.
The Company adopted a share option scheme on 10th
March 1999. During the year, 7,019,500 shares were
issued under the scheme. Details of the scheme can
be found in note 19 to the accounts.
Following approval at the Company’s Extraordinary
General Meeting held on 22nd August 2006, the
authorised share capital of the Company increased
from HK$780,000,000 (comprising 3,900,000,000
ordinary shares of HK$0.20 each) to HK$1,000,000,000
(comprising 5,000,000,000 ordinary shares of HK$0.20
each) on 22nd August 2006; and the Company issued
548,045,724 new shares of HK$0.20 each at an issue
price of HK$13.50 per share on 28th September 2006
as part consideration for the acquisition of the shares
of Dragonair.
At 31st December 2006, 3,935,697,572 shares were
in issue (31st December 2005: 3,380,632,348 shares).
Details of the movement of share capital can be found
in note 19 to the accounts.
Commitments and contingencies
The details of capital commitments and contingent
liabilities of the Group and the Company as at
31st December 2006 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, Davy
Ho, James Hughes-Hallett, Tony Tyler and Robert
Woods are interested in the JSSHK Services
Agreement (as defined below). David Turnbull was
interested as a director and an employee of the Swire
group until his resignation on 31st January 2006.
Particulars of the fees paid and the expenses
reimbursed for the year ended 31st December 2006
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 2006. 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 a purchase agreement with The Boeing Company
on 22nd June 2006 for the acquisition of six Boeing
747-400ERF 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 22nd June 2006 was
published and a circular dated 29th June 2006 was
sent to shareholders.
Discloseable transaction
CPAS entered into an agreement with The Boeing
Company on 1st June 2006 for the acquisition of two
Boeing 777-300ER aircraft. This transaction constituted
a discloseable transaction under the Listing Rules in
respect of which an announcement dated 1st June
2006 was published and a circular dated 8th June
2006 was sent to shareholders.
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Cathay Pacific Airways Limited Annual Report 2006
Directors’ Report