Cathay Pacific 2006 Annual Report Download - page 85

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83
Cathay Pacific Airways Limited Annual Report 2006
26. Related party transactions (continued)
(d) Guarantees given by the Company in respect of bank loan facilities held by an associate at 31st December
2006 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.
27. Commitments and contingencies
(a) Outstanding commitments for capital expenditure authorised at the year end but not provided for in
the accounts:
Group Company
2006
HK$M
2005
HK$M
2006
HK$M
2005
HK$M
Authorised and contracted for 23,422 16,724 2,932 1,958
Authorised but not contracted for 1,646 1,034 1,638 1,032
25,068 17,758 4,570 2,990
Operating lease commitments are shown in note 8 to the accounts.
(b) Guarantees in respect of lease obligations, bank loans and other liabilities outstanding at the year end:
Group Company
2006
HK$M
2005
HK$M
2006
HK$M
2005
HK$M
Subsidiaries ––3,122 2,311
Associate 17 18 17 18
Staff 200 200 200 200
217 218 3,339 2,529
(c) The Company has under certain circumstances undertaken to maintain specified rates of return within the
Group’s leasing arrangements. The Directors do not consider that an estimate of the potential financial effect
of these contingencies can practically be made.
(d) The Company operates in many jurisdictions and in certain of these there are disputes with the tax authorities.
Provisions have been made to cover the expected outcome of the disputes to the extent that outcomes
are likely and reliable estimates can be made. However, the final outcomes are subject to uncertainties and
resulting liabilities may exceed provisions.
(e) The Company is the subject of investigations in respect of its air cargo operations by the competition
authorities of various jurisdictions including the United States, the European Union, Canada, Switzerland and
New Zealand. The Company has been cooperating with the authorities in their investigations. The focus of the
investigations appears to be on issues relating to pricing and competition. The Company is represented by
legal counsel in connection with the investigations.
The Company has been named as a defendant in a number of civil class action complaints in the United States,
Canada and Australia. The Company is represented by legal counsel in the actions filed in the United States,
Canada and Australia and intends to defend each of those actions.
The investigations and civil actions are ongoing and the outcomes are subject to uncertainties. The Company is
not in a position at the present time to assess any potential liabilities and cannot therefore make any provisions.
Notes to the Accounts Related Party Transactions / Supplementary Information