Cathay Pacific 2007 Annual Report Download - page 36

Download and view the complete annual report

Please find page 36 of the 2007 Cathay Pacific annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 100

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100

(g) Pursuant to a framework agreement dated 21st
May 2007 (“Framework Agreement”) with HAECO,
HAECO and its subsidiaries (“HAECO group”)
provide services to the Group’s aircraft fleets. The
services include line maintenance, base
maintenance, comprehensive stores and logistics
support, component and avionics overhaul, material
supply, engineering services and ancillary services
at Hong Kong International Airport, Xiamen or other
airports. Payment is made in cash by the Group to
HAECO group within 30 days upon receipt of the
invoice. The term of the Framework Agreement is
for 10 years ending on 31st December 2016.
HAECO is a connected person of the Company by
virtue of it being an associate of the Company’s
substantial shareholder Swire Pacific. The
transactions under the Framework Agreement are
continuing connected transactions in respect of
which an announcement dated 21st May 2007 was
published and a circular dated 31st May 2007 was
sent to shareholders.
The fees payable by the Group to HAECO group
under the Framework Agreement totalled HK$1,831
million for the year ended 31st December 2007.
The independent non-executive Directors, who are not
interested in any connected transactions with the
Group, have reviewed and confirmed that the
continuing connected transactions as set out above
have been entered into by the Group:
(a) in the ordinary and usual course of business of the
Group;
(b) either on normal commercial terms or, if there are
not sufficient comparable transactions to judge
whether they are on normal commercial terms, on
terms no less favourable to the Group than terms
available to or from (as appropriate) independent
third parties; and
Directors’ Report
(c) in accordance with the relevant agreement
governing them on terms that are fair and
reasonable and in the interests of the shareholders
of the Company as a whole.
The Auditors of the Company have also reviewed these
transactions and confirmed to the Board that:
(a) they have been approved by the Board of the
Company;
(b) they are in accordance with the pricing policies of
the Group (if the transactions involve provision of
goods or services by the Group);
(c) they have been entered into in accordance with the
relevant agreements governing the transactions; and
(d) they have not exceeded the relevant annual caps
disclosed in previous announcements.
Major customers and suppliers
6.3% of sales and 25.7% of purchases during the year
were attributable to the Group’s five largest customers
and suppliers respectively. 1.6% of sales were made to
the Group’s largest customer while 7.5% of purchases
were made from the Group’s largest supplier.
Directors
Augustus Tang and John Slosar were appointed
Directors on 1st January and 1st July 2007
respectively. All the other present Directors of the
Company whose names are listed on pages 28 and 29
served throughout the year. Philip Chen was elected
Deputy Chairman on 1st July 2007. In addition, Davy
Ho served as a Director until his resignation with effect
from 1st July 2007.
Cathay Pacific Airways Limited Annual Report 2007
34