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ANNUAL REPORT 2014
83
Notes to the Financial Statements Supplementary Information
30. Capital commitments and contingencies
(a) Outstanding capital commitments authorised at the year end but not provided for in the financial statements:
Group Company
2014
HK$M
2013
HK$M
2014
HK$M
2013
HK$M
Authorised and contracted for 100,841 113,307 3,094 3,921
Authorised but not contracted for 10,102 15,897 9,868 12,499
110,943 129,204 12,962 16,420
Operating lease commitments are shown in note 10(b) to the financial statements.
(b) Guarantees in respect of lease obligations, bank loans and other liabilities outstanding at the year end:
Group Company
2014
HK$M
2013
HK$M
2014
HK$M
2013
HK$M
Subsidiaries ––4,686 5,218
Associates 3,112 753 90 90
Related parties 1,032 1,064 1,032 1,064
Staff 200 200 200 200
4,344 2,017 6,008 6,572
Related parties are companies under control of a company which has a significant influence on the Group.
In February 2015, the Group provided a guarantee in respect of an associate amounting to HK$548 million.
(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 remains the subject of antitrust proceedings in various jurisdictions except as otherwise noted
below. The proceedings are focused on issues relating to pricing and competition. The Company is represented by
legal counsel in connection with these matters.
In November 2010, the European Commission issued a decision in its airfreight investigation finding that, amongst
other things, the Company and a number of other international cargo carriers agreed to cargo surcharge levels and
that such agreements infringed European competition law. The European Commission imposed a fine of
Euros 57,120,000 (equivalent to HK$618 million at the exchange rate current as of the date of the announcement) on
the Company. In January 2011, the Company filed an appeal with the General Court of the European Union. The
appeal is currently pending.
The Company has been named as a defendant in a number of civil complaints, including class litigation and third
party contribution claims, in a number of countries including the United States, Canada, the United Kingdom, the
Netherlands, Norway and Korea alleging violations of applicable competition laws arising from the Company’s
conduct relating to its air cargo operations. In addition, civil class action claims have been filed in the United States
and Canada alleging violations of applicable competition laws arising from the Company’s conduct relating to
certain of its passenger operations. The Company is represented by legal counsel and is defending these actions,
except as noted below.