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Annual Report 2015
85
28. Capital commitments and contingencies
(a) Outstanding capital commitments authorised at the year end but not provided for in the financial statements:
2015
HK$M
2014
HK$M
Authorised and contracted for 94,272 100,841
Authorised but not contracted for 5,096 10,102
99,368 110,943
Operating lease commitments are shown in note 8(b) to the financial statements.
(b) Guarantees in respect of lease obligations, bank loans and other liabilities outstanding at the year end:
2015
HK$M
2014
HK$M
Associates 4,776 3,112
Related parties 1,186 1,032
Staff 200 200
6,162 4,344
Related parties are companies under control of a company which has a significant influence on the Group.
(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.
The proceedings and civil actions, except as otherwise stated below, are ongoing and the outcomes are subject to
uncertainties. The Company is not in a position to assess the full potential liabilities but makes provisions based on
facts and circumstances in line with the accounting policy 20 set out on page 105.
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
57.12millionontheCompany.InJanuary2011,theCompanyfiledanappealwiththeGeneralCourtoftheEuropean
Union. The appeal was heard by the General Court in Luxembourg in May 2015. The General Court delivered
judgmentinDecember2015annullingtheEuropeanCommission’sfindingagainsttheCompany.ThefineofEuros
57.12millionhadbeenrefundedtotheCompanyinearlyFebruary2016.TheEuropeanCommissionhaduntil26th
February 2016 to appeal against the General Court’s decision, no appeal had been lodged.
The Company is a defendant in a number of civil claims, including class litigation and third party contribution claims,
in a number of countries including Canada, the United Kingdom, Germany, the Netherlands, Norway and Korea
alleging violations of applicable competition laws arising from the Company’s alleged 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 alleged conduct relating to certain of its
passenger operations. The Company is represented by legal counsel and is defending these actions, except as
noted below.
Notes to the Financial Statements Supplementary Information